MAYER PIPE - Annual Report 2021 | FinancialReports.eu

Mayer Steel Pipe Corporation and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2021 and 2020 and Independent Auditors’ Report

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REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of Mayer Steel Pipe Corporation as of and for the year ended December 31, 2021, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Mayer Steel Pipe Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

Mayer Steel Pipe Corporation

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Chun-Fa Huang Chairman March 22, 2022

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Mayer Steel Pipe Corporation

Opinion

We have audited the accompanying consolidated financial statements of Mayer Steel Pipe Corporation and its subsidiaries (the “Group”), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows for the years then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis of 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 Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters from the Group’s consolidated financial statements for the year ended December 31, 2021 are stated as follows:

Valuation of inventory

As of December 31, 2021, the inventory - manufacturing net amount of Mayer Steel Pipe Corporation and subsidiaries is NT$1,807,251 thousand (after deducting allowance for inventory valuation, obsolescence losses, and idled losses of NT$5,000 thousand). Please refer to Notes 5 and 6 (8) for the consolidated financial statements. The inventory valuation of the Group are affected by international steel price and market fluctuations, possibly resulting in slow-moving inventory and subsequent obsolescence losses. The Group’s accounting policies for reporting allowance for inventory valuation and obsolescence losses are based on information on the age of inventory, which comes from management’s evaluation of the expected net realizable value of each product based on inventory sales and purchase price to determine the value of normal quality inventory by the lower cost and net realizable value and report allowances for valuation loss. Because such evaluation involves major judgments from management and the inventory’s book value is such a major part of consolidated financial statements, we have listed inventory valuation as a key audit matters. Our primary auditing procedure for the aforementioned item is as follows:

Understand and evaluate the design and effectiveness of the Group’s internal inventory control system, including the accuracy of reported age of inventory.
Evaluate the age of inventory at the end of the year and take samples to verify the accuracy of reported age of inventory.
Verify that basic assumptions made in the calculation of net realizable values are sound.

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Conduct inventory sampling at the end of the year to confirm and evaluate whether the inventory is out of date or damaged.

Valuation of financial assets

As of December 31, 2021, the Group’s non-current financial assets at fair value through profit or loss, non-current financial assets at fair value through other comprehensive income, and net investment accounted under the equity method totals NT$1,202,183 thousand. Please refer to Notes 5 and 6 (2), (3), and (11). The Group assess their fair value and report their financial asset (losses) income at fair value, unrealized gains (losses) from investments in equity instruments at fair value through other comprehensive income, and shares of income of affiliated companies and joint ventures accounted under the equity method. These assessments are made by management based on assessment reports by professional appraisal companies and the net equity value and current gains/losses of affiliated companies. The management evaluates increases and decreases in book value to recognize the shares of investees’ income, then evaluate whether there are any objective evidence of impairment to determine any impairment amount. Because book value is significant to the consolidated financial statements, we have listed non-current financial asset at fair value through other comprehensive income, non-current financial assets at fair value through other comprehensive income, and net investment amount recognized under the equity method as key audit matters. Our primary auditing procedure for the aforementioned item is as follows:

Obtain professional appraisal report of the Group’s non-current financial assets at fair value through other comprehensive income, non-current financial assets at fair value through other comprehensive income, as well as the most recent comparable financial statements provided by affiliate companies to verify the soundness of how the fair value is determined.
Verify the accuracy of reported financial assets at fair value through profit or loss, unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income, and shares of profits and losses of affiliated companies and joint ventures recognized under the equity method.

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Make adjustments to the financial statements of affiliated companies based on auditing results so that the financial statements comply with the requirements and presentations of the IFRS, IAS, IFRIC, and SIC approved by Financial Supervisory Commission.

Other Matters

We did not audit the financial statements of certain Those financial statements were audited by other independent accountants, whose reports thereon have been furnished to us, and our opinion, insofar as it relates to the amounts included in the consolidated financial statements was based solely on the reports of other independent accountants. Investments in these associates amounted to NT$370,500 thousand and NT$189,240 thousand, representing 5%and 3% of the consolidated total assets as of December 31, 2021 and 2020 respectively. the share of profit of these associates accounted for using equity method amounted to NT$78,267 thousand and NT$53,900 thousand, representing 10%and 12% of total consolidated income before income tax for the years then ended, respectively. In addition, the share of other comprehensive income of these associates accounted for using equity method amounted to NT$ (3,556) thousand and NT$ (8,830) thousand, representing (4%) and (31%) of total consolidated comprehensive income for the years then ended, respectively.

We have also audited the parent company only financial statements of Mayer Steel Pipe Corporation as of and for the years ended December 31, 2021 and 2020 on which we have issued an unmodified opinion.

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

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

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

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

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

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

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

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

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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 Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the consolidated 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 Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our auditor 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 ethica1 requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

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The engagement partners on the audit resulting in this independent auditors’ report are Chin-Feng Lin and Ya-Chuan Chang.

Crowe (TW) CPAs Taipei, Taiwan (Republic of China)

March 22, 2022

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance 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 consolidated financial statements are those generally accepted and applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

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Mayer Steel Pipe Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS December 31, 2021 and 2020

(In Thousands of New Taiwan Dollars)

Assets Current assets： Cash and cash equivalents (Note 6) Financial assets at fair value through profit or loss-current (Note 6) Financial assets at fair value through other comprehensive income-current (Note 6) Financial assets at amortised cost-current (Note 6) Notes receivable, net (Note 6) Accounts receivable, net (Note 6) Accounts receivable from related parties, net (Note 6 and 7) Finance lease receivable, net (Note 6 and 8) Other receivables (Note 6) Current tax assets Inventories (manufacturing business) (Note 6) Inventories (for construction business) (Note 6、7 and 8) Prepayments (Note 6) Other current assets (Note 6 and 8) Total current assets Non-current assets： Financial assets at fair value through profit or loss-non-current (Note 6) Financial assets at fair value through other comprehensive income-non-current (Note 6) Investments accounted for using equity method(Note 6 and 7) Property, plant and equipment(Note 6, 7 and 8) Right-of-use assets(Note 6) Investment property (Note 6 and 8) Intangible assets Deferred tax assets(Note 6) Other non-current assets(Note 6, 7, 8 and 9) Total non-current assets Total assets Liabilities and equity Current liabilities： Short-term loans (Note 6 and 8 ) Short-term notes and bills payable (Note 6 and 8) Contract liabilities-current (Note 6 and 7) Notes payable Accounts payable Accounts payable to related parties (Note 7) Other payables Other payables to related parties (Note 7) Current tax liabilities Lease liabilities-current (Note 6) Long-term liabilities, current portion (Note 6 and 8) Other current liabilities, others Total current liabilities Non-current liabilities： Long-term loans (Note 6 and 8) Provisions-non-current (Note 6 and 9) Current tax liabilities, non-current (Note 6) Deferred income tax liabilities (Note 6) Lease liabilities-non-current (Note 6) Net defined benefit liability, non-current(Note 6) Other non-current liabilities, others(Note 6) Total non-current liabilities Total liabilities Equity attributable to owners of parent Capital stock (Note 6) Capital surplus(Note 6) Retained earnings(Note 6) Legal reserve Special reserve Unappropriated retained earnings Total retained earnings Other equity interest (Note 6) Total equity attributable to owners of parent Non-controlling interests (Note 6) Total equity Total liabilities and equity	December 31,2021	% 7 1 1 1 1 5 - - 1 - 22 9 2 10 60 6 2 7 12 8 2 - - 3 40 100 32 - 1 4 1 - 2 - 2 1 - - 43 - 1 1 2 7 - 1 12 55 27 4 3 2 10 15 ( 1 ) 45 - 45 100	% ＄ 244,858 4 42,620 1 59,335 1 61,248 1 92,752 1 478,822 7 8,384 - 840 - 100,385 1 - - 1,039,463 15 628,142 9 116,143 2 841,938 13 3,714,930 55 374,725 6 204,297 3 412,305 6 1,024,556 15 658,560 10 150,569 2 3,141 - 20,000 - 214,296 3 3,062,449 45 ＄ 6,777,379 100 ＄ 1,959,907 29 29,992 1 2,743 - 229,038 3 94,997 1 120 - 129,029 2 16 - 78,774 1 48,745 1 2,711 - 6,752 - 2,582,824 38 72,435 1 41,746 1 21,814 - 176,385 3 614,523 9 22,903 - 100,394 2 1,050,200 16 3,633,024 54 2,225,261 33 281,622 4 197,832 3 208,224 3 404,805 6 810,861 12 ( 179,392 ) ( 3 ) 3,138,352 46 6,003 - 3,144,355 46 ＄ 6,777,379 100 December 31,2020 Amount
	＄ 539,679 65,875 48,080 56,800 91,930 425,572 23,498 1,068 118,234 57 1,807,251 724,666 157,143 836,728 4,896,581 447,909 166,073 588,201 1,007,236 619,140 147,635 3,455 8,946 246,659 3,235,254 ＄ 8,131,835 ＄ 2,633,443 29,958 61,003 347,068 89,751 126 186,900 11 127,101 54,934 2,750 7,241 3,540,286 20,152 38,664 37,253 170,279 580,120 29,209 91,583 967,260 4,507,546 2,225,261 281,622 236,689 179,392 768,342 1,184,423 ( 70,494 ) 3,620,812 3,477 3,624,289 ＄ 8,131,835 Amount

The accompanying notes are an integral part of the consolidated financial statements.

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Mayer Steel Pipe Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2021 and 2020

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Operating revenue (Note 6, 7 and 14)
Operating costs (Note 6 and 7)
Gross profit from operations
Unrealized profit (loss) from sales
Realized profit (loss) on from sales
Gross profit from operations
Operating expenses (Note 6 and 7)
Selling expenses
Administrative expenses
Expected credit loss (reversal)
Total operating expenses
Net operating income
Non-operating income and expenses
Interest income (Note 6)
Other income (Note 6 and 7)
Other gains and losses, net (Note 6)
Finance costs, net (Note 6)
Share of profits of subsidiaries and associates (Note 6 and 14)
Total non-operating income and expenses
Profit (loss) from continuing operations before tax
Income tax expense (Note 6 and 14)
Net Income
Other comprehensive income (loss)
Remeasurement of defined benefit obligation (Note 6)
Unrealised gains (losses) on investments in equity instruments
at fair value through other comprehensive income (Note 6)
Items that will not be reclassified to profit or loss
Exchange differences on translation (Note 6)
Share of other comprehensive income of associates and joint ventures accounted for using equity method,
components of other comprehensive income that will be reclassified to profit or loss (Note 6)
Other comprehensive loss for the year, net of income tax (Note 6)
Items that will be reclassified to profit or loss
Other comprehensive income, net
Total comprehensive income
Net Income attributable to:
Shareholders of the parent
Non-controlling interests
Total comprehensive income attributable to:
Shareholders of the parent
Non-controlling interests
Basic earnings per share (Note 6)

2021

The accompanying notes are an integral part of the consolidated financial statements.

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Mayer Steel Pipe Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2021 and 2020

(In Thousands of New Taiwan Dollars)

Common Stock	Capital Reserve		Retained	Earnings			Others		Total
		Legal Reserve	Special Reserve	Unappropriated Earnings	Totel	Foreign Currency Translation Reserve	Unrealized Gain(Loss) on Financial Assets at Fair Value Through Other Comprehensive Income	Total
＄ 2,225,261 - - - - -	＄ 281,622 - - - - -	＄ 156,048 41,784 - - - -	＄ 242,551 - - ( 34,327 - -	＄ 435,360 ( 41,784 ( 411,674 ) 34,327 392,624 ( 173	＄ 833,959 ) - ) ( 411,674 - 392,624 ) ( 173	＄ 4,419 - ) - - - ) ( 29,125
-	-	-	-	392,451	392,451	( 29,125	) 57,957	28,832	421,283
- -	- -	- -	- -	( 3,875 -	) ( 3,875 -	) - -	- -	- -	( 3,875 -
2,225,261 - - - - -	281,622 - - - - -	197,832 38,857 - - - -	208,224 - - ( 28,832 - -	404,805 ( 38,857 ( 378,294 ) 28,832 782,909 ( 13,445	810,861 ) - ) ( 378,294 - 782,909 ) ( 13,445	( 24,706 - ) - - - ) ( 25,071	) ( 154,686 - - - - ) 135,433	) ( 179,392 - - - - 110,362	) 3,138,352 - ( 378,294 - 782,909 96,917
-	-	-	-	769,464	769,464	( 25,071	) 135,433	110,362	879,826
- -	- -	- -	- -	- ( 17,608	- ) ( 17,608	- ) -	- ( 1,464	- ) ( 1,464	- ) ( 19,072
＄ 2,225,261	＄ 281,622	＄ 236,689	＄ 179,392	＄ 768,342	＄ 1,184,423

The accompanying notes are an integral part of the consolidated financial statements.

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Mayer Steel Pipe Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2021 and 2020

(In Thousands of New Taiwan Dollars)

Cash flows from operating activities
Profit (loss) before tax
Adjustments：
Adjustments to reconcile profit (loss)
Depreciation expense
Amortization expense
Expected credit loss (gain)
Net loss (gain) on financial assets or liabilities at fair value through profit or loss
Interest expense
Interest income
Dividend income
Share of loss (profit) of associates and joint ventures accounted for using equity method
Loss (gain) on disposal of property, plan and equipment
Loss (gain) on disposal of investments
Total adjustments to reconcile profit (loss)
Changes in operating assets and liabilities
Financial assets mandatorily measured at fair value through profit or loss
Notes receivable
Accounts receivable
Accounts receivable from related parties
Other receivable
Inventories
Prepayments
Other current assets
Total changes in operating assets
Contract liabilities
Notes payable
Notes payable to related parties
Accounts payable
Accounts payable to related parties
Other payable
Other payable to related parties
Provisions
Other current liabilities
Net defined benefit liability
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash inflow (outflow) generated from operations
Interest received
Dividends received
Interest paid
Income taxes refund (paid)
Net cash generated by (used in) operating activities

＄
906,174
＄
445,931
145,361
138,334
8,867
7,578
29,452
(
19,663 )
(
138,133 )
(
84,877 )
49,326
48,663
(
17,241 )
(
19,149 )
(
37,990 )
(
48,763 )
(
124,605 )
(
81,142 )
390
3,690
(
109,167 )
(
24,809 )
(
193,740 )
(
80,138 )
198,852
92,738
822
(
29,716 )
53,838
(
124,352 )
(
15,114 )
(
6,032 )
(
38,703 )
(
58,726 )
(
864,312 )
(
326,595 )
(
41,000 )
(
2,081 )
(
87,352 )
(
21,815 )
(
792,969 )
(
476,579 )
58,260
(
2,132 )
118,030
(
82,680 )
-
(
572 )
(
5,246 )
38,396
6
120
56,171
(
14,179 )
(
5 )
(
2,205 )
(
3,082 )
41,430
489
51
(
7,139 )
(
284 )
217,484
(
22,055 )
(
575,485 )
(
498,634 )
(
769,225 )
(
578,772 )
136,949
(
132,841 )
8,054
15,736
114,577
116,997
(
31,054 )
(
30,838 )
(
52,654 )
(
16,960 )
175,872
(
47,906 )
2021
2020

(Continued)

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Cash flows from investing activities：
Acquisition of financial assets at fair value through other comprehensive income
Proceeds from disposal of financial assets at fair value through other comprehensive income
Proceeds from return of capital of financial assets at fair value through other comprehensive income
Acquisition of financial assets at amortized cost
Proceeds from redemption of financial assets at amortized cost
Acquisition of investments accounted for using equity method
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Decrease in refundable deposits
Acquisition of intangible assets
Decrease in long-term lease and installment receivables
Increase in other non-current assets
Increase in prepayments for business facilities
Other investing activities
Net cash generated by (used in) investing activities
Cash flows from financing activities：
Increase in short-term loans
Increase in short-term notes and bills payable
Decrease in short-term notes and bills payable
Repayments of long-term loans
Increase in guarantee deposits received
Decrease in guarantee deposits received
Payments of the principal portion of lease liabilities
Cash dividends paid
Change in non-controlling interests
Net cash generated by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

(
13,073 )
(
20,189 )
179,523
2,707
43,720
36,433
(
57,128 )
(
61,248 )
60,554
10,000
(
156,600 )
-
(
61,776 )
(
31,694 )
-
3,677
(
2,717 )
-
-
3,493
(
889 )
(
1,527 )
513
685
(
5,876 )
(
4,895 )
(
32,954 )
(
9,612 )
897
8,569
(
45,806 )
(
63,601 )
673,536
456,753
-
20
(
34 )
-
(
52,244 )
(
2,667 )
-
21,580
(
7,780 )
-
(
70,022 )
(
68,735 )
(
378,294 )
(
411,674 )
2,000
8,328
167,162
3,605
(
2,407 )
(
9,061 )
294,821
(
116,963 )
244,858
361,821
＄
539,679
＄
244,858
2021
2020

The accompanying notes are an integral part of the consolidated financial statements.

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Mayer Steel Pipe Corporation and subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. GENERAL INFORMATION

Mayer Steel Pipe Corporation (hereby referred to as “The Company”), was founded in September 1959 in compliance with the Company Act of the Republic of China and registered in Taipei City. The Company is the first professional steel pipe manufacturer in Taiwan. The primary business of the Company and its entities is to specialize in the production and sales of black steel pipes, galvanized steel pipes and stainless-steel coils for pipes. The Company was also awarded the CNS Mark certificate by the Bureau of Standards, Metrology, and Inspection of the Ministry of Economic Affairs for “black welded steel pipes for low pressure use, zinc-coated welded steel pipes for low pressure use, carbon steel pipes for general structures, carbon steel pipes for machine structures, and electrical metallic tubing”. In order to expand diversified operations, the Company established its construction department in 2003 and purchased land to build public housing in independent or joint construction projects. To learn more about the major construction projects of the Company and its subsidiaries (hereby referred to as “The Group”), please refer to Note 4 (3).

The Company’s shares were approved for public offering in August 1990 by the Securities and Futures Commission of the Ministry of Finance (now the Securities and Futures Bureau of the Financial Supervisory Commission, Executive Yuan), approved for listed on February 4, 1993, and officially listed for trading on April 27, 1993.

2. THE AUTHORIZATION OF FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on March 22, 2022.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND

INTERPRETATIONS

(1) Effect of the adoption of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC

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Interpretations (SIC) (collectively, the “IFRSs”) in issue and endorsed by the Financial Supervisory Commission, R.O.C. (FSC):

The IFRSs endorsed and issued by the FSC in 2021 were stated as follows:

New, Revised or Amended Standards and Interpretations Amendments to IFRS 4 Extension of the Temporary Exemption from Applying IFRS 9 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform - Phase 2	Effective Date Announced byIASB June 25, 2020 (Effective immediately upon promulgation) January 1, 2021

Amendments of IFRS 16 Covid-19-Related Rent Concessions April 1, 2021 (Note) beyond June 30, 2021

Note: The FSC allows companies to apply these amendments in advance on January 1, 2021.

