FH - Audit Report / Information 2021

FENG HSIN STEEL CO., LTD. AND SUBSIDIARIES

STANDALONE FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS

FOR THE YEARS ENDED 31 DECEMBER 2021 AND 2020

Address: No.998, Sec. 1, Jiahou Rd., Houli Dist., Taichung City 421, Taiwan ,R.O.C. Telephone: 886-4-2556-5101

The reader is advised that these standalone financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

Independent Auditors’ Report

To FENG HSIN STEEL Co., Ltd.

Opinion

We have audited the accompanying standalone balance sheets of FENG HSIN STEEL Co., Ltd. and its subsidiaries (the “Company”) as of 31 December 2021 and 2020, and the related standalone statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2021 and 2020, and notes to the standalone financial statements, including the summary of significant accounting policies (together “the standalone financial statements”).

In our opinion, based on our audits and the reports of other auditors (please refer to the Other Matter – Making Reference to the Audits of Component Auditors section of our report), the standalone financial statements referred to above present fairly, in all material respects, the standalone financial position of the Company as of 31 December 2021 and 2020, and their standalone financial performance and cash flows for the years ended 31 December 2021 and 2020, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers .

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 Standalone 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 (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of other auditor(s), 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 2021 standalone financial statements. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation for inventories

As of 31 December 2021, the Company’s net inventories amounted to NT$7,390,581 thousand which represented 27% of the total standalone assets. The amount of inventories was significant to the Company’s financial statements. The Company manufacture and sell various types of steel products. The main ingredient is iron scrap. The material and finished goods are affected by the fluctuation of international prices that may cause significant changes in inventory prices. As a result, the calculation of net realizable value was complicated, we therefore determined this a key audit mater. Our audit procedures included, but not limited to, understanding and testing the effectiveness of internal control; evaluating the adequacy of accounting policies around obsolete inventories; evaluating stocktaking plan and selecting important storage locations to observe inventory counts to ensure inventory quantities and status; obtaining inventory aging schedule to test whether inbound and outbound records are accurate; re-calculating the unit cost of inventories; evaluating and testing net realizable value adopted by management; testing selling prices; and implementing analytical procedures with respect to the gross profit ratios by products. We also assessed the adequacy of disclosures of inventories. Please refer to Note 6 to the Company’s standalone financial statements.

Other Matter – Making Reference to the Audits of Component Auditors

Those financial statements were audited by other auditors, whose reports thereon have been furnished to us, and our opinions expressed herein are based solely on the audit reports of the other auditors. We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method whose statements are based solely on the reports of other auditors. Investment in these associates and joint ventures under equity method amounted to NT$880,227 thousand and NT$744,203 thousand, both representing 3% of the standalone total assets as of 31 December 2021 and 2020, respectively. The related shares of profits from the associates and joint ventures under the equity method amounted to NT$124,215 thousand and NT$83,504 thousand, representing 2% and 3% of the standalone net income before tax for the years ended 31 December 2021 and 2020, respectively; and the related shares of other comprehensive income from the associates and joint ventures under the equity method amounted to NT$174 thousand and NT$159 thousand, both representing 0% of the standalone other comprehensive income for the years ended 31 December 2021 and 2020, respectively.

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

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

In preparing the standalone financial statements, management is responsible for assessing the ability to continue as a going concern of the Company 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 the audit committee, are responsible for overseeing the financial reporting process of the Company.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 standalone financial statements.

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2021 standalone financial statements and are therefore the key audit matters. We describe these matters in our auditor’s 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.

/s/Chen, Ming Hung

/s/Yen, Wen Pi

Ernst & Young, Taiwan

24 February 2022

Notice to Readers

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

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone BALANCE SHEETS

31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Assets	Notes	2021.12.31	2020.12.31
Current Assets Cash and cash equivalents Financial assets at fair value through other comprehensive income-current Contract assets, current Notes receivable, net Accounts receivable, net Other receivables Inventories, net Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through other comprehensive income-noncurrent Investments accounted for under the equity method Property, plant and equipment Right-of-use asset Investment property,net Deferred tax assets Other non-current assets Total non-current assets	4, 6.(1) 4, 6.(14),(15) 4, 6.(15) 4, 6.(3),(15) 4 4, 6.(4) 6.(5) 4, 6.(6) 4, 6.(7) 4, 6.(16) 4, 6.(8) 4, 6.(20) 6.(9) 4, 6.(2) 4, 6.(2)	$1,220,485 461,511 946 1,913,374 44,964 7,390,581 712,798 7,611 1,925,798	$2,174,223 397,242 12,193 1,477,780 8,579 3,301,468 668,739 7,352 1,700,311
		13,678,068	9,747,887
		2,148,943 8,946,284 172,823 694,434 103,633 238,224 889,807	1,943,411 9,436,032 178,936 698,381 109,222 343,142 556,851
		13,194,148	13,265,975

Total assets

$26,872,216 $23,013,862

(Continued)

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone BALANCE SHEETS (Continued)

31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

	2021.12.31 $890,802 171,057 1,597,724 1,190,281 676,982 3,898 2,260 4,533,004 20 170,906 68,455 31	2020.12.31
Current liabilities Short-term loans Contract liabilities, current Accounts payable Other payables Current tax liabilities Lease liabilities, current Other current liabilities Total current liabilities Non-current liabilities Deferred tax liabilities Lease liabilities, noncurrent Net defined benefit obligation, noncurrent Guarantee deposits Total non-current liabilities Total liabilities Equity attributable to the parent company Capital Common stock Additional paid-in capital Retained earnings Legal reserve Special reserve Unappropriated earnings Total Retained earnings Other components of equity Unrealized gains (losses) on financial asset measured at fair value through other comprehensive income Gains (losses) on hedging instruments, associates and joint ventures accounted for using the equity method Total Other components of equity Total equity Total liabilities and equity		$329,941 134,198 1,302,794 1,026,124 414,836 5,109 2,159 3,215,161 - 174,803 155,688 - 330,491 3,545,652 5,815,994 560,097 4,354,532 278,241 8,543,337 13,176,110 (83,991) - (83,991) 19,468,210 $23,013,862
	239,412 4,772,416 5,815,994 452,514 4,630,509 83,991 10,800,945 15,515,445 318,742 (2,895)
	315,847 22,099,800 $26,872,216

(The accompanying notes are an integral part of the Standalone financial statements)

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF COMPREHENSIVE INCOME

For the years ended 31 December 2021 and 2020

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

Notes	2021	2020
4,6.(14) 6.(17),7 6.(17) 4,6.(18) 6.(18) 6.(18) 6.(6) 4,6.(20) 6.(19) 4,6.(21)	$38,360,406 (32,711,483)	$27,298,051 (23,448,762) 3,849,289 (410,547) (304,025) (43,833) (758,405) 3,090,884 3,479 65,015 (11,468) (5,917) 94,949 146,058 3,236,942 (617,516) 2,619,426 (7,784) 159 334,594 $2,954,020 $4.50 $4.48 1,525 340,694
	5,648,923
	(505,724) (375,614) (46,555)
	(927,893)
	4,721,030
	1,316 163,895 22,383 (7,917) 127,815
	307,492
	5,028,522 (993,957)
	4,034,565
	(20,622) (3,445) 4,813 761,289
	742,035
	$4,776,600
	$6.94
	$6.89

(The accompanying notes are an integral part of the Standalone financial statements)

English Translation of Standalone Financial Statements Originally Issued in Chinese

FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF CHANGES IN EQUITY

For the years ended 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

	Common Stock	Additional Paid-in Capital		Retained earnings		Other components of equity	Other components of equity	Total Equity
			Legal Reserve	Special reserve	Unappropriated Earnings	Unrealized Gains (losses) measured at fair value through other comprehensive income	Gains (losses) on hedging instruments
Balance as of 1 January 2020 Appropriation and distribution of 2019 retained earnings Legal reserve Cash dividends Reversal of special reserve Change in other paid-in capital Change in other paid-in capital of associates and joint ventures accounted for using the equity method Change in other paid-in capital Net income for the year ended 31 December 2020 Other comprehensive income (loss), net of tax for the year ended 31 December 2020 Total comprehensive income (loss) Disposal of financial assets at fair value through other comprehensive income Balance as of 31 December 2020 Balance as of 1 January 2021 Appropriation and distribution of 2020 retained earnings Legal reserve Cash dividends Reversal of special reserve Change in other paid-in capital Change in other paid-in capital of associates and joint ventures accounted for using the equity method Change in other paid-in capital Net income for the year ended 31 December 2021 Other comprehensive income (loss), net of tax for the year ended 31 December 2021 Total comprehensive income (loss) Disposal of financial assets at fair value through other comprehensive income Balance as of 31 December 2021	$5,815,994 - $5,815,994 $5,815,994 - $5,815,994	$588,123 (28,867) 841 - $560,097 $560,097 (108,392) 809 - $452,514	$4,158,088 196,444 - $4,354,532 $4,354,532 275,977 - $4,630,509	$316,503 (38,262) - $278,241 $278,241 (194,250) - $83,991	$7,686,547 (196,444) (1,744,798) 38,262 2,619,426 (6,100)	$(278,241) 340,694	$ - - $ - $ - (2,895) (2,895) $(2,895)	$18,287,014 - (1,744,798) - (28,867) 841 2,619,426 334,594
					2,613,326	340,694		2,954,020
					146,444	(146,444)		-
					$8,543,337	$(83,991)		$19,468,210
					$8,543,337 (275,977) (2,035,598) 194,250 (1,829) 4,034,565 (16,359)	$(83,991) 761,289		$19,468,210 - (2,035,598) - (110,221) 809 4,034,565 742,035
					4,018,206	761,289		4,776,600
					358,556	(358,556)		-
					$10,800,945	$318,742		$22,099,800

(The accompanying notes are an integral part of the financial statements)

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF CASH FLOWS

For the years ended 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Net income before tax Adjustments to reconcile net income before tax to net cash provided by operating activities: Income and expense adjustments: Depreciation Amortization Net gain of financial assets and liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of associates and joint ventures Gain on disposal of property, plant and equipment Loss on disposal of other assets Other items Changes in operating assets and liabilities: Increase in current contract assets Decrease in notes receivable (Increase) Decrease in accounts receivable (Increase) Decrease in other receivables (Increase) Decrease in inventories, net Increase in prepayments Increase in other current assets Increase in current contract liabilities Decrease in notes payable Increase in accounts payable Increase in other payables Increase in other current liabilities Decrease in net defined benefit obligation Cash generated from operations Interest received Dividends received Interest paid Income tax paid Net cash provided by operating activities	Forthe years ended 31 December	Forthe years ended 31 December
	2021 $5,028,522 1,218,266 3,000 (3,753) 7,917 (1,316) (122,990) (127,815) (4,990) - - (64,269) 12,056 (435,594) (2,973) (4,084,348) (92,707) (259) 36,859 - 294,930 78,516 101 (22,485) 1,716,668 1,345 123,553 (5,320) (721,389) 1,114,857	2020
		$3,236,942 1,184,374 3,000 (520) 5,917 (3,479) (48,056) (94,949) (497) 98 (544) (158,101) 15,122 53,304 8,700 1,007,086 (40,114) (1,892) 2,826 (241) 129,036 39,594 783 (23,612)
		5,314,777
		3,479 51,293 (3,186) (319,452)
		5,046,911

(Continued)

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF CASH FLOWS (Continued)

For the years ended 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Disposal of financial assets at fair value through other comprehensive income Return of paid-in capital for capital reduction in financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through profit or loss Disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for under the equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Acquisition of investment properties Decrease (Increase) in non-current-assets Dividends received Net cash used in investing activities Cash flows from financing activities: Increase (Decrease) in short-term loans Increase in guarantee deposits Cash payments for the principal of lease liability Cash dividends Net cash used in financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	Forthe years ended 31 December	Forthe years ended 31 December
	2021 (1,937,804) 2,077,491 29,155 (37,680) 41,433 (262,371) (670,318) 733 - 101,918 71,232 (586,211) 560,861 31 (7,678) (2,035,598) (1,482,384) (953,738) 2,174,223 $1,220,485	2020
		(2,666,305) 1,303,417 13,407 (10,000) 10,520 (52,122) (726,663) 150 (321,843) (244,501) 58,816
		(2,635,124)
		(51,210) - (7,367) (1,744,798)
		(1,803,375)
		608,412 1,565,811
		$2,174,223

(The accompanying notes are an integral part of the Standalone financial statements)

FENG HSIN STEEL CO., LTD. AND SUBSIDIARIES

NOTES TO STANDALONE FINANCIAL STATEMENTS

For the Years Ended 31 December 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

1. History and organization

FENG HSIN STEEL Co., Ltd. (the Company) was incorporated in 1969. The Company operates in the blast furnaces and steel mills sector. Its products include angle irons, steel channel, flat structural frames and shafts. In June 1989, the second steel-rolling plants began operations, thus, the Company is capable of producing of other types of steel products such as: carbon steel and particular steel. Also, the second steel plant completed trail run in 1997. The second steel plant works primarily to produce particular types of steelnet, which supplies the first steel-rolling plant work and second steel-rolling plant work to ensure the control over quality and reduce manufacturing costs. The Company was approved for listing on the Taiwan Stock Exchange (“TWSE”) in 1991. The Company’s common shares were publicly traded on the TWSE on 25 May 1992. The Company’s registered office and the main business location is at No.998, Sec.1, Jiahou Rd., Houli Dist., Taichung, Taiwan (R.O.C.).

