CST - Audit Report / Information 2020

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT

DECEMBER 31, 2020 AND 2019

For the convenience of readers and for information purpose only, the 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. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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Cheng Shin Rubber Ind. Co., Ltd. and subsidiaries Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2020, pursuant to “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises,” the company that is required to be included in the consolidated financial statements of affiliates, is the same as the company required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standards 10. Also, if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR20004276

To the Board of Directors and Shareholders of Cheng Shin Rubber Ind. Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Cheng Shin Rubber Ind. Co., Ltd. and subsidiaries (the “Group”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of other auditors (please refer to the “other matter” section of our report), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants in 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 and the report of other auditors are sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

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

Key audit matters for the Group’s financial statements of the current period are stated as follows:

Appropriateness of cut-off on sales revenue

Description

For the accounting policy of sales revenue recognition, please refer to Note 4(31). For the detail of sales revenue, please refer to Note 6(21). For the year ended December 31, 2020, the sales revenue amounted to NT$96,209,056 thousand.

The Group’s main business is the manufacturing and sales of various tires and rubber products. The main sources of sales revenue are from the assembly plants and dealers. In accordance with the contract terms with some assembly plants, as inspections are completed in the assembly plants, the transfer of control to the merchandise is completed and sales revenue is recognized. The sales revenue recognition process involves many manual controls and adjustments are likely to occur. As a result, the timing of sales revenue recognition could be inappropriate. Therefore, we included the appropriateness of cut-off on sales revenue as one of the key areas of focus for this year.

How our audit addressed the matter

The procedures that we have conducted in response to the above key audit matter are summarized as follows:

We obtained an understanding of the Group’s sales revenue cycle, reviewed internal control process and contracts of assembly plant sales in order to assess the effectiveness of managements’ control of revenue recognition on assembly plant sales.
We tested the Group’s sales transactions around the year-end date to check whether assembly plant sales are recorded in the proper period. We also tested whether changes in inventory and cost of goods sold were carried over and recorded in the proper period in order to assess the appropriateness of cut-off on sales revenue.

~4~

Timing of reclassification of unfinished construction and uninspected equipment to property, plant and equipment.

Description

For the accounting policy on property, plant and equipment, please refer to Note 4(15). For the details of property, plant and equipment, please refer to Note 6(7). As at December 31, 2020, the unfinished construction and equipment under acceptance amounted to NT$5,346,734 thousand.

To maintain market competitiveness, the Group continuously expands plants, replaces old production lines with new ones and incurs significant amounts of capital expenditures every year. The unfinished construction and uninspected equipment are measured at cost. When the finished construction’s inspection report is issued and the uninspected equipment is ready for use, they are reclassified to property, plant and equipment and starts accrual of depreciation expense. The inspection process involves management’s judgement, thus, the timing of reclassification and accrual of depreciation expense could be inappropriate. Therefore, we indicated that the audit of timing of depreciation recognition after reclassification of unfinished construction and uninspected equipment to property, plant and equipment as one of the key areas of focus for this year.

How our audit addressed the matter

The procedures that we have conducted in response to the above key audit matter are summarized as follows:

We obtained an understanding of the Group’s property, plant and equipment process cycle, reviewed the internal control process and purchase contracts of property, plant and equipment in order to assess the effectiveness of managements’ control of timing of reclassification of unfinished construction and uninspected equipment to property, plant and equipment.
We tailored our audit over fixed asset classification to check whether reclassification of assets are accurate and recorded in the proper period.
We verified the status of unfinished construction and uninspected equipment and assessed the reasonableness of the recognition of unfinished construction and uninspected equipment.

~5~

Changes of enterprise resource planning ERP system

Description

The ERP system of the Company’s subsidiary, CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD., was changed from a self- developed system to the SAP system in October 2020. The SAP system would replace the operating platform initially used to record the subsidiary’s operating activities. Since this involved changes in the information environment of primary operating platform, thus, we listed the change of ERP system as a key audit matter.

How our audit addressed the matter

The procedures that we have conducted in response to the above key audit matter are summarized as follows:

Interviewed with management to discuss about the operating process which affected the new system, internal controls and introduction plan to assess the effectivity of the change in the system.
Obtained an understanding on the control of data transfer when the system changed, and checked the accuracy of account balances at the beginning date.
Obtained an understanding and tested the internal controls of primary operation and the system environment which was relied upon by the financial reporting to assess the effectiveness of internal controls after the data was transferred.

Other matter – Scope of the audit

We did not audit the financial statements of certain consolidated subsidiaries, which statements reflect total assets of NT$5,525,613 thousand and NT$5,017,732 thousand, constituting 4% and 3% of the consolidated total assets as of December 31, 2020 and 2019, respectively, and the total liabilities of NT$1,874,180 thousand and NT$1,767,827 thousand, constituting 3% and 2% of the consolidated total liabilities as of December 31, 2020 and 2019, respectively, and total operating revenues of NT$5,323,093 thousand and NT$5,585,826 thousand, constituting 6% and 5% of consolidated total net operating revenue for the years then ended, respectively. Those financial statements and the information disclosed in Note 13 were audited by other auditors whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on the audit reports of the other auditors.

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Other matter – Parent company only financial statements

We have audited and expressed an unqualified opinion with other matter paragraph on the parent company only financial statements of the Group as at and for the years ended December 31, 2020 and 2019.

Responsibilities of management and those charged with governance for the consolidated financial statements

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

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

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

Wang, Yu-Chuan Chou, Chien-Hung

For and on behalf of PricewaterhouseCoopers, Taiwan March 24, 2021

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets	December 31, 2020 AMOUNT % `$` `19,112,521` `13` `820` `-` `29,817` `-` `4,544,057` `3` `9,472,839` `6` `43,474` `-` `17,563,439` `12` `1,142,851` `1` `993,074` `1` `52,902,892` `36` `58,187` `-` `172,981` `-` `89,547,273` `59` `5,278,546` `3` `531,097` `-` `1,921,209` `1` `912,968` `1` `98,422,261` `64` `$` `151,325,153` `100`	December 31, 2019	December 31, 2019
	AMOUNT `$` `19,112,521` `820` `29,817` `4,544,057` `9,472,839` `43,474` `17,563,439` `1,142,851` `993,074` `52,902,892` `58,187` `172,981` `89,547,273` `5,278,546` `531,097` `1,921,209` `912,968` `98,422,261` `$` `151,325,153`	AMOUNT `$` `25,501,222` `-` `25,935` `3,761,453` `8,938,927` `54,053` `17,949,870` `1,214,726` `1,483,789` `58,929,975` `58,187` `157,489` `95,889,585` `5,518,534` `550,156` `1,986,139` `950,164` `105,110,254` `$` `164,040,229`	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1120 Financial assets at fair value through other comprehensive income - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Current Assets Non-current assets 1517 Financial assets at fair value through other comprehensive income - non- current 1550 Investments accounted for using the equity method 1600 Property, plant and equipment, net 1755 Right-of-use assets 1760 Investment property, net 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets			`16` `-` `-` `2` `5` `-` `11` `1` `1`
			`36`
			`-` `-` `59` `3` `-` `1` `1`
			`64`
			`100`

(Continued)

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CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity December 31, 2020
December 31, 2019
Notes
AMOUNT
%
AMOUNT
%
6(11)
$
7,222,391
5
$
16,843,366
10
6(21)
1,149,282
1
935,619
1
157,811
-
1,122,276
1
8,442,030
5
7,793,330
5
6(12)
5,557,536
4
5,587,574
3
6(27)
1,345,258
1
755,825
-
179,624
-
139,374
-
6(13)(14)(15)
10,341,077
7
10,226,810
6
34,395,009
23
43,404,174
26
6(14)
8,500,000
6
14,500,000
9
6(15) and 7
22,940,974
15
23,302,050
14
144,918
-
141,841
-
6(27)
1,076,640
1
1,313,834
1
534,727
-
569,553
-
6(16)
2,757,604
2
2,838,090
2
35,954,863
24
42,665,368
26
70,349,872
47
86,069,542
52
6(17)
32,414,155
21
32,414,155
20
6(18)
53,267
-
52,576
-
6(19)
15,533,661
10
15,186,978
9
6,904,245
5
5,200,298
3
32,143,063
21
31,445,921
19
6(20)
6(20)
(
6,611,296) (
4) (
6,904,245) (
4 )
80,437,095
53
77,395,683
47
538,186
-
575,004
1
80,975,281
53
77,970,687
48
9
11
$
151,325,153
100
$
164,040,229
100

Current liabilities
2100
Short-term borrowings
2130
Current contract liabilities
2150
Notes payable
2170
Accounts payable
2200
Other payables
2230
Current income tax liabilities
2280
Current lease liabilities
2300
Other current liabilities
21XX
Current Liabilities
Non-current liabilities
2530
Corporate bonds payable
2540
Long-term borrowings
2550
Provisions for liabilities - non-current
2570
Deferred income tax liabilities
2580
Non-current lease liabilities
2600
Other non-current liabilities
25XX
Non-current liabilities
2XXX
Total Liabilities
Equity
Equity attributable to owners of
parent
Share capital
3110
Share capital - common stock
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
31XX
Equity attributable to owners of
the parent
36XX
Non-controlling interest
3XXX
Total equity
Significant contingent liabilities and
unrecognised contract commitments
Significant events after the balance
sheet date
3X2X
Total liabilities and equity

Liabilities and Equity	December 31, 2020 December 31, 2019 Notes AMOUNT % AMOUNT % 6(11) `$` `7,222,391` `5` `$` `16,843,366` `10` 6(21) `1,149,282` `1` `935,619` `1` `157,811` `-` `1,122,276` `1` `8,442,030` `5` `7,793,330` `5` 6(12) `5,557,536` `4` `5,587,574` `3` 6(27) `1,345,258` `1` `755,825` `-` `179,624` `-` `139,374` `-` 6(13)(14)(15) `10,341,077` `7` `10,226,810` `6` `34,395,009` `23` `43,404,174` `26` 6(14) `8,500,000` `6` `14,500,000` `9` 6(15) and 7 `22,940,974` `15` `23,302,050` `14` `144,918` `-` `141,841` `-` 6(27) `1,076,640` `1` `1,313,834` `1` `534,727` `-` `569,553` `-` 6(16) `2,757,604` `2` `2,838,090` `2` `35,954,863` `24` `42,665,368` `26` `70,349,872` `47` `86,069,542` `52` 6(17) `32,414,155` `21` `32,414,155` `20` 6(18) `53,267` `-` `52,576` `-` 6(19) `15,533,661` `10` `15,186,978` `9` `6,904,245` `5` `5,200,298` `3` `32,143,063` `21` `31,445,921` `19` 6(20) 6(20) `(` `6,611,296) (` `4) (` `6,904,245) (` `4 )` `80,437,095` `53` `77,395,683` `47` `538,186` `-` `575,004` `1` `80,975,281` `53` `77,970,687` `48` 9 11 `$` `151,325,153` `100` `$` `164,040,229` `100`
Current liabilities 2100 Short-term borrowings 2130 Current contract liabilities 2150 Notes payable 2170 Accounts payable 2200 Other payables 2230 Current income tax liabilities 2280 Current lease liabilities 2300 Other current liabilities 21XX Current Liabilities Non-current liabilities 2530 Corporate bonds payable 2540 Long-term borrowings 2550 Provisions for liabilities - non-current 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Non-current liabilities 2XXX Total Liabilities Equity Equity attributable to owners of parent Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity

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

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CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items YearendedDecember 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
6(21) and 7
$
96,209,056
100
$
109,507,773
100
6(5)
(
72,220,406) (
75) (
85,548,240) (
78)
23,988,650
25
23,959,533
22
7
(
7,272,906) (
7) (
8,170,109) (
8)
(
3,540,352) (
4) (
3,638,136) (
3)
(
4,578,667) (
5) (
5,148,156) (
5)
(
15,391,925) (
16) (
16,956,401) (
16)
8,596,725
9
7,003,132
6
6(22)
259,135
-
295,566
-
6(23)
1,005,988
1
598,662
1
6(24) and 10
(
697,239) (
1) (
356,865)
-
6(25)
(
1,026,423) (
1) (
1,719,849) (
2)
6(6)
18,520
-
6,653
-
(
440,019) (
1) (
1,175,833) (
1)
8,156,706
8
5,827,299
5
6(27)
(
2,155,503) (
2) (
2,311,602) (
2)
$
6,001,203
6
$
3,515,697
3

4000
Sales revenue
5000
Operating costs
5900
Net operating margin
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6000
Total operating expenses
6900
Operating profit
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7060
Share of profit of associates and
joint ventures accounted for using
the equity method
7000
Total non-operating income and
losses
7900
Profit before income tax
7950
Income tax expense
8200
Profit for the year

Items	YearendedDecember 31 2020 2019 Notes AMOUNT % AMOUNT % 6(21) and 7 `$` `96,209,056` `100` `$` `109,507,773` `100` 6(5) `(` `72,220,406) (` `75) (` `85,548,240) (` `78)` `23,988,650` `25` `23,959,533` `22` 7 `(` `7,272,906) (` `7) (` `8,170,109) (` `8)` `(` `3,540,352) (` `4) (` `3,638,136) (` `3)` `(` `4,578,667) (` `5) (` `5,148,156) (` `5)` `(` `15,391,925) (` `16) (` `16,956,401) (` `16)` `8,596,725` `9` `7,003,132` `6` 6(22) `259,135` `-` `295,566` `-` 6(23) `1,005,988` `1` `598,662` `1` 6(24) and 10 `(` `697,239) (` `1) (` `356,865)` `-` 6(25) `(` `1,026,423) (` `1) (` `1,719,849) (` `2)` 6(6) `18,520` `-` `6,653` `-` `(` `440,019) (` `1) (` `1,175,833) (` `1)` `8,156,706` `8` `5,827,299` `5` 6(27) `(` `2,155,503) (` `2) (` `2,311,602) (` `2)` `$` `6,001,203` `6` `$` `3,515,697` `3`
4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for using the equity method 7000 Total non-operating income and losses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year

(Continued)

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CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items Year ended December 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
6(16)
$
1,267
-
$
4,820
-
6(3)(20)
3,882
-
3,050
-
6(6)
(
528)
-
722
-
6(27)
(
253)
- (
964)
-
4,368
-
7,628
-
6(20)
347,703
1 (
2,190,282) (
2)
6(20)(27)
(
72,267)
-
426,749
1
275,436
1 (
1,763,533) (
1)
$
279,804
1 ($
1,755,905) (
1)
$
6,281,007
7
$
1,759,792
2
$
5,988,702
6
$
3,466,827
3
12,501
-
48,870
-
$
6,001,203
6
$
3,515,697
3
$
6,282,137
7
$
1,767,458
2
(
1,130)
- (
7,666)
-
$
6,281,007
7
$
1,759,792
2
6(28)
$
1.85
$
1.07
6(28)
$
1.85
$
1.07

Other comprehensive income
Components of other comprehensive
income that will not be reclassified to
profit or loss
8311
Other comprehensive income, before
tax, actuarial gains on defined
benefit plans
8316
Unrealized gain on valuation of
entity instruments at fair value
through profit or loss
8320
Share of other comprehensive
income of associates and joint
ventures accounted for using equity
method, components of other
comprehensive income that will not
be reclassified to profit or loss
8349
Income tax related to components of
other comprehensive income that
will not be reclassified to profit or
loss
8310
Components of other
comprehensive income that will
not be reclassified to profit or loss
Components of other comprehensive
income that will be reclassified to
profit or loss
8361
Financial statements translation
differences of foreign operations
8399
Income tax relating to the
components of other comprehensive
income that will be reclassified to
profit or loss
8360
Components of other
comprehensive income(loss) that
will be reclassified to profit or loss
8300
Other comprehensive income(loss)
for the year
8500
Total comprehensive income for the
year
Profit attributable to:
8610
Owners of the parent
8620
Non-controlling interest
Comprehensive income attributable to:
8710
Owners of the parent
8720
Non-controlling interest
Earnings per share (in dollars)
9750
Basic earnings per share
9850
Diluted earnings per share

Items	Year ended December 31 2020 2019 Notes AMOUNT % AMOUNT % 6(16) `$` `1,267` `-` `$` `4,820` `-` 6(3)(20) `3,882` `-` `3,050` `-` 6(6) `(` `528)` `-` `722` `-` 6(27) `(` `253)` `- (` `964)` `-` `4,368` `-` `7,628` `-` 6(20) `347,703` `1 (` `2,190,282) (` `2)` 6(20)(27) `(` `72,267)` `-` `426,749` `1` `275,436` `1 (` `1,763,533) (` `1)` `$` `279,804` `1 ($` `1,755,905) (` `1)` `$` `6,281,007` `7` `$` `1,759,792` `2` `$` `5,988,702` `6` `$` `3,466,827` `3` `12,501` `-` `48,870` `-` `$` `6,001,203` `6` `$` `3,515,697` `3` `$` `6,282,137` `7` `$` `1,767,458` `2` `(` `1,130)` `- (` `7,666)` `-` `$` `6,281,007` `7` `$` `1,759,792` `2` 6(28) `$` `1.85` `$` `1.07` 6(28) `$` `1.85` `$` `1.07`
Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Other comprehensive income, before tax, actuarial gains on defined benefit plans 8316 Unrealized gain on valuation of entity instruments at fair value through profit or loss 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8399 Income tax relating to the components of other comprehensive income that will be reclassified to profit or loss 8360 Components of other comprehensive income(loss) that will be reclassified to profit or loss 8300 Other comprehensive income(loss) for the year 8500 Total comprehensive income for the year Profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

