CSSSC — Annual Report 2023

Nov 19, 2024

Stock Code: 2025

This Annual Report is Available at: 1.http://mops.twse.com.tw 2.http://www.csssc.com.tw

==> picture [84 x 67] intentionally omitted <==

Chien Shing Stainless Steel Co., Ltd.

2023

Annual Report

Printed on May 2, 2024

• I. Name, title, contact number and e-mail of the spokesperson: Name: Shuo-Tang Yeh Title: Chairman Contact Number: (06) 570-3271

II. Name, title, contact number and e-mail of the acting spokesperson: Name: Ching-Wen Huang Title: Head of Finance Department Contact Number: (06) 570-3271 E-Mail: janine.huang@msa.csssc.com.tw

III. Address and telephone number of the head office and plant: Head office address: No. 222, Industry Road, Madou District, Tainan Tel. No.: (06) 570-3271 Plant address: No. 222, Industry Road, Madou District, Tainan Tel. No.: (06) 570-3271

• IV. Name, address, website URL, and telephone number of share or corporate bonds certification institution: Name: Stock Agency Department of Horizon Securities Address: 3F, No. 236, Section 4, Xinyi Road, Da'an District, Taipei City Website URL: srd.honsec.com.tw Tel. No.: (02) 2326-8818

• V. Firm name, address, website URL, telephone number, and the name of the CPA who attested the most recent year's financial report:

Name of CPAs: CPA Wei-Chin Hou, Jui-Wen Lu

Name of the firm: Diwan & Company Address: 8F, No. 253, Sec. 3, Dongmen Road, Tainan Website URL: www.diwan.com.tw Tel. No.: (06) 336-6139

• VI. The name of any exchanges where the company's securities are traded offshore, and the method by which to access information on said offshore securities: None.

• VII. Company website: http://www.csssc.com.tw

Table of Contents

	Table of Contents	Table of Contents
One.	Report to Shareholders
I.		Business Report 2023. --------------------------------------------------------------------- 1
II.		Summary of the 2024 Business Plan ---------------------------------------------------- 2
III.		Future development strategy of the company ------------------------------------------ 2
IV.		Impact from external competitive environment, regulatory environment and general
		business environment ---------------------------------------------------------------------- 3
Two.	Company Profile----------------------------------------------------------------------- 4
Three.	**Corporate Governance Report **
I.		Organizational structure ------------------------------------------------------------------- 6
II		Background information of directors, supervisors, the President, vice
		presidents, assistant vice presidents, and heads of various departments and
		branches ------------------------------------------------------------------------------------- 9
III.		The State of Corporate Governance ---------------------------------------------------- 17
IV.		Information on attesting CPA professional fees --------------------------------------- 50
V.		Information on replacement of certified public accountant -------------------------- 50
VI.		Where the company's chairperson, president, or any managerial officer in
		charge of finance or accounting matters has in the most recent year held a
		position at the accounting firm of its certified public accountant or at an
		affiliated enterprise of such accounting firm: ----------------------------------------- 50
VII.		Any transfer of equity interests and/or pledge of or change in equity interests
		by a director, supervisor, managerial officer, or shareholder with a stake of
		more than 10 percent during the most recent fiscal year or during the current
		fiscal year up to the date of publication of the annual report ------------------------ 50
VIII.		Relationship information, if among the Company's 10 largest shareholders
		any one is a related party or a relative within the second degree of kinship of
		another -------------------------------------------------------------------------------------- 51
IX.		The total number of shares and total equity stake held in any single
		enterprise by the company, its directors and supervisors, managerial officers,
		and any companies controlled either directly or indirectly by the company ------ 52
Four.	Information on capital raising activities:
I.		Capital and shares ------------------------------------------------------------------------ 53
II.		The Company's handling of corporate bonds ----------------------------------------- 56
III.		The Company's preferred stocks -------------------------------------------------------- 56
IV.		Global Depository Receipts ------------------------------------------------------------- 56
V.		The status of issue and private placement of employee stock warrants ------------ 56
VI.		The status of new restricted employee shares ----------------------------------------- 56
VII.		Basic Information on acquiree and transferee Companies -------------------------- 56

VIII.	Matters to be recorded regarding the capital allocation plan ------------------------ 56
Five. Operational Overview
I.	Business activities ------------------------------------------------------------------------ 57
II.	Market, production and sales overview ------------------------------------------------ 59
III.	Information on employees during the most recent 2 fiscal years or during the
	current fiscal year up to the date of publication of the annual report -------------- 62
IV.	Contribution to environmental protection --------------------------------------------- 62
V.	Labor-management relations ------------------------------------------------------------ 63
VI.	Major contracts --------------------------------------------------------------------------- 65
Six. An Overview of the Company's Financial Status
I.	Condensed balance sheets and statements of comprehensive income for the
	most recent 5 fiscal years ---------------------------------------------------------------- 66
II.	Financial analysis for the past five fiscal years --------------------------------------- 68
III.	Audit Committee's Review Report on the Most Recent Annual Financial
	Report -------------------------------------------------------------------------------------- 71
IV.	Financial Statement for the Most Recent Year --------------------------------------- 72
V.	The company or its affiliates have experienced financial difficulties in the
	most recent fiscal year or during the current fiscal year up to the date of
	publication of the annual report and their impact on the company’s financial
	situation ------------------------------------------------------------------------------------ 126
Seven. A review and analysis of the Company's financial position and financial
performance, and a listing of risks
I.	Financial situation ------------------------------------------------------------------------ 127
II.	Financial performance ------------------------------------------------------------------- 127
III.	Cash flow ---------------------------------------------------------------------------------- 128
IV.	Major capital expenditures in the most recent year and their impact on
	financial operations ---------------------------------------------------------------------- 128
V.	The company's reinvestment policy for the most recent fiscal year, the main
	reasons for the profits/losses generated thereby, the plan for improving
	re-investment profitability, and investment plans for the coming year ------------ 128
VI.	Risk evaluation during the most recent fiscal year or during the current
	fiscal year up to the date of publication of the annual report ----------------------- 128
VII.	Other important matters ----------------------------------------------------------------- 131
Eight. If	any of the situations listed in Article 36, paragraph 2 subparagraph 2 of
the Securities and Exchange Act, which might materially affect shareholders'
equity or	the price of the company's securities, has occurred during the most recent
fiscal year or during the current fiscal year up to the date of publication of the
annual report------------------------------------------------------------------------------------------ 131

One. Report to Shareholders

I. Business Report 2023

• (I) Implementation result of the business plan:

The year 2023 is still a very difficult year for the stainless steel industry. Given the pressure of global inflation and interest rate hikes, the Russo-Ukrainian War and the outbreak of conflict between Israel and Palestine, the nickel price fell below US$20,000 per ton, which is unfavorable for market development. Due to increasing geopolitical uncertainties and volatile international raw material prices, the downstream end users are more conservative in their view of the economy, and the market and downstream demand are less than expected. The raw material quotations are weak and the customer end shows low purchase momentum. Hence, demand has also slowed down relatively.

The Company's operating revenue in 2023 was NT$738,691 thousand, a decrease of 39.99% from the 2022 operating revenue of NT$1,231,007 thousand; the operating loss was NT$155,834 thousand, an increase of NT$46,363 thousand from the 2022 operating loss of NT$109,471 thousand; the net profit after tax amounted to NT$228,218 thousand in 2023.

• (II) Budget implementation status: Not applicable as the Company did not disclose financial forecast information to the public in 2023.

• (III) Financial income and expenses, financial structure and profitability analysis

Analysis Item		2023	2022
Financial income and expenditure	Net operating income (NT$ thousand)	738,691	1,231,007
	Operating profit (loss) (NT$ thousand)	(155,834)	(109,471)
	Net profit (loss) after tax (NT$ thousand)	228,218	780,657
Financial structure	Debt to assets ratio (%)	5.56	3.26
	Long-term capital to property, plant and equipment ratio (%)	464.23	375.58
Profitability	Return on assets (%)	13.74	45.34
	Return on equity (%)	14.39	72.09
	Ratio of net income before tax to paid-in capital (%)	8.66	28.81
	Net profit margin (%)	30.89	63.42
	Earnings per share (NT$)	0.81	2.78

• 1 -

(IV) Research and Development:

Through research in the cold rolling mill process , the Company is constantly searching for feasible solutions and proprietary technologies to improve the quality and consistency of stainless steel, reduce defect rates, promote real-time production quality feedback and online monitoring, streamline production and maintenance processes, and increase levels of automation. The team has made many breakthroughs over the years and proven itself competent at improving existing production procedures.

II. Summary of the 2024 Business Plan

(I) Business Policy:

Although the world is full of uncertainty, it seems that the prices of stainless steel and carbon steel have gradually stabilized. The overall economic situation of the steel industry this year is expected to be more stable compared to last year.

With the changes in the economy around the world, the Company not only increases the flexibility of order transfer but also continues to cultivate existing mature channels, consolidate existing customers, and actively develop markets. It is aiming to strengthen the upstream links and the stability of material sources and prices in the hope of expanding the sales market share. Due to the prevailing trade protectionism in the world, many countries have proposed anti-dumping and defensive measures on imports in recent years. Meanwhile, the confrontation between the US and China has intensified and the supply chain has been restructured. Sandwiched between the two powers highlights the relatively difficult situation for Taiwanese companies in global trade. Therefore, in addition to relying on the revitalization plan of the government, we will continue to reduce the cost of production and sales through the resource integration of upstream and downstream in the steel industry in order to improve the competitiveness of the Company and our customers in the steel market.

Furthermore, the Company’s operating direction will also be adjusted according to the changes in the market. To seek growth, favorable preparation and plans will be drawn up based on the market evaluation in a bid to respond to the actual situation in the future steel industry. The Company will also uphold the spirit of stable quality, stable existing suppliers, flexible sales, and comprehensive services, and actively respond to changes in the situation to grasp the pulse of the market in order to achieve operational goals.

• (II) Important production and marketing policies:

• Apply the price difference of each regional market with flexibility to make the most favorable entry and conversion. We actively expand the export market. We hope that old markets can be replaced when there is a change in a single market, increasing flexibility of substitutability.

• Carry out operational plans thoroughly and strengthen communication with customers while improving after-sales service. New customers will be developed by working closely with traders from all over the world so as to facilitate the deployment of new channels when production increases.

• With quality being the priority of the Company, we adhere to the business philosophy of "Customer First" and "Quality First", and take "Reasonable Price" and "On-time Delivery" as the quality policy to strive to stabilize the source of customers. We will uphold the spirit of continuous improvement to enhance management.

Feedback from our customers will be gathered to improve the defects in the manufacturing process to further increase the quality of our stainless steel. At Chien Shing, we ensure our reputation by insisting on quality before price.

III. Future development strategy of the company

Our customers in the “domestic market” are large-scale processing plants with processing facilities which provide services to downstream and end users or to process for export on their own. Considering the demand for stainless steel coils is relatively stable, the prices and delivery times are crucial as manufactures can easily obtain materials from outside sources due to trade liberalization.

The export markets have been impacted by the pandemic and maritime transport in recent years, and the order volume has gradually declined. Therefore, we aim to proactively develop new clients to maximize the order volume. However, the acquisition of raw materials and the stability of delivery time have a significant impact on export orders, so we are striving for customization to meet clients’ needs

• 2 -

and increase sales in various regions.

As the world pays attention to ESG-related issues, energy conservation and emission reduction have become important issues of social management. In response to the global low-carbon competition, apart from focusing on operating profits, the management team will continue to improve equipment, develop energy-saving processes, and expand the use of renewable energy to strive for sustainable development. In addition, we will obtain competitive raw materials from diversified sources to reduce costs, promote energy conservation and emission reduction, lay a good foundation for the Company's sustainable development in the future, and achieve sustainable and steady growth and profits.

IV. Impact from external competitive environment, regulatory environment and general business environment

• (I) The disorder in the nickel price in March 2022 has caused investors to lose confidence in nickel. The overall nickel market appears to be relatively fragile with unstable prices, which is not conducive to the long-term development of nickel and various industrial markets. Russia and Ukraine are the world's second- and ninth-largest exporters of iron and steel, and they usually focus on selling low-priced steel products. Before the war, the two countries accounted for about 20% of the EU's imports of finished steel. With the war between the two countries, Russia was subject to international economic sanctions, while Ukraine's exports were hindered due to the war. The supply of steel from both countries was greatly reduced. Currently, the major steel suppliers in the EU include Turkey, India, China, Taiwan, and South Korea. The total export value of these five countries to the EU is 51%. Among them, Taiwan and South Korea have replaced Russia and Ukraine as the main exporting countries to the EU in 2022.

• Under the Russo-Ukrainian War, the price of energy and materials in Europe soared, production costs continued to rise, and inflation was serious, causing losses to European steelmakers. However, as the price of raw steelmaking materials for the main stainless steel product rises, the surcharge of stainless steel alloys in Europe and the United States continues to rise, which is helpful in supporting the future price of stainless steel. However, as the demand for stainless steel in various regions is still weak, whether the price can be raised smoothly in the market outlook remains to be seen.

• (II) Our Company’s sales are mainly focused on the domestic market, supported by export. In a fiercely competitive environment, we make every effort to stabilize downstream sectors, while being dedicated to promoting cost advantages, production automation, reducing manpower costs, shortening delivery times, reducing inventory costs, enhancing quality, reducing raw material consumption costs, saving energy and reducing fuel costs. We aim to expand business growth with the advantage of multi implemented cost reduction.

• (III) Steel is the basic structure of buildings and one of the key materials in modern society. In the near future, steel will remain an irreplaceable and important raw material, especially in the construction and manufacturing industries. Therefore, forging more "green" steel will inevitably become the trend of the future. In particular, the production of iron and steel produces large amounts of greenhouse gases, which is a major cause of climate change. In response to the trend of carbon reduction in iron and steel, one of the future trends is to try to introduce carbon reduction technologies or new steel manufacturing processes to reduce the use of electricity and greenhouse gas emissions. We understand that there is only one Earth, and proactively commit ourselves to waste and resource reduction, energy efficiency improvement and water source recycling and reuse, so as to fully manage the environment while reducing the impact that production poses on the environment. By positively linking environmental improvement and economic benefits, we are a step closer to sustainable development.

• 3 -

Two. Company Profile

• I. Date of establishment: May 8, 1972

II.	Company history:
	October 1978	Former chairman Mr. Yung-Lin Yeh purchased Chien Shing Stainless Steel Enterprise Co.,
		Ltd. from Madam Shu-Ying Lin Hsieh et. al., and acquired rolling and annealing equipment to
		support new business activities including processing and manufacturing.
	December 1981	Increased share capital to NT$10 million.
	December 1982	Re-organized to Chien Shing Stainless Steel Co., Ltd.
	December 1984	Completed a NT$20-million cash issue, increasing share capital to NT$30 million.
	May 1985	Shuo-Tang Yeh succeeded as Chairman.
	November 1987	Completed a NT$90-million cash issue, increasing share capital to NT$120 million.
	August 1988	Completed a NT$78-million cash issue, NT$36 million of which was subscribed by Chiao
		Tung Bank, increasing share capital to NT$198 million.
	October 1988	Set authorized capital at NT$1.1 billion for improved financial structure and to support future
		business growth and plant expansions.
	April 1989	Completed a NT$242 million cash issue, increasing share capital to NT$440 million, and
		made public offering.
	March 1990	Completed a NT$660-million cash issue to finance plant expansion, increasing paid-up capital
		to NT$1.1 billion.
	August 1991	69KV power delivery began, and the cold rolling mill began trial run.
	September 1991	Commenced trial production.
	March 1992	Completed a NT$550 million cash issue, increasing share capital to NT$1.65 billion.
	May 1992	Cold rolling mill began production. The Company's steel mill investment project received
		approval from the Industrial Development Bureau, Ministry of Economic Affairs, to be
		recognized as key investment under Statute for Upgrading Industries.
	September 1992	The Company's investment project for 400 series BA grade materials was approved as a key
		technology project.
	March 1993	SAN bell type annealing furnace began trial run.
	June 1993	SLL slitting machine began trial run.
		SHL leveling and shearing machine began trial run.
	July 1993	Trial run of SAN bell type annealing furnace completed.
	November 1993	Chairman Shuo-Tang Yeh received recommendation from General Chamber of Commerce
		and was approved by the Ministry of Economic Affairs as "Excellent Businessman."
	May 1994	The Company and person-in-charge Shuo-Tang Yeh were recognized by the Ministry of
		Finance as "1994 Trusted Uniform Invoice Issuing Business."
	November 1994	Trial run of SLL slitting machine completed.
		Trial run of SHL leveling and shearing machine completed.
	April 1995	The Company applied for listing with Taiwan Stock Exchange Corporation.
	September 1995	Board of directors of Taiwan Stock Exchange Corporation (TWSE) approved the Company's
		listing application.
	November 1995	Securities and Futures Commission, Ministry of Finance, approved the Company's TWSE
		listing application.
	January 1996	Capitalization of earnings to increase the capital by NT$165 million and cash capital increase
		by NT$385 million,
		with new shares issued, totaling NT$550 million, bringing the paid-in capital to NT$2.2
		billion.
	February 1996	Shares of the Company were listed for trading on TWSE.
	March 1996	The Company passed DNV-approved ISO9002 certification.
	March 1996	Founded subsidiary - Chien Ying Investment Co., Ltd.
	September 1996	Capitalized NT$220 million of earnings, increasing share capital to NT$2.42 billion.
	June 1997	Capitalized NT$242 million of earnings, increasing share capital to NT$2.662 billion.
	May 1998	Founded subsidiary - Chien Yi Investment Co., Ltd.
	June 1998	Capitalized NT$266.2 million of capital reserve and earnings, increasing share capital to
		NT$2,928.2 million.
	March 1999	Founded subsidiary - Chien Ting Investment Co., Ltd.
	August 1999	Capitalized NT$146.41 million of capital reserve, increasing share capital to NT$3,074.61
		million.
	June 2000	The second annealing and acid wash production line commenced trial run.
	August 2000	Capitalized NT$153.7305 million of capital reserve and earnings, increasing share capital to
		NT$3,228,340,500.
	December 2001	The second cold rolling machine began trial run.
	July 2003	Founded subsidiary - Qianding International Limited (SAMOA).
	June 2004	The Ministry of Economic Affairs approved conversion of 55,965,950 shares from convertible
		corporate bonds, increasing share capital to NT$3,788 million.
	November 2005	Subsidiary Qianding International Limited (SAMOA) invested into Qianding Stainless Steel
		(Vietnam) Limited.
	September 2008	Subsidiary Qianding International Limited (SAMOA) ceased investment in Qianding Stainless
		Steel (Vietnam) Limited.
	June 2009	Received correspondence from the government of Vietnam to remove registration of Qianding

• 4 -

	Stainless Steel (Vietnam) Limited.
August 2009	Typhoon Morakot caused damage to some of the Company's equipment, but was repaired
	within one year's time.
December 2011	Subsidiary Chien Ting Investment Co., Ltd. was renamed Motory Mate Technology Co., Ltd.
	and had business activities changed.
April 2012	Founded subsidiary - Qianding International Limited (BVI)
December 2012	Completed research and development of the Company's first electric motorcycle, and obtained
	safety certification as general moped from Ministry of Transportation and Communication as
	well as the approval to be driven on road.
June 2014	Completed dissolution of subsidiary - Qianding International Limited (BVI).
December 2014	Completed dissolution of subsidiary - Qianding International Limited (SAMOA).
February 2016	Following a resolution made in board of directors meeting dated February 3, 2016, the
	Company filed a request for restructuring and injunction with Taiwan Tainan District Court.
	The court approved the injunction on February 15, at which time the Company's shares were
	suspended from trading.
March 2016	Following appeals raised by creditor banks, the Company received the court's decision to
	withdraw the injunction and remand the case. Trading of the Company's shares resumed on
	March 16, 2016.
September 2016 November 2017	The court's decision to withdraw injunction during and before the Company's restructuring was effected. The Company and its 100%-owned subsidiaries, namely Chien Ying Investment Co., Ltd., Chien Yi Investment Co., Ltd., and Motory Mate Technology Co., Ltd., completed a simple merger on November 27, 2017 pursuant to board of directors'
	resolution and Article 19 of Business Mergers And Acquisitions Act. Change of company registration was approved by the
	Ministry of Economic Affairs on January 4, 2018.

• 5 -

Three. Corporate Governance Report

• I. Organizational structure

• (I) Organizational structure

Chien Shing Stainless Steel Co., Ltd. - Organizational Chart

==> picture [496 x 442] intentionally omitted <==

----- Start of picture text -----

Shareholders' Meeting
Remuneration
Committee
Audit Office Board of
Directors
Audit Committee
Chairman Chairman's Corporate Governance
Office Officer
President’s Office
Work Safety Electric Vehicle Cold Rolling Administrative Treasury
Office Plant Mill Division Division
Packaging & Production Procedures Business Section Accounting
Testing Section Section General Affairs Section
Quality Assurance Rolling Section Section Finance Section
Section Instruments & Electrical IT Section
Production Section Quality Assurance
Management Environmental Section
Section Protection & Industrial
After-sale Service Safety Team
Section Utilities Section
Product Production Management
Development Section
Section Maintenance Section
----- End of picture text -----

• 6 -

(II) Responsibilities of main departments:

Department	Main responsibilities
Audit Office	Conducts review and assessment on whether internal management system and internal accounting system have been effectively implemented, and performs appropriate evaluation on whether each department performs its duties in an efficient manner.
Corporate Governance Officer	1. Providing directors with the company information they need and maintaining smooth communication between directors and managers in each department. 2. Arranging communication meetings between independent directors and the chief internal auditor or certified public accountants (CPAs). 3. Arranging courses for independent directors and general directors according to the Company's industry characteristics and their education backgrounds and experience. 4. Reporting the Company's corporate governance business to the Board of Directors, independent directors, and the Audit Committee and confirming if the shareholders' meetings or board meetings are in compliance with applicable laws and corporate governance principles. 5. Assisting and reminding directors of the laws and regulations that should be observed when performing duties or adopting resolutions at board meetings. 6. Reviewing the release of material information on important resolutions adopted by the Board of Directors after each board meeting, to ensure the legality and correctness of the content of the material information. 7. Notifying directors no later than seven days before drafting the agenda of a board meeting and providing them with meeting materials; reminding them of recusing themselves due to a conflict of interest, if any, in advance and completing board meeting minutes within 20 days after a board meeting. 8. Completing the registration of the date of a shareholders’ meeting according to the law beforehand, preparing a meeting notice, the meeting handbook, and meeting minutes prior to a deadline required by law, and completing the change registration in the case of amendment to the Articles of Incorporation or an election of all directors.
Treasury Division	Consolidates and coordinates functions of the Finance Section and Accounting Section to achieve financial stability, and to ensure reliability and completeness of accounting information.
Finance Section	Responsible for sourcingand use of capital,and management of bankingrelationship.
Accounting Section	Responsible for accounting, asset management, and operational analysis.
Administrative Division	Management, coordination, and supervision of tasks between General Affairs Section, Business Section, Quality Assurance Section,and IT Section.
Business Section	Responsible for matters concerningdomestic and export sales.
General Affairs Section	Establishment, amendment, and interpretation of personnel management policies, and handling of sundry affairs. Devises procurement plan based on production plan, equipment plan, and procurement order of the Cold Rolling Mill, and inquires, compares, negotiates, and estimates prices with domestic and foreign material suppliers.
IT Section	Responsible for the planning and execution of IT development; planning, maintenance, and management of computer equipment; and handlingof inter-departmentpurchase of computer equipment within the Company.
Quality Assurance Section	Quality inspection and control of finished and semi-finished goods in the steel rolling process; retention of customers' complaint/claim records for future improvement;andpreparingstatistical analyses on customers' orders(and complaints/claims).
Cold Rolling Mill	Devises production plan in line with sales plan and the Company's policies; ensures effective control over production elements, optimal coordination of manpower and supplies for production activities, and proper inventory management in an economical yet effective way; and produces raw materials, supplies, and finished goods at the right quality, quantity, and value in a timely manner to achieve the Company'sproduction and salesgoals.
Production Procedures Section	1. Soft annealing for SUS 300 series hot-rolled coil steel, and sand blast and acid wash for SUS 300 and 400 series. 2. Performs intermediate annealing. (Stress relieving, recrystallization) 3. Performs the final annealing and acid wash on cold-rolled coil steel to eliminate hardening of the rolled material and to ensure evenness of steel sheet structure.
Rolling Section	Rolling of hot-rolled and cold-rolled coil steel after acid wash, including first and second rolling, in order to produce cold-rolled coil steel of the right size, and of the right thickness as specified by customer; and ensures surface quality and shape of the finished coil steel.
Instruments & Electrical Section	Ensures that instruments and electrical equipment of the Cold Rolling Mill operate at the optimal state, using the least time-consuming, most cost-efficient, safest, and most productive methods.

• 7 -

Environmental Protection & Industrial Safety Team	Plans environmental protection-related activities to comply with environmental standards and improve quality of the environment; promotes certification for ISO 14000 - Environmental Protection; oversees worker safety and health to prevent occupational hazard; protects workers' health and safety; creates a safe operating environment; and ensures reasonable terms of employment for workers.
Utilities Section	Ensures consistent and timely supply of energy and indirect materials needed to support production activities and accomplish the Company's operationalgoals,usingthe most economical and effective methods.
Production Management Section	Devises production plan in line with sales plan and the Company's policies; ensures effective control over production elements, optimal coordination of manpower and supplies for production activities, and proper inventory management in an economical yet effective way; and produces raw materials, supplies, and finished goods at the right quality, quantity, and value in a timely manner to achieve the Company'sproduction and salesgoals.
Maintenance Section	Repair, causal analysis, and prevention of machinery malfunction.
Electric Vehicle Plant	Packaging & Testing Section: 1. Testing of cells and BMS circuit protection. 2. Testing of finished battery and charge-discharge learning. 3. Battery classification management; maintenance and operation of test equipment. 4. Maintenance/repair of malfunctioned goods and protection circuitry, and communication and coordination during the authority's inspection. 5. Mass packaging, connection, wiring, and enclosure processing for the main battery production line. 6. Assembly of accessories and secondary parts. (1) After-sale Service Section: A. Devises sales plan and handles sale of finished goods. B. Handling of sales proceeds. C. Communication and arrangement of shipment loading and delivery. D. Review of distributor contract details and consolidation of distribution requirements. E. Handling and response of customer complaint. F. Establishment of sales targets and profit plans. (2) Product Development Section: A. Project planning and gathering of market information. B. Design drawing and research, development, and modification of electrical control system. C. Research, development, and modification of mechanical structures and related projects. D. Management of molds and mold schematics. E. Modification of mass production and test molds; contact with mold-related suppliers. F. Elimination of mold-related technical issues. G. Design of battery structure and wiring. H. Design of BMS circuit protection. I. Development of applications, parts, and accessories. J. Development of enclosure jigs and molds, and design of schematics and technical information. K. Elimination of technical issues.
Work Safety Office	Oversees worker safety and health issues within the Company, and reduces risk and cost of occupational hazard.

