CSSSC — Audit Report / Information 2021

Nov 15, 2021

Stock Code ： 2025

Chien Shing Stainless Steel Co., Ltd. Individual Financial Statements 2021 and 2020 (CPAs’ audit report included)

Address of the Company : No.222 Industry Road, Hsiao Pyi Li, Madou Dist., Tainan City Telephone Number of the Company : (06)570-3271

Individual Financial Statements

Table of Contents

Individual Financial Statements Table of Contents
Item	Page
I. Cover	1
II. Table of Contents	2
III. CPAs’ Audit Report	3-7
IV. Individual Balance Sheet	8
V. Individual Statement of Comprehensive Income	9
VI. Individual Statement of Changes in Equity	10
VII. Individual Cash Flow Statements	11
VIII. Notes to Individual Financial Statements
(I) History of Company	12
(II) The Authorization of Financial Statements	12
(III) Application of New and Revised International Financial Reporting Standards	12-14
(IV) Summary of Significant Accounting Policies	14-24
(V) Critical Accounting Judgements and Key Sources of Estimation and Uncertainty	24-26
(VI) Summary of Significant Accounting Items	26-47
(VII) Related party transaction	47-48
(VIII) Pledged Assets	49
(IX) Significant Contingent Liabilities and Unrecognized Commitments	49
(X) Loss on Material Disaster	49
(XI) Material Events after the Period	49
(XII) Others	50
(XIII) Additional Disclosures
1. Information about significant transactions	58, 61
2. Information about investees	58
3. Information on investments in mainland China	58
4. Information on main investors	58, 62
(XIV) Segments Information	58-61
IX. Details of Significant Accounting Items	63-88

==> picture [483 x 63] intentionally omitted <==

CPAs’ Audit Report

To Chien Shing Stainless Steel Co., Ltd.:

Audit Opinion:

We have audited the accompanying individual balance sheet of Chien Shing Stainless Steel Co., Ltd. (the “Company”), as of December 31, 2021 and 2020, and the individual statements of comprehensive income, individual changes in equity and individual cash flows for the years then ended, and the notes to the individual financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying individual financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021 and 2010, and its individual financial performance and its individual cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the individual financial statements of the Company for the year 2021. These matters were addressed in the context of our audit of the individual financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We decided the key audit matters are the followings:

• 3 -

==> picture [483 x 63] intentionally omitted <==

I. Impairment of Property, Plant and Equipment

Please refer to Note 4.8(2) of the individual financial statements for the accounting policy for property, plant and equipment; for the material estimations and the major sources of assumed uncertainties, please refer to Note 5.2(4) of the individual financial statements

Property, plant and equipment are the major assets of the Company, as of December 31, 2021, their carrying amount was NTD 487,264 thousand, accounted fro 25% of the total assets. When evaluating any impairment sign by the management, they have to estimate the recoverable amount of such asset. When evaluating the impairment of assets, the value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit. The application of value in use must estimate the future cash inflow and outflow derived from continuous use and final disposal of such asset, and the proper discount rate shall be applied to such future cash flow. Since the judgement and assumption involved in evaluating impairment of assets, including identification of cash-generating unit, future sales forecast, estimated profit of products, remaining economic life of the asset, and the current time value of money; the management shall make the best estimation. Therefore we consider the impairment of property, plant and equipment is one of the most material matters when auditing the Company’s individual forecast statements.

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

II. Valuation of Inventories

Please refer to Note 4.9 of the individual financial statements for the accounting policy for valuation of inventories; for the material estimations and the major sources of assumed uncertainties, please refer to Note 5.2(3) of the individual financial statements

As of December 31, 2021, the Company’s carrying amount of inventories was NTD 313,541 thousand, accounted fro 16% of the total assets. The Company mainly produces and sells cold-rolled stainless coil products; its production and marketing policy is affected by the changes of market demands. When an inventory is damaged, all or part obsolete or selling price depreciated, the cost of such inventory may not be recovered. When the estimated costs to be input until completion and the estimated costs required for sales increased, the cost of such inventory may not be recovered, either. The use and value of inventories mainly depend on the inventory management policy of the management, and the future sales forecast of the products. However, forecast is uncertain, and thus we consider valuation of inventories is one of the most material matters when auditing the Company’s individual forecast statements.

• 4 -

==> picture [483 x 63] intentionally omitted <==

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

III. Estimated Provision for Expenses to Clean the Landfilled Industrial Waste in the Plant Area and the Fine due to Violating the Waste Disposal Act

Please refer to Note 4.14 of the individual financial statements for the accounting policy for provision; for the material estimations and the major sources of assumed uncertainties, please refer to Note 5.2(2) of the individual financial statements; for details of provision please refer to Note 6.9 of the individual financial statements.

The Company has been suspected to landfill the industrial waste in its plant area, and thus violating the Waste Disposal Act; consequently the estimates of the said waste cleaning expense and possible fine are derived. The Company’s best estimate of the required expenditure to fulfill this obligation, and the best estimate for each subsequent balance sheet date, are involved with the material assumptions and estimates made by the management, including the estimate of the volumes of waste and polluted soil, and estimate of the cleaning expenses. The actual results may differ from the estimates. Therefore, we consider the estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the Wast Disposal Act is one of the most material matters when auditing the Company’s individual forecast statements.

The related audit procedure undertaken by us including understanding the estimation procedure applied by the management, estimation method and related assumptions, and regularly reviewing the estimation process and assessing the reasonableness; obtaining the expert’s appraisal report or the approved result of the waste cleaning plan by the competent authorities; obtaining the quotation or agreement of the cleaning expense provided by vendors; reviewing and calculating the estimate documents from the management, reviewing if the management’s regular review of estimates reflect the current best estimates; corresponding with external lawyers for inquiry and proof, and clarifying the use of provision.

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

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

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

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

• 5 -

==> picture [483 x 63] intentionally omitted <==

Auditors’ Responsibilities for the Audit of the Individual Financial Statements

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

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

• I. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• II. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

• III. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• IV. Conclude on the appropriateness of management’s use of the going concern basis of accounting and. based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or. if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• V. Evaluate the overall presentation, structure and content of the individual financial statements, including the disclosures, and whether the individual financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• 6 -

==> picture [483 x 63] intentionally omitted <==

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the individual financial statements for the year ended December 31, 2021 and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Diwan & Company The Financial Supervisory Commission R.O.C. Approval No. for the Certification:

Jing Guang Zheng Shen Zhi No. 1000047855 Jing Guang Zheng Shen Zhi No. 0990071790

Rui-Wen Lu

CPA:

Arnico Tseng

March 25, 2022

• 7 -

Chien Shing Stainless Steel Co., Ltd.