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

~13~

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Notes							Equityattr	utable to owners of	theparent					Non-controlling interest	Total equity
	Share capital - common stock		Capital surplus					Retained earnings			Other equityinterest		Total
		Treasury stock transactions	G	ain on sale of assets	d	Capital surplus - onated assets received	Legal reserve	Special reserve	Unappropriated retained earnings	d	Financial statements translation ifferences of foreign operations	Unrealized gains from financial assets measured at fair value through other comprehensive income
6(20) 6(19) 6(20) 6(19)	`$ 32,414,155` `-` `-` `-` `-` `-` `-` `-` `$ 32,414,155` `$ 32,414,155` `-` `-` `-` `-` `-` `-` `-` `-` `$ 32,414,155`	`$` `9,772` `-` `-` `-` `-` `-` `-` `-` `$` `9,772` `$` `9,772` `-` `-` `-` `-` `-` `-` `-` `-` `$` `9,772`		`$ 42,804` `-` `-` `-` `-` `-` `-` `-` `$ 42,804` `$ 42,804` `-` `-` `-` `-` `-` `-` `-` `-` `$ 42,804`		`$` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-` `$` `-` `-` `-` `-` `-` `-` `-` `-` `691` `$` `691`	`$ 14,834,946` `-` `-` `-` `352,032` `-` `-` `-` `$ 15,186,978` `$ 15,186,978` `-` `-` `-` `346,683` `-` `-` `-` `-` `$ 15,533,661`	`$ 4,430,061` `-` `-` `-` `-` `770,237` `-` `-` `$ 5,200,298` `$ 5,200,298` `-` `-` `-` `-` `1,703,947` `-` `-` `-` `$ 6,904,245`	`$` `32,662,342` `3,466,827` `4,578` `3,471,405` `(` `352,032 )` `(` `770,237 )` `(` `3,565,557 )` `-` `$` `31,445,921` `$` `31,445,921` `5,988,702` `486` `5,989,188` `(` `346,683 )` `(` `1,703,947 )` `(` `3,241,416 )` `-` `-` `$` `32,143,063`		`($` `5,214,518 )` `-` `(` `1,706,997 )` `(` `1,706,997 )` `-` `-` `-` `-` `($` `6,921,515 )` `($` `6,921,515 )` `-` `289,067` `289,067` `-` `-` `-` `-` `-` `($` `6,632,448 )`	`$` `14,220` `-` `3,050` `3,050` `-` `-` `-` `-` `$` `17,270` `$` `17,270` `-` `3,882` `3,882` `-` `-` `-` `-` `-` `$` `21,152`	`$` `79,193,782` `3,466,827` `(` `1,699,369 )` `1,767,458` `-` `-` `(` `3,565,557 )` `-` `$` `77,395,683` `$` `77,395,683` `5,988,702` `293,435` `6,282,137` `-` `-` `(` `3,241,416 )` `-` `691` `$` `80,437,095`	`$` `624,224` `48,870` `(` `56,536 )` `(` `7,666 )` `-` `-` `-` `(` `41,554 )` `$` `575,004` `$` `575,004` `12,501` `(` `13,631 )` `(` `1,130 )` `-` `-` `-` `(` `35,688 )` `-` `$` `538,186`	`$` `79,818,006` `3,515,697` `(` `1,755,905 )` `1,759,792` `-` `-` `(` `3,565,557 )` `(` `41,554 )` `$` `77,970,687` `$` `77,970,687` `6,001,203` `279,804` `6,281,007` `-` `-` `(` `3,241,416 )` `(` `35,688 )` `691` `$` `80,975,281`

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

~14~

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation

Depreciation expense on right-of-use assets

Depreciation on investment property

Amortisation expense

Expected credit loss

Share of profit of associates and joint ventures
Saccounted for using equity method

Net gain on financial assets or liabilities at fair value
Nthrough profit or loss

Loss on disposal of property, plant and equipment

(Reversal of)/Impairment loss on non -financal assets
Interest expense

Interest income

Deferred government grants revenue
Unrealized foreign exchange loss (gain) on long-term
Uforeign currency loans
Disaster loss

Compensation revenue from levy of right-of-use
Changes in operating assets and liabilities
Changes in operating assets
Notes receivable, net
Accounts receivable
Accounts receivable - related parties
Inventories
Prepayments
Other current assets
Other non-current assets
Changes in operating liabilities
Contract liabilities - current
Notes payable
Accounts payable
Other payables
Other current liabilities
Accrued pension liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
Income tax refund received
Net cash flows from operating activities YearendedDecember 31
Notes
2020
2019
$
8,156,706 $
5,827,299
6(7)(26)
11,634,602
12,682,025
6(8)(26)
290,531
246,190
6(9)(26)
22,994
23,995
6(10)(26)
98,712
102,729
12(2)
46,173
29,461
6(6)
(
18,520 ) (
6,653 )
6(2)(24)
756
2,383
6(7)(24)
35,960
66,705
6(7)
(
956 )
278,592
6(7)(25)
1,026,423
1,719,849
6(22)
(
259,135 ) (
295,566 )
(
147,309 ) (
117,831 )
2,671 (
343,657 )
6(5)(7)(24) and 10
279
-
(
13,982 )
-
(
782,604 ) (
1,087,910 )
(
580,917 )
894,661
10,579 (
6,077 )
375,519
1,412,359
65,684
239,607
556,348
127,023
(
18,601 )
161,965
213,663
188,548
(
964,465 )
498,861
648,700 (
1,159,872 )
588,523
31,528
249,526
67,971
(
135,633 )
2,203
2,114
10,115
21,104,341
21,596,503
255,502
292,320
2,500
2,500
(
1,117,009 ) (
1,758,533 )
(
1,904,517 ) (
2,440,090 )
60,861
204,699
18,401,678
17,897,399

(Continued)

~15~

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Net changes in financial assets and liabilities at fair value
Nthrough profit or loss
Acquisition of property, plant and equipment

Payment for capitalized interests

Proceeds from disposal of property, plant and equipment
Acquisition of investment properties

Acquisition of intangible assets

(Increase) decrease in refundable deposits
Proceeds from disposal of right-of-use assets
Increase in other non-current liabilities
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans

Decrease in short-term loans

Repayments of bonds

Increase in long-term loans

Decrease in long-term loans

Increase (decrease) in guarantee deposits received

Repayments of principal portion of lease liabilities

Cash dividends paid

Cash dividends paid to non-controlling interests

Capital surplus arising from donated assets
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash
Eequivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year YearendedDecember 31
Notes
2020
2019
($
1,576 ) $
860
6(7)(29)
(
6,595,878 ) (
8,587,584 )
6(7)(25)
(
24,489 ) (
20,319 )
98,557
167,489
6(9)
(
82 )
-
6(10)
(
32,680 ) (
68,548 )
(
9,225 )
33,102
32,515
-
159,878
44,305
(
6,372,980 ) (
8,430,695 )
6(11)(30)
14,371,207
21,205,751
6(11)(30)
(
23,540,010 ) (
19,745,431 )
6(14)(30)
(
2,500,000 ) (
4,800,000 )
6(15)(30)
7,927,028
13,030,724
6(15)(30)
(
10,896,382 ) (
17,357,382 )
6(30)
9,392 (
6,828 )
6(8)(30)
(
176,196 ) (
113,705 )
6(19)(30)
(
3,241,416 ) (
3,565,557 )
6(30)
(
35,688 ) (
41,554 )
691
-
(
18,081,374 ) (
11,393,982 )
(
336,025 ) (
380,996 )
(
6,388,701 ) (
2,308,274 )
6(1)
25,501,222
27,809,496
6(1)
$
19,112,521 $
25,501,222

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

~16~

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

Cheng Shin Rubber Ind. Co., Ltd. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in: (a) Processing, manufacturing and trading of bicycle tires, electrical vehicle tires, reclaimed rubber, various rubbers and resin and other rubber products; and (b) Manufacturing and trading of various rubber products and relevant rubber machinery. The Company has been listed on the Taiwan Stock Exchange starting December 1987.

THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorised for issuance by the Board of Directors on March 24, 2021.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

follows:
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Note：Earlier application from January 1, 2020 is allowed by FSC. Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of Amaterial’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9 and IAS 39 and IFRS 7, ‘Interest rate Abechmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows：

the Group New standards, interpretations and amendments endorsed by the FSC follows：	effective from 2021 are a
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption from Aapplying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, A‘Interest Rate Benchmark Reform - Phase 2’	January 1, 2021 January 1, 2021

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

~17~

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

ndorsed by the FSC are as follows:
New Standards,Interpretations and Amendments Amendments to IFRS 3, ‘Reference to the conceptual framework’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’ Amendments to IAS 37, ‘Onerous contracts — cost of fulfilling a contract’ Annual improvements to IFRS Standards 2018–2020 Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’	Effective date by International Accounting Standards Board
	January 1, 2022 To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022 January 1, 2022

ndorsed by the FSC are as follows:

New Standards,Interpretations and Amendments
Amendments to IFRS 3, ‘Reference to the conceptual framework’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, ‘Insurance contracts’
Amendments to IAS 1, ‘Classification of liabilities as current or
non-current’
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 16, ‘Property, plant and equipment: proceeds
before intended use’
Amendments to IAS 37, ‘Onerous contracts — cost of fulfilling
a contract’
Annual improvements to IFRS Standards 2018–2020
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’

Effective date by
International Accounting
Standards Board

January 1, 2022
To be determined by
International
Accounting Standards
Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022
January 1, 2022
January 1, 2022

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation
A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
- (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
- (b) Financial assets at fair value through other comprehensive income.
- (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.
B. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

~18~

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions 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 recognised directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiary	Main business activities		December 31,2020 December 31,2019 100 100 100 100 100 100 100 100 Ownership (%)	Description
				December 31,2020
CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD.	MAXXIS International Co., Ltd. CST Trading Ltd. MAXXIS Trading Ltd. CHENG SHIN RUBBER USA, INC.	Holding company Holding company Holding company Import and export of tires		100 100 100 100

~19~

Name of investor	Name of subsidiary	Main business activities		December 31,2020 December 31,2019 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 - 20 - 100 100 60 60 100 100 Ownership (%)	Description Note 5 Note 4 Note 3
				December 31,2020
CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD. CHENG SHIN RUBBER IND. CO., LTD. MAXXIS International Co., Ltd. MAXXIS International Co., Ltd. MAXXIS International Co., Ltd.	CHENG SHIN RUBBER CANADA, INC. MAXXIS Tech Center Europe B.V. PT MAXXIS International Indonesia Maxxis Rubber India Private Limited MAXXIS (Taiwan) Trading CO., LTD. PT.MAXXIS TRADING INDONESIA Maxxis Europe B.V. MAXXIS RUBBER JAPAN CO., LTD. MAXXIS INTERNATIONAL MEXICO S. de R.L. de C.V. TIANJIN TAFENG RUBBER IND CO., LTD. CHENG SHIN PETREL TIRE (XIAMEN) CO., LTD. MAXXIS International (HK) Ltd.	Import and export of tires Technical center Production and sales of various types of tires Production and sales of various types of tires Wholesale and retail of tires Large-amount trading of vehicles parts and accessories Import and export of tires Import and export of tires Import and export of tires Warehouse logistics and after-sales service centre Production and sales of various types of tires Holding company		100 100 100 100 100 100 100 100 20 100 60 100

~20~

Name of investor	Name of subsidiary	Main business activities		December 31,2020 December 31,2019 100 100 100 100 100 100 25 25 100 100 100 100 50 50 30 30 70 70 Ownership (%)	Description Note 2 Note 1 Note 1
				December 31,2020
MAXXIS International (HK) Ltd. MAXXIS International (HK) Ltd. MAXXIS International (HK) Ltd. MAXXIS International (HK) Ltd. CST Trading Ltd. Cheng Shin International (HK) Ltd. Cheng Shin International (HK) Ltd. Cheng Shin International (HK) Ltd. CHENG SHIN TIRE & RUBBER (CHINA) CO.,LTD.	CHENG SHIN RUBBER (XIAMEN) IND., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. CHENG SHIN (XIAMEN) INTL AUTOMOBILE CULTURE CENTER CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. Cheng Shin International (HK) CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN TOYO (KUNSHAN) MACHINERY CO., LTD. CHENG SHIN TIRE & RUBBER (CHONGQING) CO., LTD. CHENG SHIN TIRE & RUBBER (CHONGQING) CO., LTD.	Production and sales of various types of tires Production and sales of various types of tires Research, development, testing and exhibition of tires and automobile accessory products and related products, and management of racing tracks Production and sales of various types of tires Holding company Production and sales of various types of tires Production, sales and maintenance of models Production and sales of various types of tires Production and sales of various types of tires		100 100 100 25 100 100 50 30 70

~21~

Name of investor	Name of subsidiary	Main business activities		December 31,2020 December 31,2019 100 100 100 100 95 95 40 40 49 49 75 75 100 100 100 100 100 100 80 - Ownership (%)	Description Note 3 Note 2 Note 4
				December 31,2020
CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. MAXXIS Trading Ltd. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. MAXXIS Holdings (BVI) Co., Ltd. MAXXIS Holdings (BVI) Co., Ltd. CHENG SHIN RUBBER USA, INC.	KUNSHAN MAXXIS TIRE CO., LTD. MAXXIS Holdings (BVI) Co., Ltd. CHIN CHOU CHENG SHIN ENTERPRISE CO., LTD. CHENG SHIN PETREL TIRE (XIAMEN) CO., LTD. CHENG SHIN LOGISTIC (XIAMEN) CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. XIAMEN ESTATE CO., LTD. MAXXIS International (Thailand) Co., Ltd. Cheng Shin Rubber (Vietnam) IND Co., Ltd. MAXXIS INTERNATIONAL MEXICO S. de R.L. de C.V.	Retail of accessories for rubber tires Holding company Retail of accessories for rubber tires Production and sales of various types of tires International container transportation business Production and sales of various types of tires Construction and trading of employees’ housing Production and sales of various types of tires Production and sales of various types of tires Import and export of tires		100 100 95 40 49 75 100 100 100 80

~22~

     - Note 1: Cheng Shin International (HK) Ltd. and Cheng Shin Tire & Rubber (China) Co., Ltd. collectively hold 100% equity interest in Cheng Shin Tire & Rubber (Chongqing) Co., Ltd.

     - Note 2: Maxxis International (HK) Ltd. and Cheng Shin Rubber (Xiamen) Ind., Ltd. collectively hold 100% equity interest in Cheng Shin Rubber (Zhangzhou) Ind. Co., Ltd.

     - Note 3: Maxxis International Co., Ltd. and Cheng Shin Rubber (Xiamen) Ind., Ltd. collectively hold 100% equity interest in Cheng Shin Petrel Tire (Xiamen) Co., Ltd.

     - Note 4: In March 2019, the Company established MAXXIS INTERNATIONAL MEXICO S. de R.L. de C.V. in Mexico, and remitted out investment in the amount of MXN 2,093 thousand with the subsidiary, CHENG SHIN RUBBER USA, INC., during the second quarter and third quarter of 2020, and jointly acquired 100% equity interest of MAXXIS INTERNATIONAL MEXICO S. de R.L. de C.V. The subsidiary was included in the consolidated entity in the second quarter of 2020.

     - Note 5: In February 2020, the Company established MAXXIS RUBBER JAPAN CO., LTD. in Japan, and remitted out investment in the amount of JPY 50,000 thousand in April 2020 , and acquired 100% equity interest. The subsidiary was included in the consolidated entity in the second quarter of 2020.

  - C. Subsidiaries not included in the consolidated financial statements:

None.
D. Adjustments for subsidiaries with different balance sheet dates:
None.
- E. Significant restrictions:
None.
F. Subsidiaries that have non-controlling interests that are material to the Group:
None.
(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.
(b)Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.
B. Translation of foreign operations

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The operating results and financial position of all the group entities and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  - (a) Assets and liabilities presented in each balance sheet are translated at the closing exchange rate at the date of that balance sheet;

  - (b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

  - (c) All resulting exchange differences are recognised in other comprehensive income.