The Corporation assesses the application of the above standards, amendments and interpretations have not material impact on the Corporation’s financial position and financial performance.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by FSC but not yet adopted by the Company:

The IFRSs endorsed by the FSC for application with starting date from 2022 were stated as follows:

stated as follows:
New, Revised or Amended Standards and Interpretations Amendments of IAS 16 Property, Plant and Equipment - Proceeds before Intended Use Amendments of IAS 37 Onerous Contracts-Cost of Fulfilling a Contract Amendments of IFRS 3 Reference to the Conceptual Framework Annual Improvements to IFRS Standards 2018–2020	Effective Date Announced byIASB
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022 (Note 4) January 1, 2022 (Note 5)

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Note 1:Unless otherwise stated, the above new standards, amendments and interpretations are effective for annual periods beginning on or after the date mentioned.
Note 2: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 3: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.
Note 4: The amendments are applicable to business combinations for which the acquisition date is on or after January 1, 2022.
Note 5: The amendments to IFRS 9 are applied prospectively to modifications and exchanges of financial liabilities that occur on or after January 1, 2022. The amendments to IAS 41 “Agriculture” are applied prospectively to the fair value measurements on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” are applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
As of the date the parent company only financial statements were reported to the board of directors and authorized for issue, the Company is continuously assessing the possible impact that the initial application of the other standards and the amendments and interpretations will have on their financial position and financial performance and disclose the relevant impact when the assessment is completed.
(3) The IFRSs issued by IASB but not yet endorsed and issued into effect by the FSC:

Effective Date New, Revised or Amended Standards and Interpretations Announced by IASB Amendments to IFRS 10 Sale or Contribution of Assets Effective date to be and IAS 28 between an Investor and its determined by IASB Associate or Joint Venture IFRS 17 Insurance Contracts January 1, 2023 Amendments to IFRS 17 Initial Application of IFRS 9 and January 1, 2023 IFRS 17 -Comparative Information Amendments to IAS 1 Classification of Liabilities as January 1, 2023 Current or Non-current

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Effective Date New, Revised or Amended Standards and Interpretations Announced by IASB Amendments to IAS 1 Disclosure of Accounting Policies January 1, 2023 Amendments to IAS 8 Definition of Accounting Estimates January 1, 2023 Amendments to IAS 12 Deferred Tax related to Assets and January 1, 2023 Liabilities arising from a Single Transaction

As of the date the accompanying consolidated financial statements were authorized for issue, the Company continues in evaluating the impact on its financial position and financial performance from the initial adoption of the aforementioned standards or interpretations and related applicable period. The related impact will be disclosed when the Company completes its evaluation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies adopted during the preparation of the parent company only financial statements are described as follows: Unless otherwise stated, such policies are consistently applicable to all the periods presented.

(1) Statement of Compliance

This consolidated financial report have been prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuer and the IFRSs as endorsed and issued into effect by the FSC.

(2) Basis of Preparation

A. The consolidated financial statements have been prepared on a historical cost basis except for financial instruments measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.
B. The preparation of financial statements in compliance with IFRSs as endorsed by the FSC requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or

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complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

C. The Group’s entities are measured financial statements item using the functional currency.The consolidated financial statements are presented in the Group's functional currency, New Taiwan Dollars.
(3) Basis of Consolidation
A. Basis for preparation of consolidated financial statements:
- (a)All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
- (b)Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
- (c)Each component of profits and losses and other comprehensive profits and losses belong to the owners and non-controlling interests of the parent company.
- (d)Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions (i.e., transactions among owners in their capacity as owners). Difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received shall be recognized directly in equity.
- (e)If the Group loses control of a subsidiary, its remaining investments in the former subsidiary shall be remeasured based on fair value and count as the fair value of the originally recognized financial assets or the cost of originally recognized investment in an affiliated company or joint venture. The difference between fair value and carrying amount will be recognized as the profit or loss

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for the period. All amounts previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss.

B. Subsidiaries included in the consolidated financial statements

The subject of this consolidated financial statements is as follows:

Name of Investor Mayer Steel Pipe Corporation Glory World Development Limited (BVI)	Name of subsidiary Vietnam Mayer Co., Ltd. Glory World Development Ltd. (BVI) Mei Kong Development Ltd. Miramar Development Limited Mayer Inn Corporation Mei Yi Architecture Co.,Ltd. Sinowise Development Limited Elternal Galaxy Limited Grace Capital Group Limited	Nature of business Processing and sales of steel pipes, steel plates and other metal products Various investment business Various investment and property development business Various investment business Various wholesale trade and general hotel business Real Estate Development Activities Trading in non-ferrous metals and other mineral resources Trading in non-ferrous metals and other mineral resources Trading in non-ferrous metals and other mineral resources	Ownership (%)	Ownership (%)	Ownership (%)
			2021.12.31 100.00% － 100.00% 90.00% 100.00% 90.00% 100.00% 100.00% 100.00%	2020.12.31 100.00% － 100.00% 90.00% 100.00% － 100.00% 100.00% 100.00%	Description
					Note1 Note2

Note1: Glory World Development Ltd. (BVI) was struck off by the local government

on November 3, 2020 and is therefore not included as an entity in the preparation of the consolidated financial statements.

Note2: Mei Yi Architecture Co.,Ltd. is established in December 8, 2021.

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C. Subsidiaries not included in the consolidated financial statements:
- (a)Mayer Corporation Development International Limited (BVI) has been removed as an entity in the preparation of consolidated financial statements since March 27, 2017. For the relevant liquidation process, please refer to Note 9 (3).
- (b)Glory World Development Ltd. (BVI) was struck off by the local government on November 3, 2020 and is therefore not included as an entity in the preparation of this consolidated financial statements.
D. Subsidiaries that have non-controlling interests that are material to the Group: None.
(4) Foreign Currency Translation
A. Items included in the financial statements of each of the Group’s entities are all measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). The consolidated financial statements are presented in New Taiwan Dollars, which is the Group’s functional and presentaion currency.
B. In preparing the individual financial statements of each consolidated entity, transactions in currencies other than the functional currency of the entity (foreign currency) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange difference on monetary items are recognized as the period’s profit or loss. Non-monetary items measured at fair value that are denominated in foreign currency are retranslated at the rates prevailing at the date when the fair value was determined. Exchange difference arising on the are retranslation of non-monetary items are included in profit of loss for the year except for exchange difference arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange difference are also recognized directly in other comprehensive income. Non-monetary items that are measured by historical cost in a foreign currency are not retranslated.

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C. In preparation of consolidate financial statements, the assets and liabilities of foreign operations are translated to NTD using the exchange rates at the end of the reporting period. The income and expenses of foreign operations are translated at the average exchange rate for the period. Exchange difference are recognized in other comprehensive income and accumulated in equity attributed to the owners.(and appropriately allocated to non-controlling interests).

(5) Classification of Current and Non-Current Assets and Liabilities

(1) Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realised within twelve months from the balance sheet date; or
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
(2) Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be paid off within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be paid off within twelve months from the balance sheet date, even if an agreement to refinance, or to reschedule payments on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. 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.

(6) Cash and Cash Equivalents

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

(7) Financial Instruments

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

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In the initial recognition of financial assets and financial liabilities, if financial assets or financial liabilities are not measured at fair value through profit or loss, they are measured at fair value plus transaction costs directly attributable to the acquisition or issuance of financial assets or financial liabilities. Transaction costs directly attributable to the acquisition or issuance of financial assets or financial liabilities measured at fair value through profit and loss are immediately recognized as profit and loss.

Financial Assets

A. Category of financial assets and measurement

Regular transaction of financial assets are recognized on the day of transaction.

Financial assets transactions on a regular way purchase or sale are recognized and derecognized using trade date accounting.

The Group has held categories of financial assets are including financial assets at fair value through profit or loss, financial assets at amortized cost and equity instrument at fair value through other comprehensive income.

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets mandatorily measured at fair value through profit or loss and financial assets designated to be measured at fair value through profit or loss. Financial assets mandatorily measured at fair value through profit or loss include equity instrument investments that the Group did not designate to be measured at fair value, or investment in debt instruments that cannot be classified as either measured at cost after amortization or measured at fair value through other comprehensive gains and losses.

Financial assets at fair value through profit or loss are recognized at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss. These profit or loss incorporates any dividends or interests.For the method of determining fair value, please refer to Note 12 (2).

(b) Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

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i.The financial asset are held under certain business models with the purpose of holding financial assets to collect contractual flows, and
ii.The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial recognition, financial assets at amortized cost are measured by the gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

With exception to the following two conditions, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asse:

i.Purchased or originated credit-impaired financial asset, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of the financial asset; and
ii.Financial asset that has subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset.
(c) Equity instrument at fair value through other comprehensive income

On initial recognition, the Group may irrevocably designate investments in equity investments that are not held for trading as at fair value through other comprehensive income.

Investments in equity instruments measured at fair value through other comprehensive income are measured at fair value. Subsequent changes in fair value are reported in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments measured at fair value through other comprehensive income are recognized in profit and loss when the Group’s right to receive the dividends is established, unless the dividends clearly represent partial recovery of the investment cost.

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B. Impairment of financial assets

The Group recognizes a loss allowance for financial assets (including accounts receivable) at amortized cost based on expected credit loss assessment at the end of the reporting period, investment in debt instruments measured at fair value through other comprehensive income , finance lease receivables, or contract assets.

Accounts receivable, contract assets and financial lease receivables are all recognized as allowance for loss based on expected credit losses of the duration. Other financial assets are first assessed to determine whether there has been significant increases to credit risk since the initial recognition. If there has been no significant increase, the 12-month expected credit loss is recognized as allowance of loss. If there has been significant increase, then the duration expected credit loss is recognized as allowance for loss.

Expected credit loss is the weighted average credit loss based on default risk. 12-month expected credit loss refers to expected credit losses arising from possible defaults of financial instruments within 12 months after the reporting date. Duration expected credit loss refers to expected credit losses arising from possible defaults during the expected duration of a financial instrument.

The impairment loss of all financial assets reduces carrying amount by the allowance account, with exception to the allowance of loss of debt instrument investments measured at fair value through other comprehensive income, which is recognized as other comprehensive income and dose not reduce the carring amount of the financial asset.

C. Derecognition of financial assets

The Group only derecognizes financial assets when the contractual rights to the cash flows from the financial assets expire, or when financial assets have been transferred and almost all the risks and rewards of the ownership of the assets have been transferred to other entity.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument measured at fair value through other comprehensive income, the difference the asset’s carrying amount and the sum of the consideration received

～ 25 ～

and receivable and the cumulative gain or loss that had been recognized in other comprehensive income is recognized in profits and losses. However, on derecognition of an investment in an equity instrument at fair value through other comprehensive income, the accumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

Equity Instruments

An equity instrument refers to any contract that recognizes the remaining equity of the Group after deducting all liabilities from its assets. The equity instruments issued by the Group are recognized at the amount obtained after deducting direct issuance costs.

Retrieving the company’s own equity instruments is recognized and deducted under equity. The purchase, sale, issuance, or cancellation of the company's own equity instruments are not recognized in profit or loss.

Financial Liabilities

A. Subsequent assessments

Except for the following situations, all financial liabilities are measured at amortized cost using the effective interest method:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss are financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition. A financial liability is classified as held for trading if it is incurred principally for the purpose of repurchasing it in the near term. Derivatives are also categorized as financial liabilities held for trading unless they are financial guarantee contracts or designated and effective hedging derivatives. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition.

B. Derecognition of financial liabilities

The Group only derecognizes financial liabilities when obligations are discharged, cancelled or expired. In derecognizing financial liabilities, the difference between

～ 26 ～

the carrying amount and the total consideration paid and payable is recognized as profit or loss.

(8) Inventories – Manufacturing Business

Inventories include raw materials, materials, finished products, and works in progress. Acquisition cost is used as the accounting basis for inventories, and costs are calculated through weighted average. Inventory is measured by cost or net realizable value, depending on which is lower. Cost and net realizable value are compared based on individual items unless the inventories are of the same category. Net realizable value refers to estimated selling price under normal circumstances after subtracting the estimated costs and sales expenses that need to be invested to complete the project. Inventory write-downs and unallocated fixed expenses when actual production is lower than normal production capacity are transferred to the current cost of goods sold.

(9) Inventories (for Construction Business)

Inventories include properties for sale, properties under construction, and prepaid land payments. Inventories are recorded based on acquisition cost, and construction profit and loss is recognized according to the completed contract method. Prepaid land payments are transferred under construction land after the Group obtains ownership, then transferred once again under construction site when active development begins. Relevant interests are capitalized from the start of active development or construction work to project completion.

(10) Joint Agreement

Investment joint agreements are divided into joint operations and joint ventures based on contractual rights and obligations.

Joint Operations

Regarding equity in joint operations, the Group recognizes its direct rights (and their shares) in the assets, liabilities, income and expenses of the joint operation, which have been included under applicable items in the financial report.

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(11) Investments Accounted for Using Equity Method - Associates.

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor a joint venture. Significant influence refers to the power to participate in but not control nor jointly control financial and operating policy decisions of the investee company. The Group adopts the equity method in handling investments in associates. Under the equity method, investment in associates are initially recognized at cost. After the date of acquisition, the carrying amount is increased or decreased in accordance with the share of profits and losses of associates and other comprehensive income enjoyed by the Group and profit distribution. In addition, changes in the equity of associates are recognized based on the ownership percentage.

If the Group does not subscribe or acquire new shares issued by associates according to its ownership percentage, resulting in changes to the ownership percentage, thus causing increases or decreases in the net equity value of the investment, the increase or decrease is adjusted to the “capital surplus” and “investments accounted for using equity method”. However, if not subscribe or acquire new shares according to ownership percentage resulted in a decrease in the Group’s ownership interest in the associates, the amount recognized in the other comprehensive income related to the associates shall be reclassified according to the reduction percentage. The basis of this accounting process is the same as the associates must follow if they directly dispose of relevant assets or liabilities. If the former adjustment must be debited to additional paid-in capital, but the paid-in capital generated by investments using the equity method is insufficient, the difference will be debited to retained earnings.

The Group will cease to recognize further losses if the Group's share of losses in an associates equals or exceeds its equity in the associates. The Group only recognizes additional losses and liabilities within the scope of legal obligations, constructive obligations, or payments made on behalf of associates.

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If the acquisition cost exceeds the Group’s share of the net fair value of the associates’s identifiable assets and liabilities on the date of acquisition, the exceeded amount is listed as goodwill. This goodwill is included in the carrying amount of the investment and cannot be amortized. If the Group’s share of the net fair value of the associates’s identifiable assets and liabilities on the date of acquisition exceeds the acquisition cost, the difference is listed as current income.

When assessing impairment, the Group treats the overall book value of the investment (including goodwill) as a single asset and compares the recoverable amount (value in use or fair value minus sales costs, whichever is higher) with the book value to test for impairment. The recognized impairment loss is also part of the book value of the investment. Any reversal of impairment losses shall be recognized within the scope of the subsequent increase in the recoverable amount of the investment.

The Group will cease to adopt the equity method from the date it ceases to be a significant influence over an associate. It will then measure its remaining investments in the former associates at fair value. The fair value of remaining investments and the difference between any disposition price and the book value of the investment on the day the Group ceases to be a significant influence shall be included in the current profit and loss. In addition, the accounting basis for amounts recognized in other comprehensive income related to said associates is the same as the basis that the associates must follow if it directly disposes of relevant assets or liabilities.

Gains and losses resulting from upstream, downstream, and sidestream transactions between the Group and its associates are only recognized in the consolidated financial statement to the extent that they are unrelated to the Group's equity in the associates.

(12) Property, Plants and Equipment

Properties, plants and equipment are stated at cost, less accumulated depreciation and accumulated impairment loss. Cost includes incremental costs that can be directly attributed to the acquisition or construction of assets.

Self-owned lands are not listed for depreciation.

The Group uses the straight-line depreciation method, which means that the difference between the cost of the asset and salvage value of the asset is divided by the useful life of the asset. The estimated useful life, salvage value and depreciation method of assets

～ 29 ～

are reviewed at least once at the end of each year. Prospective application for any impact of estimated changes.

Derecognize properties, plants, and equipment that are disposed of or if the disposal or usage of which can no longer be expected to generate future economic benefits. The amount of gains or losses resulting from the derecognition of properties, plants, and equipment is the difference between the net disposal price and the carrying amount of the assets in question and are recognized in that period’s profit or loss.

(13) Leases

The Group assesses whether a contract belongs to (or includes) a lease on the day the contract is established. For contracts with a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to the lease components based on the relative stand-alone price of each lease component and the aggregate stand-alone price of non-lease components.

A. The Group as leasee

Except from recognizing short-term and low-value leases on a straight-line bases, the Group recognizes right-of-use assets and lease liability for all arrangements in which it is a lessee.

(a) Right-of-use assets

Right-of-use assets are initially measured at cost (including the amount of the initial measurement of the corresponding lease liability, lease payment made prior to the commencement date of the lease minus lease incentives received, initial direct costs, and the estimated cost of restoring the underlying asset). Subsequent measurements are based on cost minus accumulated depreciation and impairment, adjusted by the re-measurement of lease liability.

With exception to right-of-use assets that can be defined as investment properties, right-of-use assets are reported in consolidated balance sheets as line items.

Right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease over the shorter of the useful life of the right-of-use asset or the end of the lease term. However, if ownership of an

～ 30 ～

underlying asset will be obtained by the Group at the end of the lease term, or if the cost of a right-of-use asset reflects the exercise of the purchase option, the asset is depreciated from the commencement date of the lease to the end of the underlying asset’s useful life.

(b) Lease liabilities

Lease liabilities are initially measured at the present value of lease payments (including fixed payment, substantive fixed payment and deduction of lease incentives). If the interest rate implicit in the lease is readily determinable, then lease payments are discounted using the interest rate. If the interest rate implicit in the lease is not readily determinable, the incremental borrowing rate of the leasee will be used instead.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, and interest expenses are amortized during the lease term. During the lease term, if evaluation of the purchasing options of the underlying asset, amounts expected to be paid under residual value guarantees, or variable lease payments that depend on an index or a rate causes a change in future lease payments, the Group will remeasures the lease liability and make corresponding adjustments to right-of-use assets. However, if the book value of right-of-use assets has been reduced to zero, the remaining re-measurement amount will be recognized in profit and loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

B. The Group as the lessor

Leases that transfer substantially all risks and rewards incidental to the underlying asset are categorized as finance leases. Otherwise, they are categorized as operating leases.

When a lease includes land and building components, the Group assesses each component to categorize them as wither a finance lease or operating lease and allocate lease payments (including any one-off front-end payments) between the land and buildings in proportion to their fair values at the commencement date of the contract. If lease payments cannot be reliably allocated to these two components, then the overall lease is categorized as a finance lease. However, if these two

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components are clearly in line with operating lease standards, then the overall lease is categorized as an operating lease.

When subleasing right-of-use assets, the Group uses right-of-use assets (instead of underlying assets) to determine the classification of the sublease. However, if the main lease is a short-term lease for which the recognition exemption applies to the Group, the sublease is classified as an operating lease.

Under finance leases, lease payment includes both fixed payments (including in-substance fixed payments) and variable lease payments that depend on an index or rate. Net lease investment is the sum of the present value of both the lease receivable and the unguaranteed residual value plus the original direct cost that is expressed as the financial lease receivable. The Group allocates finance income over the lease term on a systematic and rational basis to reflect the constant periodic rate of return on the Group’s net investment in the lease.

Under operating leases, lease payments after deducting lease incentives are recognized on a straight-line basis. Lease negotiation with the leasee is accounted as a new lease from the effective date of the lease modification.

(14) Investment Property

Investment property refers to property held for the purpose of earning rent or capital appreciation or both. Investment property also includes land held for a currently undetermined future use. And right-of-use assets that meet the definition of investment property.

Investment property is initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

The Group recognizes depreciation on a straight line basis. In other words, the asset cost minus residual value is allocated over the useful life of the investment property.

Derecognize investment properties that disposed of or permanently withdrawn from use, or if the disposal of which can no longer be expected to generate future economic benefits. The amount of gains or losses resulting from the derecognition of investment properties is the difference between the net disposal price and the carrying amount of the assets in question and are recognized in that period’s profit or loss.

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(15) Intangible Assets

Goodwill

The cost of goodwill obtained from business combinations is measured at the goodwill amount recognized on the date of acquisition and subsequently measured at cost less accumulated impairment losses.

Other Intangible Assets

Separately-acquired intangible assets with finite useful lives are recognized as cost less accumulated amortization and accumulated impairment, and amortized in a straight-line basis over the useful lives. The estimated useful lives and amortization method are reviewed at the end of the reporting period, with prospective application for any impact of estimated changes.

Derecognize intangible assets that are disposed of or if the disposal or usage of which can no longer be expected to generate future economic benefits. The amount of gains or losses resulting from the derecognition of intangible assets is the difference between the net disposal price and the book value of the assets in question and are recognized in that period’s profit or loss.

(16) Impairment of Non-Financial Assets

The Group assesses at the end of each reporting period the recoverable amounts of those assets where there are any impairment indications. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell or value in use. If there are no asset impairments recognized in the previous year, the amount can be reversed within the scope of losses recognized in the previous year.