Individual Balance Sheet December 31, 2021 and December 31, 2020 (All amounts in NTD thousand)

Assets	Assets	Note	December 31, 2	021	December 31, 2020	December 31, 2020	Liabilities and equity	Liabilities and equity	Note	December 31, 2021	December 31, 2021	December 31, 2020	December 31, 2020
Code	Accounting items		Amount	%	Amount	%	Code	Accounting items		Amount	%	Amount	%
11xx 1100 1110 1170 1200 130x 1410 1470 15xx 1517 1600 1760 1780 1840 1915 1920 1990 1xxx	Current assets Cash and cash equivalents Financial assets measured at FVTPL - current Net receivable Other receivables Inventories Prepayments Other current assets Total current assets non-current assets Financial assets measured at FVTOCI - non-current Property, Plant and Equipment Net investment property Intangible assets Deferred tax assets Prepayments for equipment Refundable deposits Other non-current assets- others Total non-current assets Total assets	IV and VI.1 IV and VI.2 IV and VI.3 IV IV, V and VI.4 IV and VI.5 IV, V, VI.6, VIII and IX IV, V, VI.6, VI.7, VI.21 VII, VIII and XI IV, VI.8 IV, V and VI.20	$ 373,575 70,517 - 773 313,541 386,969 99	19 4 - - 16 20 -	$ 20,588 52,410 18,139 846 435,741 294,749 2,603	1 3 1 - 25 17 -	21xx 2150 2170 2200 2220 2230 2250 2300 2322 2365 25xx 2540 2550 2640 2xxx 31xx 3100 3110 3300 3350 3400 3420 3xxx	Current liabilities Note payable Accounts payable Other payables Other payables- related parties Income tax liabilities for the period Provision for liabilities - current Advance receipts and other current liabilities Long-term borrowings due within a year Refund liabilities - current Total current liabilities Non-current liabilities Long-term borrowings Provision for liabilities - non-current Net defined benefit liabilities - non-current Total non-current liabilities Total liabilities Equity Share capital Ordinary share capital Retained earnings Deficit to be compensated Other equities Unrealized valuation loss on financial assets measured at FVTOCI Total equity Total liabilities and equities	IV IV IV IV and VII IV and VI.20 IV, V and VI.9 IV, VI.10 and VIII IV IV, VI.10 and VIII IV, V and VI.9 IV, V and VI.11 IV and VI.12 VI.13 IV, VI.5, VI.14 and VI.19	$ 13,362 4,712 37,175 - 135 370,420 266 512,174 22,256	1 - 2 - - 19 - 26 1	$ 7,408 4,919 26,846 83,000 - 236,262 1,701 512,174 217	- - 2 5 - 14 - 29 -
			1,145,474	59	825,076	47
			55,574 487,264 256,328 145 2,551 6,169 2 -	3 25 13 - - - - -	67,968 729,083 127,863 - 2,847 1,660 2 126	4 42 7 - - - - -
										960,500	49	872,527	50
										286,949 - 7,058	15 - -	286,949 147,508 13,533	16 8 1
										294,007	15	447,990	25
										1,254,507	64	1,320,517	75
										2,811,673 (2,094,552) (18,121)	144 (107) (1)	2,811,673 (2,372,061) (5,504)	160 (135) -
			808,033	41	929,549	53
			$ 1,953,507	100	$ 1,754,625	100				699,000	36	434,108	25
										$ 1,953,507	100	$ 1,754,625	100

(Please refer to the notes to individual financial statements)

Managerial Officer: Shuo-Tang Yeh

Chairman: Shuo-Tang Yeh

Head of Accounting: Li-Yun Chiu

• 8 -

Chien Shing Stainless Steel Co., Ltd.

Individual Statement of Comprehensive Income January 1, 2021 to December 31, 2021 January 1, 2020 to December 31, 2020

(Unit: NTD thousand; but EPS in NTD)

Code	Accounting items	Note	2021		2020
			Amount	%	Amount	%
4000 5000 5900 6000 6100 6200 6500 6900 7000 7100 7010 7020 7050 7900 7950 8200 8300 8310 8311 8316 8349 8500 9750	Net operating revenue Operating cost Operating profit (loss) Operating expenses Selling and marketing expenses Administrative expenses Total operating expenses Net other income and expenses Operating profit (loss) Non-operating income and expense Interest income Other income Other gains or losses Financial costs Total non-operating income and expenses Net profit (loss) before tax from continuing operations Income tax expense Net profit (loss) for the period Other comprehensive income Items that will not be reclassified subsequently to profit or loss: Re-measurement of the defined benefit plan Unrealized valuation gains (losses) on investments in equity instruments measured at fair value through other comprehensive income Income tax relating to items that will not be reclassified subsequently to profit or loss Total items that will not be reclassified subsequently to profit or loss Other comprehensive income (net after tax) Total comprehensive income for the period Earnings per share (NTD) Basic earnings per share (after tax)	IV and VI.15 IV, VI.4, VI.11 and VI.16 IV, VI.11 and VI.16 IV, VI.7, VI.17 and VII VI.18 V.2, V.5, V.6 and V.18 V.2 and V.18 IV, VI.18 and VII IV and VI.20 IV, VI.5, VI.10, VI.11, VI.14, VI.19 and V.20 IV and VI.22	$ 2,470,941 (2,166,542)	100 (88)	$ 803,775 (992,604)	100 (123)
			304,399	12	(188,829)	(23)
			(8,946) (28,245)	- (1)	(5,918) (25,554)	(1) (3)
			(37,191)	(1)	(31,472)	(4)
			(1,687)	-	(1,687)	-
			265,521	11	(221,988)	(27)
			81 8,001 16,512 (13,653)	- - 1 (1)	144 19,860 6,350 (14,044)	- 2 1 (2)
			10,941	-	12,310	1
			276,462 (138)	11 -	(209,678) -	(26) -
			276,324	11	(209,678)	(26)
			1,481 (12,617) (296)	- - -	735 16,737 (147)	- 2 -
			(11,432)	-	17,325	2
			(11,432)	-	17,325	2
			$ 264,892	11	$ (192,353)	(24)
			$ 0.98		$ (0.75)

(Please refer to the notes to individual financial statements)

Chairman：Shuo-Tang Yeh Managerial Officer: Shuo-Tang Yeh Head of Accounting: Li-Yun Chiu

• 9 -

Chien Shing Stainless Steel Co., Ltd. Individual Statement of Changes in Equity January 1, 2021 to December 31, 2021 January 1, 2020 to December 31, 2020

(All amounts in NTD thousand)

Item	Ordinaryshare capital	Retained earnings	Other items of equity	Total Equity
		Deficit to be compensated	Unrealized valuation gain (loss) on financial assets measured at FVTOCI
Balance on January 1, 2020 Net loss of 2020 Other comprehensive income of 2020 Total comprehensive income of 2020 Balance on December 31, 2020 Net loss of 2021 Other comprehensive income of 2021 Total comprehensive income of 2021 Balance on December 31, 2021	$ 2,811,673 - - - 2,811,673 - - - $ 2,811,673	$ (2,162,971) (209,678) 588 (209,090) -2,372,061 276,324 1,185 277,509 $ (2,094,552)	$ (22,241) - 16,737 16,737 (5,504) - (12,617) (12,617) $ (18,121)	$ 626,461 (209,678) 17,325 (192,353) 434,108 276,324 (11,432) 264,892 $ 699,000

