MAYER PIPE — Audit Report / Information 2021

Nov 5, 2021

Mayer Steel Pipe Corporation

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

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Mayer Steel Pipe Corporation

Opinion

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

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the accompanying parent company only financial position of the Company as of December 31, 2021 and 2020, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

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

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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 parent company only financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the parent company only 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 Company’s parent company only 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 the Company is NT$1,724,201 thousand (after deducting allowance for inventory valuation, obsolescence losses, and idled losses of NT$4,305 thousand). Please refer to Notes 5 and 6 (7) for the financial statements. The inventory valuation of the Company are affected by international steel price and market fluctuations, possibly resulting in slow-moving inventory and subsequent obsolescence losses. The Company’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 financial statements, we have listed inventory valuation as a key audit matters. Our primary auditing procedure for the aforementioned item is as follows:

1. Understand and evaluate the design and effectiveness of the Company’s internal inventory control system, including the accuracy of reported age of inventory.

2. Evaluate the age of inventory at the end of the year and take samples to verify the accuracy of reported age of inventory.

3. Verify that basic assumptions made in the calculation of net realizable values are sound.

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1. 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 Company’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$2,100,621 thousand. Please refer to Notes 5 and 6 (2), (3), and (11). The Company 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 parent company only 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:

1. Obtain professional appraisal report of the Company’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.

2. 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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1. 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 companies in which the Company has investments accounted for using the equity method. Those financial statements were audited by other independent accountants, whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included based solely on the reports of Investments in these associates amounted to NT$370,500 thousand and NT$189,240 thousand, representing 5% and 3% of the 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$53,900 thousand, representing 9% and 12% of total income before income tax for the years then ended, respectively. In addition, the share of other comprehensive income of these associates accounted for using equity method amounted to NT$ (3,556) thousand and NT$ (8,830) thousand, representing (4%) and (31%) of total comprehensive income for the years then ended, respectively.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

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

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

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

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only 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 the parent company only 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:

1. Identify and assess the risks of material misstatements of the parent company only 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.

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

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

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

4. Evaluate the overall presentation, structure, and content of the parent company only financial statements, including the disclosures, and whether the the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

5. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the Company 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.

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only 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.

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 financial statements are intended only to present the 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 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 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 financial statements shall prevail.

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Mayer Steel Pipe Corporation

PARENT COMPANY ONLY 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) 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) Other receivables from related parties (Note 7) 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 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： 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 Total liabilities and equity	December 31, 20	21	% 6 1 1 1 5 - - 2 - 23 3 2 11 55 6 1 21 11 1 2 - - 3 45 100 35 - 1 5 1 - 2 2 - - - 46 - 1 1 2 - 1 1 6 52 30 4 3 2 10 15 1 ) 48 100	% ＄ 172,557 3 28,516 - 53,410 - 92,752 2 424,032 7 8,384 - 840 - 68,476 1 - - 1,000,184 16 153,398 3 104,878 2 841,938 14 2,949,365 48 374,725 6 113,560 2 1,457,306 24 798,430 13 32,136 1 150,569 3 177 - 20,000 - 192,397 3 3,139,300 52 ＄ 6,088,665 100 ＄ 1,959,907 32 29,992 1 2,461 - 228,904 4 64,745 1 120 - 120,300 2 76,446 1 10,489 - 2,711 - 6,613 - 2,502,688 41 72,435 1 41,746 1 21,814 - 176,385 3 21,788 - 22,903 - 90,554 2 447,625 7 2,950,313 48 2,225,261 37 281,622 5 197,832 3 208,224 3 404,805 7 810,861 13 ( 179,392 ) ( 3 ) 3,138,352 52 ＄ 6,088,665 100 Amount December 31, 2020
	＄ 468,053 65,875 48,080 91,930 367,704 37,065 1,068 116,895 10 1,724,201 247,417 143,013 836,728 4,148,039 447,909 91,799 1,560,913 810,330 41,969 147,635 937 8,946 226,096 3,336,534 ＄ 7,484,573 ＄ 2,633,443 29,958 60,687 346,901 63,508 126 178,054 121,626 14,379 2,750 7,090 3,458,522 20,152 38,664 37,253 170,279 27,940 29,209 81,742 405,239 3,863,761 2,225,261 281,622 236,689 179,392 768,342 1,184,423 ( 70,494 ) 3,620,812 ＄ 7,484,573 Amount
		(

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

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Mayer Steel Pipe Corporation

PARENT COMPANY ONLY 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 and 7) 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 and 7) 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) Total non-operating income and expenses Profit (loss) from continuing operations before tax Income tax expense (Note 6) 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) Share of other comprehensive gain (loss) of subsidiaries and associates －Items that will not be reclassified to profit or loss (Note 6) Items that will not be reclassified to profit or loss Share of other comprehensive gain (loss) of subsidiaries and associates －Items that may be reclassified subsequently to profit or loss(Note6) 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 Basic earnings per share (Note 6)	2021	％ ％ 100 ＄ 4,811,114 100 ( 87 ) ( 4,330,519 ) ( 90 ) 13 480,595 10 - ( 1,143 ) - - 980 - 13 480,432 10 ( 1 ) ( 75,677 ) ( 2 ) ( 3 ) ( 130,987 ) ( 3 ) - 19,663 1 ( 4 ) ( 187,001 ) ( 4 ) 9 293,431 6 1 13,850 1 1 60,969 1 4 58,294 1 ( 1 ) ( 32,042 ) ( 1 ) 1 45,980 1 6 147,051 3 15 440,482 9 ( 2 ) ( 47,858 ) ( 1 ) 13 392,624 8 - ( 173 ) - 2 45,833 1 - 12,124 - 2 57,784 1 ( 1 ) ( 36,406 ) ( 1 ) - 7,281 1 ( 1 ) ( 29,125 ) - 1 28,659 1 14 ＄ 421,283 9 ＄ 1.76 2020 Amount
	＄ 6,199,234 ( 5,389,193 ) 810,041 ( 2,040 ) 1,143 809,144 ( 91,108 ) ( 180,729 ) 588 ( 271,249 ) 537,895 14,064 50,575 249,946 ( 33,663 ) 75,697 356,619 894,514 ( 111,605 ) 782,909 ( 13,445 ) 135,678 ( 245 ) 121,988 ( 31,340 ) 6,269 ( 25,071 ) 96,917 ＄ 879,826 ＄ 3.52 Amount

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

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Mayer Steel Pipe Corporation

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2021 and 2020

(In Thousands of New Taiwan Dollars)