2. Date and procedures of authorization of financial statements for issue

The standalone financial statements of the Company (“the Company”) for the years ended 31 December 2021 and 2020 were authorized for issue by the Company’s board of directors (the Board) on 24 February 2022.

3. Newly issued or revised standards and interpretations

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Company applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after 1 January 2021. The adoption of these new standards and amendments had no material impact on the Company.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are endorsed by FSC, but not yet adopted by the Company as at the end of the reporting period are listed below.

Item	New, Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and theAnnual Improvements	1 January 2022

(a) Narrow-scope amendments of IFRS, including Amendments to IFRS 3, Amendments to IAS 16, Amendments to IAS 37 and the Annual Improvements
A. Updating a Reference to the Conceptual Framework (Amendments to IFRS 3) The amendments updated IFRS 3 by replacing a reference to an old version of the Conceptual Framework for Financial Reporting with a reference to the latest version, which was issued in March 2018. The amendments also added an exception to the recognition principle of IFRS 3 to avoid the issue of potential “day 2” gains or losses arising for liabilities and contingent liabilities. Besides, the amendments clarify existing guidance in IFRS 3 for contingent assets that would not be affected by replacing the reference to the Conceptual Framework.
B. Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16)

The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in profit or loss.

C. Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)
The amendments clarify what costs a company should include as the cost of fulfilling a contract when assessing whether a contract is onerous.
D. Annual Improvements to IFRS Standards 2018 - 2020

Amendment to IFRS 1

The amendment simplifies the application of IFRS 1 by a subsidiary that becomes a first-time adopter after its parent in relation to the measurement of cumulative translation differences.

Amendment to IFRS 9 Financial Instruments

The amendment clarifies the fees a company includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability.

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

The amendment to Illustrative Example 13 accompanying IFRS 16 modifies the treatment of lease incentives relating to lessee’s leasehold improvements.

Amendment to IAS 41

The amendment removes a requirement to exclude cash flows from taxation when measuring fair value thereby aligning the fair value measurement requirements in IAS 41 with those in other IFRS Standards.

The abovementioned standards and interpretations were issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after 1 January 2022. The remaining standards and interpretations have no material impact on the Company.

(3) Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, and not yet adopted by the Company as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued byIASB
a	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures	To be determined by IASB
b	IFRS17“Insurance Contracts”	1January2023
c	Classification of Liabilities as Current or Non-current – Amendments to IAS 1	1 January 2023
d	Disclosure Initiative - Accounting Policies – Amendments to IAS1	1 January 2023
e	Definition of AccountingEstimates – Amendments to IAS 8	1January2023
f	Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12	1 January 2023

(a) IFRS 10“Consolidated Financial Statements” and IAS 28“Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures , in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

(b) IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in June 2020. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain.

– – IFRS 17 replaces an interim Standard IFRS 4 Insurance Contracts from annual reporting period beginning on or after 1 January 2023.

These are the amendments to paragraphs 69-76 of IAS 1 Presentation of Financial statements and the amended paragraphs related to the classification of liabilities as current or non-current.

(d) Disclosure Initiative - Accounting Policies – Amendments to IAS 1

The amendments improve accounting policy disclosures that to provide more useful information to investors and other primary users of the financial statements.

(e) Definition of Accounting Estimates – Amendments to IAS 8

The amendments introduce the definition of accounting estimates and included other amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to help companies distinguish changes in accounting estimates from changes in accounting policies.

(f) Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Company’s financial statements were authorized for issue. The new or amended standards and interpretations have no material impact on the Company.

4. Summary of significant accounting policies

(1) Statement of compliance

The standalone financial statements of the Company for the years ended 31 December 2021 and 2020 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”), IFRSs, IASs, IFRIC and SIC, which are endorsed by the FSC (collectively referred to as “TIFRSs”).

(2) Basis of preparation

The standalone financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”).According to the Regulations Article 21 “The profit or loss during the period and other comprehensive income presented in parent company only financial reports shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to owners of the parent presented in the financial reports prepared on a consolidated basis, and the owners' equity presented in the parent company only financial reports shall be the same as the equity attributable to owners of the parent presented in the financial reports prepared on a consolidated basis.” Therefore the subsidiaries is incorporated in the standalone financial statements under the equity method.

The standalone financial statements have been prepared on a historical cost basis, except

for financial instruments that have been measured at fair value. The standalone financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

(3) Foreign currency transactions

The Company’s standalone financial statements are presented in NT$, which is also the Company’s functional currency.

Transactions in foreign currencies are initially recorded by the Company’s entities at their respective functional currency rates prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

(a) Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
(b) Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.
(c) Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

(4)Translation of Foreign Currency Financial Statements

The assets and liabilities of foreign operations are translated into NTD at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average exchange rate for the period. The exchange differences arising on the translation

are recognized in other comprehensive income. On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized.

On partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. On partial disposal of an associate or a joint venture that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising from the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

(5) Current and non-current distinction

An asset is classified as current when:

(a) The Company expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
(b) The Company holds the asset primarily for the purpose of trading
(c) The Company expects to realize the asset within twelve months after the reporting period
(d) The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

(a) The Company expects to settle the liability in its normal operating cycle.
(b) The Company holds the liability primarily for the purpose of trading.
(c) The liability is due to be settled within twelve months after the reporting period.
(d) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

All other liabilities are classified as non-current.

(6) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within 3 months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(7) Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs.

(1) Financial instruments: Recognition and Measurement

The Company accounts for regular way purchase or sales of financial assets on the trade date.

The Company classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

A. the Company’s business model for managing the financial assets and

B. the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables, financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

(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.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance). A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

(a) purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(b) financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

(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.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

(a) A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.

(b) When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
(c) Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:
(i) Purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(ii) Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Company made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

(2) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on debt instrument

investments measured at fair value through other comprehensive income and financial asset measured at amortized cost.

The Company measures expected credit losses of a financial instrument in a way that reflects:

A. an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes ；
B. the time value of money ； and
C. 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.

The loss allowance is measures as follows:

A. At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Company measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.
B. At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.
C. For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Company needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

(3) Derecognition of financial assets

A financial asset is derecognized when:

A. The rights to receive cash flows from the asset have expired
B. The Company has transferred the asset and substantially all the risks and rewards of the asset have been transferred
C. The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

(4) Financial liabilities and equity

Classification between liabilities or equity

The Company classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

(5) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(8) Fair value measurement

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 fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

(a) In the principal market for the asset or liability, or
(b) In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s

ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(9) Inventories

Inventories are valued at lower of cost and net realizable value item by item.

Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

Materials ─ Weighted average of actual procurements Finished goods and ─ Cost of direct materials and labor and a proportion of work in process manufacturing overheads based on normal operating capacity. Finished goods and work in process are accounted under the weighted average method.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Rendering of services is accounted in accordance with IFRS 15 and not within the scope of inventories.

(10) Investments accounted for using the equity method

The subsidiary is incorporated in the standalone financial statements under the equity method. The standalone financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”).According to the Regulations Article 21 “The profit or loss during the period and other comprehensive income presented in parent company only financial reports shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to owners of the parent presented in the financial reports prepared on a consolidated basis, and the owners' equity presented in the parent company only financial reports shall be the same as the equity attributable to owners of the parent presented in the financial reports prepared on a consolidated basis.”

The Company’s investment in its associate is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Company has significant influence.

Under the equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Company’s share of net assets of the associate or joint venture. After the interest in the associate or joint venture is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Unrealized gains and losses resulting from transactions between the Company and the associate or joint venture are eliminated to the extent of the Company’s related interest in the associate or joint venture.

When changes in the net assets of an associate or a joint venture occur and not those that are recognized in profit or loss or other comprehensive income and do not affects the Company’s percentage of ownership interests in the associate or joint venture, the Company recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate or joint venture on a pro-rata basis.

When the associate or joint venture issues new stock, and the Company’s interest in an associate or a joint venture is reduced or increased as the Company fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in Additional Paid in Capital and Investment accounted for using the equity method. When the interest in the associate or joint venture is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Company disposes the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.

The Company determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures . If this is the case the Company calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 Impairment of Assets . In determining the value in use of the investment, the Company estimates:

(1) Its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or
(2) The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 Impairment of Assets .

Upon loss of significant influence over the associate or joint venture, the Company measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

(11) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Company recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment . When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Items Buildings	Useful Lives
	6`～`56 years

Machinery and equipment	3`～`41 years
Transportation equipment	4`～`16 years
Furniture, fixtures and equipment	3`～`17 years
Leasehold improvements	2`～`25 years

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate, and are treated as changes in accounting estimates.

(12) Investment property

The Company’s owned investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, other than those that meet the criteria to be classified as held for sale (or are included in a disposal Company that is classified as held for sale) in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations , investment properties are measured using the cost model in accordance with the requirements of IAS 16 Property, plant and equipment for that model. If investment properties are held by a lessee as right-of-use assets and is not held for sale in accordance with IFRS 5, investment properties are measured in accordance with the requirements of IFRS 16.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Items	Useful Lives
Buildings	30`～`50 years

Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

The Company transfers properties to or from investment properties according to the actual use of the properties.

The Company transfers to or from investment properties when there is a change in use for these assets. Properties are transferred to or from investment properties when the properties meet, or cease to meet, the definition of investment property and there is evidence of the change in use.

(13) Leases

The Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses whether, throughout the period of use, has both of the following:

(a)the right to obtain substantially all of the economic benefits from use of the identified asset; and

(b)the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Company for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Company estimates the stand-alone price, maximising the use of observable information.

Company as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Company recognizes right-of-use asset and lease liability for all leases which the Company is the lessee of those lease contracts.

At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease

term that are not paid at the commencement date:

(a)fixed payments (including in-substance fixed payments), less any lease incentives receivable;
(b)variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
(c)amounts expected to be payable by the lessee under residual value guarantees;
(d)the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
(e)payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Company measures the lease liability on an amortised cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Company measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

(a)the amount of the initial measurement of the lease liability;
(b)any lease payments made at or before the commencement date, less any lease incentives received;
(c)any initial direct costs incurred by the lessee; and
(d)an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Company measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Company measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Company by the end of the lease term or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The Company applies IAS 36 “Impairment of Assets” to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Company accounted for as short-term leases or leases of low-value assets, the Company presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge

in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Company elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

For the rent concession arising as a direct consequence of the Covid-19 pandemic, the Company elected not to assess whether it is a lease modification but accounted it as a variable lease payment. The Company have applied the practical expedient to all rent concessions that meet the conditions for it.

Company as a lessor

At inception of a contract, the Company classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Company recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Company allocates the consideration in the contract applying IFRS 15.

The Company recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

(14) Impairment of non-financial assets

The Company assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset

which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(15) Revenue recognition

The Company’s revenue arising from contracts with customers are primarily related to sale of goods and rendering of services. The accounting policies are explained as follows:

Sale of goods

The Company manufactures and sells goods. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. The main product of the Company is iron and steel, and revenue is recognized based on the consideration stated in the contract. For certain sales of goods transactions, they are usually accompanied by volume discounts (based on the accumulated total sales amount for a specified period). Therefore, revenue from these sales is recognized based on the price specified in the contract, net of the estimated volume discounts. The Company estimates the discounts using the expected value method based on historical experiences. Revenue is only recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. During the period specified in the contract, refund liability is recognized for the expected volume discounts.

The credit period of the Company’s sale of goods is within 10 to 75 days. For most of the contracts, when the Company transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Company usually collects the payments shortly after transfer of goods to customers;

therefore, there is no significant financing component to the contract. For some of the contracts, the Company has transferred the goods to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. Besides, in accordance with IFRS 9, the Company measures the loss allowance for a contract asset at an amount equal to the lifetime expected credit losses. Rendering of services

The Company provides maintenance services for the sale of iron and steel. Such services are separately priced or negotiated, and provided based on contract periods. As the Company provides the maintenance services over the contract period, the customers simultaneously receive and consume the benefits provided by the Company. Accordingly, the performance obligations are satisfied over time, and the related revenue is recognized by straight -line method over the contract period.

Most of the contractual considerations of the Company are collected evenly throughout the contract periods. When the Company has performed the services to customers but does not have a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. However, for some rendering of services contracts, part of the consideration was received from customers upon signing the contract, and the Company has the obligation to provide the services subsequently; accordingly, these amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year, thus, no significant financial component aroise.

(16) Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(17) Post-employment benefits

All regular employees of the Company are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence, not associated with the Company and its domestic subsidiaries. Therefore fund assets are not included in the Company’s standalone financial statements.

For the defined contribution plan, the Company and its domestic subsidiaries will make a

monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur. Past service costs are recognized in profit or loss on the earlier of:

(a) the date of the plan amendment or curtailment, and

(b) the date that the Company recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

(18) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders’ meeting.