(Please refer to the notes to individual financial statements)

Chairman：Shuo-Tang Yeh Managerial Officer: Shuo-Tang Yeh Head of Accounting: Li-Yun Chiu

• 10 -

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

January 1, 2021 to December 31, 2021 January 1, 2020 to December 31, 2020 (All amounts in NTD thousand)

Item	2021	2020
Cash flow from operating activities Net profit (loss) before tax from continuing operations Adjusted item: Adjustments for: depreciation expenses Amortization expenses Net gain on financial assets measured at FVTPL Interest expense Interest income Dividend revenue Net gain on disposal of property, plant and equipment Unrealized net foreign currency exchange gain Assets related to operating activities/Changes in liabilities Financial assets measured at FVTPL Accounts receivable Other receivables Inventories Prepayments Other current assets Note payable Accounts payable Other payables Provision Advance receipts and other current liabilities Refund liabilities - current Defined benefit liability Cash inflows (outflows) from operating activities Interest paid Income tax paid Interest received Net cash inflows (outflows) from operating activities Cash flow from investing activities Acquisition of financial assets measured at FVTOCI Acquisition of property, plant and equipment Disposal of property, plant and equipment Acquisition of intangible assets Decrease (increase) in prepayments for equipment Dividends received Net cash used in investing activities Cash flows from financing activities Other payables-related parties-increase (decrease) in financial accommodation Net cash inflows (outflows) from financing activities Effect of exchange rate changes on cash and cash equivalents Increase (decrease) in cash and equivalents in the period Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year	$ 276,462 120,732 162 (23,621) 13,653 (81) (415) - (37) 5,514 18,139 73 122,200 (92,220) 2,504 5,954 (207) 9,946 (13,350) (1,435) 22,039 (4,994)	$ (209,678) 120,700 153 (6,152) 14,044 (144) (1,894) (198) - 15,742 (18,139) 1,309 118,612 (180,089) (2,553) (3,508) 4,832 (3,523) (53,988) 1,224 - (422)
	461,018 (13,653) (3) 81	(203,672) (14,179) - 144
	447,443	(217,707)
	(223) (7,181) 186 (181) (4,509) 415	- (5,244) 276 - 2,742 1,894
	(11,493)	(332)
	(83,000)	83,000
	(83,000)	83,000
	37	-
	352,987 20,588	(135,039) 155,627
	$ 373,575	$ 20,588

(Please refer to the notes to individual financial statements)

Chairman：Shuo-Tang Yeh Managerial Officer: Shuo-Tang Yeh Head of Accounting: Li-Yun Chiu

• 11 -

Chien Shing Stainless Steel Co., Ltd. Notes to Individual Financial Statements January 1, 2021 to December 31, 2021 January 1, 2020 to December 31, 2020 (In NTD thousand, unless stated otherwise)

I. Company history:

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

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

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

II. The Authorization of Financial Statements

The individual finance statements of 2021 and 2020 were approved by the Board of Directors on March 25, 2022 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, 2020, the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), interpretations and interpretation announcement thereof to be applied from 2020 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, 2021, there is no material impact on the Company’s individual finance statements.

• 12 -

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

1. The new/revised/amended standards and interpretations issued by International Accounting Standards Board (IASB), that are recognized and issued by FSC, to be applied from 2022

New, Revised or Amended Standards and Interpretations	Key content	Effective Date Issued by IASB January 1, 2022 January 1, 2022 January 1, 2022 January 1, 2022
IFRS 3 (amendment) IFRS (amendment) IAS 16 (amendment) IAS 37 (amendment)	“Reference to the Conceptual Framework” IFRS (amendment) 2018-2020 annual improvement Property, plant and equipment: Proceeds before Intended Use Onerous Contracts — Cost of Fulfilling a Contract

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

1. New/revised/amended standards and interpretations that issued by IASB to be effective, but not recognized and issued as effective by FSC: none

2. New/revised/amended standards and interpretations that issued by IASB to be effective, but not recognized by FSC

FSC
New, Revised or Amended Standards andInterpretations	Key content	Effective Date Issued byIASB
IFRS 10 IAS 28 (amendment) IFRS 17 IFRS 17 (amendment) IFRS 17 (amendment) IAS 1 (amendment) IAS 1 (amendment) IAS 8 (amendment) IAS 12 (amendment)	Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Insurance contracts Amendment to IFRS 17 Initial application of IFRS 17 and IFRS 9 - Comparative information Classification of Liabilities as Current or Non- curren and deferral of effective date” Disclosure of Accounting Policies Definition of Accounting Estimates Deferred Income Taxes Related to Assets and Liabilities Arising from a Single Transaction	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023

• 13 -

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

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 on the fair value of the consideration given in exchange for the assets. For liabilities, it refers to the amount received when assuming obligations, or the amount expected to pay for repaying a liability

(3) Functional and presentation currency

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

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

2. (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.

3. (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.

4. 14 -

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

1. Foreign currency transaction

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

1. 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. (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

5. (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.

6. (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, notes receivable, receivables, 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.

7. 15 -

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

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 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 amortised cost, including short-term borrowings, notes payable, payables, other payables, and long-term borrowings; these are measured at the amortised 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.

• 16 -

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

1. Fair value measurement

2. (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.

• Derecognition of financial assets and liabilities

• (1) Financial asset

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

• (2) Financial liability

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

• 17 -

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

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 amortised cost (including cash and cash equivalents, notes receivable, accounts receivable and other receivables, etc.).

• 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 notes receivable, accounts receivable, and 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 reestimated. If the estimate of the recoverable amount of the asset changes and increases, the impairment loss shall be reversed; provided that, the carrying amount of the asset increased by the reversal of the impairment loss shall not exceed the carrying amount of the asset after deducting the amortisation or depreciation if the impairment loss was not recognized in the previous year.

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

• 18 -

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

1. 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.

2. Property, Plant and Equipment

3. (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.

4. (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 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.

• 19 -

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

11. Lease

(1) The Company is the lessor

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

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

• A. Under a financing lease, the net lease investment is measured by the sum of the current value of amount to be collected from the lessee and the unguaranteed residual value plus the original direct cost, and is expressed as the financing lease receivable. The recognition of financing lease income is based on the fixed rate of return that reflects the Company's unexpired net lease investment during each lease period.

• B. The rental income of operating leases is recognized as revenue during the lease period on a straight-line basis. If the lease contract provides incentives to the lessee to facilitate the signing of the lease contract, the total cost of the incentives is recognized during the lease period using the straight-line method, as a deduction of rental income. The original direct costs incurred by negotiating and arranging operating leases are added to the carrying amount of the underlying assets and recognized as expenses during the lease period on a straight-line basis.

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

(2) The Company is the lessee

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

• A. The initial recognition and subsequent measurement of the right-of-use asset is based on a cost model, where the cost minus the accumulated depreciation and accumulated impairment loss, and the amount after adjusting the remeasurement of the lease liability is presented. The depreciation of the right-of-use asset is based on the straight-line method. The depreciation is calculated based on the earlier of the lease start date to the end of the useful life of the right-ofuse asset or the expiration of the lease term.