(5) Classification of current and non-current items
A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
- (a) Assets arising from operating activities that are expected to be 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 twelve months from the balance sheet date;
- (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 twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
- (a) Liabilities that are expected to be settled within the normal operating cycle;
- (b) Assets held mainly for trading purposes;
- (c) Liabilities that are to be settled within twelve months from the balance sheet date;
- (d) Liabilities for which the repayment date cannot be deferred unconditionally for at least twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
(6) Cash equivalents
Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.
(7) Financial assets at fair value through profit or loss
A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.
D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(8) Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:
- (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

~24~

(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:
(a) The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognised in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss.
(9) Accounts and notes receivable
A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
(10) Impairment of financial assets
For accounts receivable that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs at each reporting date.
(11) Derecognition of financial assets
The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.
－
(12) Leasing arrangements (lessor) lease receivables/ operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(13) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.
(14) Joint operation and investments accounted for using the equity method joint ventures
The Group accounts for its interest in a joint venture using the equity method. When the transaction provides evidence of a reduction in the net realisable value of current assets or an impairment loss, all such losses shall be recognised immediately. When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture together with any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint venture.
(15) Property, plant and equipment
A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will

~25~

flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

C. Property, plant and equipment are measured at cost model subsequently. Land is not depreciated. Other property, plant and equipment are depreciated using the straight-line method over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:
- (a) Buildings and structures: 5 ~ 60 years
- (b) Machinery and equipment: 5 ~ 30 years
- (c) Test equipment: 5 ~ 15 years
- (d) Transportation equipment: 5 ~ 10 years
- (e) Office equipment: 3 ~ 10 years
- (f) Other equipment: 3 ~ 20 years
(16) Leasing arrangements (lessee)－right-of-use assets/ lease liabilities
A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:
- (a) Fixed payments, less any lease incentives receivable; and
- (b) Variable lease payments that depend on an index or a rate.
- The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.
C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;
- (b) Any lease payments made at or before the commencement date; and
- (c) Any initial direct costs incurred by the lessee.
- The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.
D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognise the difference between remeasured lease liability in profit or loss.

(17) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model.

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Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 5 ~ 40 years.

(18) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 2 to 5 years.

(19) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised 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. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(20) Borrowings
Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
(21) Notes and accounts payable
A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.
B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
(22) Financial liabilities at fair value through profit or loss
A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges.
B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.
(23) Bonds payable
Ordinary corporate bonds issued by the Group are initially recognised at fair value less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is presented as an addition to or deduction from bonds payable, which is amortised to profit or loss over the period of bond circulation using the effective interest method as an adjustment to ‘finance costs’.

(24) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified group classified the contract is discharged or cancelled or expires.

(25) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(26) Non-hedging derivatives

Non-hedging derivatives are initially recognised at fair value on the date a derivative contract is entered into and recorded as financial assets or financial liabilities at fair value through profit or loss. They are subsequently remeasured at fair value and the gains or losses are recognised in profit or loss.

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(27) Provisions

Provisions (including decommissioning) are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.
(28) 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 respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

B. Pensions
(a) Defined contribution plan

For the defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

  - (b) Defined benefit plan

     - i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.

     - ii. Remeasurements arising on the defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

C. Employees’, directors’ and supervisors’ remuneration
- Employees’ remuneration and directors’ and supervisors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal obligation 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.
(29) Income taxes
A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions

~28~

where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.
F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.
(30) Dividends
Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities.
(31) Revenue recognition
A. Sales of goods:
- (a) The Group manufactures and sells various tire and rubber products. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.
- (b) Sales revenue of the Group, which mainly consists of sale of various tire and rubber products, was recognised based on the contract price net of sales discount and price break. Accumulated experience is used to estimate and provide for the sales discounts and allowances and price break, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected sales discounts and allowances and price break payable to customers in relation to sales made until the end of the reporting period. The sales are usually made with a credit term of 30 ~90 days. As the time interval between the transfer

~29~

of committed goods or service and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.

  - (c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

B. Property development and resale
- (a) The Group develops and sells residential properties. Revenue is recognised when control over the property has been transferred to the customer. The properties have generally no alternative use for the Group due to contractual restrictions. However, an enforceable right to payment does not arise until legal title has passed to the customer. Therefore, revenue is recognised at a point in time when the legal title has passed to the customer.
- (b) The revenue is measured at an agreed upon amount under the contract. The consideration is due when legal title has been transferred.
(32) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Company will comply with conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognised as non-current liabilities and are amortised to profit or loss over the estimated useful lives of the related assets using the straight-line method.

(33) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Group’s chief operating decision maker is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. There is no critical accounting judgement, estimates and assumptions uncertainty for the year ended December 31, 2020.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and revolving funds Checking deposit Demand deposits Time deposits Interest rate range Time deposits	December31,2020 3,833 $ 1,217,460 16,478,670 1,412,558 $19,112,521 0.20%~2.90%	December31,2019
		3,285 $ 1,439,563 19,648,228 4,410,146
		$25,501,222
		1.75%~3.15%

The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

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

Items

December 31, 2020 December 31, 2019

Current items:

Financial assets mandatorily measured at fair

value through profit or loss

Derivative instruments $ 820 $ -

A. The Group recognised net loss amounting to $756 thousand and $2,383 thousand on financial assets mandatorily measured at fair value through profit or loss - derivative instruments for the years ended December 31, 2020 and 2019, respectively.
B. The non-hedging derivative instruments transaction and contract information are as follows:

The Group has no derivative instruments transaction on December 31, 2019. Contract amount Derivative instruments (Notionalprincipal) Contractperiod Current items: Forward foreign exchange contracts 2020/11/09~ USD enchange to NTD USD 40,000thousand 2021/3/22 Foreign exchange swap 2020/10/20~ USD enchange to NTD USD60,000thousand 2021/11/8 December31,2020	December	31,2020
		Contractperiod

The Group entered into forward foreign exchange contracts and foreign exchange swap to hedge exchange rate risk of import (export) proceeds. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

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

Items Current items: Equity instruments Listed stocks Valuation adjustment Total Non-current items: Equity instruments Unlisted stocks	December31,2020 8,665 $ 21,152 29,817 $ 58,187 $	December31,2019
		8,665 $ 17,270
		25,935 $
		58,187 $

A. The Group has elected to classify equity instruments investment that are considered to be steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $88,004 thousand and $84,122 thousand as at December 31, 2020 and 2019, respectively.

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B. Amounts recognized in other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Year ended Year ended December 31, 2020 December 31, 2019 Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income (loss) $ 3,882 $ 3,050

C. Information relating to credit risk of financial assets at fair value through other comprehensive loss/income is provided in Note 12(2).
(4) Notes and accounts receivable

Notes and accounts receivable
			December31,2020			December31,2019
Notes receivable		$	4,553,334		$	3,770,730
Less: Loss allowance	(		9,277)	(		9,277)
		$	4,544,057		$	3,761,453
Accounts receivable		$	9,533,434		$	8,980,542
Less: Loss allowance	(		60,595)	(		41,615)
		$	9,472,839		$	8,938,927

A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

is as follows:
Without past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	December	31,2020	December	31,2019
	Accounts receivable	Notesreceivable	Accounts receivable		Notesreceivable
	8,285,062 $ 880,500 212,594 67,641 87,637 9,533,434 $	4,553,334 $ - - - - 4,553,334 $	7,376,434 $ 1,099,362 282,247 83,960 138,539 8,980,542 $		3,770,730 $ - - - - 3,770,730 $

The above ageing analysis was based on past due date.

B. As at December 31, 2020 and 2019, accounts receivable and notes receivable were all from contracts with customers. And as at January 1, 2019, the balance of receivables from contracts with customers amounted to $12,608,070 thousand.
C. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes and accounts receivable was $4,544,057 thousand and $9,472,839 thousand; $3,761,453 thousand and $8,938,927 thousand, respectively.
D. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

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(5) Inventories

Inventories
			December31,2020
				Allowance for
		Cost		valuation loss			Bookvalue
Raw materials	$	5,345,364		- $		$	5,345,364
Work in progress		2,497,417	(	1,833)			2,495,584
Finished goods		6,312,629	(	98,948)			6,213,681
Buildings and land held for sale		2,249,841		-			2,249,841
Inventory in transit		1,258,969		-			1,258,969
	$	17,664,220	100,781) ($			$	17,563,439
			December31,2019
				Allowance for
		Cost		valuation loss			Bookvalue
Raw materials	$	5,977,629		- $		$	5,977,629
Work in progress		2,508,792		-			2,508,792
Finished goods		6,525,220	(	85,899)			6,439,321
Buildings and land held for sale		2,336,891		-			2,336,891
Inventory in transit		687,237		-			687,237
	$	18,035,769	85,899) ($			$	17,949,870
The cost of inventories recognized as expense for the period:
		Year ended					Year ended
		December31,2020			December31,2019
Cost of goods sold		$		72,105,934 $			85,609,331
Unallocated overheads				185,460			-
Others		(		70,988) (			61,091)
		$		72,220,406 $			85,548,240

On September 26, 2020, a plant located in Xizhou owned by the parent company of the Group absorbed some fire damage. The book value of the buildings and equipment which were damaged by the fire amounted to $10,912 thousand. The Group has relevant property insurance and has filed a claim to the insurance company. The related losses and estimated insurance claims income are presented in net amount and are shown as losses under other gains and losses. Information relating to the fire damage is provided in Note 10.

(6) Investments accounted for using the equity method

The carrying amount of the Group’s interests in all individually immaterial joint ventures and the Group’s share of the operating results are summarized below:

As at December 31, 2020 and 2019, the carrying amount of the Group’s individually immaterial joint ventures amounted to $172,981 thousand and $157,489 thousand, respectively.

Year ended December31,2020 Share of profit of associates and joint ventures accounted for using the equity method 18,520 $ Other comprehensive (loss) income- net of tax 528) ( Total comprehensive income 17,992 $	Year ended December31,2019
	6,653 $ 722
	7,375 $

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(7) Poperty, plant and equipment, net

Cost Land Buildings and structures Machinery Testing equipment Transportation equipment Office equipment Other facilities Unfinished construction and equipment under acceptance Accumulated depreciation Buildings and structures Machinery Testing equipment Transportation equipment Office equipment Other facilities Accumulated impairment Machinery Testing equipment Transportation equipment Office equipment Other facilities				Year ended December 31,2020

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Year ended December 31, 2019

															Exchange rate
	Beginningofperiod					Additions			Disposals			Transfers			differences			End ofperiod
Cost
Land		$	4,583,467		$	-		$	-		$	-		$	27,431		$	4,610,898
Buildings and structures			49,684,022			479,057	(		44,727)			796,905	(		1,104,995)			49,810,262
Machinery			100,304,545			1,089,711	(		496,950)			4,073,374	(		2,328,706)			102,641,974
Testing equipment			3,729,686			58,799	(		16,085)			180,298	(		83,346)			3,869,352
Transportation equipment			1,369,500			81,522	(		28,067)			48,438	(		43,366)			1,428,027
Office equipment			954,368			97,107	(		7,983)			36,538	(		25,118)			1,054,912
Other facilities			31,361,160			2,247,633	(		324,633)			1,171,035	(		456,739)			33,998,456
Unfinished construction and
equipment under acceptance			8,005,642			3,951,492			-	(		6,350,367)	(		42,925)			5,563,842
		$	199,992,390		$	8,005,321	($		918,445)	($		43,779)	($		4,057,764)		$	202,977,723
Accumulated depreciation
Buildings and structures	($		17,052,347)	($		2,119,130)		$	29,794		$	-		$	497,284	($		18,644,399)
Machinery	(		53,074,452)	(		6,312,299)			324,739	(		97,106)			1,022,748	(		58,136,370)
Testing equipment	(		2,670,049)	(		306,040)			10,915			1,427			75,639	(		2,888,108)
Transportation equipment	(		998,805)	(		113,250)			22,769			-			27,822	(		1,061,464)
Office equipment	(		596,140)	(		138,672)			7,013			316			16,883	(		710,600)
Other facilities	(		22,331,442)	(		3,692,634)			289,021			95,363			275,251	(		25,364,441)
	($		96,723,235)	($		12,682,025)		$	684,251		$	-		$	1,915,627	($		106,805,382)
Accumulated impairment
Machinery	($		12,651)	($		253,353)		$	-		$	-		$	9,470	($		256,534)
Testing equipment			-	(		282)			-			-			11	(		271)
Transportation equipment			-	(		2,036)			-			-			76	(		1,960)
Office equipment			-	(		60)			-			-			2	(		58)
Other facilities	(		1,926)	(		22,861)			-			-			854	(		23,933)
	($		14,577)	($		278,592)		$	-		$	-		$	10,413	($		282,756)
		$	103,254,578														$	95,889,585

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A. On September 26, 2020, a plant located in Xizhou owned by the parent company of the Group absorbed some fire damage. The book value of the buildings and equipment which were damaged by the fire amounted to $51,367 thousand. The Group has relevant property insurance and has filed a claim to the insurance company. The related losses and estimated insurance claims income are presented in net amount and are shown as losses under other gains and losses. Information relating to the fire damage is provided in Note 10.
B. The Group transformed TIANJIN TAFENG RUBBER IND CO., LTD. as logistics warehousing center since it was under the environmental protection restriction of China Government for the year ended December 31, 2019. The Group wrote down the carrying amount of certain equipment that are not qualified for operations based on the recoverable amount and recognised an impairment loss of $278,592 thousand accordingly. The recoverable amount is computed based on the equipment’s fair value less costs of disposal, estimated by the price of replacement cost and dismantling realisable value: (1) The replacement cost value is the evaluation value determined with reference to the market replacement value and the integrated depreciation rate of equipment; (2) The dismantling realisable value is the evaluation value based on the corresponding net weight of the equipment and market recovery unit price of waste and used items. The fair value is classified as a level 2 fair value.
C. The Group recognised impairment loss for the year ended December 31, 2019 was $278,592 thousand. Details of such loss are as follows:

thousand. Details of such loss are as follows:
Impairment loss Machinery Testing equipment Transportation equipment Office equipment Other equipment	YearendedDecember31,2019
	Recognisedinprofit or loss
	253,353 $ 282 2,036 60 22,861
	278,592 $

D. Amount of borrowing costs capitalized as part of property, plant and equipment and the range of the interest rates for such capitalization are as follows:

Amount capitalized Range of the interest rates for capitalization	Year ended December31,2020 24,489 $ 3.83%~4.68%	Year ended December31,2019
		20,319 $
		2.20%~7.53%

－
(8) Leasing arrangements lessee
A. The Group leases various assets including land, buildings, business vehicles, multifunction printers. Rental contracts are typically made for periods of 1 to 95 years. Lease terms are negotiated on an individual basis and contain various terms and conditions. The lease agreements do not impose covenants, but leased assets of land may not be used as security for borrowing purposes.
B. Short-term leases comprise of forklift trucks and stacking machines. Low-value assets comprise of computers.

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C. The carrying amount of right-of-use assets and the depreciation expense are as follows:

Land Buildings and structures Machinery Transportation equipment Office equipment Other equipment Land Buildings and structures Machinery Transportation equipment Office equipment Other equipment	December31,2020 Bookvalue 4,639,486 $ 416,568 17,917 172,707 6,645 25,223 5,278,546 $ Year ended December31,2020 Depreciationexpense 104,850 $ 91,907 3,079 74,996 3,939 11,760 290,531 $	December31,2019
		Bookvalue
		4,882,312 $ 473,987 22,208 98,075 6,257 35,695
		5,518,534 $
		Year ended December31,2019
		Depreciationexpense
		116,628 $ 64,611 3,245 46,344 2,687 12,675
		246,190 $

D. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets amounted to $215,312 thousand and $494,845 thousand, respectively.
E. Information on profit or loss in relation to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets Expense on variable lease payments	Year ended December31,2020 14,440 $ 17,215 3,268 237,669 272,592 $	Year ended December31,2019
		13,869 $ 30,248 3,158 223,278
		270,553 $

F. For the years ended December 31, 2020 and 2019, the Group’s total cash outflow for leases amounted to $448,788 thousand and $384,258 thousand, respectively.
G. Variable lease payments
(a) Some of the Group’s lease contracts contain variable lease payment terms that are linked to the stored amount of tires. For the aforementioned lease contracts, up to 42.21% and 43.21% of lease payments are on the basis of variable payment terms for the years ended December 31, 2020 and 2019 and are accrued based on the stored amount of tires. Variable payment terms are used for a variety of reasons. Various lease payments that depend on the stored amount of tires are recognised in profit or loss in the period in which the event or condition that triggers those payments occurs.
(b) A 1% increase in the stored amount of tires with such variable lease contracts would increase total lease payments by approximately $2,377 thousand and $2,233 thousand for the years ended December 31, 2020 and 2019, respectively.