(17) Provisions

Provisions are measured at the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Provisions are measured using the cash flows estimated to settle the present obligation.

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(18) Employee Benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for that service, and shall be recognized as expenses when the employees have rendered service.

B. Pensions

(a) Defined contribution plans

Under the defined contribution plan, the pension amount appropriated during the service years of the employees is recognized as the current pension cost.

(b)Defined benefit plans

The defined benefit cost of defined benefit plans (including the cost of service, net interest, and reevaluation) is calculated using the projected unit credit method. Cost of service and net defined benefit liability (asset) interest shall be recognized as employee benefit expenses at the time of realization. Reevaluation (including actuarial gains and losses, changes in the impact of asset limits, and planned asset returns after interest deduction) shall be recognized as other comprehensive income, reported as retained earnings at the time of realization, and not be reclassified as income in subsequent periods.

The net defined benefit liability (asset) is the amount short (remaining) in appropriation of the defined benefit retirement plan. Net defined benefit assets shall not exceed the refund of the appropriated fund or decrease the present value of appropriation of fund in the future.

C. Employees’ remuneration and directors' remuneration

Employees’ remuneration and directors’ remuneration are recognized as expense and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

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D. Termination benefits

Termination benefits are benefits provided when an employee's employment is terminated before their normal retirement date or when the employee decides to accept the company's offer of benefits in exchange for termination of employment. The Group recognizes termination benefit liabilities when it can no longer withdraw termination benefit offers or recognize relevant restructuring costs (whichever is earlier).

(19) Revenue Recognition

A. Merchandise sales

Merchandise sales come from the sale of merchandise such as carbon steel and stainless steel. Merchandise sold by the Group is mainly recognized when customers obtain control of their promised assets, that is, when the Group fulfills its obligations by delivering the merchandise to the designated location. Payments received before the merchandise is delivered are recognized as contract liabilities.

When materials are sent in for processing, control and ownership of the processed product is not transferred, therefore material for processing is not recognized as revenues.

Merchandise sales is measured at fair value based on considerations receivable minus estimated returns, discounts, and other allowances. Based on experience, the Company considers different contract conditions to estimate possible sales returns and discounts, and recognizes refund liabilities (payable expenses and other current liabilities).

B. Sale of property and land

For real estate sales within the scope of normal business activity, a fixed transaction price is charged in installments and contract liabilities are recognized. After considering major financial components, revenue is recognized when the real estate sold is completed and delivered to the buyer.

C. Financial components

For contracts between the Group and the customer, if the time between the transfer of committed goods or service and payment from the customer exceed one year, the transaction price shall be adjusted to reflect the time value of money.

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(20) Borrowing Costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset until almost all necessary activities for the asset to reach its intended use or sale status have been completed.

Specific borrowings, such as income from temporary investments prior to qualifying capital expenditures, are deducted from borrowing costs that meet capitalization conditions.

Except for the above scenarios, all other borrowing costs are recognized as an expense for the period in which they occurred.

(21) Income Tax

Income tax expense is the sum of current income tax plus deferred income tax.

A. Current income tax

Current income tax liabilities are based on the taxable income of the current year. Because some income and expenses are taxable or deductible items in other years or non-taxable and non-deductible items according to relevant tax laws, the taxable income is not the same as the net profit reported in the consolidated comprehensive balance sheet. The current income tax-related liabilities of the Group are calculated based on the tax rate that has been legislated or has been substantively legislated at the balance sheet date.

Additional profit-seeking enterprise income tax on unappropriated retained earnings are listed as income tax expense of shareholders’ resolution year according to the Income Tax Act.

Adjusted the income tax payable of the past year that recognize as current income tax.

B. Deferred income tax

Deferred income tax is recognized based on the temporary difference between the carrying amount of assets and liabilities in the consolidated financial report and the tax basis for calculating taxable income.

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Deferred income tax liabilities are generally recognized for all taxable temporary differences, while deferred income tax assets are recognized when there is likely to be taxable income to deduct temporary differences, loss deductions or income tax deductions from expenditures such as research and development.

Deferred income tax liabilities are recognized for all taxable temporary differences related to the Company’s subsidiaries, affiliated companies, and joint venture equities unless the Company can control the timing of reversal of temporary differences and the temporary differences are unlikely to be reversed in the foreseeable future. Deferred income tax assets arising from deductible temporary differences associated with such investments and equities are recognized within the scope of earnings that with sufficient taxable income to realize temporary differences and are expected to be reversed in the foreseeable future.

The book value of deferred income tax assets must be reviewed at the balance sheet date, and the book value of those that no longer have sufficient taxable income to recover all or part of the asset should be revised down. Assets originally not recognized as deferred income tax assets must also be reviewed at the balance sheet date, and the book value of those that have a high likelihood of producing enough taxable income to recover all or part of the asset should be revised up.

Deferred income tax assets and liabilities are measured in accordance with the expected liability liquidation or the tax rate in the period when the asset is realized. The tax rate is based on the tax rate and tax laws that are legislated or substantively legislated at the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax effect resulting from the book amount of the assets and liabilities expected to be recovered or liquidated at the balance sheet date.

C. Current and deferred income tax

Current and deferred income taxes are recognized in the profit or loss, except for the current and deferred income taxes related to the items recognized in other comprehensive profit or loss or directly included in the equity, which are recognized in the other comprehensive profit or loss or directly included in the equity, respectively. If the current income tax or deferred income tax is generated from a business combination, the income tax effects are included in the accounting treatment of the business combination.

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(22) Government Grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the subsidies and the subsidies will be received. Income-related subsidies refer to government grants other than asset-related subsidies. Such subsidies may be for the purpose of providing immediate financial support to companies and have no future related costs and should be recognized in profit or loss during the period in which they can be received.

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS ON UNERTAINTY

The Groups has included economic impacts from the COVID-19 pandemic as a major considering factor of accounting estimates and will continue to review basic assumptions and estimates. If revision of the estimate only affects the current period, it is recognized in the period of the revision. If the revision of the accounting estimate affects the current period and future periods, it is recognized in future periods as well as the period in which the revision is made.

In preparing this consolidated financial report, the Group made the following critical judgements, critical accounting estimates, and assumptions:

(1) Critical Accounting Judgements

A. Judgment of business model of financial asset classification

The Group evaluates the business model of financial assets based on the level of financial assets that are jointly managed to achieve a specific business purpose. Such evaluation calls for consideration of all relevant evidence, including asset performance assessment methods, risks affecting performance, and the salary determination method of relevant managers, as well as sound judgement. The Group continuously assesses whether its judgement on business models is appropriate. It also monitors the financial assets carried at amortized cost and investment in debts instruments at fair value through other comprehensive income to look into the reasons for its disposition and assess whether the disposition would be consistent with the business model's objectives. Whenever the business model was found to have changed, the Group reclassify financial assets according to the regulations of IFRS 9 and postpone application of the above to the day of the reclassification.

～ 38 ～

B. Revenue recognition

In accordance with IFRS 15, the Group determines whether it has obtained control of specific goods or services before transferring said goods or services to customers, and whether the Group is the principal or agent of said transactions. If determined to be the agent, the net transaction amount is recognized as income.

The Group is considered the principal in the following scenarios:

(a)If the Group obtains control of goods or other assets from another party before said goods or assets are transferred to the customer.
(b)If the Group controls the right to have another party provide labor services, so that it can arrange for the other party to provide services to the customer on behalf of the Group.
(c)If the Group obtains control of goods or services from another party to combine with other goods or services in order to provide customers with specific goods or services.

Indicators used to help determine whether the Group obtained control of goods or services before transferring said goods or services to the customer include (but are not limited to):

(a)Whether the Group is primarily responsible for fulfilling the commitment to provide specific goods or services.
(b)Whether the Group assumes inventory risk before and after specific goods and services are transferred to customers.
(c)Whether the Group has the discretion to set prices.

C. Lease terms

In determining the lease term, the Group takes into account all relevant facts and circumstances that might generate economic incentives to exercise (or not to exercise) the option, including all facts and circumstances from the start of the lease to the day when the option is exercised with expected changes. The main factors taken into account include the contract terms and conditions during the period covered within the option, significant lease interest improvements (or expected improvements) during the contract period, and the importance of the underlying

～ 39 ～

assets to the lessee's operations. The lease term shall be reassessed if there are significant changes to major matters or circumstances within the control of the Group.

(2) Critical Accounting Estimates and Assumptions

A. Revenue recognition

Sales revenue is recognized when the control of goods or services is transferred to the customer to meet performance obligations. Estimated related sales returns, discounts and other similar discounts are deducted. These sales returns and discounts are estimated based on the Group’s historical experience and other known reasons, and the Group regularly assesses how reasonable the estimates are.

B. Estimated impairment of financial assets

The impairment of accounts receivable and contract assets was estimated based on the Group's assumptions about the default rate and the expected loss rate. The Group took into account historical experience, current market conditions and forward-looking information to work out assumptions and select input values for impairment assessment.

C. Fair value measurement and evaluation process

Regarding the fair value of the level 3 equity assets, the Company adopts appropriate evaluation methods based on the nature of the investee, such as the financial status and operating results of the investee, the transaction price of similar instruments in the market, market conditions, and necessary discounts, to assess fair value. If the actual changes in future input values and expectations would differ, fair value changes might occur. The Group regularly updated each input value according to market conditions to monitor whether fair value measurement was appropriate.

D. Assessment on the impairment of tangible assets and intangible assets

In the process of asset impairment assessment, the Group needs to rely on subjective judgment, asset usage patterns, and industry characteristics to determine the independent cash flow of a particular asset group, years of useful life, and future revenue and expenses that might cause significant impairment in the future due to changes in economic conditions or estimated changes to the Group’s strategies.

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E. Feasibility of deferred income tax assets

Deferred income tax assets are recognized when there is a possibility in the future that there would be sufficient taxable income to deduct temporary differences. Assessing the feasibility of deferred income tax assets requires the management to make significant accounting judgments and estimations, including the estimation of future sales revenue growth and profit margins, tax exemption periods, available income tax deductions, and tax planning. Any changes in the global economic environment, industrial environment, or laws and regulations might cause significant adjustment of deferred income tax assets.

F. Evaluation of inventories

Inventory falling price loss is measured by cost or net realizable value, depending on which is lower. Cost and net realizable value are compared based on individual items unless the inventories are of the same category. In addition, obsolescence loss of inventories is evaluated based on inventory turnover and days sales of inventory.

G. Calculation of net defined benefit liabilities

Upon calculation of the present value of the benefit obligations, the Group must use judgments and estimates to determine the relevant actuarial hypotheses on the balance sheet date, including the discount rate and future salary growth rate. Any changes in actuarial assumptions could significantly affect the Group’s defined benefit obligations amount.

H. Lessee's incremental loan interest rate

When determining the lessees' incremental loan interest rate for discounting lease payments, the Group used the risk-free interest rate of the equivalent duration and currency as the reference interest rate, and takes the estimated credit risk discounts and lease specific adjustments of the lessee (such as asset characteristics and factors such as guarantees) into consideration.

6. Details of Significant Accounts

(1) Cash and Cash Equivalents

Cash and Cash Equivalents
Cash on hand and revolving fund Bank Deposits Cash equivalents	2021.12.31 $ 774 509,399 29,506 $ 539,679	2020.12.31
		$ 599 222,542 21,717
		$ 244,858

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A. The Group transacts with a variety of financial institutions with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. As of December 31, 2021 and 2020, the amount the Group provided in bank deposits and cash equivalents due to restrictions on their use and the amount pledged to financial institutions as collateral for loans under other financial assets are NT$115,166 thousand and NT$27,814 thousand, respectively,please refer to Note 8.

(2) Financial Assets at Fair Value Through Profit or Loss

Financial Assets-Current Mandatorily measured at fair value through profit or loss Non-derivative financial assets Domestic listed stocks Foreign non-listed stocks Fund beneficiary certificate Financial Assets-Non-Current Mandatorily measured at fair value through profit or loss Non-derivative financial assets Domestic non-listed stocks Foreign non-listed stocks	2021.12.31 $ 59,407 － 6,468 $ 65,875 $ 421,785 26,124 $ 447,909	2020.12.31
		$ 21,352 14,104 7,164
		$ 42,620
		$ 350,320 24,405
		$ 374,725

A. The Group’s investment in the above-mentioned investment targets are not for strategic investment purpose. The Group’s management believes that the short-term fair value fluctuations of these investments should be included in the profit and loss, and chose to designate these investments to be mandatorily measured at fair value through profit and loss.
B. For matters pertaining to the Group’s provision of financial assets at fair value through profit or loss as collateral for loans as of December 31 of ,2021 and 2020, please refer to Note 8.

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(3) Financial Assets at Fair Value Through Other Comprehensive Income

Current Equity Instruments Domestic listed stocks Evaluation adjustment Non-Current Equity Instruments Domestic non-listed stocks Foreign non-listed stocks Evaluation adjustment	2021.12.31 $ 82,685 (34,605) $ 48,080 2021.12.31 $ 7,660 130,222 28,191 $ 166,073	2020.12.31
		$ 57,356 1,979
		$ 59,335
		2020.12.31
		$ 7,660 173,381 23,256
		$ 204,297

A. The Group invests in the above-mentioned investment targets based on mid- to long-term strategies and expects to profit from long-term investments. The Group’s management believes that including short-term fair value fluctuations of these investments in the profit and loss is inconsistent with the above-mentioned long-term investment plan, and therefore chose to designate these investments to be measured at fair value through other comprehensive profit and loss.
B. In 2021 and 2020, the Group adjusted its investment position to diversify risks, selling some of its domestic listed stocks at fair value of NT$179,523 thousand and NT$2,707 thousand. The relevant “other equity - unrealized gains and losses from financial assets measured at fair value through other comprehensive income” of NT$ (17,608) thousand and NT$ (3,875) thousand are transferred to “retained earnings”.
C. For matters pertaining to the Group’s provision of financial assets at fair value through other comprehensive profit or loss as collateral for loans as of December 31,2021 and 2020, please refer to Note 8.

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(4) Financial Assets at Amortized Cost

2021.12.31

2020.12.31

Current

Time deposits with original maturity over three months Interest rate range	$ 56,800 $ 61,248 5.30%-5.40% 5.30%-7.20%

As of December 31, 2021 and 2020, none of the above financial assets measured at amortized cost are restricted in use or pledged as collateral.

(5) Notes Receivable, Net

Notes receivable Less: Allowance for impairment loss	2021.12.31 $ 92,995 (1,065) $ 91,930	2020.12.31 $ 93,847 (1,095) $ 92,752

A. For disclosures related to the loss allowance on notes receivable please refer to the following accounts receivable.
B. As of December 31,2021 and 2020, none of the above notes receivable are restricted in use or pledged as collateral.

(6) Accounts Receivable, Net

Accounts receivable Less: Allowance for impairment loss Net accounts receivable - non-related parties Accounts receivable - related parties	2021.12.31 $ 429,327 (3,755) 425,572 23,498 $ 449,070	2020.12.31 $ 483,135 (4,313) 478,822 8,384 $ 487,206

The Group’s average credit period of sales of goods is 30 to 120 days. Loss provisions refer to the estimated unrecoverable amount calculated based on the aging of accounts, historical experience and the customer’s financial condition.

The Group adopted the simplified method of recognizing loss provisions based on expected credit loss in the duration. The expected credit loss in the duration takes customer’s payment history into account. As the Group’s historical experience of

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credit losses indicates that there is no significant difference in the loss patterns of different customer bases, the expected credit loss rate is determined only by the accounts receivable days past due.

The Group’s loss provisions based on notes receivable an accounts receivable (excluding related parties) measured by the preparation matrix are as follows:

	Expected			Loss allowance	Loss allowance
	credit	Gross carrying		(expected credit loss in
2021.12.31	loss rate	amount		the	duration)		Amortized cost
Not past due	0%-1%	$ 522,322		$(	4,820)		$	571,502
	Expected			Loss allowance
	credit	Gross carrying		(expected credit loss in
2020.12.31	loss rate	amount		the	duration)		Amortized cost
Not past due	0%-1%	$ 576,982		$(	5,408)		$	571,574
Movements of the	loss allowance for accounts and notes receivable:
				2021				2020
Beginning balance			$		5,408 $				80,949
Add:Allowance impairment		loss (gain)							1,337
from this year			(		588)
Consolidated entities	with reduced	influence			－	(			76,878)
Foreign currency exchange difference					－				－
Ending balance			$		4,820 $				5,408
Movements of the	loss allowance for other		accounts and notes receivable (excluding
related parties):
				2021				2020
Beginning balance			$		61,364 $			308,648
Add:Allowance impairment		loss (gain)			30,040				－
from this year
Add: Provision					－				20,000
Less: Remittance from this year (note)					－	(			23,000)
Consolidated entities with reduced influence					－	(		244,284)
Foreign currency exchange difference			(		346)				－
Ending balance			$		91,058 $				61,364

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Note: The Group listed NT$ 21,000 thousand in “expected credit losses (reversal)”

and NT$ 2,000 thousand in “other income” in 2020.

For details on relevant risk management and evaluation methods, please refer to Note 12.

As of December 31, 2021 and 2020, none of the above accounts receivable are restricted in use or pledged as collateral.

(7) Finance Lease Receivables

Undiscounted lease payments Year 1 Year 2 Year 3 Year 4 Year 5 Over 5 years Less: Unrealized financing income Net investment in lease Current Non-Current	2021.12.31 $ 5,936 5,555 5,555 5,555 5,555 68,050 96,206 (56,383) $ 39,823 $ 1,068 38,755 $ 39,823	2020.12.31 $ 5,909 5,654 5,654 5,654 5,654 74,917 103,442 (63,106) $ 40,336 $ 840 39,496 $ 40,336

The Company’s power supply contract regarding solar power generation equipment stipulates that all power generated since the date of transfer will be sold to Taiwan Power Company. The contract will be treated in accounting as a finance lease with an average finance period of 20 years.

The Company measures the loss provisions of the finance lease receivables based on the expected credit loss in the contract duration. As of the balance sheet date, there are no overdue finance lease receivables. At the same time, considering the past default rate of the other party, the future development of industries related to the lease target, and the value of the collateral, the Company believes that there are no impairments regarding the above-mentioned finance lease receivables.

～ 46 ～

For the company’s provision of solar power generation equipment to financial institutions as pledged collateral for bank loans as of December 31,2021 and 2020, please refer to Note 8.

(8) Inventories, Manufacturing Business

Inventories, Manufacturing Business
Finished goods Work in process Semi-finished goods Materials in transit Raw materials Goods Total Mortgage situation	2021.12.31 $ 409,636 36,099 175,729 － 1,136,980 48,807 $ 1,807,251 None	2020.12.31
		$ 198,029 23,223 117,801 5,945 597,112 97,353
		$ 1,039,463
		None

A. Inventory-related (losses) profits recognized as cost of goods in the current period are as follows:

Cost of goods sold Guest room cost Construction cost Loss on net realizable value of inventory (gains from recovery) Loss on inventory idle capacity (gains from recovery) Loss (gain) on physical inventory	2021 $ 5,620,044 86,105 － ( 557 ) 136 (4,827) $ 5,700,901	2020 $ 4,499,238 81,579 6,667 ( 4,098) ( 211) 24 $ 4,583,199

B. The Group's inventories are mainly steel products, construction land and housing sites under construction, the net realizable value of which is affected by market prices. The amount of the inventory cost reduced to the net realizable value should be recognized as an expense in the current period. Reduction of the inventory cost to the net realizable value should be recognized as an expense in the year the reduction occurred. However, the reversal amount due to increased net realizable value is also reduced in the amount recognized as an expense in the period in which the reversal occurs.