• B. The initial recognition of lease liabilities is measured by the current value of the lease payments not yet paid on the lease start date. If the implicit interest rate of the lease is easy to determine, the lease payment is discounted at that interest rate. If the interest rate is not easy to determine, the lessee’s incremental borrowing interest rate is used to discount. The subsequent measurement is measured at the amortised cost with the effective interest method. The remeasurement of the lease liability is used as an adjustment of the right-of-use asset, but if the carrying amount of the right-of-use asset has been reduced to zero, the remaining remeasured amount is recognized in the profit and loss.

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

• 20 -

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

1. Investment Property

2. (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.

3. (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.

4. Intangible assets

5. (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:

6. (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.

7. Provision for liabilities

8. (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.

9. (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: Estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the Wast 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.

• 21 -

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

15. Equity instrument:

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

16. Revenue recognization

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

Sales of goods

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

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

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

17. Borrowing costs

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

• 22 -

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

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.

• (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 profitseeking 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.

• 23 -

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

(In NTD thousand, unless stated otherwise)

1. Government grants

2. (1) Government grants are recognized until there is reasonable assurance that the Company will comply with the conditions attaching to them; and the grants will be received.

3. (2) Asset-related government grants are recognized in profit and loss on a systematic basis during the period when the cost of related assets that it intends to subsidize is recognized as an expense by the Company. If it is used as compensation for the expense or loss that has already occurred, it shall be recognized in the profit and loss during the period when it can be collected.

4. (3) The expression of government grants in individual financial reports is as follows: unrealized ones (that is, the benefits of deferred government grants) are listed as liabilities in individual balance sheets; those realized are listed as other income in individual comprehensive income statements.

21. Earnings per Share

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

22. Operating Segment Report

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

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

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

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: Please also refer to Note 6.7 of the individual financial statements for the classification of investment properties.

2. 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:

3. (1) Employee benefit: measurement to determine benefit obligations

   • As stated in Note 6.11 of individual financial statements, the measurement of defined benefits obligations and expenses are based on actuarial assumptions, including demographic assumptions and financial assumptions about the future characteristics of employees who are eligible for benefits. Any change in actuarial assumptions may result in actuarial gains and losses, and affect the amount of net determined welfare liabilities.

4. 24 -

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

The carrying amount of the net defined benefit liability was NTD 7,058 thousand as of December 31, 2021. If the discount rate used by the Company’s actuarial assumptions and the expected salary increase rate increase or decrease by 0.25%, the carrying amount of the net definite benefit liability will decrease by NTD 411,000 or increase by NTD 428,000, and increase by NTD 388 thousand or decrease by NTD 376 thousand.

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

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

As stated in Note 4.14 and 6.9 of the individual financial statements, the Company estimates the removal and disposal costs of landfilled industrial waste based on expert appraisal outcomes while supplemented by relevant vendor’s quotations, and estimates the possible fines based on expert opinions as the best estimate of the Company’s management for the expenditure required to settle this obligation. The management of the Company will regularly review the reasonableness of the estimates.

The Company recognized the estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the Wast Disposal Act on December 31, 2021, was NTD 355,420 thousand and NTD 15,000 thousand respectively, and total NTD 370,420 thousand. If the final result differs the estimate of the Company’ management for 10%, the carrying amount of the estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the Wast Disposal Act will decrease NTD 37,042 thousand or increase NTD 35,542 thousand.

• (3) Valuation of Inventories

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

The carrying amount of the inventories was NTD 313,541 thousand as of December 31, 2021; the allowance of inventory depreciation losses of NTD 4,185 thousand was deducted.

• (4) 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, 2021, please refer to Note 6.21 of the individual financial statements.

• 25 -

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

(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, 2021 was NTD 2,551 thousand. For the amounts not recognized as deferred income tax assets, please refer to Note 6.20(7) of 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 Total	2021.12.31	December 31,2020
	$1,418 372,157	$1,550 19,038
	$373,575	$20,588

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

1. Financial assets measured at FVTPL - current

Financial assets measured at FVTPL-current
Financial assets measured at FVTOCI TWSE/TPEx listed shares: Valuation adjustment for financial assets mandatorily measured at FVTOCI TWSE/TPEx listed shares: Total	2021.12.31 $75,272 (4,755) $70,517	December 31, 2020
		$77,414 (25,004)
		$52,410

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

• 26 -

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

3. Net accounts receivable

Net accounts receivable
Accounts receivable Less: Allowance for loss Net Total	2021.12.31 $- - $-	December 31, 2020
		$18,139 -
		$18,139

• (1) The Company’s allowance losses of the accounts receivables applies the simplified approach, measuring at the expected credit loss of the duration Accounts receivable are classified based on the common risk characteristics of the customer’s ability to pay all due amounts in accordance with contractual terms, taking reasonable and supportable information related to past events, current conditions and forecasts of future economic conditions (that is available without undue cost or effort at the reporting date) into account, and estimate the expected credit loss based on the estimated default rate and expected credit loss rate.

• (2) There has been no change for the loss allowance of the accounts receivable in 2021 and 2020.

• (3) For the disclosure of the credit risk of the accounts receivable, please refer to Note 12.2 (3)B of the individual financial statements.

4. Inventories

Inventories
Raw materials Supplies Work in process Finished goods Total		December31,2021
	Cost $1,081 12,905 8,062 295,678 $317,726	Allowance of inventory depreciation losses $(1,081) (9) (287) (2,808) $(4,185)	Carrying amount
			$- 12,896 7,775 292,870
			$313,541

Raw materials Supplies Work in process Finished goods Total		December31,2020
	Cost $1,081 11,904 226,012 225,796 $464,793	Allowance of inventory depreciation losses $- (85) (3,284) (25,683) $(29,052)	Carrying amount
			$1,081 11,819 222,728 200,113
			$435,741

• 27 -

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

• (1) Cost of sales related to inventories:

Inventories transferred to cost of sales Cycle count loss on inventories Appreciating net realisable value of inventories Total operating cost	2021 $2,190,848 561 (24,867) $2,166,542	2020
		$1,033,214 - (40,610)
		$992,604

• (2) In 2021 and 2020, the net realisable value of some inventories was lower than the cost and disappeared due to the sale, resulting in a rebound in the net realisable value of the inventories, thus the cost of goods sold reduced by NTD 24,867 thousand and NTD 40,610, respectively..

• (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	December31,2021 $65,438 8,257 73,695 (9,864) (8,257) (18,121) $55,574	December31,2020
		$65,215 8,257
		73,472
		2,753 (8,257)
		(5,504)
		$67,968

• (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 2021 and 2020 as a result of investment in equity instruments measured at fair value through other comprehensive income was NTD 0 and NTD 497 thousand, respectively.

• (3) The Company did not have accumulated profits or losses transferred within the equity in both 2021 and 2020.

• (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.