Balance, January 1, 2020 Appropriation and distribution of retained earnings: Legal reserve Cash dividends Reversal of special reserve Net income in 2020 Other comprehensive income (loss) in 2020, net of income tax Total comprehensive income (loss) in 2020 Disposal of investments in equity instruments at fair value through other comprehensive income Balance, Decomber 31, 2020 Appropriation and distribution of retained earnings: Legal reserve Cash dividends Reversal of special reserve Net income in 2021 Other comprehensive income (loss) in 2021, net of income tax Total comprehensive income (loss) in 2021 Disposal of investments in equity instruments at fair value through other comprehensive income Balance, Decomber 31, 2021	＄ 2,225,261 - - - - - - - 2,225,261 - - - - - - - ＄ 2,225,261 Common Stock	＄ 281,622 - - - - - - - 281,622 - - - - - - - ＄ 281,622 Capital Surplus		Retai	ned Earnings	＄ 833,959 - ( 411,674 ) - 392,624 ( 173 ) 392,451 ( 3,875 ) 810,861 - ( 378,294 ) - 782,909 ( 13,445 ) 769,464 ( 17,608 ) ＄ 1,184,423 Totel		Others	＄( 208,224 ) ＄ 3,132,618 - - - ( 411,674 ) - - - 392,624 28,832 28,659 28,832 421,283 - ( 3,875 ) ( 179,392 ) 3,138,352 - - - ( 378,294 ) - - - 782,909 110,362 96,917 110,362 879,826 ( 1,464 ) ( 19,072 ) ＄( 70,494 ) ＄ 3,620,812 Total Total Equity
			＄ 156,048 41,784 - - - - - - 197,832 38,857 - - - - - - ＄ 236,689 Legal Reserve	＄ 242,551 - - ( 34,327 ) - - - - 208,224 - - ( 28,832 ) - - - - ＄ 179,392 Special Reserve	＄ 435,360 ( 41,784 ) ( 411,674 ) 34,327 392,624 ( 173 ) 392,451 ( 3,875 ) 404,805 ( 38,857 ) ( 378,294 ) 28,832 782,909 ( 13,445 ) 769,464 ( 17,608 ) ＄ 768,342 Unappropriated Earnings		＄ 4,419 - - - - ( 29,125 ) ( 29,125 ) - ( 24,706 ) - - - - ( 25,071 ) ( 25,071 ) - ＄( 49,777 ) Foreign Currency Translation Reserve	＄( 212,643 ) - - - - 57,957 57,957 - ( 154,686 ) - - - - 135,433 135,433 ( 1,464 ) ＄( 20,717 ) Unrealized Gain(Loss) on Financial Assets at Fair Value Through Other Comprehensive Income

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

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Mayer Steel Pipe Corporation

PARENT COMPANY ONLY 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 Notes receivable from related parties Accounts receivable Accounts receivable from related parties Other receivable Other receivable from related parties Inventories Prepayments Other current assets Total changes in operating assets Contract liabilities Notes payable 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

＄ 894,514 ＄ 440,482 67,723 67,077 6,347 5,949 ( 588 ) ( 19,663 ) ( 151,996 ) ( 82,801 ) 33,663 32,042 ( 14,064 ) ( 13,850 ) ( 37,990 ) ( 48,763 ) ( 75,697 ) ( 45,980 ) 387 3,674 ( 109,167 ) ( 23,780 ) ( 281,382 ) ( 126,095 ) 198,852 56,734 821 ( 29,716 ) - 86 55,740 ( 97,884 ) ( 28,681 ) ( 6,032 ) ( 39,631 ) ( 33,756 ) ( 10 ) 30,000 ( 818,036 ) ( 306,852 ) ( 38,134 ) ( 2,046 ) ( 87,351 ) ( 21,815 ) ( 756,430 ) ( 411,281 ) 58,226 ( 2,115 ) 117,997 ( 75,285 ) ( 1,237 ) 32,835 6 120 56,053 ( 4,661 ) - ( 126 ) ( 3,082 ) 41,430 477 94 ( 7,138 ) ( 284 ) 221,302 ( 7,992 ) ( 535,128 ) ( 419,273 ) ( 816,510 ) ( 545,368 ) 78,004 ( 104,886 ) 5,276 7,932 172,672 222,003 ( 31,055 ) ( 30,838 ) ( 37,087 ) ( 11,636 ) 187,810 82,575 2021 2020

(Cotinued)

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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 Proceeds from redemption of financial assets at amortized cost Acquisition of investments accounted for using equity method Proceeds from capital reduction 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 Decrease 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 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 ) ( 16,789 ) 174,617 2,707 24,977 20,814 - 10,000 ( 204,600 ) ( 110,000 ) 10,000 - ( 61,671 ) ( 18,750 ) - 3,677 ( 2,678 ) - - 3,486 ( 889 ) ( 185 ) 513 685 ( 5,026 ) ( 4,848 ) ( 32,954 ) ( 11,007 ) ( 609 ) 171 ( 111,393 ) ( 120,039 ) 673,536 456,753 - 20 ( 34 ) - ( 52,244 ) ( 2,667 ) - 21,580 ( 7,780 ) - ( 16,105 ) ( 15,214 ) ( 378,294 ) ( 411,674 ) 219,079 48,798 - - 295,496 11,334 172,557 161,223 ＄ 468,053 ＄ 172,557 2021 2020

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

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Mayer Steel Pipe Corporation

NOTES TO PARENT COMPANY ONLY 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.

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 parent company only 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

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• (1) Effect of the adoption of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC 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	Effective Date Announced byIASB
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) January 1, 2022

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Effective Date New, Revised or Amended Standards and Interpretations Announced by IASB Framework (Note 4) Annual Improvements to January 1, 2022 IFRS Standards 2018–2020 (Note 5)

• 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

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Effective Date Announced by IASB

New, Revised or Amended Standards and Interpretations

,	p	Announced byI
	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
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

The accompanying parent company only financial report have been prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuer.

(2) Basis of Preparation

• A. The accompanying parent company only financial statements have been prepared on a historical cost basis except for financial instruments measured at fair value and

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

• (3) Foreign Currency Translation

• A. The parent company only financial statements are presented in New Taiwan Dollars, which is the Company’s functional and presentaion currency.

• B. In preparing the parent company only financial statements, 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.

• C. In preparation of the parent company only 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

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recognized in other comprehensive income and accumulated in equity attributed to the owners.(and appropriately allocated to non-controlling interests).

• (4) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets;

  • (a)Assets arising from operating activities that are expected to be realized, 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 realized within 12 months after 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 settle liabilities more than 12 months after the balance sheet date.

Assets that meet none of the above criteria are classified by the Company as noncurrent assets.

• B. Liabilities that meet one of the following criteria are classified as current liabilities.

• (a)Liabilities that are expected to be settled within the normal operating cycle;

• (b)Liabilities held mainly for trading purposes;

• (c)Liabilities that are to be settled within 12 months after the balance sheet date;

• (d)Liabilities for which the repayment date cannot be extended unconditionally

to more than 12 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.

Liabilities that meet none of the above criteria are classified by the Company as non-current liabilities.

• (5) Cash and Cash Equivalents

Cash and cash equivalents include cash in hand, cash in banks, and short-term and highly liquid time deposits and investments that can be converted into imprest cash at

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any time with little risk of changing value. Such cash and cash equivalents are used to meet short-term cash commitments.

(6) Financial Instruments

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

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 Company 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 Company 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

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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:

• 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 Company 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

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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 Company’s right to receive the dividends is established, unless the dividends clearly represent partial recovery of the investment cost.

B. Impairment of financial assets

The Company 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

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The Company 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 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 Company after deducting all liabilities from its assets. The equity instruments issued by the Company 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 conditions, subsequent assessments of financial liabilities are made based on amortized cost calculated by effective interest method or measured at fair value through profit and loss.

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and designated to be measured at fair value through profit or loss.

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Financial liabilities at fair value through profit or loss are measured at fair value. Any benefits or losses resulting from reassessments are recognized as profit or loss.

Financial liabilities not held for trading nor designated to be measured at fair value through profit or loss are measured at amortized cost at the end of the subsequent reporting period.

B. Derecognition of financial liabilities

The Company only derecognizes financial liabilities when obligations are discharged, cancelled or expired. In derecognizing financial liabilities, the difference between the carrying amount and the total consideration paid and payable is recognized as profit or loss.

(7) 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.

(8) 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 Company 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.

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(9) 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 Company 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.