• 8 -

II. Background information of directors, supervisors, the President, vice presidents, assistant vice presidents, and heads of various departments and branches

(I) Background information of directors and supervisors

1. Directors:

1. Directors:	1. Directors:	1. Directors:	1. Directors:	1. Directors:	1. Directors:	1. Directors:
																	April 16,2024
Title	Name (Note 1)	Gender Age	Nationality	Date first elected	Date elected (appointed)	Service term	Shareholding when elected		Current shareholding		Shareholding of spouse and underage children		Shares held by proxy		Main career (academic) achievements	Concurrent duties in the Company and in other companies	Spouse or relatives of second degree or closer acting as manager, directororsupervisor			Remarks
							No. of shares	Shareholding Ratio	No. of shares	Shareholding Ratio	No. of shares	Shareholdi ng Ratio	No. of shares	Shareho lding Ratio			Title	Name	Relations
Chairman	Shuo-Tang Yeh	Male 71 - 75 years old	The Republic of China	1994.06.07	2021.08.12	3 years	20,046,540	7.13%	20,046,540	7.13%	4,777,439	1.70%	0	0	Tainan Commercial Vocational Senior High School	Chien Shing Construction Co., Ltd. - Chairman Chien Shing Investment Co., Ltd. - Chairman Shin Shin Development Co., Ltd. - Chairman	None	None	None
Director	Chien Shing Investment Co., Ltd.		The Republic of China	2015.04.21	2021.08.12	3 years	4,944,000	1.76%	9,529,000	3.39%	0	0	0	0	Not applicable	Not applicable	Not applicable
	Representative: Su-Chu Wang	Female 66 - 70 years old	The Republic of China	2020.06.23	2021.08.12	3 years	Not applicable	0	0	0	0	0	0	0	Department of International Trade, Providence College of Arts and Sciences for Women	King Wan Chemical - Accounting Manager Chien Shing Investment Co., Ltd. - Director Shin Shin Development Co., Ltd. - Director	None	None	None
Director	Chien Shing Construction Co., Ltd.		The Republic of China	2015.04.21	2021.08.12	3 years	9,241,347	3.29%	9,241,347	3.29%	0	0	0	0	Not applicable	Not applicable	Not applicable
	Representative: Tsai-Yun Yeh	Female 66 - 70 years old	The Republic of China	2022.12.29	2022.12.29	1 year and 8 months	Not applicable	0%	1,764	0%	0	0	0	0	Shihjia Junior High School	Chien Shing Construction Co., Ltd. - Supervisor Shin Shin Development Co., Ltd. - Director	None	None	None
Director	Wei-Zheng Yang	Male 36 - 40 years old	The Republic of China	2021.08.12	2021.08.12	3 years	0	0	0	0	0	0	0	0	Major in Accounting and E-Commerce, Auckland University	Cheng Ying Stainless Steel Trading Ltd. Responsible person	None	None	None
Independent Director	Ying-Ying Yang	Female 61 - 65 years old	The Republic of China	2016.02.03	2021.08.12	3 years	0	0	0	0	0	0	0	0	Department of Mathematics, Soochow University	Chun Li Technical Co., Ltd. Chairman	None	None	None
Independent Director	Yi-Hung Chen	Male 46 - 50 years old	The Republic of China	2020.06.11	2021.08.12	3 years	0	0	0	0	0	0	0	0	Department of Civil Engineering, Chung Hua University	Hong Yun Fa Real Estate Development Co., Ltd. - Deputy Manager of Sales Department	None	None	None
Independent Director	Ho-Yi Liu	Male 56 - 60 years old	The Republic of China	2023.06.15	2023.06.15	1 year and 2 months	0	0	0	0	0	0	0	0	Department of Accounting, National Chengchi University	Not applicable	None	None	None

Note 1: One of the independent directors, Ho-Yi Liu, took office on June 15, 2023.

Note 2: President, Shuo-Tang Yeh, resigned on December 21, 2023, and succeeded by Tsai-Yun Yeh; Tsai-Yun Yeh resigned on April 16, 2024.

• 9 -

2. Major shareholders of corporate shareholders:

Major shareholders of corporate shareholders:	Major shareholders of corporate shareholders:
December 31,2023
Name of corporate shareholder	Major shareholders of corporate shareholders
Chien Shing Construction Co., Ltd.	Shuo-Tang Yeh (46.89%), Chien Shing Investment Co., Ltd.(33.91%), Pin Yeh Chen (19.11%), Hung-Ting Yeh (0.05%), Ya-Ching Yeh (0.04%)
Chien Shing Investment Co., Ltd.	Shin Shin Development Co., Ltd. (58.19%), Ya-Ching Yeh (27.32%), Shuo-Tang Yeh (5%), Pin-Yeh Chen (4%), Hung-Ting Yeh (3.06%), Tien-En Yeh(2.43%)

3. Key shareholders of major corporate shareholders

Key shareholders of major corporate shareholders	Key shareholders of major corporate shareholders
December 31,2023
Name of corporate	Major shareholders of corporate shareholders
Chien Shing Investment Co., Ltd.	Shin Shin Development Co., Ltd. (58.19%), Ya-Ching Yeh (27.32%), Shuo-Tang Yeh (5%), Pin-Yeh Chen (4%), Hung-Ting Yeh (3.06%), Tien-En Yeh (2.43%)
Shin Shin Development Co., Ltd.	Chien Shing Investment Co., Ltd. (74.92%), Hung-Ting Yeh (24.28%), Ya-Ching Yeh(0.4%), Shuo-Tang Yeh (0.4%)

• 10 -

4. Director's profile:

4. Director's profile:
Criteria Name (Note 1)	Professional qualification and experience	Independence	Number of concurrent roles as independent director in other public companies
Director - Shuo-Tang Yeh	Founder of Chien Shing, and engaging in steel industry for more than half of a century. Since the foundation of Chien Shing, he has served as the chairman, and very capable in terms of business judgement, knowledge to the steel industry, and management.	1. Company’s chairman 2. Chairman of affiliates (Chien Shing Construction, Chien Shing Investment, Shin Shin Development) 3. Holding more than 5% of stake, and the spouse is also on of the top ten major shareholders. 4. Not in any of the circumstance stated in Article 30 of The Company Act	0
Director, Su-Chu Wang	One of the female directors. Graduated from Department of International Trade, Providence University. Served as a secretary in Chian-Shuo Metal, and currently serving as the Accounting Manager of Jin-Won Chemical Engineering Corp. Her education and background bring her good international perspectives.	1. Director of affiliates (Chien Shing Investment and Shin Shin Development). 2. One of the top ten corporate shareholders, Chien Shing Investment Co., Ltd., appoints her as the representative. 3. Not in any of the circumstance stated in Article 30 of The Company Act 4. Elected to be the director as the representative of a corporate shareholder.	0
Director - Tsai-Yun Yeh	Supervisor of Chien Shing Construction and Director of Shin Shin Development.	1. Director of affiliates (Supervisor of Chien Shing Construction, Director of Shin Shin Development). 2. One of the top ten corporate shareholders, Chien Shing Construction Co., Ltd., appoints him as the representative. 3. Not in any of the circumstance stated in Article 30 of The Company Act 4. Elected to be the director as the representative of a corporate shareholder.	0
Director - Wei-Zheng Yang	Double major in Accounting and E-Commerce in Auckland University; served as Product Sales Representative in Asia for PRODAC N.V, and Product Manager in Nik Kang Metals Enterprise. Owning marketing experience in the steel industry, with educational background in accounting. Currently serving as the Person in Charge of Cheng Ying Stainless Trading Ltd.	1. I am Person in Charge of Cheng Ying Stainless Trading Ltd., which is not an affiliate of the Company, nor having any financial or business relationship with the Company 2. Not in any of the circumstance stated in Article 30 of The Company Act.	0
Independent Director-	One of the female directors.	1. I am the Chairman of Chun	0

• 11 -

Ying-Ying Yang	Graudated from Department of Mathematics, Soochow University, and worked in the securities sector for more than two decades. Very sensitive to figures, with experience in accounting, financial analysis and management. Currently serving as the Chairman of Chun Li Technical Co., Ltd.	Li Technical Co., Ltd., which is not an affiliate of the Company, nor having any financial or business relationship with the Company 2. Not in any of the circumstance stated in Article 30 of The Company Act.
Independent Director - Yi-Hung Chen	Graduated from Department of Civil Engineering, Chung Hua University; currently serving as the Vice Manager of a real-estate development company; used to serve as a deputy chief of a steel plant, with the industrial knowledge to the steel and real estate industries.	1. I am Deputy Manager of Sales Department of Hong Yun Fa Real Estate Development Co., Ltd., which is not an affiliate of the Company, nor having any financial or business relationship with the Company 2. Not in any of the circumstance stated in Article 30 of The Company Act.	0
Independent Director - Ho-Yi Liu	Graduated from the Accounting Department of National Chengchi University, and worked as a committee member of the Management Department of Hua Nan Securities Co., Ltd.; he has more than 21 years of experience in the securities industry, and is very sensitive for industry and economy, data analysis, and investment and wealth management.	1. Not in any of the circumstance stated in Article 30 of The Company Act	0

Note 1: President, Shuo-Tang Yeh, resigned on December 21, 2023, and succeeded by Tsai-Yun Yeh; Tsai-Yun Yeh resigned on April 16, 2024.

Independent directors, Ho-Yi Liu, took office on June 15, 2023.

• 12 -

(II) Background information of the President, vice presidents, assistant vice presidents, and heads of various departments and branches

departments and branches	departments and branches	departments and branches	departments and branches	departments and branches
													April 16,2024
Title	~~N~~ationality	Name	Gender	Date elected (appointed)	Current shareholding		Shareholding by spouse or dependents		Shares held by proxy		Main career (academic) backgrounds	Concurrent positions in other companies	Spouse or relatives of second degree or closer acting as managers			Remarks
					No. of shares	Shareholding Ratio	No. of shares	Shareholding Ratio	No. of shares	Shareholding Ratio			Title	Name	Relationship
President	The Republic of China	Shuo-Tang Yeh	Male	2014.10.01	20,046,540	7.13%	4,777,439	1.70%	0	0	Tainan Commercial Vocational Senior High School	Chien Shing Construction Co., Ltd. Company’s chairman Chien Shing Investment Co., Ltd. Company’s chairman Shin Shin Development Co., Ltd. Company’s chairman	None	None	None	The President and the Chairman served by the same person (Note 1)
President	The Republic of China	Tsai-Yun Yeh	Female	2023.12.21	1764	0%	0	0	0	0	Shihjia Junior High School	Representative of Corporate Director, Chien Shing Stainless Steel Co., Ltd. Chien Shing Construction Co., Ltd. - Supervisor Shin Shin Development Co., Ltd. - Director	None	None	None	Note 2
Corporate Governance Officer	The Republic of China	Wen-Ji Su	Male	2023.07.01	0	0	0	0	0	0	Hsing Kuo University of Management Department of Asset Management Science	None	None	None	None	Note 3
Head of Finance Department	The Republic of China	Ching-Wen Huang	Female	2022.11.07	0	0	0	0	0	0	Southern Taiwan University of Science and Technology EMBA Southern Taiwan University of Science and Technology	None	None	None	None
Acting Deputy Plant Manager of Cold Rolling Mill	The Republic of China	Chih-Ling Ho	Male	2021.09.01	0	0	0	0	0	0	National Tseng-Wen Agricultural and Industrial High School Department of Micro-computer Maintenance	None	None	None	None	Note 4
Senior Supervisor of Cold Rolling Mill	The Republic of China	Ming-Da Li	Male	2021.09.01	0	0	0	0	0	0	Department of Electrical Engineering, Southern Taiwan University of Science and Technology Optoelectronic Semiconductor Section	None	None	None	None

Note 1: In situations where the company's President or manager of the highest equivalent grade is the same person as or a spouse or first-degree relative of the Chairman, please explain the reasons, rationality and necessity of such an arrangement and any response measures taken, such as introduction of independent directors. Furthermore, disclose whether more than half of directors are involved in concurrent duty as employees or managers.

(1) The Chairman concurrently assumes the position of President for enhanced operational efficiency and better execution of decisions; meanwhile, the Company is training for suitable personnel to succeed the President role to ensure independence of the board of directors. The Chairman also communicates regularly with

• 13 -

directors about the Company's operations, plans, and strategies as a sound corporate governance practice. In the future, the Company plans to increase the number of independent director seats to better support the board of directors in various duties and supervisory functions.

• (2) Existing independent directors possess expert knowledge on finance and accounting, and are able to perform supervisory duties effectively.

• (3) No more than half of board members are involved in concurrent duty as employees or managers.

• (4) Independent directors are able to discuss important issues and present recommendations to the board of directors through involvement in various functional committees, and therefore contribute to corporate governance.

• Note 2: One of the Presidents, Shuo-Tang Yeh, resigned on December 21, 2023, and succeeded by Tsai-Yun Yeh; Tsai-Yun Yeh resigned on April 16, 2024.

• Note 3: Wen-Ji Su, one of the Corporate Governance Officers, was discharged from the position on February 10, 2023, and took the office on July 1, 2023.

• Note 4: One of the Acting Vice Plant Chiefs of the cold-rolling plant, Chih-Lin He, resigned on August 14, 2023.

• 14 -

(III) Remuneration to Directors, the President, and Vice Presidents

1. Remuneration to Directors (including Independent Directors):

Unit: NT$ thousand; %

Title	Name	Remuneration to directors	Remuneration to directors	Remuneration to directors	Remuneration to directors	Remuneration to directors	Remuneration to directors	Remuneration to directors	Remuneration to directors	Sum of A, B, C, and D as a % of the net income after tax	Sum of A, B, C, and D as a % of the net income after tax	Remuneration received for serving as an employee concurrently	Remuneration received for serving as an employee concurrently	Remuneration received for serving as an employee concurrently	Remuneration received for serving as an employee concurrently	Remuneration received for serving as an employee concurrently	Remuneration received for serving as an employee concurrently	Remuneration received for serving as an employee concurrently	Remuneration received for serving as an employee concurrently	The sum of A, B, C, D, E, F, and G as a percentage of net income after tax (%)	The sum of A, B, C, D, E, F, and G as a percentage of net income after tax (%)	Remuneratio n from investees other than subsidiaries or from the parent company
		Remuneration (A)		Severance and pension (B)		Remuneration to directors (C)		Fees for services rendered (D)				Remuneration, bonus, and allowance (E)		Severance and pension (F)		Employee remuneration (G)
		The Company	All companies included in the financial reports	The Company	All companies included in the financial reports	The Company	All companies included in the financial reports	The Company	All companies included in the financial reports	The Company	All companies included in the financial reports	The Company	All companies included in the financial reports	The Company	All companies included in the financial reports	The Company		All companies included in the financial reports		The Company	All compani es included in the financial reports
																Cash Amount	Stock Amount	Cash Amount	Stock Amount
Director	Shuo- Tang Yeh	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	0	None
Director	Tsai- Yun Yeh	108	108					120	120	0.1	0.1									0.1	0.1	None
Director	Wei- Zheng Yang	108	108	0	0	0	0	120	120	0.1	0.1	0	0	0	0	0	0	0	0	0.1	0.1	None
Director	Su- Chu Wang	108	108	0	0	0	0	120	120	0.1	0.1	0	0	0	0	0	0	0	0	0.1	0.1	None
Independent Director	Ying- Ying Yang	108	108	0	0	0	0	120	120	0.1	0.1	0	0	0	0	0	0	0	0	0.1	0.1	None
Independent Director	Yi-Hung Chen	108	108	0	0	0	0	120	120	0.1	0.1	0	0	0	0	0	0	0	0	0.1	0.1	None
Independent Director	Ho-Yi Liu	59	59	0	0	0	0	60	60	0.05	0.05	0	0	0	0	0	0	0	0	0.05	0.05	None
1. Please specify the independent director 2. Remuneration rece table: None.		policy, system, criteria and structure for the payment of remuneration to independent Directors, and the relevance of the amount of r s: The independent Directors of the Company do not receive performance bonuses or remuneration for directors and supervisors, exce ived by directors for providing service to any company included in the financial statements (e.g. consultancy service without the title														emuneration to the responsibilities, risks and time commitment of the pt for a fixed monthly transport allowance. of an employee) in the last year, except those disclosed in the above

Note: 1. Ho-Yi Liu was elected as an independent director on the annual general meeting held on June 15, 2023.

1. Pension (F) is the amount of pension contribution in accordance with the “Labor Pension Act” and the “Labor Standards Act” for 2023.

2. 15 -

2. Remuneration to presidents and vice presidents

Unit: NT$ thousand

Title	Name	Salary (A)	Salary (A)	Severance and pension (B)	Severance and pension (B)	Bonuses, special allowances, etc. (C)	Bonuses, special allowances, etc. (C)	Remuneration to employees (D)	Remuneration to employees (D)	Remuneration to employees (D)	Remuneration to employees (D)	The sum of A, B, C and D as a percentage of net income after tax (%)	The sum of A, B, C and D as a percentage of net income after tax (%)	Remuneration from investees other than subsidiaries or from the parent company
		The Company	All companies included in the financial reports	The Company	All companies included in the financial reports	The Company	All companies included in the financial reports	The Company		All companies included in the financial reports		The Company	All companies included in the financial reports
								Cash Amount	Stock Amount	Cash Amount	Stock Amount
President	Shuo-Tang Yeh	0	0	0	0	0	0	0	0	0	0	0	0	None
President	Tsai-Yun Yeh	0	0	0	0	0	0	0	0	0	0	0	0	None

Remarks: President, Shuo-Tang Yeh, resigned on December 21, 2023, and succeeded by Tsai-Yun Yeh; Tsai-Yun Yeh resigned on April 16, 2024.

3. Top 5 executives with the highest remuneration

Unit: NT$ thousand

Title	Name	Salary (A)	Salary (A)	Severance and pension (B)	Severance and pension (B)	Bonuses, special allowances, etc. (C)	Bonuses, special allowances, etc. (C)	Remuneration to employees (D)	Remuneration to employees (D)	Remuneration to employees (D)	Remuneration to employees (D)	The sum of A, B, C and D as a percentage of net income after tax (%)	The sum of A, B, C and D as a percentage of net income after tax (%)	Remuneration from investees other than subsidiaries or from the parent company
		The Company	All companies included in the financial reports	The Company	All companies included in the financial reports	The Company	All companies included in the financial reports	The Company		All companies included in the financial reports		The Company	All companies included in the financial reports
								Cash Amount	Stock Amount	Cash Amount	Stock Amount
Senior Supervisor of Cold Rolling Mill	Ming-Da Li	917	917	50	50	96	96	0	0	0	0	0.47	0.47	None
Head of Finance Department	Ching-Wen Huang	740	740	49	49	88	88	0	0	0	0	0.38	0.38	None
Acting Deputy Plant Manager of Cold Rolling Mill	Chih-Ling Ho	350	350	22	22	0	0	0	0	0	0	0.16	0.16	None
Corporate Governance Officer	Wen-Ji Su	210	210	0	0	60	60	0	0	0	0	0.12	0.12	None
Chairman	Shuo-Tang Yeh	0	0	0	0	0	0	0	0	0	0	0	0	None

Note: 1. Acting Vice Plant Chiefs of the cold-rolling plant, Chih-Lin He, resigned on August 14, 2023.

1. Wen-Ji Su, Corporate Governance Officer, was discharged from the position on February 10, 2023, and took the office again on July 1, 2023.

(IV) Separately compare and describe total remuneration, as a percentage of net income stated in the individual financial reports, during the past 2 fiscal years to directors, presidents, and vice presidents, and analyze and describe remuneration policies, standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure:

• 16 -

• Analysis of total remuneration paid to Directors, the President, and Vice Presidents of the Company as a percentage of net income after tax as stated in the individual financial reports

	2023	2022
Net income (loss) after income tax (NT$thousand)	228,218	780,657
Percentage of remuneration to directors	0.55%	0.22%
Percentage of remuneration to presidents and vice presidents	0.0%	0.04%

1. Analysis and description of remuneration policies, standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure:

2. 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.

III. The State of Corporate Governance:

(I) The state of operations of the Board of Directors’ meeting

During the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a total of 9 Board of Directors’ meetings were held (A); below is the attendance of directors/supervisors:

Title	Name	Actual Attendance (B)	Proxy Attendance	Percentage of actual attendance (%) (B/A)	Remarks
Chairman	Shuo-TangYeh	9	0	100
Director	Chien Shing Construction Co., Ltd. Representative: Tsai-Yun Yeh	9	0	100
Director	Wei-ZhengYang	7	2	77.78
Director	Chien Shing Investment Co., Ltd. Representative: Su-Chu Wang	9	0	100
Independent Director	Yi-Hung Chen	9	0	100
Independent Director	Ying-Ying Yang	9	0	100
Independent Director	Ho-Yi Liu	3	1	75	Newly appointed on June15,2023
Other information required: I. For Board of Directors meetings that meet any of the following descriptions, state the date, session, the discussed agenda, independent directors' opinions and how the company has responded to such opinions: (I) Matters listed in Article 14-3 of the Securities and Exchange Act: Date of Board Meeting Session Motion Content Opinions of independent directors The Company’s response to such opinions 2023.02.06 1st board meeting in 2023 1. Motion to sell the land at land lot 5-1, Magong Section, Madou District, Tainan City. 2. Motion to sell the land at land lot 491, Pitou Section, Madou District, Tainan City (including a two-story building on the ground that is not registered for preservation and the substation facility), pending the completion of an application for the 22.8KV feeder before sale. Without an opinion The motion is passed

• 17 -

			3. Motion for investment income/loss between December 28, 2022 and January 31, 2023 as the Board of Directors resolved a decision, on December 21, 2022, to delegate the Chairman to trade the TWSE/TPEx listed stocks held at his own discretion. 4. Motion for reallocation for investment in TWSE/TPEx listed stocks.
	2023.03.14	2nd board meeting in 2023	1. Motion for reallocation for investment in TWSE/TPEx listed stocks. 2. Motion for the Company's 2022 internal control system declaration. 3. Motion for the appointment and independence evaluation of the Company's CPAs.	Without an opinion	The motion is passed
	2023.05.03	4th board meeting in 2023	1. On March 28, 2023, the Company and the buyer, Haoneng Corp, Limited, signed a supplementary contract for the transaction at land lot 5, Magong Section, Madou District, Tainan City. 2. On March 28, 2023, the Company and the buyer, Haoneng Corp, Limited, signed a real estate trading contract for the land at land lot 491, Pitou Section, Madou District, Tainan City (excluding a two-story building on the ground that is not registered for preservation and the substation facility). 3. On March 28, 2023, the Company and the buyer, Haoneng Corp, Limited, signed an equipment transfer contract for the electric room, booster station and Chien Shing 69KV pipelines at the Madou Plant in the building on the land, at land lot 491, Pitou Section, Madou District, Tainan City, that is not registered for preservation, including the assets and right of use with respect to in-plant equipment and external conduits.	Without an opinion	The motion is passed
	2023.06.29	6th board meeting in 2023	1. Motion to appoint Mr. Wen-Ji Su as the Corporate Governance Officer.	Without an opinion	The motion is passed
	2023.08.08	7th board meeting in 2023	1. Motion for reallocation for investment in TWSE/TPEx listed stocks. 2. Motion to sell the stocks of the TWSE/TPEX listed company currently held.	Without an opinion	The motion is passed
	2023.11.09	8th board meeting in 2023	1. On the change of attesting CPAs of the Company. 2. Motion for reallocation for investment in TWSE/TPEx listed stocks. 3. Motion to sell the stocks of the TWSE/TPEX listed company currently held.	Without an opinion	The motion is passed
	2023.12.21	9th board meeting in 2023	1. Motion for the appointment of a president.	Without an opinion	The motion is passed
	2024.03.14	1st board meeting	1. Release of the Company’s Directors from non-compete clauses.	1. In accordance with the

• 18 -

(II) II.			in 2024	in 2024	2. Motion for reallocation for investment in TWSE/TPEx listed stocks. 3. Motion to sell the stocks of the TWSE/TPEX listed company currently held. 4. Motion for the Company's 2023 internal control system declaration. 5. Motion for the appointment and independence evaluation of the Company's attesting CPAs. 6. Motion for partial amendment of the "Procedures for Preparation, Verification, Announcement and Filing of Sustainability Report" of the Company.	2. Motion for reallocation for investment in TWSE/TPEx listed stocks. 3. Motion to sell the stocks of the TWSE/TPEX listed company currently held. 4. Motion for the Company's 2023 internal control system declaration. 5. Motion for the appointment and independence evaluation of the Company's attesting CPAs. 6. Motion for partial amendment of the "Procedures for Preparation, Verification, Announcement and Filing of Sustainability Report" of the Company.	2. Motion for reallocation for investment in TWSE/TPEx listed stocks. 3. Motion to sell the stocks of the TWSE/TPEX listed company currently held. 4. Motion for the Company's 2023 internal control system declaration. 5. Motion for the appointment and independence evaluation of the Company's attesting CPAs. 6. Motion for partial amendment of the "Procedures for Preparation, Verification, Announcement and Filing of Sustainability Report" of the Company.	principle on the avoidance of conflicts of interest, the independent Director Ying-Ying Yang and Director Wei-Zheng Yang recused themselves from the meeting. 2. Without an opinion
		Board of Directors		Name of director		Motion Content	Reason for recusal due to conflict of interest and participation in the voting process
		3rd board meeting in 2023		Shuo-Tang Yeh		Motion for the remuneration to the Chairman and President of the Company	The Chairman Shuo-Tang Yeh recused himself from the case and did not participate in the voting to avoid conflicts of interest.
		9th board meeting in 2023		Tsai-Yun Yeh		Motion for the appointment of a vice president.	The Director Tsai-Yun Yeh recused himself from the case and did not participate in the voting to avoid conflicts of interest.
		1st board meeting in 2024		Wei-Zheng Yang Ying-Ying Yang		Release of the Company’s Directors from non-compete clauses.	Director Wei-Zheng Yang and independent Director Ying-Ying Yang recused themselves from the case and did not participate in the votingto avoid conflicts of interest.