～ 47 ～

C. As of December 31, 2021 and 2020, none of the above inventories are restricted in use or pledged as collateral.

(9) Inventories (for Construction Business)

Inventories (for Construction Business)
Name of construction site Land held for sale – Wugu Section, Wugu District Land held for construction site– Xitou Section, Qidu District Prepayment for land purchases– Xitou Section, Qidu District Construction in progress– Hulin Section, Xinyi District	2021.12.31 $ 1,161 476,088 － 247,417 $ 724,666	2020.12.31
		$ 1,161 464,589 8,994 153,398
		$ 628,142

A. On March 7, 2008, the Company signed a contract to purchase Land No. 800 in the Guoguang Section of Banqiao District, New Taipei City from Chien Ching-Hui and three others for the total price of NT$1,930,800 thousand. In the same year, the Company paid NT$89,110 thousand per the contract, with the money under “prepayments”. Banqiao Guoguang Section was rezoned to Banqiao Yongcui Section on November 26, 2015. However, the Company that Chien Ching-Hui and the others conducted adverse behavior such as giving away and selling parts of the land in question, so the Company filed for provisional seizure and provisional disposition. For the relevant legal proceedings and ruling, please refer to Note 9 (1).
B. On August 26, 2014, February 4, 2015, and March 26, 2018, the Company’s Board of Directors decided to have the Group’s Mei Kong Development Ltd. (hereby referred to as “Mei Kong Development”) purchase no more than 2,700 ping of land in the Xitou Section of Qidu District, Keelung City for up to NT$1,800 thousand per ping. Since August 2014, Mei Kong Development has gradually purchased No.464 and other plots in Qidu’s Xitou Section from unrelated parties and obtained two plots of land in the area through foreclosure in 2016 for the total price of NT$443,344 thousand, which has been paid in full. Also, on March 10, 2020, the Board of Directors decided to increase Mei Kong Development’s land acquisition limit to under 200 thousand NTD per ping. Mei

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Kong Development also signed a land sale contract to purchase the joint ownership of 131.405 ping of land for NT$26,281 thousand. As of December 31, 2021, the aforementioned sum has been paid.

C. On April 24, 2019, the Company’s Board of Directors decided to participate in the “Drafted Proposal for the Urban Regeneration and Right Transfer of 34 Plots of Land Including No. 310 of Subsection 4, Hulin Section, Xinyi District, Taipei City” approved by the Taipei City Urban Regeneration Office. On April 25, 2019, the Company and Ding Bang Development Co., Ltd. signed joint investment and construction in the form of joint operation with 1:1 investment. As of December 31, 2021, the Company has paid the relevant deposit of NT$84,458 thousand, with the money listed under “refundable deposits”.

Also, to facilitate the smooth construction and delivery of construction cases and projects, the Company signed a trust contract with the bank regarding the “Xinyi Hulin Section Urban Regeneration” construction project along with Ding Bang Development Co., Ltd. The Company managed the land, existing structures, and funds in compliance with the trust contract throughout the duration of the trust, which is earmarked for the construction progress to facilitate smooth construction and the first registration of structures as soon as they are completed.

D. For the Group’s provision of “Inventories (for Construction Business) as pledged collateral for bank loans as of December 31, 2021 and 2020, please refer to Note 8.

(10) Prepayments

repayments
Deferred Selling Commissions expense Excess business tax paid (or Net Input VAT) Prepayment for land purchases Other prepayments	2021.12.31 $ 24,552 19,094 95,854 17,642 $ 157,143	2020.12.31
		$ － 10,241 95,854 10,048
		$ 116,143

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(11) Other Current Assets

ther Current Assets
Other Financial Assets Payments for other	2021.12.31 $ 836,718 10 $ 836,728	2020.12.31
		$ 841,928 10
		$ 841,938

For matters pertaining to the Group’s offshore funds under “The Management, Utilization and Taxation of Repatriated Offshore Funds Act” and provision of financial assets as collateral for loans and construction presale buyer trust funds as of December 31,2021 and 2020, please refer to Note 8.

(12) Investments Accounter for Using Equity Method

A. The Group’s investments under the equity method are listed below:

		Initial
		investment
		cost		2021.12.31		2020.12.31
Subsidiaries
Mayer Corporation Development	$	390,881	$	15,287	$	15,287
International Limited (BVI)
Glory World Development Ltd. (BVI)		259,121		－		－
Subtotal				15,287		15,287
Less: Accumulated Impairment Loss -	Investments Under
the Equity Method				(15,287 )		(15,287 )
				－		－
Affiliated Companies
Grand Tech Precision Manufacturing		179,688		217,701		247,114
(Thailand) Co., Ltd.
Diamond Precision Steel Corp.		106,248		212,140		178,664
Luen Jin Enterprise Co., Ltd.		156,600		158,360		－
				588,201		412,305
			$	588,201	$	412,305

(a)As of December 31, 2021 and 2020, Mayer Corporation Development International Limited (BVI), which was recognized by the Company under the

～ 50 ～

equity method, transferred its net book equity value minus other receivables transferred to allowance for loss of NT$ (52,998) thousand and NT$ (54,549) thousand under “Other Non-Current Liabilities - Other” as part of its liquidation process.

(b)As of December 31, 2021 and 2020, Glory World Development Ltd. (BVI), which was recognized by the Company through the equity method, recognized accumulated investment losses and other comprehensive profit and losses to the book value of NT$ (8,361) thousand and NT$ (7,842) thousand, respectively, listing the amount under “Other Non-Current Liabilities - Other”.
(c)The Company subscribed 30% new shares issued by Luen Jin Enterprise Co., Ltd. in the amount of NT$156,600 thousand on November 2021.

Parts of the Group’s investments under the equity method are disclosed in financial reports made from audit conducted by other CPAs.

B. The Group’s percentage of ownership interest and voting rights in its subsidiaries and affiliate companies as of the balance sheet date is as follows:

Mayer Corporation Development International Limited (BVI) Glory World Development Ltd.(BVI) Grand Tech Precision Manufacturing (Thailand) Co., Ltd. Diamond Precision Steel Corp. Luen Jin Enterprise Co., Ltd.	2021.12.31 100.00% (Note 1) 50.21% (Note 2) 45.01% 42.50% 30.00%	2020.12.31
		100.00% (Note 1) 50.21% (Note 2) 45.01% 42.50% －

Note 1: Under the ruling of the British Virgin Islands (BVI) court on March 27, 2017, Mayer Corporation Development International Limited (BVI) agreed to enter liquidation and appoint a liquidator. As a result, the Company has lost control of the company and therefore has not included it as an entity in the preparation of consolidated reports since March 27, 2017.
Note 2: Glory World Development Ltd. (BVI) was struck off by the local government on November 3, 2020 and has therefore not been included as an entity in the preparation of consolidated reports since November 2, 2020.

～ 51 ～

For information on the business nature and main operating locations of the aforementioned subsidiaries and affiliates, please refer to Appendix 6.

C. Subsidiary Summary Information:

The Group’s share Net income from continuing operations Other comprehensive income for the period Total consolidated income	2021 $ ( 757) 1,790 $ 1,033	2020 $ ( 136) 3,503 $ 3,367

D. The market price information of listed companies’ equity investments on the balance sheet date using the equity method, calculated based on the closing price of the stock, are as follows: None.
E. The summarized financial information of the associates that are material to the Company is as follows: None.
F. The carrying amount of the Company’s interests in all individually immaterial associates and the Company’s share of the operating results are summarized below

		2021		2020
The Group’s share
Net income from continuing operations	$	125,362 $			81,278
Other comprehensive income for the period		(	28,583)	(	26,355)
Total consolidated income	$		96,779 $		54,923

G. As of December 31,2021 and 2020, none of the above investments under the equity method are restricted in use or pledged as collateral.
H. On December 31,2021 and 2020, the Group assessing impairment that associates ventures investment, after assessment not recognized as impairment losses.

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(13) Property, Plant and Equipment

				2021			Total
	Land	Buildings and structures	Machinery and equipment	Transportation equipment	Other equipment	Leasehold improvements
Cost: Beginning balance Increase Disposal or write off Effects of foreign currency exchange differences Endingbalance	$ 557,911 －－－ $ 557,911	$ 250,475 315 － ( 456) $ 250,334	$ 1,432,928 55,178 ( 5,764) ( 1,425) $ 1,480,917	$ 63,976 1,866 － ( 28) $ 65,814	$ 160,377 4,256 ( 123) ( 392) $ 164,118	$ 142,694 161 －－ $ 142,855	$ 2,608,361 61,776 ( 5,887) ( 2,301) $ 2,661,949
Accumulated depreciation: Beginning balance Increase Disposal or write off Effects of foreign currency exchange differences Endingbalance	$－－－－ $－	$ 211,021 4,750 － ( 145) $ 215,626	$ 1,227,869 42,420 ( 5,406) ( 1,011) $ 1,263,872	$ 52,918 2,350 － ( 28) $ 55,240	$ 76,071 18,232 ( 90) ( 354) $ 93,859	$ 15,926 10,190 －－ $ 26,116	$ 1,583,805 77,942 ( 5,496) ( 1,538) $ 1,654,713
Endingnet amount	$ 557,911	$ 34,708	$ 217,045	$ 10,574	$ 70,259	$116,739	$ 1,007,236

2020

Cost: Beginning balance Increase Disposal or write off Reclassification Effects of foreign currency exchange differences Ending balance	Land $ 557,911 －－－－ $ 557,911	Buildings and structures $ 261,428 1,048 ( 10,611) － ( 1,390) $ 250,475	Machinery and equipment $ 1,500,975 11,860 ( 75,576) － ( 4,331) $ 1,432,928	Transportation equipment $ 75,098 2,009 ( 13,047) － ( 84) $ 63,976	Other equipment $ 118,549 4,592 ( 19,680) 58,108 ( 1,192) $ 160,377	Leasehold improvements $ 9,775 228 ( 152) 132,843 － $ 142,694	Unfinished construction $ 178,994 11,957 － (190,951) － $－	Total $ 2,702,730 31,694 ( 119,066) － ( 6,997) $ 2,608,361

～ 53 ～

2020

Accumulated depreciation: Beginning balance Increase Disposal or write off Effects of foreign currency exchange differences Ending balance Ending net amount	Land $－－－－ $－ $ 557,911	Buildings and structures $ 216,835 5,080 ( 10,479) ( 415) $ 211,021 $ 39,454	Machinery and equipment $ 1,262,087 41,562 ( 72,936) ( 2,844) $ 1,227,869 $ 205,059	Transportation equipment $ 57,972 3,661 ( 8,632) ( 83) $ 52,918 $ 11,058	Other equipment $ 82,015 14,595 ( 19,500) ( 1,039) $ 76,071 $ 84,306	Leasehold improvements $ 9,083 6,995 ( 152) － $ 15,926 $ 126,768	Unfinished construction $－－－－ $－ $－	Total $ 1,627,992 71,893 ( 111,699) ( 4,381) $ 1,583,805 $ 1,024,556

A. The Group’s property, plants, and equipment are depreciated on a straight-line basis based on the following useful lives:

Buildings and structures 3 to 46 years Machinery and equipment 3 to 15 years Transportation equipment 2 to 15 years Other equipment 3 to 20 years Leasehold improvements 3 to 14 years

B. On January 1, 2012, the Group chose the revaluation value from land revaluation conducted according to the generally accepted accounting principles in the Republic of China as recognized costs.
C. For the Group’s provision of property, plants, and equipment as pledged collateral for bank loans as of December 31,2021 and 2020, please refer to Note 8.

(14) Lease Agreement

A. Right-of-use assets

Cost: Beginning balance Increase Decrease Effects of foreign currency exchange differences Ending balance			2021	2021		Total $ 747,501 25,238 ( 12,541) ( 187) $ 760,011
	Land $ 13,273 2,953 ( 2,288) ( 187) $ 13,751	Buildings and structures $ 727,203 21,592 ( 9,941) `－` $ 738,854	Machinery and equipment $ 312 693 ( 312) `－` $ 693	Transportation equipment $ 6,136 `－` `－` `－` $ 6,136	Other equipment $ 557 `－` `－` `－` $ 577

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Accumulated depreciation: Beginning balance Increase Decrease Effects of foreign currency exchange differences Ending balance Ending net amount			2021	2021		Total $ 88,941 64,485 ( 12,541) ( 14) $140,871 $ 619,140
	Land $ 2,728 1,812 ( 2,288) ( 14) $2,238 $ 11,513	Buildings and structures $ 84,482 60,333 ( 9,941) `－` $134,874 $ 603,980	Machinery and equipment $ 277 139 ( 312) `－` $104 $ 589	Transportation equipment $ 1,224 2,045 `－` `－` $3,269 $ 2,867	Other equipment $ 230 156 `－` `－` $386 $ 191

Cost: Beginning balance Increase Decrease Effects of foreign currency exchange differences Ending balance Accumulated depreciation: Beginning balance Increase Decrease Effects of foreign currency exchange differences Ending balance Ending net amount			2020	2020		Total $ 742,124 6,290 ( 344) ( 569) $747,501 $ 25,749 63,508 ( 287) ( 29) $88,941 $658,560
	Land $ 13,842 `－` `－` ( 569) $13,273 $ 1,239 1,518 `－` ( 29) $2,728 $10,545	Buildings and structures $ 726,935 542 ( 274) `－` $727,203 $ 24,196 60,559 ( 273) `－` $84,482 $642,721	Machinery and equipment $ 312 `－` `－` `－` $312 $ 139 138 `－` `－` $277 $35	Transportation equipment $ 483 5,653 `－` `－` $ 6,136 $ 80 1,144 `－` `－` $ 1,224 $ 4,912	Other equipment $ 552 95 ( 70) `－` $577 $ 95 149 ( 14) `－` $230 $347

The Group's revenue from subletting right-of-use assets is NT$179 thousand in both 2021 and 2020.

B. Lease liabilities

Lease liabilities
Carrying amount of lease liabilities Current Non-Current	2021.12.31 $ 54,934 580,120 $ 635,054	2020.12.31
		$ 48,745 614,523
		$ 663,268

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Ranges of discount rates for lease liabilities are as follows:

Land Buildings and structures Machinery and equipment Transportation equipment Other equipment	2021.12.31 1.90% 1.95%-2.75% 1.5314% 1.4744%-1.55% 1.52%-1.55%	2020.12.31
		2.01% 1.95%-2.75% 1.55% 1.4744%-1.55% 1.52%-1.55%

A. Material terms of right-of-use assets

The Group leases land, buildings, and equipment to serve as operating premises and equipment for plants and offices. The terms of lease contruct generally range between 1 to 14 years, and the Company has the right to renew leases at the end of lease terms. Also, the contract stipulates that the Group may not sublease leased assets to others without the permission of the lessor. As of December 12, 2021, there is no sign of impairments to right-of-use assets, so no impairment assessments have been made.

B. Sublease

The Group subleases the right to use buildings under operating leases with lease terms of 1 to 5 years. The maturity analysis of lease payments receivable under operating sublease lease is as follows:

operating sublease lease is as follows:
Year 1 Between 1 and 5 years	2021.12.31 $ 179 292 $ 471	2020.12.31
		$ 179 472
		$ 651

C. Other lease information

In 2021 and 2020, the Group chose to apply recognition exemptions for short-term leases and qualifying low-value asset leases, and did not recognize related right-of-use assets and lease liabilities for these leases. Information about the relevant expenses are as follows:

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Short-term rental and leasing expenses Low-value asset lease expenses Variable lease payments not included in lease liability assessments. Total cash outflow for leases	2021 $ 1,600 62 130 $ 1,792 $(71,814)	2020 $ 1,491 67 161 $ 1,719 $ (70,454)

(15) Investment Property, Net

A. The Company’s investment properties are listed below:

Cost: Beginning balance Endingbalance				2021		Total 187,506 187,506
		Land 82,543 82,543		Buildings 104,963 104,963
	$		$		$
	$		$		$
Accumulated depreciation: Beginning balance Increase Endingbalance	$	－－－	$	36,937 2,933 39,871	$	36,937 2,933 39,871
	$		$		$
Endingnet amount	$	82,543	$	65,092	$	147,635
Cost: Beginning balance Ending balance Accumulated depreciation: Beginning balance Increase Ending balance Ending net amount				2020		Total 187,506 187,506 34,004 2,933 36,937 150,569
		Land 82,543 82,543 －－－ 82,543		Buildings 104,963 104,963 34,004 2,933 36,937 68,026
	$		$		$
	$		$		$
	$		$		$
	$		$		$
	$		$		$

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B. Lease revenue from investment properties and direct operating expenses:

Lease revenue from investment properties Direct operating expenses of investment properties that generate lease revenue	2021 2020 $ 10,514 $ 8,057 ( 2,934 ) ( 2,933 ) $ 7,580 $ 5,124

C. As of December 31, 2021 and 2020, the total amount of lease payments to be received in the future for leasing investment properties under operating leases is as follows:

as follows:
Under 1 year Between 1 to 5 years	2021.12.31 $ 10,514 32,229 $ 42,743	2020.12.31
		$ 10,514 42,743
		$ 53,257

D. In 2020, due to how the COVID-19 pandemic severely impacted the market economic, the Company agreed to unconditionally reduce lease amounts by 40% from April 1 to July 31, 2020.
E. The Company’s investment properties are depreciated based on the straight-line method according to an estimated useful lives of 35 years.
F. The fair value of the Company’s investment properties on December 31 of 2020 is NT$272,992 thousand, as valued by independent valuation experts. The valuation for December 31, 2021 and 2020 was made by referencing the market evidence of similar real estate transactions and showed no significant change from the basic estimation from December 31, 2020.
G. For the Company’s provision of investment properties as pledged collateral for bank loans as of December 31 of 2021 and 2020, please refer to Note 8.

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(16) Other Non-Current Assets

ther Non-Current Assets
Appeal deposit Contract bond Prepayments for business facilities Long-term lease payments receivable Others	2021.12.31 $ 37,654 84,458 46,091 38,755 39,701 $ 246,659	2020.12.31
		$ 37,654 86,290 13,137 39,496 37,719
		$ 214,296

For the Company’s provision of solar power generation equipment to financial institutions as pledged collateral for bank loans as of December 31,2021 and 2020, please refer to Note 8.

(17) Short-term Loans

Secured Loans Bank loans Unsecured Loans Credit loans Letter of credit purchase borrowing Interest rate range Unspent amount Secured borrowing situation hort-Term Notes and Bills Payable Commercial paper Less: Unamortized discounts Net amount	2021.12.31 $ 1,923,725 286,847 422,871 709,718 $ 2,633,443 1.25%~2.05% $ 784,432 Note 8 2021.12.31 $ 30,000 (42) $ 29,958	2020.12.31 $ 1,235,145 391,917 332,845 724,762 $ 1,959,907 1.30%~1.89% $ 772,095 Note 8 2020.12.31 $ 30,000 (8) $ 29,992

(18) Short-Term Notes and Bills Payable

As of December 31, 2021 and 2020, the Company’s short-term bills payable that are not yet expired are as follows:

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											Secured	Secured
Guarantee/Accep tance agency		Par value		Discount value		Book value		Interest rate range borrowing situation
2021.12.31
Dah Chung Bills	$		30,000 $	42		$	29,958	0.92%			Note8
2020.12.31
Dah Chung Bills	$		30,000 $	8		$	29,992	0.93%			Note8
(19) Long-Term Bank	Loans of Non-Current Borrowings
							2021.12.31				2020.12.31
Secured Loans
Bank loans					$			22,902		$		75,146
Less: Current portionr						(		2,750)			(	2,711)
					$			20,152		$		72,435
Interest rate range							1.45%				1.45%-2.05%
Unspent amount					$			－$			200,468
Secured borrowing situation							Note8				Note8
(20) Provisions
							2021.12.31				2020.12.31
Employee benefits					$			983		$		637
Decommission,		restoration,		and repair				37,681				41,109
costs
Non-Current					$			38,664		$		41,746
							2021				2020
Beginning balance					$			41,746		$		316
New addition								1,604				41,430
Reduce addition						(		4,686	)			－
Ending balance					$			38,664		$		41,746

(21) Pensions

A. Defined contribution plans

(a)The pension system applicable to the Company in accordance with the "Labor Pension Act" is the defined contribution pension plan managed by the

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government. Under this plan, the Company have mademonthly contributions equal to 6% of employees’ salary as labor pension to employees’ personal pension accounts of the Bureau of Labor Insurance.

(b)The Group recognized pension expenses of NT$8,944 thousand and NT$7,874 thousand in 2021 and 2020, respectively.

B. Defined benefit plans

The Group has defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Group contributes an amount equal to 4% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Group assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by the government’s designated authorities; as such, the Group does not have any right to intervene in the investments of the Funds.