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

i. Where the deferred tax liability arises from the initial recognition of goodwill or of an

asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

ii. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

i. Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
ii. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

5. Significant accounting judgements, estimates and assumptions

The preparation of the Company’s standalone financial statements require management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

(1) Judgement

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the standalone financial statements:

(a) Investment Properties

Certain properties of the Company comprise a portion that is held to earn rentals or for capital appreciation and another portion that is owner-occupied. If these portions could be sold separately, the Company accounts for the portions separately as investment properties and property, plant and equipment. If the portions could not be sold separately, the property is classified as investment property in its entirety only if the portion that is owner-occupied is insignificant.

`－` (b) Operating lease commitment Company as the lessor

The Company has entered into commercial property leases on its investment property portfolio. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

(2) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate and future salary increases, mortality rates and future pension increases. Please refer to Note 6 for more details.

(b) Revenue recognition – sales returns and allowance

The Company estimates sales returns and allowance based on historical experience and other known factors at the time of sale, which reduces the operating revenue. In assessing the aforementioned sales returns and allowance, revenue is recognized to the extent it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Please refer to Note 6 for more details.

(c) Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Company’s domicile.

Deferred tax assets are recognized for all carryforward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

(d) Accounts receivables–estimation of impairment loss

The Company estimates the impairment loss of accounts receivables at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that expects to receive (evaluate forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Please refer to Note 6 for more details.

(e) Inventories

Estimates of net realizable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 for more details.

6. Contents of significant accounts

(1) Cash and cash equivalents

Cash on hand Demand deposits Cash equivalents Total	As of 31 December	As of 31 December
	2021 $955 819,932 399,598 $1,220,485	2020 $948 1,073,683 1,099,592 $2,174,223

(2) Financial assets at fair value through other comprehensive income

Equity instrument investments measured at fair value through other comprehensive income – Current: Listed companies stocks Equity instrument investments measured at fair value through other comprehensive income – Non-current: Listed companies stocks Unlisted companies stocks Total	As of 31 December	As of 31 December
	2021 $1,925,798 $442,185 447,622 $889,807	2020
		$1,700,311 $245,294 311,557
		$556,851

Financial assets at fair value through other comprehensive income were not pledged.

The Company’s dividend income related to equity instrument investments measured at fair value through other comprehensive income for the year ended 2021 and 2020 are as follow:

Related to investments held at the end of the reporting period Related to investments derecognized during the period Dividends recognized during the period	2021	2020
	$70,400 52,590	$38,623 9,433
	$122,990	$48,056

Ascentek Venture Capital Corporation, in which the Company holds shares, has been liquidated on 31 May 2021, and the share capital was refunded in the amount of NT$706 thousand, on 24 June 2021.

The return of paid-in capital for the capital reduction of Tung Ho steel Enterprise Corporation amounted to NT$28,449 thousand as of November 2021.

The Company disposed of equity instrument measured at fair value through other comprehensive income for the year ended 2021. Upon derecognition, the fair value of the investments was NT$2,111,495 thousand, and the cumulative disposal gain in the amount of NT$358,556 thousand was transferred from other equity to retained earnings.

The return of paid-in capital for capital reduction of Ascentek Venture Capital Corporation amounted to NT$13,407 thousand as of 23 November 2020.

The Company disposed of equity instrument measured at fair value through other comprehensive income for the year ended 2020. Upon derecognition, the fair value of the investments was NT$1,303,417 thousand, and the cumulative disposal gain in the amount of NT$146,444 thousand was transferred from other equity to retained earnings.

(3) Accounts receivables

Accounts receivables
Accounts receivables Less: loss allowance Total	As of 31 December
	2021 $1,916,679 (3,305)	2020
		$1,481,085 (3,305)
	$1,913,374	$1,477,780

Accounts receivables were not pledged.

Accounts receivables are generally on 10-75 day terms. The total carrying amount are NT$1,916,679 thousand and NT$1,481,085 thousand as of 31 December 2021 and 2020, respectively. Please refer to Note 6 (15) for more details on loss allowance of accounts receivables for the year periods ended 31 December 2021 and 2020. Please refer to Note 12 for more details on credit risk management.

(4) Inventories

Inventories
Raw materials Supplies & parts Work in progress Finished goods Total	As of 31 December
	2021 $3,384,209 400,453 2,038,649 1,567,270 $7,390,581	2020
		$1,405,703 267,145 796,631 831,989
		$3,301,468

The cost of inventories recognized in expenses amounted to NT$32,711,483 thousand and NT$23,448,762 thousand, respectively, for the years ended 31 December 2021 and 2020.

No inventories were pledged.

(5) Prepayments

Prepayments
Factory supplies Prepayments of purchases Other prepayments Total	As of 31 December 2021 2020 $593,426 $578,186 116,310 86,989 3,062 3,564 $712,798 $668,739
	2021 $593,426 116,310 3,062 $712,798
		$668,739

Prepayments were not pledged.

(6) Investments accounted for using the equity method

The following table lists the investments accounted for using the equity method of the Company:

Investees Investment in subsidiaries: GREAT FORTUNE HOLDING LIMITED Investment in associates: Listed companies: Taiwan Steel Union Co., Ltd. Unlisted companies: Fong Yu Resources Co., Ltd. Wen-Shan Enterprise Co., Ltd. Total	As of 31 December 2021 2020 Carrying amount Percentage of ownership(%) Carrying amount Percentage of ownership(%) $516,422 100 $516,457 100 $880,227 23.23 $744,203 20.92 563,945 29.08 510,929 29.71 188,349 18.00 171,822 18.00 $2,148,943 $1,943,411	As of 31 December 2021 2020 Carrying amount Percentage of ownership(%) Carrying amount Percentage of ownership(%) $516,422 100 $516,457 100 $880,227 23.23 $744,203 20.92 563,945 29.08 510,929 29.71 188,349 18.00 171,822 18.00 $2,148,943 $1,943,411
	2021 Carrying amount Percentage of ownership(%) $516,422 100 $880,227 23.23 563,945 29.08 188,349 18.00 $2,148,943
	Carrying amount $516,422 $880,227 563,945 188,349 $2,148,943	Carrying amount $516,457 $744,203 510,929 171,822 $1,943,411

A. The share of profit or loss of associates and joint ventures for the years ended 31 December 2021 and 2020:

December 2021 and 2020:
	For theyears ended 31 December
	2021	2020
Investment in subsidiaries:

GREAT FORTUNE HOLDING LIMITED Investment in associates: Taiwan Steel Union Co., Ltd. Fong Yu Resources Co., Ltd Wen-Shan Enterprise Co., Ltd. Total	$(35) 124,215 (12,892) 16,527 $127,815	$(95) 83,504 (3,865) 15,405
		$94,949

B. Investment in subsidiaries:

Investment in subsidiaries is represent as “Investments accounted for under the equity method” in standalone statements and necessary evaluation adjustments are made.

C. Investment in associates:

For the years ended 31 December 2021, the Company increased its investment in Taiwan Steel Union Co., Ltd. in the amount of NT$193,987 thousand, which increased its shareholding ratio from 20.92% to 23.23%. Thus, the Company recognized a decrease in other capital surplus in the amount of NT$109,291 thousand and retained earnings in the amount of NT$1,829 thousand.

For the years ended 31 December 2020, the Company increased its investment in Taiwan Steel Union Co., Ltd. in the amount of NT$52,122 thousand, which increased its shareholding ratio from 20.24% to 20.92%. Thus, the Company recognized a decrease in capital surplus in the amount of NT$28,867 thousand.

In the third quarter of 2021, the Company participated in issuance of common stock for cash of Fong Yu Resources Co., Ltd., increasing its investment in Fong Yu Resources Co., Ltd in the amount of NT$68,628 thousand. However, because the Company did not increase investment according to the shareholding radio, the shareholding ratio decreased from 29.71% to 29.08 %. The Company increased other capital surplus in the amount of NT$899 thousand.

Although the holding of Wen-Shan Enterprise Co., Ltd. is less than 20%, the Company presumed to have significant influence on these invested companies. Hence, it evaluates the investment by using the equity method.

Fair value of the investment in the associate when there is a quoted market price for the investment: Taiwan Steel United Co., Ltd. is a listed entity on the Taiwan Stock Exchange (TWSE). The fair value of the investment in Taiwan Steel United Co., Ltd. was NT$2,093,655 thousand and NT$1,766,921 thousand as of 31 December 2021 and 2020, respectively.

The Company’s investments in Taiwan Steel Union Co., Ltd., Fong Yu Resources Co., Ltd. and Wen-Shan Enterprise Co., Ltd are not individually material. The summarized financial information based on the Company’s investment in associates is as follows:

Profit from continuing operations Other comprehensive income (post-tax) Total comprehensive income	For theyears ended 31 December	For theyears ended 31 December
	2021 $127,850 (2,756) $125,094	2020
		$95,044 127
		$95,171

The above mentioned associates had no contingent liabilities or capital commitments as of 31 December 2021 and 2020. No investment in the associates was pledged.

Our audit, in so far as it related to the investments accounted for under the equity method amounting to NT$880,227 thousand and NT$744,203 thousand as of 31 December 2021 and 2020; the related shares of investment income from the associates and joint ventures amounted to NT$124,215 thousand and NT$83,504 thousand for the years ended 31 December 2021 and 2020, respectively; and the related shares of other comprehensive income from the associates and joint ventures amounted to NT$174 thousand and NT$159 thousand for the years ended 31 December 2021 and 2020, respectively; are based solely on the reports of other independent accountants.

(7) Property, plant and equipment

Land	Buildings	Machinery and equipment	Office equipment	Transportation equipment	Leasehold improvements	Construction in progress and equipment pending inspection	Total $22,671,941 670,318 (512,881) 48,648 $22,878,026 $13,235,909 1,208,206 (512,881) - $13,931,742 $22,197,078 726,663 (291,754) 39,954
$1,285,809 2,544 - -	$3,475,129 1,225 (1,442) 5,149	$16,867,846 266,436 (504,252) 501,780	$48,956 - - -	$409,785 24,665 (7,187) -	$330,148 - - 6,151	$254,268 375,448 - (464,432)
$1,288,353	$3,480,061	$17,131,810	$48,956	$427,263	$336,299	$165,284
$ - - - -	$1,383,229 105,032 (1,442) -	$11,461,215 1,062,183 (503,744) -	$17,800 2,617 - -	$307,332 24,831 (7,187) -	$66,333 13,543 - -	$ - - - -
$ -	$1,486,819	$12,019,654	$20,417	$324,976	$79,876	$ -
$1,193,967 91,482 - -	$3,439,406 1,063 - 34,660	$16,667,078 321,949 (288,904) 167,723	$46,438 2,518 - -	$394,566 18,069 (2,850) -	$330,148 - - -	$125,475 291,222 - (162,429)
$1,285,809	$3,475,129	$16,867,846	$48,956	$409,785	$330,148	$254,268	$22,671,941
$ - - - -	$1,279,505 103,724 - -	$10,716,926 1,032,167 (287,878) -	$15,159 2,641 - -	$286,391 23,791 (2,850) -	$52,975 13,358 - -	$ - - - -	$12,350,956 1,175,681 (290,728) - $13,235,909 $8,946,284 $9,436,032
$ -	$1,383,229	$11,461,215	$17,800	$307,332	$66,333	$ -
$1,288,353	$1,993,242	$5,112,156	$28,539	$102,287	$256,423	$165,284
$1,285,809	$2,091,900	$5,406,631	$31,156	$102,453	$263,815	$254,268

There is no capitalization of interest due to purchase of property, plant and equipment.

As of 31 December 2021 and 2020 deeds of certain agriculture land amounted to NT$149,811 thousand and NT$146,267 thousand, respectively. The ownership of the land was not transferred to the Company. The Company had entered into a trust deed with the entrusted registrant for such agriculture land.

Property, plant and equipment were not pledged.

(8) Investment property

The Company has entered into commercial property leases on its owned investment properties with terms of between 1and 10 years. These leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions.

Cost: As of 1 January 2021 Additions As of 31 December 2021 Depreciation`：` As of 1 January 2021 Depreciation As of 31 December 2021 Cost: As of 1 January 2020 Additions Disposals As of 31 December 2020 Depreciation`：` As of 1 January 2020 Depreciation Disposals As of 31 December 2020 Net carrying amount`：` As of 31 December 2021 As of 31 December 2020	Land $506,477 `-` $506,477 $ - - $ - $376,867 129,610 - $506,477 $ - - - $ - $506,477 $506,477	Buildings $192,233 `-` $192,233 $329 3,947 $4,276 $6,086 192,233 (6,086) $192,233 $2,536 1,039 (3,246) $329 $187,957 $191,904	Total
			$698,710 `-`
			$698,710
			$329 3,947
			$4,276
			$382,953 321,843 (6,086)
			$698,710
			$2,536 1,039 (3,246)
			$329
			$694,434
			$698,381

Rental income from investment property Less: Direct operating expenses from investment property generating rental income Direct operating expenses from investment property not generating rental income Total	For theyears ended 31 December 2021 2020 $2,528 $2,296 (2) - (2,383) - $143 $2,296	For theyears ended 31 December 2021 2020 $2,528 $2,296 (2) - (2,383) - $143 $2,296
	2021 $2,528 (2) (2,383) $143
		$2,296

No investment property was pledged.