• 19 -

III. The company should disclose information including the evaluation cycle and period, evaluation scope, method and evaluation content of the board’s self (or peer) evaluation:

The Board of Directors Performance Evaluation Policy (hereinafter referred to as the “Policy”) was approved at the 4th board meeting held on November 6, 2019; the most recent amendment was approved by resolution of the Board of Directors at the board meeting held on August 11, 2020. The performance self-evaluation of the entire board, individual directors and all functional committees is conducted through questionnaires each year in December. The results of the evaluation are collected by the Company's Treasury Division and submitted to the next board meeting for report. These results are used as a basis for review and improvement which will also be disclosed on the Company's website.

website.
Evaluation cycle	Evaluation period	Evaluation scope	Evaluation method	Evaluation content
Once a year	2023.01.01–2023.12.31	Board of Directors	1. Internal self-evaluation of the Board of Directors 2. Self-evaluation of the directors	The five aspects and 25 indicators cover: Participation in the operation of the company; Improvement of the quality of the board of directors' decision making; Composition and structure of the board of directors; Election and continuing education of the directors; and Internal control.
Once a year	2023.01.01–2023.12.31	Performance evaluation of the board members	1. Internal self-evaluation of the Board of Directors 2. Self-evaluation of the directors	The six aspects and 20 indicators cover: Alignment of the goals and missions of the company; Awareness of the duties of a director; Participation in the operation of the company; Management of internal relationship and communication; The director's professionalism and continuing education; and Internal control.
Once a year	2023.01.01–2023.12.31	Performance evaluation of the Audit Committee	1. Self-evaluation of the directors	The 20 indicators in the five aspects include: Participation in the operation of the company; Awareness of the duties of the functional committee; Improvement of quality of decisions made by the functional committee; Makeup of the functional committee and election of its members; and Internal control.
Once a year	2023.01.01–2023.12.31	Performance evaluation of the Remuneration Committee	1. Self-evaluation of the directors	The 15 indicators in the five aspects include: Participation in the operation of the company; Awareness of the duties of the functional committee; Improvement of quality of decisions made by the functional committee; Makeup of the functional committee and election of its members; and Internal control.

• 20 -

Future improvement plans have been proposed targeting the repeated and relatively low scoring indicators based on the evaluation results:

1. The composition and structure of the Board: The Company emphasizes diversity in the composition of the Board of Directors. There are two female members in the Board to ensure gender equality. In the future, the directors will be selected from among those who have expertise in management, industry development, financial management, professional marketing, and risk control.

2. Directors’ professionalism and continuing education: The Company is advised to provide different types of continuing education courses outside of their professionalism (industry, law, finance, etc.) to directors.

3. Internal control: The Company understands the operating status, financial reports, and internal audit reports properly and takes follow-up actions. the management of the Company supervises the operating status all the way to achieve effective risk management.

4. Awareness of the duties of the functional committees: The functional committees regularly review the policies, systems, standards and structures of the performance evaluation and remuneration of directors and managerial officers, in order to submit timely, professional and objective recommendations to the Board of Directors for discussion as a reference for them to make decisions.

5. IV. Measures the objectives to strengthen the functionality of the Board (e.g. establish an audit committee, enhance information transparency) and execution status in the current year and the recent years: The Company has established the Audit Committee to strengthen corporate governance and management.

6. 21 -

(II) Information on the operation of the Audit Committee:

During the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a

total of 8 Audit Committee meetings were held (A); below is the attendance of independent directors:

Title	Name	Actual Attendance (B)	Proxy Attendance	Actual Attendance Rate (%) (B/A)	Remarks
Independent Director	Yi-Hung Chen	8	0	100
Independent Director	Ying-Ying Yang	8	0	100
Independent Director	Ho-Yi Liu	3	1	75	Newly appointed on June 15, 2023
Other information required: I. For Audit Committee meetings that meet any of the following descriptions, state the date and meeting of board of directors meeting held, the discussed topics, reservations or significant recommendations of the independent Directors, the Audit Committee's resolutions, and how the company has responded to the Audit Committee's opinions: (I) Matters listed in Article 14-5 of the Securities and Exchange Act: Audit Committee Meeting Date Session Motion Content Opinions of all Audit Committee members The Company’s response to such opinions 2023.02.06 1st board meeting in 2023 1. Motion to sell the land at land lot 5-1, Magong Section, Madou District, Tainan City. 2. Motion to sell the land at land lot 491, Pitou Section, Madou District, Tainan City (including a two-story building on the ground that is not registered for preservation and the substation facility), pending the completion of an application for the 22.8KV feeder before sale. 3. Motion for investment income/loss between December 28, 2022 and January 31, 2023 as the Board of Directors resolved a decision, on December 21, 2022, to delegate the Chairman to trade the TWSE/TPEx listed stocks held at his own discretion. 4. Motion for reallocation for investment in TWSE/TPEx listed stocks. Without an opinion The motion is passed 2023.03.14 2nd board meeting in 2023 1. Motion for the Company's 2022 annual financial report. 2. Motion for reallocation for investment in TWSE/TPEx listed stocks. 3. Motion for the Company's 2022 internal control system declaration. 4. Motion for the appointment and independence evaluation of the Company's CPAs. Without an opinion The motion is passed 2023.05.03 3rd board meeting in 2023 1. On March 28, 2023, the Company and the buyer, Haoneng Corp, Limited, signed a supplementary contract for the transaction at land lot 5, Magong Section, Madou District, Tainan City. 2. On March 28, 2023, the Company and the buyer, Haoneng Corp, Limited, signed a real estate trading contract for the land at land lot 491, Pitou Section, Madou District, Tainan City (excluding a two-story building on the ground that is Without an opinion The motion is passed

• 22 -

		not registered for preservation and the substation facility). 3. On March 28, 2023, the Company and the buyer, Haoneng Corp, Limited, signed an equipment transfer contract for the electric room, booster station and Chien Shing 69KV pipelines at the Madou Plant in the building on the land, at land lot 491, Pitou Section, Madou District, Tainan City, that is not registered for preservation, including the assets and right of use with respect to in-plant equipment and external conduits.
2023.05.11	4th board meeting in 2023	1. Motion for the Company's financial report for 2023 Q1.	Without an opinion	The motion is passed
2023.06.29	5th board meeting in 2023	1. Motion to appoint Mr. Wen-Ji Su as the Corporate Governance Officer.	Without an opinion	The motion is passed
2023.08.08	6th board meeting in 2023	1. Motion for the Company's financial report for 2023 Q2. 2. Motion for reallocation for investment in TWSE/TPEx listed stocks. 3. Motion to sell the stocks of the TWSE/TPEX listed company currently held.	Without an opinion	The motion is passed
2023.11.09	7th board meeting in 2023	1. On the change of attesting CPAs of the Company. 2. Motion for the Company's financial report for 2023 Q3. 3. Motion for reallocation for investment in TWSE/TPEx listed stocks. 4. Motion to sell the stocks of the TWSE/TPEX listed company currently held.	Without an opinion	The motion is passed
2024.03.14	1rd board meeting in 2024	1. Motion for the Company's 2023 annual financial report. 2. Motion for reallocation for investment in TWSE/TPEx listed stocks. 3. Motion to sell the stocks of the TWSE/TPEX listed company currently held. 4. Motion for the Company's 2022 internal control system declaration. 5. Motion for the appointment and independence evaluation of the Company's attesting CPAs. 6. Motion for partial amendment of the "Procedures for Preparation, Verification, Announcement and Filing of Sustainability Report" of the Company.	Without an opinion	The motion is passed

• 23 -

• statement have been submitted to the Audit Committee for review. The Head of Audit communicated with the Audit Committee and the communication between them was sound.

• The Company’s CPAs reports the results of financial statement audits or reviews as well as other communication matters required by applicable laws at the quarterly the Audit Committee meeting. The Company’s Audit Committee maintains good communication with CPAs.

• 24 -

(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies

Assessment	Actualgovernance	Actualgovernance	Actualgovernance	Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary description
I. Has the company established and disclosed its corporate governance principles based on "Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies?"		V	The Company has yet to establish such as policy.	One may be created in the future as needed to support the Company's growth and comply with regulations.
II. Shareholding structure and shareholders' interests (I) Has the Company implemented a set of internal procedures to handle shareholders' suggestions, queries, disputes and litigations? (II) Is the Company constantly informed of the identities of its major shareholders and the ultimate controller? (III) Has the Company established and implemented risk management practices and firewalls for companies it is affiliated with? (IV) Has the Company established internal policies that prevent insiders from trading securities against non-public information?	V V V	V	(I) The Company has dedicated personnel available to answer shareholders' queries and resolve issues. (II) The Company maintains good relationship with major shareholders, and is constantly updated on changes in shareholding of directors, managers, and major shareholders with more than 10% ownership interest. (III) The Company currently does not have any affiliate, hence not applicable. (IV) The Company has a set of "Insider Trading Prevention Procedures" in place that prohibits insiders from trading securities against non-public information.	(一) No material deviation is found. (二) No material deviation is found. (III) No material deviation is found. (IV) No material deviation is found.
III. Composition and responsibilities of the board of directors (I) Has the board of directors formulated diversity policies and their concreate management goals, and have them actually be implemented? (II) Apart from the Remuneration Committee and Audit Committee, has the Company assembled other functional committees at its own discretion? (III) Has the company established a set of policies and assessment tools for evaluating board performance, and conducted performance evaluation on a yearly basis? Are performance evaluation results reported to the board of directors and used as reference for compensation and nomination decisions? (IV) Are external auditors' independence assessed on a regular basis?	V V V	V	(I) The Company's board of directors currently consists of four directors and three independent directors; the board as a whole possesses extensive experience in business management. (II) Aside from the Remuneration Committee and Audit Committee, the Company has not assembled other functional committees. (III) The Company established "Board Performance Self-evaluation or Peer Evaluation Policy" with board of directors' approval on November 6, 2019; details of which have been disclosed on the Company's website. The Company also amended its Board of Directors Performance Evaluation Policy based on the latest regulations during the board of directors meeting held on August 11, 2020. Board members, Audit Committee members, and Remuneration Committee members conducted a self-evaluation in December, 2023; outcomes of which have been reported to the board of directors and disclosed on the Company's website to provide reference for future improvements. (IV) The Company not only follows Article 29 of Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies and evaluates independence of its financial statement auditors at least once a year, but also prepares "CPA Independence Assessment Reports" (Note) and requires financial statement auditors to issue "Statements of Independence" according to Article 47 of Certified Public Accountant Act and the "Integrity, Fairness, Objectivity and Independence" principles of Statement of CPA Professional Ethics No. 10. All CPA independence assessments are reviewed by the Audit Committee and approved by the board of directors.	(I) No material deviation is found. (II) The Company will adopt practices as deemed appropriate to support future growth and comply with regulations. (III) No material deviation is found. (IV) No material deviation is found.

• 25 -

Assessment	Actualgovernance	Actualgovernance	Actualgovernance	Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary description
IV. Has the TWSE/TPEX listed company allocated adequate number of competent corporate governance staff and appointed a corporate governance officer to oversee corporate governance affairs (including but not limited to providing directors/supervisors with the information needed to perform their duties, assisting directors/supervisors with compliance issues, convention of board meetings and shareholder meetings, and preparation of board/shareholder meetingminutes)?	V		The Company has a employed a corporate governance officer, who is specially responsible for providing the board of directors and Audit Committee with the information needed to perform duties, making arrangements for board of directors and shareholder meetings, updating and changing company registration, preparing board/shareholder meeting minutes, assisting directors with duties and ongoing education, assisting directors with compliance issues, and other corporate governance-related affairs outlined in the Articles of Incorporation or contracts.	No material deviation is found.
V. Has the Company provided proper communication channels and created dedicated sections on its website to address corporate social responsibility issues that are of significant concern to stakeholders (including but not limited to shareholders, employees, customers and suppliers)?	V		The Company has a spokesperson and acting spokesperson system in place to handle related issues. The Company has a stakeholders section created on its website to respond to issues that are of concern to stakeholders.	No material deviation is found.
VI. Does the Company engage a share transfer agency to handle shareholder meeting affairs?	V		The Company currently engages the Share Transfer Agency Department of Horizon Securities Corp. to handle matters relating to shareholder meetings.	No material deviation is found.
VII. Information disclosure (I) Has the Company established a website that discloses financial, business, and corporate governance-related information? (II) Has the Company adopted other means to disclose information (e.g. English website, assignment of dedicated personnel to collect and disclose corporate information, implementation of a spokesperson system, broadcasting of investor conferences via the company website)? (III) Does the Company publish and make official filing of annual financial report within two months after the end of an accounting period, and publish/file Q1, Q2 and Q3 financial reports along with monthly business performance before the required due dates?	V V	V	(I) The Company discloses financial, business, and corporate governance information on its website(http://www.csssc.com.tw). (II) 1. The Company has assigned dedicated personnel to gather and disclose information, and implements a spokesperson system. 2. Video recordings and briefing materials of investor seminars are placed on the investors section of the Company's website. (III) 1. The Company follows Article 36 of the Securities and Exchange Act by publishing and filing its annual financial reports within 3 months after the end of an accounting period. Q1, Q2, and Q3 financial reports are submitted to the Audit Committee and the board of directors for approval before the statutory due dates, and are published on Market Observation Post System on days they are presented to the board of directors. 2. Monthly business performance data is fully disclosed on the Company's website and on Market Observation Post Systembefore the statutory due dates.	(I) No material deviation is found. (II) No material deviation is found. (III) No material deviation is found.
VIII. Does the Company have other information that enables a better understanding of the Company's corporate governance practices (including but not limited to employee rights, employee care, investor relations, supplier relations, stakeholders' interests, continuing education of directors/supervisors, implementation of risk management policies and risk measurements, implementation of customer policy, and purchase of liability insurance for directors and supervisors)?	V		1. With respect to employees’ rights and employee care, the Company hires local workers where possible, encourages re-employment of women, provides local employees with employment benefits, and extends care to the underprivileged. An employee welfare committee has long been assembled to cater for employees’ welfare, and the committee allocates benefits regularly according to the Articles of Incorporation. 2. The Company has purchased director liability insurance according to rules from Taian Insurance. 3. The continuing education status of directors is declared, which can be inquired on the Market Observation Post System.	No material deviation is found.

• 26 -

Assessment	Actualgovernance	Actualgovernance	Actualgovernance	Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies
	Yes	No	Summary description
IX. Please explain the improvements made, based on the latest Corporate Governance Evaluation results published by Stock Exchange Corporate Governance Center, and propose enhancement measures for any issues that are yet to be rectified. (Not required if the Company is not one of the evaluated subjects): The Company is not subject to evaluation.

Note: CPA independence assessment report (listed as key issue)

• (1) The Company and the CPAs it engages hold no material financial stake in each other.

• (2) None of the CPAs serve as the Company's director, supervisor, manager, or any position that has material influence on audit activities, whether currently or at any time in the last two years. The Company is certain that they will not hold the abovementioned positions during future audits.

• (3) The CPAs, their spouses, and dependents did not serve as the Company's director, supervisor, manager, or hold any position that had direct and material influence on audit activities during the audit period.

• 27 -

(IV) The state of the composition, duties and the state of the Remuneration Committee:

1. Information on the members of the Remuneration Committee

				December 31, 2023
Criteria Name Position		Professional qualification and experience	Independence	No. of concurrent roles as remuneration committee member in other public companies
Independent Director Convener	Ying-Ying Yang	Ms. YAng Graduated from Department of Mathematics, Soochow University and worked in the securities sector for more than two decades. She is very sensitive to figures and has experience in accounting, financial analysis and management. She is currently serving as the Chairman of Chun Li Technical Co., Ltd.	She has been a director of Chien Shing Co. Ltd. since two years before Being elected. She is serving for Chun Li Technical Co., which is not an affiliate of the Company, nor having any financial or business relationship with the Company.	0
Independent Director	Yi-Hung Chen	Mr. Chen graduated from Department of Civil Engineering, Chung Hua University; he is currently serving as the Vice Manager of a real-estate development company and used to serve as a deputy chief of a steel plant. He has the industrial knowledge to the steel and real estate industries.	He has been a director of Chien Shing Co. Ltd. since two years before Being elected He is serving for Hong Yun Fa Real Estate Development Co., Ltd., which is not an affiliate of the Company, nor having any financial or business relationship with the Company.	0
Others	Tsung-Ming Chang	Mr. Chang graduated from Agronomy Department of Yuanlin Agricultural and Industrial Vocational High School and retired as a Plant Manager of Gang Jou Stainless Steel ENT Co., Ltd. He has rich experience in the steel industry.	He has been a retiree since two years before being elected.	0

• 28 -

2. Information on the operation of the Remuneration Committee

• (1) The Company's Remuneration Committee has 3 members.

• (2) The term of office of the current members: The term is from August 12, 2021 to August 11, 2024. During the most recent year, a total of 2 Remuneration Committee meetings were held (A); The qualifications and attendance of members are as follows:

Title	Name	Actual Attendance (B)	Proxy Attendance	Actual Attendance Rate (%) (B/A)	Remarks
Convener	Ying-Ying Yang	2	0	100
Member	Yi-Hung Chen	2	0	100
Member	Tsung-Ming Chang	2	0	100
Other information required: I. If the board of directors declines to adopt or modify a recommendation of the remuneration committee, the date, session, topic discussed and the resolution of the board meeting and handling of the resolution of the remuneration committee shall be specified (if the compensation package approved by the Board is better than the recommendation made by the committee, please specify the discrepancy and its reason): None. II. As to the resolution of the Remuneration Committee, if a member expresses any objection or reservation, either by recorded statement or in writing, the date, session and topic discussed of the committee meeting, all members’ opinions and handling of members’opinions shall be specified: None.

3. Information on nomination committee members and their operation

• I. Specification of the appointment qualifications and duties of the Company’s nomination committee members

• II. Professional qualifications and experience of the nomination committee members and their operation: None.

• 29 -

(V) The promotion of sustainable development and the deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor:

Item	Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and thereasons therefor
	Yes	No	Summary description
I. Has the Company established a governance structure to promote sustainable development and set up a dedicated (concurrent) unit to promote sustainable development, which is authorized by the Board of Directors to be handled by senior managerial officers, and is supervised by the Board of Directors?	V		In order to implement sustainable corporate management, the Company has established the Sustainable Development Task Force. The Chairman appoints a convener to hold the sustainable development meeting, and department heads, employees of all levels and external professional consultants are invited to participate in the meeting for discussion. The Sustainable Development Task Force consists of the chief convener, deputy convener, and department heads as task force leaders. An executive secretary is also appointed to assist the chief convener and deputy convener in the planning and implementation of sustainable development policies. In order to strengthen the integration of resources and improve the efficiency of sustainable development policy implementation, a regular meeting is convened at least once a year to report the implementation progress and results to the Chairman and the Board of Directors. A total of 3 sustainability meetings were held in 2023. The motion content includes (1) Establishment of a sustainable development team; (2) Discussion of sustainability goals from economic, social, and environmental aspects; (3) Decisions on major sustainability-related issues.	No material deviation is found.

• 30 -

Item	Operations (Note)	Operations (Note)	Operations (Note)	Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and thereasons therefor
	Yes	No	Summary description
II. Has the Company conducted risk assessment on environmental, social, and corporate governance issues that are relevant to its operations, and implemented risk management policies or strategies based on principles of materiality?	V		To ensure the Company’s sustainable and stable development, we are actively formulating relevant strategies to respond to the environmental, social, and governance issues and incorporating the spirit of social responsibility in our business administration philosophy, to place ethics before profits and provide more sincere services to clients, thereby fulfilling our corporate social responsibilities. Key Topics Risk Assessment Projects Risk management policies or strategies Environmental Environmental Impact and Management 1.We have eliminated old energy-consuming equipment, effectively reduced energy consumption in the process, and upgraded the wastewater treatment system to significantly reduce the emission of pollution and its impact on the environment. 2.Regular inventory of greenhouse gas emissions in accordance with ISO 14064-1 to examine the impact on company operations. Based on the results of the inventory, the Company will continue to implement carbon reduction measures. Social Occupational Safety Fire drills and industrial safety education training are held regularly every year. Cultivating employees’ self-safety management and emergency response capabilities. Corporate Legal The Company is managed on				No material deviation is found.
				Key Topics	Risk Assessment Projects	Risk management policies or strategies
				Environmental	Environmental Impact and Management	1.We have eliminated old energy-consuming equipment, effectively reduced energy consumption in the process, and upgraded the wastewater treatment system to significantly reduce the emission of pollution and its impact on the environment. 2.Regular inventory of greenhouse gas emissions in accordance with ISO 14064-1 to examine the impact on company operations. Based on the results of the inventory, the Company will continue to implement carbon reduction measures.
				Social	Occupational Safety	Fire drills and industrial safety education training are held regularly every year. Cultivating employees’ self-safety management and emergency response capabilities.
				Corporate	Legal	The Company is managed on

• 31 -

Item					Operations (Note)	Operations (Note)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and thereasons therefor
	Yes	No			Summary description
				Governance	Compliance	the principle of integrity, implements internal control mechanisms and strengthens employees’ awareness of compliance with laws and regulations.
					Strengthening of Directors’ Functions	We plan for Directors to participate in external corporate governance-related courses and provide protection for Directors by taking out Directors’ liability insurance.
					Stakeholder Communication	The Company has set up various communication channels such as spokespersons and investor mailboxes in the hope of establishing good communications with stakeholders.
III. Environmental issues (I) Has the Company set up an appropriate environmental management system as per its industrial characteristics? (II) Is the Company committed to improving energy efficiency and adopting recycled materials with low environmental impact?	V	V	(I) As part of the manufacturing industry, the Company is still striving to establish appropriate operational activities and internal office environment management to achieve the goal of energy saving and sustainable development. (II) The Company is in the traditional manufacturing industry and mainly produces stainless steel coils. The stainless steel waste generated during the process is collected and processed by qualified downstream businesses. We are also actively promoting energy saving measures, eliminating old energy-consuming equipment and replacing it with energy-efficient equipment, reusing materials that can be recycled in manufacturing as much as possible, and actively formulating manufacturing processes to reduce pollution and optimize waste reduction, as well as renewing the wastewater treatment system to reduce environmental pollution.				(I) The Sustainable Development Task Force will study the establishment of an environmental management system in the future and follow all legal requirements. (II) No material deviation is found.

• 32 -

Item			Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and thereasons therefor
	Yes	No	Summary description
(III) Has the Company assessed its current and future potential risks and opportunities of climate change and taken countermeasures against climate-related issues? (IV) Has the Company counted the greenhouse gas emissions, water consumption, and total weight of waste over the past two years and formulated policies on greenhouse gas reduction, water consumption reduction, or other waste management?	V V		(III) In light of the enormous impact of climate change, the Company continues to promote energy-saving and carbon-reduction policies: Electric scooters were used as means of transportation on site. replacing energy-saving light bulbs, encouraging employees to use environmentally friendly tableware and printing on double-sided or recycled paper, and planting trees in the Company’s vacant land to expand the green area coverage. In addition, we are committed to promoting energy conservation and carbon reduction through daily education and training to raise employees’ awareness of environmental protection, energy conservation, and waste recycling. We ask employees to turn off lights when necessary, put waste paper to good use, and adopt electronic devices to save energy. (IV) We are committed to promoting energy conservation and carbon reduction to fulfill our responsibilities as a global citizen and corporate social responsibilities. We will continue to implement energy conservation and carbon reduction and greenhouse gas reduction policies in the future. Water consumption, total weight of waste, and electricity consumption for the most recent two years: 1. Water consumption for the most recent two years: Year Total water consumption (m3) 2022 30,858 2023 29,886 2. Total waste for the most recent 2 years: Year Non-hazardous waste (tons) 2022 1213.49 2023 804.45			(III) No material deviation is found. (IV) No material deviation is found.
			2.
				Year	Total water consumption (m3)
				2022	30,858
				2023	29,886
				Year 2022 2023
					Non-hazardous waste (tons)
					1213.49
					804.45

• 33 -

Item			Operations (Note)	Operations (Note)	Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and thereasons therefor
	Yes	No	Summary description
			(No hazardous waste is produced by the Company，Non-hazardous waste includes: Category D - general industrial waste and Category R - waste that has been announced for reuse. In 2023, Category D: 481.19 tons, Category R: 323.26 tons; total of Category D and Category R: 804.45 tons) In 2021, the Company has updated its recycling system to recover and recycle hydrofluoric acid from our manufacturing processes, resulting in a significant reduction of over 58% in the amount of waste generated. 3. Carbon emissions from electricity consumption for the most recent two years: Year Emissions (tons CO2e/year) 2022 5,103 2023 4,343
				Year		Emissions (tons CO2e/year)
				2022		5,103
				2023		4,343
IV. Social issues (I) Does the Company formulate relevant management policies and procedures in accordance with applicable laws and the International Bill of Human Rights?	V		(I) The Company shall comply with the Labor Standards Act and other relevant laws and regulations, and shall establish relevant complaint channels to protect the rights and interests of employees. Based on respect for internationally recognized basic human rights, the Company strictly abides by Article 5 of the Employment Service Act and assists employees in maintaining physical and mental health and work-life balance, provides a safe and healthy working environment, and prohibits forced overtime. The Company also complies with laws and regulations when recruiting employees, never hiring child labor, and does not discriminate in terms of salaries, benefits, evaluations, and promotion opportunities based on gender, ethnicity, or marriage and childbirth. The Company’s human rights management policy and implementation plan are as follows: Human rights management policy Implementation plan 1. Helping employees *Employees are given a					(I) No material deviation is found.
			Human rights management policy				Implementation plan
			1. Helping employees				*Employees are given a

• 34 -

Item			Operations (Note)	Operations (Note)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and thereasons therefor
	Yes	No	Summary description
(II) Has the Company developed and implemented reasonable employee welfare measures (including compensation, leave of absence and other benefits), and appropriately reflected business performance or outcome in employees’ compensations?	V		maintain physical and psychological health and work-life balance 2. Providing a safe and healthy work environment 3. Prohibiting forced overtime work and complying with government labor laws and regulations	one-hour lunch break with sufficient time to rest. Onsite nurses regularly track employees’ physical conditions. The onsite environment is cleaned regularly, and relevant machinery, equipment, and firefighting equipment are regularly maintained and inspected; hazardous areas are marked. *A leave policy is implemented to motivate employees to focus on work-life balance.	(II) No material deviation is found.

• 35 -

Item	Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and thereasons therefor
	Yes	No	Summary description
(III) Does the Company provide employees with a safe and healthy work environment and offer safety and health education to employees regularly?	V		opportunities for the same work for men and women. In 2023, female employees accounted for an average of 20% of all employees. 4. Regarding remuneration, the Company increases individual salaries according to the salary level in the market, economic trends, and individual performance, to maintain the competitiveness of the remuneration we provide. In 2023, there is no annual salary adjustment for Company's managerial positions and non-managerial positions. (III) The Company has set up an Work Safety Office and implemented "Work Environment and Safety Management Procedures" and worker safety and health rules to outline requirements such as cleanliness and safety of the operating environment, safety of production machinery operations, and regular safety and health training. Employee safety and health training is held on a regular basis. The Company maintains and supervises the environment of plants and offices in accordance with applicable labor safety and health laws and regulations and organizes employee health checks on a regular basis. We provide employees with a safe and healthy workplace. Our offices are equipped with a central air-conditioning system. We also have industrial fans in place for the places where the temperature is higher. We have sufficient lighting equipment, emergency escape routes and exits, and firefighting equipment in place. We regularly hold fire exercises, clean work environment, and test water quality. We remind employees to perform daily inspections of larger machines and equipment to ensure their safety. In order to protect workers from harmful substances in the workplace and provide workers with a healthy and comfortable working environment, operating environment monitoring is implemented every year to understand the actualexposure status ofworkers.	(III) No material deviation is found.