(10)Investments Accounted for Using Equity Method

Investment in subsidiaries

A subsidiary is an entity that is controlled by the Company. According to Regulations Governing the Preparation of Financial Reports by Securities Issuers, the profit or loss of the period and other comprehensive income presented in parent company only financial statements shall be the same as the allocations of profit or loss of the period and of other comprehensive income attributable to owners of the parent presented in the financial statements prepared on a consolidated basis, and the owners' equity presented in the parent company only financial statements shall be the same as the equity attributable to owners of the parent presented in the financial statements prepared on a consolidated basis.

The Company’s share of profits or losses after the acquisition of associates is recognized in profit or loss, and its share of other comprehensive income after acquisition is recognized in other comprehensive income. If the Company’s share of loss in a subsidiary exceeds its share of equity in such a subsidiary, the Company continues to recognize losses in its shareholding percentage.

If a change in shareholding in a subsidiary does not result in a loss of control (i.e. transactions with non-controlling interests), such a change is accounted for as an equity transaction, that is, a transaction with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

When the Company loses control of a subsidiary, any retained investment of the former subsidiary is measured at the fair value at that date. A gain or loss is

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recognized in profit or loss and calculated as the difference between (a) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and (b) the previous carrying amount of the investments in such subsidiary. In addition, the Company shall account for all amounts previously recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the subsidiary had directly disposed of the related assets and liabilities.

When the Company transacts with its subsidiaries, profits and losses resulting from the transactions with the subsidiaries are recognized in the Company’s parent company only financial statements only to the extent of interests in the subsidiaries that are not owned by the Company.

Investment in associates

An associate is an entity over which the Company 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 Company 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 Company 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 Company and profit distribution. In addition, changes in the equity of associates are recognized based on the ownership percentage.

If the Company 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

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acquire new shares according to ownership percentage resulted in a decrease in the Company’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 Company will cease to recognize further losses if the Company's share of losses in an associates equals or exceeds its equity in the associates. The Company only recognizes additional losses and liabilities within the scope of legal obligations, constructive obligations, or payments made on behalf of associates.

If the acquisition cost exceeds the Company’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 Company’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 Company 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 Company 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 Company 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

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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 Company and its associates are only recognized in the the parent company only financial statement to the extent that they are unrelated to the Company's equity in the associates.

(11)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 Company 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 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.

(12)Leases

The Company 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 Company 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 Company as leasee

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Except from recognizing short-term and low-value leases on a straight-line bases, the Company 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 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 underlying asset will be obtained by the Company 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

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lease payments that depend on an index or a rate causes a change in future lease payments, the Company 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 balance sheets.

B. The Company 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 Company 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 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 Company 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 Company, 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 Company allocates finance income over the lease term on a systematic and rational basis to reflect the constant periodic rate of return on the Company’s net investment in the lease.

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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.

(13)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 Company 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.

(14)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.

(15)Impairment of Non-Financial Assets

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The Company 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.

(16)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.

(17)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.

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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.

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 Company recognizes termination benefit liabilities when it can no longer withdraw termination benefit offers or recognize relevant restructuring costs (whichever is earlier).

(18)Revenue Recognition

A. Merchandise sales

Merchandise sales come from the sale of merchandise such as carbon steel and stainless steel. Merchandise sold by the Company is mainly recognized when customers obtain control of their promised assets, that is, when the Company 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

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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 Company 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.

(19)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.

(20)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

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balance sheet. The current income tax-related liabilities of the Company 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 the parent company only financial report and the tax basis for calculating taxable income.

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.

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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.

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS ON UNERTAINTY

The Companys 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 the parent company only financial report, the Company made the following critical judgements, critical accounting estimates, and assumptions:

(1) Critical Accounting Judgements

• A. Judgment of business model of financial asset classification

The Company 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

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performance assessment methods, risks affecting performance, and the salary determination method of relevant managers, as well as sound judgement. The Company 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 Company reclassify financial assets according to the regulations of IFRS 9 and postpone application of the above to the day of the reclassification.

B. Revenue recognition

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

The Company is considered the principal in the following scenarios:

• (a)If the Company obtains control of goods or other assets from another party before said goods or assets are transferred to the customer.

• (b)If the Company 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 Company.

• (c)If the Company 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 Company obtained control of goods or services before transferring said goods or services to the customer include (but are not limited to):

• (a)Whether the Company is primarily responsible for fulfilling the commitment to provide specific goods or services.

～ 37 ～

• (b)Whether the Company assumes inventory risk before and after specific goods and services are transferred to customers.

• (c)Whether the Company has the discretion to set prices.

C. Lease terms

In determining the lease term, the Company 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 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 Company.

(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 Company’s historical experience and other known reasons, and the Company 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 Company's assumptions about the default rate and the expected loss rate. The Company 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

～ 38 ～

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 Company 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 Company 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 Company’s strategies.

• 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

～ 39 ～

Upon calculation of the present value of the benefit obligations, the Company 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 Company’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 Company 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

TAILS OF SIGNIFICANT ACCOUNTS Cash and Cash Equivalents
Cash on hand and revolving fund Bank Deposits	2021.12.31 $ 239 467,814 $ 468,053	2020.12.31
		$ 240 172,317
		$ 172,557

• A. The Company 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 Company 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 Fund beneficiary certificate	2021.12.31 $ 59,407 6,468 $ 65,875	2020.12.31
		$ 21,352 7,164
		$ 28,516

～ 40 ～

2021.12.31

2020.12.31

	2021.12.31	2020.12.31
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	$ 421,785 26,124 $ 447,909	$ 350,320 24,405
		$ 374,725

• A. The Company’s investment in the above-mentioned investment targets are not for strategic investment purpose. The Company’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 Company’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.

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

Current Equity Instruments Domestic listed stocks Evaluation adjustment Non-Current Equity Instruments Foreign non-listed stocks Evaluation adjustment	2021.12.31 $ 82,785 (34,705) $ 48,080 $ 74,158 17,641 $ 91,799	2020.12.31 $ 53,956 (546) $ 53,410 $ 98,574 14,986 $ 113,560

• A. The Company invests in the above-mentioned investment targets based on mid- to long-term strategies and expects to profit from long-term investments. The Company’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.

～ 41 ～

• B. In 2021 and 2020, the Company adjusted its investment position to diversify risks, selling some of its domestic listed stocks at fair value of NT$174,617 thousand and NT$2,707 thousand. The relevant “other equity - unrealized gains and losses from financial assets measured at fair value through other comprehensive income” of NT$ (19,114) thousand and NT$ (3,875) thousand are transferred to “retained earnings”.

• C. For matters pertaining to the Company’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.

(4)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.

(5)Accounts Receivable, Net

Accounts Receivable, Net
		2021.12.31	2020.12.31
Accounts receivable	$	371,459 $	428,345
Less: Allowance for impairment loss		(3,755)	(4,313)
Net accounts receivable - non-related parties		367,704	424,032
Accounts receivable - related parties		37,065	8,384
	$	404,769 $	432,416

The Company’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 Company 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 Company’s historical experience of

～ 42 ～

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

2021.12.31 Not past due 2020.12.31 Not past due	Expected credit loss rate 0%-1% Expected credit loss rate 0%-1%	Gross carrying amount $ 464,454 Gross carrying amount $ 522,192	Loss allowance (expected credit loss in the duration) $ (4,820) Loss allowance (expected credit loss in the duration) $ (5,408)	Amortized cost
				$ 459,634
				Amortized cost
				$ 516,784

Movements of the loss allowance for accounts and notes receivable: 2021 2020 Beginning balance $ 5,408 $ 4,071 Provision (Reversal) (588) 1,337 Ending balance $ 4,820 $ 5,408	Movements of the loss allowance for accounts and notes receivable: 2021 2020 Beginning balance $ 5,408 $ 4,071 Provision (Reversal) (588) 1,337 Ending balance $ 4,820 $ 5,408	Movements of the loss allowance for accounts and notes receivable: 2021 2020 Beginning balance $ 5,408 $ 4,071 Provision (Reversal) (588) 1,337 Ending balance $ 4,820 $ 5,408
Beginning balance Provision (Reversal) Ending balance	2021 $ 5,408 (588) $ 4,820
		$ 4,071 1,337
		$ 5,408

Movements of the loss allowance for other accounts and notes receivable (excluding related parties):

Beginning balance Add: Provision Less: Remittance from this year (note) Foreign currency exchange difference Ending balance	2021 $ 61,364 － － － $ 61,364	2020 $ 64,364 20,000 ( 23,000) － $ 61,364

Note:The Company 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.