Investment properties held by the Company are not measured at fair value but for which the fair value are disclosed. The fair value measurements of the investment properties are categorized at Level 3. The fair value has been determined based on valuations performed by an independent appraiser and the result is as follows:

2021.12.31

Item A B C	Valuation Method Comparison Method and Land Development Analysis Method Comparison Method and Cost Method Comparison Method and the income method	Valuation Amount $895,315 69,333 441,347 $1,405,995	Valuation Time
			December 2021 December 2021 August 2020

The fair value of said investment property (Item C) evaluated by the Company by referring to the information on the Department of Land Administration website, Ministry of Interior and actual transactions in the similar locations on 31 December 2021 appeared to be equivalent to that appraised by an independent appraiser in the latest period.

2020.12.31

Item A B C	Valuation Method Comparison Method and Land Development Analysis Method Comparison Method and Cost Method Comparison Method and the income method	Valuation Amount $599,003 28,519 441,347 $1,068,869	Valuation Time
			February 2017 February 2017 August 2020

The fair value of said investment property (Items A, B and C) evaluated by the Company by referring to the information on the Department of Land Administration website, Ministry of Interior and actual transactions in the similar locations on 31 December 2020 appeared to be equivalent to that appraised by an independent appraiser in the latest period.

(9) Other non-current assets

Other non-current assets
Advance payments in equipment Refundable deposits Other non-current assets - other Total	As of 31 December
	2021 $221,026 1,012 16,186	2020
		$316,530 7,081 19,531
	$238,224	$343,142

(10) Short-term borrowings

Short-term borrowings
Unsecured bank loans	Interest Rates(%) 0.65%-0.87%	As of 31 December
		2021 $890,802	2020
			$329,941

The Company’s unused short-term lines of credits amounted to NT$8,810,482 thousand and NT$6,084,526 thousand as of 31 December 2021 and 2020, respectively.

(11) Other payables

) Other payables
Accrued Salary and bonus Accrued Utilities Pollution control payable Accrued Discount Others Total	As of 31 December
	2021 $450,237 207,798 131,011 170,964 230,271 $1,190,281	2020
		$344,290 194,542 176,499 162,391 148,402
		$1,026,124

(12) Post-employment benefits

Defined contribution plan

The Company adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The Company has made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Pension expenses under the defined contribution plan for the years ended 31 December 2021 and 2020 were NT$22,538 thousand and NT$20,796 thousand, respectively.

Defined benefits plan

The Company adopts a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company and its domestic subsidiaries contribute an amount equivalent to 2% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before the end of each year, the Company and its domestic subsidiaries assess the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the same year, the Company and its domestic subsidiaries will make up the difference in one appropriation before the end of March the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is managed by the in-house managers or under discretionary accounts, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension 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. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Company expects to contribute NT$98,360 thousand to its defined benefit plan during the 12 months beginning after 31 December 2021.

The weighted average duration of the defined benefits obligation was 8 years of 31 December 2021.

Pension costs recognized in profit or loss are as follows:

Current period service costs Past service cost Gains and losses arising from settlements Net interest on the net defined benefit liabilities(assets) Total	For the years ended 31 December	For the years ended 31 December
	2021 $7,949 - 55 487 $8,491	2020
		$8,895 163 348 1,336
		$10,742

Reconciliations of the defined benefit obligation and fair value of plan assets are as follows:

	As of
31 December 2021	31 December 2020	1 January 2020
$712,452 (549,769)	$708,911 (544,366)	$696,770 (516,396)
162,683 (94,228)	164,545 (8,857)	180,374 (20,886)
$68,455	$155,688	$159,488

Reconciliation of liabilities (assets) of the defined benefit plan are as follows:

Defined benefit obligation	Fair value of plan assets	Benefit liability (asset)
$696,770 8,895 5,136 511	$(516,396) - (3,800) -	$180,374 8,895 1,336 511
14,542	(3,800)	10,742
	- - - (17,626)	129 26,862 (1,581) (17,626)
25,410	(17,626)	7,784

Defined benefit obligation	Fair value of plan assets	Benefit liability (asset)
(12,961) - (14,850)	8,289 (26,143) 11,310	(4,672) (26,143) (3,540)
708,911 7,949 2,085 55	(544,366) - (1,598) -	165,545 7,949 487 55
10,089	(1,598)	8,491
	- - - (8,118)	378 11,291 17,071 8,118
28,740	(8,118)	20,622
(34,028) - (1,260)	17,010 (13,957) 1,260	(17,018) (13,957) -
$712,452	$(549,769)	$162,683

The principal assumptions used in determining the Company’s defined benefit plan are shown below:

Discount rate Expected rate of salary increases	As of 31 December	As of 31 December
	2021	2020
	0.70% 1.10%	0.30% 0.50%

Sensitivity analysis for significant assumption are shown below:

For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December
2021		2020
Defined benefit obligation increase	Defined benefit obligation decrease	Defined benefit obligation increase	Defined benefit obligation decrease
$ - 14,749 14,653 -	$14,306 - - 14,285	$ - 15,300 15,230 -	$14,823 - - 14,830

The sensitivity analysis above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analysis compared to the previous period.

(13) Equities

(a) Common stock

The Company’s authorized capital was both NT$7,000,000 thousand as at 31 December 2021 and 2020, each at a par value of NT$10. The Company has issued 581,599,424 common shares both as at 31 December 2021 and 2020. The paid-up capital was NT$5,815,994 thousand. Each share has one voting right and a right to receive dividends.

(b) Capital surplus

Capital surplus
Additional paid-in capital Treasury share transactions Share of changes in net assets of associates and joint ventures accounted for using the equity method Gain on sale of assets Donated assets Other Total	As of 31 December
	2021 $271,134 175,263 - 665 218 5,234 $452,514	2020
		$271,134 175,263 108,392 665 218 4,425
		$560,097

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

(c) Legal reserve

The Company Act provides that companies must retain at least 10% of their annual earnings, as defined in the Act, until such retention equals the amount of paid-in capital. This retention is accounted for as a legal reserve account. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

(d) Special reserve

When the Company distributed the earnings, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed.

(e) Retained earnings and dividend policies

According to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:

a. Payment of all taxes and dues
b. Offset prior years’ operation losses
c. Set aside 10% of the remaining amount after deducting items (a) and (b) as legal reserve
d. Set aside or reverse special reserve in accordance with law and regulations
e. The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders’ meeting

As the Company’s industry is mature and the Company makes stable profits, most of the dividends will be distributed to shareholders as cash dividends. However, when there is significant capital expenditure, no more than 70% of total dividends can be distributed as stock dividends to shareholders.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total paid-in capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal reserve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

Details of the 2021 and 2020 earnings distribution and dividends per share as approved and resolved by the board of directors’ meeting and shareholders’ meeting on 24 February 2022 and 22 July 2021 respectively, are as follows:

Legal reserve Special reserve Common stock -cash dividend	Appropriation of earnings	Appropriation of earnings	Dividendper share(NT$)	Dividendper share(NT$)
	2021	2020	2021	2020
	$437,493 (83,991) 2,907,997	$275,977 (194,250) 2,035,598	$5.0	$3.5

Please refer to Note 6(17) for further details on employees’ compensation and remuneration to directors and supervisors.

(14) Operating revenue

Operating revenue
Revenue from contracts with customers Sale revenue Revenue arising from rendering of services Total	For theyears ended 31 December
	2021	2020
	$38,217,271 143,135	$27,186,421 111,630
	$38,360,406	$27,298,051

Analysis of revenue from contracts with customers during the year periods ended 31 December 2021 and 2020 are as follows:

(1) Disaggregation of revenue

A. The Company is a single operating department and should report the income information disclosed by the department. Please refer to the preceding paragraph for details.
B. The income types of contracts with customers from 1 January to 31 December 2021 and 2020 are all recognized at a certain point in time.

(2) Contract balances

A. Contract assets - current

31 Dec. 2021 31 Dec. 2020 1 Jan. 2020 Sales of goods $461,511 $397,242 $239,141

The significant changes in the Company’s balances of contract assets during the twelve-month periods ended 31 December 2021 and 2020 are as follows ：

The beginning balance transferred to accounts receivable Increase in receivable (excluding the account incurred and transferred to accounts receivable) B. Contract liabilities - current 31 Dec. 2021 Sales of goods $171,057	The beginning balance transferred to accounts receivable Increase in receivable (excluding the account incurred and transferred to accounts receivable) B. Contract liabilities - current 31 Dec. 2021 Sales of goods $171,057		12 month period ended 31 December 2021 2020 $(397,242) $(239,141) 461,511 397,242 31 Dec. 2020 1 Jan. 2020 $134,198 $131,372	12 month period ended 31 December 2021 2020 $(397,242) $(239,141) 461,511 397,242 31 Dec. 2020 1 Jan. 2020 $134,198 $131,372
			2021
	$171,057		$134,198

The changes in the Company’s balances of contract liabilities during the twelve-month periods ended 31 December 2021 and 2020 were mainly affected by the orders for steel products, the delivery schedule required by the clients and progress schedule.

(3) Transaction price allocated to unsatisfied performance obligations

As of 31 December 2021 and 2020, the Company expected that all of the transaction price allocated to unsatisfied performance obligations will be recognized as revenue within one year, therefore, it is not required to provide information about the unsatisfied performance obligations.

(4) Assets recognized from costs to fulfil a contract

None.

(15) Expected credit losses

The Company expected credit losses for the year ended 31 December 2021 and 2020: None.

Please refer to Note 12 for more details on credit risk.

The Company measures the loss allowance of its contract assets and trade receivables (including note receivables and trade receivables) at an amount equal to lifetime expected credit losses. The assessment of the Group’s loss allowance as of 31 December 2021 and

2020 are as follows:

(1)the loss allowance of contract assets is measured at an amount equal to lifetime expected credit losses, details are as follow:

credit losses, details are as follow:
Total carrying amount Expected credit loss rates Loss allowance Total	As of 31 December
	2021	2020
	$461,511 0% -	$397,242 0% -
	$461,511	$397,242

(2)the Company considers the grouping of trade receivables by counterparties’ credit rating, by geographical region and by industry sector and its loss allowance is measured by using a provision matrix, details are as follows:

31 December 2021

Not yet due (Note)			Overdue			Total
	<=30 days	31-60 days	61-90 days	91-120 days	>=121 days
$1,870,885 0-1%	$44,970 -%	$1,770 -%	$ - -%	$ - -%	$ - -%	$1,917,625 3,305
3,305	-	-	-	-	-
$1,867,580	$44,970	$1,770	$-	$-	$-	$1,914,320

31 December 2020

Not yet due (Note)			Overdue			Total
	<=30 days	31-60 days	61-90 days	91-120 days	>=121 days
$1,488,248 0-1%	$5,030 -%	$ - -%	$ - -%	$ - -%	$ - -%	$1,493,278 3,305
3,305	-	-	-	-	-
$1,484,943	$5,030	$-	$-	$-	$-	$1,489,973

Note: The Company’s notes receivables are not overdue, and the credit loss of its duration period is all recorded in the previous year.

The movement in the provision for impairment of contract assets, note receivables and accounts receivables for the year ended 31 December 2021 and 2020 are as follows:

As of 1 January 2021 Addition/(reversal) for the current period Write off As of 31 December 2021 As of 1 January 2020 Addition/(reversal) for the current period Write off As of 31 December 2020	Contract assets Note receivables Accounts receivables
	$ - $ - $3,305 - - - - - -
	$ - $ - $3,305
	$ - $ - $3,305 - - - - - -
	$ - $ - $3,305

(16) Leases

(1) Company as a lessee

The Company leases various properties, including real estate such as land, machinery and equipment. The lease terms range from 1 to 50 years.

The Company’s leases effect on the financial position, financial performance and cash flows are as follow:

A. Amounts recognized in the balance sheet
a. Right-of-use assets

The carrying amount of right-of-use assets

Land Machinery and equipment Total	As of 31	December 2020 $176,281 2,655 $178,936
	2021
	$172,042 781
	$172,823

During the year period ended 31 December 2021 and 2020, the Company did not add new right-of-use assets.

b. Lease liabilities

Lease liabilities Current Non-current Total	As of 31 December	As of 31 December
	2021	2020
	$3,898 170,906	$5,109 174,803
	$174,804	$179,912

Please refer to Note 6 (18)(c) for the interest on lease liabilities recognized during the year period ended 31 December 2021 and 2020 and refer to Note 12 (5) Liquidity Risk Management for the maturity analysis for lease liabilities as at 31 December 2021 and 2020.

B. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

Depreciation charge for right-of-use assets
Land Machinery and equipment Total Income and costs relating to leasing activities The expenses relating to short-term leases	For the years ended 31 December 2021 2020 $4,239 $5,779 1,874 1,875 $6,113 $7,654 For the years ended 31 December 2021 2020 $5,431 $4,154
		2020 $4,154

C. Income and costs relating to leasing activities

For the rent concession arising as a direct consequence of the Covid-19 pandemic from 1 January to 31 December 2020, the rent concession in the amount of NT$544 thousand was recognized as a rental expense deduction. The Company have applied the practical expedient to reflect the changes in rental payments.

D. Cash outflow relating to leasing activities

During the year period ended 31 December 2021 and 2020, the Company’s total cash outflows for leases amounting to NT$13,141 and NT$12,181 thousand.

E. Other information relating to leasing activities

(i) Variable lease payments

Some of the Company’s property rental agreement contain variable payment terms that are linked to certain percentages of sales generated from the leased stores, which is very common in the industry of the Company. As such variable lease payments do not meet the definition of lease payments, those payments are not included in the measurement of the assets and liabilities.