• 36 -

Item	Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and thereasons therefor
	Yes	No	Summary description
(IV) Has the Company established an effective career development training program for employees? (V) Does the Company comply with applicable laws and international standards regarding issues, such as customer health and safety, customer privacy, as well as marketing and labelling of products and services? Has it formulated relevant policies and complaint procedures to protect consumers’ or customers’ rights and interest? (VI) Has the Company formulated a supplier management policy, required suppliers to follow applicable regulations on issues, such as environmental protection, occupational safety and health, or labor rights? The implementationthereof?	V V	V	Occupational injury in 2023: 1, number of employees: 1, accounting for 1.47% of the total number of employees. Relevant improvement measures: Strengthen the promotion of personnel must use safety protection equipment when working, and prohibit dangerous behavior; furthermore, strongly demand the personnel that they confirm the safety status of the equipment before working, and be sure to observe safe working methods at work. There was no fire incident in 2023. (IV) In addition to the training for new employees, the Company organizes internal training courses and assigns employees to undergo external training from time to time every year to help employees develop professional character and competitive advantage. We are also committed to establishing a comprehensive benefit policy and planning diversified education and training courses to improve employees’ skill sets. (V) The Company has established the "Personal Information Management Protection Policy" and the "Customer Complaint Policy" to protect the rights of customers. 1. When providing sales services, we keep customers’ personal information confidential according to laws. 2. There is a customer complaint period for all products sold according to the contracts signed. Customers can report their problems by phone or email or through the Company’s website, and relevant personnel will respond to their questions or complaints and handle various applications. (VI) The Company has not established a supplier management policy.	(IV) No material deviation is found. (V) No material deviation is found. (VI) One may be created in the future as needed to support the Company’s growth and comply with regulations.

• 37 -

Item	Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and thereasons therefor
	Yes	No	Summary description
V. Has the Company referred to the internationally accepted reporting standards or guidelines to prepare reports, such as ESG reports that discloses the Company’s non-financial information? Are the abovementioned reports supported by assurance or opinion of a third-party certifier?	V		The Company has published the Sustainability Report in 2023 with reference to the International Standards of Preparation of Reports and disclosed it on the Company’s website (http://www.rssc.com.tw/tw/2022ESG_report.pdf). The report has not yet been certified by a third-party verification unit. In the future, it will be prepared in accordance with the Company’s developmentneeds andlaws andregulations.	No material deviation is found.
VI. Where the Company has formulated its own sustainable development code in accordance with the Sustainable Development Best Practice Principles, please specified the differences between the implementation and the principles: Theregulations ofthe Company’s SustainableDevelopmentBestPracticePrinciples are underconsideration.
VII. Other material informationtohelp understand the efforts to promote sustainable development: None.

• 38 -

(VI) Enforcement of business integrity, and deviation and causes of deviation from Ethical Corporate Management Best Practice Principles for TWSE/TPEX-Listed Companies

Item	Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
I. Formulation of ethical management policies and plans (I) Has the Company formulated an ethical management policy approved by the board of directors and disclosed the policy and practice of ethical management in its regulations and public documents? Are the board of directors and the senior management committed to actively implementing the policy? (II) Has the Company established an assessment mechanism for the risk of unethical conduct to regularly analyze and evaluate the business activities with a higher risk of unethical conduct within the business scope and formulated a prevention plan accordingly, at least covering the prevention measures for the acts under each subparagraph under Article 7, paragraph 2 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies? (III) Has the Company clearly specified operating procedures, guidelines for conduct, and a violation punishment and complaint system in the unethical conduct prevention plan and duly implemented them? Does the Company regularlyreview andrevise said plan?	V V V		(I) The Company formulated the Ethical Corporate Management Best Practice Principles and the Procedures for Ethical Management with reference to the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies in 2021 and implemented them after they were approved by the Board of Directors. The above regulations clearly define the Company's ethical corporate management policies and approaches, which are adopted in both internal management and external business activities. (II) The Company has established the "Procedures for Ethical Management and Guidelines for Conduct" to clearly regulate and prohibit unethical conducts. The personnel department regularly analyzes and assesses the risks of unethical conducts within the business scope, and assists the Board of Directors and the management in reviewing and assessing the implementation of ethical corporate management Whether the established preventive measures are operating effectively. (III) The Company has established the "Procedures for Ethical Management and Guidelines for Conduct," with a clear disciplinary and grievance system in place to specify the matters that the Company's personnel should be aware of when conducting business, and areregularlyreviewedfor revision.	(I) No material deviation is found. (II) No material deviation is found. (III) No material deviation is found.
II. Enforcement of business integrity (I) Does the Company evaluate each counterparty’s records for ethics? Has the Company specified the terms of ethical conduct in each contract signed with each counterparty?	V		(I) Before establishing a business relationship with another party, the Company shall evaluate the legality of the counterparty, the ethical corporate management policy, and whether there is any record of unethical practices. Any personnel of this Corporation, when engaging in commercial activities, shall make a statement to the trading counterparty about this Corporation's ethical managementpolicyand related rules,and	(I) No material deviation is found.

• 39 -

Item	Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
(II) Has the Company established a dedicated (concurrent) unit under the board of directors to conduct ethical corporate management, regularly (at least once a year) report to the board of directors on its ethical management policies and prevention plans for unethical conduct, and supervise the implementation? (III) Has the Company formulated policies to prevent conflicts of interest, provided appropriate methods for stating one’s conflicts of interest, and implemented them appropriately? (IV) Has the Company has established an effective accounting system and an internal control system for the implementation of ethical management and assigned the internal audit unit to formulate relevant audit plans based on the assessment results of the risk of unethical conduct and audit the compliance with the unethical conduct prevention plan accordingly or commissioned a CPA to perform such audits? (V) Does the Company regularly hold internal and external educationand training onethical management?	V V V V		shall clearly refuse to provide, promise, request, or accept, directly or indirectly, any improper benefit in whatever form or name. The personnel of the Company shall refrain from engaging in business transactions with counterparties involved in unethical practices. (II) The Company shall designate the personnel unit as the dedicated unit, and shall regularly report (at least once a year) to the Board of Directors on the implementation of the ethical corporate management policy and the plans to prevent unethical conducts, and the supervision and implementation. (III) When a director, managerial officer or other stakeholder of this Corporation attending or present at a board meeting, or the juristic person represented thereby, has a stake in a matter under discussion in the meeting , that director, supervisor, officer or stakeholder shall state the important aspects of the stake in the meeting and, where there is a likelihood that the interests of this Corporation would be prejudiced, may not participate in the discussion or vote on that proposal, shall recuse himself or herself from any discussion and voting, and may not exercise voting rights as proxy on behalf of another director. The directors shall practice self-discipline and must not support one another in improper dealings. (IV) The Company shall establish effective accounting systems and internal control systems for business activities possibly at a higher risk of being involved in an unethical conduct, and conduct reviews regularly so as to ensure that the design and enforcement of the systems are showing results. The internal audit unit of the Company shall, based on the results of assessment of the risk of involvement in unethical conduct, devise relevant audit plans? including auditees, audit scope, audit items, audit frequency, etc., and examine accordingly the compliance with the prevention programs. The internal audit unit may engage professionals to assist if necessary. (V) The responsible unit of this Corporation shall organize internal awareness sessions periodically and arrangeforthe chairperson,	(II) No material deviation is found. (III) No material deviation is found. (IV) No material deviation is found. (V) No material deviation is found.

• 40 -

Item	Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
			general manager, or senior management to communicate the importance of ethics to its directors, employees, and mandataries.
III. Whistleblowing system (I) Has the Company formulated a specific whistleblowing and reward system, established a convenient whistleblowing method, and assigned appropriate personnel to handle the party accused? (II) Has the Company formulated standard operating procedures for investigation of reported cases, the follow-up measures to be taken after the investigation is completed, and a confidentiality mechanism? (III) Does the Company take measures to protect whistleblowers from being mistreated due to their whistleblowing behavior?	V V V		(I) For the establishment of an honest and transparent enterprise, the Company has established and announced an independent whistle-blowing mailbox: su3167@msa.csssc.com.tw Provided for internal and external personnel to report crime, fraud, or illegal activities and has designated dedicated personnel to handle reports on reports. (II) The Company has not yet established a procedure for handling whistle-blowing cases. When a whistle-blowing case occurs in the Company, the dedicated unit that handles the whistle-blowing will immediately start an investigation where necessary, with the assistance of the legal compliance or other related department. Personnel of this Corporation shall represent in writing they will keep the whistleblowers' identity and contents of information confidential. This Corporation also undertakes to protect the whistleblowers from improper treatment due to their whistleblowing. (III) Personnel of this Corporation handling whistle-blowing matters shall represent in writing they will keep the whistleblowers' identity and contents of information confidential. This Corporation also undertakes to protect the whistleblowers from improper treatment due to their whistleblowing. In 2023, the dedicated unit of the Company did not receive any internal or external reports of dishonest behavior or any improper behavior of corruption and violation of business ethics.	(I) No material deviation is found. (II) No material deviation is found. (III) No material deviation is found.
IV. Enhanced information disclosure Has the Company disclosed its integrity principles and progress ontoits website andMOPS?	V		The Company discloses the Ethical Corporate Management Best Practice Principles on the Company's website and MOPS.	No material deviation is found.
V.Ifthe Companyhasformulatedits ownCorporate GovernanceBestPracticePrinciples as perthe Corporate GovernanceBestPracticePrinciplesfor TWSE/TPEx Listed

• 41 -

Item	Operations (Note)	Operations (Note)	Operations (Note)	Deviation from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Brief description
Companies, please specify the difference between its operationand the principles: None.
VI. Other information relevant to understanding the Company's businessintegrity (e.g.reviews ofbusinessintegrity principles): None.

• (VII) Methods of inquiry for the Company's corporate governance principles and policies, if any: Disclosures have been made on the Company’s website and corporate governance section of MOPS.

(VIII) Other important information material to the understanding of corporate governance within the Company: None.

• 42 -

(IX) Climate-Related Information of TWSE/TPEx Listed Company

Climate-related information implementation

Climate-related information implementation
Item	Implementation
1. Describe the board of directors' and management's oversight and governance of climate-related risks and opportunities.	The Chairman of the Company appoints a five-member sustainable development team, with the President as the general convener. At least one meeting is convened per year to discuss the Company's sustainable development goals from the economic, social and environmental aspects, and regarding climate change risks, energy efficiency, and environmental impacts involved that may be generated from the Company's operations, the annual sustainability reports are prepared every year, as well as reported to the Board of Directors
2. Describe how the identified climate risks and opportunities affect the business, strategy, and finances of the business (short, medium, and long term).	The risks and opportunities identified by the Company are as follows: ▪Transition risks: In order to reduce carbon emissions, the thermal insulation performance of the main equipment in the process - heating furnaces is improved, and the scrubbers were renovated to introduce air pollution control systems, thereby increasing capital expenditures and operating costs. ▪Physical risks: Power rationing and water shortages caused by abnormal weather, such as high temperatures and droughts, further increase the operating costs such as water purchase, and reduce revenues due to water shortages. ▪Opportunity: The consumption of natural gas can be effectively reduced by improving the thermal insulation performance of the heating furnaces, and the scrubbers are renovated to effectively control air pollution emissions, while improving the Company's image.
3. Describe the financial impact of extreme weather events and transformative actions.	Impacts of extreme weather on the Company's operations: 1. The extreme weather increases the risk of water shortage, which in turn affects the operation of the factory's production processes. Responding strategy: By flexibly deploying water resources, the water storage capacity of the raw water pools and industrial water pools in the factory is maximized, to reduce the impact of water shortage or reduced pressure on the factory's production process. Goal: Continue to maintain the raw water pools and industrial water pools in the factory, to reduce the risk of shutdown resulted from water shortage. The impact of transition actions on the Company’s finance: The Company continues to strengthen the maintenance of raw water pools and industrial water pools in the factory, which is expected to increase operating costs. 2. Extreme weather may cause raw material supply issues that may disrupt the supply chain or affect production.

• 43 -

Item	Implementation
	Responding strategy: Considering the transportation risks in the supply chain, the bases less affected by climate factors are selected as the transportation hubs for raw material transportation. Goal: Maintain the volume, capacity and stability of raw material supply, while ensuring the balance of supply chain transportation and transportation costs. The impact of the transition actions on the Company’s finance: The selection of raw material transportation hubs is expected to increase operating costs.
4. Describe how climate risk identification, assessment, and management processes are integrated into the overall risk management system.	The Company constantly reviews related issues regarding the impacts and risks of climate change and makes appropriate adjustments to risk management policies responding to the short-, mid-, and long-term risk changes. The relevant operations are promoted by the sustainable development teams at the operation level by sub-teams, and the Chairman is in charge of supervising and regularly reviewing the implementation plans and implementation of the Committee, coordinating the promotions of the Company's various sustainable development matters, such as corporate social responsibility, energy saving and carbon reduction, information security safeguard, and climate change responses, among other goals, while formulating relevant management guidelines and concrete promotion plans. For the operating activities related to the Company’s business scope, a check-and-balance mechanism for mutual supervision is established, annual work-related standard operating procedures and conduct guidelines are formulated, and annual education and training are planned; meanwhile, the relevant strategies and plans promoted by the Company are completed by all employees of each department. Although climate change may have negative financial impacts, it is also possible to find opportunities for positive impacts from the trends of climate change.
5. If scenario analysis is used to assess resilience to climate change risks, the scenarios, parameters, assumptions, analysis factors and major financial impacts used should be described.	Climate change scenario analysis has not been conducted.
6. If there is a transition plan for managing climate-related risks, describe the content of the plan, and the indicators and targets used to identify and manage physical risks and transition risks.	The Company's sustainable development team and the management actively evaluate various transition plans and carbon reduction measures, and will officially explain when there are specific goals.
7. If internal carbon pricing is used as a planning tool, the basis for setting the price should be stated.	Internal carbon pricing has not been implemented.

• 44 -

Item	Implementation
8. If climate-related targets have been set, the activities covered, the scope of greenhouse gas emissions, the planning horizon, and the progress achieved each year should be specified. If carbon credits or renewable energy certificates (RECs) are used to achieve relevant targets, the source and quantity of carbon credits or RECs to be offset should be specified.	I. Goals(2024~2026) 1. Conduct the organizational greenhouse gas inventory (including Scope 1 and Scope 2) according to the 14064-1 standards. 2. Reduce carbon emissions by 0.2% - 0.5% year by year. 3. Phase-out the old equipment for update, and the improvement plan for operating procedures. II. Implementation plan: 1. Conduct the organizational greenhouse gas inventory, and collect statistics on the carbon emissions from the organization. 2. Inspect internal equipment and propose improvement plans.
9. The greenhouse gas inventory and assurance status are stated in Table (I).	The Company has completed the greenhouse gas inventory in 2023 and planned pursuant to the Sustainable Development Roadmap for TWSE/TPEx Listed Companies. It is expected to pass the third-party verification in 2024.
10. GHG Reduction Targets, Strategies and Specific Action Plans.	Not applicable to the Company at present.

• 45 -

Table (I) Greenhouse Gas Inventory and Assurance Status

Table (I) Greenhouse Gas Inventory and Assurance Status	Table (I) Greenhouse Gas Inventory and Assurance Status
Basic information of the company □ Capital of NT$10 billion or more, iron and steel industry, or cement □ Capital of NT$5 billion or more but less than NT$10 billion  Capitalof less thanNT$5 billion		industry	Minimum required disclosure under the Sustainable Development Roadmap for TWSE/TPEx Listed Companies: Inventory for parent company only □ Inventory for all consolidated entities Assuranceforparent company only□ Assuranceforallconsolidated entities
Scope 1	Total emissions (tons CO2e)	Intensity (tons CO2e/NT$ thousand)		Assurance body	Description of assurance status
Parent company
Subsidiary
(Note 1)
Total
Scope 2	Total emissions (tons CO2e)	Intensity (tons CO2e/NT$ thousand)		Assurance body	Description of assurance status
Parent company
Subsidiary
(Note 1)
Total
Scope 3	No disclosure

Note: As the Company did not obtain the full greenhouse gas assurance opinion by the date of publication of the annual report, the full assurance information will be disclosed in the sustainability report and in the annual report of the next year.

• 46 -

(X) Implementation of the Internal Control System 1. Internal Control Statement

==> picture [476 x 453] intentionally omitted <==

----- Start of picture text -----

Chien Shing Stainless Steel Co., Ltd.
Internal Control System Statement
Date: March 14, 2024
Based on the findings of a self-assessment, the Company states the following with regard to its internal control
system during 2023:
I. We understand it is the responsibility of the Company’s management to have internal control system
established, enforced, and maintained. The purpose is to provide reasonable assurance on the achievement of
operating effectiveness and efficiency (including profits, performance, and assets safeguarding), reporting
matters with reliability, timeliness, and transparency, and compliance with the relevant law and regulations.
II. Internal control policies are prone to limitations. No matter how robustly designed, effective internal control
policies merely provide reasonable assurance to the achievements of the three goals above. Furthermore,
environmental, and situational changes may affect the effectiveness of internal control policies. Nevertheless,
the internal control system of the Company contains self-monitoring mechanisms, and corrective action is
taken whenever a deficiency is identified.
III. The Company has based on the criteria of the internal control system effectiveness in the “Regulations
Governing Establishment of Internal Control Systems by Public Companies” (hereinafter referred to as the
“Regulations”) to determine the effectiveness of the internal control system design and implementation. The
criteria introduced by “The Governing Principles” consisted of five major elements, each representing a
different stage of internal control: 1. Control environment; 2. Risk evaluation and response; 3. Procedural
control; 4. Information and communication; and 5. Supervision. Each element further contains several items.
Please refer to the “Governing Rules” for the details of the said items.
IV. The Company has adopted the above judgment items of internal control system to assess the design and
operating effectiveness of the internal control system.
V. Based on the findings of the evaluation, the Company believes that, as of December 31, 2023, its internal
control system (including supervision and management of subsidiaries) as well as monitoring the
achievement of its objectives concerning operational effectiveness and efficiency; reliability, timeliness and
transparency of the reporting and compliance with applicable laws and regulations etc. were effective in
design and operation, and reasonably assured the achievement of the above-mentioned objectives.
VI. The Declaration of Internal Control is the content of our annual report and prospectus for the information of
the public. For any forgery and concealment of the aforementioned information to the public, we will be held
responsible by law in accordance with Article 20, Article 32, Article 171 and Article 174 of the Securities
and Exchange Act.
VII. The declaration has been passed by board in the meeting held on March 14, 2024, with all seven attending
directors affirming the content of the declaration.
Chien Shing Stainless Steel Co., Ltd.
Chairman: Shuo-Tang Yeh Signature
----- End of picture text -----

1. If an accountant was entrusted to carry out the review of the internal control system, the accountant’s audit report shall be disclosed: None.

2. 47 -

3. (XI) If there has been any legal penalty against the company or its internal personnel, or any disciplinary penalty by the company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report: None.

4. (XII) Material resolutions of a shareholders meeting or a Board of Directors meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report:

1. Material resolutions and their implementation of a shareholders meeting:	1. Material resolutions and their implementation of a shareholders meeting:	1. Material resolutions and their implementation of a shareholders meeting:	1. Material resolutions and their implementation of a shareholders meeting:
Date	Session	Material resolution	Implementation
2023.06.15	Shareholders' Meeting	1. Passed the motion for the Company's 2022 business report and financial report. 2. Passed the motion for the Company’s 2022 loss allocation. 3. Motion of by-electing one seat of independence director.	Completed Completed Completed

2. Material resolutions of the Board of Directors:

Date	Session	Material resolution
2023.02.06	1st board meeting	1. Passed the motion to sell the land at land lot 5-1, Magong Section, Madou District, Tainan City. 2. Passed the motion to sell the land at land lot 491, Pitou Section, Madou District, Tainan City (including a two-story building on the ground that is not registered for preservation and the substation facility), pending the completion of an application for the 22.8KV feeder before sale. 3. Passed the motion for investment income/loss between December 28, 2022 and January 31, 2023 as the Board of Directors resolved a decision, on December 21, 2022, to delegate the Chairman to trade the TWSE/TPEx listed stocks held at his own discretion. 4. Passed the motion for reallocation for investment in TWSE/TPEx listed stocks.
2023.03.14	2nd board meeting	1. Passed the motion for the Company's 2022 business report and financial report. 2. Passed the motion for the Company’s 2022 loss allocation. 3. Passed the motion for the Company’s application for a short-term secured loan of NT$200 million to the Tainan Branch of the Union Bank of Taiwan, which has been approved by the bank; delegated the Board of Directors to handle all transactions with the bank at his own discretion. 4. Passed the motion for the Company’s application for issuance of usance letters of credit of NT$500 million for the purchase of raw materials to the Tainan Branch of the Union Bank of Taiwan, which has been approved by the bank; delegated the Board of Directors to handle all transactions with the bank at his own discretion. 5. Passed the motion for reallocation for investment in TWSE/TPEx listed stocks. 6. Passed the motion for a by-election of one independent director and the nomination acceptance matters. 7. Passed the motion to set the date, location, method, and relevant affairs for the Company's 2023 annual general meeting. 8. Passed the motion for the proposal period and location for the Company's 2023 annual general meeting to accept proposals from shareholders holding 1% or more of the shares. 9. Passed the motion for the Company's 2022 internal control system statement. 10. Passed the motion for the appointment and independence evaluation of the Company's CPAs.
2023.04.13	3rd board meeting	1. The motion of the nomination for the by-election of two independence director seats and the acceptance-related matters. 2. Motion to set the date, location, method, and relevant affairs for the Company's 2023 annual general meeting. 3. Motion for the remuneration to the Chairman and President of the Company. 4. Motion for review of salary and remuneration to the Company’s directors, Audit Committee members and managerial officers.
2023.05.03	4th board	1. On March 28, 2023, the Company and the buyer, Haoneng Corp, Limited, signed a supplementarycontract for the transaction at land lot 5,MagongSection,Madou

• 48 -

	meeting	District, Tainan City. 2. On March 28, 2023, the Company and the buyer, Haoneng Corp, Limited, signed a real estate trading contract for the land at land lot 491, Pitou Section, Madou District, Tainan City (excluding a two-story building on the ground that is not registered for preservation and the substation facility). 3. On March 28, 2023, the Company and the buyer, Haoneng Corp, Limited, signed an equipment transfer contract for the electric room, booster station and Chien Shing 69KV pipelines at the Madou Plant in the building on the land, at land lot 491, Pitou Section, Madou District, Tainan City, that is not registered for preservation, including the assets and right of use with respect to in-plant equipment and external conduits. 4. Motion for the list of independent director candidates nominated by the Company’s board of directors. 5. Motion to cancel the by-election of two director seats at the 2023 annual general meeting.
2023.05.11	5th board meeting	1. The Company's financial report for Q1 2023 has been completed, and its approval given by the Audit Committee pursuant to regulations.
2023.06.29	6th board meeting	1. Motion to appoint Mr. Wen-Ji Su as the Corporate Governance Officer.
2023.08.08	7th board meeting	1. The Company's financial report for Q2 2023 has been completed, and its approval given by the Audit Committee pursuant to regulations. 2. Motion for reallocation for investment in TWSE/TPEx listed stocks. 3. Motion to sell the stocks of the TWSE/TPEX listed company currently held.
2023.11.09	8th board meeting	1. On the change of attesting CPAs of the Company. 2. Motion for the revision of the "Procedures for Preparation, Verification, Announcement and Filing of Sustainability Report" of the Company on September 8, 2023. 3. The Company's financial report for Q3 2023 has been completed, and its approval given by the Audit Committee pursuant to regulations. 4. Motion for the Company's 2024 audit plan. 5. Motion for reallocation for investment in TWSE/TPEx listed stocks. 6. Motion to sell the stocks of the TWSE/TPEX listed company currently held.
2023.12.21	9th board meeting	1. Motion for various compensation and remuneration to be implemented by the Company in 2024. 2. Motion for the Company's 2024 operating plans and financial forecast. 3. Motion for the appointment of a president.
2024.03.14	1st board meeting	1. Motion for the Company's 2023 business report and financial report. 2. Motion for the Company’s 2023 deficit compensation. 3. Motion for the election of seven directors (including three independent directors) and the director nomination by shareholders and the acceptance-related matters. 4. Motion for the proposal period and location for the Company's 2024 annual general meeting to accept proposals from shareholders holding 1% or more of the shares. 5. Motion for the nomination of directors (including independent directors) by the Board of Directors. 6. Release of the Company’s Directors from non-compete clauses. 7. Passed the motion to set the date, location, method, and relevant affairs for the Company's 2024 annual general meeting. 8. In order to meet the Company's operational needs, the Company has applied to the Union Commercial Bank, Tainan Branch, for issuing an importation letter of credit with the limit totaling NT$900 million (forward NT$600 million + spot NT$300 million). The application was approved by the bank for reference. 9. Motion for reallocation for investment in TWSE/TPEx listed stocks. 10. Motion to sell the stocks of the TWSE/TPEX listed company currently held. 11. Motion for the Company's 2023 internal control system declaration. 12. Motion for the appointment and independence evaluation of the Company's attesting CPAs. 13. Remuneration and bonus to the Chairman of the Company. 14. Motion for partial amendment of the "Procedures for Preparation, Verification, Announcement andFiling ofSustainabilityReport"ofthe Company.
2024.04.25	2nd board meeting	1. Reappointment of the President of the Company. 2. Motion for reallocation for investment in TWSE/TPEx listed stocks. 3. Motion to sell the stocks of the TWSE/TPEX listed company currently held. 4. Motion of Re-election for seven directors(includingthree independent directors)at the

• 49 -

annual general meeting, and the review of director candidates nominated by shareholders and the list of nominees.

• (XIII) A director or independent director has expressed a dissenting opinion with respect to a material resolution passed by the board of directors, and said dissenting opinion has been recorded or prepared as a written declaration during the most recent fiscal year: None.

• (XIV) A summary of resignations and dismissals, during the most recent fiscal year, of the Company's chairperson, president, chief accounting officer, chief financial officer, chief internal auditor, chief corporate governance officer, and chief research and development officer:

Summary of the resignation or dismissal of the Company’s related personnel

2023.12.31

				2023.12.31
Title	Name	Date of post	Date of the resignation	Reason for resignation or dismissal
Corporate Governance Officer	Wen-Ji Su	2021.06.01	2023.02.10	Resignation
President	Shuo-Tang Yeh	2014.10.01	2023.12.21	Resignation

IV. Information on attesting CPA professional fees

Amount unit: NT$ thousand

Name of the accounting firm	Name of the CPA	Audit period	Audit fee	Non-audit fee	Total	Remarks
Diwan & Company	Wei-Chin Hou Jui-Wen Lu	2023.01.01~2023.12.31	1,740	20	1,760

• (I) When non-audit fees paid to the certified public accountant, to the accounting firm of the certified public accountant, and/or to any associate of such accounting firm are one quarter or more of the audit fees paid thereto, the amounts of both audit and non-audit fees as well as details of non-audit services: None.