• 28 -

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

6. Property, Plant and Equipment

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

2021 Original cost Beginning retained earnings Increase in the period Decrease 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 2020 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 be inspected	Total
	$312,736 - (186) - (130,209)	$367,411 - - - 490	$3,927,665 - - - 2,693	$11,891 - - - -	$9,428 - - - -	$33,401 - - - 400	$46,339 7,564 - - (3,583)	$4,708,871 7,564 (186) - (130,209)
	182,341	367,901	3,930,358	11,891	9,428	33,801	50,320	4,586,040
	- - -	359,895 1,326 -	3,570,590 115,949 -	7,813 1,354 -	9,356 34 -	32,134 325 -	- - -	3,979,788 118,988 -
	-	361,221	3,686,539	9,167	9,390	32,459	-	4,098,776
	$182,341	$6,680	$243,819	$2,724	$38	$1,342	$50,320	$487,264
	$312,736 - - -	$366,924 - - 487	$3,927,038 - (282) 909	$11,676 - (90) 305	$9,428 - - -	$33,151 - - 250	$43,046 5,244 - (1,951)	$4,703,999 5,244 (372) -
	312,736	367,411	3,927,665	11,891	9,428	33,401	46,339	4,708,871
	- - -	358,607 1,288 -	3,454,890 115,982 (282)	6,482 1,343 (12)	9,300 56 -	31,847 287 -	- - -	3,861,126 118,956 (294)
	-	359,895	3,570,590	7,813	9,356	32,134	-	3,979,788
	$312,736	$7,516	$357,075	$4,078	$72	$1,267	$46,339	$729,083

(2) The Company has conducted asset revaluation pursuant the Land Act, the Equalization of Land Rights Act, and other relevant laws and regulations over the years. The total revaluation increase amounted to NTD 1,187 thousand, which was originally listed as unrealized revaluation increase under shareholders’ equity, but on January 1, 2012 (the date when the company switched to IFRS), the Company elected to apply the revaluation value as the cost of the revaluation date.

• 29 -

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

• (3) The Company did not capitalize borrowing costs due to acquisition of property, plant and equipment in both 2021 and 2020.

• (4) There was no impairment of property, plant and equipment of the Company in both 2021 and 2020.

• (5) Pleaser refer to Note 8 of the individual financial statements for the property, plant and equipment provided as collateral or pledge. For property, plant and equipment, as Tainan District Prosecutors Office issued a letter request to the registration agency to prohibit the Company’s properties to apply for the disposal registration on August 16, 2018, due to violation of Waste Disposal Act, the carrying amount on December 31, 2021 and 2020 was NTD 312,826 thousand (Including the transfer from property, plant and equipment - land to investment property - land of $130,209 thousand in December 2021) and NTD 313,206 thousand respectively. 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 NTD 590,000 and NTD 501,000, respectively. Please also refer to Note 4.14, 5, and 6.9 of the individual financial statements for the description.

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

Please refer to Note 6.6(1)C of the individual financial statements for related information Additions to Property, Plant and Equipment in the period Plus: Other payables at the beginning of the period Less Other payables at the end of the period Add: Unrealized foreign currency exchange gain Cash outflow from acquisition of property, plant and equipment	2021 $7,564 5,953 (6,521) 185 $7,181	2020
		$5,244 5,953 (5,953) -
		$5,244

• (7) On December 29, 2021, the Board of Directors resolved to dispose of six parcels of land held by the Company, including the Magong Section, Madou District, Tainan City, in order to revitalize the land assets and improve the financial structure of the Company. Therefore, the carrying amount of property, plant and equipment - land was transferred to investment property - land in the amount of $130,209 thousand.

• (8) The Company signed a rooftop lease contract with another company in July, 2017. The lease period is from the date of commercial operation of the solar power system up to the expiration after 20 years. The rent calculation method is based on a floating system, and for the percentage of power actually generated by the solar power system, and collected on a monthly basis. The Company’s rent income incurred in the 2021 and 2020 as a result of the aforementioned leases was NTD 1,566 thousand and NTD 1,689 thousand, respectively.

• 30 -

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

7. Investment Property

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

Original cost Beginning retained earnings Increase in the period Reclassification in the period Disposal in the period 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 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 Disposal 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			2021
	Land		Buildings		Total
	$149,357 - 130,209 -		$87,203 - -		$236,560 - 130,209 -
	279,566		87,203		366,769
	- - -		36,282 1,744 -		36,282 1,744 -
	-		38,026		38,026
	38,047 - -		34,368 - -		72,415 - -
	38,047		34,368		72,415
	$241,519		$14,809		$256,328
			2020
	Land $149,357 - - 149,357 - - - - 38,047 - - 38,047 $111,310		Buildings $87,203 - - 87,203 34,538 1,744 - 36,282 34,368 - - 34,368 $16,553		Total
					$236,560 - -
					236,560
					34,538 1,744 -
					36,282
					72,415 - -
					72,415
					$127,863

• 31 -

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

• (2) Please refer to Note 6.6(7) to the individual financial statements for a description of the Company's reclassification from property, plant and equipment-land to investment property-land.

• (3) The Company has leased some investment properties in the manner of operating lease to other related parties as their offices. The lease term is from March 1, 2017 to February 28, 2022. Please also refer to Note 7.2(1) of the individual financial statements for the description.

• (4) The maturity analysis for the receivable undiscounted lease payment (tax included) under operating lease on December 31, 2021 and 2020:

Period Year 1 Year 2 Total The fair values of the investment properties held Fair value of investment property	2021.12.31 December 31,2020 $10 $60 - 10 $10 $70 by the Company are as following: 2021.12.31 December31,2020 $1,978,460 $787,649

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

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

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

Rent income from investment properties Direct operating expenses (including maintenance) incurred by investment properties that generates rent income Direct operating expenses (including maintenance) incurred by investment properties that do not generates rent income	2021 $57 $501 $1,243	2020
		$57
		$501
		$1,243

• (7) On November 11, 2021, the Board of Directors resolved to sell the investment property - land and buildings in Beiyuan Section, North District, Tainan City, with a carrying amount of $51,122 thousand as of December 31, 2021, and authorized the Chairman of the Board of Directors to dispose of them at his sole discretion, as described in Note 7.2(4) to the individual financial statements.

• (8) Pleaser refer to Note 6.21 of the individual financial statements for the investment properties impairment.

• (9) Pleaser refer to Note 8 of the individual financial statements for the investment properties provided as collateral or pledge. Also for the investment properties, as Tainan District Prosecutors Office issued a letter request to the registration agency to prohibit the Company’s properties to apply for the disposal registration on July 9, 2018, or applied for the seizure to Taiwan Tainan District Court. The carrying amount on December 31, 2021 and 2020 was NTD 126,119 thousand and NTD 127,863 thousand respectively. Please also refer to Note 4.14, 5, 6.6(5), and 6.9 of the individual financial statements for the description. On August 28, 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 amount on December 31, 2021 and 2020 was NTD 51,122 thousand and NTD 52,866 thousand respectively. Please also refer to Note 6.10(1) of the individual financial statements for the description.