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(9) Investment property, net

Investment property, net
				Year ended		December31,2020
	Opening net book								Exchange	Closing net book
		amount as at							rate		amount as at
		January1	Additions		Transfer				differences		December31
Cost
Land	$	336,339	$	82	$	-		$	-	$	336,421
Buildings and structures		455,023		-		-			7,145		462,168
	$	791,362	$	82	$	-		$	7,145	$	798,589
Accumulated depreciation
Buildings and structures	($	190,168)	($	22,994)	$	-	($		3,292)	($	216,454)
Accumulated impairment
Land	($	51,038)	$	-	$	-		$	-	($	51,038)
	$	550,156								$	531,097
				Year ended		December31,2019
	Opening net book								Exchange	Closing net book
		amount as at							rate		amount as at
		January1	Additions		Transfer				differences		December31
Cost
Land	$	336,339	$	-	$	-		$	-	$	336,339
Buildings and structures		471,597		-		-	(		16,574)		455,023
	$	807,936	$	-	$	-	($		16,574)	$	791,362
Accumulated depreciation
Buildings and structures	($	172,654)	($	23,995)	$	-		$	6,481	($	190,168)
Accumulated impairment
Land	($	51,038)	$	-	$	-		$	-	($	51,038)
	$	584,244								$	550,156

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the period	Year ended December31,2020 28,144 $ 22,994 $	Year ended December31,2019
		30,287 $
		23,995 $

B. The fair value of the investment property held by the Group as at December 31, 2020 and 2019 was $1,093,399 thousand and $1,066,478 thousand, respectively, which were valued by independent appraisers. Valuations were made using the comparison method which is categorized within Level 3 in the fair value hierarchy.
C. The Company acquired the land in Shangmei Section, Dacun Township, Changhua County which is farming and pasturable land. The land will be registered under the Company after the classification of the land is changed. Currently, the land is under the name of related party, Mr. /Ms. Chiu. The Company plans to use the land for operational expansion. The Company holds the

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original ownership certificate of such land and signed a land trust agreement, which requires the nominal holder not to transfer the ownership of the land to others.

(10) Other non-current assets

									December	December	31,2020	31,2020	31,2020			December31,2019	December31,2019	December31,2019
Intangible assets								$					181,768			$		246,790
Others													731,200					703,374
								$					912,968			$		950,164
Movements in intangible assets:
							Year			ended December 31,				2020
			Opening net													Exchange	Closing net book
	book amount as															rate		amount as at
		at January1			Additions			Reductions				Transfer			differences			December 31
Cost
Computer software		$	514,464	$		32,680		($		12,541)	($		354)	($		4,203)	$	530,046
Others			7,762			-				-			-			130		7,892
		$	522,226	$		32,680		($		12,541)	($		354)	($		4,073)	$	537,938
Accumulated amortisation
Computer software	($		273,107)	($		97,940)			$	12,541		$	66		$	5,427	($	353,013)
Others	(		2,329)	(		772)				-			-	(		56)	(	3,157)
	($		275,436)	($		98,712)			$	12,541		$	66		$	5,371	($	356,170)
		$	246,790														$	181,768
							Year			ended December 31,				2019
			Opening net													Exchange	Closing net book
	book amount as															rate		amount as at
		at January1			Additions			Reductions				Transfer			differences			December 31
Cost
Computer software		$	420,716	$		68,548		($		11,400)		$	47,230	($		10,630)	$	514,464
Others			-			-				-			8,063	(		301)		7,762
		$	420,716	$		68,548		($		11,400)		$	55,293	($		10,931)	$	522,226
Accumulated amortisation
Computer software	($		183,666)	($		101,923)			$	11,400	($		2,368)		$	3,450	($	273,107)
Others			-	(		806)				-	(		1,613)			90	(	2,329)
	($		183,666)	($		102,729)			$	11,400	($		3,981)		$	3,540	($	275,436)
		$	237,050														$	246,790

Details of amortisation on intangible assets are as follows:

Operating costs Selling expenses Administrative expenses Research and development expenses	Year ended December31,2020 10,611 $ 6,407 67,409 14,285 98,712 $	Year ended December31,2019
		9,955 $ 5,916 73,693 13,165
		102,729 $

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(11) Short-term borrowings

Type of borrowings December 31, 2020 Interest rate range Collateral Bank borrowings Bank unsecured borrowings $ 7,222,391 0.45%～5.95% None Type of borrowings December 31, 2019 Interest rate range Collateral Bank borrowings Bank unsecured borrowings $ 16,843,366 0.55%～7.95% None

The abovementioned credit loan includes the guarantee of endorsement provided by the Group. (12) Other payables

Other payables
		December31,2020			December31,2019
Dividend payable	$		657	$		657
Wages and salaries payable			1,485,019			1,432,816
Payable on machinery and equipment			607,905			1,128,354
Employee compensation payable			249,834			209,476
Compensation due to directors and supervisors			101,019			67,093
Other accrued expenses			1,751,515			1,911,096
Others			1,361,587			838,082
	$		5,557,536	$		5,587,574
Other current liabilities
		December31,2020			December31,2019
Long-term liabilities due within one year	$		9,765,552	$		9,900,811
Advance receipts			804			272
Refund liabilities			451,827			106,627
Others			122,894			219,100
	$		10,341,077	$		10,226,810
Bonds payable
		December31,2020			December31,2019
Bonds payable -issued in 2016	$		2,500,000	$		5,000,000
Bonds payable -issued in 2017			7,000,000			7,000,000
Bonds payable -issued in 2018			5,000,000			5,000,000
			14,500,000			17,000,000
Less: Current portion	(		6,000,000)	(		2,500,000)
	$		8,500,000	$		14,500,000

(13) Other current liabilities

(14) Bonds payable

A. In order to fulfil its capital and repay long-term and short-term loans, the Board of Directors of the Company has resolved to issue domestic unsecured bonds (“the bonds”). The bond issuance has been approved by the Taipei Exchange on July 16, 2018 and completed on July 25, 2018. The bonds were fully issued and total issuance amount was $5 billion with a coupon rate of 0.87%. The issuance period of the bonds is 5 years, which is from July 25, 2018 and July 25, 2023. The terms are as follows:

(a) Interest accrued/paid:

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The interest is accrued/paid at a single rate annually from the issue date.

(b) Redemption:
- The principal of the corporate bond will be redeemed at 50% of the total amount after four and five years from the issue date.
B. In order to fulfil its capital and repay long-term and short-term loans, the Board of Directors of the Company has resolved to issue domestic unsecured bonds (“the bonds”). The bond issuance has been approved by the Taipei Exchange on August 1, 2017 and completed on August 10, 2017. The bonds were fully issued and total issuance amount was $7 billion with a coupon rate of 1.03%. The issuance period of the bonds is 5 years, which is from August 10, 2017 to August 10, 2022. The terms are as follows:
(a) Interest accrued/paid:

The interest is accrued/ paid at a single rate annually from the issue date.

(b) Redemption:
- The principal of the corporate bond will be redeemed at 50% of the total amount after four and five years from the issue date.
C. In order to fulfil its capital and repay long-term and short-term loans, the Board of Directors of the Company has resolved to issue domestic unsecured bonds (“the bonds”). The bond issuance has been approved by the Taipei Exchange on September 13, 2016 and completed on September 26, 2016. The bonds were fully issued and total issuance amount was $5 billion with a coupon rate of 0.71%. The issuance period of the bonds is 5 years, which is from September 26, 2016 to September 26, 2021. The terms are as follows:
(a) Interest accrued/paid:

The interest is accrued/ paid at a single rate annually from the issue date.

(b) Redemption:
- The principal of the corporate bond will be redeemed at 50% of the total amount after four and five years from the issue date.
D. In order to meet operating capital requirements, repay debts and improve the financial structure, the Board of Directors of the Company has resolved to issue domestic unsecured bonds (“the bonds”). The bond issuance has been approved by FSC on June 6, 2014 and completed on July 18, 2014. The bonds were fully issued and total issuance amount was $4.8 billion with a coupon rate of 1.40%. The issuance period of the bonds was 5 years, which is from July 18, 2014 to July 18, 2019. The terms are as follows:
(a) Interest accrued/paid:

The interest is accrued/ paid at a single rate annually from the issue date.

(b) Redemption:

The corporate bonds will be redeemed in full amount at the maturity date.

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- (15) Long term borrowings

Long-term borrowings
Type ofborrowings	Borrowing period andrepayment term	Interest rate range 0.70%～ 4.50% 6.65% Interest rate range 1.00%～ 4.76% 6.65%	Collateral December31,2020 None 26,487,676 $ None 218,850 26,706,526 3,765,552) ( 22,940,974 $ Collateral December31,2019 None 30,487,611 $ None 215,250 30,702,861 7,400,811) ( 23,302,050 $
Long-term bank borrowings Unsecured borrowings Other borrowings Unsecured borrowings Type ofborrowings Less: Current portion	Principal is repayable in installment until June 2027. Principal is repayable in November 2022 at the maturity. Borrowing period andrepayment term
Long-term bank borrowings Unsecured borrowings Other borrowings Unsecured borrowings Less: Current portion	Principal is repayable in installment until November 2026. Principal is repayable in November 2022 at the maturity.

A. Above mentioned borrowings are capital financings through financial institutions and other related parties.
B. According to the borrowing contract, the Group shall calculate the financial ratios based on the audited annual consolidated financial statements and the reviewed semi-annual consolidated financial statements. The financial ratios shall be maintained as follows: at least 100% for current ratio, no more than 200% for debt-to-equity ratio, at least 150% for debt-service coverage ratio. The financial ratios as assessed in the financial statements have met the abovementioned requirements as at December 31, 2020 and 2019.
C. The currencies and carrying amounts (in thousands of New Taiwan dollars) of the Group’s longterm borrowings (including current portion) denominated in foreign currencies are as follows:

Currency December 31, 2020 December 31, 2019 USD $ 13,731,157 $ 16,339,100

(16) Pensions

A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act,

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covering all regular employees’ including commissioned managers service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor Standard Act. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions to cover the deficit by next March.

(b) The amounts recognised in the balance sheet are as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability	December31,2020 1,278,916 $ 695,313) ( 583,603 $	December31,2019
		1,351,590 $ 653,508) (
		698,082 $

2020

Movements in net defined benefit liabilities are as follows: Net defined benefit liability 583,603 $ $ 2020	698,082
Present value of defined Fair value of benefit obligations planassets Balance at January 1 1,351,590 $ 653,508) ($ Current service cost 15,530 - Interest expense (income) 9,461 4,575) ( 1,376,581 658,083) ( Remeasurements: Change in financial assumptions 47,926 - Experience adjustments 25,410) ( - Return on plan asset (excluding amounts included in interest income or expense) - 23,783) ( 22,516 23,783) ( Pension fund contribution - 125,044) ( Paid pension 120,181) ( 111,597 Balance at December 31 1,278,916 $ 695,313) ($	Net defined benefitliability
	$ 698,082 15,530 4,886
	718,498
	47,926 ( 25,410) (23,783)
	(1,267)
	( 125,044) ( 8,584)
	$ 583,603

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2019

2019
Present value of defined Fair value of benefit obligations planassets Balance at January 1 1,389,880 $ 680,510) ($ Current service cost 18,362 - Interest expense (income) 13,899 6,805) ( 1,422,141 687,315) ( Remeasurements: Change in financial assumptions 39,375 - Experience adjustments 18,760) ( - Return on plan asset (excluding amounts included in interest income or expense) - 25,435) ( 20,615 25,435) ( Pension fund contribution - 23,824) ( Paid pension 91,166) ( 83,066 Balance at December 31 1,351,590 $ 653,508) ($	Net defined benefitliability
	$ 709,370 18,362 7,094
	734,826
	39,375 ( 18,760) (25,435)
	(4,820)
	( 23,824) ( 8,100)
	$ 698,082

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

For the years ended December 31, 2020 and 2019, the actual return on plan assets was $28,358 thousand and $32,240 thousand, respectively.

(e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases	0.30% 3.00% Year ended December31,2020	Year ended December31,2019
		0.70% 3.00%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in each territory.

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Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

Increase Decrease 0.25% 0.25% December 31, 2020 Effect on present value of defined benefit obligation 30,281) ($ 31,415 $ December 31, 2019 Effect on present value of defined benefit obligation 32,934) ($ 34,189 $ Discountrate	Increase Decrease 0.25% 0.25% 27,471 $ 26,674) ($ 30,116 $ 29,219) ($ Future salaryincreases

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

(f) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2021 amount to $18,853 thousand.
(g) As of December 31, 2020, the weighted average duration of the retirement plan is 10 years. The analysis of timing of the weighted average duration of the future pension payment was as follows:

as follows:
Within 1 year 2-5 years Over 6 years	127,492 $ 278,072 320,250
	725,814 $

B. (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The pension costs under defined contribution pension plans of the Company and MAXXIS (Taiwan) Trading Co., Ltd. for the years ended December 31, 2020 and 2019 were $153,133 thousand and $150,789 thousand, respectively.
C. (a) The Company’s mainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. The contribution percentage for the years ended December 31, 2020 and 2019 ranged between 14% ~ 20%. Other than the monthly contributions, the Group has no further obligations. The pension costs under defined contribution pension plans of the Group for the years ended December 31, 2020 and 2019, were $236,303 thousand and $336,288 thousand, respectively.
(b) Other overseas entities contribute to the statutory pension insurance or pension fund for their employees based on their wages and salaries in compliance with local laws and regulations. Other than the annual contributions, the entities have no further obligations. The pension costs under the defined contribution pension plan of the Group for the years ended December

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31, 2020 and 2019 were $73,898 thousand and $55,989 thousand, respectively.

(17) Share capital
As at December 31, 2020, the Company’s authorized capital and paid-in capital were both $32,414,155 thousand, and all proceeds from shares issued have been collected.
(18) Capital surplus
Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalized 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.
(19) Retained earnings
A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The appropriation of the remaining amount along with the unappropriated earnings shall be proposed by the Board of Directors and resolved by the shareholders. According to the appropriation of earnings proposed by the Board of Directors, at least 10% ~ 80% of the Company’s accumulated distributable earnings shall be appropriated as dividends, and cash dividends shall account for at least 10% of the total dividends distributed.
B. Where the Company accrues annual net income, no less than 2% of which shall be appropriated as employees’ compensation and no higher than 3% of which shall be appropriated as directors’ and supervisors’ remuneration after offsetting accumulated deficit. The employees’ compensation can be appropriated in the form of shares or cash whereas the directors’ and supervisors’ remuneration can only be appropriated in the form of cash. The appropriations require attendance of over two thirds of Board of Directors members and approval of over the half of attendees. The resolution of Board of Directors shall be reported at the shareholders’ meeting. The recipients of aforementioned employees’ compensation include eligible employees of subordinate companies who meet the requirements set out by the Board of Directors.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
- (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities-Corporate1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently.
E. The Company recognized dividends distributed to shareholders amounting to $3,241,416 thousand and $3,565,557 thousand ($1.0 (in dollars) and $1.1 (in dollars) per share) for the years ended December 31, 2020 and 2019, respectively. On March 24, 2021, the Board of Directors that total dividends for the distribution of earnings for the year of 2020 was $3,889,699 thousand at $1.2 (in dollars) per share.
F. For the information relating to employees’ remuneration and directors’ and supervisors’ remuneration, please refer to Note 6(26).