• (II) When the company changes its accounting firm and the audit fees paid for the fiscal year in which such change took place are lower than those for the previous fiscal year, the amounts of the audit fees before and after the change and the reasons: Not applicable.

• (III) When the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by ten percent or more, the amount, percentage and reason shall be disclosed: Not applicable.

• V. Information on change in CPA: Based on the letter that the Company received from Diwan & Company CPA firm on September 25, 2023, the attesting CPA was proposed to be changed from CPA Jui-Wen Lu and CPA Arnico Tseng to CPA Wei-Chin Hou and CPA Jui-Wen Lu since Q3 of 2023 pursuant to the CPA firm’s quality management policy.

• VI. Where the company's chairperson, president, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm: None.

• VII. Any transfer of equity interests and/or pledge of or change in equity interests by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

• 50 -

Title	Name (Note 1)	2023	2023	As of March 31	As of March 31
		Increase (decrease) in the number of shares held	Increase (decrease) in the number of shares pledged	Increase (decrease) in the number of shares held	Increase (decrease) in the number of shares pledged
Chairman	Shuo-Tang Yeh	0	0	0	0
Director	Chien Shing Investment Co., Ltd. Representative: Su-Chu Wang	0	0	0	0
Director	Chien Shing Construction Co., Ltd. Representative: Tsai-Yun Yeh	0	0	0	0
Director	Wei-ZhengYang	0	0	0	0
Independent Director	Ying-Ying Yang	0	0	0	0
Independent Director	Yi-Hung Chen	0	0	0	0
Independent Director	Ho-Yi Liu (Note 1)	0	0	0	0

Note 1: Independent directors, Ho-Yi Liu, took office on June 15, 2023.

Information on transfer of equity interests

Name (Note 1)	Reason for the transfer of equity interests (Note2)	Transaction date	Transaction counterparty	Relationship between the counterparty and the company, directors, supervisors, managerial officers and shareholders holding 10 percent or more of the shares	No. of shares	Transaction price
None	None	None	None	None	None	None

Note 1: Names of directors, supervisors, managerial officers and shareholders holding 10 percent or more of the shares are listed. Note 2: Acquisition or disposal.

Information on equity pledges

Name (Note 1)	Changes in pledge Reasons(Note 2)	Date of change	Transaction counterparty	Relationship between the counterparty and the company, directors, supervisors, managerial officers and shareholders holding 10 percent or more ofthe shares	No. of shares	Shareh olding Ratio	Pledge Ratio	Pledge (redemption) amount
None	None	None	None	None	None	None	None	None

Note 1: Names of directors, supervisors, managerial officers and shareholders holding 10 percent or more of the shares are listed.

Note 2: Pledge or redemption.

VIII. Relationship information, if among the Company's 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another

Name (Note 1)	Shareholding	Shareholding	Shareholding by spouse or dependents	Shareholding by spouse or dependents	Total shareholding in the name of others	Total shareholding in the name of others	Disclosure of names and relationships between the top ten shareholders including spouses, second degree of kinship of another.(Note 3)	Disclosure of names and relationships between the top ten shareholders including spouses, second degree of kinship of another.(Note 3)	Remarks
	No. of shares	Shareholding Ratio (Note 2)	No. of shares	Shareholding Ratio (Note 2)	No. of shares	Shareholding Ratio (Note 2)	Name	Relationship
Shuo-Tang Yeh	20,046,540	7.13%	4,777,439	1.70%	0	0	Chien Shing Construction Co., Ltd. Chien Shing Investment Co., Ltd. Chen-Pin Yeh	Same chairman Same chairman Spouse
Tsu-Rong Dai	15,117,000	5.38%	0	0	0	0	None	None
Asahi Enterprises Corp. Representative: Chung-Hsien Chen	10,581,000	3.76%	0	0	0	0	Mi-Chuan Chen	Vice Chairman of the Company

• 51 -

Chien Shing Investment Co., Ltd. Representative: Shuo-Tang Yeh	9,529,000	3.39%	0	0	0	0	Chien Shing Construction Co., Ltd. Shuo-Tang Yeh	Same chairman The Company’s chairman
Chien Shing Construction Co., Ltd. Representative: Shuo-Tang Yeh	9,241,347	3.29%	0	0	0	0	Chien Shing Investment Co., Ltd. Shuo-Tang Yeh	Same chairman The Company’s chairman
Bao Li Do Investment Co., Ltd. Representative: Mi-Chuan Chen	7,500,000	2.67%	0	0	0	0	Asahi Enterprises Corp.	The Chairman and Vice Chairman are the same person
Representative of Chia Chi Sdry Enterprise Co., Ltd.: Nien-Chen Hsueh	6,666,000	2.37%	0	0	0	0	None	None
Chun-Lang Huang	6,096,000	2.17%	0	0	0	0	None	None
Ya-Ping Yang	5,056,000	1.80%	0	0	0	0	None	None
Chen-Pin Yeh	4,777,439	1.70%	20,046,540	7.13%	0	0	Shuo-Tang Yeh	Spouse

Note 1: List the top 10 shareholders. If they are corporate shareholders, list both the titles of the corporate shareholders and their representatives separately.

• Note 2: The calculation of the percentage of shareholding refers to the calculation of the percentage of shareholding in the name of themselves, spouse, minor children or others separately.

• Note 3: The aforementioned shareholders for disclosure shall include corporate shareholders and natural persons, with the relations between the shareholders as required by the Criteria for the Compilation of Financial Statements by Securities Issuers.

IX. The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the company

• 52 -

Four. Information on capital raising activities:

I. Capital and shares

(I) Source of capital stock:

1. Formation of capital stock:

Year/ month	Issue price	Authorized share capital	Authorized share capital	Paid-in capital	Paid-in capital	Remarks	Remarks	Remarks
		No. of shares	Amount	No. of shares	Amount	Source of capital stock	Paid in properties other than cash	Others
1972.05	1,000	-	-	3,000	3,000,000	Established by cash 3,000,000	None	-
1981.12	1,000	-	-	10,000	10,000,000	Capital increase by cash 7,000,000	None	-
1984.12	1,000	-	-	30,000	30,000,000	Capital increase by cash 20,000,000	None	-
1987.11	1,000	-	-	120,000	120,000,000	Capital increase by cash 90,000,000	None	-
1988.08	10	-	-	19,800,000	198,000,000	Capital increase by cash 78,000,000	None	-
1989.04	10	110,000,000	1,100,000,000	44,000,000	440,000,000	Capital increase by cash 242,000,000	None	Order Letter Tai-Cai-Zheng(78)(1) 00453
1990.03	10	110,000,000	1,100,000,000	110,000,000	1,100,000,000	Capital increase by cash 660,000,000	None	Order Letter Tai-Cai-Zheng(78)(1) 29798
1992.03	10	220,000,000	2,200,000,000	165,000,000	1,650,000,000	Capital increase by cash 550,000,000	None	Order Letter Tai-Cai-Zheng(80)(1) 03322
1996.01	10	220,000,000	2,200,000,000	220,000,000	2,200,000,000	Surplus transferred to capital increase 165,000,000 Capital increase by cash 385,000,000	None	Order Letter Tai-Cai-Zheng(84)(1) 61115 dated December 2, 1995
1996.09	10	300,000,000	3,000,000,000	242,000,000	2,420,000,000	Surplus transferred to capital increase 220,000,000	None	Order Letter Tai-Cai-Zheng(85)(1) 52109 dated August 23,1996
1997.06	10	300,000,000	3,000,000,000	266,200,000	2,662,000,000	Surplus transferred to capital increase 242,000,000	None	Order Letter Tai-Cai-Zheng(86)(1) 40863 dated May21,1997
1998.06	10	300,000,000	3,000,000,000	292,820,000	2,928,200,000	Surplus transferred to capital increase 133,100,000 Capital reserve transferred to capital increase 133,100,000	None	Order Letter Tai-Cai-Zheng(87)(1) 42752 dated May 15, 1998
1999.08	10	307,461,000	3,074,610,000	307,461,000	3,074,610,000	Capital reserve transferred to capital increase 146,410,000	None	Order Letter Tai-Cai-Zheng(88)(1) 56190 dated June 17, 1999
2000.08	10	322,834,050	3,228,340,500	322,834,050	3,228,340,500	Surplus transferred to capital increase 92,239,000 Capital reserve transferred to capital	None	Order Letter Tai-Cai-Zheng(89)(1) 58939 dated July 7, 2000
2004.06	10	378,800,000	3,788,000,000	322,834,050	3,228,340,500	~~increase~~ -	-	Order Letter Jing-Shou-Shang-Zi 09301110010 dated June 30, 2004
2018.01	10	378,800,000	3,788,000,000	281,167,262	2,811,672,620	Consolidation of capital reduction and cancellation of treasury stock	None	Order Letter Jing-Shou-Shang-Zi 10601170400 dated January 4,2018
2022.06	10	500,000,000	5,000,000,000	281,167,262	2,811,672,620	-	-	Order Letter Jing-Shou-Shang-Zi 11101114880 dated June 28, 2022

• 53 -

2. Type of shares:

2024.04.16 Unit: Shares

2. Type of shares:	2024.04.16	2024.04.16	2024.04.16	Unit: Shares
Type of shares	Authorized share capital			Remarks
	Outstandingshares	Unissued shares	Total
Ordinaryshares	281,167,262	218,832,738	500,000,000	Listed stock

1. Approval granted to offer and issue securities by shelf registration: None.

(II) Shareholder Structure

2024.04.16

						2024.04.16
Shareholder Structure Quantity	Government agency	Financial institution	Other legal entities	Individual	Foreign institutions and foreigners	Total
Number of people	-	2	152	36,879	34	37,067
Number of shares held	-	14,000	46,325,265	229,139,929	5,688,068	281,167,262
Shareholding ratio	-	0	16.48%	81.50%	2.02%	100%

(III) Diffusion of ownership:

Face value of NT$10 per share

2024.04.16

			2024.04.16
Shareholding range	Number of shareholders	Number of shares held	Shareholding ratio (%)
１－９９９	22,574	802,339	0.29
１０００－１００００	12,168	42,724,269	15.20
１０００１－２００００	1,126	18,467,292	6.57
２０００１－３００００	385	10,399,290	3.70
３０００１－４００００	166	6,182,515	2.20
４０００１－５００００	168	8,141,020	2.90
５０００１－１０００００	258	19,389,746	6.90
１００００１－２０００００	114	16,748,285	5.96
２００００１－４０００００	51	14,512,871	5.16
４００００１－６０００００	22	10,699,306	3.81
６００００１－８０００００	6	4,167,000	1.48
８００００１－１００００００	6	5,593,000	1.99
More than 1,000,001	23	123,340,329	43.87
Total	37,067	281,167,262	100.00

Note: No preferred shares issued

• 54 -

(IV) List of major shareholder

Unit: Shares

(IV) List of major shareholder		Unit: Shares
Shares Name of major shareholder	Number of shares held	Shareholding percentage (%)
Shuo-Tang Yeh	20,046,540	7.13%
Tsu-Rong Dai	15,117,000	5.38%
Asahi Enterprises Corp. Representative: Chung-Hsien Chen	10,581,000	3.76%
Chien Shing Investment Co., Ltd. Representative: Shuo-Tang Yeh	9,529,000	3.39%
Chien Shing Construction Co., Ltd. Representative: Shuo-Tang Yeh	9,241,347	3.29%
Bao Li Do Investment Co., Ltd. Representative: Mi-Chuan Chen	7,500,000	2.67%
CHIA CHI SDRY ENTERPRISE CO., LTD. Representative: Nien-Chen Hsueh	6,666,000	2.37%
Chun-Lang Huang	6,096,000	2.17%
Ya-Ping Yang	5,056,000	1.80%
Chen-Pin Yeh	4,777,439	1.70%

Note: As there are less than 10 shareholders holding more than 5% of the shares, the list of top 10 shareholders is disclosed.

(V) Provide share prices for the past 2 fiscal years, together with the company's net worth per share, earnings per share, dividends per share, and related information:

Item	Year	Year	2022	2023	As of March 31, 2024 (Note 8)
Market price per share (Note 1)	Highest		6.3	8.39	13.95
	Lowest		3.71	4.9	7.02
	Average		5.29	6.16	9.55
Net worth per share (Note 2)	Before distribution		5.22	6.06	Note 9
	After distribution		Undistributed	Undistributed	Unresolved
Earnings per Share	Weighted-average shares		281,167,262	281,167,262	281,167,262
	Earnings per share (Note 3)		2.78	0.81	Note 9
Dividend per share	Cash dividends		-	-	Unresolved
	Share dividend	Dividend distribution from earnings	-	-	Unresolved
		Dividend distribution from capital reserve	-	-	Unresolved
	Accumulated unpaid dividends (Note4)		-	-	Unresolved
Investments Return analysis	P/E ratio (price-to-earnings ratio) (Note 5)		1.9	7.60	Unresolved
	Price/Dividend ratio (Note 6)		-	-	Unresolved
	Cash dividend yield (Note 7)		-	-	Unresolved

Note 1: The highest and lowest market prices of common stocks for each year are listed, and are calculated on the basis of the annual transaction value and volume.

Note 2: Please fill in the number of shares issued at the end of the year and the distribution according to the resolution of the board of directors or general meeting of shareholders of next year.

Note 3: If there is a retroactive adjustment from distribution of bonus shares, the pre-adjustment and adjusted surplus per share shall be

• 55 -

listed.

• Note 4: Dividends that have not been issued in the current year are accrued to the issuer of the annual surplus; the accumulated undistributed dividends of the current year should be disclosed separately.

• Note 5: Price/Earnings Ratio = Average Closing Price for the Year / Earnings per Share

• Note 6: Price/Dividend Ratio = Average Closing Price for the Year / Cash Dividends per Share

• Note 7: Cash Dividend Yield = Cash Dividends per Share / Average Closing Price for the Year

• Note 8: The share price and related information are shown up until March 31, 2024.

• Note 9: Up to the date of publication of the annual report, it has not been reviewed by the CPAs.

• (VI) The company's dividend policy and implementation thereof:

• The company’s dividend policy:

• 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.

• 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.

• Dividend distribution proposed on the most recent shareholders’ meeting: The shareholders’ meeting proposed not to distribute dividends.

• (VII) Effect upon business performance and earnings per share of any distribution of bonus shares proposed or adopted at the most recent shareholders' meeting:

Not applicable as the shareholders’ meeting did not resolve any distribution of bonus shares.

• (VIII) Remuneration to employees and directors and supervisors:

• Information Relating to Remuneration of Employees, Directors and Supervisors in the Company's 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. Employee and director remuneration proposals are to be raised for resolution during shareholder meetings.

• Profits must first be reserved to offset against cumulative losses, if any, before the remainder can be distributed as employee/director remuneration in the above percentages. The annual profit mentioned in Paragraph 1 shall refer to pre-tax profit before employees’ and directors’ remuneration in the current year.

• The basis for estimating the amount of employee, director, and supervisor remuneration, for calculating the number of shares to be distributed as employee compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure, for the current period: No distribution of remuneration to employees, directors, or supervisors.

• Information on the proposed distribution of remuneration passed by the Board of Directors:

• (1) Remuneration to employees, directors and supervisors is distributed in cash or shares. If there is a difference between the estimates in the year in which the expense is recognized, the amount, the reason and the treatment for the difference shall be disclosed: No distribution of remuneration to employees, directors, or supervisors.

• (2) The amount of any employee remuneration distributed in stock, and the size of that amount as a percentage of the sum of the after-tax net income stated in the parent company only financial reports or individual financial reports for the current period and total employee remuneration: No distribution of remuneration to employees, directors, or supervisors.

• The actual distribution of employee, director, and supervisor profit-sharing compensation for the previous fiscal year (with an indication of the number of shares, monetary amount, and stock price, of the shares distributed), and, if there is any discrepancy between the actual distribution and the recognized employee, director, or supervisor profit-sharing compensation, additionally the discrepancy, cause, and how it is treated: No distribution.

• (IX) Status of the Company repurchasing its own shares: None.

• II. The Company's handling of corporate bonds: None.

• III. The Company's preferred stocks: None.

• IV. Global Depository Receipts: None.

• V. The status of issue and private placement of employee stock warrants: None.

• VI. The status of new restricted employee shares: None.

• VII. Basic Information on acquiree and transferee Companies: None.

• VIII. Matters to be recorded regarding the capital allocation plan

Up to the date of publication of the annual report, the Company did not have a capital allocation plan that was not completed, or planned to be completed but the benefits had not yet been shown.

• 56 -

Five. Operational Overview

I. Business activities

(I) Business activities:

Business activities:	Business activities:
1.Principal business activities:
(1) CA01010	Iron and Steel Smelt
(2) CA01020	Iron and Steel Rolling and Extruding
(3) CA01050	Steel Secondary Processing
(4) CA02990	Other Metal Products Manufacturing
(5) CB01010	Mechanical Equipment Manufacturing
(6) CC01080	Electronics Components Manufacturing
(7) CO01010	Tableware Manufacturing
(8) F113010	Wholesale of Machinery
(9) F199990	Other Wholesale Trade
(10) F401010	International Trade
(11) H701010	Housing and Building Development and Rental
(12) H701030	Funeral Places Lease Construction and Development
(13) H701040	Specific Area Development
(14) B201010	Mining of Metal Ores
(15) F115020	Wholesale of Ores
(16) CA01090	Aluminum Casting
(17) CC01010	Manufacture of Power Generation, Transmission and Distribution Machinery
(18) CC01090	Manufacture of Batteries and Accumulators
(19) CD01030	Motor Vehicles and Parts Manufacturing
(20) CD01040	Motorcycles and Parts Manufacturing
(21) CD01050	Bicycles and Parts Manufacturing
(22) CD01990	Other Transport Equipment and Parts Manufacturing
(23) CQ01010	Mold and Die Manufacturing
(24) E603050	Automatic Control Equipment Engineering
(25) E603100	Electric Welding Engineering
(26) E604010	Machinery Installation
(27) E605010	Computer Equipment Installation
(28) JA02020	Motorcycle Repair
(29) JA02030	Bicycle Repair
(30) C901040	Manufacture of Ready-mix Concrete
(31) C901050	Cement and Concrete Products Manufacturing
(32) C901990	Other Non-Metallic Mineral Products Manufacturing
(33) J101080	Resource Recycling
(34) ZZ99999	All business items that are not prohibited or restricted by law, except those that are subject to special
	approval.

1. Main products and weight:

approval. Main products and weight:
Product/year	2023	2022
300 series	100.00%	100.00%
Others	0%	0%
Total	100.00%	100.00%

(II) Industry overview

1. Current and future industry prospects:

Steel is the foundation of a nation's industries; the material is critical for industrial development, and serves as a main driver for downstream industries, structural improvements, and growth of the overall economy. Specialized steel is especially useful for the development of high value-adding and technology-intensive industries in advanced nations; it is used extensively and has profound effect in industries such as machinery, electromechanical parts, auto industry, and electrical hand tools, making it an essential material for industry upgrade. The more advanced a nation's industries are, the higher volume of specialized steel is used. Taiwan's demand for stainless steel will increase given the ongoing upgrade of its industries, and there is still tremendous room for growth compared to other industrialized nations; meanwhile, demand for stainless steel among consumers is also rising due to improved living standards.

In today's society, stainless steel has been widely used in various fields of life. With the continuous improvement of people's living standards, more than 80% of the use of stainless steel materials is for people's livelihood. It can be seen of the importance of the stainless steel industry in our daily lives, which is closely related.

• 57 -

The main distinction between stainless steel and ordinary carbon steel is that the former has chromium and nickel added to it, making it resistant against rust and acid/alkaline corrosion when exposed to air. Stainless steel materials can be broadly classified between 300 series and 400 series, whereas product characteristics and uses are mainly distinguished between sheet and tube. Sheet materials emphasize more on surface treatment, and are used in applications that require flawless, steel-based exterior such as building decoration, chemical container, and household appliance; tube materials, on the other hand, demand less on surface treatment and emphasize more on material quality and chemical composition as they directly affect weld quality.

Tang Eng Iron Works was the nation's first company to produce stainless steel in July 1983. In the 1990s, Taiwan's self-sufficiency rate for cold-rolled stainless steel products was only 60%. Due to the rapid growth of demand, more manufacturers subsequently joined the production. The stainless steel plant of Yieh United Steel for steelmaking, hot rolling and cold rolling operations was completed and started operations in 1995. The industry in Taiwan has entered the stage of rapid growth. Currently, the companies engaged in producing stainless steel cold-rolled steel are Tang Eng Iron Works, Yieh United Steel, and Chien Shing. The self-sufficiency rate has exceeded 100%.

1. Association between upstream, midstream, and downstream industry participants:

The Company operates in the midstream and upstream. It processes hot-rolled stainless steel coils through main production lines to produce 300 series cold-rolled stainless steel coils. China Steel, Yieh United, Tang Eng, and Walsin Lihwa are currently the main suppliers of hot-rolled stainless steel in Taiwan. High versatility makes stainless steel an essential material for light and heavy industries from metal hardware, construction, chemical engineering, food, mechanical engineering, to home appliance.

Association of Taiwan's stainless steel industry is depicted in the following figure:

Construction materials, chemical tanks, paper factories, automobile Stainless steel Semi-finished parts, industrial Stainless Steel rolling and coils and wire sheets, tubes, machinery, home steel-making thermal treatment rods and bars appliances, medical instruments etc.

1. Product trends:

Stainless steel is used in all aspects of architecture and construction. For better corrosion resistance, most

architectural design and structural engineering companies prefer to use stainless steel with higher molybdenum alloy content in the more corrosive position. Stainless steel is the fastest growing segment of the construction industry; population growth and urbanization are increasing the demand for residential, commercial and hospital construction around the world. With the advancement of urbanization, more buildings and infrastructure need to be built.

Sophistication and application of stainless steel technology have evolved consistently over time, and the material is being used extensively for construction, transportation, kitchenware, appliances, and industrial machinery all over the world. Recent movements toward energy-saving, environment-friendly, and long-lasting materials also increase demand for stainless steel, and there is substantial gain to be generated from the growth of the stainless steel industry in the future.

1. Competition:

Currently, main producers of cold-rolled stainless steel coils in Taiwan include: Tang Eng, Yieh United, Chien Shing, Tung Mung, and Walsin, with Yieh United being able to produce more than one million tonsa year. In terms of foreign competition, Tsinghan Holding has constructed plant facilities right at Indonesia's nickel mine zone, and proximity to raw materials provides it with great pricing advantage when competing with the rest of the world. Faced with such an intense competition, the Company will be diversifying raw material purchases to reduce production cost, while at the same time making improvements to production procedures and quality to improve competitiveness. The Company also has plans to explore new customer sources, build customer relations, and work with customers on expanding distribution channels for improved sales.

• (III) Technological research and development:

• R&D expenses made in the current year up until the publication date of annual report: None.

• Future R&D plans:

The Company has an internal R&D team that is constantly researching for feasible solutions and proprietary technologies to improve quality consistency, reduce defect rate, promote real-time production quality feedback and online monitoring, streamline production and maintenance processes, and increase level of automation. The team has made many accomplishments over the years and proven itself competent at improving existing production procedures.

• 58 -

(IV) Long and short-term business plans:

Business development	Short-termplan	Medium and long-termplans
Product aspect	Make ongoing improvements to product quality and production efficiency; reduce costs and enhance competitiveness.	Keep track of demand changes in the market at all times, and develop new customer sources to facilitate market demand.
Customer, market, and sales aspects	1. Customer-oriented.Develop adequate understanding of customers' needs, build productive interaction with customers, gain control over distribution network, and explore business opportunities. 2. Secure market share in domestic sales and continuegrowingexport sales.	1. Strive to expand the market share of export market. 2. Aim to decrease production cost, and thereby raising competitiveness and sharing profits with midstream and downstream customers.

II. Market, production and sales overview

(I) Market analysis:

1. Locations where products are mainly sold:

The Company mainly purchases hot-rolled stainless steel coils and have them processed through main production lines to produce 300 series cold-rolled stainless steel coils. Products are then sold to the downstream for cutting or tubing. The Company currently sells 100% of products domestically and exports 0%.

Locations where products are mainly sold in the last two years

			Unit: NT$thousand	Unit: NT$thousand
Year Location	2023		2022
	Amount	%	Amount	%
Domestic sales	738,691	100.00	1,231,007	100.00
Export sales	0	0	0	0
Total	738,691	100.00	1,231,007	100.00

2. Market share:

Currently, main suppliers of cold-rolled stainless steel in Taiwan include: Tang Eng, Chien Shing, Tung Mung, Yieh United, and Walsin. Based on monthly volumes supplied by major stainless steel manufacturers in Taiwan, the Company is estimated to have a 4% market share selling an average of 3,000-4,000 tonnes per month.

3. Future market supply, demand and growth:

Stainless steel is used extensively in construction, transportation, kitchens, electrical appliances, and industrial machinery. The emphasis is particularly on long material life, energy saving, environmental protection, and informatization. Therefore, it is expected that stainless steel products will move towards environmental protection, long-term use, and informatization in the future. In addition, electric vehicles will be more practical, so it is expected that more stainless steel will be used in automobile batteries. Other products that require high-precision and high-performance materials are such as mobile phones and other equipment that require the use of materials with high strength, flexibility, and non-magnetic properties. Stainless steel can meet these requirements. For the equipment used in the manufacturing of semiconductors and integrated circuits, stainless steel which has the characteristics of cleanliness and durability can meet their requirements, and the demand in the future is expected to be further expanded. Judging by the consistent growth of demand for cold-rolled stainless steel sheets, the stainless steel industry is still presented with great potentials, both in terms of domestic and export sales.

4. Competitive advantage:

The Company has placed great emphasis on raising technological competence and productivity, developing R&D capacity, and training local technological talents since it first constructed plant facilities. It is the only company in Taiwan capable of constructing an upgraded cold rolling mill all on its own without acquiring technology from a foreign counterpart, which greatly reduces operational and production costs. Furthermore, the Company has made pro-active efforts to expand production capacity, adding an annealing acid wash line in year 2000 followed by a 20-hi cold rolling mill in 2001 that increased annual production capacity from 75,000 tones to 120,000 tonnes. These expansions allowed the Company to achieve economy of scale, expand market share, increase utilization rate of existing facilities, support activation of other production lines, and ultimately reduce unit production cost.

1. Future opportunities, threats, and response strategies:

2. (1) Opportunities:

3. 59 -

a. Automated production, refined employee base, and strong productivity.

b. Advanced production technology, top product quality, and track record of customer satisfaction.