• 32 -

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

• (10) The Company did not capitalize borrowing costs due to the acquisition of investment properties in both 2021 and 2020.

• (11) On March 3, 2022, the Company entered into a land sale and purchase agreement with the buyer to sell two parcels of land, No. 26 and No. 27, Magong Section, Madou District, Tainan City, for a total consideration of $251,234 thousand. However, the land has been secured for bank borrowings and is subject to a registration ban. According to the provisions of the sale and purchase agreement, the Company must complete the release of the land subject to the sale and purchase from the Environmental Protection Administration of the Executive Yuan, apply for the cancellation of the mortgage, the release of the registration ban and the registration of the transfer of property rights before the sale price can be transferred to the Company from the property trust account. If the Company fails to complete the aforementioned release of possession and prohibition of disposition within 180 days of signing the contract, the purchaser may cancel the land sale and purchase agreement or extend it for another 180 days. As of the date of the individual financial report, the Purchaser has transferred $25,000 thousand of the contracted amount to the aforementioned account.

• (12) On March 3, 2022, the Company entered into a land lease agreement with a lessee to lease land at a monthly rent of $500 thousand for the period from March 3 to July 2, 2022, in Magong Section, Madou District, Tainan City, Cadastral Number 5. After the lessee confirms that it has passed the procedures for applying for the land for the installation of grid-connected energy storage equipment within the lease term and the Company has followed the procedures for acquiring or disposing of the assets, the lessee may sign a land sale and purchase contract with the lessee. However, if the lessee does not complete the application procedures within the aforementioned period, the aforementioned lease shall be terminated after the expiration date.

8. 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	2021 $- 181 - 181 - (36) - (36) $145	2020
		$- - -
		-
		- - -
		-
		$-

• (2) There was no impairment of intangible assets of the Company in both 2021 and 2020.

• 33 -

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

9. Provision for liabilities - current/non-current

Provision for liabilities-current/non-current
2021.12.31 Provision for liabilities - current $370,420 Provision for liabilities - non-current - Total $370,420 (1) Changes of the Company’s provision is as the following: 2021 Estimated provision for expenses to clean the landfilled industrial waste in the plant area and the fine due to violating the Wast Disposal Act Carrying amount at the beginning of period $383,770 Used in the period (13,350) Carrying amount at the end of period $370,420	December31,2020
	$236,262 147,508
	$383,770
	2020 $437,758 (53,988) $383,770

(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. Please refer to the explanations under Notes 6.6(5) and 6.7(9) of individual financial statements. On April 8, 2019, the Company received an indictment of a violating the Waste Disposal Act by the Prosecutor’s Office. Twelve people including the company and the Chairman, Mr. Yeh Shuotang, were listed as defendants. The cleaning costs were estimated to be NTD 1,224,404 thousand (tax included), and the fines was set a maximum amount of NTD 15,000 thousand. As of the release date of individual financial statements, the case is under trial at Tainan District Court. Based on the results of experts and the price quoted by the relevant vendor, the Company estimated a disposal and handling expense of NT$436,395 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. Up to the date of publication of the standalone financial statements, the aforementioned inspections and reviews are still in progress.

• 34 -

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

• (3) On July 9, 2021, the Company received a judgment from the Taiwan Tainan District Court, which imposed a fine of NT$12,000,000 on the Company for violating the Waste Disposal Act, and Mr. Shuo-Tang Yeh, the Chairman of the Company, was sentenced to five years and four months in prison. The Company has filed an appeal against the aforementioned judgment of the first instance made by the Taiwan Tainan District Court. Up to the date of publication of the standalone financial statements, the appeal is still pending at the Taiwan High Court, Tainan Branch Court.

10. Long-term borrowings

Creditors	Nature of borrowing	Contractualperiod	Interest rate	Amount	Repayment method
		2018.05.04~2023.02.02 May 4, 2018 to February 2, 2022	1.70% 1.70%	$799,123 (512,174)	(Note) (Note)
				$286,949
				$799,123 (512,174)
				$286,949

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

• (1) As stated in Note 6.7(9) of individual financial statements, the Company’s original short-term borrowings of NTD 799,123 thousand was deemed overdue and default, but the Company had signed an agreement with the creditor bank on October 25, 2018 to alter the credit conditions as stopping the use of the original credit facility, and extending the original maturity date of each of the aforementioned borrowing for another year. Interests are paid monthly, and the principal is paid at the maturity. Therefore, the company reclassified the aforementioned short-term borrowings as long-term loans. On September 9, 2019, the Company and the creditor bank entered into a modification agreement to extend the original maturity date of each of the aforementioned loans for another year, with interest payable monthly and principal repaid on maturity. On September 22, 2020, the Company and the creditor bank entered into a further modification agreement to extend the original maturity date of each of the aforementioned loans for another year, with interest payable monthly and principal repaid on maturity. On November 10, 2021, the Company and the creditor bank entered into a modification agreement to extend the original maturity date of each of the aforementioned loans for another year, with interest payable monthly and principal repaid on maturity.

• (2) For the collateral provided by the Company for long-term loans, please refer to Note 8 of individual financial statements.

• 35 -

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

11. 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:

B. The remeasurement of net defined benefit liabilities is recognized in other comprehensive income and the cumulative amount is as follows:	B. The remeasurement of net defined benefit liabilities is recognized in other comprehensive income and the cumulative amount is as follows:	comprehensive
2021 2020 Amount at the beginning of the period $3,199 $2,464 Net re-measurement of the defined benefit plan 1,481 735 Amount at the end of period $4,680 $3,199 C. Adjustment of the current value of defined benefit obligation and fair value of planned assets 2021.12.31 December31,2020 Current value of a defined benefit obligation $13,305 $15,072 Fair value of planned assets (6,247) (1,539) Defined benefit liability $7,058 $88,528 $13,533 $88,528 D. Changes of the current value of a defined benefit obligation 2021 2020 Carrying amount at the beginning of period $15,072 $33,396 Current service cost - 42 Interest expense 60 234 Net re-measurement of the defined benefit liability Actuarial loss generated from the changes of financial assumption 18 - Actuarial loss (gain) generated from the changes of financial assumption (533) 600 Actuarial gains generated from the experience adjustment (752) (719) Benefit paid (560) (18,481) Carrying amount at the end of period $13,305 $15,072 E. Changes of fair value of planned assets are as following 2021 2020 Carrying amount at the beginning of period $1,539 $18,706 Interest income 6 131 Net determined welfare assets re- measurement plan asset return (excluding current interest) 214 616 Contribution from employer 5,048 567 Benefit paid (560) (18,481) Carrying amount at the end of period $6,247 $1,539		2020
		$2,464 735
		$3,199
	$13,305 (6,247)	$15,072 (1,539)
	$7,058 $88,528	$13,533 $88,528
		2020 $33,396 42 234 - 600 (719) (18,481) $15,072
		2020 $18,706 131 616 567 (18,481) $1,539

• 36 -

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

• (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, 2021 and 2020, the balances of Company’s dedicated account in Bank of Taiwan for depositing pension reserve, was NTD 6,247 thousand and NTD 1,539 thousand, respectively.