(a) Recognized pension expenses regarding defined benefit plans are as follows:

Current service cost Net interest cost Recognized in profit and loss Remeasured Plan asset compensation (excluding sums included in the net interest) Actuarial loss (gain) - change in demographic assumptions Actuarial loss (gain) - change in financial assumptions Actuarial loss (gain) - experience adjustment Recognized in other comprehensive income Total	2021 $ 2,058 82 2,140 ( 2,262) 3,482 ( 2,686) 14,911 13,445 $ 15,585	2020 $ 2,557 158 2,715 ( 5,936) － 3,157 2,952 173 $ 2,888

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The aforementioned pension expenses include the following items:

Operating costs Selling expenses Administrative expenses	2021 $ 1,670 147 323 $ 2,140	2020
		$ 2,111 190 414
		$ 2,715

(b)The amounts arising from the defined benefit plans were as follows:

2021.12.31 Present value of defined benefit obligations $( 178,764) Fair value of plan assets 149,555 Net defined benefit liabilities $( 29,209 )	2020.12.31 $( 184,088) 161,185 $( 22,903 )

(c)Movements in the present value of defined benefit obligations were as follows:

2021 Beginning balance $ 184,088 Current service cost 2,058 Interest expenses 696 Remeasured Actuarial loss (gain) - change in demographic assumptions 3,482 Actuarial loss (gain) - change in financial assumptions ( 2,686) Actuarial loss (gain) - experience adjustment 14,911 Benefit payments - expenditure from plan assets ( 23,785) Ending balance $ 178,764	2020 $ 186,398 2,557 1,348 － 3,157 2,952 ( 12,324) $ 184,088

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(d)Movements in the fair value of plan assets were as follows:

2021 Beginning balance $ 161,185 Interest Income 615 Fund attributed by employer 9,278 Remeasured Plan asset compensation (excluding sums included in the net interest) 2,262 Benefit payments - expenditure from plan assets ( 23,785) Ending balance $ 149,555	2020 $ 163,384 1,190 2,999 5,936 ( 12,324) $ 161,185

(e)The Company has been exposed to the following risks due to the Labor Standards Act:

Through the defined benefit plans under the R.O.C. Labor Standards Law, the Company is exposed to the following risks:

i. Investment risk: The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government’s designated authorities or under the mandated management. However, under the R.O.C. Labor Standards Law, the rate of return on assets shall not be less than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return.

ii. Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.

iii. Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

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(f) The present value of the Group’s defined benefit obligations were carried out by qualified actuaries. The principal assumptions made on the measurement date were as flows:

date were as flows:
Discount rate Future salary growth rate	Measurement date
	2021.12.31 0.69% 1.00%	2020.12.31
		0.38% 1.00%

In the event that significant actuarial assumptions are subject to possible changes, if all other assumptions remain unchanged, the amount of increase (decrease) in present value of defined benefit obligations will be as follows:

Discount rate Increased by 0.25% and 0.5%, respectively Decreased by 0.25% and 0.5%, respectively Future salary growth rate Increased by 0.25% and 0.5%, respectively Decreased by 0.25% and 0.5%, respectively	Effect on defined benefit obligations	Effect on defined benefit obligations
	2021.12.31 $(1,926) $ 1,926 $ 1,508 $(1,491)	2020.12.31
		$(2,171)
		$ 2,213
		$ 1,734
		$(1,712)

Since actuarial assumptions might be related to one another, it would be unlikely for only a single assumption to change. Therefore, the aforementioned sensitivity analysis, might not reflect the actual change in the present value of defined benefit obligations.

The Group expects to make contributions of NT$3,008 thousand to defined benefit plans in the next year strating from December 31, 2021.

(22) Equity

A. Capital stock

Capital stock
Authorized shares (thousand shares) Authorized capital Number of shares issued with payments received in full (thousand shares) Issued share capital	2021.12.31 320,000 $ 3,200,000 222,526 $ 2,225,261	2020.12.31
		320,000
		$ 3,200,000
		222,526
		$ 2,225,261

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B. Capital surplus

Capital surplus
		2021.12.31	2020.12.31
Additional paid-in capital arising from	$	232,709 $	232,709
bonds conversion
Difference between consideration and		36,010	36,010
carrying amount arising from the
disposal of subsidiaries stock
Changes in equity of associates		6,828	6,828
acconnted for using equity method.
Interest compensation payable for
		6,075	6,075
convertible bonds
	$	281,622 $	281,622

Under the Company Act, where the Company incurs no loss, it may distribute its additional paid-in capital and endowments received by the Company by issuing new shares as dividend shares to its original shareholders in proportion to the number of shares being held by each of them or by cash. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient. The capital surplus from long-term investments may not be used for any purpose.

C. Retained earnings and dividend policy

In accordance with the earnings distribution policy stipulated in the Company’s Articles of Incorporation, if the Company made gains that year, it shall distribute 1% to 5% of the earnings as employees’ remuneration and no higher than 3% as directors’ remuneration. However, in the event the Company has sustained cumulative losses, a proportion of profit shall be reserved in advance for compensation purposes before remunerations are calculated.

Employee remuneration may be paid in cash or stock shares, and shall be payable to employees of the Company that meet certain requirements. Directors’ remuneration shall be paid in cash only.

～ 65 ～

Matters regarding the distribution of employees’ and directors’ remuneration shall be approved by over half of directors at board meetings with more than 2/3 of the directors present, and reported in the shareholders’ meeting.

If the aforementioned Board of Directors has resolved to distribute employees’ remuneration in stocks, they many determine whether to distribute new shares or purchase their own shares.

The Company’s dividend policy takes into account the Company’s capital needs and long-term financial planning, current and future development plans, investment environment and domestic/foreign competition, and shareholders’ interests to decide the amount and method of surplus distribution. If there are earnings in the Company’s annual accounting statement, 10% of the balance shall be added to the legal reserve after paying income tax and making up for losses in previous years, unless the legal reserve has reached the total paid-in capital. After making special reserve allowance or reversal according to the regulations of competent authorities, However, if there is a special surplus reserve for the net amount of other equity deductions accumulated in the previous period, the same amount of special surplus reserve shall be withdrawn from the undistributed surplus in the previous period. Items other than the current after-tax net profit are included in the amount of the undistributed surplus for the current period, and the undistributed surplus is accumulated with the previous year,the Board of Directors shall draft an earnings distribution plan and submit it to the shareholder’ meeting to resolve how to distribute the remaining earnings plus any unappropriated retained earnings from previous years.

Earnings can be distributed as cash dividends or stock dividend. If distributed, no less than 50% of distributable earnings for the current year shall be allocated as bonus dividends for shareholders. Bonus dividends to shareholders should be distributed as cash dividends in principle. If stock dividends are distributed, it should not exceed 50% of the total dividends.

The Board of Directors is authorized to carry out the aforementioned distribution of bonus dividends to shareholders as cash dividends based on resolutions agreed upon by over half of attending directors in Board meetings attended by at least 2/3 of directors and report such distributions in the shareholders’ meeting.

～ 66 ～

In distributing earnings, the Company must set aside a special reserve based on net deductions of other shareholders’ equity (such as the accumulated balance of financial statements translation differences of foreign operations or unrealized profit and loss of financial assets measured at fair value). If there are subsequent reversals of the equity deduction amount, the reversal amount may be added to distributable earnings.

The distribution of 2020 earnings was adopted in the shareholders’ meeting on July 15, 2021 and the distribution of 2019 earnings was adopted in the shareholders’ meeting on June 16, 2020. Details are summarized below:

Appropriation legal reserve Reversal from special reserve Cash dividend	2020 $ 38,857 ( 28,832 ) 378,294	2019 2020 $ 41,784 ( 34,327 ) 411,674 $ 1.70	2019
			$ 1.85

The aforementioned 2020 and 2019 appropriation approved by shareholders’ meeting were consistent with the resolutions of the Board of Directors’ meeting.

Information on employees’ compensation and directors’ remuneration of the Company as by the Board of Directors and shareholders’ meetings is available in the Market Observation Post System website of on Taiwan Stock Exchange.

D. Special reserve

Special reserve
Special reserve recognized through IFRSs for the first time Others	2021.12.31 $ 102,504 76,888 $ 179,392	2020.12.31
		$ 102,504 105,720
		$ 208,224

The Company made special reserve allowance and reversal according to Jin-Guan Certificate Fa Zi No. 1010012865, Jin-Guan Certificate Fa Zi No. 1010047490, and the “Questions and Answers Regarding Special Reserve Allowance Based on the IFRSs”. If there is subsequent reversal based on the reduction of shareholders’ equity, the Company may make a special reserve allowance or reversal based on the rules of partial distributed surplus reversal.

E. Other equity interests

～ 67 ～

2021

			2021
			Unrealised	gains
			(losses) from	financial
		Foreign Currency	assets measured at fair		Total
		Translation Reserve	value through other
			comprehensive
			income
Beginning balance	$	( 24,706) $ (		154,686) $ ( 179,392)
Exchange differences arising on		( 4,547)		－	(	4,547)
translation of foreign operations
Unrealized gain/(loss) on		－		135,433	135,433
investments in equity
instruments at fair value
through other comprehensive
income
Share of other comprehensive		( 26,793)		－	( 26,793)
income (loss) of and associates
Other comprehensive Income		6,269		－		6,269
for the year, net of income tax
Disposal of investments in		－	(	1,464 )	(	1,464 )
equity instruments designated
at fair value through other
comprehensive income
Endingbalance	$	(49,777)$ (		20,717)$(70,494)
			2020
			Unrealised	gains
			(losses) from	financial
		Foreign Currency	assets measured at fair		Total
		Translation Reserve	value through other
			comprehensive
			income
Beginning balance	$	4,419 $ (		212,643) $ ( 208,224)
Exchange differences arising on		( 13,554)		－	( 13,554)
translation of foreign operations
Unrealized gain/(loss) on		－		57,957	57,957
investments in equity
instruments at fair value
through other comprehensive
income
Share of other comprehensive		( 22,852)		－	( 22,852)
income (loss) of and associates
Other comprehensive Income		7,281		－		7,281
for the year, net of income tax
Endingbalance	$	(24,706)$ (		154,686)$(179,392)

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F. Non-controlling interests

Beginning balance Shares attributable to non-controlling interests: Net profit (loss) of this year Exchange differences on translation of foreign financial statements Changes in non-controlling interests Others Ending balance	2021 2020 $ 6,003 $ ( 1,512 ) ( 4,406 ) ( 480 ) ( 120 ) ( 333 ) 2,000 －－ 8,328 $ 3,477 $ 6,003

(23) Operating Revenue

A. Revenue from customer contracts

Revenue from customer contracts
Revenue from customer contracts Sales revenue Others	2021 $ 6,515,200 43,418 $ 6,558,618	2020
		$ 5,030,155 43,612
		$ 5,073,767

For the income analysis of major products, please refer to Note 14 (3)

B. Contract balance

Information regarding the Group’s revenue from customer contracts in 2021 and 2020 are as follows:

2020 are as follows:
Sale ofgoods	2021.01.01 $ 2,743	2021.12.31 $ 61,003	Variance $ (58,260)
Sale of goods	2020.01.01 $ 4,875	2020.12.31 $ 2,743	Variance $ (2,132)

Changes in contract liabilities are mainly due to the difference between the time when the contract obligations are met and the time when customers make payments.

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The amount of contract liabilities from the beginning of the year recognized in operating income in 2021 and 2020 is NT$2,684 thousand and NT$4,486 thousand, respectively.

(24) Interest Income

nterest Income
Bank deposits Financial assets at amortized cost Other interest income ther Income Rent income Dividend income Government subsidies income Others income	2021 $ 3,188 － 14,053 $ 17,241 2021 $ 10,712 37,990 1,040 6,373 $ 56,115	2020
		$ 6,126 110 12,913
		$ 19,149
		2020
		$ 8,261 48,763 3,496 6,648
		$ 67,168

(25) Other Income

The Group applied for the Tourism Bureau, Ministry of Transportation and Communications’ subsidies for necessary operating costs of tourist hotel industry and hotel industry. The application was approved for a one-time operating capital subsidy on June 22, 2021 and July 3, 2020.

(26) Other Gains and Losses, Net

Gains (Loss) from disposals of property, plant and equipment Gain (loss) on disposal of investments Net foreign exchange gain (loss) Gain (loss) on financial assets at fair value through profit or loss Other losses	2021 $ ( 390) 109,167 ( 5,866) 138,133 (6,146) $ 234,898	2020 $ ( 3,690) 23,780 ( 2,806) 84,979 (42,588) $ 59,675

～ 70 ～

(27) Finance Cost, Net

Interest expense Borrowing interest expense Lease liability expense Others interest expense Less: Qualifying asset capitalization amount	2021 2020 $ 36,252 $ 33,470 16,570 17,404 19 26 ( 3,515 ) ( 2,237 ) $ 49,326 $ 48,663

(28) Employee Benefits, Depreciation, and Amortization Costs

	2021		2020
Belonging to operating costs $ 202,151 19,240 10,227 8,406 130,002 8,202 $ 378,228	Belonging to operating expenses $ 84,391 6,231 3,251 93,356 15,359 665 $ 203,253	Belonging to operating costs $ 166,369 17,169 7,665 8,172 122,726 7,082 $ 329,183	Belonging to operating expenses	Total
			$ 77,922 5,474 3,245 52,038 15,608 496	$ 244,291 22,643 10,910 60,210 138,334 7,578
			$ 154,783	$ 483,966

A. In accordance with the Company’s Articles of Incorporation, the Company shall distribute 1% to 5% of the distributed earnings covering accumulated losses as employees’ remuneration and no higher than 3% as directors’ remuneration. The Company’s estimated employees’ remuneration for 2021 and 2020 are NT$48,615 thousand and NT$23,939 thousand, respectively. The Company’s estimated directors’ remuneration in 2021 and 2020 are NT$29,169 thousand and NT$14,364 thousand, recognized based on the aforementioned pre-tax benefits of 5% and 3%. Any changes to the sum after

～ 71 ～

the publication of the Company’s annual financial report are treated as accounting estimates and added to the balance of the following year.

B. The distributions of employees and directors’ compensation for 2021 and 2020 were approved through the Board of Directors’ meeting on March 22, 2022 and March 19, 2021, respectively. The details of distribution were as follows:

Approved amount	2021 Employees’ remuneration Directors’ remuneration $ 48,615 $ 29,169	2020	2020
	Employees’ remuneration $ 48,615	Employees’ remuneration $ 23,939	Directors’ remuneration
			$ 14,364

The amounts, as stated in the parent company only financial statements, are identical to those of the actual distributions for 2021 and 2020.

Information relevant to the aforementioned employees and directors’ compensation can be obtained from the “Market Observation Post System” on the website of the TWSE.

(29) Income Tax

A. Components of income tax expenses

2021 Current income tax Occurred in the current year $ 117,547 Additional undistributed earnings － Adjustment of previous years (1,092) 116,455 Deferred income tax Origination and reversal of temporary differences 11,216 Total tax expenses $ 127,671 Income tax recognized in other comprehensive income 2021 Financial statements translation differences of foreign operations $ (6,269)	2020 $ 71,936 318 59 72,313 ( 18,526 ) $ 53,787 2020 $ (7,281 )

B. Income tax recognized in other comprehensive income

～ 72 ～

C. Adjustments to the income tax expenses recognized in profit and loss in the current

year:
2021
Net profit before tax
$ 906,174
Net profit before tax calculated based on
the statutory tax rate
$ 194,813
Effected tax amount from adjusted items:
Effected items are not included in the
calculation of taxable income
( 90,350)
Origination and reversal of temporary
differences
11,216
Additional undistributed earnings
－
Adjustments in respect of prior years
( 1,092)
Taxed separately
13,084
Current income tax relief
－
Income tax expenses recognized in profit
and loss
$ 127,671

2020
$ 445,931
$ 96,489
( 25,656)
( 18,526 )
318
59
3,508
(2,405)
$ 53,787

The statutory tax rate applicable to the Group is 20% per the R.O.C. Income Tax Act, while the tax rate applicable to unappropriated retained earnings is 5%. Taxes incurred in other jurisdictions are calculated based on the tax rates applicable to each relevant jurisdiction.

The Company’s application to repatriate offshore funds within a time limit according to the “Management, Utilization, and Taxation of Repatriated Offshore Funds Act” implemented in Taiwan on August 15, 2019 was approved. Since the day the act was implemented, the applicable tax rate was 8% in the first year and 10% in the second year, separate from the general income tax system. Within a year of repatriating funds, the Company needs to apply to participate in real investment from the Ministry of Economic Affairs. Only those who have completed this step will receive the 50% tax refund.

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D. Information on the deduction of unused losses

Information about the Group’s loss deduction as of December 31, 2021 is as follows:

follows:
Year of maturity 2024 to 2031	Amount not yet deducted
	$ 181,178

E. Deferred income tax assets and liabilities generated from temporary difference

Deferred Tax Assets Temporary differences Unrealized inventory valuation loss and idle loss Effects of investment income tax recognized using the equity method Others			2021	2021	2021	2021		Ending balance 8,397 － 549 8,946
		Beginning balance 9,165 10,471 364 20,000	Recognized in profit and loss Recognized in other Comprehensive income $ ( 768 )$ －$ ( 10,471 ) － 185 － $ (11,054)$ －$
	$		$
	$		$				$
Deferred Tax Liabilities Temporary differences Properties, Plants and Equipment Exchange difference of foreign operations Effects of investment income tax recognized using the equity method	$	162,405 13,980 － 176,385	$	－－ 163 163	$	－$ ( 6,269 ) － (6,269 )$		162,405 7,711 163 170,279
	$		$		$

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Deferred Tax Assets Temporary differences Unrealized inventory valuation loss and idle loss Effects of investment income tax recognized using the equity method Others Deferred Tax Liabilities Temporary differences Properties, Plants and Equipment Exchange difference of foreign operations Effects of investment income tax recognized using the equity method		2020
	Beginning balance $ 1,804 － 207 $ 2,011 $ 162,405 21,261 537 $ 184,203	Recognized in profit and loss Recognized in other Comprehensive income Ending balance $ 7,361 $ －$ 9,165 10,471 － 10,471 157 － 364 $ 17,989 $ －$ 20,000 $ －$ －$ 162,405 － ( 7,281 ) 13,980 ( 537 ) －－ $ (537)$ (7,281 )$ 176,385	Ending balance

F. Impacted by the COVID-19 pandemic, the Company’s declared profit-seeking enterprise income tax payable for 2020 and 2019 is NT$59,964 thousand and NT$43,627 thousand respectively. On June 25, 2021 and June 20, 2020, the National Taxation Bureau of Taipei of the Ministry of Fincl3ance approved the request to pay the tax in 36 installments. As of December 31, 2021, the Company has paid 6 and 18 installments totaling NT$31,807 thousand.
G. Income tax assessment

As of December 31, 2021, the tax collection agency approved Company’s profit-seeking enterprise income tax settlement declaration to 2019.