(ii) Extension and termination options

Some of the Company’s property rental agreement contain extension and termination options. In determining the lease terms, the non-cancellable period for which the Company has the right to use an underlying asset, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. These options are used to maximize operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Company. After the commencement date, the Company reassesses the lease term upon the occurrence of a significant event or a significant change in circumstances that is within the control of the lessee and affects whether the Company is reasonably certain to exercise an option not previously included in its determination of the lease term, or not to exercise an option previously included in its determination of the lease term.

(iii) Residual value guarantees

None.

(2) Company as a lessor

Please refer to Note 6 (8) for details on the Company’s owned investment properties and investment properties held by the Company as right-of-use assets. Leases of owned investment properties are classified as operating leases as they do not transfer substantially all the risks and rewards incidental to ownership of underlying assets.

Lease income for operating leases Income relating to fixed lease payments and variable lease payments that depend on an index or a rate	For the years ended 31 December	For the years ended 31 December
	2021	2020
	$2,528	$2,296

Please refer to Note 6 (8) for relevant disclosure of property, plant and equipment for operating leases under IFRS 16. For operating leases entered by the Company, the undiscounted lease payments to be received and a total of the amounts for the remaining years as at 31 December 2021 and 2020 are as follow:

years as at 31 December 2021 and 2020 are as follow:
Not later than one year Later than one year but not later than two years Later than two years but not later than three years Later than three years but not later than four years Later than four years but not later than five years Later than five years Total	As of 31 December
	2021	2020
	$2,027 1,536 991 991 785 9,420	$1,849 1,552 1,323 785 785 10,205
	$15,750	$16,499

(17) Summary statement of employee benefits, depreciation and amortization expenses by function for the year ended 31 December 2021 and 2020:

Function Nature	2021	2021	2021	2020	2020
	Operating costs	Operating expenses	Total amount	Operating costs	Operating expenses	Total amount
Employee benefits expense
Salaries	$825,541	$226,722	$1,052,263	$717,397	$199,727	$917,124
Labor and health insurance	57,537	18,743	76,280	51,916	15,882	67,798
Pension	25,986	5,043	31,029	26,120	5,418	31,538
Remuneration to directors	-	71,145	71,145	-	51,090	51,090
Other employee benefits expense	44,418	9,981	54,399	33,016	8,067	41,083
Depreciation	1,167,070	51,196	1,218,266	1,135,350	49,024	1,184,374
Amortization	3,000	-	3,000	3,000	-	3,000

The number of employees of the Company and other information as of 31 December 2021 and 2020 as below:

Number of employees Non-employee directors Average labor cost Average salary and bonus The average salary and bonus adjustment	As of 31 December	As of 31 December
	2021	2020
	911 10 $1,347 1,168 13%	893 9 $1,196 1,037 7%

The company has set up an audit committee to replace the supervisor in accordance with the regulations, so the supervisor's remuneration has not been recognized.

The company's salary and remuneration policy is as follows:

According to Article 27 of the company's articles of association, directors should allocate no more than 2% as directors’ remuneration if they make a profit each year. The procedures for determining the remuneration in addition to considering the usual level of payment in the industry, personal performance and contribution, the company’s operating performance and the reasonableness of the relationship between future risks, and the results of the director’s performance evaluation are also considered, and the reasonableness of the relevant salary is reported. The remuneration committee and the board of directors approve the application, and review the remuneration system in a timely manner based on the actual operating conditions and relevant laws and regulations, in order to strike a balance between the company's sustainable operation and risk control.

Managers and employees are in accordance with Article 27 of the company's articles of association. If there is any profit in the year, no less than 2% shall be allocated as employee remuneration. In addition to considering the relative reasonableness of the industry's usual level of payment, personal performance and contribution, and the company's operating performance, the results of the annual performance evaluation are also considered to be rewarded.

According to the Articles of Incorporation, no less than 2% of profit of the current year is distributable as employees’ compensation and no higher than 2% of profit of the current

year is distributable as remuneration to directors and supervisors. However, the company's accumulated losses shall have been covered. The Company may, by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation in the form of cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. Information on the board meeting resolution regarding the employees’ compensation and remuneration to directors and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

Based on profit of 31 December 2021, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors for the period ended of 31 December 2021 to be 7.36% and 1.18% of profit, respectively. The employees’ compensation and remuneration to directors and supervisors for the period ended of 31 December 2021 amounted to NT$404,684 thousand and NT$65,000 thousand respectively, recognized as employee benefits expense.

A resolution was passed at a board meeting to distribute NT$404,684 thousand and NT$65,000 thousand in cash as employees’ compensation and remuneration to directors and supervisors of 2021, respectively. Differences between the estimated amount and the actual distribution of the employee compensation and remuneration to directors and supervisors for the year ended 31 December 2021 were recognized in profit or loss of the subsequent year.

The employees’ compensation and remuneration to directors and supervisors for the period ended of 31 December 2020 amount to NT$305,699 thousand and NT$45,000 thousand respectively. No material differences exist between the estimated amount and the actual distribution of the employee bonuses and remuneration to directors and supervisors for the year ended 31 December 2020.

(18) Non-operating income and expenses

(a) Other income

For the years ended 31 December

Dividend income Rental income Others Total	2021 $122,990 2,528 38,377 $163,895	2020
		$48,056 2,296 14,663
		$65,015

(b) Other gains and losses

Other gains and losses
Gains on disposal of property, plant and equipment, net Foreign exchange (losses) gains, net Gains on financial assets at fair value through profit or loss Others Total	For theyears ended 31 December
	2021	2020
	$4,990 30,329 3,753 (16,689)	$497 7,280 520 (19,765)
	$22,383	$(11,468)

(c) Finance costs

Finance costs
Interest on loans from bank Interest on lease liabilities Total	For theyears ended 31 December
	2021	2020
	$5,347 2,570	$3,001 2,916
	$7,917	$5,917

(19) Components of other comprehensive income

For the year ended 31 December 2021:

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income Share of other comprehensive income of associates and joint ventures accounted for using the equity method Total of other comprehensive income	Arising during theperiod	Reclassificatio n adjustments during the period	Other comprehensive income, before tax	Income tax effect	Other comprehensive income, net of tax
	$(20,622) 761,289 (3,445)	$ - - -	$(20,622) 761,289 (3,445)	$4,124 - 689	$(16,498) 761,289 (2,756)
	$737,222	$ -	$737,222	$4,813	$742,035

For the year ended 31 December 2020:

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income Share of other comprehensive income of associates and joint ventures accounted for using the equity method Total of other comprehensive income	Arising during theperiod	Reclassificatio n adjustments during the period	Other comprehensive income, before tax	Income tax effect	Other comprehensive income, net of tax
	$(7,784) 340,694 159	$ - - -	$(7,784) 340,694 159	$1,557 - (32)	$(6,227) 340,694 127
	$333,069	$ -	$333,069	$1,525	$334,594

(20) Income tax

The major components of income tax expense (income) for the year ended 31 December 2021 and 2020 are as follows:

(A)Income tax expense (income) recognized in profit or loss

Current income tax expense: Current income tax charge Adjustment in respect of current income tax of prior periods Defered tax income Deferred tax income relating to origination and reversal of temporary differences Adjustment in respect of deferred tax income of prior periods Total income tax expense	For theyears ended 31 December	For theyears ended 31 December
	2021	2020
	$984,624 (1,089) 6,094 4,328	$615,075 (1,372) 3,813 -
	$993,957	$617,516

(B)Income tax relating to components of other comprehensive income

Deferred tax expense (income): Remeasurements of defined benefit plans Share of other comprehensive income of associates and joint ventures accounted for using the equity method Income tax relating to components of other comprehensive income	For theyears ended 31 December 2021 2020 $(4,124) $(1,557) (689) 32 $(4,813) $(1,525)
	2021
	$(4,124) (689)
	$(4,813)

(C)A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rate is as follows:

Accounting profit before tax from continuing operations Tax at the domestic rates applicable to profits in the country concerned Adjustment of in respect of current income tax of prior periods Tax effect of revenues exempt from taxation Additional income tax on undistributed earnings Tax effect of expenses not deductible for tax purposes Adjustment in respect of deferred tax income of prior periods Total income tax expenses recognized in profit or loss	For the years ended 31 December	For the years ended 31 December
	2021	2020
	$5,028,522	$3,236,942
	$1,005,704 (1,089) (50,171) 32,123 3,062 4,328	$647,388 (1,372) (28,770) - 270 -
	$993,957	$617,516

(D)Deferred tax assets (liabilities) relate to the following:

For the year ended 31 December 2021:

Items	Balance as of 1 January	Recognized in profit or loss	Recognized in other comprehensive income	Balance as of 31 December
Temporary difference Bonus payable Impairment losses on available-for-sale financial assets Loss from price recovery (reduction) of inventories Unrealized foreign exchange gains or losses Investments accounted for using the equity method Share of other comprehensive of associates and joint ventures-cash flow hedges Share of other comprehensive of associates and joint ventures-remeasurements of defined benefit plans Non-current liability-Defined benefit Liability Remeasurements of defined benefit plans Difference between book depreciation expense and tax depreciation expense Deferred tax income Net deferred tax assets Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	$5,336 4,328 1,308 366 55,462 - 14 15,477 17,002 9,929 $109,222	$217 (4,328) (1,308) (290) 6 - - (4,497) - (222)	$ - - - - - 723 (34) - 4,124 -	$5,553 - - 76 55,468 723 (20) 10,980 21,126 9,707
		$(10,422)	$4,813	$103,613

	$109,222			$103,633
	$ -			$ 20

For the year ended 31 December 2020:

Items	Balance as of 1 January	Recognized in profit or loss	Recognized in other comprehensive income	Balance as of 31 December
Temporary difference Bonus payable Impairment losses on available-for-sale financial assets Loss from price recovery (reduction) of inventories Unrealized foreign exchange gains or losses Investments accounted for using the equity method Share of other comprehensive of associates and joint ventures Non-current liability – Defined benefit Liability Remeasurements of defined benefit plans Difference between book depreciation expense and tax depreciation expense Deferred tax income Net deferred tax assets Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	$4,701 4,328 1,308 111 55,443 46 20,199 55,445 9,929	$635 - - 255 19 - (4,722) - -	$ - - - - - (32) - 1,557 -	$5,336 4,328 1,308 366 55,462 14 15,477 17,002 9,929
	$111,510	$(3,813)	$1,525	$109,222
	$111,510			$109,222
	$ -			$ -

The assessment of income tax returns

As of 31 December 2021, the Company’s income tax returns through 2019 have been assessed and approved by the tax authority.

(21) Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

(1) Basic earnings per share Profit attributable to ordinary equity holders of the Company (in thousand NT$) Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) Basic earnings per share (NT$) (2) Diluted earnings per share Profit attributable to ordinary equity holders of the Company (in thousand NT$) Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) Effect of dilution: Employee compensation`－`stock (in thousands) Weighted average number of ordinary shares outstanding after dilution (in thousands) Diluted earnings per share (NT$)	For the years ended 31 December	For the years ended 31 December
	2021	2020
	$4,043,565	$2,619,426
	581,599	581,599
	$6.94	$4.50
	$4,034,599	$2,619,426
	581,599 4,036	581,599 3,563
	585,635	585,162
	$6.89	$4.48

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date the financial statements were authorized for issue.

7. Related party transactions

Information of the related parties that had significant transactions with the Company during the financial reporting period is as follows:

Name and nature of relationship of the related parties

Name of the relatedparties Taiwan Steel Union Co., Ltd. Fong Yu Resources Co., Ltd. Taiwan Steel Resources Co., Ltd.	Nature of relationshipof the relatedparties
	Associate Associate Subsidiary of associate

Significant transactions with the related parties

(a)Account Payable

) Account Payable
Associate Subsidiary of associate Total	As of 31 December 2021 2020 $2,381 $6,894 - 12,513 $2,381 $19,407
	2021
	$2,381 -
	$2,381	$19,407

(b)Other

Taiwan Steel Union Co., Ltd was commissioned to process the electric arc furnace dust. Manufacturing expenses recognized for the years ended 31 December 2021 and 2020 amounted to NT$18,999 thousand and NT$79,606 thousand, respectively. The unpaid amounts as of 31 December 2021 and 2020 were NT$2,381 thousand and NT$6,894 thousand, respectively, stated as accounts payable.

Taiwan Steel Resources Co., Ltd. was commissioned to process the reduction slag. Manufacturing expenses recognized paid to Taiwan Steel Resources Co., Ltd. for the years ended 31 December 2021 and 2020 amounted to NT$66,681 thousand and NT$65,507 thousand. The unpaid amounts as of 31 December 2021 and 2020 were NT$0 thousand and NT$12,513 thousand, stated as accounts payable.

The Company sold the emission right of sulfide and nitride to Fengyu Resource Co.,Ltd. and recognized other revenue in the amount of NT$13,920 thousand for the year ended 31 December 2021. No such transaction has been conducted for the year ended 31 December 2020.