～ 43 ～

(6)Finance Lease Receivables

2021.12.31 2020.12.31

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	$ 5,936 5,555 5,555 5,555 5,555 68,050 96,206 (56,383) $ 39,823 $ 1,068 38,755 $ 39,823	$ 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.

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.

～ 44 ～

(7)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	2020.12.31
	$ 359,106 36,099 175,729 － 1,104,461 48,806	$ 176,726
		23,223
		117,801
		5,945
		579,136
		97,353
	$ 1,724,201 None	$ 1,000,184
		None

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

Cost of goods sold 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 $ 5,394,429 － ( 557) 148 (4,827) $ 5,389,193	2020 $ 4,328,131 6,667 ( 4,098) ( 205) 24 $ 4,330,519

B. The Company'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.

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

～ 45 ～

(8)Inventories (for Construction Business)

Name of construction site 2021.12.31 2020.12.31 Construction in progress – Hulin Section, Xinyi District $ 247,417 $ 153,398

• 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 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.

• C. For the Company’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.

～ 46 ～

(9)Prepayments

(10)	Deferred commissions expense Offset Against Business Tax Payable Prepayment for land purchases Other prepayments Other Current Assets Other Financial Assets Payments for other	2021.12.31 $ 24,552 5,918 95,854 16,689 $ 143,013 2021.12.31 $ 836,718 10 $ 836,728	2020.12.31
			$ － － 95,854 9,024
			$ 104,878
			2020.12.31
			$ 841,928 10
			$ 841,938

For matters pertaining to the Company’s 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.

(11) Investments Accounted for Using Equity Method

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

Initial investment cost Subsidiaries Mayer Corporation Development International Limited (BVI) $ 390,881 Vietnam Mayer Co., Ltd. 212,601 Glory World Development Ltd. (BVI) 259,121 Mei Kong Development Ltd. 525,149 Miramar Development Limited 498,923 Mayer Inn Corporation 344,800 Mei Yi Architecture Co.,Ltd. 18,000 Subtotal Less: Accumulated Impairment Loss - Investments Under the Equity Method	2021.12.31 2020.12.31 $ 15,287 $ 15,287 217,722 214,140 － － 554,701 565,097 13,361 54,023 168,999 211,741 17,929 － 987,999 1,060,288 (15,287 ) (15,287 ) 972,712 1,045,001

～ 47 ～

	Initial
	investment
	cost		2021.12.31	2020.12.31
Affiliated Companies
Grand Tech Precision Manufacturing	179,688		217,701	223,065
(Thailand) Co., Ltd.
Diamond Precision Steel Corp.	106,248		212,140	189,240
Luen Jin Enterprise Co., Ltd.	156,600		158,360	－
Subtotal			588,201	412,305
Less: Accumulated Impairment Loss - Investments Under
the Equity Method			－	－
			588,201	412,305
		$	1,560,913 $	1,457,306

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

• (d)The Company subscribed 90% new shares issued by Mei Yi Architecture Co.,Ltd. in the amount of NT$18,000 thousand on December 2021.

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

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

～ 48 ～

Mayer Corporation Development International Limited (BVI) Vietnam Mayer Co., Ltd. Glory World Development Ltd.(BVI) 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.	2021.12.31 100.00% (Note 1) 100.00% 50.21% (Note 2) 100.00% 90.00% 100.00% 90.00% 45.01% 42.50% 30.00%	2020.12.31
		100.00% (Note 1) 100.00% 50.21% (Note 2) 100.00% 90.00% 100.00% － 45.01% 42.50% －

Note1: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.

• Note2:Glory World Development Ltd. (BVI) was struck off by the local government on November 3, 2020.

For information on the business nature and main operating locations of the aforementioned subsidiaries and affiliates, please refer to Appendix 5.

• C. Subsidiary summary information:

The Company’s share Net income from continuing operations Other comprehensive income for the period Total consolidated income	2021 2020 $ ( 49,665) $ ( 35,298) (2,757) 2,073 $ ( 52,422 )$ ( 33,225)

• 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.

～ 49 ～

• 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 Company’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. For the years ended December 31, 2021 and 2020, the Corporation conducted evaluation and impairment test for investment in associates. The result recognized losses on impairment of investment both were $0.

(12) Property, Plant and Equipment

Cost: Beginning balance Increase Disposal or write off Ending net amount Accumulated depreciation: Beginning balance Increase Disposal or write off Ending balance Ending net amount				2021			Total $ 2,280,158 61,671 ( 5,881) $ 2,335,948 $ 1,481,728 49,384 ( 5,494) $ 1,525,618 $ 810,330
	Land $ 557,911 － － $ 557,911 $ － － － $－ $ 557,911	Buildings and structures $ 223,646 315 － $ 223,961 $ 202,739 4,108 － $ 206,847 $ 17,114	Machinery and equipment $ 1,349,155 55,122 ( 5,763) $ 1,398,514 $ 1,170,415 36,398 ( 5,406) $ 1,201,407 $ 197,107	Transportation equipment $ 62,358 1,866 － $ 64,224 $ 51,300 2,350 － $ 53,650 $ 10,574	Other equipment $ 77,465 4,208 ( 118) $ 81,555 $ 48,081 6,294 ( 88) $ 54,287 $ 27,268	Leasehold improvements $ 9,623 160 － $ 9,783 $ 9,193 234 － $ 9,427 $ 356

～ 50 ～

2020

Cost: Beginning balance Increase Disposal or write off Ending net amount Accumulated depreciation: Beginning balance Increase Disposal or write off Ending balance Ending net amount	Land $ 557,911 － － $ 557,911 $ － － － $－ $ 557,911	Buildings and structures $ 233,208 1,048 ( 10,610) $ 223,646 $ 208,815 4,403 ( 10,479) $ 202,739 $ 20,907	Machinery and equipment $ 1,413,337 11,394 ( 75,576) $ 1,349,155 $ 1,208,109 35,242 ( 72,936) $ 1,170,415 $ 178,740	Transportation equipment $ 73,396 2,009 ( 13,047) $ 62,358 $ 56,300 3,632 ( 8,632) $ 51,300 $ 11,058	Other equipment $ 92,827 4,299 ( 19,661) $ 77,465 $ 61,386 6,193 ( 19,498) $ 48,081 $ 29,384	Leasehold improvements $ 9,776 － ( 153) $ 9,623 $ 9,083 261 ( 151) $ 9,193 $ 430	Total $ 2,380,455 18,750 ( 119,047) $ 2,280,158 $ 1,543,693 49,731 ( 111,696) $1,481,728 $ 798,430

• A. The Company’s property, plants, and equipment are depreciated on a straight-line basis based on the following service life 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 14 years Leasehold improvements 3 to 5 years

• B. On January 1, 2012, the Company 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 Company’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.