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(30) Earnings Per Share

arnings Per Share
Basic earnings per share Basic earnings per share		2021
	Profit attributable to ordinary shareholders of the parent company Before tax After tax $ 910,580 $ 782,909	Weighted average number of ordinary shares outstanding (thousand shares) 222,526 2020	EPS (NT$)
	Before tax $ 910,580		Before tax $ 4.09	After tax
				$ 3.52

	Profit attributable to ordinary shareholders of the parent company Before tax After tax $ 446,411 $ 392,624	Weighted average number of ordinary shares outstanding (thousand shares) 222,526	EPS (NT$)
	Before tax $ 446,411		Before tax $ 2.01	After tax
				$ 1.76

(31) Adjustments in Liabilities From Financing Activities

Short-term loans Short-term notes and bills payable Long-term loans (including long-term liabilities, current portion) Lease liabilities Guarantee deposits received Total liabilities from financingactivities	2021.01.01 $ 1,959,907 29,992 75,146 663,268 28,163 $ 2,756,476	Cash Flow $ 673,536 ( 34) ( 52,244) ( 70,022) ( 7,780) $ 543,456	Non-cash changes Others $ －－－ 41,808 － $ 41,808	2021.12.31
				$ 2,633,443 29,958 22,902 635,054 20,383
				$ 3,341,740

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Current borrowings Short-term notes and bills payable Non-current borrowings (including long-term borrowings, current portion) Lease liabilities Guarantee deposits received Total liabilities from financing activities	2020.01.01 $ 1,503,154 29,972 77,813 708,367 6,583 $ 2,325,889	Non-cash changes Cash Flow Others $ 456,753 $ － 20 － ( 2,667 ) － ( 68,735 ) 23,636 21,580 － $ 406,951 $ 23,636	2020.12.31
			$ 1,959,907 29,992 75,146 663,268 28,163
			$ 2,756,476

7. RELATED PARTY TRANSACTIONS

(1) Names of Related Parties and Their Relationship with the Group

Name of related parties
Mayer Corporation Development International Limited
Grand Tech Precision Manufacturing (Thailand) Co., Ltd.
(hereby referred to as Grand Tech Precision)
Diamond Steel Tube Co., Ltd. (Vietnam)
Diamond Precision Steel Corp.
(hereby referred to as KY-Diamond)
LUEN JIN ENTERPRISE CO., LTD.
Durban Development Co., Ltd.
Ying Shun Construction Co., Ltd.
Athena Information Systems International Co., Ltd.
Miramar Hospitality Co., Ltd.
Huang Yu-Chi
Directors, president, vice president, and other executive
officers

Relationship with
thegroup

Subsidiaries
Affiliated
companies
Affiliated
companies
Affiliated
companies
Affiliated
companies
Other related
parties
Other related
parties
Other related
parties
Other related
parties
Key management
Key management

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(2) Significant Transactions with Related Parties

In 2021 and 2020, the Group conducted the following operating transactions with the related parties of non-merged companies:

A. Sales Revenue

Sales Revenue
Affiliated companies	2021 $ 70,511	2020
		$ 13,934

The Group’s transactions with the above-mentioned related parties are handled based on conditions agreed upon by both parties.

B. Accounts Receivable

Accounts Receivable
Affiliated companies	2021.12.31 $ 23,498	2020.12.31
		$ 8,384

C. Construction Cost

In 2020, the Company paid NT$6,667 thousand of construction and maintenance costs to other related parties for the exterior wall renovation of the sold construction project. The sum is accounted for under "Operating Cost".

D. Construction in Progress

The management service fees the Company paid to other related parties for real estate development is NT$1,440 thousand in both 2021 and 2020. The sums are accounted for under “Inventories(for construction business)- Construction in Progress”.

E. Other Receivable (Including amounts loaned)

General payment Subsidiaries Amount loaned Subsidiaries Subtotal Less: Allowance for impairment loss	2021.12.31 $ 155 16,859 17,014 (17,014) $ －	2020.12.31 $ 160 17,353 17,513 (17,513) $ －

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F. Refundable Deposits

F. Refundable Deposits
Other related parties G. Contract Liabilities Other related parties H. Accounts Payable Other related parties I. Other Payables Other related parties J. Lease Revenue Other related parties K. Dividend Income Investment reductions under the equity method Grand Tech Precision KY-Diamond	2021.12.31 $ 5 2021.12.31 $ 7 2021.12.31 $ 126 2021 $ 11 2021 $ 179 2021 $ 26,536 50,051 $ 76,587	2020.12.31
		$ 5
		2020.12.31
		$ 7
		2020.12.31
		$ 120
		2020
		$ 16
		2020
		$ 179
		2020
		$ 33,739 34,494
		$ 68,233

L. Others

i. The company signed a transportation equipment purchase agreement with the management on January 7, 2020. The total contract price was NT$1,056 thousand. Ownership of the goods was transferred on January 15, 2020, and the relevant payments were paid off on January 16, 2020.
ii. The Group signed equipment and software purchase agreements with other related parties in August and November, 2020. The total contract price was NT$1,556 thousand. The Group paid NT$220 thousand and NT$1,336 thousand

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in 2020 and 2019, respectively, and has transferred the purchase under “machinery, equipment, and intangible assets” in 2020.

iii. In 2021 and 2020, the Company purchased NT$48 thousand and NT$86 thousand worth of gifts from other related parties respectively, and listed the purchase under “operating expenses”.
iv. In 2021 and 2020, the Group paid NT$94 thousand and NT$0 worth of computer information service fees to other related parties respectively, with the payment listed under “operating costs”.
v. The Group’s computer information service fees and commissions paid to other related parties in 2021 and 2020 are NT$160 thousand and NT$80 thousand respectively, with the payments listed under “operating expenses”.
vi. On February 4, 2021, the Group revised a Jointly-constructed with house divided contract in the Xitou section of Qidu District, Keelung City with Durban Development Co., Ltd. And, The house can exchange of 1.32 square meters land.

(3) Key Management Compensation

Key Management Compensation
Salary and short-term employee benefits Post-Employment Benefits	2021 $ 75,344 655 $ 75,999	2020
		$ 46,415 614
		$ 47,029

The remuneration of directors and other key management are determined based on individual performance and market trends by the remuneration committee.

8. PLEDGED ASSETS

The book value of the Group’s assets pledged to financial institutions as collateral for long or short-term loans, presale buyer trust funds for construction projects, and restrictions on repatriated overseas funds on December 31, 2021and 2020 are detailed below:

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Inventories (for construction business) Other financial assets - bank deposits Other financial assets - current financial assets at fair value through profit and loss Other financial assets - current investments in equity instruments designated at fair value through other comprehensive income Finance lease receivables Properties, plants and equipment Investment property	2021.12.31 $ 247,417 115,166 576,612 144,940 39,823 575,025 147,635 $ 1,846,618	2020.12.31
		$ 153,398 27,814 624,844 189,270 40,336 578,819 150,569
		$ 1,765,050

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMPACT

COMMIMENTS

(1)On March 7, 2008, the Company entered into a contract with Chien Ching-Hui and three other persons to purchase rezoned land No. 38 and other lots in Yongcui Section, Banqiao District, New Taipei City for a total of NT$ 1,930,800 thousand. As of December 31, 2021, the Company has paid NT$ 89,110 thousand according to the contract, and the unpaid balance has been offset by the claim for damages. Unexpectedly, Chien Ching-Hui and three others, after donating part of the land, sold it to Yeashin Inter. Development Co., Ltd. and registered the transfer of ownership, which is a serious violation of the agreement between the two parties and has damaged the Company's obligatory rights. The progress of the trial is as follows:
A. On April 7, 2017, the Company filed a civil lawsuit with the Taiwan Taipei District Court requesting Chien Ching-Huang and two others to transfer the ownership of the land holdings of lots No. 62 to 67 in Yongcui Section, Banqiao District, New Taipei City (totaling 1,511.19 square meters), after rezoning, to the Company in accordance with the Preliminary Land Sale and Purchase Agreement and Supplemental Agreement (hereinafter referred to as the "Sale and Purchase Agreement") executed by the parties in 2008. The Taiwan Taipei District Court ruled in favor of the Company in the civil judgment Chong-Su-Zi No. 594 of 2017, and Chien

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Ching-Huang and two others shall transfer the ownership of the aforesaid land to the Company. However, Chien Ching-Huang and two others appealed the ruling. The Taiwan High Court dismissed their appeal in the civil judgment Chong-Shang-Zi No. 739 of 2018. Chien Ching-Huang and two others appealed the ruling. On November 25, 2021, the Supreme Court remanded the case to the Taiwan High Court based on the civil judgment Tai-Shang-Zi No. 2947 of 2020. The case is being tried.

B. On October 25, 2017, the Company filed a civil lawsuit with the Taiwan Taipei District Court, seeking damages of NT$ 118,678 thousand for the transfer of the land at lot No. 48 in Yongcui Section, Banqiao District, New Taipei City to a third party by Chien Ching-Hui and three others. The Taiwan Taipei District Court ruled in the civil judgment Chong-Su-Zi No. 1325 of 2017 that Chien Ching-Hui and three others shall pay the Company NT$ 97,825 thousand together with interest at the rate of 5% per annum from March 24, 2017 to the date of settlement. The Company filed an appeal against the lost part of the lawsuit, requesting that Chien Ching-Hui and three others should pay the Company a further NT$ 20,853 thousand along with interest at the rate of 5% per annum from March 24, 2017 to the date of settlement. Chien Ching-Hui and three others appealed against the foregoing ruling. On December 21, 2021, the Taiwan High Court dismissed their appeal in the civil judgment Chong-Shang-Zi No. 298 of 2020. Chien Ching-Huang and three others appealed. The case is being tried by the Supreme Court.

C. On April 30, 2020, the Company filed a civil lawsuit with the Taiwan Taipei District Court, seeking damages of NT$ 594,956 thousand for the transfer of the land at lot No. 49 in Yongcui Section, Banqiao District, New Taipei City to a third party by Chien Ching-Hui and three others. The case, Chong-Su-Zi No. 487 of 2020, is being tried by the Taiwan Taipei District Court.
D. On June 29, 2021, the Company filed a civil lawsuit with the Taiwan Taipei District Court, seeking damages of NT$ 823,018 thousand for the transfer of the land at lot No. 38 in Yongcui Section, Banqiao District, New Taipei City to a third party by Chien Ching-Hui and three others. The case, Chong-Su-Zi No. 528 of 2021, is being tried by the Taiwan Taipei District Court.
(2)Regarding the 200 million shares (the "disputed shares") of Mayer Holdings Limited (Cayman) (hereinafter referred to as "Mayer Holdings (Cayman)") held by the

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Company's Mayer Corporation Development International Limited (hereinafter referred to as "Mayer Corp. (BVI)"), Computershare notified on January 12, 2012 that: Aspial Investment Limited and Bumper East Limited applied for transfer of the disputed shares to their names. Mayer Corp. (BVI), Aspial Investment Limited, and Bumper East Limited all filed a statement of claim. The progress of the trial is as follows:

A. On July 3, 2014, the Hong Kong Court of Final Appeal ruled that Mayer Corp. (BVI) lost its ownership of Mayer Holdings (Cayman). Aspial Investment Limited and Bumper East Limited were registered as shareholders of Mayer Holdings (Cayman) on August 19, 2014. As of December 31, 2021, Mayer Corp. (BVI) had recognized US$2,678 thousand in the defendant's compensation expenses as a result of the foregoing case. It has been assessed that there is no more significant impact on the Group. Further specifics will be expressed when available.
B. On July 30 and August 21, 2014, 3rd defendant Lin Chien-Chin petitioned the Hong Kong Court of First Instance to have Hong Kong courts order the Company to join the case as a defendant. However, whether the Company will become a defendant in the case is pending the decision of the Hong Kong Court of First Instance. No trial date has been set yet. Further specifics will be expressed when available.
C. The Company entrusted the foregoing "disputed shares" to the person in charge of Mayer Corp. (BVI), surnamed Lai, for safekeeping and disposal. Without the consent or authorization of the Company, Lai disposed of (sold) the foregoing shares to a third party, which prevented the Company from returning the shares to Mayer Corp. (BVI). On April 29, 2015, the Board of Directors resolved to file a criminal complaint with the District Prosecutor's Office to pursue the legal responsibility of person in charge Lai in order to protect the rights and interests of the Company and all shareholders. On March 19, 2021, the prosecutor of Taiwan Taipei District Prosecutors Office filed an indictment under Zhen-Zi No. 7922 and No. 7923 of 2016. The cases have been transferred to the Criminal Court of the Taiwan Taipei District Court for trial under Jin-Chong-Su-Zi No, 16 of 2021.
D. On January 28, 2016, Mayer Corp. (BVI) filed a statement of claim in the High Court of Hong Kong against all the foregoing defendants. The High Court of Hong Kong originally ruled that the ownership of Mayer Corp. (BVI) of 200 million shares of Mayer Holdings Limited (Cayman) was invalid. On April 12, 2016, Mayer Corp.

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(BVI) petitioned the High Court of Hong Kong for a joint trial due to the commonality of this case and the foregoing and related cases. On July 25, 2016, the High Court of Hong Kong decided to defer the joint trial petition until the strike out application was concluded. As Mayer Corp. (BVI) has already filed a winding-up petition (as described in III below) and the parties in the joint trial petition have been ordered to go into liquidation, the joint trial petition is expected to be deferred indefinitely. Further specifics will be expressed when available.

E. As of December 31, 2021, the Company and Mayer Corp. (BVI) had recognized cumulative attorneys' fees of US$ 500 thousand and US$ 3,339 thousand, respectively, in connection with the foregoing case.
(3)Mayer Corp. (BVI) received a letter from the Hong Kong Official Receiver's Office on September 27, 2016 informing that them the High Court of the Hong Kong Special Administrative Region had received a petition from Bumper East Limited and Aspial Investment Limited (hereinafter referred to as the "Petitioners") for the liquidation of Mayer Corp. (BVI), and that legal proceedings for the said petition had been certified as completed on December 8, 2016. Mayer Corp. (BVI) filed an affidavit of objections with the High Court of Hong Kong on December 28, 2016 and February 21, 2017, respectively, and a hearing was held on April 20, 2017. It has been assessed that there is no more significant impact on the Group. Further specifics will be expressed when available. The related liquidation proceedings are described below:
A. On March 3, 2017, Mayer Corp. (BVI) appointed counsel to file a petition for winding-up due to insolvency with the British Virgin Islands (BVI) Court and appointed a liquidator to handle tasks related to the winding-up. On March 27, 2017, the BVI Court issued a winding-up order in respect of Mayer Corp. (BVI) and appointed RHSW Limited (BVI) and Ernst & Young Transactions Ltd. as its joint liquidators. On April 18, 2017, the Hong Kong Court issued a recognition order.
B. At the hearing on April 20, 2017, the counsel appointed by the Petitioners pointed out that the Hong Kong Court could not issue a recognition order in a case of voluntary winding-up; however, the High Court of Hong Kong re-affirmed the validity of the recognition order issued on April 18, 2017 and agreed that Ernst & Young Transactions Ltd. (hereinafter referred to as the "Liquidator") may enforce the winding-up order in respect of Mayer Corp. (BVI) in Hong Kong. The Hong Kong

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Court of Final Appeal dismissed their application for appeal in court on March 19, 2020 and issued grounds for rejecting the application on April 16, 2020. As of March 22, 2022, the Liquidator is claiming relevant fees from the Petitioners.

C. As of December 31, 2021, Mayer Corp.(BVI) has recognized accumulated attorneys' fees totaling NT$31 thousand because of the foregoing case.
(4) On September 15, 2010, Glory World Development Limited (BVI), a joint venture between the Company and Mayer Holdings Limited (Cayman), entered into an exclusive supply contract with Vietnam Minerals Holding Company (Brunei), a Vietnamese mining holding company, through its subsidiary Elternal Galaxy Limited (BVI). The first installment of the performance bond,US$ 10 million, was paid off on October 15, 2010.

As Vietnam Minerals Holding Company (Brunei) failed to comply with the contract, the entire amount of the "refundable deposits" was transferred to "other receivables" and an allowance for bad debt was provided for based on the conservatism principle. The cumulated impairment loss and allowance for bad debt amounted to US$ 2.92 million and US$ 5.42 million, respectively. In addition to having yet to confirm the value of the assets (or rights) and whether they can be legally pledged or transferred, the Group intends to discuss with the co-beneficiaries whether to take legal action to protect the Company's rights and interests.

(5)On September 27, 2010, Glory World Development Limited (BVI), a joint venture between the Company and Mayer Holdings Limited (Cayman), entered into an exclusive supply contract with Dynamic Natural Resources Pte. Ltd. (Singapore) through its subsidiary Sinowise Development Limited (BVI). The contract took effect on the date of signing and would remain valid for a period of five years. The performance bond of US$4 million was paid off on October 5, 2010. However, Sinowise Development Limited (BVI) signed a termination agreement with that company on March 25, 2012. The amount of the performance bond, advance payments, and apportioned losses as of that date was repaid in installments plus interest at a rate of 5% per annum from January 1, 2012, totaling US$ 6.98 million. Only US$ 1.3 million were received; therefore, a 100% allowance for bad debt has been provided for based on the conservatism principle. The appointed counsel stated that Dynamic Natural Resources Pte. Ltd. (Singapore) was in struck off status. Sinowise Development

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Limited (BVI) intends to discuss with the co-beneficiaries whether to take legal action to protect the Company's rights and interests.

(6) The Company's Hong Kong Miramar Development Limited participated in the seasoned equity offering of Oasis Eden Properties Limited on February 10, 2011 for 17,500 thousand USD and signed an "investment agreement" with Oasis Eden Properties Limited (BVI), Chongqing Hengyang Real Estate Development Co., Ltd., and Rising Sun Real Estate Investment Consulting LLC. The agreement stipulated that Oasis Eden Properties Limited (BVI) would return US$ 45,150 thousand (including the principal of US$ 17,500 thousand and after-tax profit of US$ 27,650 thousand ) to Hong Kong Miramar Development Limited, with Rising Sun Real Estate Investment Consulting LLC. providing joint guarantee. At the same time the agreement was being executed , Hong Kong Miramar Development Limited and Chongqing Hengyang Real Estate Development Co., Ltd. signed the original pre-purchase contract for hotel commercial housing located in the U Standard Zone of Xiyong Group, Chongqing proper for RMB$ 299,484 thousand, which is approximately NT$1,323,719 thousand.

Oasis Eden Properties Limited (BVI) signed an equity transfer agreement with Evergrande Real Estate Group Limited on October 17, 2016, selling 100% equity it held of Chongqing Hengyang Real Estate Development Co., Ltd. and other three reinvestment companies for RMB$700 million. However, the money should first be used to cover the existing debts of Oasis Eden Properties Limited (BVI) before the rest could be distributed to shareholders. As of December 31, 2021, the proportionate share of receivables from Hong Kong Miramar Development Limited was US$1,073 thousand. Due to the low probability of recovery, the expected credit impairment loss has been fully provided for. The investment has no more significant impact on the Group.

(7)Since April 2016, the Group and Durban Development Co., Ltd. filed a total of 35 civil lawsuits with the Taiwan Keelung District Court, requesting Yu Chun-Lai and others to demolish the structures on the ground and vacate the land located at Xitou Section, Qidu and return it to all co-owners, as well as to pay monthly rent until the date the land is returned. The last case was closed on February 7, 2022.
(8)On April 5, 2017, the Securities and Futures Commission of Hong Kong imposed a total fine of HKD $10.2 million on Mayer Holdings Limited (Cayman) and nine of its current

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and former senior staff in the Market Misconduct Tribunal for breach of the "disclosure obligations" under the Securities and Futures Ordinance. The Company appointed a counsel to represent the Company's President and five other persons to appeal to the Court of Appeal of the High Court of Hong Kong. Leave to appeal was granted by the Court of Appeal on June 14, 2017. Following the hearing of the appeal on November 20 and 21, 2018, the Tribunal gave directions on July 24, 2020 requiring the parties to submit expert reports. The Tribunal's ruling has been pending since the hearing on February 14 and 15, 2022. As of December 31, 2021, the Company has recognized a total of HKD$ 3,023 thousand in attorneys' fees with relation to the foregoing case.

(9)On June 12, 2017, the Company entered into a tripartite sale and purchase agreement for 40,000 wet tons of manganese ore in Brazil for an estimated total price of US$ 6,154 thousand in a bid to expand its new business. The Company acted as an intermediary and expected to receive a commission of US$ 292 thousand. However, on July 5, 2017, the Company, the supplier, and the buyer agreed to terminate the tripartite sale and purchase contract, and the Company entered into a new Brazilian manganese ore sale and purchase agreement with the supplier and a new buyer, respectively. The Company paid the supplier US$ 2,923 thousand, or NT$ 88,259 thousand, in accordance with the terms of the agreement. The supplier defaulted on the agreement due to failure to deliver the goods on time. On November 5, 2021, the Company's Board of Directors resolved to offset the loss on the agreement through the provision of land by the joint and several guarantors of the manganese ore sale and purchase agreement, and the transfer of ownership was completed on January 6, 2022.