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(20) Other equity items

2020

Other equity items	2020
Currency translation At January 1 6,921,515) ($ Valuation adjustment – Group - Currency translation differences: – Group 361,334 – Tax on Group 72,267) ( At December 31 6,632,448) ($ Currency translation At January 1 5,214,518) ($ Valuation adjustment – Group - Currency translation differences: – Group 2,133,746) ( – Tax on Group 426,749 At December 31 6,921,515) ($	Unrealized gain (loss) on valuation of equity instruments at fair value through other comprehensiveincome Total 17,270 $ 6,904,245) ($ 3,882 3,882 - 361,334 - 72,267) ( 21,152 $ 6,611,296) ($ 2019	Total


	Unrealized gain (loss) on valuation of equity instruments at fair value through other comprehensiveincome Total 14,220 $ 5,200,298 ($ 3,050 3,050 $ - 2,133,746 ( - 426,749 17,270 $ 6,904,245 ($	Total

(21) Operating revenue

Operating revenue
Revenue from contracts with customers	Year ended December31,2020 96,209,056 $	Year ended December31,2019
		109,507,773 $

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services at a point in time in the following and geographical regions:

Year ended December 31, 2020

	Year ended December	Year ended December	31,2020
Revenue from external customer contracts Inter-segment revenue Total segment revenue	Taiwan China 6,048,080 $ 50,584,199 $ 4,838,759 7,331,527 10,886,839 $ 57,915,726 $ Year ended December		US 8,012,544 $ 6,079,698 14,092,242 $ 31,2019	Others 31,564,233 $ 1,667,934 33,232,167 $	Total
					96,209,056 $ 19,917,918
					116,126,974 $

Revenue from external customer contracts Inter-segment revenue Total segment revenue	Taiwan 6,456,620 $ 4,190,726 10,647,346 $	China 57,452,960 $ 6,478,507 63,931,467 $	US 8,468,030 $ 5,704,178 14,172,208 $	Others 37,130,163 $ 2,358,715 39,488,878 $	Total
					109,507,773 $ 18,732,126
					128,239,899 $

~47~

B. Contract liabilities

The Group has recognised the following revenue-related contract liabilities:

December 31, 2020 December 31, 2019 January 1, 2019

	December31,2020	December31,2019	January1,2019
Contract liabilities: Advance sales receipts Customer loyalty Cprogrammes Total	1,118,360 $ 30,922 1,149,282 $	895,825 $ 39,794 935,619 $	694,413 $ 52,658
			747,071 $

Revenue recognised that was included in the contract liability balance at the beginning of the period:

	Revenue recognised that was included in the contract liability balance at the beginning of the period:	e at the beginning of the
(22) (23) (24)	Interest income Other income Other gains and losses Year ended Year ended December31,2020 December31,2019 Advance sales receipts 658,762 $ 518,325 $ Customer loyalty programmes 38,763 47,937 697,525 $ 566,262 $ Year ended Year ended December31,2020 December31,2019 Interest income from bank deposits 259,135 $ 295,566 $ Year ended Year ended December31,2020 December31,2019 Grant revenue 596,256 $ 318,593 $ Other income 409,732 280,069 1,005,988 $ 598,662 $ Year ended Year ended December31,2020 December31,2019 Net currency exchange (loss) gain 556,186) ($ 103,735 $ Casualty loss 279) ( - Loss on disposal of property, plant and equipment 35,960) ( 66,705) ( Net loss on financial assets and liabilities at fair value through profit or loss 756) ( 2,383) ( Impairment loss recognised in profit or loss, property, plant and equipment - 278,592) ( Other expenses 104,058) ( 112,920) ( 697,239) ($ 356,865) ($	Year ended December31,2019 518,325 $ 47,937 566,262 $ Year ended December31,2019 295,566 $ Year ended December31,2019
		318,593 $ 280,069
		598,662 $
		Year ended December31,2019

~48~

(25) Finance costs

Finance costs
			Year ended			Year ended
			December31,2020			December31,2019
Interest expense:
Bank borrowings		$	879,365		$	1,527,461
Corporate bonds			146,383			187,554
Provisions-discount			10,724			11,284
Lease liability-interest expense			14,440			13,869
			1,050,912			1,740,168
Add: Reversal of capitalisation of disqualifying assets			-			16,581
Less: Capitalisation of qualifying assets	(		24,489)	(		36,900)
Finance costs		$	1,026,423		$	1,719,849

(26) Expenses by nature

Expenses by nature Finance costs	1,026,423 $	1,719,849 $
Employee benefit expense Wages and salaries Labour and health insurance fees Pension costs Directors’ remuneration Other personnel expenses Raw materials and supplies used Depreciation expense on property, plant and equipment Depreciation expense on right-of-use assets Depreciation expense on investment property Amortisation expense on intangible assets	Year ended December31,2020 11,815,866 $ 681,402 483,750 105,099 753,841 13,839,958 $ 46,278,620 $ 11,634,602 $ 290,531 $ 22,994 $ 98,712 $	Year ended December31,2019
		12,393,523 $ 712,076 574,522 63,228 816,749
		14,560,098 $
		55,692,735 $
		12,682,025 $
		246,190 $
		23,995 $
		102,729 $

Note: As at December 31, 2020 and 2019, the Company had 28,596 and 28,590 employees, of which 9 and 7 directors were not the Company’s employees, respectively.
A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 2% for employees’ compensation and shall not be higher than 3% for directors’ and supervisors’ remuneration.
B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $139,544 thousand and $93,053 thousand, respectively; while directors’ and supervisors’ remuneration was accrued at $91,611 thousand and $61,089 thousand, respectively. The aforementioned amounts were recognized in salary expenses.

The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 2% and 1.313% of distributable profit of current year for the year ended December 31, 2020.

Employees’ compensation and directors’ and supervisors’ remuneration for 2019 amounting to

~49~

$93,053 thousand and $61,089 thousand, respectively, as resolved at the meeting of Board of Directors were in agreement with those amounts recognised in the 2019 financial statements. The employees’ compensation for 2019 will be distributed in the form of cash. As of March 24, 2021, the employees’ compensation for 2019 has not yet been distributed.

Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(27) Income tax

A. Income tax expense

(a) Components of income tax expense:

e tax ome tax expense Components of income tax expense:
			Year ended			Year ended
		December31,2020			December31,2019
Current tax:
Current tax on profits for the period		$	2,569,514		$	2,530,760
Prior year income tax overestimation	(		169,227)	(		157,499)
Total current tax			2,400,287			2,373,261
Deferred tax:
Origination and reversal of temporary
Odifferences	(		244,784)	(		61,659)
Total current tax	(		244,784)	(		61,659)
Income tax expense		$	2,155,503		$	2,311,602

(b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

follows:
		Year ended			Year ended
	December31,2020			December31,2019
Generated during the period：
Currency translation differences	($	72,267)		$	426,749
Remeasurement of defined benefit
Robligations	(	253)	(		964)
Total generated during the period	($	72,520)		$	425,785

B. Reconciliation between income tax expense and accounting profit

~50~

			Year ended		Year ended
	December31,2020			December31,2019
Tax calculated based on profit before
tax and statutory tax rate		$	2,964,638	$	2,589,648
Effect from items disallowed by tax regulation			83,540		49,969
Income from investing overseas
subsidiaries not recognized as deferred
tax liabilities	(		820,398)	(	545,723)
Temporary differences not recognized
as deferred tax regulation			550,979		694,213
Tax exempt income by tax regulation	(		296,807)	(	317,062)
Effect from investment tax credits	(		156,295)		-
Prior year income tax overestimation	(		169,227)	(	157,499)
Impact of change in the tax rate	(		927)	(	1,944)
Income tax expense		$	2,155,503	$	2,311,602

C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

Temporary differences: -Deferred tax assets: Unrealised gain on inter -affiliated accounts Remeasurement of defined benefit obligations Exchange differences on translation of foreign financial statements Deferred government grant revenue Unrealised exchange loss Others Subtotal -Deferred tax liabilities: Gain on foreign long-term investments Adjustment of land value increment tax Others Subtotal Total		2020	December31 156,234 $ 165,549 1,136,794 273,596 68,818 120,218 1,921,209 $ 449,284) ( 514,733) ( 112,623) ( 1,076,640) ( 844,569 $
	January1 146,333 $ 165,802 1,209,061 271,284 64,214 129,445 1,986,139 $ 738,159) ( 514,733) ( 60,942) ( 1,313,834) ( 672,305 $	Recognised in other Recognised in comprehensive profit or loss income 9,901 $ - $ - 253) ( - 72,267) ( 2,312 - 4,604 - 9,227) ( - 7,590 $ 72,520) ($ 288,875 - - - 51,681) ( - 237,194 - 244,784 $ 72,520) ($

~51~

2019

Temporary differences:
-Deferred tax assets:
Unrealised gain on inter
-affiliated accounts
Remeasurement of defined
benefit obligations
Exchange differences on
translation of foreign
financial statements
Deferred government grant
revenue
Unrealised exchange loss
Others
Subtotal
-Deferred tax liabilities:
Gain on foreign long-term
investments
Adjustment of land value
increment tax
Others
Subtotal
Total

Recognised
in other
Recognised in
comprehensive
January1
profit or loss
income
December31
169,527
$ 23,194)
($ -
$ 146,333
$ 166,766
-
964)
(
165,802
782,312
-
426,749
1,209,061
287,131
15,847)
(
-
271,284
19,289
44,925
-
64,214
101,604
27,841
-
129,445
1,526,629
$ 33,725
$ 425,785
$ 1,986,139
$ 767,625)
(
29,466
-
738,159)
(
514,733)
(
-
-
514,733)
(
59,410)
(
1,532)
(
-
60,942)
(
1,341,768)
(
27,934
-
1,313,834)
(
184,861
$ 61,659
$ 425,785
$ 672,305
$

D. (a) The China subsidiary that was consolidated in the financial statements was a productive foreign enterprise and established in People’s Republic of China and is eligible for local tax incentives. In line with local tax law, the tax rate and applicable tax rate was 15% and 25%, respectively.

(b) For the years ended December 31, 2020 and 2019, the Company’s subsidiary, Cheng Shin (Thailand) eligible to avail of the local tax incentives.

E. The Company accrued deferred tax liabilities, taking into account operating result, degree of expansion and dividend policy of each overseas subsidiary. Based on the assessment, the amounts of temporary difference unrecognised as deferred tax liabilities as of December 31, 2020 and 2019 were $47,546,817 thousand and $42,638,273 thousand, respectively.

F. The Company’s income tax returns through 2018 have been assessed and approved by the Tax Authority.

~52~

(28) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Assumed conversion of all dilutive potential ordinary shares Employees’ compensation	YearendedDecember31,2020
	Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) 5,988,702 $ 3,241,416 1.85 $ 5,988,702 3,241,416 5,988,702 $ 3,245,451 1.85 $ - 4,035 YearendedDecember31,2019	Earnings per share (in dollars)
		1.85 $
		1.85 $
	Amount Weighted average number of ordinary shares outstanding Earnings per share aftertax (sharesinthousands) (in dollars) 3,466,827 $ 3,241,416 1.07 $ 3,466,827 3,241,416 - 2,801 3,466,827 $ 3,244,217 1.07 $

~53~

(29) Supplemental cash flow information

Investing activities with partial cash payments ：

Supplemental cash flow information Investing activities with partial cash payments`：`
			Year ended			Year ended
		December31,2020			December31,2019
Purchase of property, plant and equipment		$	6,099,918		$	8,005,321
Add: Opening balance of payable on equipment			1,128,354			1,730,936
Less: Ending balance of payable on equipment	(		607,905)	(		1,128,354)
Cash paid during the year		$	6,620,367	$		8,607,903

(30) Changes in liabilities from financing activities

Short-term Long-term Bonds Dividends Lease Guarantee deposits Liabilities from financing borrowings borrowings payable payable liability received activities-gross At January 1 16,843,366 $ 30,702,861 $ 17,000,000 $ 657 $ 708,927 $ 248,381 $ 65,504,192 $ Changes in cash flow from financing activities 9,168,803) ( 2,969,354) ( 2,500,000) ( 3,277,104) ( 176,196) ( 9,392 18,082,065) ( Interest paid - - - - 14,440) ( - 14,440) ( Additions - - - 3,277,104 209,121 - 3,486,225 Amortisation of interest expense - - - - 14,440 - 14,440 Impact of changes in foreign exchange rate 452,172) ( 1,026,981) ( - - 27,501) ( - 1,506,654) ( At December 31 7,222,391 $ 26,706,526 $ 14,500,000 $ 657 $ 714,351 $ 257,773 $ 49,401,698 $ Short-term Long-term Bonds Dividends Lease Guarantee deposits Liabilities from financing borrowings borrowings payable payable liability received activities-gross At January 1 15,569,136 $ 35,526,041 $ 21,800,000 $ 657 $ 339,938 $ 255,209 $ 73,490,981 $ Changes in cash flow from financing activities 1,460,320 4,326,658) ( 4,800,000) ( 3,607,111) ( 113,705) ( 6,828) ( 11,393,982) ( Interest paid - - - - 13,869) ( - 13,869) ( Additions - - - 3,607,111 490,578 - 4,097,689 Amortisation of interest expense - - - - 13,869 - 13,869 Impact of changes in foreign exchange rate 186,090) ( 496,522) ( - - 7,884) ( - 690,496) ( At December 31 16,843,366 $ 30,702,861 $ 17,000,000 $ 657 $ 708,927 $ 248,381 $ 65,504,192 $ 2020 2019				2020
						Guarantee deposits Liabilities from financing received activities-gross 248,381 $ 65,504,192 $ 9,392 18,082,065) ( - 14,440) ( - 3,486,225 - 14,440 - 1,506,654) ( 257,773 $ 49,401,698 $	Liabilities from financing activities-gross
							49,401,698 $

							Liabilities from financing activities-gross
							65,504,192 $

~54~

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties Relationship with the Group

Associate which invests in subsidiary by using the equity Toyo Tire & Rubber Co., Ltd. method New Pacific IND. CD., LTD. Investee accounted for using the equity method MERIDA INDUSTRY CO., LTD. The Company’s director is the company’s vice chairman Maxxis (XiaMen) Trading CO., LTD. The Company’s director is the company’s representative Jye Luo Memory Co Ltd. The Company’s director is the company’s representative (Note) Luo, Jye Relative of the Company’s director within first degree of relationship Lo, Ming-Ling Spouse of the Company’s director Lo, Ming-I Spouse of the Company’s chairman Lo, Tsai-Jen The Company’s director Luo, Yuan-Yo Relative of the Company’s director within first degree of relationship Lo, Yuan-Long Relative of the Company’s director within first degree of relationship

Note: This company was established on September 24, 2020.

(2) Significant related party transactions

A. Operating revenue

Year ended Year ended December 31, 2020 December 31, 2019 Sales of goods: -Other related parties $ 243,746 $ 314,438

Prices and collection terms of abovementioned sales are the same with third parties, and the credit terms are between 60~90 days.

B. Receivables from related parties

B.	terms are between 60~90 days. Receivables from related parties
C.	Loans to / from related parties: shown as long-term borrowings December31,2020 Accounts receivable: -Other related parties 43,474 $ December31,2020 Payables due to related parties： -Other related parties 218,850 $	December31,2019
		54,053 $
		December31,2019
	Payables due to related parties： -Other related parties
		215,250 $

The Group obtained financing from other related parties and financial institutions for capital needs. Please refer to Note 6(15) for interest rates, borrowing periods and repayment methods.

D. Lease transactions - lessee

(a) The Group leases lands from Luo, Jye, Lo, Ming-Ling, Lo, Ming-I, Lo, Tsai-Jen, Luo, YuanYo and Lo, Yuan-Long. Rental contracts are typically made for periods of 4 to 5 years. Rents are prepaid at the beginning of the year.

(b) Acquisition of right-of-use assets

~55~

(c) Lease liabilities i. Outstanding balance ii. Interest expense Key management compensation Key management personnel Key management personnel Key management personnel Short-term employee benefits Post-employment benefits	Year ended Year ended December31,2020 December31,2019 - $ 5,785 $ December 31,2020 December 31,2019 41,546 $ 55,136 $ Year ended Year ended December31,2020 December31,2019 385 $ 503 $ Year ended Year ended December31,2020 December31,2019 239,434 $ 212,253 $ 2,038 2,561 241,472 $ 214,814 $	Year ended Year ended December31,2020 December31,2019 - $ 5,785 $ December 31,2020 December 31,2019 41,546 $ 55,136 $ Year ended Year ended December31,2020 December31,2019 385 $ 503 $ Year ended Year ended December31,2020 December31,2019 239,434 $ 212,253 $ 2,038 2,561 241,472 $ 214,814 $	Year ended Year ended December31,2020 December31,2019 - $ 5,785 $ December 31,2020 December 31,2019 41,546 $ 55,136 $ Year ended Year ended December31,2020 December31,2019 385 $ 503 $ Year ended Year ended December31,2020 December31,2019 239,434 $ 212,253 $ 2,038 2,561 241,472 $ 214,814 $	Year ended Year ended December31,2020 December31,2019 - $ 5,785 $ December 31,2020 December 31,2019 41,546 $ 55,136 $ Year ended Year ended December31,2020 December31,2019 385 $ 503 $ Year ended Year ended December31,2020 December31,2019 239,434 $ 212,253 $ 2,038 2,561 241,472 $ 214,814 $


				212,253 $ 2,561
				214,814 $

(3) Key management compensation

8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) Contingencies

None.

(2) Commitments

A. Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

Amount of letter of credit that has been issued Property, plant and equipment Amount of letter of credit that has been issued but not yet used	but not yet used: December31,2020 3,634,056 $ December31,2020 22,886 $	December31,2019
		2,990,369 $
		December31,2019 45,524 $

B. Amount of letter of credit that has been issued but not yet used:

10. SIGNIFICANT DISASTER LOSS

On September 26, 2020, a fire damaged a plant located in Xizhou owned by the parent Company of the Group and destroyed some buildings, equipment and inventories in the plant. The book value of the damaged properties amounted to $62,279 thousand, including buildings and equipment as well as inventories of $51,367 thousand and $10,912 thousand, respectively. The Company has relevant property insurance and has filed a claim to the insurance company and the estimated insurance claims that can be obtained amounted to $62,000 thousand. The related losses and estimated insurance claims income are presented in net amount and are shown as losses under other gains and losses. Information relating to the fire damage is provided in Note 10.