～ 51 ～

(13) Lease Agreement

A. Right-of-use assets

Cost: Beginning balance Increase Decrease Ending balance Accumulated depreciation: Beginning balance Increase Decrease Ending balance Ending net amount			2021	2021		Total $ 54,685 25,239 ( 12,542) $ 67,382 $ 22,549 15,405 ( 12,541) $ 25,413 $ 41,969
	Land $ 2,289 2,953 ( 2,289) $ 2,953 $ 2,002 1,453 ( 2,288) $ 1,167 $ 1,786	Buildings and structures $ 45,371 21,592 ( 9,941) $ 57,022 $ 18,816 11,612 ( 9,941) $ 20,487 $ 36,535	Machinery and equipment $ 312 694 ( 312) $ 694 $ 277 139 ( 312) $ 104 $ 590	Transportation equipment $ 6,136 － － $ 6,136 $ 1,224 2,045 － $ 3,269 $ 2,867	Other equipment $ 577 － － $ 577 $ 230 156 － $ 386 $ 191

Cost: Beginning balance Increase Decrease Ending balance Accumulated depreciation: Beginning balance Increase Decrease Ending balance Ending net amount			2020	2020		Total $ 48,739 6,290 ( 344) $ 54,685 $ 8,423 14,413 (287) $ 22,549 $ 32,136
	Land $ 2,289 － － $ 2,289 $ 859 1,143 － $ 2,002 $ 287	Buildings and structures $ 45,103 542 ( 274) $ 45,371 $ 7,250 11,839 (273) $ 18,816 $ 26,555	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

～ 52 ～

The Company's revenue from subletting right-of-use assets are NT$303 thousand and NT$294 thousand in 2021 and 2020, respectively.

B. Lease liabilities

Lease liabilities
		2021.12.31	2020.12.31
Carrying amount of lease liabilities
Current	$	14,379 $	10,489
Non-Current		27,940	21,788
	$	42,319 $	32,277
Ranges of discount rates for lease	liabilities are as follows:
		2021.12.31	2020.12.31
Land		1.9%	2.01%
Buildings and structures		1.95%-2.2%	1.95%-2.75%
Machinery and equipment		1.5314%	1.55%
Transportation equipment		1.4744%-1.55%	1.4744%-1.55%
Other equipment		1.52%-1.55%	1.52%-1.55%

• C. Material terms of right-of-use assets

The Company leases land, buildings, and equipment to serve as operating premises and equipment for plants and offices. The terms of lease contracts generally range between 1 to 5 years, and the Company has the right to renew leases at the end of lease terms. Also, the contract stipulates that the Company 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.

D. Sublease

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

operating subleases is as follows:
Year 1 Between 1 and 5 years	2021.12.31 $ 351 396 $ 747	2020.12.31
		$ 236 472
		$ 708

～ 53 ～

E. Other lease information

In 2021 and 2020, the Company 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:

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 $ 910 62 40 $ 1,012 $(17,117)	2020 $ 853 67 40 $ 960 $(16,174)

(14) Investment Property, Net

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

Cost: Beginning balance Ending balance Accumulated depreciation: Beginning balance Increase Ending balance Ending net amount Cost: Beginning balance Ending balance		2021
	Land $ 82,543 $ 82,543 $ － － $ － $ 82,543	Buildings $ 104,963 $ 104,963 $ 36,937 2,934 $ 39,871 $ 65,092 2020	Total
			$ 187,506
			$ 187,506
			$ 36,937 2,934
			$ 39,871
			$ 147,635
	Land $ 82,543 $ 82,543	Buildings $ 104,963 $ 104,963	Total
			$ 187,506
			$ 187,506

～ 54 ～

Accumulated depreciation: Beginning balance Increase Ending balance Ending net amount		2020
	Land $ － － $ － $ 82,543	Buildings $ 34,004 2,933 $ 36,937 $ 68,026	Total
			$ 34,004 2,933
			$ 36,937
			$ 150,569

• 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:

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.

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• 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.

(15) Other Non-Current Assets

Other 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 19,138 $ 226,096	2020.12.31
		$ 37,654 86,290 13,137 39,496 15,820
		$ 192,397

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.

(16) Short-Term Loans

Short-Term Loans
Secured Loans Bank loans Unsecured Loans Credit loans Letter of credit purchase borrowing Interest rate range Unspent amount Secured borrowing situation	2021.12.31 $ 1,923,725 286,847 422,871 709,718 $ 2,633,443 1.25%~2.05% $ 784,432 Note 8	2020.12.31
		$ 1,235,145
		391,917 332,845
		724,762
		$ 1,959,907
		1.30%~1.89%
		$ 772,095
		Note 8

(17) Short-Term Notes and Bills Payable

Commercial paper Less: Unamortized discounts Net amount	2021.12.31 $ 30,000 (42) $ 29,958	2020.12.31 $ 30,000 (8) $ 29,992

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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(18) (19)	Guarantee/Accep tance agency Par value 2021.12.31 Dah Chung Bills $ 30,000 2020.12.31 Dah Chung Bills $ 30,000 Long-Term Bank Loans Secured Loans Bank loans Less: Current portion Interest rate range Unspent amount Secured borrowing situation Provisions Employee benefits Decommission, restoration, and Beginning balance Addition Reduction Ending balance	Discount value Book value Interest rate range Secured borrowing situation $ 42 $ 29,958 0.92% Note8 $ 8 $ 29,992 0.93% Note8 2021.12.31 2020.12.31 $ 22,902 $ 75,146 (2,750) (2,711) $ 20,152 $ 72,435 1.45% 1.45%-2.05% $ －$ 200,468 Note 8 Note 8 2021.12.31 2020.12.31 $ 982 $ 637 repair costs 37,682 41,109 $ 38,664 $ 41,746 2021 2020 $ 41,746 $ 316 1,604 41,430 (4,686 ) － $ 38,664 $ 41,746	Secured borrowing situation
		$
		repair costs

(20) Pensions

A. Defined contribution plans

(a)The pension system applicable to the Company and the domestic subsidiaries of the Company in accordance with the "Labor Pension Act" is the defined contribution pension plan managed by the government. Under this plan, the Company have mademonthly contributions equal to 6% of employees’ salary as

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labor pension to employees’ personal pension accounts of the Bureau of Labor Insurance.

• (b)The Company recognized pension expenses of NT$8,261 thousand and NT$7,012 thousand in 2021 and 2020, respectively.

B. Defined benefit plans

The Company 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 Company 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 Company 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 Company 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 Company 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) arising - changes 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		2020.12.31
Present value of	defined	benefit
obligations			$(	178,764)	$(	184,088)
Fair value of plan assets				149,555		161,185
Net defined benefit liabilities			$(	29,209 )	$(	22,903 )
Movements in the present value of defined				benefit obligations were as follows:
				2021		2020
Beginning balance			$	184,088	$	186,398
Current service cost				2,058		2,557
Interest expenses				696		1,348
Remeasured
Actuarial loss (gain)	arising -	changes		3,482		－
in demographic assumptions
Actuarial loss (gain) - change in			(	2,686)		3,157
financial assumptions
Actuarial loss (gain) - experience				14,911		2,952
adjustment
Benefit payments -	expenditure from		(	23,785)	(	12,324)
plan assets
Ending balance			$	178,764	$	184,088

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

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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 acturial valuations of present value of the Company’s defined benefit obligations were carried out by qualified actuaries. The principal assumptions made on the measurement date were as flows:

made on the measurement date were as	flows:
Discount rate Future salary growth rate	Measurement date 2021.12.31 2020.12.31 0.69% 0.38% 1.00% 1.00%
	2021.12.31 0.69% 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 were 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 2021.12.31 2020.12.31 $(1,926)$ (2,171) $ 1,961 $ 2,213 $ 1,508 $ 1,734 $(1,491)$ (1,712)
	2021.12.31 $(1,926) $ 1,961 $ 1,508 $(1,491)

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

(21) Equity

A. 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

B. Capital surplus

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

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.