(10) On June 30, 2016, the Securities and Futures Commission of Hong Kong provided Mayer Holdings (Cayman) with a stamped copy of the petition filed in the High Court of Hong Kong under Miscellaneous Litigation No. 1673 (2016). Pursuant to the petition, Mayer Holdings (Cayman) has taken legal action to recover losses incurred by the involved directors as a result of three suspicious transactions. No trial date has been set currently. Further specifics will be expressed when available. In view of the fact that two of the former executive and non-executive directors were recommended by the Company to be directors of Mayer Holdings (Cayman), the Company's Board of Directors agreed on March 26, 2018 to reimburse the legal fees and other necessary expenses incurred by two former executive directors for the litigation. As of December

～ 87 ～

31, 2021, the Company recognized cumulative attorneys' fees of HKD$282 thousand for the foregoing case.
(11) The Environmental Protection Administration, Executive Yuan, R.O.C. (Taiwan) informed the Company by a letter dated September 7, 2018 that the groundwater pollution control site and the delineated pollution control area of the Company's production plant (Puxin Plant) would be announced as the groundwater pollution remediation site. The Company proposed the "Soil and Groundwater Contamination Investigation and Assessment Plan" and the "Report on Results" on April 23 and December 3, 2019, respectively, and the Taoyuan City Government agreed to file said documents for future reference on June 5, 2019 and July 13, 2020, respectively. Moreover, the Soil and Groundwater Contamination Remediation Plan was approved on May 3, 2021 for commencement of implementation on August 4, 2021. As of December 31, 2021, a provision of NT$ 37,681 thousand has been estimated and recognized as a liability for remediation costs.
(12) Mayer Holdings Limited (Cayman) filed a petition for arbitration with the Hong Kong arbitration authority on December 4, 2019 requiring the Company to replace a director of Glory World Development Limited (BVI) and produce relevant books and records of that company in accordance with the shareholders' agreement dated September 5, 2010. The Company filed its defence and counterclaim with the arbitration authority on March 11, 2020, and Mayer Holdings Limited (Cayman) filed its statement of claim on September 2, 2020. On September 14, 2021, the Hong Kong arbitration authority issued a partial final award in which the Company shall cause the removal of the director and the provision of relevant books and records, and all other claims and counterclaims were dismissed. The arbitration proceedings were completed on February 4, 2022. The Company has fully estimated and recognized the costs associated with the arbitration proceedings.
(13) On March 19, 2020, the Company's Board of Directors resolved to enter into an agreement with a non-affiliated party to transfer the scope of the Company's request for the transfer of land ownership of the Yongcui section of Banqiao in the cases of Chien Ching-Huang and two others, the Taiwan Taipei District Court civil judgment Chong-Su-Zi No. 594 of 2017 and the Taiwan High Court civil judgment Chong-Shang-Zi No. 739 of 2018, for NT$ 300 million as the purchase price. The

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foregoing agreement cannot be signed until the Supreme Court's decision is confirmed. However, the non-affiliated party does not intend to sign the agreement anymore. As of March 22, 2022, no update is available.

(14) As of December 31, 2021 and 2020, the unused balances of letters of credit issued by the Company were NT$96,485 thousand and NT$115,754 thousand, respectively.
(15) As of December 31, 2021 and 2020, the balance of guaranteed notes issued by the Company for bank borrowings, procurement of materials, and endorsements/guarantees were NT$3,321,660 thousand and NT$2,913,316 thousand, respectively.
(16) As of December 31, 2021 and 2020, the Company’s contracted and unpaid amount for the procurement of machinery and equipment and land development was NT$76,215 thousand and NT$20,760 thousand, respectively.

10. SIGNIFICANT DISASTER LOSS: None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE:None.

12. OTHERS:

(1) Capital Risk Management

The Group needs to maintain enough capital to support expansions and improvements of plants and equipment. Therefore, the Group’s capital management is to ensure that it has necessary financial resources and operating plans to meet the needs of working capital, capital expenditures, research and development expenses, debt repayment, and dividend expenditures in the next 12 months.

(2) Financial Instruments
A. Financial instruments by category

Financial instruments by category
Financial Assets Designated at amortized cost (Note 1) Designated at fair value through profit or loss Designated at fair value through other comprehensive income Financial Liabilities Designated by amortized cost (Note 2)	2021.12.31 $ 1,554,890 1,090,396 359,093 $ 3,330,542	2020.12.31
		$ 1,196,071 1,042,189 452,902 $ 2,546,408

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Note 1: The balance includes financial assets measured at amortized cost such as cash and cash equivalents, notes receivable, accounts receivable, other receivables, refundable deposits, finance lease receivables, and other financial assets.
Note 2: The balance includes financial liabilities at amortized cost such as current borrowings, short-term notes and bills payable, notes payable, accounts payable, other payables, guarantee deposits received, and non-current portion of non-currnet borrowings.

B. Fair value information

(a)Financial instruments not measured at fair value
The Group believes that the book value of financial assets and financial liabilities measured at amortized cost is a reasonable approximation of fair value.

(b)Financial instruments measured at fair value

The following table provides the relevant analysis of financial instruments measured at fair value after initial recognition, and is divided into Levels 1 to 3 based on fair value observability.

i. Level 1 fair value measurements are quoted prices in active markets for identical assets or liabilities (unadjusted)
ii. Level 2 fair value measurements are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly (price) or indirectly (derived from price).
iii. Level 3 fair value measurement refers to fair value evaluation techniques not based on the input value of assets or liabilities based on observable market data (unobservable input value).

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Recurringfair value measurements				2021.12.31	2021.12.31	2021.12.31
		Level 1		Level 2		Level 3		Total
Financial assets at fair value through profit or loss Domestic listed company stocks Domestic non-listed company stocks Foreign non-listed company stocks Fund beneficiary certificate	$	636,018 －－ 6,469	$	－－－－	$	－ 421,785 26,124 －	$	636,018 421,785 26,124 6,469
	$	642,487	$	－	$	447,909	$	1,090,396
Financial assets at fair value through other comprehensive income Domestic listed company stocks Domestic non-listed company stocks Foreign non-listed company stocks	$	193,020 －－	$	－－－	$	－ 5,635 160,438	$	193,020 5,635 160,438
	$	193,020	$	－	$	166,073	$	359,093
Recurringfair value measurements				2020.12.31
		Level 1		Level 2		Level 3		Total
Financial assets at fair value through profit or loss Domestic listed company stocks Domestic non-listed company stocks Foreign non-listed company stocks Fund beneficiary certificate	$	646,196 －－ 7,164	$	－－－－	$	－ 350,320 38,509 －	$	646,196 350,320 38,509 7,164
	$	653,360	$	－	$	388,829	$	1,042,189
Financial assets at fair value through other comprehensive income Domestic listed company stocks Domestic non-listed company stocks Foreign non-listed company stocks	$	248,605 －－	$	－－－	$	－ 5,052 199,245	$	248,605 5,052 199,245
	$	248,605	$	－	$	204,297	$	452,902

There have been no transfers between Level 1 and Level 2 of the Group's financial assets and liabilities measured at fair value on a repetitive basis in 2021 and 2020.

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Adjustment of financial instruments measured at Level 3 fair value.

The Group's financial assets measured at Level 3 fair value are equity instrument investments that measured at fair value through profit and loss or at fair value through other comprehensive profit or loss.

Financial assets at fair value through profit or loss were adjusted as follows:

2021
Beginning balance
$ 388,829
3,645
Capital reduction and refund
of shares
－
Finance measured at fair value
through profit or loss
Unrealized gains (losses) from
assets
55,676
Foreign currency exchange
difference
( 241)
Ending balance
$ 447,909
Investments in equity instruments measured at fair
comprehensive income were adjusted as follows:
2021
Beginning balance
$ 204,297
Obtained in the period
561
Capital reduction and refund
of shares
( 43,720 )
Unrealized gains (losses) of
financial assets
measured at fair value through
other comprehensive income
4,935
Ending balance
$ 166,073

2020
$ 414,338
－
( 31,702 )
7,525
( 1,332)
$ 388,829
value through other
2020
$ 218,695
－
( 36,433 )
22,035
$ 204,297

(c)Evaluation techniques and assumptions used to measure fair value

The Group determines the fair value of its financial assets and liabilities through the following methods and assumptions:

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The fair value of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined with reference to quoted market prices (including listed corporate bonds, agency bonds, stocks of listed companies, and government bonds).

The fair value of unlisted companies without an active market are estimated using the market method, which is based on parameters such as recent fundraising activities, valuation of similar companies, technological development of the company, market conditions, and other economic indicators.

C. Financial risk management purpose and policy

The objective of the Group’s financial risk management is to manage operation-related foreign currency risk, interest rate risk, credit risk, and liquidity risk. To reduce relevant financial risks, the Group is committed to identifying, evaluating, and avoiding market uncertainties in order to reduce potential negative impacts of market changes on the Company’s financial performance.

The Group’s significant financial activities are reviewed by the Board of Directors in accordance with relevant regulations and internal control systems. In executing financial plans, the Group must strictly follow financial operating procedures regarding overall financial risk management and division of power and responsibilities.

(a)Market risk

Market risk to the Group is the risk that the fair value or cash flows of financial instruments will fluctuate because of changes in market prices. Market risk comprise of mainly currency risk, interest rate risk, and other price risks.

i. Currency risk

The Group’s operation and net investments by foreign operating institutions are mainly conducted in foreign currencies, which expose the Group to currency risk. The Company's foreign currency receivables are the same as some of the foreign currency payables, with certain positions resulting in a

～ 93 ～

natural hedging effect. Also, the net investment of foreign operating institutions is a strategic investment, so the Group has not hedged against it.

Currency risk sensitivity analysis calculated based on information on the Group’s foreign currency financial assets and liabilities with significant impact:

impact:
(Foreign currency: functional currency) Foreign currency Financial Assets Monetary items USD: NTD $ 4,697 USD: VND 246 Financial Liabilities ：None. (Foreign currency: functional currency) Foreign currency Financial Assets Monetary items USD: NTD $ 1,334 USD: VND 410 Financial Liabilities HKD: USD ：None	Unit: $1000 in each foreign currency 2021.12.31
	Exchange rate Degree of variation Effects on profit and loss (NTD) 27.67 1% $ 1,300 22,800 1% 68 Unit: $1000 in each foreign currency 2020.12.31		Effects on profit and loss (NTD)
	Exchange rate 28.48 23,082.5	Degree of variation 1% 1%	Effects on profit and loss (NTD)
			$ 380 117

～ 94 ～

ii. Interest rate risks

Interest rate risk is the risk that a change in market interest rates will reduce the fair value of financial instruments. The Group’s exposure to interest rate risk is primarily due to fixed-income investments and fixed-rate borrowings.

The sensitivity analysis of interest rate risk is based on changes in the fair value of fixed-income investments at the balance sheet date. If interest rates increase/decrease by 0.25% with all other variables remaining constant, the Group’s net profit in 2021 and 2020 will be reduced by NT$5,020 thousand and NT$4,372 thousand, respectively.

iii. Other price risks

The price risk of the Group’s equity instruments comes mainly from financial assets measured at fair value through profit and loss and financial assets measured at fair value through other comprehensive gains and losses. All major equity instrument investments must be approved by the Company's Board of Directors.

The sensitivity analysis of equity instrument price risk is based on changes in fair value at the balance sheet date. If the price of equity instruments increased/decreased by 5%, the Group’s net profit in 2021 and 2020 will be increased/reduced by NT$31,989 thousand and NT$33,245 thousand, respectively, with other comprehensive profit and loss increasing/decreasing by NT$9,664 thousand and NT$12,417 thousand, respectively.

(b)Credit risk

Credit risk refers to the risk of a counterparty breaching contractual obligations, causing financial losses to the Group. The Group’s exposure to credit risk comes mainly from receivables from operating activities, bank deposits from investment activities, fixed-income investments, and other financial instruments. Operation-related credit risk and financial credit risk are managed separately.

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i. Operation-related credit risk

The Group has established operation-related credit risk management procedures to maintain the quality of accounts receivable.

Risk assessments of individual customers takes into account multiple factors that can affect a customer’s ability to make payments, including the customer’s financial situation, credit rating by credit rating agencies, credit rating by the Group, transaction history, and current economic situation. The Group will also use certain credit enhancement tools like prepayments and credit insurance to reduce the credit risk of specific customers.

Concentrations of credit risk are limited given that the Group's customer base is large and unrelated. As of December 31, 2021 and 2020, the ratio of the total accounts receivable from the Group’s top ten customers to the total accounts receivable was 36% and 49%, respectively.

ii. Financial credit risk

The credit risk of bank deposits and other financial instruments are assessed and monitored by the Group’s finance department. Because the Group’s transaction partners and counterparties are all banks with high credit quality and financial institutions of investment grade, there is no significant default risk, and therefore no significant credit risk.

(c)Liquidity risk management

The Group’s purpose for managing liquidity risk is to maintain cash and cash equivalents, highly liquid securities, and sufficient bank financing limits needed for operations to ensure that the Group has sufficient financial flexibility.

The following table summarizes the analysis of financial liabilities within the agreed repayment period of the Group based on maturity date and undiscounted maturity amount:

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Non-Derivative Financial		2021.12.31
	2 to 3 years $ `－` `－` `－` `－` 106,560 5,621 $ 112,181	4 to 5 years $ `－` `－` `－` `－` 98,744 5,786 $ 104,530	Over 5 years $ `－` `－` `－` `－` 374,816 8,745 $ 383,561	Total
				$ 2,633,443 29,958 436,945 186,911 635,054 22,902
				$ 3,945,213
Non-Derivative Financial		2020.12.31
	2 to 3 years $ `－` `－` `－` `－` 99,556 5,540 $ 105,096	4 to 5 years $ `－` `－` `－` `－` 92,941 5,703 $ 98,644	Over 5 years $ `－` `－` `－` `－` 422,026 61,192 $ 483,218	Total
				$ 1,959,907 29,992 324,155 129,045 663,268 75,146
				$ 3,181,513

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13. SUPPLEMENTARY DISCLOSURES:

When preparing the consolidated financial report, all major transactions between the parent and subsidiary companies and their balances have been eliminated.

(1)Information on major transactions and (2) invested businesses:
A. Loans to others：Please refer to Table 1.
B. Provision of endorsements/guarantees to others：Please refer to Table 2.
C. Holding of marketable securities at the end of the period (excluding investment in subsidiaries, associates and joint venture equity)：Please refer to Table 3.
D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of paid-in capital or more: None.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more：Please refer to Table 4.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
G. Purchase or sale of goods from or to related parties reaching at least NT$100 million or 20% of paid-in capital: None.
H. Receivables from related parties reaching at least NT$100 million or 20% of paid-in capital: None.
I. Entities engaged in derivative trading: None.
J. Business relations and important transactions between parent and subsidiary companies：Please refer to Table 5.
K. Names, locations, and other information of investee companies (excluding the investees in Mainland China)：Please refer to Table 6.
(2)Information on investments in Mainland China
A. The name, primary operations, paid-in capital, investment methods, capital remittances, shareholding ration, investment gains and losses, ending investment book value, remitted investment gains, and invest limit in Mainland China of investees in Mainland China：Please refer to Table 7.

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B. Direct or indirect significant transactions with investees in Mainland China via a third region and the prices, payment terms, and unrealized gains and losses of such transactions：Please refer to Table 7.
(3) Information on major shareholders (the names and number/percentage of shares held of shareholders that hold over 5% shares)：Please refer to Table 8.

14. DEPARTMENTAL INFORMATION

(1) Operating Segments

Information provided to chief operating decision makers for allocating resources and evaluating departmental performance, focusing on each type of product or service delivered or provided. In accordance with IFRS 8 - "Operating Segments", department in the Group that should be reported are described as follows:

A. Steel department: This department is primarily for the production and sales of black steel pipes, zinc-coated steel pipes, and stainless-steel coils for Pipes.
B. Real estate investment department: This department is primarily engaged in the procurement of construction land to build public housing in independent or joint construction projects, as well as the development, leasing, and purchase and sale of properties.
C. Investment department: This department is primarily for business regarding holding companies and operating investments.
D. Mineral trade department: This department is primarily engaged in mineral resources trading.
E. Hotel services department: This department primarily handles hotel operations.
(2) Department revenue and operating results

Information on the revenue and operating results of the Group’s departments are as follows:

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				2021	2021
Revenue		Steel Department	Real Estate Investment Department $ －－ $ －	Direct Investment Department $ 2,720 － $ 2,720	Hotel Services Department $ 40,698 － $ 40,698
Revenue from external customers Inter-department revenue	$	6,515,200 34,188
	$	6,549,388
Operatingincome	$	624,609	$ ( 13,112 ) $ ( 29,106 )$ ( 59,874 ) $ 124 $ 522,641
Recognize shares in the net benefits of affiliated companies and joint ventures using the equitymethod	$	75,697	$ － $ －$ － $ 48,908 $ 124,605
Total tax expenses	$	127,569	$ － $ 102 $ － $ － $ 127,671

Revenue				2020
	Steel Department	Real Estate Investment Department $ －－ $ － $ 1,988 $ － $ －	Direct Investment Department	Hotel Services Department $ 39,651 － $ 39,651 $ ( 58,504) $ － $ －	Other departments $ －－ $ － $ ( 1,399) $ － $ －	Inter-department write-offs $ －－ $ － $ 113 $ 35,162 $ －	Total
Revenue from external customers Inter-department revenue Operating income Recognize shares in the net benefits of affiliated companies and joint ventures using the equity method Total tax expenses	$ 5,030,155 －		$ 3,961 －				$ 5,073,767 －
	$ 5,030,155		$ 3,961				$ 5,073,767
	$ 323,469		$ 1,793				$ 267,460
	$ 45,980		$ －				$ 81,142
	$ 53,469		$ 318				$ 53,787

(3) Revenue from primary goods and services

～ 100 ～

Analysis of the Group’s revenue from primary goods and services are as follows:

		2021		2020
Steel	$	6,515,200	$	5,030,155
Hotel		40,698		39,651
Investments		2,720		3,961
	$	6,558,618	$	5,073,767

(4) Regional information

gional information
Revenue from external customers		2021	2020
Taiwan	$	6,027,298 $	4,771,680
Vietnam		314,340	191,517
Thailand		172,489	73,539
Others		44,491	37,031
	$	6,558,618 $	5,073,767
Non-current assets		2021.12.31	2020.12.31
Taiwan	$	3,176,069 $	2,993,424
Vietnam		59,185	69,025
	$	3,235,254 $	3,062,449

(5) Information on primary customers

The following is a list of primary customers whose annual amount of sales account for more than 10% of the Group’s net operating revenue on the balance sheet in 2021 and 2020:

20:
Name of customer CompanyZ	2021 Amount of sales Percentage of net sales % $ 894,170 13.63	2020
	Amount of sales $ 894,170	Amount of sales $ 656,393	Percentage of net sales %
			12.94

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Mayer Steel Pipe Corporation and subsidiaries Loans to others January 1 to December 31, 2021

Table1

In Thousands of New Taiwan Dollars

No. (Note 1)	Lender	Borrower	General ledger account	Related party	Maximum outstanding balance during the current period	Ending balance (Note 2)	Actual amount drawn down	Interest rate range	Nature of loan	Transaction amount	Reason for short-term financing	Allowance for loss provision	Collateral	Collateral	Limit on loans granted to a single party (Note 4)	Limit on total lender’s loans granted (Note 5)
													Name	Value
0	Mayer Steel Pipe Corporation	Mayer Corporation Development International Limited	Other receivables	Yes	$ 17,383	$ 16,859	$ 16,859	1.22 % (Note 6)	Note 3	－	In response to the short-term financing needs of subsidiaries	$ 16,859	－	－	$ 362,081	$ 1,448,325
0	Mayer Steel Pipe Corporation	Ding Bang Development Co., Ltd.	Other receivables	No	69,000	53,000	49,300	18%	Note 3	－	In response to short-term financingneeds	－	－	－	362,081	1,448,325

Note 1: How to fill out the number column:

Issuer is 0.
Investees are numbered in order starting from ‘1’.

Note 2: Funds available for loans to others approved by the Board of Directors.

Note 3: Those in need of short-term financing.

Note 4: The Group ’ s financing limit for a single enterprise must not exceed 10% of its net worth according to most recent financial report.