11. SIGNIFICANT EVENT AFTER THE BALANCE SHEET DATE

To meet the requirements of business development and production capacity improvement of the parent Company of the Group, the construction project to engage others to build the ATV plant on its own land

~56~

in the Douliu 3rd plant was resolved at the meeting of the Board of Directors on January 28, 2021. The total estimated cost for the project is NT$2.34 billion, of which the construction cost of the plant, machinery and equipment and utility was $663 million, $1.508 billion and $169 million, respectively. 12. OTHERS

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt.

During the year ended December 31, 2020, the Group’s strategy was unchanged from 2019. The gearing ratios as at December 31, 2020 and 2019 were as follows:

‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt. During the year ended December 31, 2020, the Group’s strategy was unchanged from 2019. The gearing ratios as at December 31, 2020 and 2019 were as follows:	‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt. During the year ended December 31, 2020, the Group’s strategy was unchanged from 2019. The gearing ratios as at December 31, 2020 and 2019 were as follows:
Financial instruments A. Financial instruments by category December31,2020 December31,2019 Total liabilities 70,349,872 $ 86,069,542 $ Total equity 80,975,281 $ 77,970,687 $ Less : Intangible assets 181,768) ( 246,790) ( Tangible equity 80,793,513 $ 77,723,897 $ Debt-equity ratio 87% 111% December31,2020 December31,2019 Financial assets Financial assets at fair value through profit or loss - current Financial assets mandatorily measured at fair value through profit or loss 820 $ - $ Financial assets at fair value through other comprehensive income - current Designation of equity instrument 29,817 25,935 Financial assets at fair value through other comprehensive income - non-current Designation of equity instrument 58,187 58,187 Financial assets at amortised cost/Loans and receivables Cash and cash equivalents 19,112,521 25,501,222 Notes receivable, net 4,544,057 3,761,453 Accounts receivable (including related parties) 9,472,839 8,992,980 Guarantee deposits paid 62,291 53,066 Other financial assets 4,943 374,790 33,285,475 $ 38,767,633 $
A.
	- $ 25,935 58,187 25,501,222 3,761,453 8,992,980 53,066 374,790
	38,767,633 $

(2) Financial instruments

~57~

Financial liabilities Financial liabilities at amortised cost Short-term borrowings Notes payable Accounts payable Other accounts payables Corporate bonds payable (including current portion) Long-term borrowings (including current portion) Guarantee deposits received Lease liabilities (including current portion)	December31,2020 7,222,391 $ 157,811 8,442,030 5,557,536 14,500,000 26,706,526 257,773 $ 62,844,067 714,351 $	December31,2019
		16,843,366 $ 1,122,276 7,793,330 5,587,574 17,000,000 30,702,861 248,381
		$79,297,788
		708,927 $

B. Financial risk management policies
(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programmer focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial position and financial performance.
(b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The material financing activities are reviewed by the Board of Directors in accordance with procedures required by relevant regulations and internal control system. During the implementation of financing plans, the Board of Directors is assisted in its oversight role by the internal audit department. Internal audit undertakes both regular and exceptional reviews of risk management controls and procedures, and reports the results to the Board of Directors.
C. Significant financial risks and degrees of financial risks
(a) Market risk

Foreign exchange risk

i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company and its subsidiaries used in various functional currency. Primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities.
ii. The Group hedges foreign exchange rate by using forward exchange contracts. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss.
iii.The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: TWD; other certain subsidiaries’ functional currency: RMB, THB, VND, CAD, IDR, EUR, INR, JPY, MXN and USD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

~58~

December 31, 2020

	Sensitivityanalysis
Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit or loss 64,490 $ 3,014 5,962 1,625 20,052 5,817 2,757 16,782 1,156 9,908 6,350 8,009	Effect on other comprehensive income
		- $ - - - - - - - - - - -

~59~

December 31, 2020

	Sensitivityanalysis
Degree of variation 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit or loss 9,447 $ 8,645 2,175 5,792 11,348 2,211 85,970 54,843	Effect on other comprehensive income
		- $ - - - - - -

~60~

December 31, 2019

Sensitivity analysis	Sensitivity analysis	Sensitivity analysis
Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit or loss 45,331 $ 31,267 12,266 4,323 1,298 28,081 6,564 1,315 1,447 1,655 16,143 4,394 8,675 6,457 6,373	Effect on other comprehensive income
		- $ - - - - - - - - - - - - - -

~61~

		December31,2019	December31,2019	December31,2019	December31,2019
Foreign currency amount (thousands) 16,513 $ 89,815 7,416 38,456 36,809 6,988 311,695 233,647	Exchange rate 29.980 6.964 7.803 29.689 25,623.932 1.305 13,752.294 71.043	Book value (TWD inthousands) 495,060 $ 2,692,655 249,118 1,153,137 1,103,534 209,453 9,344,616 7,004,771	Sensitivityanalysis
			Degree of variation 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit or loss 4,951 $ 26,927 2,491 11,531 11,035 2,095 93,446 70,048	Effect on other comprehensive income
					- $ - - - - - - -

~62~

iv. The exchange (loss) gain including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2020 and 2019 amounted to ($556,186) thousand and $103,735 thousand, respectively.
Price risk
i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. The Group diversifies its portfolio to manage its price risk arising from investments in equity securities.
ii. Shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, equity investments at fair value through other comprehensive income and gain or loss for the years ended December 31, 2020 and 2019 would have increased/decreased by $880 thousand and $841 thousand, respectively.

Cash flow and fair value interest rate risk

i. The Group’s main interest rate risk arises from long-term and short-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. During the years ended December 31, 2020 and 2019, the Group’s borrowings at variable rate were denominated in the TWD, USD, THB, RMB, EUR and INR.
ii.The Group’s borrowings are measured at amortised cost. The rate of borrowings are referred market interest rates and to that extent are also exposed to the risk of future changes in market interest rates.
iii.As at December 31, 2020 and 2019, if interest rates on TWD, USD, THB, RMB, EUR and INR denominated borrowings at that date had been 0.1% higher/lower with all other variables held constant, pre-tax profit for the years ended December 31, 2020 and 2019 would have been $33,964 thousand and $47,484 thousand higher/lower, respectively, mainly as a result of higher/lower interest expense on floating rate borrowings.
(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of financial instruments at fair value through profit or loss and at fair value through other comprehensive income.
ii.According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard receiving and payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors.
iii.The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 30 days.
iv.The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
v. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

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(ii) The disappearance of an active market for that financial asset because of financial difficulties;
(iii) Default or delinquency in interest or principal repayments;
(iv) Adverse changes in national or regional economic conditions that are expected to cause a default.
vi. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights. As at December 31, 2020 and 2019, the Group has no written-off financial assets that are still under recourse procedures.
vii. The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable; accounts receivable that are significantly past due are assessed individually for their expected credit losses. As at December 31, 2020 and 2019, the provision matrix is as follows:

December31,2020 Without past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days Individual December31,2019 Without past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days Individual	Expectedlossrate 0.00% 0.82% 1.48% 4.55% 9.72% 100.00% Expectedlossrate 0.00% 0.32% 0.98% 1.95% 5.81% 100.00%	Totalbookvalue 8,285,062 $ 880,500 212,594 67,641 44,845 42,792 9,533,434 $ Totalbookvalue 7,376,434 $ 1,099,362 282,247 83,960 111,310 27,229 8,980,542 $	Loss allowance
			- $ 7,220 3,146 3,078 4,359 42,792
			60,595 $
			Loss allowance
			- $ 3,518 2,766 1,635 6,467 27,229
			41,615 $

viii. Movements in relation to the group applying the simplified approach to provide loss allowance for accounts receivable are as follows:


At January 1		$	41,615		$	15,343
Provision for impairment			46,823			30,357
Reversal of impairment loss	(		650)	(		896)
Write-offs	(		28,025)	(		2,071)
Effect of exchange rate changes			832	(		1,118)
At December 31		$	60,595		$	41,615

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing

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facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements.

ii. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in interest bearing current accounts and time deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts.
iii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

December 31, 2020

December 31, 2020
Short-term borrowings Notes and accounts payable Other payables Lease liability Guarantee deposits received Long-term borrowings Bonds payable December 31, 2019 Short-term borrowings Notes and accounts payable Other payables Lease liability Guarantee deposits received Long-term borrowings Bonds payable Non-derivative financial liabilities Non-derivative financial liabilities	Less than 90 days 6,882,527 $ 8,599,841 5,250,900 54,513 116 1,332,650 - Less than 90 days 12,271,246 $ 8,868,422 5,355,433 44,142 373 1,578,812 -	Between 91 Between 181 and 180 days and 365 days 281,773 $ 86,091 $ - - 77 153,867 56,158 68,953 - - 176,655 2,530,855 - 6,133,350 Between 91 Between 181 and 180 days and 365 days 3,162,609 $ 1,562,289 $ 1,268 35,694 6,127 118,084 32,667 62,565 - - 1,700,671 4,712,180 - 2,651,100	- $ - 152,692 534,727 257,657 23,593,722 8,601,300 - $ 10,222 107,930 569,553 248,008 24,222,151 14,734,650 Over 1year Over 1year	Total
				7,250,391 $ 8,599,841 5,557,536 714,351 257,773 27,633,882 14,734,650 Total
				16,996,144 $ 8,915,606 5,587,574 708,927 248,381 32,213,814 17,385,750

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks, beneficiary certificates, is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in most derivative instruments is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.
B. Fair value information of investment property at cost is provided in Note 6(9).
C. Financial instruments not measured at fair value

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(a) Except for those listed in the table below, the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, guarantee deposits paid, short-term borrowings, notes payable, accounts payable, other payables, long-term borrowings (including current portion) and guarantee deposits received are approximate to their fair values.

December 31, 2020

Carrying amount 14,500,000 $		Fairvalue
	Level 1 Level 2 - $ 14,546,679 $ December31,2019		Level 3
			- $

Carrying amount 17,000,000 $		Fair value
	Level 1 - $	Level 2 17,050,741 $	Level3
			- $

(b) The methods and assumptions of fair value estimate are as follows:
- Bonds payable: They are measured at present value, which is calculated based on the cash flow expected to be paid and discounted using a market rate prevailing at balance sheet date, the interest rate of par value was equivalent to market interest rate.
D. The related information on financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:
(a) The related information of natures of assets and liabilities is as follows:

	December	31,2020
Level 1 - $ 29,817 29,817 $	Level 2 820 $ - 820 $ December	Level3 - $ 58,187 58,187 $ 31,2019	Total
			820 $ 88,004
			88,824 $

Level 1 25,935 $	Level 2 - $	Level3 58,187 $	Total
			84,122 $

(b) The methods and assumptions the Group used to measure fair value are as follows:
i. For Level 1, the Group used market quoted prices as their fair values according to the

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characteristics of instruments. Listed shares and balanced mutual fund use closing price as their fair values.

  - ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes.

  - iii. Level 2: When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

E. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.
F. There was no movement in Level 3 for the years ended December 31, 2020 and 2019.
(4) Assessment of impact of the COVID-19
Regarding the assessment of impact of the COVID-19, the Group was affected by the COVID-19 pandemic. Since early 2020, production of some of the Group’s factories had stopped and orders had been delayed. However, all factories have resumed operations in the second quarter of 2020. Additionally, although the Group’s sales orders from some areas have declined because of the COVID-19 pandemic, overall business and finance were not significantly affected based on the Group’s assessment.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information
A. Loans to others: please refer to table 1.
B. Provision of endorsements and guarantees to others: please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): please refer to table 3.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: please refer to table 4.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: please refer to table 5.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: please refer to table 6.
I. Trading in derivative instruments undertaken during the reporting periods: please refer to Notes 6 (2), 6(24) and 12(2), 12(3).
J. Significant inter-company transactions during the reporting periods: please refer to table 7.
(2) Information on investees
Names, locations and other information of investee companies (not including investees in Mainland China)：Please refer to table 8.

(3) Information on investments in Mainland China

A. Basic information: please refer to table 9.
B. Ceiling on investments in Mainland China: please refer to table 9.
C. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area:
Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area for the year ended December 31, 2020: please refer to tables 5, 6 and 7.
(4) Major shareholders information
Major shareholders information: Please refer to table 10.

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14. SEGMENT INFORMATION

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the Chief Operating Decision-Maker that are used to make strategic decisions. Business organization is divided into Cheng Shin (Taiwan), MAXXIS (Taiwan) Trading, Cheng Shin (Xiamen), Cheng Shin (China), Petrel (Xiamen), Cheng Shin (Thailand) and other segments based on the nature of each company. The Group’s revenue is mainly from manufacturing and sales of bicycle tires, electrical vehicle tires, reclaimed rubber, etc.

(2) Measurement of segment information

The Group’s segment profit (loss) is measured with the profit (loss) before tax, which is used as a basis for the Group in assessing the performance of the operating segments. The accounting policies of the operating segments are in agreement with the significant accounting policies summarized in Note 4.

(3) Information about segment profit or loss, assets and liabilities

The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

Year ended December 31, 2020

CHENG SHIN RUBBER IND. CO., LTD. and MAXXIS (Taiwan) Trading CO.,LTD.	CHENG SHIN RUBBER (XIAMEN) IND.,LTD.	CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. and CHENG SHIN PETREL TIRE (XIAMEN) CO.,LTD.	MAXXIS INTERNATIONAL (THAILAND) CO.,LTD.	Total
13,777,876 $ 9,534,605 23,312,481 $ 2,139,330 $ 1,685,870 $ 82,504 $ 267,118 $ 18,520 $	15,176,809 $ 1,474,320 16,651,129 $ 682,336 $ 1,916,156 $ 21,965 $ 157,700 $ - $	28,906,764 $ 673,924 29,580,688 $ 2,559,805 $ 3,397,666 $ 204,172 $ 95,780 $ - $	9,181,494 $ 1,672,992 10,854,486 $ 166,446 $ 1,620,660 $ 989 $ 98,303 $ - $	85,797,515 $ 19,107,658
				104,905,173 $
				9,819,833 $
				11,114,937 $
				549,375 $
				915,813 $
				18,520 $

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Year ended December 31, 2019

CHENG SHIN RUBBER IND. CO., LTD. and MAXXIS (Taiwan) Trading CO.,LTD.	CHENG SHIN RUBBER (XIAMEN) IND.,LTD.	CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. and CHENG SHIN PETREL TIRE (XIAMEN) CO.,LTD.	MAXXIS INTERNATIONAL (THAILAND) CO.,LTD.	Total
14,159,292 $ 9,589,727 23,749,019 $ 1,290,070 $ 1,620,260 $ 135,320 $ 306,674 $ 6,653 $	16,039,124 $ 1,475,643 17,514,767 $ 199,313 $ 2,028,475 $ 36,910 $ 248,819 $ - $	34,111,182 $ 810,695 34,921,877 $ 3,269,862 $ 3,591,971 $ 257,091 $ 274,035 $ - $	11,314,497 $ 1,550,076 12,864,573 $ 603,385) ($ 2,004,900 $ 2,285 $ 194,835 $ - $	96,294,731 $ 18,023,137
				114,317,868 $
				7,150,031 $
				11,953,135 $
				669,723 $
				1,444,592 $
				6,653 $

(4) Reconciliation for segment income (loss)

A. A reconciliation of income after adjustment and total segment income from continuing operations is provided as follows:

is provided as follows:
		Year ended		Year ended
	December31,2020		December31,2019
Adjusted revenue from reportable segments	$	104,905,173	$	114,317,868
Adjusted revenue from other operating segments		11,221,801		13,922,031
Total operating segments		116,126,974		128,239,899
Elimination of inter-segment revenue	(	19,917,918)	(	18,732,126)
Total consolidated operating revenue	$	96,209,056	$	109,507,773
A reconciliation of adjusted current income before	tax	and the income before		tax from continuing
operations is provided as follows:
		Year ended		Year ended
	December31,2020		December31,2019
Adjusted income from reportable
segments before income tax	$	9,819,833	$	7,150,031
Adjusted loss from other operating
segments before income tax	(	1,629,801)	(	1,398,232)
Total operating segments		8,190,032		5,751,799
(Loss) income from elimination of inter-segment
revenue	(	33,326)		75,500
Income from continuing operations
before income tax	$	8,156,706	$	5,827,299

B. A reconciliation of adjusted current income before tax and the income before tax from continuing operations is provided as follows:

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(5) Information on products and services

Revenue from external customers is mainly from processing, manufacturing and trading of bicycle tires, electrical vehicle tires, reclaimed rubber, various rubbers and resin and other rubber products. Details of revenue is as follows:

Details of revenue is as follows:
Sales revenue Others	Year ended December31,2020 95,599,490 $ 609,566 96,209,056 $	Year ended December31,2019
		107,714,550 $ 1,793,223
		109,507,773 $

(6) Geographical information

Geographical information for the years ended December 31, 2020 and 2019 is as follows:

Revenue Non-current assets 50,584,199 $ 54,569,454 $ 8,012,544 757,744 6,048,080 16,680,718 31,564,233 24,261,968 96,209,056 $ 96,269,884 $ YearendedDecember31,2020	YearendedDecember31,2019	YearendedDecember31,2019
Revenue 50,584,199 $ 8,012,544 6,048,080 31,564,233 96,209,056 $	Revenue 57,452,960 $ 8,468,030 6,456,620 37,130,163 109,507,773 $	Non-current assets
		58,200,161 $ 855,279 17,177,800 26,675,199
		102,908,439 $

The Company’s geographical revenue is calculated based on the countries where sales occur. Noncurrent assets refer to property, plant and equipment, right-of-use assets, investment property, intangible assets (shown as other non-current assets) and guarantee deposits paid (shown as other non-current assets), but exclude financial instruments and deferred income tax assets.