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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.

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

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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
		$ 102,504 140,047
		$ 242,551

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.

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E. Other equity interests

. Other equity interests
Beginning balance Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income Disposal of investments in equity instruments designated at fair value through other comprehensive income Share of other comprehensive income (loss) of subsidiaries and associates Other comprehensive Income for the year, net of income tax Ending balance Beginning balance Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income Share of other comprehensive income (loss) of subsidiaries and associates Other comprehensive Income for the year, net of income tax Endingbalance		2021
	Foreign Currency Translation Reserve $ ( 24,706) － － ( 31,340) 6,269 $ (49,777)	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income $ ( 154,686) 135,678 ( 1,464) ( 245) － $ (20,717) 2020

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(22) Operating Revenue

A. Revenue from customer contracts

Revenue from customer contracts
Revenue from customer contracts Sales revenue	2021 $ 6,199,234	2020
		$ 4,811,114

For the income analysis of major products, please refer to Note 14.

B. Contract balance

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

2020 are as follows:
Sale of goods Sale of goods	2021.01.01 $ 2,461 2020.01.01 $ 4,576	2021.12.31 $ 60,687 2020.12.31 $ 2,461	Variance
			$ 58,226
			Variance
			$(2,115)

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.

The amount of contract liabilities from the beginning of the year recognized in operating income in 2021 and 2020 is NT$2,197 thousand and NT$4,259 thousand, respectively.

(23) Interest Income

Interest Income
Bank deposits Financial assets at amortized cost Other interest income	2021 $ 105 － 13,959 $ 14,064	2020
		$ 265 110 13,475
		$ 13,850

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(24) Other Income

(24) Other Income
			2021		2020
Rent income		$		10,836 $		8,376
Dividend income				37,990		48,763
Others income				1,749		3,830
		$		50,575 $		60,969
(25) Other Gains and Losses, Net
			2021		2020
Gains (loss) on disposals of property,		$	(	387) $	(	3,674)
plant and equipment
Gains (loss) on disposals of investments			109,167			23,780
Net foreign exchange gain (loss)			(	4,693)	(	2,657)
Gains (loss) on financial assets at fair			151,996			82,801
value through profit or loss
Other losses			(	6,137)	(	41,956)
		$	249,946 $			58,294
(26) Finance Cost, Net
			2021		2020
Interest expense
Borrowing interest expense		$		36,251 $		33,470
Lease liability expenses				908		783
Others interest expense				19		26
Less: Qualifying asset	capitalization		(	3,515 )	(	2,237 )
amount
		$		33,663 $		32,042

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(27) Employee Benefits, Depreciation, and Amortization Costs

Employee benefits Salary expenses Employee healthcare and labor insurance expenses Pension expenses Compensation of directors Other employee benefit expenses Depreciation expenses Amortization expenses Total		2021	Total $ 254,041 24,036 12,795 35,629 68,974 67,723 6,347 $ 469,545		2020
	Belonging to operating costs $ 188,246 18,543 9,896 － 8,406 54,102 6,247 $ 285,440	Belonging to operating expenses $ 65,795 5,493 2,899 35,629 60,568 13,621 100 $ 184,105		Belonging to operating costs $ 152,550 16,301 7,229 － 8,171 53,279 5,933 $ 243,463	Belonging to operating expenses	Total
					$ 56,770 4,624 2,819 20,964 33,721 13,798 16	$ 209,320 20,925 10,048 20,964 41,892 67,077 5,949
					$ 132,712	$ 376,175

A. For the years ended December 31, 2021 and 2020, the numbers of the Company

employees and employee benefits are as follows:

employees and employee benefits are as follows:
2021 The numbers of employees 337 The numbers of directors who were not employees 9 346 Average employee benefits $ 1,068 Average employee salaries $ 754 The percentage change in the average salary expenses 19.92%	2020
	333 9
	342
	$ 847
	$ 629
	7.50%

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• B. The Company’s compensation policies are as follow:

(a)Employees

The salary of the employee is determined based on the eductional experience,position,resposibility,performce with the market salay level.

The increasment of annual salary depends on the operate condiction and price level changes.

In addition, employees who are promoted in accordance with the Company’s transfer management method (promotion) will take into account the changes in their responsibilities and adjust the original salary.

The Company’s employee salary includes regular salary(monthly salary and compensation, bouns, benefit), overtime, unregular salary(unmonthly bonus,benefit,etc.)

(b)Managers

The appointment of managers of the Company is handled in accordance with the company’s regulations. The management’s salary shall be assessed by the remuneration committee based on the industry salary benchmark, the manager’s personal performance indicators, and the company’s operating performance,and submitted to the Board of Directors for discussion and resolution.

• (c)The Company did not have supervisors for the years ended December 31, 2021 and 2020. Therefore, there was no compensation to the supervisor.

(d)Directors

The remuneration of directors includes compensation,business execution fee and directors’remuneration. According to the Articles of Incorporation of the Company, a ration of profit of the current year distributable shall not be higher than 3 for directors’remuneration.

• C. According to the Company’s Articles of Incorporation, the Company shall allocate no 1% to 5% of profit as employees’ compensation and no more than 3% of profit as directors’ compensation for each profitable fiscal year after offsetting any cumulative losses. The Company’s employees’ compensation for 2021 and 2020

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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 profits of 5% and 3%. Any changes to the sum after the publication of the Company’s annual financial report are treated as accounting estimates and added to the balance of the following year.

• D. 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’ compensation Directors’ remuneration $ 48,615 $ 29,169	2020 Employees’ compensation Directors’ remuneration $ 23,939 $ 14,364
	Employees’ compensation $ 48,615	Employees’ compensation $ 23,939

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.

(28) Income tax

• A. Components of income tax expenses

Current income tax Occurred in the current year Additional undistributed earnings Adjustment of previous years Deferred income tax Origination and reversal of temporary differences Total tax expenses	2021 $ 101,481 － (1,092) 100,389 11,216 $ 111,605	2020 $ 66,007 318 59 66,384 ( 18,526 ) $ 47,858

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B. Income tax recognized in other comprehensive income

Financial statements translation differences of foreign operations	2021 $(6,269)	2020 $(7,281 )

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

year:

2021 Net profit before tax $ 894,514 Net profit before tax calculated based on the statutory tax rate $ 178,903 Effected tax amount from adjusted items: Effected items are not included in the calculation of taxable income ( 90,506) Origination and reversal of temporary differences 11,216 Additional undistributed earnings － Adjustments in respect of prior years ( 1,092) Taxed separately 13,084 Income tax expenses recognized in profit and loss $ 111,605

2020 $ 440,482 $ 88,096 ( 25,597) ( 18,526 ) 318 59 3,508 $ 47,858

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.

～ 71 ～

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

～ 72 ～

2020

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	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

• E. Impacted by the COVID-19 pandemic, the Company’s declared profit-seeking enterprise income tax payable for 2020, and 2019 are 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 Finance approved the request to pay the tax in 36 installments. As of December 31, 2021, the Company has paid for 2020, and 2019 are 6 installments and 18 installments totaling NT$31,807 thousand.