(c)Key management personnel compensation

Short-term employee benefits Post-Employment Benefits Total	For theyears ended 31 December	For theyears ended 31 December
	2021	2020
	$123,914 344	$91,559 347
	$124,258	$91,906

8. Assets pledged as security

The Company has furnished the following assets as collaterals:

Items Other non-current assets	As of 31 December 2021 2020 $13,686 $13,686	Secured liabilities
	2021 $13,686
		Performance bond

9. Commitments and contingencies

(1) As of 31 December 2021 and 2020, the Company issued guaranty notes as security for borrowings in the amount of NT$12,968,000 thousand and NT$10,062,450 thousand, respectively.
(2) As of 31 December 2021 and 2020, the Company was issued letters of guarantee by banks both in the amount of NT$30,000 thousand for importing goods.
(3) Amounts available under unused letters of credit are as follows:

Currency USD JPY EUR	Carrying	amount
	2021.12.31 $44,690 103,740 737	2020.12.31
		$58,487 213,413 440

The amounts that are available under unused letters of credit above are unguaranteed.

(4) The following table lists major purchase contracts of the Company:

Contract counterparty Company A	Contract content Oxygen field update project	Contract amount JPY 550,000	Contract amountpaid JPY 495,000	Unpaid amount as of 31 December 2021
				JPY 55,000

10. Losses due to major disasters

None.

11. Significant subsequent events

None.

12. Others

(1) Categories of financial instruments

Categories of financial instruments
Financial assets Financial assets at fair value through other	As of 31 December
	2021	2020
	$2,815,605	$2,257,162

Financial assets comprehensive income Financial assets measured at amortized cost: Cash and cash equivalents (exclude cash on hand) Contract assets Notes and accounts receivable Other receivables Other financial assets -Non Current Subtotal Total Financial liabilities Financial liabilities at amortized cost: Short-term borrowings Notes and accounts payable Other payables Lease liabilities Total	As of 31 December	As of 31 December
	2021	2020
	1,219,530 461,511 1,914,320 44,964 13,686	2,173,275 397,242 1,489,973 8,579 13,686
	3,654,011	4,082,755
	$6,469,616	$6,339,917
	$890,802 1,597,724 1,190,281 174,804	$329,941 1,302,794 1,026,124 179,912 $2,838,771
	$3,853,611

(2) Financial risk management objectives and policies

The Company’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activities. The Company identifies measures and manages the aforementioned risks based on the Company’s policy and risk appetite.

The Company has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant financial activities, due approval process by the board of directors and audit committee must be carried out based on related protocols and internal control procedures. The Company complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise currency risk, interest rate risk and other price risk.

In practice, it is rarely the case that a single risk variable will change independently from other risk variables, there is usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a different currency from the Company’s functional currency).

The Company has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company’s profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period. The Company’s foreign currency risk is mainly related to the volatility in the exchange rates for USD, JPY and EUR.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s bank borrowings with fixed interest rates and variable interest rates.

The interest rate sensitivity analysis is performed on the borrowings and investments with variable interest rates as of the end of the reporting period, under the assumption that, a change of 10 basis points of interest rates in a reporting period.

Pre-tax sensitivity analysis of changes in related risk factors for the years ended 31 December 2021 and 2020 are as follows:

For the year ended 31 December 2021

Main Risk Foreign currency risk Interest rate risk	Fluctuation NTD/USD rate +/− 1% NTD/JPY.rate +/− 1% Market rate +/− 10 basis points	Sensitivity of profit/loss +/−$(6,757) +/−$(193) −/+$891	Sensitivity of equity
			$ - $ - $ -

For the year ended 31 December 2020

Main Risk Foreign currency risk Interest rate risk	Fluctuation NTD/USD rate +/− 1% NTD/JPY rate +/− 1% NTD/EUR rate +/− 1% Market rate +/− 10 basis points	Sensitivity of profit/loss +/−$(1,375) +/−$(266) +/−$(3) −/+$330	Sensitivity of equity
			$ - $ - $ -

Equity price risk

The fair value of the Company’s listed and unlisted equity securities is susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company’s listed and unlisted equity securities are classified under held for trading financial assets measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income. The Company manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s board of directors reviews and approves all equity investment decisions.

At the reporting date, a change of 1% in the price of the listed equity securities measured at fair value through other comprehensive income could have an impact of NT$23,680 thousand and NT$19,456 thousand on the equity attributable to the Company for the year periods ended 31 December 2021 and 2020, respectively.

(4) Credit risk management

Credit risk is the risk that counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from operating activities (primarily for contract assets, accounts and notes receivables and lease receivables) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to credit risk management. Credit limits are established for all counter parties based on their financial position, ratings from credit rating agencies, historical experiences, prevailing economic condition and the Company’s internal rating criteria, etc. Certain counter parties’ credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment.

As of 31 December 2021 and 2020, account receivables from top ten customers represented 17.81% and 24.53% of the total trade receivables of the Company, respectively. The credit concentration risk of other accounts receivables is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Company’s treasury in accordance with the Company’s policy. The Company only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating and with no significant default risk. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments and bank loans. The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial liabilities

Non-derivative financial liabilities
As of 31 December 2021 Short-term borrowings Notes and accounts payable Other payable Lease liabilities(note) As of 31 December 2020 Short-term borrowings Notes and accounts payable Other payable Lease liabilities(note)	Less than 1 year	2 to 3 years	4 to 5 years	> 5years	Total
	$898,345 1,597,724 1,190,281 6,400 $332,860 1,302,794 1,026,124 7,679	$ - - - 10,883 $ - - - 11,842	$ - - - 10,883 $ - - - 10,883	$ - - - 206,786 $ - - - 212,226	$898,345 1,597,724 1,190,281 234,952 $332,860 1,302,794 1,026,124 242,630

Note: Information about the maturities of lease liabilities is provided in the table below ：

2021.12.31 2020.12.31			Maturities	Maturities
	Less than 1 year	2 to 5 years	6 to 10 years	11 to 15 years	> 15years	Total
	$6,400 $7,679	$21,766 $22,725	$27,209 $27,208	$27,209 $27,209	$152,368 $157,809	$234,952 $242,630

Derivative financial liabilities

None.

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for the year ended 31 December 2021:

As of 1 Jan. 2021 Cash flows Non-cash changes As of 31 Dec. 2021	Short-term borrowings	Leases liabilities	Total liabilities from financingactivities
	$329,941 560,861 -	$179,912 (7,678) 2,570	$509,853 553,183 2,570
	$890,802	$174,804	$1,065,606

Reconciliation of liabilities for the year ended 31 December 2020:

As of 1 Jan. 2020 Cash flows Non-cash changes As of 31 Dec. 2020	Short-term borrowings	Leases liabilities	Total liabilities from financingactivities
	$381,151 (51,210) -	$210,403 (7,367) (23,124)	$591,554 (58,577) (23,124)
	$329,941	$179,912	$509,853

(7) Fair value of financial instruments
(1) The methods and assumptions applied in determining the fair value of financial instruments

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 following methods and assumptions were used by the Company to measure or disclose the fair values of financial assets and financial liabilities:

A. The carrying amount of cash and cash equivalents, accounts receivables, accounts payable and other current liabilities approximate their fair value due to their short maturities.

B. For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities and bonds) at the reporting date.
C. Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).
D. Fair value of debt instruments without market quotations, bank loans and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by the GreTai Securities Market, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)
(2) Fair value of financial instruments measured at amortized cost

The book value of the Company’s financial assets and financial liabilities measured at amortized cost is very close to the fair value.

(3) Fair value measurement hierarchy for financial instruments

Please refer to Note 12. (9) for fair value measurement hierarchy for financial instruments of the Company.

(8) Derivative financial instruments

None.

(9) Fair value measurement hierarchy
(1) Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

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

Level 3 – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

(2) Fair value measurement hierarchy of the Company’s assets and liabilities

The Company does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Company’s assets and liabilities measured at fair value on a recurring basis is as follows:

As of 31 December 2021 Financial assets: Financial assets measured at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income As of 31 December 2020 Financial assets: Financial assets measured at fair value through other comprehensive income Equity instrument measured at fair value through other comprehensive income

Level 1	Level 2	Level 3	Total
$2,367,983 Level 1	$ - Level 2	$447,622 Level 3	$2,815,605 Total
$1,945,605	$ -	$311,557	$2,257,162

Transfers between Level 1 and Level 2 during the period

During the year period ended 31 December 2021 and 2020, there were no transfers between Level 1 and Level 2 fair value measurements.

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

Beginning balances as of 1 January 2021 Total gains and losses recognized for the year ended 31 December 2021: Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income) Sale Return of paid-in capital for capital reduction Acquisition Ending balances as of 31 December 2021 Beginning balances as of 1 January 2020 Total gains and losses recognized for the year ended 31 December 2020: Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income) Return of paid-in capital for capital reduction Ending balances as of 31 December 2020	Assets
	At fair value through other comprehensive income
	Stocks
	$311,557 39,711 (2,940) (706) 100,000
	$447,622
	Assets
	At fair value through other comprehensive income
	Stocks
	$264,161 60,803 (13,407)
	$311,557

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of 31 December 2021

Financial assets at fair value through other comprehensive income Stocks and others As Financial assets at fair value through other comprehensive income Stocks and others	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
	Market approach discount for lack of marketability of 31 December 2020 Valuation techniques Significant unobservable inputs		10%~30% Quantitative information	The higher the discount for lack of marketability, the lower the fair value of the stocks Relationship between inputs and fair value	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Company’s equity by NT$44,762 thousand Sensitivity of the input to fair value
	Market approach	discount for lack of marketability	10%~30%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Company’s equity by NT$31,156 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Company’s financial Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company’s accounting policies at each reporting date.

(3) Fair value measurement hierarchy of the Company’s assets and liabilities not measured at fair value but for which the fair value is disclosed

As of 31 December 2021 Financial assets not measured at fair value but for which the fair value is disclosed: Investment properties (Notes 6, 8) Investments accounted for using the equity method (please refer to Notes 6, 6) As of 31 December 2020 Financial assets not measured at fair value but for which the fair value is disclosed: Investment properties (Notes 6, 8) Investments accounted for using the equity method (please refer to Notes 6, 6)	Level 1 $ - 2,093,655 Level 1 $ - 1,766,921	Level 2 $ - - Level 2 $ - -	Level 3 $1,405,995 - Level 3 $1,068,869 -	Total
				$1,405,995 2,093,655 Total
				$1,068,869 1,766,921

(10) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

Financial assets Monetary items: USD JPY	As of	31 December 2021 Foreign exchange rate NTD	31 December 2021 Foreign exchange rate NTD	Unit: Thousands As of 31 December 2020	Unit: Thousands As of 31 December 2020	Unit: Thousands As of 31 December 2020
	Foreign currencies $12,516 -	Foreign exchange rate		Foreign currencies $7,886 2	Foreign exchange rate 28.0500 0.2706	NTD
		27.6350 0.2385	$345,875 -			$221,203 -

Financial liabilities Monetary item: USD EUR JPY	As of	31 December 2021 Foreign exchange rate NTD	31 December 2021 Foreign exchange rate NTD	As of 31 December 2020	As of 31 December 2020	As of 31 December 2020
	Foreign currencies $36,834 - 79,640	Foreign exchange rate		Foreign currencies $12,744 7 97,060	Foreign exchange rate 28.1500 34.7250 0.2744	NTD
		27.7350 31.4940 0.2423	$1,021,566 - 19,297			$358,720 252 26,633

The Company has a number of different functional currencies; therefore, we are unable to disclose the exchange loss and gain of monetary financial assets and financial liabilities under each foreign currency that has significant impact. The Company had NT$30,329 thousand and NT$7,280 thousand foreign exchange gains for the years ended 31 December 2021 and 2020, respectively.

The above information is disclosed based on the carrying amount of foreign currency (after conversion to functional currency).