(7) Major customer information

None of the revenue from any single customer has exceeded 10% of the revenue in the consolidated statement of comprehensive income for the years ended December 31, 2020 and 2019.

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CHENG SHIN RUBBER IND. CO., LTD.

Table 1

Loans to others

Year ended December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

No. （Note 1）	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended December 31, 2020	Balance at December 31, 2020 `（`Note 5`）`	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty `（`Note 2`）`	Ceiling on total loans granted （Note 3）	Footnote
													Item	Value
1 1 1 2 2 3 4	XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. CHENG SHIN PETREL TIRE (XIAMEN) CO., LTD. CHENG SHIN PETREL TIRE (XIAMEN) CO., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN LOGISTIC (XIAMEN) IND., LTD.	CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN (XIAMEN) INTL AUTOMOBILE CULTURE CENTER CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. CHIN CHOU CHENG SHIN ENTERPRISE CO., LTD	Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables Other receivables	Yes Yes Yes Yes Yes Yes Yes	3,449,600 $ 3,459,200 864,800 3,870,000 1,078,000 423,500 8,758	3,282,750 $ 2,188,500 569,010 2,188,500 - - 8,754	2,656,839 $ 1,641,375 389,553 1,387,509 - - 8,754	3.85% 3.85% 4.85% 3.85% 0.00% 0.00% 3.85%	Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4	- $ - - - - - -	Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital	- $ - - - - - -	None None None None None None None	- $ - - - - - -	4,922,318 $ 4,922,318 4,922,318 7,655,635 7,655,635 14,414,063 25,911	8,203,864 $ 8,203,864 8,203,864 12,759,391 12,759,391 24,023,438 103,646	Note 6 Note 6 Note 6 Note 6 Note 6 Note 6 Note 6

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.
(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Limit on loans granted by CHENG SHIN RUBBER (XIAMEN) IND., LTD., CHENG SHIN PETREL TIRE (XIAMEN) CO., LTD. and XIAMEN CHENG SHIN ENTERPRISE CO., LTD. to a single party is 60% of above Companies' net assets. Limit on loans granted by CHEN SHIN LOGISTIC (XIAMEN) CO., LTD to a single party is 10% of above Companies' net assets.

Note 3: Limit on loans granted by CHENG SHIN RUBBER (XIAMEN) IND., LTD. , CHENG SHIN PETREL TIRE (XIAMEN) CO., LTD. and XIAMEN CHENG SHIN ENTERPRISE CO., LTD. to a single party is 100% of above Companies' net assets. Limit on loans granted by CHEN SHIN LOGISTIC (XIAMEN) CO., LTD to others is 40% of above Companies' net assets.

Note 4: Fill in purpose of loan when nature of loan is for short-term financing. The transaction was completed through the trust loans signed with financial institutions in Mainland China.

Note 5: The amount of ending balance was equal to the limit on loans as approved by the Board of Directors.

Note 6: The transactions were eliminated when preparing the consolidated financial statements.

Table 1, page 1

CHENG SHIN RUBBER IND. CO., LTD.

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Provision of endorsements and guarantees to others

Year ended December 31, 2020

Number （Note 1）	Endorser/ guarantor	Partybeingendorsed/guaranteed	Partybeingendorsed/guaranteed	Limit on endorsements/ guarantees provided for a singleparty	Maximum outstanding endorsement/ guarantee amount as of December 31, 2020	Outstanding endorsement/ guarantee amount at December 31, 2020	Actual amount drawn down	Amount of endorsements / guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company (%)	Ceiling on total amount of endorsements/ guarantees provided	Provision of endorsements/ guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser/ guarantor
0 0 0 1	Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. CHENG SHIN RUBBER (XIAMEN) IND., LTD.	MAXXIS International (Thailand) Co., Ltd. Maxxis Rubber India Private Limited PT MAXXIS International Indonesia XIAMEN ESATE CO., LTD.	Sub- subsidiary Subsidiary Subsidiary Note 3 (1)	40,218,548 $ 40,218,548 40,218,548 19,218,750	3,307,750 $ 8,832,445 11,304,150 1,945,800	1,911,200 $ 7,395,004 10,631,584 -	546,297 $ 6,043,554 8,240,213 -	- $ - - -	2.38 9.19 13.22 -	56,305,967 $ 56,305,967 56,305,967 24,023,438	Y Y Y N	N N N N	N N N Y	Note 2 , Note 5 Note 2 , Note 5 Note 2 , Note 5 Note 4 , Note 5

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.
Note 2: Ceiling on the Company’s total endorsements/guarantees to others is 70% of the Company’s current net assets.

Limit on the Company’s endorsements/guarantees to a single party is 20% of the Company’s net assets.

Limit on the Company’s endorsements/guarantees to a foreign single affiliate company is 50% of the Company’s net assets. Note 3: Relationship between the endorser/guarantor and the Company is classified into the following two categories:

$	56,305,967
$	16,087,419
$	40,218,548

(1) The endorser/guarantor parent company owns directly and indiectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

(2) The endorser/guarantor parent company owns directly and indiectly more than 50% voting shares of the endorsed/guaranteed company. Note 4:Limit on the Company’s endorsements/gurantees provided to others is 100% of the Company’s net assets. Limit on total endorsements provided to a single party is 80% of the Company's net assets. Note 5: Outstanding endorsement/guarantee amount and draw down amount are translated at the spot exchange rates prevailing at December 31, 2020.

Table 2, page 1

CHENG SHIN RUBBER IND. CO., LTD.

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2020

Table 3

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by	Marketable securities(Note 1)	Relationship with the securities issuer	General ledger account		As of December31,2020	As of December31,2020	As of December31,2020	Footnote
				Number of shares/units	Bookvalue	Ownership (%)	Fairvalue
Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd.	Other ordinary shares Other ordinary shares	- -	Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income	- -	29,817 $ 58,187	- -	29,817 $ 58,187	Note 2 Note 2

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9, ‘Financial instruments’. Note 2: Other marketable securities do not exceed 5% of the account.

Table 3, page 1

CHENG SHIN RUBBER IND. CO., LTD.

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

Year ended December 31, 2020

Table 4 Investor	Marketable securities `（`Note 1`）`	General ledger account	Counterparty `（`Note 2`）`	Relationship with the investor `（`Note 2`）`	Balance as at January1,2020	Balance as at January1,2020	Addition `（`Note 3`）`	Addition `（`Note 3`）`		Disposal `（`Note 3`）`	Disposal `（`Note 3`）`		Expressed in thousands of NTD Balance as at December 31,2020 (Except as otherwise indicated)	Expressed in thousands of NTD Balance as at December 31,2020 (Except as otherwise indicated)
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd.	PT MAXXIS International Indonesia Maxxis Rubber India Private Limited	Investments accounted for using the equity method Investments accounted for using the equity method	PT MAXXIS International Indonesia Maxxis Rubber India Private Limited	Subsidiary Subsidiary	79,997,000 649,994,730	$ 2,461,355 3,124,651	59,997,750 224,998,176	$ 1,772,034 902,893	- -	$ - -	$ - -	$ - -	139,994,750 874,992,906	$ 4,233,389 4,027,544

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. Note 2: Fill in the columns the counterparty and relationship if securities are accounted for using the equity method; otherwise leave the columns blank. Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more. Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Table 4, page 1

Table 5

Expressed in thousands of NTD

CHENG SHIN RUBBER IND. CO., LTD.

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more

Year ended December 31, 2020

(Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms compared to third party transactions (Note1)	Differences in transaction terms compared to third party transactions (Note1)	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote (Note2)
			Purchases (sales)	Amount	Percentage of total purchases (sales) (%)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable) (%)
Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN TOYO (KUNSHAN) MACHINERY CO., LTD. CHENG SHIN TIRE & RUBBER (CHONGQING) CO., LTD. CHENG SHIN TIRE & RUBBER (CHONGQING) CO., LTD. Cheng Shin Rubber (Vietnam) IND Co., Ltd. MAXXIS International (Thailand) Co., Ltd. MAXXIS International (Thailand) Co., Ltd.	CHENG SHIN RUBBER USA, INC. CHENG SHIN RUBBER CANADA, INC. Cheng Shin Rubber (Vietnam) IND Co., Ltd. Maxxis (Taiwan) Trading Co., LTD. Cheng Shin Rubber Ind. Co., Ltd. TIANJIN TAFENG RUBBER IND CO., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN PETREL TIRE (XIAMEN) CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. Cheng Shin Rubber Ind. Co., Ltd. CHENG SHIN RUBBER CANADA, INC. Toyo Tire & Rubber Co., Ltd. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. KUNSHAN MAXXIS TIRE CO., LTD. MAXXIS International (Thailand) Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. CHENG SHIN RUBBER USA, INC.	Subsidiary Subsidiary Sub-subsidiary Subsidiary Same ultimate parent Same ultimate parent Same ultimate parent Same ultimate parent Same ultimate parent Same ultimate parent Same ultimate parent Same ultimate parent Same ultimate parent Same ultimate parent Same ultimate parent Associates Same ultimate parent Same ultimate parent Same ultimate parent Same ultimate parent Same ultimate parent	(sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales) (sales)	4,763,551) ($ 655,518) ( 136,152) ( 3,798,690) ( 132,192) ( 176,179) ( 938,935) ( 134,844) ( 1,908,484) ( 408,294) ( 191,835) ( 119,285) ( 1,117,439) ( 148,321) ( 168,912) ( 129,677) ( 1,430,673) ( 174,623) ( 120,972) ( 372,479) ( 1,232,984) (	25.17) ( 3.46) ( 0.72) ( 20.07) ( 0.79) ( 1.06) ( 5.64) ( 0.81) ( 48.22) ( 10.32) ( 4.85) ( 3.01) ( 11.35) ( 0.79) ( 0.90) ( 59.78) ( 27.86) ( 3.40) ( 2.27) ( 3.43) ( 11.36) (	Collect within 90 days after shipment of goods Collect within 90 days after shipment of goods Collect within 60 days after shipment of goods Collect within 30 days Collect within 60 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60 days after shipment of goods Collect within 60~90 days after shipment of goods	Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same	Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same Same	1,121,502 $ 179,366 11,758 433,464 22,464 34,783 265,475 53,603 396,100 92,648 40,754 17,990 307,597 52,294 39,972 7,759 271,033 - 9,908 174,723 197,871	35.18 5.63 0.37 13.60 0.94 1.46 11.15 2.25 26.55 6.21 2.73 1.21 45.31 1.32 1.01 28.44 36.33 - 2.37 9.09 10.30	Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4

Table 5, page 1

Table 5

CHENG SHIN RUBBER IND. CO., LTD.

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more

Year ended December 31, 2020


Table 5 Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms compared to third party transactions (Note1)		Balance Percentage of total notes/accounts receivable (payable) (%) Notes/accounts receivable (payable) Footnote (Note2) (Except as otherwise indicated) Expressed in thousands of NTD
			Purchases (sales)	Amount	Percentage of total purchases (sales) (%)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable) (%)
PT MAXXIS International Indonesia	Cheng Shin Rubber (Vietnam) IND Co., Ltd.	Same ultimate parent	(sales)	288,775) ($	25.78) (	Collect within 60~90 days after shipment of goods	Same	Same	21,662 $	10.73	Note 4

Note 1: If terms of related-party transactions are different from third-party transactions, explain the differences and reasons in the ‘Unit price’ and ‘Credit term’ columns.

Note 2: In case related-party transaction terms involve advance receipts (prepayments) transactions, explain in the footnote the reasons, contractual provisions, related amounts,

and differences in types of transactions compared to third-party transactions.

Note 3: Paid-in capital referred to herein is the paid-in capital of parent company.

Note 4: The transactions were eliminated when preparing the consolidated financial statements.

Table 5, page 2

CHENG SHIN RUBBER IND. CO., LTD.

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2020

		December 31,	2020
Table 6 Creditor	Counterparty	Relationship with the counterparty	Balance as at December31,2020	Turnover rate	Overdue	receivables	Amount collected subsequent to the balance sheet date (Note 1) Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. CHENG SHIN RUBBER (XIAMEN) IND., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. CHENG SHIN TIRE & RUBBER (CHONGQING) CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. MAXXIS International (Thailand) Co.,	CHENG SHIN RUBBER USA, INC. CHENG SHIN RUBBER CANADA, INC. MAXXIS International (Thailand) Co., Ltd. Maxxis (Taiwan) Trading Co., LTD. PT MAXXIS International Indonesia. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER USA, INC.	Subsidiary (Note 5) Subsidiary (Note 5) Sub-subsidiary (Note 5) Subsidiary (Note 5) Subsidiary (Note 5) Same ultimate parent (Note 5) Same ultimate parent (Note 5) Same ultimate parent (Note 5) Same ultimate parent (Note 5) Same ultimate parent (Note 5)	1,121,981 $ 179,490 144,863 437,654 121,082 265,475 397,756 271,033 307,597 197,871	Note 4 Note 4 Note 3 Note 4 Note 3 3.53 Note 4 10.21 3.63 6.28	- - - - - - - - -	- - - - - - - - -	825,917 $ 123,140 19,297 435,820 22,137 126,459 371,582 217,924 284,870 197,444	- - - - - - - - - -

Ltd.

Note 1: Subsequent collection is the amount collected as of March 17, 2021.

Note 2: Paid-in capital referred to herein is the paid-in capital of parent company.

Note 3: The amount comprises accounts receivable, commission receivable, endorsements/guarantees receivable, patent royalties receivable, royalties receivable for trademark and other receivables and thus, the turnover rate is not calculated.

Note 4: The amount comprises accounts receivable and other receivables and thus, the turnover rate is not calculated.

Note 5: The transactions were eliminated when preparing the consolidated financial statements.

Table 6, page 1

CHENG SHIN RUBBER IND. CO., LTD.

Significant inter-company transactions during the reporting periods Year ended December 31, 2020

Table 7 Number (Note1)	Companyname	Counterparty	Relationship (Note2)		(Except as otherwise indicated) Expressed in thousands of NTD Transaction	(Except as otherwise indicated) Expressed in thousands of NTD Transaction	(Except as otherwise indicated) Expressed in thousands of NTD Transaction
				General ledgeraccount	Amount (Note4)	Transactionterms	Percentage of consolidated total operating revenues or totalassets (Note 3)
0 0 0 0 0 1 1 2 2 2 2 2 2 2 3 4 4 5 5	Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. XIAMEN CHENG SHIN ENTERPRISE CO., LTD. CHENG SHIN PETREL TIRE (XIAMEN) CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD.	CHENG SHIN RUBBER USA, INC. CHENG SHIN RUBBER USA, INC. CHENG SHIN RUBBER CANADA, INC. Maxxis (Taiwan) Trading Co., LTD. Maxxis (Taiwan) Trading Co., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN PETREL TIRE (XIAMEN) CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN (XIAMEN) INTL AUTOMOBILE CULTURE CENTER CO., LTD CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN RUBBER CANADA, INC. CHENG SHIN TIRE & RUBBER (CHONGQING) CO., LTD.	1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 3 3 3 3	Sales Accounts receivable Sales Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Accounts receivable Sales Other receivables Other receivables Other receivables Other receivables Sales Accounts receivable Sales Royalty income	4,763,551 $ 1,121,502 655,518 3,798,690 433,464 938,935 265,475 1,908,484 396,100 674,444 408,294 2,656,839 1,641,375 389,553 1,387,509 1,117,439 307,597 268,677 214,174	Collect within 90 days after shipment of goods Collect within 90 days after shipment of goods Collect within 90 days after shipment of goods The term is 30 days after monthly billing. The term is 30 days after monthly billing. Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Pay interest quarterly Pay interest quarterly Pay interest quarterly Pay interest quarterly Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect monthly	4.95% 0.74% 0.68% 3.95% 0.29% 0.98% 0.18% 1.98% 0.26% 0.45% 0.42% 1.76% 1.08% 0.26% 0.92% 1.16% 0.20% 0.25% 0.20%

Table 7, page 1

Table 7

CHENG SHIN RUBBER IND. CO., LTD.