• F. 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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(29) Earnings Per Share

Basic earnings per share		2021
	Profit attributable to ordinary shareholders of the parent company Before tax After tax $ 894,514 $ 782,909	Weighted average number of ordinary shares outstanding (thousand shares) 222,526	EPS (NT$)
	Before tax $ 894,514		Before tax $ 4.02	After tax
				$ 3.52

2020 Profit attributable to ordinary shareholders of the parent company Weighted average number of ordinary shares outstanding EPS (NT$) Before tax After tax (thousand shares) Before tax After tax Basic earnings per share $ 440,482 $ 392,624 222,526 $ 1.98 $ 1.76 Adjustments in Liabilities From Financing Activities Non-cash changes 2021.01.01 Cash Flow Others 2021.12.31 Short-term loans $ 1,959,907 $ 673,536 $ －$ 2,633,443 Short-term notes and bills payable 29,992 ( 34 ) － 29,958 Long-term loans (including long-term liabilities, current portion) 75,146 ( 52,244 ) － 22,902 Lease liabilities 32,277 ( 16,105 ) 26,147 42,319 Guarantee deposits received 28,163 ( 7,780 ) － 20,383 Total liabilities from financing activities $ 2,125,485 $ 597,373 $ 26,147 $ 2,749,005			2020
				EPS (NT$)
					After tax
					$ 1.76
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 financing activities		2021.01.01 $ 1,959,907 29,992 75,146 32,277 28,163 $ 2,125,485

(30) Adjustments in Liabilities From Financing Activities

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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 financing activities	2020.01.01 $ 1,503,154 29,972 77,813 40,477 6,583 $ 1,657,999	Non-cash changes Cash Flow Others 2020.12.31 $ 456,753 $ －$ 1,959,907 20 － 29,992 ( 2,667 ) － 75,146 ( 15,214 ) 7,014 32,277 21,580 － 28,163 $ 460,472 $ 7,014 $ 2,125,485	2020.12.31
			$ 2,125,485

7. RELATED PARTY TRANSACTIONS

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

～75～ Name of related parties Mayer Corporation Development International Limited Mei Kong Development Ltd. (hereby referred to as Mei Kong Development) Mayer Inn Corporation(hereby referred to as Mayer Inn) Vietnam Mayer Co., Ltd.(hereby referred to as Vietnam Mayer) Mei Yi Architecture Co.,Ltd. Grand Tech Precision Manufacturing (Thailand) Co., Ltd. (hereby referred to as Grand Tech Precision) Diamond Precision Steel Corp. (hereby referred to as KY-Diamond) Diamond Steel Tube Co., Ltd. (Vietnam) Luen Jin Enterprise Co., Ltd. Durban Development Co., Ltd. Miramar Hospitality Co., Ltd. (hereby referred to as Miramar Hospitality) Ying Shun Construction Co., Ltd.

Relationship with the Company

Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Affiliated companies Affiliated companies Affiliated companies Affiliated companies Other related parties Other related parties Other related parties

Name of related parties Relationship with the Company Huang Yu-Chi Key management Directors, president, vice president, and other executive officers Key management

(2)Significant Transactions with Related Parties

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

A. Sales Revenue

Sales Revenue
Subsidiaries Affiliated companies	2021 $ 34,188 69,036 $ 103,224	2020
		$ － 13,934
		$ 13,934

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

B. Accounts Receivable

Accounts Receivable
		2021.12.31	2020.12.31
Subsidiaries	$	13,567 $	－
Affiliated companies		23,498	8,384
	$	37,065 $	8,384
Other receivables
		2021.12.31	2020.12.31
Subsidiaries	$	10 $	－

C. Other receivables

D. 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 Costs".

E. Construction in Progress

The management service fees the Company paid to other related parties for real estate development in 2021 and 2020 are NT$1,440 thousand. The sums are

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accounted for under “Inventories (for construction business) - Construction in Progress”.

• F. Other Receivables (Including Amounts Loaned)

			2021.12.31	2021.12.31	2020.12.31	2020.12.31
	General payment
	Subsidiaries	$		165 $		160
	Amount loaned
	Subsidiaries			16,859		17,353
	Subtotal			17,024		17,513
	Less: Allowance for impairment loss		(	17,014)	(	17,513)
		$		10 $		－
			2021		2020
	Interest income
	Subsidiaries	$		－$		688
G.	Refundable Deposits
			2021.12.31		2020.12.31
	Other related parties	$		5 $		5
H.	Contract Liabilities
			2021.12.31		2020.12.31
	Other related parties	$		7 $		7
I.	Accounts Payable
			2021.12.31		2020.12.31
	Other related parties	$		126 $		120
J.	Lease Revenue
			2021		2020
	Subsidiaries	$		124 $		114
	Other related parties			179		179
		$		303 $		293

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K. Dividend Income

Dividend Income
Investment reductions under the equity method Mei Kong Development Vietnam Mayer Grand Tech Precision KY-Diamond	2021 $ 1,495 56,600 26,536 50,051 $ 134,682	2020
		$ 2,701 102,306 33,739 34,494
		$ 173,240

L. Others

• i. Acquisition of investments accounted for using equity method

2021:

Acquisition of investments Percentage of ownership interest

2021:	Acquisition of	investments	Percentage of ownershipinterest	nershipinterest
Mayer Inn 2020: Mayer Inn	Number of Shares 3,000 Acquisition of	Price $ 30,000 investments Price $ 110,000	Before After 100% 100% Percentage of ownershipinterest	After
				100%
	Number of Shares 11,000		Before 100%	After
				100%

• ii. 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.

• iii. The Company purchased worth of gifts from other related parties amounted to NT$48 thousand and NT$86 thousand, respectively, for 2021 and 2020, were record as “operating expenses”.

(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

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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 Company’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, 2021 and 2020 are detailed below:

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 receivable Property, plant 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:

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• 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 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

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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 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

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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. (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:

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• 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 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.

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• (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 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

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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 $10.2 million on Mayer Holdings Limited (Cayman) and nine of its current and former senior staff in the Market Misconduct Tribunal for breach of the "disclosure obligations" under the Securities and Futures Ordinance. The Company appointed a counsel to represent the Company's President and five other persons to appeal to the Court of Appeal of the High Court of Hong Kong. Leave to appeal was granted by the Court of Appeal on June 14, 2017. Following the hearing of the appeal on November 20 and 21, 2018, the Tribunal gave directions on July 24, 2020 requiring the parties to submit expert reports. The Tribunal's ruling has been pending since the hearing on February 14 and 15, 2022. As of December 31, 2021, the Company has recognized a total of HKD$ 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

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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 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

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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 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:

The chairman of the company was prosecuted by the Taipei District Prosecutor's Office in Taiwan for other cases. The case has entered judicial proceedings. Pending the results

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of the judicial investigation, the case has no impact on the financial planning and daily operations of the company.

12. OTHERS:

(1)Capital Risk Management

The Company needs to maintain enough capital to support expansions and improvements of plants and equipment. Therefore, the Company’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 $ 1,368,568 1,090,396 284,819 $ 3,295,275	2020.12.31
		$ 963,595 1,028,085 356,240 $ 2,507,277

Note 1: The balance includes financial assets 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 amd bills payable, notes payable, accounts payable, other payables, guarantee deposits received, and non-current portion of non-current borrowings.

B. Fair value information

(a)Financial instruments not measured at fair value

The Company believes that the book value of financial assets and financial liabilities measured at amortized cost is a reasonable approximation of fair value.

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(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).