• (C) As of December 31, 2021, the defined benefit plan expected to contribute NTD 276 thousand in 2022.

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

follows:
Current service cost Interest expense Interest income Total Operating cost Selling and marketing expenses Administrative expenses Total	2021	2020
	$- 60 (6)	$42 234 (131)
	$54	$145
	2021	2020
	$47 4 3	$129 2 14
	$54	$145

• 37 -

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

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

obligation are as follows:
Discount rate Expected wage increase rate	2021.12.31 0.70% 2.00%	December31,2020
		0.40% 2.00%

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

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

Weighted average duration Maturity analysis of future benefit payment Within a year 2-5 years 6 years or more Total undiscounted cash amount	2021.12.31 13 years $139 818 13,588 $14,545	December 31, 2020
		14 years
		$298 901 14,722
		$15,921

(2) Defined contribution plans

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

• B. The amount of pension expenses recognized by the Company as a result of the definite contribution plan is as follows:

Operating cost Selling and marketing expenses Administrative expenses Total	2021 $1,313 35 476 $1,824	2020 $1,691 34 541 $2,266

• 38 -

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

12. Share capital

Share capital
Balance on January 1, 2020 Balance on December 31, 2020 Balance on January 1, 2021 Balance on December 31, 2021	Registered authorized capital (thousand shares) (note) 378,800 378,800 378,800 378,800	Issued commonshares,face value pershare NTD 10
		(thousand shares) 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 NTD 5,000,000 thousand, divided into 500,000 thousand shares, each with a face value of NTD 10, and issuance in installments. The aforementioned amendment to the authorized share capital could not be registered for such change with the Company Act before the amendment. As the the Company Act was amended on August 1, 2018, and enforced on November 1, 2018, the change can be directly registered. However, as of the release date of individual financial statements, the Company has not yet completed the change registration.

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.

• 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 2021 and 2020, the Company only accumulated loss, and thus no earnings to be distributed.

• 39 -

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

14. Other equity (net amount after tax)

14.	Other equity (net amount after tax)
15.	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	2021	2020 $(22,241) 16,737 $(5,504)
		$(5,504) (12,617)
		$(18,121)
		2021	2020 $769,242 34,774 804,016 (70) (171) $803,775
		$2,465,872 27,371
		2,493,243 (21,205) (1,097)
		$2,470,941

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

(1) Major product/service lines

(1)	Major product/service lines
(2)	Steel coil Other Total Major regional market Regions where customers arelocated Taiwan		2021	2020
			$2,443,570 27,371	$769,001 34,774
			$2,470,941	$803,775
			2021 $2,470,941	2020
				$803,775

• 40 -

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

16. Operating costs and expenses

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

following:
By function By nature	2021			2020
	As operating costs	As operating expenses	Total	As operating costs	As operating expenses	Total
Employee benefits expense
Wage expense (Note 1)	$24,428	$9,747	$34,175	$30,172	$10,168	$40,340
Labor and health insurance expense	2,881	1,167	4,048	3,686	1,307	4,993
Pension expense	1,360	518	1,878	1,820	591	2,411
Remuneration to directors (Note1)	-	1,117	1,117	-	1,215	1,215
Other employee benefits expense	4,244	1,927	6,171	3,759	1,263	5,022
Depreciation expense (Note2)	117,288	1,700	118,988	117,250	1,706	118,956
Amortization expenses	132	30	162	153	-	153

• 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 2021 and 2020, the Company only accumulated loss, and thus no employee or director remuneration is estimated.

• (2) As of the end of 2021 and 2020, 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 2021 and 2020 were NTD 120,732 thousand and NTD 120,700 thousand, respectively. Of which the depreciation expenses for investment properties-leased assets were both NTD 1,744 thousand, and listed in net other income and expenses.

• 41 -

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

• Note 3: (1) The average number of employees at the end of each month of the Company during 2021 and 2020 was 72 and 95 respectively; of which the number of directors who were not currently serving employees were both six.

• (2) The Company's average employee benefit expenses in 2021 and 2020 were NTD 701 thousand and NTD 593 thousand, respectively.

• (3) The Company's average employee wage costs in the 2021 and 2020 were NTD 518,000 and NTD 453 thousand, respectively; the average employee wage costs in 2021 were 14.35% higher than that 2020.

• (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) above.

17. Net other income and expenses

17.	Net other income and expenses
18.	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	2021 $57 (1,744) $(1,687) 2021 $81	2020
			$57 (1,744)
			$(1,687)
			2020
	(1)
			$144

• 42 -

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

(2) Other income

(2)	Other income
(3)	Rent income Dividend revenue Gains from government grants Other income Total Other gains or losses Financial assets measured at FVTPL Asset gains Net foreign exchange gains Net gain on disposal of property, plant and equipment Other losses - return of gains from government subsidies (Note) Other losses Total	2021 $1,566 415 - 6,020 $8,001 2021 $23,621 37 - (6,885) (261) $16,512	2020
			$1,689 1,894 6,897 9,380
			$19,860
			2020
			$6,152 - 198 - -
			$6,350

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

(4) Financial costs

Financial costs
Interest on bank borrowings Interest on borrowings from related parties Total	2021 $(13,585) (68) $(13,653)	2020
		$(14,044) -
		$(14,044)

• 43 -

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

19. Other comprehensive income

19. Other comprehensive income
Composition Items of Other Comprehensive Income	Recognized during the period	Reclassification adjustments of the period Other comprehensive income Income tax expense			After-tax amount
2021 Items that will not be reclassified subsequently to profit or loss: Re-measurement of the defined benefit plan Unrealized valuation losses on investments in equity instruments as at fair value through other comprehensive income Total 2020 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	$1,481 (12,617)	$- -	$1,481 (12,617)	$(296) -	$1,185 (12,617)
	$(11,136)	$-	$(11,136)	$(296)	$(11,432)
	$735 16,737	$- -	$735 16,737	$(147) -	$588 16,737
	$17,472	$-	$17,472	$(147)	$17,325

20. Income tax

(1) The Company's profit-seeking enterprise income tax settlement and report cases before the 2019 (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

Major components of income tax expense were as follows: A. Income tax recognized in profit or loss
2021 Income tax expense of the period Income tax expense to be borne for the period $138 Deferred income tax expense - Income tax expense $138 B. Income tax related to other comprehensive income components 2021 Deferred income tax expense related to initially generated temporary difference and reversal . $296	2020
	$- -
	$-
	2020
	$147

• 44 -

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

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

(3)	The relationship between income tax expenses and accounting profits:
(4)	2021 Accounting profit Net profit (loss) before tax from continuing operations $276,462 Tax amount based on the tax rate applicable to the Company $55,292 Excess of basic income tax over ordinary income tax 138 Adjusted item The effects of income tax from unrecognizable items on the tax return (3,281) Income tax effects of temporary differences (8,711) Income tax effect of loss carryforwards (43,300) Income tax expense to be borne for the period 138 Adjustment of income tax of previous years recognized in current period - Income tax expense of the period 138 Deferred income tax expense - Income tax expense $138 The information of unused tax credit for loss Amount not credited Year of occurrence 2021.12.31 December 31, 2020 2011 $- $291,017 2012 407,770 407,770 2013 268,611 268,611 2014 86,078 86,078 2015 332,570 332,570 2016 21,430 21,430 2018 44,293 44,293 2019 193,592 193,592 2010 317,827 317,827 Total $1,672,171 $1,963,188	2020
		$(209,678)
		$(41,936) - (2,887) 44,823 -
		- -
		- -
		$-
		Last Last year for credit
		2021 2022 2023 2024 2025 2026 2028 2029 2030

(5) There was no income taxes related to direct credit or debt of equity for 2021 and 2020.