• (2) Threats:

Oversupply and intensifying competition of stainless steel.

• (3) Response strategies:

  • a. Explore export markets outside China to diversify sales, and reduce impact of capacity expansion on the Company.

  • b. Promote systematic management, digitalization, and modernization for enhanced management efficiency.

  • c. Escalate research and development efforts for reduced production cost, enhanced production efficiency, and improved production process, quality, technological standards, and corporate competitiveness.

• (II) Main product applications and production processes:

1. Main product applications: 304 series

Building facade, beer keg, grain processing equipment, cryo tube, acid-making equipment, nuclear reactor dome, sprinkler, awning, liquid nitrogen/fluorine/nitrogen container, carbonated drink mixer, distilling tube etc. 2. Production process of main products:

==> picture [398 x 74] intentionally omitted <==

----- Start of picture text -----

Hot-rolled Coil steel Annealing 20-hi cold Annealing Finished Customers
Raw materials Finishing mill
----- End of picture text -----

• (III) Supply of main materials:

Hot-rolled stainless steel coils are the main raw materials used by the Company. These materials were sourced from foreign suppliers in China in 2023. The Company has developed productive and stable relationship with raw material suppliers; overall, the Company foresees no shortage of raw material in the future.

• (IV) A list of any suppliers and clients accounting for 10 percent or more of the company's total procurement (sales) amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement (sales) accounted for by each

• List of major procurement customers:

Information on major suppliers in the most recent 2 fiscal years

Unit: NT$ Thousand

	2023	2023	2023	2023	2022	2022	2022	2022	As of the previous quarter of 2024	As of the previous quarter of 2024	As of the previous quarter of 2024	As of the previous quarter of 2024
Item											Ratio to net
			Ratio to net	Relation			Ratio to net	Relation			procurement in	Relation
	Name	Amount	annual	to the	Name	Amount	annual	to the	Name	Amount	current year to	to the
			purchase	issuer			purchase	issuer			the end of the	issuer
			(%)				(%)				previous quarter
											(%)
1	d	739,642	69.92	None	b	654,690	61.18	None	e	289,505	100	None
2	e	318,138	30.08	None	c	415,467	38.82	None
3
4
	Net procurement	1,057,780	100.00		Net procurement	1,070,157	100.00		Net procurement	289,505	100.00
Reason for the change: Mainly due to the Company's operational needs.

• 60 -

2. List of major sales customers:

Major sales customers in the most recent 2 fiscal years

Unit: NT$ Thousand

	2023				2022				As of the previous quarter of 2024
Item	Name	Amount	Ratio to net annual sales (%)	Relation to the issuer	Name	Amount	Ratio to net annual sales (%)	Relation to the issuer	Name	Amount	Ratio to net sales in current year to the end of the previous quarter (%)	Relation to the issuer
1	A	279,189	37.80	None	A	371,840	30.21	None	A	120,068	40.72	None
2	B	228,248	30.90	None	B	275,987	22.42	None	B	73,937	25.07	None
	Others	231,254	31.30	None	C	202,499	16.45	None	C	50,353	17.07	None
				None	E	136,874	11.12	None	Others	50,539	17.14	None
				None	Others	243,807	19.80	None				None
				None				None
	Net sales	738,691	100.00		Net sales	1,231,007	100.00		Net sales	294,897	100.00

Reason for the change: Mainly due to a decrease in customer demand.

(V) Production value table for the most recent 2 fiscal years:

Unit: NT$ Thousand

Year Production Value Majorproduct	2023	2023	2023	2022	2022	2022
	Production capacity	Production volume	Production value	Production capacity	Production volume	Production value
300 Series (ton)	120,000	10,429	752,831	120,000	13,344	1,231,476
Total	120,000	10,429	752,831	120,000	13,344	1,231,476

(VI) Sales volume for the most recent 2 fiscal years:

Unit: NT$ thousand

					Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
Year Volume/ Value Major product	2023				2022
	Domestic sales		Export sales		Domestic sales		Export sales
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
300 Series (ton)	10,851	726,148	0	0	14,426	1,202,062	0	0
Other		12,543				28,945
Total	10,851	738,691	0	0	14,426	1,231,007	0	0

• 61 -

III. Information on employees during the most recent 2 fiscal years or during the current fiscal year up to the date of publication of the annual report

Information on employees during the most recent 2 fiscal years or during the current fiscal year up to the date of ication of the annual report	Information on employees during the most recent 2 fiscal years or during the current fiscal year up to the date of ication of the annual report	Information on employees during the most recent 2 fiscal years or during the current fiscal year up to the date of ication of the annual report	Information on employees during the most recent 2 fiscal years or during the current fiscal year up to the date of ication of the annual report	Information on employees during the most recent 2 fiscal years or during the current fiscal year up to the date of ication of the annual report
March 31, 2024
Year		2023	2022	As of March 31
Number of employees	Directpersonnel	33	21	33
	Indirectpersonnel	12	11	12
	Managementpersonnel	24	22	24
	Total	69	54	69
Average age		46.66	47.18	46.66
Averagey	ears of service	9.86	12.47	9.86
Education level distribution ratio (%)	Doctor	-	-	-
	Master	1.45%	1.89%	1.45%
	College	55.07%	54.72%	55.07%
	Senior high school	34.78%	39.62%	34.78%
	Below senior high school	8.70%	3.77%	8.70%

IV. Contribution to environmental protection

• (I) Losses (compensations) and fines incurred due to pollution of environment in the last year up until the publication date of annual report:

	2023	As of March 31, 2024
Pollution (category and severity)	1. Violation of Waste Disposal Act	None
Claimant or penalty issuer	Tainan City Government Environmental Protection Bureau	None
Amount of compensation or penalty	1. $6,000	None
Other losses	None	None

• (II) Future response strategies (including improvement measures) and possible expenses (including possible losses due to absence of response strategy, estimated amount of penalties and compensations etc.): 1. Proposed improvement plans:

• (1) Air pollution:

  • a. Prohibition against waste combustion within plant, and promotion of waste sorting.

  • b. Regular replacement of production scrubber and accurate recording of replacement time, making sure that PH value and statutory requirements are met.

  • c. Replacement and accurate recording of replacement date for bag-type dust filter A103 and differential pressure gauge.

• (2) Waste:

  • a. Change of Waste Disposal Plan depending on the state of waste produced in plant.

  • b. Monthly reporting of waste produced, stored, cleared, and treated in plant.

  • c. Storage of waste in accordance with rules, and thereby preventing pollution to the environment.

• (3) Water pollution:

  • a. Accurate recording of sludge produced, stored, and cleared.

  • b. Change of water pollution prevention permit depending on the state of in-plant water treatment facilities.

  • c. Quarterly inspection and reporting, and prevention of reporting errors.

  • d. Installation of nitrous nitrate and ammonia nitrogen improvement works.

• Possible expenses: NTD 1 million

• Possible losses due to absence of response strategy, and estimated amount of penalties and compensations: None

• 62 -

V. Labor-management relations

• (I) Availability and execution of employee welfare, education, training, and retirement policies; elaborate on the agreements between employers and employees, and protection of employees' rights:

• All employees of the Company are covered by Labor Insurance, National Health Insurance, and group insurance. Benefits on childbirth, injury, healthcare, retirement, and death are paid according to Labor Insurance Act, National Health Insurance Act, and Labor Standards Act.

• The Company has an Employee Welfare Committee in place to oversee matters concerning employee welfare. In addition to organizing unscheduled activities, the Company also offers regular benefits such as: domestic trip, festive cash/gift, birthday cash, and wedding/funeral/celebration/condolence cash.

• The Company organizes internal training courses on a department-by-department basis and assigns employees to undergo external training from time to time to help employees develop professional character and competitive advantage.

• Implementation of the retirement system:

• The Company has established employee retirement policy as part of its work rules. All permanent employees are entitled to pension benefits upon retirement that are calculated based on years of service and 6-month average salary at the time of retirement. The Company makes contributions totaling 2% of employees' monthly salary into a pension fund account maintained with Bank of Taiwan according to "Regulations for the Allocation and Management of the Workers' Retirement Reserve Funds." Starting from July 1, 2005, a defined contribution plan was introduced under the "Labor Pension Act" and applied to all local employees. For the new scheme, the Company contributes an amount no less than 6% of employees' monthly salary to their individual accounts held with the Bureau of Labor Insurance.

• Enforcement of labor agreements and employee rights:

• The Company has always valued employees' benefits, and strives to provide a satisfying work environment and engage employees in two-way communication to promote harmonic employment relations.

• Employee behavior or ethics guidelines:

• The Company has implemented the following rules to provide employees with a better understanding about work duties and ethics:

• (1) Organization and responsibilities: Outline the function and responsibilities of each department.

• (2) Work rules: Outline work hours, attendance requirements, reward and disciplinary actions, Leave of Absence Policy, and Employee Performance Evaluation Policy.

• (3) Employee Work Ethics Guidelines.

• (II) Losses as a result of employment dispute in the last year up until the publication date of annual report: None

• (III) Existing and possible losses arising as a result of employment dispute, and response measures:

• The Company currently does not have a union, but it values employees' welfare, provides them with a satisfying work environment, and engages them in two-way communication to maintain harmonic relations. The Company also has work rules implemented according to regulations to introduce reasonable standards on salary, work hours, leave of absence, and retirement. Due to proper training and robust measures on safety and health, the Company encountered no major employment dispute to date, and considers it extremely unlikely to incur losses on employment dispute in the future.

• (IV) Work environment and protection of employees’ safety:

Chien Shing makes annual safety and health plans and duly enforces them to continually improve workplace health and safety. Chien Shing has assembled a Worker Safety and Health Committee to improve on work safety issues. The committee convenes meetings once per quarter or on an ad-hoc basis. Work safety issues are discussed during management meetings held every Monday, and the Company has a work safety unit that publishes newsletters regularly or on an ad-hoc basis to convey work safety message.

1. Key safety and health management tasks

2. (1) Labeling and communication of dangerous and harmful materials

3. a. Certain chemical equipment (tanks) are inspected once every two years and duly recorded in logs.

4. b. The Company is involved in chemical operations; operators in each shift are certified to handle special chemical substances, and are re-trained once every 3 years according to policy.

5. c. Substance safety data sheets are placed at locations that accessible to operators, and updated regularly or on an ad-hoc basis.

6. d. Each unit conducts its own checks on chemical pipe flow and valve switch labeling.

7. e. Protective gears are assigned to the units in need and placed under the custody of individual users.

8. f. A 3-hour hazard training is held in December each year; below is the course program:

9. (a) Code of conduct for handling special chemical substances. (b) Operating procedures for handling special chemical substances. (c) Special chemical training.

10. g. Leakage alarms are placed near workplaces that involve chemicals.

11. 63 -

12. h. First-aid kits are placed near workplaces that involve chemicals.

13. I. Emergency sprinklers are inspected on a monthly basis.

14. j. Rules on tank car unloading, tank labeling, tank car parking zone, and tyre stoppers have been implemented.

15. k. A hazardous substances list has been created.

16. (2) The Company takes samples and conducts tests on the following hazardous workplaces once every six months: a. Workplaces that involve special chemicals. b. Workplaces of strong dust. c. Workplaces of high noise. d. Workplaces of high heat.

17. (3) Subcontractor management:

18. a. The Company has implemented Subcontractor Safety and Health Work Rules. b. Hazard advices and safety advices are produced.

19. (4) The Company has implemented Employee Safety and Health Code of Conduct.

20. (5) Safety and health training.

21. a. New recruits are subjected to worker safety and health training.

22. b. Existing employees are subjected to the following on-job training:

23. (a) On-job training on boilers. (b) On-job training for special chemical substances managers.

24. (c) On-job training on cranes. (d) On-job training for first-aid personnel, re-trained once every 3 years。

25. (e) On-job training for hypoxia operations supervisor, re-trained once every 3 years.

26. (f) On-job training for forklift operator, re-trained once every 3 years.

27. (g) On-job training for safety and health officer, re-trained once every 3 years.

28. (h) On-job training for Class A safety and health officer, re-trained once every 3 years.

29. (6) Management of personal protection gear.

30. a. A registry of protective gears has been created. b. Notes on use of protective gear have been established.

31. (7) Health checkup, health management, and health promotion activities are carried out in August each year.

32. (8) Emergency response measures are implemented in June and December each year.

Training of the internal fire safety team is held at the end of June and December each year.

• (9) Data on occupational hazards, close calls, and events that affect physical or mental health is analyzed.

• a. Accidental injury report forms are filed for every injury occurred. b. Occupational hazard statistics is analyzed on a yearly basis.

• (10) Other safety and health measures.

• a. Notes on coil steel and retaining walls have been established. b. Notes on forklift operations have been established as part of the safety and health code of conduct.

• c. Notes on crane operations have been established as part of the safety and health code of conduct. d. Notes on earthquake have been established.

• e. Notes on prevention of pneumoconiosis have been established. f. Prevention of noise hazard has been established as part of the safety and health code of conduct.

• g. Test reports on high pressure equipment is prepared on a yearly basis.

• Worker and mechanical equipment audit

• (1) Mechanical equipment management.

• a. Dangerous machinery: All cranes are certified and inspected on a monthly basis, whereas operators are certified and re-trained once every 3 years.

• b. Dangerous equipment: All boilers are certified and inspected on a monthly basis, whereas operators are certified and re-trained once every 3 years.

• (2) Regular inspection, special inspection, operational inspection, and on-site inspection:

• a. Monthly inspections:

• (a) Crane inspection sheet. (b) Cable inspection sheet. (c) Boiler inspection sheet.

• (d) Generator inspection sheet.

• (e) Gas pipe inspection sheet. (f) Air compressor inspection sheet.

• b. Daily inspections: (a) Special chemical pre-operation inspection sheet. (b) Forklift inspection sheet. (c) Crane inspection sheet.

• c. The work safety unit inspects for defect on a regular and ad-hoc basis, and raises defect on-site or during manager meetings.

• d. The work safety unit communicates with employees on work safety issues on a regular or ad-hoc basis through the use of work safety newsletters.

• The Company adopts Management by Walking Around as a way to manage safety and health, and to raise employees' work safety awareness for the prevention of future accidents.

• 64 -

VI. Major contracts

Nature of contract	Nature of contract	Parties involved	Contract start/end date	Main details	Restrictive clauses
1.	Supply contract	Shin Nan Natural Gas	2019.05.17-2029.05.17	Supply of natural gas as industrial fuel	None
2.	Environmental protection contract	Chin Haur	2023.08.01-2028.07.31	Clearance of plant waste (D-1801;D-0899; D-0299)	None
3.	Environmental protection contract	Xu Ri Environmental Protection Technology Co., Ltd.	2022.11.23-2023.12.31	Clearance of plant waste (D-0902)	None
4.	Environmental protection contract	Chan Sing Ready Mixed Concrete Co., Ltd.	2022.11.23-2023.12.31	Treatment of plant waste (D-0902)	None
5	Environmental protection contract	Li Fa Environment Technology	2024.01.01-2025.12.31	Treatment of plant waste (D-0902)	None
6	Environmental protection contract	San Yu Transport	2024.01.01-2025.12.31	Clearance of plant waste (D-0902;R-1201)	None
7	Environmental protection contract	San Yu Transport	2022.08.15-2023.06.30	Clearance of plant waste (D-0903)	None
8	Environmental protection contract	She Ching Enterprise Co.	2022.08.15-2023.06.30	Treatment of plant waste (D-0903)	None
9	Environmental protection contract	San Yu Transport	2023.01.03-2023.12.31	Clearance of plant waste (R-1201)	None
10	Environmental protection contract	Shang Shun Concrete	2024.01.01-2025.12.31	Treatment of plant waste (R-1201)	None
11	Environmental protection contract	Yi Bang Enterprise	2023.01.03-2023.12.31	Treatment of plant waste (R-1201)	None
12	Environmental protection contract	Hong Pan Enterprise	2023.11.20-2024.12.31	Treatment of plant waste (R-1201)	None
13	Information contract	InfoChamp Systems Corp.	2022.07.15-2023.07.14	Contract on entire information system maintenance	None
14	Information contract	InfoChamp Systems Corp.	2023.07.15-2024.07.14	Contract on entire information system maintenance	None

• 65 -

Six. An Overview of the Company's Financial Status

• I. Condensed balance sheets and statements of comprehensive income for the most recent 5 fiscal years

• (I) Condensed balance sheets and comprehensive income statements - International Financial Reporting Standards

• Condensed Balance Sheet - Individual

Unit: NT$ Thousand

Note 1: Information for the most recent 5 fiscal years has been audited by CPAs.

Year Item	Year Item	Financial information for the most recent 5 fiscal years (Note 1)	Financial information for the most recent 5 fiscal years (Note 1)	Financial information for the most recent 5 fiscal years (Note 1)	Financial information for the most recent 5 fiscal years (Note 1)	Financial information for the most recent 5 fiscal years (Note 1)	Financial information for the current year up until March 31, 2024 (Note 3)
		2023	2022	2021	2020	2019
Current assets		1,277,182	956,263	1,145,474	825,076	888,845	Not applicable.
Property, plant and equipment		368,473	392,032	487,264	729,083	842,873
Intangible assets		42	93	145	-	-
Other a	ssets	159,230	168,043	320,624	200,466	188,515
Total a	ssets	1,804,927	1,516,431	1,953,507	1,754,625	1,920,233
Current liabilities	Before distribution	94,364	44,023	960,500	872,527	727,909
	After distribution	Note 2	Undistributed	Undistributed	Undistributed	Undistributed
Non-current liabilities		6,079	5,486	294,007	447,990	565,863
Total liabilities	Before distribution	100,443	49,509	1,254,507	1,320,517	1,293,772
	After distribution	Note 2	Undistributed	Undistributed	Undistributed	Undistributed
Equity attributable to owners of the parent company		1,704,484	1,466,922	699,000	434,108	626,461
Share capital		2,811,673	2,811,673	2,811,673	2,811,673	2,811,673
Capital r	eserve	-	-	-	-	-
Retained earnings	Before distribution	(1,085,068)	(1,312,771)	(2,094,552)	(2,372,061)	(2,162,971)
	After distribution	Note 2	Undistributed	Undistributed	Undistributed	Undistributed
Other equities		(22,121)	(31,980)	(18,121)	(5,504)	(22,241)
Treasury stocks		-	-	-	-	-
Non-controlling interests		-	-	-	-	-
Total equity	Before distribution	1,704,484	1,466,922	699,000	434,108	626,461
	After distribution	Note 2	Undistributed	Undistributed	Undistributed	Undistributed

• 2: Not yet resolved by the shareholders' meeting for distribution or appropriation.

• 3: Until publication date of the annual report, it has not been reviewed by the CPAs.

• 4: Individual financial information for 2019 - 2023.

• 66 -

2. Condensed statement of comprehensive income - individual

Unit: NT$ Thousand

Year Item	Financial information for the most recent 5 fiscal years (Note 1)	Financial information for the most recent 5 fiscal years (Note 1)	Financial information for the most recent 5 fiscal years (Note 1)	Financial information for the most recent 5 fiscal years (Note 1)	Financial information for the most recent 5 fiscal years (Note 1)	Financial information for the current year up until March 31, 2024 (Note 3)
	2023	2022	2021	2020	2019
Operating income	738,691	1,231,007	2,470,941	803,775	1,155,098	Not applicable.
Operating profit (loss)	(155,834)	(109,471)	304,399	(188,829)	(159,593)
Operating (loss) income	(188,991)	(145,835)	265,521	(221,988)	(197,101)
Non-operating income and expense	432,408	955,832	10,941	12,310	19,272
Net income (loss) before tax	243,417	809,997	276,462	(209,678)	(177,829)
Continuing operations Net profit (loss)forthe period	228,218	780,657	276,324	(209,678)	(177,829)
Loss of discontinued operations	-	-	-	-	-
Net income (loss) for the period	228,218	780,657	276,324	(209,678)	(177,829)
Other comprehensive income for the period (Net aftertax)	(9,344)	(12,735)	(11,432)	17,325	(19,709)
Total comprehensive income for the period	237,562	767,922	264,892	(192,353)	(197,538)
Net income attributable to owners of the parent company	228,218	780,657	276,324	(209,678)	(177,829)
Net income attributable to non-controlling interests	-	-	-	-	-
Comprehensive income attributable to owners of the parent company	237,562	767,922	264,892	(192,353)	(197,538)
Comprehensive income attributable to non-controllinginterests	-	-	-	-	-
Earnings per Share	0.81	2.78	0.98	(0.75)	(0.63)

Note 1: Information for the most recent 5 fiscal years has been audited by CPAs.

• 2: For those who have been notified by the competent authorities to revise their financial information: None.

• 3: Until publication date of the annual report, it has not been reviewed by the CPAs.

• 4: Individual financial information for 2019 - 2023.

(II) Name and audit opinion of the CPAs for the most recent 5 fiscal years:

Year	Attesting CPAs	Audit opinion
2019	Wei-Chin Hou, Jui-Yen Tseng	Unqualified opinion plus material uncertainties relating to continuing operations
2020	Wei-Chin Hou, Jui-Yen Tseng	Unqualified opinion plus material uncertainties relating to continuing operations
2021	Jui-Wen Lu, Jui-Yen Tseng	Unqualified opinion
2022	Jui-Wen Lu, Jui-Yen Tseng	Unqualified opinion
2023	Wei-Chin Hou, Jui-Wen Lu	Unqualified opinion

• 67 -

II. Financial analysis for the past five fiscal years

(I) Financial analysis - International Financial Reporting Standards

1. Financial analysis - Individual

1. Financial analysis - Individual	1. Financial analysis - Individual
Year Analysis Item		Financial analysis		for the past five fiscal years (Note 1)			Financial information for the current year up until March 31, 2024 (Note 5)
		2023	2022	2021	2020	2019
Financial structure %	Debt to assets ratio	5.56	3.26	64.22	75.26	67.38	Not applicable.
	Long-term capital to property, plant and equipment ratio	464.23	375.58	203.79	120.99	141.46
Solvency (%)	Liquidity ratio	1353.46	2,172.19	119.26	94.56	122.11
	Quick ratio	512.18	1,328.78	46.32	10.54	30.19
	Times interest earned	Note 3	110.96	21.25	Note 3	Note 3
Operating capacity	Turnover of receivables (per time)	-	-	272.45	88.62	-
	Average collection days for receivables	-	-	1.34	4.12	-
	Inventory turnover (per time)	1.87	4.68	5.78	2.01	2.3
	Payables turnover (per time)	105.42	88.05	116.99	55.41	89.56
	Average days for sale	195.18	77.99	63.14	181.59	158.70
	Turnover of property, plant, and equipment (per time)	1.94	2.80	4.06	1.02	1.3
	Total assets turnover (per time)	0.44	0.71	1.33	0.44	0.57
Profitability	Return on assets (%)	13.74	45.34	15.49	(10.80)	(8.15)
	Return on equity (%)	14.39	72.09	48.77	(39.54)	(24.52)
	Ratio of profit before tax to paid-in capital (%) (Note 10)	8.66	28.81	9.83	(7.46)	(6.32)
	Net profit margin (%)	30.89	63.42	11.18	(26.09)	(15.4)
	Earnings per share (NT$)	0.81	2.78	0.98	(0.75)	(0.63)
Cash flows	Cash flow ratio (%)	Note 2	384.37	46.58	Note 2	Note 2
	Cash flow adequacy ratio (%)	Note 2	Note 2	Note 2	Note 2	142.25
	Cash re-investment ratio (%)	Note 2	3.00	8.88	Note 2	Note 2
Leverage	Operating leverage	Note 4	Note 4	1.46	Note 4	Note 4
	Financial leverage	Note 4	Note 4	1.05	Note 4	Note 4

• 68 -

• Please explain the reason for ratio changes for financial information in the most recent 2 fiscal years. I. In terms of the financial structure: 1. Liabilities to assets ratio increased from last year, because the current liabilities in 2023 increased.

• Long-term capital to property, plant and equipment ratio increased due to the increase in shareholders' equity in 2023.

II. In terms of solvency:

1. Current ratio and quick ratio decreased from last year, because the current liabilities increased in 2023.

III. In terms of operating capacity: 1. Inventory turnover rate decreased, because the sales costs of 2023 increased due to the declining sales revenue, and the inventories of the period decreased, and thus the inventory turnover rate decreased from last year.

1. Average days for sale increased from last year, because the inventory turnover rate decreased in 2023, resulting in an increase in average days for sales.

2. Property, plant and equipment turnover rate and total asset turnover rate decreased from last year, because the net sales in 2023 decreased from last year.

3. Payables turnover increased from last year, because the payables in 2023 decreased from last year.

IV. In terms of profitability:

1. Returns on assets and equity decreased from last year, because the net profit after tax for 2023 decreased.

2. Net income before tax to paid-in capital decreased from last year, because the net income after tax for 2023 decreased.

3. Net profit margin and earnings per share decreased from last year, because the net income after tax for 2023 decreased from last year.

V. In terms of cash flows: 1. Not applicable as the net cash flows from operating activities for 2019, 2020 and 2023 were net outflows.

VI. In terms of leverage: As it is a net operating loss for 2023, leverage was not calculated.

Note 1: Above financial information has been audited by CPAs. Note 2: Not applicable as the net cash flows from operating activities are outflows. Note 3: Not calculated as this year was a net loss before income tax expense. Note 4: Not calculated as this year was a net operating loss. Note 5: Until publication date of the annual report, it has not been reviewed by the CPAs. Note 6: Formulas for calculating each of the above ratios are as follows:

1. Financial structure

2. (1) Debt-to-asset Ratio = total liabilities/total assets.

3. (2) Long-term Capital to Property, Plant and Equipment Ratio＝(total equity + non-current liabilities)/net of property, plant, and equipment.

4. Solvency

5. (1) Liquidity Ratio = current assets/current liabilities.

6. (2) Quick Ratio = (current assets – inventory – prepaid expenses)/current liabilities.

7. (3) Times Interest Earned = income before income tax and interest expenses/current interest expenses.

8. Operating Capacity

9. (1) Receivables (including accounts receivable and notes receivable arising from business operations) Turnover Rate = net sales amount/average receivables (including accounts receivable and notes receivable arising from business operations) for each period.

10. (2) Average Collection Days for Receivables = 365/turnover of receivables.

11. (3) Inventory Turnover = cost of goods sold/average inventory.

12. (4) Payables (including accounts payable and notes payable arising from business operations) Turnover Rate = cost of goods sold/average payables (including accounts payable and notes payable arising from business operations) for each period.

13. (5) Average Days of Sale = 365/inventory turnover.

14. (6) Turnover of Property, Plant, and Equipment = net sales amount/average net worth of property, plant, and equipment.

15. (7) Total Assets Turnover = net sales amount/average total assets.

16. Profitability

17. (1) Return on Assets = [net income + interest expenses (1- tax rate)]/average total assets.