(unobservable input value).
Recurringfair value measurements				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	$	636,019 － － 6,468	$	－ － － －	$	－ 421,785 26,124 －	$	636,019 421,785 26,124 6,468
	$	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	$	193,020 －	$	－ －	$	－ 91,799	$	193,020 91,799
	$	193,020	$	－	$	91,799	$	284,819

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Recurringfair value measurements				2020.12.31	2020.12.31	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 24,405 －	$	646,196 350,320 24,405 7,164
	$	653,360	$	－	$	374,725	$	1,028,085
Financial assets at fair value through other comprehensive income Domestic listed company stocks Domestic non-listed company stocks	$	242,680 －	$	－ －	$	－ 113,560	$	242,680 113,560
	$	242,680	$	－	$	113,560	$	356,240

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

Adjustment of financial instruments measured at Level 3 fair value.

The Company'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:

Beginning balance Addition Finance measured at fair value through profit or loss Unrealized gains (losses) from assets Ending balance	2021 $ 374,725 3,645 69,539 $ 447,909	2020
		$ 369,379 － 5,346
		$ 374,725

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Investments in equity instruments measured at fair value through other comprehensive income were adjusted as follows:

Beginning balance Addition Capital reduction and refund of shares Unrealized gains (losses) of financial assets measured at fair value through other comprehensive income Ending balance	2021 $ 113,560 561 ( 24,977 ) 2,655 $ 91,799	2020 $ 121,938 － ( 20,814 ) 12,436 $ 113,560

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

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

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 Company’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 Company 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.

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The Company’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 Company must strictly follow financial operating procedures regarding overall financial risk management and division of power and responsibilities.

(a)Market risk

Market risk to the Company 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 Company’s operation and net investments by foreign operating institutions are mainly conducted in foreign currencies, which expose the Company 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 natural hedging effect. Also, the net investment of foreign operating institutions is a strategic investment, so the Company has not hedged against it.

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

impact:
(Foreign currency: functional currency) Foreign currency Financial Assets Monetary items USD: NTD $ 4,584 Financial Liabilities ：None.		Unit: $1000 in each foreign currency 2021.12.31
		Exchange rate 27.67	Degree of variation 1%	Effects on profit and loss (NTD)
				$ 1,268

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Unit: $1000 in each foreign currency

2020.12.31

(Foreign currency: functional currency) Foreign currency Financial Assets Monetary items USD: NTD $ 1,325 Financial Liabilities ：None.	Exchange rate 28.48	Degree of variation 1%	Effects on profit and loss (NTD)
			$ 377

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 Company’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 Company’s net profit in 2021 and 2020 will be reduced by NT$5,340 thousand and NT$4,705 thousand, respectively.

iii. Other price risks

The price risk of the Company’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 Company’s net profit in 2021 and 2020 will be increased/reduced by NT$31,989 thousand and NT$32,540 thousand, respectively, with other comprehensive profit and loss increasing/decreasing by NT$9,664 thousand and NT$12,122 thousand, respectively.

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(b)Credit risk

Credit risk refers to the risk of a counterparty breaching contractual obligations, causing financial losses to the Company. The Company’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.

i. Operation-related credit risk

The Company 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 Company, transaction history, and current economic situation. The Company 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 Company's customer base is large and unrelated. As of December 31, 2021 and 2020, the ratio of the total accounts receivable from the Company’s top ten customers to the total accounts receivable was 35% and 50%, respectively.

ii. Financial credit risk

The credit risk of bank deposits and other financial instruments are assessed and monitored by the Company’s finance department. Because the Company’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 Company’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 Company has sufficient financial flexibility.

～ 94 ～

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

Less than 1 year Non-Derivative Financial Liabilities Short-term loans $ 2,633,443 Short-term notes and bills payable 29,958 Notes and accounts payable (including related parties) 410,535 Other payables (including related parties) 178,054 Lease liabilities 14,379 Long-term liabilities,current portion 2,750 $ 3,269,119 Less than 1 year Non-Derivative Financial Liabilities Short-term loans $ 1,959,907 Short-term notes and bills payable 29,992 Notes and accounts payable (including related parties) 293,769 Other payables (including related parties) 120,300 Lease liabilities 10,489 Long-term liabilities,current portion 2,711 $ 2,417,168			2021.12.31
		2 to 3 years $ － － － － 22,099 5,621 $ 27,720	4 to 5 years $ － － － － 5,841 5,786 $ 11,627 2020.12.31	Over 5 years $ － － － － － 8,745 $ 8,745	Total
					$ 2,633,443 29,958 410,535 178,054 42,319 22,902
					$ 3,317,211
		2 to 3 years $ － － － － 17,518 5,540 $ 23,058	4 to 5 years $ － － － － 4,270 5,703 $ 9,973	Over 5 years $ － － － － － 61,192 $ 61,192	Total
					$ 1,959,907 29,992 293,769 120,300 32,277 75,146
					$ 2,511,391

～ 95 ～

13. SUPPLEMENTARY DISCLOSURES:

When preparing the the parent company only 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. Names, locations, and other information of investee companies (excluding the investees in Mainland China) ： Please refer to Table 5.

• (3)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 6.

～ 96 ～

• 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 6.

• (4)Information on major shareholders (the names and number/percentage of shares held of shareholders that hold over 5% shares) ： Please refer to Table 7.

14. DEPARTMENTAL INFORMATION

Please refer to the consolidated financial statements for the year ended December 31, 2021.

～ 97 ～

Mayer Steel Pipe Corporation

Loans to others

January 1 to December 31, 2021

Table1

Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation Loans to others January 1 to December 31, 2021 Table1	Mayer Steel Pipe Corporation 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		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 % (Note6)	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:

1.Issuer is 0.

2.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 Company’s financing limit for a single enterprise must not exceed 10% of its net worth according to most recent financial report.

Note 5: The Company’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.

～ 98 ～

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

Table 2

Table 2	Table 2	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation Provision of endorsements/guarantees to others January 1 to December 31, 2021	Mayer Steel Pipe Corporation 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:

• 1.Issuer is 0.

2.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:

• 1.Companies with business interactions with the Company.

2.Companies in which the Company directly or indirectly holds more than 50% of voting shares.

3.Companies that in directly or indirectly hold more than 50% of the Company’s voting shares.

4.Companies in which the Company directly or indirectly holds more than 90% of voting shares.

5.Companies providing mutual endorsements/guarantees between industry peers or joint applicants for purposes of undertaking a construction project.

6.Companies where all capital-contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.

7.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.

～ 99 ～

Mayer Steel Pipe Corporation

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
				Share	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 5.

～ 100 ～

Mayer Steel Pipe Corporation 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	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
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.

～ 101 ～

Mayer Steel Pipe Corporation

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

Table 5-1

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 current period	Investment (loss) profit recognized by the 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 Note 6 Note 6	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

～ 102 ～

Mayer Steel Pipe Corporation

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

Table 5-2

January 1 Table 5-2	January 1 Table 5-2	January 1 Table 5-2	January 1 Table 5-2	to December 31, 2021	to December 31, 2021	to December 31, 2021	to December 31, 2021	to December 31, 2021	to December 31, 2021	to December 31, 2021	to December 31, 2021
				In Thousands of New Taiwan Dollars
Name of investor	Name of investee	Location	Main business activities	Initial investment amount		Shares held at the end of theperiod			Net profit (loss) of investee for the current period	Investment (loss) profit recognized by the 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)	Note 6	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.

～ 103 ～

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

Table 6

Table 6
							In Thousands of New Taiwan Dollars
Investee	Main businesses	Total paid-in capital		Method of investment (1)	Accumulated outflow of investment from Taiwan as of beginning balance	I	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

～ 104 ～

Mayer Steel Pipe Corporation

Information on major shareholders

December 31, 2021

Table 7

Name of major shareholders	Shareholding	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.

～ 105 ～