Note 5: The Group ’ s financing limit must not exceed 40% of its net worth according to most recent financial report.

Note 6: Mayer Corporation Development International Limited entered liquidation on March 27, 2017, so imputed interests have been suspended since April 2017.

～ 102 ～

Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021

Table 2

Table 2	Table 2	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation and subsidiaries Provision of endorsements/guarantees to others January 1 to December 31, 2021
		In Thousands of New Taiwan Dollars
No. (Note 1)	Provider of endorsements / guarantees Name of company	Entity for which the endorsement/guarantee is made		Limit on endorsements / guarantees to a single enterprise (Note 3)	Highest outstanding balance of endorsements / guarantees in the current period	Ending balance of endorsements / guarantees	Actual amount drawn down	Endorsed / guaranteed amount with property as collateral	Cumulative endorsed / guaranteed amount as a percentage of the net value in the most recent financial statement	Maximum endorsed/guar anteed amount (Note 4)	Parent company to subsidiary	Subsidiary to parent company	To Mainland China
		Name of company	Relation to the Company (Note 2)
0	Mayer Steel Pipe Corporation	Ding Bang Development Co., Ltd.	5	$ 3,620,812	$ 250,000	$ 250,000	$ 157,699	$－	6.90	$ 3,620,812	No	No	No

Note 1: How to fill out the number column:

Issuer is 0.
Investees are numbered in order starting from ‘1’.

Note 2: Relationships between endorser/guarantor and the entity for which the endorsement/guarantee is made are classified into the following seven categories:

Companies with business interactions with the Company.
Companies in which the Company directly or indirectly holds more than 50% of voting shares.
Companies that in directly or indirectly hold more than 50% of the Company’s voting shares.
Companies in which the Company directly or indirectly holds more than 90% of voting shares.
Companies providing mutual endorsements/guarantees between industry peers or joint applicants for purposes of undertaking a construction project.
Companies where all capital-contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.
Companies in the same industry provide performance guarantees of sales contracts for pre-sale homes according to the Consumer Protection Act for one another.

Note 3: The Company’s endorsement/guarantee limit for a single firm shall not exceed the Company's net worth according to the most recent financial report.

Note 4: The Company’s endorsement/guarantee limit must not exceed 100% of its net worth according to the most recent financial report.

～ 103 ～

Mayer Steel Pipe Corporation and subsidiaries

Holding of marketable securities at the end of the period (excluding investment in subsidiaries, associates and joint venture equity) December 31, 2021

Table 3

In Thousands of New Taiwan Dollars

Holding company	Type and name of securities	Relation with the Company	General ledger account	End ofperiod	End ofperiod	End ofperiod	Fair Value	Note
				Shares	Book value	Percentage (%)
Mayer Steel Pipe Corporation Mei Kong Development Ltd. Miramar Development Limited	Xpec Entertainment Inc. Miramar Hospitality Co., Ltd. IBF Financial Holdings Co., Ltd. ADATA Technology Co., Ltd. Grand Pacific Petrochemical Co., Ltd. Taishin Senior Secured High Yield Bond Fund Manulife Global Preferred Income Fund Fubon 3-Year Maturity Asia USD Bond Fund KGI ESG Sustainable Emerging Market Bond Fund TCB US Short Duration High Yield Bond Fund Neuberger Berman Disruptive Innovation Equity Securities Investment Trust Fund Sirtec International Co., Ltd. Tze Shin International Co., Ltd. Taiwan Stock Exchange Corporation Steel United International Investment Development Co., Ltd. Chung Mao Trading Corporation Durban Development Co., Ltd. Miramar Resort Co., Ltd. Taiwan Navigator Asset Investment Limited Super Nova Optoelecronics Corporation Genesis Capital Holdings Limited Jia Ruei Investment Development Co., Ltd. CSGT (SHENZHEN) Co., Ltd. Jia Ruei Investment Development Co., Ltd. Singleton Pharma Logistics Co. Ltd. Oasis Eden Properties Limited	Chairman is the same person Chairman is the same person Chairman is the same person	Current financial assets at fair value through profit or loss 〞〞〞〞〞〞〞〞〞〞 Current financial assets at fair value through other comprehensive income 〞 Non-current financial assets at fair value through profit or loss 〞〞〞〞〞〞〞 Non-current financial assets at fair value through other comprehensive income 〞 Non-current financial assets at fair value through other comprehensive income 〞 Current financial assets at fair value throughprofit or loss	70,225 725,000 37,000,000 200,000 600,000 97,813 93,633 200,000 100,000 100,004 70,000 2,520,000 6,000,000 466,355 1,250,000 12,550 1,933,104 2,389,500 18,000,000 4,888,672 3,151 2,584,000 20,000 1,949,225 1,276,600 1,750	$－ 6,489 593,850 18,460 17,220 998 1,009 1,781 982 999 699 71,820 121,200 127,104 25,594 530 8,296 123 286,262 －－ 90,970 829 68,639 5,635 －	0.04 1.95 1.23 0.08 0.07 －－－－－－ 2.45 3.49 0.06 2.55 2.50 1.27 9.00 14.06 9.78 4.51 6.07 2.50 4.58 16.08 13.46	$－ 6,489 593,850 18,460 17,220 998 1,009 1,781 982 999 699 71,820 121,200 127,104 25,594 530 8,296 123 286,262 －－ 90,970 829 68,639 5,635 －	35,926 thousand shares pledged 1,400 thousand shares pledged 5,200 thousand shares pledged liquidation

Note: For information about investments in subsidiaries and affiliated companies, please refer to Table 6

～ 104 ～

Mayer Steel Pipe Corporation and subsidiaries Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more January 1 to December 31, 2021

Table 4	Table 4	Table 4	Table 4	Table 4	Table 4	Table 4	In Thousands of New Taiwan Dollars Data transferred before transaction with relatedparties Reference for price determination Purpose of acquisition and usage Other matters of agreement Owner Relation to the Company Date of transfer Amo unt NT$1,935,098 thousand and NT$1,862,540 thousand according to professional valuation companies. Purchased to build national housing	In Thousands of New Taiwan Dollars Data transferred before transaction with relatedparties Reference for price determination Purpose of acquisition and usage Other matters of agreement Owner Relation to the Company Date of transfer Amo unt NT$1,935,098 thousand and NT$1,862,540 thousand according to professional valuation companies. Purchased to build national housing	In Thousands of New Taiwan Dollars Data transferred before transaction with relatedparties Reference for price determination Purpose of acquisition and usage Other matters of agreement Owner Relation to the Company Date of transfer Amo unt NT$1,935,098 thousand and NT$1,862,540 thousand according to professional valuation companies. Purchased to build national housing	In Thousands of New Taiwan Dollars Data transferred before transaction with relatedparties Reference for price determination Purpose of acquisition and usage Other matters of agreement Owner Relation to the Company Date of transfer Amo unt NT$1,935,098 thousand and NT$1,862,540 thousand according to professional valuation companies. Purchased to build national housing	In Thousands of New Taiwan Dollars Data transferred before transaction with relatedparties Reference for price determination Purpose of acquisition and usage Other matters of agreement Owner Relation to the Company Date of transfer Amo unt NT$1,935,098 thousand and NT$1,862,540 thousand according to professional valuation companies. Purchased to build national housing	In Thousands of New Taiwan Dollars Data transferred before transaction with relatedparties Reference for price determination Purpose of acquisition and usage Other matters of agreement Owner Relation to the Company Date of transfer Amo unt NT$1,935,098 thousand and NT$1,862,540 thousand according to professional valuation companies. Purchased to build national housing	In Thousands of New Taiwan Dollars Data transferred before transaction with relatedparties Reference for price determination Purpose of acquisition and usage Other matters of agreement Owner Relation to the Company Date of transfer Amo unt NT$1,935,098 thousand and NT$1,862,540 thousand according to professional valuation companies. Purchased to build national housing
Acquired company	Name of property	Transaction date of date of occurrence	Transaction amount	Payment delivery (Note)	Counterparty	Relation to the Company	Data transferred before transaction with relatedparties				Reference for price determination	Purpose of acquisition and usage	Other matters of agreement
							Owner	Relation to the Company	Date of transfer	Amo unt
Mayer Steel Pipe Corporation	110 plots of land on No. 800, Guoguang Section, Banqiao District, New Taipei City	2008.3.7	$ 1,822,160	$ 89,110	Chien Ching-Hui, Chien Ching-Huang Chien Ching-Ming, Chien Ching-Hsing	None					NT$1,935,098 thousand and NT$1,862,540 thousand according to professional valuation companies.	Purchased to build national housing

Note: Payment delivery status as of December 31, 2021.

～ 105 ～

Mayer Steel Pipe Corporation and subsidiaries

Business relations and important transactions between parent and subsidiary companies January 1 to December 31, 2021

Table 5

Table 5
					In Thousands of New Taiwan Dollars Transaction Amount Transacti on terms Percentage of consolidated total operating revenues or total assets (Note 3) $ 34,188 Note 4 0.52 13,567 Note 4 0.17 114 Note 5 `－` 10 Note 5 `－` 10 Note 5 `－`
No. (Note 1)	Company name	Counterparty	Relationship with company (Note 2)		Transaction
				General ledger account	Amount	Transacti on terms	Percentage of consolidated total operating revenues or total assets (Note 3)
0 0 0 0 0	Mayer Steel Pipe Corporation Mayer Steel Pipe Corporation Mayer Steel Pipe Corporation Mayer Steel Pipe Corporation Mayer Steel Pipe Corporation	Vietnam Mayer Co., Ltd. Vietnam Mayer Co., Ltd. Mei Kong Development Ltd. Mei Yi Architecture Co.,Ltd. Mei Yi Architecture Co.,Ltd.	1 1 1 1 1	sales revenue Accounts receivable Leasing revenue Leasing revenue Other receivables	$ 34,188 13,567 114 10 10	Note 4 Note 4 Note 5 Note 5 Note 5	0.52 0.17 `－` `－` `－`

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:
Parent company is ‘0’.
The subsidiaries are numbered in order starting from ‘1’.
Note 2: Transactions can be divided in to the following three categories (please indicate the category):
Parent company to subsidiary.
Subsidiary to subsidiary.
Subsidiary to parent company.
Note 3: The percentage of transaction amount to the consolidated total revenue or total assets are calculated as the ending balance to the consolidated total assets for asset liability accounts. For profit and loss accounts, it is calculated as the cumulated amount during the period to the consolidated total revenue.
Note 4: The company sold raw materials to Vietnam Mayer Co., Ltd. according to the acceptance of orders, and there was no significant difference between the credit period and the general manufacturers.
Note 5: Revenue from sub-leasing offices and expenses for advances.

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Mayer Steel Pipe Corporation and subsidiaries

Names, locations, and other information of investee companies - excluding investees in Mainland China January 1 to December 31, 2021

Table 6-1

In Thousands of New Taiwan Dollars

Name of investor	Name of investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held at the end of theperiod	Shares held at the end of theperiod	Shares held at the end of theperiod	Net profit (loss) of investee for the currentperiod	Investment (loss) profit recognized bythe company	Note
				Balance sheet date	End of last year	Number of shares (1000 shares)	Percentage	Book value
Mayer Steel Pipe Corporation Glory World Development Limited	Mayer Corporation Development International Limited Vietnam Mayer Co., Ltd. Glory World Development Limited Mei Kong Development Ltd. Miramar Development Limited Mayer Inn Corporation Mei Yi Architecture Co.,Ltd. Grand Tech Precision Manufacturing (Thailand) Co., Ltd. Diamond Precision Steel Corp. Luen Jin Enterprise Co., Ltd. Sinowise Development Limited Elternal Galaxy Limited	British Virgin Islands Vietnam British Virgin Islands Taiwan Hong Kong Taiwan Taiwan Thailand Cayman Islands Taiwan British Virgin Islands British Virgin Islands	Holding, various investment business Processing and sales of steel pipes, steel plates and other metal products Various investment business Various investment and property development business Various investment business General hospitality business and international trade Housing and Building Development and Rental Processing and sales of steel pipes, steel plates and other metal products Various investment business Manufacture of Other Metals Trading of on-ferrous metals and other mineral resources Trading of on-ferrous metals and other mineral resources	$ 390,881 212,601 259,121 525,149 498,923 344,800 18,000 179,688 106,248 156,600 236,731 291,617	$ 390,881 212,601 259,121 535,149 498,923 314,800 － 179,688 106,248 － 236,731 291,617	5,550 － 8,882 520,000 17,100 26,000 1,800 17,350 3,528 6,525 7,550 9,350	100.00 100.00 50.21 100.00 90.00 100.00 90.00 45.01 42.50 30.00 100.00 100.00	$－ (Note 1) 217,722 － (Note 2) 554,701 13,361 168,999 17,929 217,701 212,140 158,360 － (Note 3) － (Note 4)	$－ 63,649 ( 1,509) ( 162) ( 43,980) ( 72,742) ( 79) 104,633 180,019 40,401 － ( 1,507)	$－ 63,649 ( 757) ( 162) ( 39,582) ( 72,742) ( 71) 47,095 76,507 1,760 Note6 Note6	Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Investees evaluated using the equity method Investees evaluated using the equity method Investees evaluated using the equity method Indirect investments in sub-subsidiaries Indirect investments in sub-subsidiaries

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Mayer Steel Pipe Corporation and subsidiaries

Names, locations, and other information of investee companies - excluding investees in Mainland China January 1 to December 31, 2021

Table 6-2

Name of investor	Name of investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held at the end of theperiod	Shares held at the end of theperiod	Shares held at the end of theperiod	Net profit (loss) of investee for the currentperiod	Investment (loss) profit recognized bythe company	Note
				Balance sheet date	End of last year	Number of shares (1000 shares)	Percentage	Book value
Glory World Development Limited	Grace Capital Group Limited	Samoa	Trading of on-ferrous metals and other mineral resources	2,099	2,099	70	100.00	－ (Note 5)	( 8)	Note6	Indirect investments in sub-subsidiaries

Note 1: Mayer Corporation Development International Limited (BVI) entered liquidation on March 27, 2017 and was therefore not included as an entity in the consolidated report. As a result, the balance of NT$(52,998) thousand from the net book equity value of NT$ (70,012) thousand minus other receivables transferred to allowance for loss of NT$17,014 thousand was transferred under “other non-current liabilities, others”.

Note 2: Glory World Development Limited was struck off by the local government on November 3, 2020 and was therefore not included as an entity in the preparation of this report. As a result, the net book equity value was transferred under other non-current liabilities, others NT$8,361 thousand.

Note 3: Transferred to other non-current liabilities, others NT$712 thousand.

Note 4: Transferred to other non-current liabilities, others NT$14,411 thousand.

Note 5: Transferred to other non-current liabilities, others NT$183 thousand.

Note 6: The profit and loss of the investee company has been included in its investment company and will not be expressed separately.

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Mayer Steel Pipe Corporation and subsidiaries Information of investment in mainland China January 1 to December 31, 2021

Table 7

In Thousands of New Taiwan Dollars

Investee	Main businesses	Total paid-in capital	Total paid-in capital	Method of investment (1)	Accumulated outflow of investment from Taiwan as of beginning balance	I	nvestment flows	nvestment flows	Accumulated outflow of investment from Taiwan as of ending balance	Net Income (Losses) of the Investee Company	Percentage of ownership	Investment profit (loss) of this period recognized (2)	Book value	Accumulated inward remittance of Earnings as of ending balance	Note
						O	utflow	In flow
CSGT (SHENZHEN) Co., Ltd.	Buy and sell, and act as an agency for steel products	$ 22,136 (US 800 thousand)		Through investment to set up company then invest in China.	$－	$ (US	553 20 thousand)	－	$ 553 (US 20 thousand)	$－	2.50%	$－	$ 830	$－	Financial assets at fair value through other comprehensive income non-current
							Upper limit on investment authorized by investment commission,MOEA(3) 2,172,487
Accumulated investmen December 31,2	t in China as of 021(4)		Investment amounts authorized by investme commission,MOEA(4)			nt	Upper limit on investment authorized by investment commission,MOEA(3)
553 (US$20 thousand)			165,494(US$ 5,981thousand) (5)				2,172,487

(1) Methods of investment:

(a) Remit through third area to invest in China.
(b) Through the company set up in third area and then reinvest in China.
(c) Other method.
(2)Investment profit and loss were recognized based on the audited financial statements and shareholding ratio.
(3)Calculated based on 60% of net equity value of the Corporation.
(4)Converted at the exchange rate on December 31, 2021.
(5)The investment income and loss of ownership from the sale and repatriation of the previous year have not been deducted from the approved investment amount without applying for a deduction of the mainland investment amount

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Mayer Steel Pipe Corporation and subsidiaries

Information on major shareholders

December 31, 2021

Table 8

Table 8
Name of major shareholders	Shareholding
	Shares held (thousand shares)	Percentage (%)
Yuan Chuan Steel Corporation Tze Shin International Co., Ltd. Miramar Hotel Taipei Co., Ltd. Sian Da Investment Co., Ltd.	36,962 17,000 15,562 15,000	16.61 7.63 6.99 6.74

Note 1: Taiwan Depository & Clearing Corporation calculates the information of the shareholders holding 5% or more of the Company’s non-physical common shares and special shares which have been registered in dematerialized form (including treasury shares) based on the last business day of every quarter. The stock recorded in the Company's financial statements may differs from the shares which have been registered in dematerialized form because of different basis of preparation.
Note 2: If the shareholders deliver shareholdings to the trust, the above information shows the trustor's separate account opened by the trustee. As to insiders' equity declaration of shareholdings over 10% under securities trading laws, the shareholders' shareholdings include their own shareholdings and shares delivered to the trust with the right to decide how to use the trust property. For information related to insiders' equity declaration, please refer to the Market Observation Post System.

～ 110 ～

AI assistant

MAYER PIPE — Annual Report 2021

51948_rns_2021-11-05_18891408-a2b4-496c-9407-acb8b6133c04.pdf

Mayer Steel Pipe Corporation and Subsidiaries

REPRESENTATION LETTER

Mayer Steel Pipe Corporation

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis of opinion

Key Audit Matters

Valuation of inventory

Valuation of financial assets

Other Matters

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

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

Notice to Readers

Mayer Steel Pipe Corporation and Subsidiaries

CONSOLIDATED BALANCE SHEETS December 31, 2021 and 2020

Mayer Steel Pipe Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2021 and 2020

Mayer Steel Pipe Corporation and Subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Mayer Steel Pipe Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2021 and 2020

Mayer Steel Pipe Corporation and subsidiaries

1. GENERAL INFORMATION

2. THE AUTHORIZATION OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND

INTERPRETATIONS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Statement of Compliance

(2) Basis of Preparation

B. Subsidiaries included in the consolidated financial statements

(5) Classification of Current and Non-Current Assets and Liabilities

(6) Cash and Cash Equivalents

(7) Financial Instruments

Financial Assets

(b) Financial assets at amortized cost

B. Impairment of financial assets

C. Derecognition of financial assets

Equity Instruments

Financial Liabilities

A. Subsequent assessments

Financial liabilities at fair value through profit or loss

B. Derecognition of financial liabilities

(8) Inventories – Manufacturing Business

(9) Inventories (for Construction Business)

(10) Joint Agreement

Joint Operations

(11) Investments Accounted for Using Equity Method - Associates.

(12) Property, Plants and Equipment

(13) Leases

A. The Group as leasee

(a) Right-of-use assets

(b) Lease liabilities

B. The Group as the lessor

(14) Investment Property

(15) Intangible Assets

Goodwill

Other Intangible Assets

(16) Impairment of Non-Financial Assets

(17) Provisions

(18) Employee Benefits

A. Short-term employee benefits

B. Pensions

(a) Defined contribution plans

(b)Defined benefit plans

C. Employees’ remuneration and directors' remuneration

D. Termination benefits

(19) Revenue Recognition

A. Merchandise sales

B. Sale of property and land

C. Financial components

(20) Borrowing Costs

(21) Income Tax

A. Current income tax

B. Deferred income tax

C. Current and deferred income tax

(22) Government Grants

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS ON UNERTAINTY

MAYER PIPE Annual Report 2021