18. (2) Return on Equity = net income/average total equity.

19. (3) Net profit margin = net income/net sales amount.

20. (4) Earnings per Share (EPS) = (profit and loss attributable to owners of the parent – dividends on preferred shares)/weighted average number of issued shares. (Note 7)

21. Cash Flow

22. (1) Cash Flow Ratio = net cash flow from operating activities/current liabilities.

23. (2) Net Cash Flow Adequacy Ratio =

24. net cash flow from operating activities for the most recent five years/(capital expenditures + inventory increase + cash dividends for the most recent five years).

25. (3) Cash Re-investment Ratio =

26. (net cash flow from operating activities – cash dividends)/gross property, plant, and equipment value + long-term investment + other non-current assets + working capital). (Note 8)

27. Leverage:

28. (1) Operating Leverage = (net operating revenue – variable operating costs and expenses)/operating income (Note9).

29. (2) Financial Leverage = operating income/(operating income - interest expenses).

30. 69 -

31. Note 7: The above formula for calculating earnings per shares should pay special attention to the following when measuring:

32. Based on the weighted average number of ordinary shares, rather than the number of shares issued at the end of the year.

33. Where there is a cash replenishment or treasury stock trading, the weighted average number of shares shall be calculated during the period of circulation.

34. Where there is a surplus to capital increase or capital surplus to capital increase, the calculation of the earnings per share for the previous year and half year should be adjusted by the proportion of capital increase, rather than the period the capital increase is issued.

35. If the preferred shares are non-convertible accumulative shares, its annual dividend (whether or not it is issued) shall be deductible from the net income or increased to net loss after tax. If the preferred shares are non-cumulative, then in the case of having a net profit after tax, the preferred dividend should be deducted from the net profit after tax; in the case of net loss after tax, no adjustments are required.

36. Note 8: Special attention should be paid to the following when analyzing cash flows:

37. Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.

38. Capital expenditure refers to the annual cash outflow of capital flows.

39. The increase in inventories shall only be credited when the balance at the end of the period is greater than them balance at the beginning of the period. If the inventory is reduced at the end of the year, then the inventory amount should be accounted at zero.

40. Cash dividends include cash dividends for common stock and special shares.

41. Fixed assets means the total amount of Property, plant and equipment before deducting accumulated depreciation.

42. Note 9: The issuer shall distinguish between the operating costs and operating expenses being fixed or variables. When involved in the estimation or subjective judgments, one should pay attention to its rationality and consistency.

43. Note 10: If the Company's shares are no par or not in the denomination of NT$10, the calculation of the ratio of the paid in capital shall be calculated based on the equity ratio of the balance sheet attributable to the owners of the parent company.

44. Note 11: Individual financial analysis for 2019 - 2023.

45. 70 -

III. Audit Committee's Review Report on the Most Recent Annual Financial Report

Chien Shing Stainless Steel Co., Ltd. Audit Committee’s Review Report

The Board of Directors has submitted the Company's 2023 financial report, which has been jointly

audited by CPA Wei-Chin Hou and CPA Jui-Wen Lu of Diwan & Company and an auditor report has been

issued. These and the business report and loss allocation table have been reviewed by the Audit Committee

with no discrepancy found. We have presented you the reports based on the provisions stipulated in Article

14-4 and Article 36 in the Securities and Exchange Act and Articles 219 and 228 in the Company Act.

Regards,

Annual General Meeting 2024 of Chien Shing Stainless Steel Co., Ltd.

Convener of the Audit Committee: Ying-Ying Yang

2024.3.14

• 71 -

IV. Financial Statement for the Most Recent Year

==> picture [468 x 692] intentionally omitted <==

• 72 -

==> picture [470 x 681] intentionally omitted <==

• 73 -

==> picture [485 x 701] intentionally omitted <==

• 74 -

==> picture [429 x 615] intentionally omitted <==

• 75 -

==> picture [432 x 636] intentionally omitted <==

• 76 -

==> picture [682 x 483] intentionally omitted <==

• 77 -

==> picture [505 x 678] intentionally omitted <==

• 78 -

==> picture [730 x 482] intentionally omitted <==

• 79 -

==> picture [496 x 697] intentionally omitted <==

• 80 -

Chien Shing Stainless Steel Co., Ltd.

Notes to Individual Financial Statements

For the Years Ended December 31, 2023 and 2022

(In NT$ 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 2023 and 2022 individual finance statements were approved by the Board of Directors on March 14, 2024 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, 2023, the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), interpretations and interpretation announcement thereof to be applied from 2023 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, 2023, there is no material impact on the Company’s individual finance statements.

• 81 -

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

2. The new/revised/amended standards and interpretations issued by International Accounting Standards Board

(IASB), that are recognized by FSC, to be applied from 2024

New, Revised or Amended Standards and

New, Revised or Amended Standards and
Interpretations	Main contents	Effective Date Issued byIASB
IAS 1 (amendment) IAS 1 (amendment) Amendments to IFRS 7 and IAS 7 IFRS 16 (amendment)	“Classification of Liabilities as Current or Non-current” “Non-current Liabilities with Covenants” Supplier Financing Arrangements “Lease Liability in a Sale and Leaseback”	2024.1.1 2024.1.1 2024.1.1 2024.1.1

The Company's management has assessed that the amendments to the above standards will not have a significant impact on the Company's individual financial statements.

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

New, Revised or Amended Standards and

New, Revised or Amended Standards and
Interpretations	Main contents	Effective Date Issued byIASB
Amendments to IFRS 10 and IAS 28 IFRS 17 IFRS 17 (amendment) IFRS 17 (amendment) IAS 21 (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 Lack of Exchangeability	To be determined by IASB 2023.1.1 2023.1.1 2023.1.1 2025.1.1

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.

1. 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

• 82 -

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

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 (NT$). Unless specified otherwise, all financial data presented in NT$ shall use NT$ 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.

3. Foreign currency transaction

• The New Taiwan dollar (NT$) 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.

4. 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.

1. Financial instruments

2. (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.

3. (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.

4. 83 -

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

• (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.

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

• 84 -

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

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.

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

• 85 -

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

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.

(2) Impairment of non-financial assets

For the assets applicable to IAS 36 "Impairment of Assets," except for goodwill, intangible assets with non-determined 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

• 86 -

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

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.

10. 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

• (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

• 87 -

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

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. Leases

(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

• 88 -

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

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.

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.

• 89 -

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

• (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 price has resulted in onerous purchase contracts for the Company. The Company adopts the compensation or fines incurred for failure to perform the contracts as the management’s best estimate of required expenditure to settle such obligations.

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.

• 90 -

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

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.

• 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.

• 91 -

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

• (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.

20. 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. 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.

1. 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:

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

3. 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:

4. (1) Employee benefit: measurement to determine benefit obligations As stated in Note 6.10 of individual financial statements, the measurement of defined benefits

5. 92 -

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

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 NT$ 5,963 thousand as of December 31, 2023. 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 NT$ 247 thousand or increase by NT$ 256 thousand, and increase by NT$ 227 thousand or decrease by NT$ 221 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) 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 NT$ 566,233 thousand as of December 31, 2023; the allowance of inventory depreciation losses of NT$ 66,209 thousand was deducted.

(3) 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, 2023, please refer to Note 6.20 of the individual financial statements.

• (4) Estimation of provisions for onerous purchase contracts

As stated in Notes IV.14 and VI.8 and VI.17 to the individual financial statements, the decline in raw material prices has resulted in onerous purchase contracts for the Company. The Company adopts the compensations or fines incurred for the failure to perform such contracts as the basis for management’s best estimate of required expenditure to settle such obligations. The management of the Company will regularly review the reasonableness of the estimates.

The liability reserve for the onerous purchase contract recognized by the Company on December 31, 2023 was NT$ 59,959 thousand. If the actual final result differs from the management’s estimation by 10%, the book value of the liability reserve for the onerous purchase contract would be reduced by

• 93 -

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

NT$5,996 thousand or increased by NT$0.

(5) 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, 2023 was NT$ 2,399 thousand. For the amounts not recognized as deferred income tax assets, please refer to Note VI.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	2023.12.31 $1,408 203,679 - $205,087	2022.12.31
		$1,356 27,938 450,000
		$479,294

• (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.

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

• 94 -

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

2.	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	2023.12.31 $278,400 (175) $278,225	202212.31
			$121,793 (16,703)
			$105,090

• (1) The said financial assets measured at FVTPL are not provided as collateral or pledge.

• (2) 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 XII.2(3) A and B of individual financial statements.

3. Inventories

Inventories
Merchandise Raw materials Supplies Work in progress Finished good Total		2023.12.31
	Cost	Allowance of inventory depreciation losses	Carryingamount
	$69,461 111,521 13,530 199,475 238,455 $632,442	$(466) (17,443) (22) (12,703) (35,575) $(66,209)	$68,995 94,078 13,508 186,772 202,880
			$566,233

Raw materials Supplies Work in progress Finished good 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)	Carryingamount
			$- 13,250 6,114 240,507
			$259,871

• 95 -

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

• (1) Cost of sales related to inventories:

st of sales related to inventories:
Inventories transferred to cost of sales Inventories cost offset up to the net realisable value Appreciating net realisable value of inventories Total operating cost	2023 $894,774 - (249) $894,525	2022
		$1,278,205 62,273 -
		$1,340,478

• (2) In 2023, 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 NT$ 249 thousand.

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

• Financial assets measured at FVTOCI - non-current

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	2023.12.31 $65,438 8,257 73,695 (13,864) (8,257) (22,121) $51,574	2022.12.31
		$65,438 8,257
		73,695
		(23,723) (8,257)
		(31,980)
		$41,715

• (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 2023 and 2022 as a result of investment in equity instruments measured at fair value through other comprehensive income was NT$ 0 for both years.

• (3) The Company did not have accumulated profits or losses transferred within the equity in both 2023 and 2022.

• (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.

• Property, Plant and Equipment

• 96 -

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

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

2023 Original cost Beginning retained earnings Increase in the period Disposal in the period Others- reclassification Balance at the end of the period Accumulated depreciation: Beginning retained earnings Depreciation in the period Disposal in the period Balance at the end of the period Carrying amount at the end of period 2022 Original cost Beginning retained earnings Increase in the period Disposal in the period Others- reclassification Balance at the end of the period Accumulated depreciation: Beginning retained earnings Depreciation in the period Disposal in the period Balance at the end of the period Carrying amount at the end of period	Land	Buildings	Machinery Equipment	Transport equipment	Office equipment	Other equipment	Unfinished construction and equipment to beinspected	Total
	$182,341 - - (4,104)	$369,313 - - 349	$3,941,647 - (5,795) 17,798	$12,119 - (229) 1,164	$9,428 - (78) 328	$33,321 - (339) 2,169	$47,038 7,345 - (12,768)	$4,595,207 7,345 (6,441) 4,936
	178,237	369,662	3,953,650	13,054	9,678	35,151	41,615	4,601,047
	- - -	362,536 1,191 -	3,788,361 33,058 (5,795)	10,546 961 (51)	9,406 55 (78)	32,326 397 (339)	- - -	4,203,175 35,662 (6,263)
	-	363,727	3,815,624	11,456	9,383	32,384	-	4,232,574
	$178,237	$5,935	$138,026	$1,598	$295	$2,767	$41,615	$368,473
	$182,341 - - -	$367,901 - - 1,412	$3,930,358 - - 11,289	$11,891 - - 228	$9,428 - - -	$33,801 - (480) -	$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	33,321	47,038	4,595,207
	- - -	361,221 1,315 -	3,686,539 101,822 -	9,167 1,379 -	9,390 16 -	32,459 347 (480)	- - -	4,098,776 104,879 (480)
	-	362,536	3,788,361	10,546	9,406	32,326	-	4,203,175
	$182,341	$6,777	$153,286	$1,573	$22	$995	$47,038	$392,032

(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 NT$ 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. On December 29, 2021, the Board of Directors resolved to dispose of six parcels of land held by the Company, including revaluation of 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 the aforementioned property was transferred to investment property - land in the amount of NT$130,209 thousand. The Company wrote

• 97 -

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

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 6.6(10) 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 2023 and 2022.

• (4) There was no impairment of property, plant and equipment of the Company in both 2023 and 2022.

• (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 requesting the registration agency to register the prohibition of the Company’s investment property disposal on August 16, 2018 due to violation of Waste Disposal Act. The carrying amounts of the property, plant and equipment on June 30, 2022 were NT$182,521 thousand, respectively. However, the Company paid the security deposit of NT$ 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 from disposal of the 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, 2017. The auctioned price and disposal loss were NT$ 590 thousand and NT$ 501 thousand, respectively. Please also refer to Note VI.8 to the individual financial statements for the description.

• (6) Acquired property, plant and equipment listed in the individual cash flow statement:

The property, plant and equipment listed in Note VI.5(1) of the individual financial statements added during the period Plus: Other payables at the beginning of the period Less Other payables at the end of the period Cash outflow from acquisition of property, plant and equipment	2023 $7,345 6,002 (6,591) $6,756	2022
		$4,928 6,336 (6,002)
		$5,262

• (7) 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 2023 and 2022 as a result of the aforementioned leases was NT$ 1,465 thousand and NT$ 1,474 thousand, respectively.

• (8) 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. Hence, the carrying amount of the aforementioned property amounting to NT$4,104 thousand was transferred and

• 98 -

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

recognized under investment property.

6. Investment Property

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

Original cost Beginning retained earnings Reclassification in the period Disposal in the period Balance at the end of the period Accumulated depreciation: Beginning retained earnings Depreciation in the period Balance at the end of the period Accumulated impairment: Beginning retained earnings Impairment of the period Reversal in the period Balance at the end of the period Carrying amount at the end of period Original cost Beginning retained earnings Increase in the period Disposal in the period Balance at the end of the period Accumulated depreciation: Beginning retained earnings Depreciation in the period Balance at the end of the period Accumulated impairment: Beginning retained earnings Impairment of the period Reversal in the period Balance at the end of the period Carrying amount at the end of period		2023
	Land $143,483 4,104 (24,068) 123,519 - - - 38,047 - - 38,047 $85,472	Buildings $87,203 - - 87,203 39,770 1,744 41,514 34,368 - - 34,368 $11,321 2022	Total
			$230,686 4,104 (24,068)
			210,722
			39,770 1,744
			41,514
			72,415 - -
			72,415
			$96,793
	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

• (2) Please refer to Note VI.5(8) 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 fair values of the investment properties held by the Company are as following:

Fair value of investment property	2023.12.31 $800,823	2022.12.31
		$795,750

• 99 -

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

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.

• (5) 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	2023 $- $- $1,744	2022
		$29
		$333
		$1,411

• (6) 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 a carrying amount of $50,250 thousand as of June 30, 2022, 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.

• (7) Pleaser refer to Note 6.20 to the individual financial statements for the investment properties impairment.

• (8) 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 June 30, 2022 were NT$ 125,247 thousand, respectively. However, the Company paid the security deposit of NT$ 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 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 June 30, 2022 were NT$ 50,250 thousand. 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 to the individual financial statements for the description.

• (9) The Company did not capitalize borrowing costs due to the acquisition of investment properties in both 2023 and 2022.

• (10) 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

• 100 -

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

consideration of $251,234 thousand. However, the land has been secured for bank borrowings and is subject to a registration ban. According to the provisions of the sale and purchase agreement, the Company must complete the release of the land subject to the sale and purchase from the Environmental Protection Administration of the Executive Yuan, apply for the cancellation of the mortgage, the release of the registration ban and the registration of the transfer of property rights before the sale price can be transferred to the Company from the property trust account. If the Company fails to complete the aforementioned release of possession and prohibition of disposition within 180 days of signing the contract, the purchaser may cancel the land sale and purchase agreement or extend it for another 180 days. In October 2022, the Company completed the transfer of land ownership and received the above proceed from the transaction, while recognizing a gain on the disposal of investment property of NT$ 187,676 thousand and income tax expenses - land value increment tax of NT$ 1,691 thousand.

• (11) 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 November 11, 2022, respectively, and terminated the lease on January 2, 2023 after the end of the term.

• (12) 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 NT$ 500,000 thousand and received a signing bonus of NT$ 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. Then, in August 2022, the Company completed the transfer of land ownership and received the rest proceed of NT$450,000 thousand from the transaction, while recognizing a gain on the disposal of investment property of NT$419,848 thousand and income tax expenses - land value increment tax of NT$27,633 thousand.

• (13) On January 18, 2023, the Company entered into a land lease agreement with a lessee to lease land lot divided from the land at land lot 5, Magong Section, Madou District, Tainan City, at a monthly rent of

• 101 -

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

$500 thousand over a lease term from January 18 through March 17, 2023. If the lessee fails to complete the optoelectronics industry application procedures within the above lease term, the lessee must not claim any compensation from the Company for the damage caused by the termination of the above land lease. If the lessee intends to purchase the leased land within the lease term, it may sign a land sale contract with the Company. After the Board of Directors, on February 6, 2023, approved by resolution to sell the above land for NT$ 419,176 thousand, the Company signed a property sale contract on February 10, 2023 for a total price of NT$ 419,176 thousand, and entrusted a bank to be the trustee for the payment. in April 2023, the buyer remitted the contract amount of NT$41,918 thousand into the aforementioned bank account for price trust of real estate transaction. In May 2023, the Company completed the transfer of land title, received the rest proceed of NT$377,258 from the transaction, and recognized the gain of NT$394,777 thousand on disposals of investment property and the income tax expense - land value increment tax of NT$15,099 thousand.

• (14) The Company and the buyer signed an agreement on the transfer of property and equipment on March 28, 2023 and, at the total price of NT$97,347 thousand (carrying amount NT$4,104 thousand) and NT$100,000 thousand (carrying amount NT$0), respectively, sold the land No. 491 in Pitou Section, Madou District, Tainan City, and the electric room, booster station, and UHV pipelines at the Madou Plant in the unregistered building on the land, including the assets and right of use with respect to in-plant equipment and external conduits. However, the equipment can only be delivered after the specific electrical equipment in the Company's booster station is installed and there is no concern about power utilization. The price of the aforementioned transaction is entrusted to the bank. As of the release date of the individual financial statements, the buyer has remitted the contract amounts of NT$9,735 thousand and NT$25,000 thousand to the aforementioned bank account for price trust of real estate transaction.

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	2023 $181 - - 181 (88) (51) - (139) $42	2022
		$181 - -
		181
		(36) (52) -
		(88)
		$93

(2) There was no impairment of intangible assets of the Company in both 2023 and 2022.

• 102 -

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

8. Provisions - current

Provisions-current
Provisions for onerous purchase contracts (1) Changes of the Company’s provision is as the following: Estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the Waste Disposal Act 2023 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 $- 2022 Carrying amount at the beginning of period $370,420 Newly added provision in the period - Used in the period (12,395) Reversal in the period (358,025) Carrying amount at the end of period $-		2023.12.31			2022.12.31
		$59,959			$-
		Provisions for onerous purchase contracts $- 59,959 - - $59,959 $- 45,548 - (45,548)			Total $- 59,959 - - $59,959 $370,420 45,548 (12,395) (403,573) $-
		$-

(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, 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(8) 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 NT$ 1,224,404 thousand (tax included), and the fines was set a maximum amount of NT$ 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 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

• 103 -

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

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 NT$ 355,025 thousand was reversed in March 2022. Please also refer to Notes 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 thousand 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$12,000 thousand for violating the Waste Disposal Act remained the same and that Chairman Shuo-Tang Yeh was sentenced to five years and four months in jail and should be in jail for five years. Chairman Shuo-Tang Yeh refused to accept the criminal judgment of the second instance by the Tainan Branch Court, Taiwan High Court, and filed an appeal in accordance with the law. On December 19, 2022, the criminal judgment by the Supreme Court rejected the appeal. In this regard, the Chairman of the Company, Mr. Shuo-Tang Yeh, initiated relevant judicial relief proceedings, but all were rejected. Later, in November 2022, the Taiwan Tainan District Prosecutor's Office transferred the security deposit of NT$ 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 NT$ 12,000 thousand was written off, and the overestimate of NT$ 3,000 thousand was reversed. Please also refer to Notes VI.5(5) and VI.6(8) to the individual financial statements for more details.

• (4) The provisions for onerous purchase contracts in 2022 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 Note IV.14 of the individual financial statements

• (5) The provisions for onerous purchase contracts in 2023 were made as the decline in raw material prices has resulted in onerous purchase contracts for the Company in 2022 Q4. The Company adopts the compensation or fines incurred for the failure to perform such contracts as the basis for management’s best estimate of required expenditure to settle such obligations. Please also refer to Note IV.14, V, 2(4) and VI.17 to the individual financial statements for the description.

• 104 -

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

9. Long-term borrowings

As stated in Note VI.6(8) 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.

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.

• 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:
2023 Amount at the beginning of the period $6,085 Net re-measurement of the defined benefit plan (644) Amount at the end of period $5,441 C. Adjustment of the current value of defined benefit obligation and fair value of 2023.12.31 Current value of a defined benefit obligation $9,386 Fair value of planned assets (3,423) Defined benefit liability $5,963	2022
	$4,680 1,405
	$6,085
	planned assets 2022.12.31
	$9,842 (4,372)
	$5,470

D. Changes of the current value of a defined benefit obligation

Carrying amount at the beginning of period Interest expense Net re-measurement of the defined benefit liability Actuarial loss (gain) generated from the changes of financial assumption Actuarial gains generated from the	2023 $9,842 138 198 470	2022
		$13,305 93 232 (1,478)

• 105 -

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

experience adjustment Benefit paid (1,262) Carrying amount at the end of period $9,386 E. Changes of fair value of planned assets are as following 2023 Carrying amount at the beginning of period $4,372 Interest income 61 Remeasurement of defined benefit assets, net Return on plan assets (excluding current interest) 24 Contribution from employer 228 Benefit paid (1,262) Carrying amount at the end of period $3,423	(2,310)
	$9,842
	2022
	$6,247 44 159 232 (2,310)
	$4,372

• (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-the-counter, 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 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, 2023 and 2022, the balances of Company’s dedicated account in Bank of Taiwan for depositing pension reserve, was NT$ 3,423 thousand and NT$ 4,372 thousand, respectively.

• (C) As of December 31, 2023, the defined benefit plan expected to contribute NT$ 233 thousand for 2024.

• F. The amount of pension expenses recognized as profit and loss and the accounting status are as follows:

2023

2022

• 106 -

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

Interest expense Interest income Total	$138 (61) $77	$93 (44)
		$49

Operating cost Selling and marketing expenses Administrative expenses Total	2023 $64 4 9 $77	2022
		$42 2 5
		$49

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

are as follows:
Discount rate Expected wage increase rate	2023.12.31 1.20% 3.00%	2022.12.31
		1.40% 3.00%

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	2023.12.31 11 years $178 1,325 9,196 $10,699	2022.12.31
		12 years
		$112 1,112 10,421
		$11,645

(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:

2023 2022 Operating cost $1,119 $1,007

• 107 -

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

Selling and marketing expenses Administrative expenses Total	59 510 $1,688	51 491 $1,549

11. Share capital

Share capital
Balance on January 1, 2022 Balance on December 31, 2022 Balance on January 1, 2023 Balance on January 1, 2023	Registered authorized capital stock(thousand shares) (Note) 378,800 500,000 500,000 500,000	Issued commonshares,face value pershare NT$10
		Numberofshares (inthousands) 281,167 281,167 281,167 281,167	Share capital
			$2,811,673
			$2,811,673
			$2,811,673
			$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 NT$ 5,000,000 thousand, divided into 500,000 thousand shares, each with a face value of NT$ 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.

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 2023 and 2022, the Company only accumulated loss, and thus no earnings to be distributed.

• Other equity (net amount after tax)

• 108 -

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

14.	Unrealized valuation loss on financial assets measured at FVTOCI Beginning retained earnings Occurred in the period Balance at the end of the period Net operating revenue Income from product sales Other operating revenue Total Less: sales returns Sales discounts and allowances Net operating revenue	2023 $(31,980) 9,859 $(22,121) 2023 $727,187 12,543 739,730 (602) (437) $738,691	2022
			$(18,121) (13,859)
			$(31,980)
			2022
			$1,202,552 28,945
			1,231,497 (129) (361)
			$1,231,007

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

(1)	Major product/service lines
(2)	Steel coils Others Total Major regional market Regions where customers are located Taiwan	2023 $726,148 12,543 $738,691 2023 $738,691	2022
			$1,202,062 28,945
			$1,231,007
			2022
			$1,231,007

• 109 -

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

15. Operating costs and expenses

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

By function Bynature		2023			2022
	As operating costs	As operating expenses	Total	As operating costs	As operating expenses	Total
Employee benefits expense
Wage expense(Note 1)	$20,567	$10,191	$30,758	$18,407	$10,858	$29,265
Labor and health insurance expense	2,430	1,227	3,657	2,144	1,284	3,428
Pension expense	1,183	582	1,765	1,049	549	1,598
Remuneration to directors(Note 1)	-	1,257	1,257	-	1,231	1,231
Other employee benefits expense	943	522	1,465	1,392	808	2,200
Depreciation expense (Note 2)	34,241	1,421	35,662	103,096	1,783	104,879
Amortization expenses	14	37	51	14	38	52

• 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. Employee and director remuneration proposals are to be raised for resolution during shareholder meetings. Profits must first be reserved to offset against cumulative losses, if any, before the remainder can be distributed as employee/director remuneration in the above 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 2023 and 2022, the Company only accumulated loss, and thus no employee or director remuneration is estimated.

• (2) As of the end of 2023 and 2022, 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 2023 and 2022 were NT$ 37,406 thousand and NT$ 106,623 thousand, respectively. Of which the depreciation expenses for investment properties-leased assets were both NT$ 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 2023 and 2022 was 65 and 62, 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 2023 and 2022 were NT$ 649 thousand and NT$ 640 thousand, respectively.

• (3) The Company's average employee wage costs in the 2023 and 2022 were NT$ 530 thousand and

• 110 -

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

NT$ 513 thousand, respectively; the average employee wage costs in 2023 were 3.31% more than that in 2022.

• (4) The Company has established the Audit Committee to replace the functions of supervisors, as required, and thus no remuneration to supervisor.

• (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).

1. Other income and expenses, net

16.	Other income and expenses, net
17.	Investment property- leasing assets Rent income depreciation expenses 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	2023 $- (1,744) $(1,744) 2023 $3,342 2023 $2,418 10,348 862 $13,628	2022
			$29 (1,744)
			$(1,715)
			2022
	(1) (2)
			$1,012
			2022
			$6,236 1,311 1,018
			$8,565

• 111 -

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

(3) Other gains or losses

Other gains or losses
Gain (loss) on financial assets measured at FVTPL Losses on disposals of property, plant and equipment 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 Loss on onerous purchase contract Other losses Total	2023 $69,864 (5) 394,777 10,770 - - (59,959) (9) $415,438	2022
		$(11,948) - 607,524 24 355,025 3,000 - (4)
		$953,621

Please refer to Notes IV.14, V, and VI.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 and the loss on onerous purchase contract.