• 45 -

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

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

2021 Deferred tax assets Taxation difference from the contributed pension expense 2020 Deferred tax assets Taxation difference from the contributed pension expense	Beginning retained earnings	Recognized in comprehensive income	Recognized in other comprehensive income	Balance at the end of the period
	$2,847	$-	$(296)	$2,551
	$2,994	$-	$(147)	$2,847

• (7) Unrecognized deferred tax assets

As of December 31, 2021 and 2020, the amount of income that are not likely taxable not recognized as deferred income tax assets was NTD 420,935 thousand and NTD 487,843 thousand, respectively.

21. Non-financial asset impairments

• (1) The Company treats the regulated assets based on IAS 36 “Impairment of Assets.” December 31, 2021 and 2020, the accumulated impairment balance are detailed as following:

Investment Property	2021.12.31 $72,415	December 31, 2020
		$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 NTD 24,997 thousand is recognized as an impairment loss. Also in Q2, 2014, the aforementioned investment properties-land and houses were evaluated based on the actual price registration information inquired with the announced market price. After the evaluation, the estimated recoverable amount of the land was higher than the carrying amount, and the difference of NTD 5,997 thousand was reversed. Later, on November 27, 2017, due to the merger of the Company and the subsidiary, this was transferred to the accumulated impairment of the investment properties for NTD 53,415 thousand.

22. Earnings per Share Basic earnings per share

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

period. The calculation is as follows:
Net loss of the holders of the Company’s common share equity Weighted-average shares Basic earnings per share (after tax) (NTD)	2021	2020
	$276,324	$(209,678)
	281,167 thousand shares	281,167 thousand shares
	$0.98	$(0.75)

• 46 -

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

23. Adjustment of liabilities from financing activities

2021 Long-term borrowings (due within a year included) Other payables-related parties (financial accommodation) Total 2020 Long-term borrowings (due within a year included) Other payables-related parties (financial accommodation) Total	Beginning retained earnings	Cash flows	Non-cashchange	Non-cashchange	Balance at the end ofthe period
			Acquisition	Change of exchangerate
	$799,123 83,000	$- (83,000)	$- -	$- -	$799,123 -
	$882,123	$(83,000)	$-	$-	$799,123
	$799,123 -	$- 83,000	$- -	$- -	$799,123 83,000
	$799,123	$83,000	$-	$-	$882,123

VII. Related party transaction

1. Name of related parties and the relationship

Related Party Name Relationship to the Company Chien Shing Construction Co., Ltd. (Chien Shing The two companies share the same chairman. Construction) Chien Shing Investment Co., Ltd. (Chien Shing The two companies share the same chairman. Investment)

1. Material transaction matters with related parties

2. (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 6.7 of the individual financial statements for the description.

Other incomes and expense- rent income	2021	2020
	$57	$57

• 47 -

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

(2) Financial accommodation

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

Financial accommodation The Company has borrowed funds fro the related parties as following:	ing:	ing:
Type / name of related parties Highest balance Balance at the end of the period Interest rate range Total interest expense Other payables-related parties 2021 Other related party Chien Shing Investment $83,000 - 1.2% $68 2020 Other related party Chien Shing Investment $83,000 $83,000 1.2% $- Debt and credit generated from the above transactions Type/name of related parties 2021.12.31 December31,2020 Other payables-related parties Other related party Chien Shing Investment $- $83,000	Interest rate range		Total interest expense
			$68
			$-
Type/name of related parties Other payables-related parties Other related party Chien Shing Investment
		$83,000

(3) Debt and credit generated from the above transactions

The Company has not provided collateral or guarantee to the related parties’ debts

• (4) Others

On November 23, 2021, the Company fully authorized Chien Shing Construction, another related party, to handle the sale of the land and buildings in Beiyuan Section, North District, Tainan City, which are investment properties held by the Company, including the appointment of a third party to conduct a public tender and commission sale, negotiation of commercial terms, lease modification and review, negotiation of contracts, appraisal, receipt of notices and documents, attendance of meetings, and all other matters related to the disposal of the aforementioned investment properties. The Company has authorized the disposal of the aforementioned investment properties until June 30, 2022. Please also refer to Note 6.7(7) of the individual financial statements for the description.

(5) Information of the total remunerations of major management

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

Item 2021 2020 Short-term benefit $1,117 $1,215

• 48 -

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

VIII. Pledged Assets

1. Among the assets as of December 31, 2021 and 2020, the assets provided by the Company as the collaterals for financing to the financial institutions are the followings:

Item inthe accounting book	2021.12.31	December 31,2020	Institution forpledge	Description of guaranteed debt
Property, Plant and Equipment Land Buildings Investment Property Land Total	$182,341 276 205,206	$312,736 469 74,997	Taiwan Business Bank Taiwan Business Bank Taiwan Business Bank	Long-term borrowings Long-term borrowings Long-term borrowings
	$387,823	$388,202

1. As of December 31, 2021 and 2020, the amount of Company’s investment properties provisionally seized by the course upon the application of the bank creditor was NTD 51,122 thousand and NTD 52,866 thousand, respectively. Please also refer to Note 6.7(9) of the individual financial statements for the description.

2. IX. Significant Contingent Liabilities and Unrecognized Commitments As of December 31, 2021, the Company still have the following significant contingent liabilities and unrecognized commitments not listed in the abovementioned individual financial statements:

3. The amount of material contract for constructing plants and procuring equipment is NTD. 41,064 thousand, and NTD 24,737 thousand was paid (included the accounted payables); NTD 16,327 thousand must be paid in the future.

4. The Company has issued the note as bond to the vendor for cleaning general industrial waste for NTD 2,000 thousand.

5. X. Loss on Material Disaster None.

XI. Material Events after the Period

Please refer to Note 6.7(11) and (12) to the individual financial statements for the sale or lease of investment property - land as of March 3, 2022.

• 49 -

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

XII. Other

1. Capital management.

2. (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

3. (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.

4. (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.

5. (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:

Total liabilities Less: cash and cash equivalents Net liabilities Total Equity Total capital Ratio of net liabilities to total capital	2021.12.31	December31,2020
	$1,254,507 (373,575)	$1,320,517 (20,588)
	880,932 699,000	1,299,929 434,108
	$1,579,932	$1,734,037
	55.76%	74.97%

2. Financial risk management

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

• 50 -