(11) Capital management

The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize the shareholder value. The Company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

13. Other disclosure

(1) Information at significant transactions
a. Financing provided to others for the year ended 31 December 2021: None.
b. Endorsement/Guarantee provided to others for the year ended 31 December 2021:

None.

c. Securities held as of 31 December 2021:

Name of company	Type of securities	Name of securities	Relationship	Financial statement account		31 December,2021	31 December,2021	31 December,2021	31 December,2021
					Shares	Book value	Percentage of ownership (%)	Market value/Net assets value	Note
FENG..HSIN STEEL CO.,LTD. FENG..HSIN STEEL CO.,LTD.	Stock Stock	Formosa Taffeta Co., Ltd. Yi Jinn Industrial Co., Ltd. China Steel Corporation Tung Ho Steel Enterprise Corporation Hon Hai Precision Industry Co., Ltd. Compal Electronics, Inc. Chicony Electronics Co., Ltd. Cathay Real Estate Development Co., Ltd. Taiwan Fire & Marine Insurance Company, Ltd. Yung Shin Global Holding Corporation Zhen Ding Technology Holding Limited Ststex Corporation Chien Shing Harbour Service Co., Ltd. Fengshuo Investment Co., Ltd. Gwo Uei Metals Industry Co., Ltd.	- - - - - - - - - - - - - - -	Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Financial assets at fair value through other comprehensive income, current Total Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent	3,162,000 1,368,000 28,615,000 5,776,070 160,000 506,000 409,000 3,861,000 2,362,000 2,491,000 830,000 381,000 8,203,800 3,640,000 3,800,000	$92,172 26,744 1,011,540 387,574 16,640 12,245 33,661 74,324 48,185 106,989 83,415 32,309	0.19% 0.45% 0.18% 0.79% - 0.10% 0.05% 0.33% 0.65% 0.93% 0.09% 0.14% 10.11% 18.20% 19.00%	$92,172 26,744 1,011,540 387,574 16,640 12,245 33,661 74,324 48,185 106,989 83,415 32,309
						$1,925,798
						$442,185 266,701 50,872		$442,185 266,701 50,872

Name of securities	Relationship	Financial statement account		31 December,2021	31 December,2021	31 December,2021	31 December,2021
			Shares	Book value	Percentage of ownership (%)	Market value/Net assets value	Note
Gwo Huei Iron & Steel Co., Ltd. China Trade and Development Corporation Pro-Ascentek Investment Corporation	- - -	Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Financial assets at fair value through other comprehensive income, noncurrent Total	3,800,000 1,925 10,000,000	34,217 25 95,807	19.00% - 8.33%	34,217 25 95,807
				$889,807

d. Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the paid-in capital for the year ended 31 December 2021:

The Company		Securities	Financial Statement Account	Trading counterpart( Note1)	Relationship (Note1)	Beginning	Beginning	Acquisition	Acquisition	Acquisition	Disposal	Disposal	Disposal	Disposal	Ending	Ending
	Type	Name				Shares	Amount	Shares	Cost	Evaluation	Shares	Selling price	Carrying amount	Gains (Losses) on Disposal	Shares	Amount
FENG HSIN STEEL CO.,LTD	Stock	China Steel Corporation	Financial assets at fair value through other comprehensive income,current	N/A	N/A	-	$ -	28,615,000	$800,623	$210,917	N/A				28,615,000	$1,011,540
FENG HSIN STEEL CO.,LTD	Stock	Tung Ho Steel Enterprise Corporation	Financial assets at fair value through other comprehensive income,current	N/A	N/A	-	$ -	8,621,000	$338,160	$77,863	N/A				5,776,070	$387,574

Note 1: Not required to complete the two sections, unless the security is stated as investment under the equity method.
Note 2: The return of paid-in capital for capital reduction from Tung Ho Steel Enterprise Corporation in November 2021 amounted to NT$28,449 thousand for a reduction of 2,845 thousand shares.
e. Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the paid-in capital for the year ended 31 December 2021: None.

f. Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock for the year ended 31 December 2021: None.
g. Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of the capital stock for the year ended 31 December 2021:

None.

h. Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of capital stock as of year ended 31 December 2021: None.
i. Financial instruments and derivative transactions: None.
j. Others: The business relationship, significant transactions and amounts between parent company and subsidiaries: None.
(2) Information on investees

Names, locations, main businesses and products, original investment amount, investment as of 31 December 2021, net income (loss) of investee company and investment income (loss) recognized as of 31 December 2021 (excluding investees in mainland China):

Investment company	Investee company	Address	Main businesses and products	Initial Investment	Initial Investment	Investment as of 31 December,2021	Investment as of 31 December,2021	Investment as of 31 December,2021	Net income (loss) of investee company (Note)	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of Shares (thousand)	Percentage of ownership (%)	Book value
FENG HSIN STEEL CO.,LTD.	GREAT FORTUNE HOLDING LIMITED	Offshore Chamber, P.O. Box217, Apia, Samoa	General investment business	$971,367	$971,367	31,406,834	100.00%	$516,422	$(35)	$(35)	Subsidiary company of the Company
FENG HSIN STEEL CO.,LTD.	TAIWAN STEEL UNION CO., LTD.	No. 36, Xiangong N. 1st Rd., Shengang Township, Changhua County 509, Taiwan (R.O.C.)	General business and hazardous industrial waste treatment, the manufacture and sale of zinc oxide and non-metallic mineralproducts.	$393,870	$199,883	25,847,587	23.23%	$880,227	$564,869	$124,215	Associated company of the Company
FENG HSIN STEEL	FONG YU RESOURCES	No.18, Zhangbin W.5th	General business and hazardous	$584,878	$516,250	58,161,000	29.08%	$563,945	$(43,612)	$(12,892)	Associated company

Investment company	Investee company	Address	Main businesses and products	Initial Investment Ending balance Beginning balance	Initial Investment Ending balance Beginning balance	Investment as of 31 December,2021	Investment as of 31 December,2021	Investment as of 31 December,2021	Net income (loss) of investee company (Note)	Investment income (loss) recognized	Note
					Beginning balance	Number of Shares (thousand)	Percentage of ownership (%)	Book value
CO.,LTD.	CO., LTD.	RD., Shengang Township, Changhua Conuty 509003, Taiwan(R.O.C)	industrial waste treatment								of the Company
FENG HSIN STEEL CO.,LTD.	Wen-Shan Enterprise Co., Ltd.	No.16, Wuncyuan Ln., Sec. 1, Dongguan Rd., Heping Dist., Taichung City 42444, Taiwan (R.O.C.)	General business	$209,777	$209,777	18,000,000	18.00%	$188,349	$91,778	$16,527	Associated company of the Company
			and the operation
			of hotel industry

(3) Information on investments in mainland China

a. Information on investments in mainland China from the subsidiaries through GREAT FORTUNE HOLDING LIMITED as of 31 December 2021:

Investee company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1 January2021	Investmen	t Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2021	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2021 (Note 1)	Accumulated Inward Remittance of Earnings as of 31 December 2021
					Outflow	Inflow
Shihlien Chemical Industrial Jiangsu Co.	Sodium carbonate, which is the ingredient of glass production	USD 800,000,000	Investment in Mainland China companies through a company invested and established in a third region	$755,895 (USD27,352,800)	-	-	$755,895 (USD27,352,800)	Note 1	2.83%	$ -	$488,816	$ -
Shihlien Brine Huaian Co.	Brine, which is the	USD 32,000,000	Investment in Mainland China	$41,088 (USD1,486,800)	-	-	$41,088 (USD1,486,800)	Note 1	3.94%	$ -	$26,595	$ -

Investee company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1 January2021	Investmen	t Flows	Accumulated Outflow of Investment from Taiwan as of 31 December 2021	Net income (loss) of investee company	Percentage of Ownership	Investment income (loss) recognized	Carrying Value as of 31 December 2021 (Note 1)	Accumulated Inward Remittance of Earnings as of 31 December 2021
					Outflow	Inflow
	ingredient ofsodium carbonate		companies through a company invested and established in a third region

Accumulated Investment in Mainland China as of 31 December 2021 (Note 3)	Investment Amounts Authorized by Investment Commission, MOEA (Note 3)	Upper Limit on Investment
		The lender’s net accounts value×60%
$796,983 (USD 28,839,600)	$796,983 (USD 28,839,600)	$13,259,880 (Note 2)

Note 1: The Company's subsidiary's investment in Mainland China was made indirectly through financial assets at fair value through other comprehensive income investee established in the third region.

Note 2: Pursuant to the Investment Commission, Ministry of Economic Affairs, R.O.C., the Company's investment in Mainland China is limited to 60% of net worth or standalone net worth.

Note 3: Initial investment amounts denominated in foreign currencies are translated into New Taiwan Dollars using the spot rates at the financial statement reporting date.
b. Directly or indirectly significant transactions through third regions with the investees in Mainland China, including price, payment terms, unrealized gain or loss, and other events with significant effects on the operating results and financial condition: None.

(4) Information on major shareholders

Stocks Major shareholders	Qantity of shares	shareholding
Cheng Chuang Investment Co.,Ltd.	30,039,000	5.16%

14. Segment information

Please refer to the consolidated financial statements of FENG HSIN STEEL CO., LTD. and subsidiaries for operating segment information.

FENG HSIN STEEL CO., LTD. THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS DECEMBER 31, 2021

ITEM	STATEMENT INDEX
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF ACCOUNTS RECEIVABLE	2
STATEMENT OF INVENTORIES	3
STATEMENT OF PREPAYMENTS	4
STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - CURRENT	5
STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NONCURRENT	6
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD	7
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT	Note6(7)
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY,PLANT AND EQUIPMENT	Note6(7)
STATEMENT OF RIGHT OF USE AESST	8
STATEMENT OF ACCUMULATED DEPRECIATION OF RIGHT- OF- USE AESST	8
STATEMENT OF CHANGES IN INVESTMENT PROPERTIES	Note6(8)
STATEMENT OF OTHER NON-CURRENT ASSETS	Note6(9)
STATEMENT OF SHORT-TERM LOANS	9
STATEMENT OF ACCOUNTS PAYABLE	10
STATEMENT OF LEASE LIABILITIES	11
STATEMENT OF OPERATING REVENUES	12
STATEMENT OF OPERATING COSTS	13
STATEMENT OF MANUFACTURING EXPENSES	14
STATEMENT OF OPERATING EXPENSES	15
STATEMENT OF OTHER GAINS AND LOSSES	Note6(18)

FENG HSIN STEEL CO., LTD.

1. STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2021

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

Item	Amount	Note
Cash on hand Demand deposits NTD Foreign currency deposits Checking accounts Cash equivalents Total	$955 795,651 24,191 90 399,598 $1,220,485	USD875 thousand; exchange rate: 27.6350 RP

FENG HSIN STEEL CO., LTD.

2. STATEMENT OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2021

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

Customer Name Customer A Customer B Customer C Customer D Others Total Less: loss allowance Total(net)	Amount	Note
	$116,018 107,557 98,319 97,577 1,497,208	1. The amount of individual customer included in others does not exceed 5% of the account balance. 2. Accounts receivable are non-related parties.
	1,916,679 (3,305)
	$1,913,374

FENG HSIN STEEL CO., LTD.

3. STATEMENT OF INVENTORIES

DECEMBER 31, 2021

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

Item	Cost	Net Realizable Value	Note
Raw materials Supplies & parts Work in progress Finished goods Total Less: loss allowance Total(net)	$ 3,384,209 400,453 2,038,649 1,567,270 7,390,581 - $ 7,390,581	$ 3,384,209 400,453 2,038,649 1,879,415 $7,702,726	Allowance for loss on inventory value decline of supplies is recognized according to the extent of idleness and valuation at net realizable value. Refer to Note 4(9)for details.

FENG HSIN STEEL CO., LTD.

4. STATEMENT OF PREPAYMENTS

DECEMBER 31, 2021

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

Item Factory supplies Prepayments of purchases Other prepayments Total	Description	Amount	Note
	Supplies for repairmen Prepayment for oils, raw material and import expense Prepayment of insurance, rental expense and others	$593,426 116,310 3,062 $712,798

FENG HSIN STEEL CO., LTD.

5. STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME –CURRENT

DECEMBER 31, 2021

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

Item	Description	Shares	Bar value	Amount	Cost	Accumulated Impairment	Fair value	Fair value
							Per value	Per value
Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock Stock	Formosa taffeta co.,ltd Yi Jinn Industrial Co., Ltd. China Steel Corporation Tung Ho Steel Enterprise Corporation Hon Hai Precision Industry Co., Ltd. Compal Electronics, Inc. Chicony Electronics Co., Ltd. Cathay Real Estate Development Co., Ltd. Taiwan Fire & Marine Insurance Company, Ltd. Yung Shin Global Holding Corporation Zhen Ding Technology Holding Limited Ststex Corporation	3,162,000 1,368,000 28,615,000 5,776,070 160,000 506,000 409,000 3,861,000 2,362,000 2,491,000 830,000 381,000	$10 10 10 10 10 10 10 10 10 10 10 10	$31,620 13,680 286,150 57,761 1,600 5,060 4,090 38,610 23,620 24,910 8,300 3,810 $499,211	$99,945 25,167 800,623 309,711 18,361 11,718 31,951 76,883 49,996 108,414 100,077 33,387 $1,666,233	NA NA NA NA NA NA NA NA NA NA NA NA	$29.15 19.55 35.35 67.10 104.00 24.20 82.30 19.25 20.40 42.95 100.50 84.80	$92,172 26,744 1,011,540 387,574 16,640 12,245 33,661 74,324 48,185 106,989 83,415 32,309 $1,925,798

FENG HSIN STEEL CO., LTD.

6. STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME –

NONCURRENT

FOR THE YEAR ENDED DECEMBER 31, 2021

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

Name	As of January 1, 2021	As of January 1, 2021	Additions	Additions	Decrease	Decrease	Adjustments	As of December 31, 2021	As of December 31, 2021	Accumul ated Impairme nt	Collateral	Note
	Shares	Fair Value	Shares	Amount	Shares	Amount		Shares	Fair Value
Chien Shing Harbour Service Co., Ltd. Fengshuo Investment Co., Ltd. Gwo Uei Metals Industry Co., Ltd. Gwo Huei Iron & Steel Co., Ltd. Ascentek Venture Capital Corporation Taichung International Entertainment Corporation China Trade And Development Corporation Pro-Ascentek Investment Corporation Total	8,203,800 3,640,000 3,800,000 3,800,000 70,560 1 1,925 -	$245,294 220,796 50,605 34,505 4,656 970 25 - $556,851	- - - - - - - 10,000,000	$ - - - - - - - 100,000 $100,000	- - - - (70,560) (1) - -	$ - - - - (706) (2,940) - - $(3,646)	$196,891 45,905 267 (288) (3,950) 1,970 - (4,193) $236,602	8,203,800 3,640,000 3,800,000 3,800,000 - - 1,925 10,000,000	$442,185 266,701 50,872 34,217 - - 25 95,807 $889,807	NA NA NA NA NA NA NA NA	None None None None None None None None

FENG HSIN STEEL CO., LTD.

7. STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2021

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

Name	As of January 1, 2021	As of January 1, 2021	Additions	Additions	Decrease	Decrease	Gain/Loss	As of	December 31, 2021	December 31, 2021	Market Value or Net Assets Value	Market Value or Net Assets Value	Cost	Collateral
	Shares	Amount	Shares	Amount	Shares	Amount		Shares	% of Ownership	Amount	Unit Price	Total Amount
Investment in subsidiaries: GREAT FORTUNE Investment in associates: Taiwan Steel Union Co., Ltd. Fong Yu Resources Co., Ltd Wen-Shan Enterprise Co., Ltd. Total	31,406,83 23,279,58 51,625,00 18,000,00	$516,457 744,203 510,929 171,822	- 2,568,000 6,536,000 -	$ - 82,867 Note 1 69,527 Note 4 -	- - - -	$ - (71,232) Note 1 - -	$(35) 124,389 Note 3 (16,511) Note 5 16,527	31,406,834 25,847,587 58,161,000 18,000,000	100% 23.23% 29.08% 18%	$516,422 880,227 563,945 188,349 $2,148,943		$516,422 880,227 563,945 188,349 $2,148,943	$971,367 393,870 584,878 209,777 $2,159,89	None None None None
		$1,943,411		$152,394		$(71,232)	$124,370

Note 1 ： The Company increased its investment in Taiwan Steel Union Co., Ltd. in the amount of NT$193,987 thousand, which increased its shareholding ratio from 20.92% to 23.23%. Thus, the

Company recognized a decrease in other capital surplus in the amount of NT$109,291 thousand and retained earnings in the amount of NT$1,829 thousand.

Note 2 ： The Company received cash dividend1 NT$71,232 thousand from Taiwan Steel Union Co., Ltd.

Note 3 ： Share of profit or loss of associates and joint ventures 124,215thousand and Remeasurements of defined benefit pension plans gain: 174thousand.

Note 4 ： The Company increased its investment in Fong Yu Resources Co., Ltd. in the amount of NT$68,628 thousand, which decreased its shareholding ratio from 29.71% to 29.08%. Thus, the

Company recognized a increase in other capital surplus in the amount of NT$899 thousand.

Note 5 ： Share of profit or loss of associates and joint ventures 12,892thousand and losses on hedging instruments 3,619 thousand.

FENG HSIN STEEL CO., LTD.

STATEMENT OF RIGHT OF USE AESST AND ACCUMULATED DEPRECIATION OF

RIGHT- OF- USE AESST

FOR THE YEAR ENDED DECEMBER 31, 2021

Cost:`：` As of 1 January 2021 Additions Disposals Other As of 31 December 2021 Depreciation`：` As of 1 January 2021 Depreciation Disposals As of 31 December 2021 Net carrying amount`：` As of 31 December 2021	Land $185,738 - - - $185,738 $9,457 4,239 - $13,696 $172,042	Machinery and equipment $6,405 - - - $6,405 $3,750 1,874 - $5,624 $781	Total
			$192,143 - - -
			$192,143
			$13,207 6,113 -
			$19,320
			$172,823

FENG HSIN STEEL CO., LTD.

9. STATEMENT OF SHORT-TERM LOANS

DECEMBER 31, 2021

FENG HSIN STEEL CO., LTD. 9. STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021	FENG HSIN STEEL CO., LTD. 9. STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021	FENG HSIN STEEL CO., LTD. 9. STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021	FENG HSIN STEEL CO., LTD. 9. STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021	FENG HSIN STEEL CO., LTD. 9. STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021	FENG HSIN STEEL CO., LTD. 9. STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021	FENG HSIN STEEL CO., LTD. 9. STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021	FENG HSIN STEEL CO., LTD. 9. STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021	FENG HSIN STEEL CO., LTD. 9. STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021	FENG HSIN STEEL CO., LTD. 9. STATEMENT OF SHORT-TERM LOANS DECEMBER 31, 2021
(In Thousands ofNewTaiwan Dollars, Unless Stated Otherwise)
Type	Description	SHOR T-TER M LOAN S	SHORT-TER M LOANS (Raw materials in transit)	Balance, End of Year	Contract Period	Range of Interest Rates (%)	Loan Commitments( Thousands)	Collateral	Note
Letters of credit Letters of credit Letters of credit Letters of credit Letters of credit Letters of credit Letters of credit Letters of credit	Taiwan Cooperative Bank Fongjhong Branch First Bank Fengyuan Branch Hua Nan Bank Fengyuan Branch Chang Hwa Commercial Bank Fengyuan Branch Shanghai Commercial & Savings Bank Taichung Branch Taipei Fubon Commercial Bank Co., Ltd. Fengyuan Branch Cathay United Bank Taichung Branch Mega Bank Fengyuan Branch	$11,160 40,769 64,114 61,634 1,996 1,266 3,240 7,205	$6,201 123,084 509,507 1,058 5,173 2,616	$17,361 163,853 573,621 62,692 1,996 1,266 8,413 9,821	Within 30days Within 180days Within 60days Within 60days Within 90days Within 30days Within 60days Within 60days	0.75%~0.84% 0.72%~0.75% 0.79% 0.68%~0.70% 0.87% 0.79% 0.65% 0.75%	NT$500,000 NT$1,500,000 NT$1,500,000 NT$1,500,000 US$5,000 NT$1,000,000 US$9,000 US$40,000	Cashier's Order Cashier's Order Cashier's Order Cashier's Order Cashier's Order Cashier's Order Cashier's Order Cashier's Order

Type	Description	SHOR T-TER M LOAN S	SHORT-TER M LOANS (Raw materials in transit)	Balance, End of Year	Contract Period	Range of Interest Rates (%)	Loan Commitments( Thousands)	Collateral	Note
Letters of credit Letters of credit Letters of credit Letters of credit Letters of credit	Mizuho Bank, Ltd.Taichung Branch Bangkok Bank Public Company Limited Taichung Bank Taiwan Cooperative Bank Fengyuan Branch CTBC Bank Taichung Branch Total(net)	4,690 9,014 4,330	13,326 6,374 764 13,281	18,016 15,388 4,330 764 13,281 $890,802	Within 180days Within 180days Within 120days	0.70% 0.74% 0.79%~0.83%	US$80,000 US$12,000 US$10,000 NT$330,000 NT$700,000	Cashier's Order Cashier's Order Cashier's Order Cashier's Order Cashier's Order

FENG HSIN STEEL CO., LTD.

10. STATEMENT OF ACCOUNTS PAYABLE

DECEMBER 31, 2021

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

Description	Amount	Note
Payment for Raw material electric arc furnace dust expense	$83,657 1,511,686	The amount of individual vendor in others does not exceed 5% of the account balance
	1,595,343
	2,381
	$1,597,724

FENG HSIN STEEL CO., LTD.

11. STATEMENT OF LEASE LIABILITIES

DECEMBER 31, 2021

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

Item	Description	Period	Discount rate	Amount
Land Machinery and equipment Total	Inventory warehouse Supplies & parts equipment	2014.09.01~ 2065.10.20 2017.02.01~ 2022.05.31	1.49% 1.49% Current Non-curr ent	$174,006 798
				3,898 170,906
				$174,804

FENG HSIN STEEL CO., LTD.

12. STATEMENT OF OPERATING REVENUES

FOR THE YEAR ENDED DECEMBER 31, 2021

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

Item	Units(Ton)	Amount	Note
Merchant(Domestic) Merchant(Export) SBQ(Domestic) SBQ(Export) Rebar(Domestic) Freight and Insurance Others Subtotal Less`：`Sales return Sales discounts Net Sales	210,082 142,883 470,115 31,883 922,146 893 1,778,002	$5,336,995 3,057,513 13,395,342 769,706 16,471,899 143,135 25,410 39,200,000 (3,554) (836,040) $38,360,406

FENG HSIN STEEL CO., LTD. 13. STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2021

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

Item Amount

A、Direct material：beginning of year
Add：raw material purchased
Transferred form finished goods
Transferred form work in process
Transferred from disposal PPE
Gain on physical count
Less：raw material, end of year
Revenue from selling material
Direct material uesd
B、Supplies & parts：beginning of year
Add：supplies & parts purchased
Less：supplies & parts, end of year
Revenue from selling Supplies & parts
Supplies & parts uesd
C、Direct labor
D、Manufacturing expenses(Statement 14)
Manufacturing cost
Add：work in progress, beginning of year
work in progress purchased
Adjustment
Less：work in progress, end of year
Transferred to other account
Gain on physical count
Transferred to direct material
Cost of finished goods
Add：finished goods, beginning of year
Processing cost
Gain on physical count
Less：finished goods, end of year
Transferred to direct material
Transferred to other account
Costs of goods sold
Add：revenue from selling material
Revenue from selling Supplies & parts
Non-allocated fix expense transferred to cost
Price gap of reduction slag expense
Less：gain on physical count
Loss allowance
Revenue from scraps
Total $1,405,703
25,328,039
504,606
11,989
4,765
344,209
(3,384,209)
(10,778)
24,204,324
267,145
3,688,752
(400,453)
(17,421)
3,538,023
660,847
4,729,311
33,132,505
796,631
2,343,498
465
(2,038,649)
(308)
(8)
(11,989)
34,222,145
831,989
46,171
(21)
(1,567,270)
(504,606)
(7,948)
33,020,460
10,778
17,421
27,768
12,787
(344,180)
(6,543)
(27,008)
$ 32,711,483

FENG HSIN STEEL CO., LTD.

14. STATEMENT OF MANUFACTURING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan	(In Thousands of New Taiwan	(In Thousands of New Taiwan	Dollars,Unless Stated Otherwise)
Item		Amount	Note
Utilities expense Depreciation expense Repair and maintenance expense Pollution Prevention Others Total		$2,060,397 1,141,404 765,194 397,274 365,042 $4,729,311	The amount of individual account does not exceed 5% of the account balance.

Note ： the list is not included the expense operated from oxygen factory.

FENG HSIN STEEL CO., LTD.

15. STATEMENT OF OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2021

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

Item	Sales and marketing expenses	General and administrative expenses	Research and development expenses	Total
Payroll expense Rental expense Flight expense Repair expense Depreciatio n expense Commission expense Export expense Others(note) Total	$62,350 2,227 350,686 547 996 27,260 29,247 32,411	$211,872 3,204 3 2,980 44,680 - - 112,875	$28,688 - 1 4,455 5,520 - - 7,891	$302,910 5,431 350,690 7,982 51,196 27,260 29,247 153,177
	$505,724	$375,614	$46,555	$927,893

Note: The amount of individual account does not exceed 5% of the account balance.

100

AI assistant

FH — Audit Report / Information 2021

51946_rns_2021-10-26_48695354-875d-41c4-a35e-da92e3a8265e.pdf

FENG HSIN STEEL CO., LTD. AND SUBSIDIARIES

STANDALONE FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Valuation for inventories

Other Matter – Making Reference to the Audits of Component Auditors

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

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Notice to Readers

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone BALANCE SHEETS

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone BALANCE SHEETS (Continued)

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF COMPREHENSIVE INCOME

FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF CHANGES IN EQUITY

For the years ended 31 December 2021 and 2020

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF CASH FLOWS

English Translation of Standalone Financial Statements Originally Issued in Chinese FENG HSIN STEEL CO., LTD.

Standalone STATEMENTS OF CASH FLOWS (Continued)

1. History and organization

2. Date and procedures of authorization of financial statements for issue

3. Newly issued or revised standards and interpretations

Amendment to IFRS 1

Amendment to IFRS 9 Financial Instruments

Amendment to Illustrative Examples Accompanying IFRS 16 Leases

4. Summary of significant accounting policies

(1) Statement of compliance

(2) Basis of preparation

(3) Foreign currency transactions

A. the Company’s business model for managing the financial assets and

Financial assets measured at amortized cost

Financial asset measured at fair value through other comprehensive income

Financial asset measured at fair value through profit or loss

(2) Impairment of financial assets

(3) Derecognition of financial assets

Classification between liabilities or equity

Equity instruments

Financial liabilities

Financial liabilities at amortized cost

Derecognition of financial liabilities

(10) Investments accounted for using the equity method

(11) Property, plant and equipment

(12) Investment property

(13) Leases

(b)the right to direct the use of the identified asset.

Company as a lessee

Company as a lessor

(14) Impairment of non-financial assets

(15) Revenue recognition

Sale of goods

(16) Borrowing cost

Current income tax

Deferred tax

5. Significant accounting judgements, estimates and assumptions

(1) Judgement

(a) Investment Properties

－ (b) Operating lease commitment Company as the lessor

(2) Estimates and assumptions

(a) Pension benefits

(b) Revenue recognition – sales returns and allowance

(c) Income tax

(d) Accounts receivables–estimation of impairment loss

(e) Inventories

6. Contents of significant accounts

(1) Cash and cash equivalents

(3) Accounts receivables

(4) Inventories

B. Investment in subsidiaries:

C. Investment in associates:

(7) Property, plant and equipment

(8) Investment property

2021.12.31

FH Audit Report / Information 2021

`－` (b) Operating lease commitment Company as the lessor