(4) Financial costs

(4)Financial costs
Interest on bank borrowings 18.Other comprehensive income Composition Items of Other Comprehensive Income	Recognized duringtheperiod	2023 $- Reclassification adjustments of theperiod Other comprehensive income	2023		2022 $(7,366) Income tax benefit(expense)After-tax amount
				$-
				Other comprehensive income
2023 Items that will not be reclassified subsequently to profit or loss: Re-measurement of the defined benefit plan Unrealized valuation gains on investments in equity instruments as at fair value through other comprehensive income Total 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	$(644) 9,859	$- -		$(644) 9,859	$129 -	$(515) 9,859
	$9,215	$-		$9,215	$129	$9,344
	$1,405 (13,859)	$- -		$1,405 (13,859)	$(281) -	$1,124 (13,859)
	$(12,454)	$-		$(12,454)	$(281)	$(12,735)

19. Income tax

• (1) The Company's profit-seeking enterprise income tax settlement and report cases before the 2021 (inclusive) have been approved by the tax collection agency.

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

A. Income tax recognized in profit or loss

2023

2022

• 112 -

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

Income tax expense of the period Income tax expense to be borne for the period $- Land value increment tax 15,099 Deferred income tax expense 100 income tax expense $15,199 Income tax related to other comprehensive income components 2023 Deferred income tax (gain) expense related to initially generated temporary difference and reversal $(129)	$- 29,324 16
	$29,340
	2022
	$281

B. Income tax related to other comprehensive income components

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

Accounting profit Net income before tax of continuing operations Tax amount based on the tax rate applicable to the Company Adjusted item The effects of income tax from unrecognizable items on the tax return Income tax effects of temporary differences Income tax expense to be borne for the period Land value increment tax Deferred income tax expense income tax expense	2023 $243,417 $48,683 (96,880) 48,197 - 15,099 100 $15,199	2022
		$809,997
		$162,000 (119,848) (42,152)
		- 29,324 16
		$29,340

• (4) The information of unused tax credit for loss

Year of occurrence 2013 2014 2015 2016 2018 2019 2020 2022 2023(Estimate) Total	Amount not credited 2023.12.31 2022.12.31 $- $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 80,426 170,715 - $1,246,931 $1,344,827	Lastyear for credit
	2023.12.31 $- 86,078 332,570 21,430 44,293 193,592 317,827 80,426 170,715 $1,246,931
		2023 2024 2025 2026 2028 2029 2030 2032 2033

• (5) There was no income taxes related to direct credit or debt of equity for 2023 and 2022.

• 113 -

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

• (6) The analysis of the deferred tax assets and liabilities is as following:

2023 Deferred tax assets Taxation difference from the contributed pension expense Deferred tax liabilities Unrealized foreign currency exchange gain Tax differences recognized for other expenses Total 2022 Deferred tax assets Taxation difference from the contributed pension expense Deferred tax liabilities Unrealized foreign currency exchange gain	Beginning retained earnings	Recognized in comprehensive income	Recognized in other comprehensive income	Balance at the end of the period
	$2,270	$-	$129	$2,399
	$16 -	$(16) 116	$-	$- 116
	$16	$100	$-	$116
	$2,551	$-	$(281)	$2,270
	$-	$16	$-	$16

• (7) Unrecognized deferred tax assets

As of December 31, 2023 and 2022, the amount of income that are not likely taxable not recognized as deferred income tax assets was NT$ 289,133 thousand and NT$ 296,706 thousand, respectively.

20. Non-financial asset impairments

• (1) The Company treats the regulated assets based on IAS 36 “Impairment of Assets.” December 31, 2023 and 2022, the accumulated impairment balance are detailed as following:

and 2022, the accumulated impairment balance are	detailed as following:
Investment Property	2023.12.31 $72,415	2022.12.31
		$72,415

• (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 NT$ 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 NT$ 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.

21. Earnings per Share

Basic and diluted earnings per share

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. The Company had no dilutive potential ordinary shares in 2023 and 2022, so the basic and diluted earnings per share are equivalent, and the calculation is as follows:

• 114 -

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

2023 2022 Net income for the holders of the Company’s common share equity $228,218 $780,657 Weighted-average shares 281,167 thousand shares 281,167 thousand shares Basic and diluted earnings per share (after tax) (NTD) $0.81 $2.78 Adjustment to liabilities from financing activities Non-cash change Beginning retained earnings Cash flows Acquisition Change of exchange rate Balance at the end of theperiod 2023:None. 2022 Long-term borrowings (due within a year included) $799,123 $(799,123) $- $- $-	2023 2022 Net income for the holders of the Company’s common share equity $228,218 $780,657 Weighted-average shares 281,167 thousand shares 281,167 thousand shares Basic and diluted earnings per share (after tax) (NTD) $0.81 $2.78 Adjustment to liabilities from financing activities Non-cash change Beginning retained earnings Cash flows Acquisition Change of exchange rate Balance at the end of theperiod 2023:None. 2022 Long-term borrowings (due within a year included) $799,123 $(799,123) $- $- $-	2022	2022
		$780,657
		281,167 thousand shares
			$2.78
			Balance at the end of theperiod
2023:None. 2022 Long-term borrowings (due within a year included)	Beginning retained earnings $799,123
			$-

22. Adjustment to liabilities from financing activities

VII. Related party transaction

1. Name of related parties and the relationship

Related Party Name Relationship to the Company Shuo-Tang Yeh The Company’s chairman Tsai-Yun Yeh Representative of the Company's corporate director and the Company's President (Note) Chien Shing Construction Co., Ltd. (Chien Shing The two companies share the same chairman. Construction)

Note: Served as the President of the Company since December 21, 2023.

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	2023 $-	2022
		$29

(2) Endorsements/guarantees

As of December 31, 2023, the Company's key management personnel, Shuo-Tang Yeh and Tsai-Yun Yeh, act as joint guarantors for the development of import usance letter credits.

(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

• 115 -

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

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 VI.6(6) 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	2023 $1,257	2022
		$1,531

VIII. Pledged Assets

1. Among the assets as of December 31, 2023 and 2022, the assets provided by the Company as the collaterals for issuance of material purchase L/C to the financial institutions are the followings:

Line Item Property, plant and equipment Land Buildings Investment Property Land Total	2023.12.31 $149,209 5,935 - $155,144	2022.12.31 $182,341 126 69,123 $251,590	Institution forpledge	Description of guaranteed debt
			(Note) (Note) (Note)	(Note) (Note) (Note)

Note: The Company repaid its long-term loan to Taiwan Business Bank in July, 2022; however, as of December 31, 2022, the mortgage on the property had not been written off; on December 31, 2023, development of import usance letter of credit for short-term borrowings from Union Bank of Taiwan.

IX. Significant Contingent Liabilities and Unrecognized Commitments

As of December 31, 2023, the Company still have the following significant contingent liabilities and unrecognized commitments not listed in the abovementioned individual financial statements:

1. The Company has issued an unused letter of credit with a balance of US$9,765 thousand.

2. The amount of material contract for constructing plants and procuring equipment is NT$ 52,218 thousand (tax included), and NT$ 27,645 thousand was paid (included the accounted payables); NT$ 24,573 thousand must be paid in the future.

3. X. Loss on Material Disaster

4. None.

5. 116 -

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

XI. Material Events after the Period

None.

XII. Other

1. 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:

the 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	2023.12.31 $100,443 (205,087) - 1,704,484 1,704,484 -%	2022.12.31
		$49,509 (479,294)
		- 1,466,922
		1,466,922
		-%

1. Financial risk management

2. (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, 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.

3. (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

4. (3) Major risks of the Company’s financial instruments are described as following:

5. 117 -

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

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:

Foreign currency (thousand dollar) 2023.12.31 Financial asset Monetary items USD $186 Non-currency item: none. Derivative financial instruments:none. Financial liability Monetary items USD $78 Non-currency item: none. Derivative financial instruments:none.	Foreign currency (thousand dollar)	Exchangerate	Carrying amount		Sensitivity analysis
				Change	Increase/decrease of net profit before tax	Increase/decrease ofequity
		30.63 30.78	$5,687 $2,401	5% 5%	$284 $120	$- $-

Foreign currency (thousand dollar) 2022.12.31 Financial asset Monetary items USD $95 Non-currency item: none. Derivative financial instruments:none. Financial liability Monetary items USD $78 Non-currency item: none. Derivative financial instruments:none.	Foreign currency (thousand dollar)	Exchangerate	Carrying amount		Sensitivity analysis
				Change	Increase/decrease of net profit before tax	Increase/decrease ofequity
		30.66 30.76	$2,921 $2,390	5% 5%	$146 $120	$- $-

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

• 118 -

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

into the currency expressed in individual financial statements are as follows:

Functional currency NTD	2023 Foreign exchange net gain(loss) Average exchange rate $10,770 -	2022	2022
	Foreign exchange net gain(loss) $10,770	Foreign exchange net gain(loss) $24	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. 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	2023.12.31 $- - $- $203,263 - $203,263	2022.12.31
		$450,000 -
		$450,000
		$27,899 -
		$27,899

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 2023 and 2022 increased by NT$ 1,016 thousand and NT$ 139 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

• 119 -

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

opposite direction: Profit after tax increased Financial assets measured at FVTPL Increased equity Financial assets measured at FVTOCI	2023.12.31 $13,911 $2,579	2022.12.31
		$5,255
		$2,086

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 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 accounts receivable	Reserve matrix (loss)	Loss allowance (lifetime ECLs)

2023.12.31: None. 2022.12.31: None.

• (C) The analysis of the concentration of accounts receivable credit risk is as following

Weight of receivables from top ten li	2023.12.31 -%	2022.12.31
		-%

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

2023.12.31

2022.12.31

• 120 -

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

Bank borrowing $199,443(Note) $-

Note: It refers to the limit of usance letter of credit for development of import.

(B) Maturity analysis of undiscounted financial liabilities

2023.12.31 Non-derivative financial liabilities Note payable Accounts payable Other payables Total Non-derivative financial liabilities: none 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
	$8,961 1,774 23,451				$8,961 1,774 23,451
	$34,186				$34,186
	$6,031 204 37,467				$6,031 204 37,467
	$43,702				$43,702

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.

• 121 -

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

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:

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:

2023.12.31 Asset Financial assets measured at FVTPL Equity securities Financial assets measured at FVTOCI Equity securities Liability: none 2022.12.31 Asset Financial assets measured at FVTPL Equity securities Financial assets measured at FVTOCI Equity securities Liability: none	Level 1: $278,225 51,574 $105,090 41,715	Level 2: $- - $- -	Level 3: $- - $- -	Total
				$278,225 51,574 $105,090 41,715

• (B) The Company did not have any significant transfers between the level 1 and the level 2 in the fair value hierarchy during 2023 and 2022.

• 122 -

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

• (C) The Company has no change in the fair value measurement at level 3 in 2023 and 2022, 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.

• (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 2023 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 NT$300 million or 20% of the paid-in capital: none

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

• (6) Disposal of individual real estate at costs of at least NT$ 300 million or 20% of the paid-in capital: Table 2.

• (7) Purchase or sales with related parties for at least NT$ 100 million or 20% of the paid-in capital: none

• (8) Receivable from related parties for at least NT$ 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.

• 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 2023: None.

3. Information on investments in mainland China

None.

4. 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

1. 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.

2. 123 -

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

Segments Information Revenue Income from external clients Inter-segment income Total income Segment losses Non-operating income and expense Net income before tax of continuing operations Depreciation and amortisation income tax expense Non-current assets capital expenditure of segments	2023 $738,691 - $738,691 $(188,991) 432,408 $243,417 $37,457 $15,199 $18,703	2022
		$1,231,007 -
		$1,231,007
		$(145,835) 955,832
		$809,997
		$106,675
		$29,340
		$9,367

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

Asset Segment assets Deferred tax assets Investment- non investment segment Total asset Liability Segment liabilities Deferred tax liabilities Defined benefit liability Total liabilities	2023.12.31 $1,472,729 2,399 329,799 $1,804,927 $94,364 116 5,963 $100,443	2022.12.31
		$1,367,356 2,270 146,805
		$1,516,431
		$44,023 16 5,470
		$49,509

• 124 -

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

2. Disclosure of the holistic enterprise information

(1) Information by product and service

The analysis of the Company’s major product and service:

Steel coils Others Total	2023 $726,148 12,543 $738,691	2022
		$1,202,062 28,945
		$1,231,007

(2) Information by region

A. The revenue from domestic and overseas external clients:

Regions where customers are located Taiwan	2023 $738,691	2022
		$1,231,007

• 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	2023.12.31 $473,772	2022.12.31
		$516,183

(3) Information on major customers

List of single clients from which the income accounted for 10% of net operating revenue:

Customer A B C D	2023 $279,189 228,248 (Note) (Note)	2022
		$371,840 275,987 202,499 136,874

Note: The net sales revenue to customer C and D for 2023 are not disclosed because it did not reach more than 10% of the net operating revenue.

• 125 -

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

(In NT$ thousand, unless stated otherwise)

==> picture [730 x 339] intentionally omitted <==

• V. The company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report and their impact on the company’s financial situation: None.

• 126 -

Seven. A review and analysis of the Company's financial position and financial performance, and a listing of risks

I. Financial situation:

Unit: NT$ Thousand

I. Financial situation:			Unit: NT$Thousand	Unit: NT$Thousand
Year Item	2023	2022	Difference
			Amount	Proportion(%)
Current assets	1,277,182	956,263	320,919	33.56
Property, plant and equipment	368,473	392,032	(23,559)	(6.01)
Other assets	10,863	7,827	3,036	38.79
Total assets	1,804,927	1,516,431	288,496	19.02
Current liabilities	94,364	44,023	50,341	114.35
Non-current liabilities	6,079	5,486	593	10.81
Total liabilities	100,443	49,509	50,934	102.88
Share capital	2,811,673	2,811,673	0	0
Capital reserve	0	0	0	0
Retained earnings	(1,085,068)	(1,312,771)	227,703	17.35
Total equity	1,704,484	1,466,922	237,562	16.19
The main reasons for significant changes (changes of 20% or more in two periods), their effects and future corresponding plans (I) The main reasons for changes of 20% or more; 1. Current assets, other assets: Because the advance for equipment increased in 2023. 2. Current liabilities and total liabilities: The provisions for onerous purchase contracts recognized by the Company in Q4 2023 were NT$59,959 thousand, which was generated made as the decline in raw material prices has resulted in onerous purchase contracts. The Company adopts the compensation or fines incurred for the failure to perform such contracts as the basis for management’s best estimate of required expenditure to settle such obligations. The management of the Company will review the reasonableness regularly. As such, our 2023 current liabilities and total liabilities increased. (II) Their effects and future corresponding plans: We will continue to strengthen the working capital and asset management and liability structure.

II. Financial performance:

Unit: NT$ Thousand

Year Item	2023	2022	Increase (decrease) amount	Change ratio (%)
Net operating revenue Operating cost Operating profit (loss) Operating expenses Operating profit (loss) Non-operating income and expense Net income (loss) before tax Income tax benefit (expense) Netprofit(loss)for theperiod	738,691 (894,525)	1,231,007 (1,340,478)	(492,316) (445,953)	(39.99) (33.27)
	(155,834) (31,413)	(109,471) (34,649)	46,363 (3,236)	42.35 (9.34)
	(188,991) 432,408	(145,835) 955,832	43,156 (523,424)	29.59 (54.76)
	243,417 (15,199) 228,218	809,997 (29,340) 780,657	(566,580) (14,141) (552,439)	(69.95) (48.20) (70.77)
(I) Analysis of the description of increase/decrease changes reaching 20% or more: 1. The operating revenue, gross profit, and operating income or loss for 2023 declined significantly compared with the prior year, mainly due to the weakened demand momentum, a drop in international nickel prices, the obstacles encountered by stainless steel plants to receive orders, a decrease in customer demand, and annual preventive maintenance of outdated equipment. Gross profit and operating profit and loss also 2. Net profit before tax in 2023 and net profit for the period decreased year-on-year mainly due to the effects from the combination of described above. (II) Expected sales volume and its basis: Not applicable as the Company did not disclose financial forecast information to the public in 2023. (III) Possible impact on the Company's future financial operations and corresponding plans: Please refer to "Five. Operational Overview" in the annual report.

• 127 -

III. Cash Flow:

(I) Analysis of changes in cash flows for the year:

Unit: NT$ Thousand

Opening cash balance	Estimated annual net cash flows from operating activities	Estimated annual net cash flows from investment activities	Estimated annual net cash flows from financing activities	Effects of changes in exchange rates	Remaining cash (deficiency) amount
479,294	(684,838)	410,663	0	(32)	205,087
Analysis of changes in cash flows for the period: Thedecline in 2023 from the previous year was mainly due to the decrease in 2023 cash flow from operating year-on-year.

• (II) Analysis of remedies for cash deficits and liquidity : Not applicable.

(III) Liquidity analysis for the coming year: Unit: NT$ thousand

Liquidityanaly	sis for the coming yea	r:Unit: NT$ thousand
Opening cash balance	Estimated annual net cash flows from operating activities	Estimated annual net cash flows from investment activities	Estimated annual net cash flows from financing activities	Effects of changes in exchange rates	Remaining cash (deficiency) amount
205,087	591,350	(17)	0	0	796,420
1. Analysis of expected 2024 cash flow changes: (1) Operating activities: The Company expects that the steel market in 2024 will be stable and the industry is expected to generate profits. (2) Investment activities: Routine production equipment retirement and replacement. (3) Financing activities: None. 2. Responsive measures and liquidity analysis for expected cash flow deficit: None.

IV. Major capital expenditures in the most recent year and their impact on financial operations: None.

• V. the Company's reinvestment policy for the most recent fiscal year, the main reasons for the profits/losses generated thereby,

the plan for improving re-investment profitability, and investment plans for the coming year: None.

VI. Risk evaluation during the most recent fiscal year or during the current fiscal year up to the date of publication of the

annual report:

• (I) The impact of interest rate, exchange rate changes, and inflation on the Company's profit and loss and future corresponding measures:

• The interest expense in 2023 was 0.

• In consideration of costs and timeliness, the Company's raw materials are mainly procured abroad. Due to the fact that the Company's products are all being sold in Taiwan, related personnel have been put in place to observe the trend of exchange rates and capital requirements, while adopting flexible and favorable means to reduce the exchange rate losses caused by exchange rate fluctuations.

• Impact of inflation on the company's profit and loss: None.

(II) Main reasons and future corresponding measures of policies for engaging in highly risky and highly leveraged investments, lending funds to others, endorsements and guarantees and derivatives transactions: None.

• (III) Future R&D plans and estimated R&D investment expenses:

• (IV) Impact on the Company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response: None.

• (V) Impact on the company's financial operations of developments in science and technology as well as industrial change, and measures to be taken in response: None.

• (VI) Impact on the company's crisis management of changes in the company's corporate image, and corresponding measures to be taken in response: None.

• (VII) Expected benefits and possible risks associated with any merger and acquisitions, and corresponding measures being or to be taken: None.

• (VIII) Expected benefits and possible risks associated with any plant expansion, and corresponding measures being or to be taken: None.

• (IX) Risks associated with any consolidation of sales or purchasing operations, and corresponding measures being or to be taken: None.

• 128 -

• (X) Impact upon and risk to the company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the company has been transferred or has otherwise changed hands, and corresponding measures being or to be taken: None.

• (XI) Impact upon and risk to company associated with any change in governance personnel or top management, and corresponding measures being or to be taken: None.

• (XII) Litigious and non-litigious matters. List major litigious, non-litigious or administrative disputes that: involve the Company and/or any company director (including independent director), the president, any person with actual responsibility for the firm, any major shareholder holding a stake of greater than 10 percent, and/or any company or companies controlled by the company; and have been concluded by means of a final and unappealable judgment, or are still under litigation. Where such a dispute could materially affect shareholders' equity or the prices of the company's securities, the annual report shall disclose the facts of the dispute, amount of money at stake in the dispute, the date of litigation commencement, the main parties to the dispute, and the status of the dispute as of the date of publication of the annual report: On April 8, 2019, the Company received an indictment from the District Prosecutor’s Office for violating the Waste Disposal Act, with the Company and 12 persons listing as defendants including the Company's chairman, Shuo-Tang Yeh. The cleanup cost was estimated at NT$1,224,404 thousand (tax included), with a maximum fine of NT$15,000 thousand. 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 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, 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 NT$ 355,025 thousand was reversed in March 2022. Please also refer to Notes 4.14, 5, and 5.17 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.

On July 9, 2021, the Company received a judgment from the Taiwan Tainan District Court, which imposed a fine of NT$12,000 thousand 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$12,000 thousand for violating the Waste Disposal Act remained the same and that Chairman Shuo-Tang Yeh was sentenced to five years and four months in jail and should be in jail for five years. Chairman Shuo-Tang Yeh refused to accept the criminal judgment of the second instance by the Tainan Branch Court, Taiwan High Court, and filed an appeal in accordance with the law. On December 19, 2022, the criminal judgment by the Supreme Court rejected the appeal. In this regard, the Chairman of the Company, Mr. Shuo-Tang Yeh, initiated relevant judicial relief proceedings, but all were rejected. Later, in November 2022, the Taiwan Tainan District Prosecutor's Office transferred the security deposit of NT$ 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 NT$ 12,000 thousand was written off, and the overestimate of NT$ 3,000 thousand 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.

(XIII) Information discloser of cyber security management

1. Cyber security management strategy:

• 129 -

• <1> Cyber safety polices

• a. Corporate security management strategy and framework

In order to effectively implement information security management, the Corporate Information Security Organization applies the management cycle mechanism of Plan-Do- Check-Act (PDCA) to review the applicability and protection measures of information security policies, and regularly reports the performance to the Proprietary Information Protection Committee.

In the “Plan Phase,” the necessary Information Security Management System (ISMS) is established depending on the Company's needs, to reduce the threat of corporate information security from the system, technical and procedural aspects, and establishes the highest-spec confidential information protection services meeting customer need.

During the “Do Phase,” the multi-layer information security safeguard is built, continuously introducing innovative technologies of information security defense, and integrating and internalizing the information security control and management mechanism into the daily operation processes such as soft- and hardware operation and maintenance, and supplier information security management. The information security is systematically monitored, to maintain the confidentiality, integrity and availability of the Company's important assets.

In the “Check Phase,” the system information such as firewalls and emails are monitored, to understand the internal information security status, while the regular information security attack simulations being conducting regularly to improve the crisis management capability.

In the “Action Phase,” the review and continuous improvement are fundamental; supervisions and audits are implemented to ensure the continued effectiveness of information security standard. The improvement actions including information security measures, trainings, and promotions are regularly reviewed and implemented, to ensure that the Company's key confidential information is not leaked

• b. Concrete management programs

Network security: Building firewall and email system for control, installing antivirus software on each computer, regularly updating system software, strengthening firewall and network controls, to prevent computer viruses from spreading across terminals.

Device security: Building the anti-virus at entrance mechanism, to prevent devices containing malicious software from entering the Company. The anti-virus measures are established depending on the type of computer to reinforce the detection of malware behavior.

Application security: Continuing to enhance the application security control mechanism and integrating such into the development process and platforms.

Enhanced data security protection technology: Individual users have corresponding permissions after logging in to the system, out-mailing control, file and data encryption control and protection, and daily backups.

Educational communications and promotion: Enhancing employees' vigilance against email social attacks, executing suspicious email defense detection, regularly conducting drills for employee identification ability, and enhancing employees' information security awareness.

2. Cyber security risks and countermeasures:

• <1> Risk and management measures for cyber technological security

The Company has established the basic information security safeguard measures, but it cannot guarantee that the computer system for controlling and maintaining the Company's manufacturing, operations, and accounting, among other key corporate functions may completely prevent any third-party paralyzing network system from disrupting the Company's operations and damaging to the Company's reputations. When under a serious cyber attack, the Company's system may lose key company information, and the production lines may also be affected. By continuously reviewing and evaluating the information security regulations and procedures, the Company ensures their appropriateness and effectiveness; provided it cannot guarantee that the Company will not be affected by emerging risks and attacks amid the evolving information security threats. Cyberattacks may also attempt to steal the Company's trade secretes and other confidential information, such as the proprietary information of customers or other stakeholders, and the personal information of the Company's employees.

The Company has been attacked in the past because the devices containing malware were purchased and installed, and it may face similar attacks in the future. In order to prevent and reduce the damage resulted from such attacks, the Company has implemented relevant improvement measures, and continued to update such, for instance, establishing the anti-virus at entrance mechanism for machines, to prevent machines containing malicious software from entering the Company; reinforcing the network firewalls and network control to prevent the spread of computer viruses across machines and plants; building endpoint anti-virus measures depending on computer types; introducing advanced solutions to detect and treat malware; designing and developing information

• 130 -

security-enhanced personal computers for employees to use; designing and developing the cloud-based application security policies; introducing new technologies to enhance data protection; reinforcing phishing email detection; establishing an integral automated information security operation and maintenance platform, and regularly performing employee vigilance tests, while commissioning external experts to perform information security appraisal. Although the Company continues to strengthen its information security protection measures, but no guarantee that the Company will be free from malicious software and hacker attacks.

In addition, the Company needs to share some highly sensitive and confidential information to some third-party system providers that provide the Company with related services. Despite that the Company requires the third-party service providers to comply with confidentiality and network security regulations in the service contracts entered, there is no guarantee that every third-party service provider will strictly comply with these obligations. The internal network systems maintained by the above-mentioned service providers and their contractors, and external cloud computing networks (such as servers) are also exposed to risk of cyber attacks. If the Company or its service providers cannot solve the technical problems caused by these network attacks in a timely manner, or ensure the integrity and availability of the data of the Company (as well as these of the customers or other third-parties), or control the Company or services providers’ computer system, all these may seriously compromise the Company's commitment to customers and other stakeholders, and the Company's operating results, financial position, prospects and reputation may also be materially and adversely impacted.

3. Major IT security incidents:

In July 2013, the Company’s email system was hacked; the email system couldn’t operate normally, and some PCs also malfunctioned. The reason for the virus infection was that the Company's old mail server was an old simple system with poor protection capability, unable to effectively prevent spam, virus spread and hacker attacks. Therefore, the paralyzed system affected the operation of receiving and sending mails. The Company has already taken improvement measures in July 2013, and urgently purchased a new mail server system with better protection for a total of NT$110,000. While no material loss was suffered in terms of operation and production, with this information security lesson, the Company has made appropriate budgets annually to strengthen the information technology security of system software and hardware. Provided, there is no guarantee that the Company is free from malicious software attacks.

VII. Other important matters: None.

• Eight. If any of the situations listed in Article 36, paragraph 2 subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

• 131 -

Chien Shing Stainless Steel Co., Ltd.

Chairman: Shuo-Tang Yeh