Significant inter-company transactions during the reporting periods Year ended December 31, 2020

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

Number (Note1)	Companyname	Counterparty	Relationship (Note2)	General ledgeraccount	Amount (Note4)	Transactionterms	Percentage of consolidated total operating revenues or totalassets (Note 3)
5 5 6 6 7	CHENG SHIN TIRE & RUBBER (CHONGQING) CO., LTD. CHENG SHIN TIRE & RUBBER (CHONGQING) CO., LTD. MAXXIS International (Thailand) Co., Ltd. MAXXIS International (Thailand) Co., Ltd. PT MAXXIS International Indonesia	CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN RUBBER USA, INC. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber (Vietnam) IND Co., Ltd.	3 3 3 2 3	Sales Accounts receivable Sales Sales Sales	1,430,673 $ 271,033 1,232,984 372,479 288,775	Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60~90 days after shipment of goods Collect within 60 days after shipment of goods Collect within 60~90 days after shipment of goods	1.49% 0.18% 1.28% 0.39% 0.30%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1) Parent company is ‘0’.
(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

(1) Parent company to subsidiary.
(2) Subsidiary to parent company.
(3) Subsidiary to subsidiary.
Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the year to consolidated total operating revenues for income statement accounts.

Note 4: Transaction amounts account for at least NT$200 million.

Table 7, page 2

CHENG SHIN RUBBER IND. CO., LTD.

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

Information on investees

Year ended December 31, 2020

Initial investment amount

Shares held as at December 31, 2020

Investor	Investee	Location	Main business activities	Balance as at December 31,2020	Balance as at December 31,2019	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31, 2020	Investment income(loss) recognised by the Company for the year ended December 31, 2020(Note 1)	Footnote
Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd. Cheng Shin Rubber Ind. Co., Ltd.	MAXXIS International Co., Ltd. CST Trading Ltd. MAXXIS Trading Ltd. CHENG SHIN RUBBER USA, INC. CHENG SHIN RUBBER CANADA, INC. NEW PACIFIC INDUSTRY COMPANY LIMITED MAXXIS Tech Center Europe B.V. PT MAXXIS International Indonesia Maxxis Rubber India Private Limited Maxxis (Taiwan) Trading Co., LTD. PT MAXXIS TRADING INDONESIA Maxxis Europe B.V. MAXXIS RUBBER JAPAN CO., LTD. MAXXIS INTERNATIONAL MEXICO S. de R.L. de C.V.	Cayman Islands British Virgin Islands British Virgin Islands U.S.A Canada Taiwan Netherlands Indonesia India Taiwan Indonesia Netherlands Japan Mexico	Holding company Holding company Holding company Import and export of tires Import and export of tires Processing and sales of various anti-vibration rubber and hardware Technical centre Production and sales of various types of tires Production and sales of various types of tires Wholesale and retail of tires Large-amount trading of vehicles parts and accessories Import and export of tires Import and export of tires Import and export of tires	912,218 $ 2,103,073 7,669,780 551,820 32,950 50,001 41,260 4,233,389 4,027,544 100,000 30,235 17,700 13,820 593	912,218 $ 2,103,073 7,669,780 551,820 32,950 50,001 41,260 2,461,355 3,124,651 100,000 30,235 17,700 - -	35,050,000 72,900,000 237,811,720 1,800,000 1,000,000 5,000,000 1,000,000 139,994,750 874,992,906 10,000,000 9,990 500,000 5,000 -	100.00 100.00 100.00 100.00 100.00 50.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 20.00	42,371,102 $ 26,823,193 10,627,664 2,495,535 677,839 172,981 78,617 685,105 - 421,097 32,572 3,917 12,661 408	2,871,118 $ 2,515,743 1,046,972 139,957 17,504 37,040 6,931 836,577) ( 1,046,611) ( 237,447 8,423 9,902) ( 1,156) ( 926) (	2,861,350 $ 2,510,944 1,020,991 139,959 17,504 18,520 6,931 841,063) ( 1,046,611) ( 237,447 8,423 9,902) ( 1,156) ( 185) (	Subsidiary Note 3 Subsidiary Note 3 Subsidiary Note 3 Subsidiary Note 3 Subsidiary Note 3 Note 2 Subsidiary Note 3 Subsidiary Note 3 Subsidiary Note 3, Note 5 Subsidiary Note 3 Subsidiary Note 3 Subsidiary Note 3 Subsidiary Note 3 Note 3, Note 4

Table 8, page 1

CHENG SHIN RUBBER IND. CO., LTD.

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

Information on investees

Year ended December 31, 2020

Initial investment amount

Shares held as at December 31, 2020

Investor	Investee	Location	Main business activities	Balance as at December 31,2020	Balance as at December 31,2019	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31, 2020	Investment income(loss) recognised by the Company for the year ended December 31, 2020(Note 1)	Footnote
MAXXIS International Co., Ltd CST Trading Ltd. MAXXIS Trading Ltd. MAXXIS Holdings (BVI) Co., Ltd. MAXXIS Holdings (BVI) Co., Ltd. CHENG SHIN RUBBER USA, INC.	MAXXIS International (HK) Ltd. Cheng Shin International (HK) Ltd. MAXXIS Holdings (BVI) Co., Ltd. MAXXIS International (Thailand) Co., Ltd. Cheng Shin Rubber (Vietnam) IND Co., Ltd. MAXXIS INTERNATIONAL MEXICO S. de R.L. de C.V.	Hong Kong Hong Kong British Virgin Islands Thailand Vietnam Mexico	Holding company Holding company Holding company Production and sales of truck and automobile tires Production and sales of various types of tires Import and export of tires	- - 7,669,780 5,724,372 1,945,408 2,278	- - 7,669,780 5,724,372 1,945,408 -	226,801,983 246,767,840 237,811,720 65,000,000 62,000,000 -	100.00 100.00 100.00 100.00 100.00 80.00	34,013,286 26,646,543 11,009,916 7,355,643 3,651,433 1,632	2,750,490 2,522,660 1,047,207 166,446 880,993 926) (	2,750,490 2,522,660 1,047,207 139,781 881,676 741) (	Sub-subsidiary Note 3 Sub-subsidiary Note 3 Sub-subsidiary Note 3 Sub-subsidiary Note 3 Sub-subsidiary Note 3 Note 3, Note 4

Note 1: Including investment income (loss) used to offset against sidestream and upstream transactions. Note 2: Investee companies are accounted for under the equity method. Note 3: The transactions were eliminated when preparing the consolidated financial statements. Note 4: The Company comprehensive holds 100% of share ownership in the investee, of which 20% is directly held and 80% is indirectly held through CHENG SHIN RUBBER USA, INC. Note 5: The Company continusly provides financial support the investee accounted for using the equity method, and transferred the credit balance fo long-term investments to 'other non-current liabilities.' The transaction was eliminated when preparing the consolidated statements.

Table 8, page 2

CHENG SHIN RUBBER IND. CO., LTD.

Information on investments in Mainland China

Year ended December 31, 2020

Investee in Mainland China Table 9	Main business activities	Paid-in capital	Investment method(Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2020	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020	Net income of investee as of December 31, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2020, (Note 2)	Book value of investments in Mainland China as of December 31,2020	Expressed in thousands of NTD (Except as otherwise indicated) Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020 Footnote	Expressed in thousands of NTD (Except as otherwise indicated) Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020 Footnote
					Remitted to Mainland China	Remitted back to Taiwan
CHENG SHIN RUBBER (XIAMEN) IND., LTD. CHENG SHIN TIRE & RUBBER (CHINA) CO., LTD. CHENG SHIN TOYO (KUNSHAN) MACHINERY CO., LTD. CHENG SHIN TIRE & RUBBER (CHONGQING) CO., LTD. KUNSHAN MAXXIS TIRE CO., LTD TIANJIN TAFENG RUBBER IND CO., LTD. CHENG SHIN PETREL TIRE (XIAMEN) CO., LTD.	A. Cover and tubes of tires and cover and tubes of bicycle tires B. Reclaimed rubber, adhesive, tape and other rubber products C. Plastic machinery, molds and its accessory products A. Cover and tubes of tires and cover and tubes of bicycle tires B. Reclaimed rubber, adhesive, tape and other rubber products C. Plastic machinery, molds and its accessory products Plastic machinery, molds and its accessory products A. Cover and tubes of tires and cover and tubes of bicycle tires B. Reclaimed rubber, adhesive, tape and other rubber products C. Plastic machinery, molds and its accessory products Retail of accessories for rubber tires Warehouse logistics and after- sales service centre A. Radial tire and other various tire products B. Reclaimed rubber and other rubber products C. Plastic machinery, molds and its accessory products	4,984,000 $ 6,408,000 242,080 2,848,000 21,885 512,640 3,702,400	2 2 2 2 2 2 2	910,834 $ 2,385,506 68,602 - - - -	- $ - - - - - -	- $ - - - - - -	910,834 $ 2,385,506 68,602 - - - -	1,802,422 $ 2,325,095 217) ( 623,302 4,490 63,544) ( 314,959	100.00 100.00 50.00 100.00 100.00 100.00 100.00	1,797,339 $ 2,336,595 109) ( 618,708 49,490 63,544) ( 314,961	24,023,438 $ 24,698,328 297,857 5,588,659 42,838 716,325 12,770,986	18,878,845 $ 22,289,125 478,714 1,422,083 - 757,407 4,185,883	(Note 2`、`3`、` 5`、`6`、`7) (Note 2`、`4`、` 6`、`8) (Note 6`、`8) (Note 2`、`4`、` 6`、`8) (Note 6`、`8) (Note 6`、`7) (Note 2`、`3`、` 6`、`7)

Table 9, page 1

CHENG SHIN RUBBER IND. CO., LTD.

Information on investments in Mainland China

Year ended December 31, 2020

Investee in Mainland China Table 9	Main business activities	Paid-in capital	Investment method(Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2020	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020	Net income of investee as of December 31, 2020	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31, 2020, (Note 2)	Book value of investments in Mainland China as of December 31,2020	Expressed in thousands of NTD (Except as otherwise indicated) Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020 Footnote	Expressed in thousands of NTD (Except as otherwise indicated) Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020 Footnote
					Remitted to Mainland China	Remitted back to Taiwan
XIAMEN CHENG SHIN ENTERPRISE CO., LTD. CHENG SHIN (XIAMEN) INTL AUTOMOBILE CULTURE CENTER CO., LTD. CHIN CHOU CHENG SHIN ENTERPRISE CO., LTD. CHENG SHIN LOGISTIC (XIAMEN) CO., LTD. CHENG SHIN RUBBER (ZHANGZHOU) IND CO., LTD. XIAMEN ESATE CO., LTD.	A. Radial tire and other various tire products B. Reclaimed rubber and other rubber products C. Plastic machinery, molds and its accessory products A. Research, development and testing of tires and automobiles accessory products and display of related products B. Management of racing tracks Distribution of rubber and components of tires International container transportation business A. Tires and tubes B. Reclaimed rubber, adhesive, tape and other rubber products C. Plastic machinery, molds and its accessory products Construction and trading of employees’ housing	1,281,600 $ 569,600 153,195 63,081 4,158,150 1,663,260	2 2 2 2 2 2	- $ - - - - -	- $ - - - - -	- $ - - - - -	- $ - - - - -	691,619 $ 97,721) ( 14,929) ( 26,188 1,417,178 9,112	100.00 100.00 95.00 49.00 100.00 100.00	686,942 $ 97,721) ( 14,182) ( 12,832 1,417,167 9,112	8,203,864 $ 60,496 99,606 126,966 6,900,302 2,014,310	5,668,834 $ - - - 678,578 -	(Note 2`、`6`、` 7) (Note 6) (Note 6`、`7) (Note 6`、`7) (Note 2`、`5`、` 6`、`7) (Note 6`、`7)

Note 1: Investment methods are classified into the following three categories:

(1) Directly invest in a company in Mainland China.

(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.

Note 2: Including investment income (loss) used to offset against sidestream and upstream transactions. Note 3: The Company and Cheng Shin Rubber (Xiamen) Ind., Ltd. directly and indirectly holds 60% and 40% of the share ownership in Cheng Shin Petrel Tire (Xiamen) Co., Ltd., respectively. Note 4: The Company and Cheng Shin Tire & Rubber (China) Co., Ltd. directly and indirectly holds 30% and 70% of share ownership in Cheng Shin Tire & Rubber (Chongqing) Co., Ltd., respectively. Note 5: Cheng Shin Rubber (Xiamen) Ind., Ltd. and MAXXIS International (HK) Ltd. directly and indirectly holds 75% and 25% of share ownership in Cheng Shin Rubber (Zhangzhou) Ind Co., Ltd, respectively. Note 6: Paid-in capital was converted at the exchange rate of NTD 28.48: USD 1 and NTD 4.377: RMB 1 prevailing on December 31, 2020. Note 7: Investment income (loss) was recognised based on the financial statements that are audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C. Note 8: Investment income (loss) was recognised based on the financial statements that are audited and attested by R.O.C. parent company's CPA.

Table 9, page 2

CHENG SHIN RUBBER IND. CO., LTD.

Ceiling on investments in Mainland China

Year ended December 31, 2020

Companyname Table 9	Accumulated amount of remittance from Taiwan to Mainland China as of December31,2020 (Note 1)	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA) (Note 1)	Ceiling on investments in Mainland China imposed by the InvestmentCommission of MOEA(Note 2) Expressed in thousands of NTD (Except as otherwise indicated)
Cheng Shin Rubber Ind. Co., Ltd.	$ 3,500,192	$ 19,164,192	$ -

Note 1: Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 was USD$122,900 thousand and the total investment amount approved by the Investment Commission, MOEA, was USD$672,900 thousand.

Note 2: According to‘Regulations Governing the Permission of Investment or Technical Cooperation in Mainland Area’, the Company acquired the operations headquarters certification issued by the Industrial Development Bureau, Ministry of Economic Affairs, R.O.C. and thus, the investments amount in Mainland China is unlimited.

Table 9, page 3

Table 10

CHENG SHIN RUBBER IND. CO., LTD.

Major shareholders information

December 31, 2020

Name of major shareholders	Number of shares held	Ownership (%)
Luo, Ming-Han Luo Jye Memory Co Ltd. Luo, Jye	370,176,378 324,430,630 224,163,978	11.42 10.00 6.91

Note 1: The major shareholders information was from the data that the Company issued common shares (including treasury shares) and preference shares in dematerialised form which were held by registered and the shareholders above 5% on the last operating date of each quarter and was calculated by Taiwan Depository & Clearing Corporation. The share capital which was recorded in the financial statements may differ from the actual number of shares issued in dematerialised form because of a differenent calculation basis.

Note 2: If the aforementioned data contains shares which were kept at the trust by the shareholders, the data disclosed was the settlor’s separate account for the fund set by the trustee.

As for the shareholder who reports share equity as an insider whose shareholding ratio is greater than 10% in accordance with Securities and Exchange Act, the shareholding ratio including the self-owned shares and trusted shares, at the same time, persons who have power to decide how to allocate the trust assets.

For the information of reported share equity of insider, please refer to Market Observation Post System

Table 10, page 1

AI assistant

CST — Audit Report / Information 2020

51971_rns_2020-12-17_40ccbc74-7ac4-42b0-a456-32f7052c4993.pdf

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

Cheng Shin Rubber Ind. Co., Ltd. and subsidiaries Declaration of Consolidated Financial Statements of Affiliated Enterprises

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Appropriateness of cut-off on sales revenue

Description

How our audit addressed the matter

Timing of reclassification of unfinished construction and uninspected equipment to property, plant and equipment.

Description

How our audit addressed the matter

Changes of enterprise resource planning ERP system

Description

How our audit addressed the matter

Other matter – Scope of the audit

Other matter – Parent company only financial statements

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements

5.

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2020 AND 2019

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020 AND 2019

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019

CHENG SHIN RUBBER IND. CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2020 AND 2019

1. HISTORY AND ORGANISATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(3) IFRSs issued by IASB but not yet endorsed by the FSC

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(3) Basis of consolidation

(17) Investment property

(18) Intangible assets

(19) Impairment of non-financial assets

(24) Derecognition of financial liabilities

(25) Offsetting financial instruments

(26) Non-hedging derivatives

(27) Provisions

(33) Operating segments

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

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

(5) Inventories

(7) Poperty, plant and equipment, net

(9) Investment property, net

(11) Short-term borrowings

(13) Other current liabilities

(14) Bonds payable

- (15) Long term borrowings

(16) Pensions

(20) Other equity items

2020

(21) Operating revenue

B. Contract liabilities

(25) Finance costs

(26) Expenses by nature

(27) Income tax

A. Income tax expense

(28) Earnings per share

(29) Supplemental cash flow information

7. RELATED PARTY TRANSACTIONS

(2) Significant related party transactions

8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

(1) Contingencies

(2) Commitments

CST Audit Report / Information 2020