CST — Audit Report / Information 2020

Dec 17, 2020

CHENG SHIN RUBBER IND. CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2020 AND 2019

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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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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 20003836

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

Opinion

We have audited the accompanying balance sheets of Cheng Shin Rubber Ind. Co., Ltd. (the “Company”) as at December 31, 2020 and 2019, and the related statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the 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 financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. 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.

Key audit matters

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

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

Appropriateness of cut-off on sales revenue

Description

For the accounting policy of 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$18,926,294 thousand.

The Company’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. The aforementioned issue arises from the Company’s subsidiaries, recognized under investments accounted for using equity method. 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:

1. We obtained an understanding of the Company’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.

2. We tested the Company’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.

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

Description

For the accounting policy of 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$872,265 thousand.

To maintain market competitiveness, the Company 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 human 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:

1. We obtained an understanding of the Company’s property, plant and equipment process cycle, reviewed 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.

2. We tailored our audit over fixed asset classification to check whether reclassification of assets are correct and recorded in the proper period.

3. We verified the status of unfinished construction and uninspected equipment and assessed the reasonableness of the recognition of unfinished construction and uninspected equipment.

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Other matter – Scope of the audit

We did not audit the financial statements of certain investments recognised under the equity method that are included in the financial statements. The balances of investments accounted for under equity method were NT$3,651,433 thousand and NT$3,249,905 thousand, representing 3% and 3% of total assets as at December 31, 2020 and 2019, respectively; and the share of profit of subsidiaries, associates and joint ventures accounted for using equity method were NT$881,676 thousand and NT$723,598 thousand, representing 14% and 41% of the total comprehensive income for the years then ended, respectively. Those financial statements were audited by other auditors whose report thereon have been furnished to us, and our opinion expressed herein is based solely on the audit reports of the other auditors.

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

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

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

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

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the 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 ROC GAAS will always detect a material misstatement when it

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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 financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the 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.

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

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

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

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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-Juan Zhou, Jian Hong

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

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The accompanying parent company only 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 parent company only 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. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(4) 7 6(5) 7 6(3) 6(6) 6(7)(29) 6(8) 6(9) 6(10) 6(27)	December 31, 2020 AMOUNT % $ 6,119,194 5 820 - 29,817 - 33,790 - 1,307,148 1 1,825,562 2 2,298,071 2 108,985 - 619,867 1 12,343,254 11 58,187 - 84,402,691 74 16,234,596 14 102,073 - 289,427 - 8,740 - 1,543,156 1 1,726 - 102,640,596 89 $ 114,983,850 100	December 31, 2019	December 31, 2019
		AMOUNT $ 6,119,194 820 29,817 33,790 1,307,148 1,825,562 2,298,071 108,985 619,867 12,343,254 58,187 84,402,691 16,234,596 102,073 289,427 8,740 1,543,156 1,726 102,640,596 $ 114,983,850	AMOUNT $ 8,525,572 - 25,935 22,919 1,161,388 1,379,208 2,564,562 128,780 555,502 14,363,866 58,187 79,687,896 16,688,254 107,294 289,951 40,633 1,618,542 1,335 98,492,092 $ 112,855,958	%
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 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets				8 - - - 1 1 2 - 1
				13
				- 71 15 - - - 1 -
				87
				100

(Continued)

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CHENG SHIN RUBBER IND. CO., LTD. PARENT COMPANY ONLY 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)(30) $ 1,400,000 1 $ 2,450,000 2 6(21) 116,293 - 99,878 - 1,286,500 1 1,047,861 1 7 380,533 - 45,165 - 6(12) and 7 1,629,607 2 1,750,638 2 6(27) 800,063 1 404,309 - 41,976 - 34,501 - 6(13)(14)(15)(30) 7,730,972 7 5,335,864 5 13,385,944 12 11,168,216 10 6(14)(30) 8,500,000 7 14,500,000 13 6(15)(30) 10,541,667 9 7,130,000 6 6(27) 982,529 1 1,293,851 1 60,213 - 69,640 - 6(6)(16) 1,076,402 1 1,298,568 1 21,160,811 18 24,292,059 21 34,546,755 30 35,460,275 31 6(17) 32,414,155 28 32,414,155 29 6(18) 53,267 - 52,576 - 6(19) 15,533,661 14 15,186,978 13 6,904,245 6 5,200,298 5 32,143,063 28 31,445,921 28 6(20) ( 6,611,296) ( 6) ( 6,904,245) ( 6 ) 80,437,095 70 77,395,683 69 9 11 $ 114,983,850 100 $ 112,855,958 100

Current liabilities 2100 Short-term borrowings 2130 Current contract liabilities 2170 Accounts payable 2180 Accounts payable - related parties 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 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Shares 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 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 parent company only financial statements.

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CHENG SHIN RUBBER IND. CO., LTD. PARENT COMPANY ONLY 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(21) and 7 $ 18,926,294 100 $ 19,497,888 100 6(5) ( 14,228,603) ( 75) ( 15,805,867) ( 81) 4,697,691 25 3,692,021 19 ( 138,985) ( 1) 40,205 - 4,558,706 24 3,732,226 19 ( 1,689,243) ( 9) ( 1,882,641) ( 10) ( 812,274) ( 4) ( 659,712) ( 3) ( 1,103,893) ( 6) ( 1,246,753) ( 6) ( 3,605,410) ( 19) ( 3,789,106) ( 19) 953,296 5 ( 56,880) - 6(22) 82,028 - 134,367 1 6(23) and 7 1,231,200 7 1,347,874 7 6(24) ( 176,563) ( 1) ( 18,771) - 6(25) ( 267,079) ( 1) ( 306,641) ( 2) 4,923,152 26 3,398,541 17 5,792,738 31 4,555,370 23 6,746,034 36 4,498,490 23 6(27) ( 757,332) ( 4) ( 1,031,663) ( 5) $ 5,988,702 32 $ 3,466,827 18 6(16) $ 1,267 - $ 4,820 - 6(3) 3,882 - 3,050 - 6(6) ( 528) - 722 - 6(27) ( 253) - ( 964) - 4,368 - 7,628 - 6(20) 361,334 2 ( 2,133,746) ( 11) 6(20)(27) ( 72,267) ( 1) 426,749 2 289,067 1 ( 1,706,997) ( 9) $ 293,435 1 ($ 1,699,369) ( 9) $ 6,282,137 33 $ 1,767,458 9 6(28) $ 1.85 $ 1.07 6(28) $ 1.85 $ 1.07

4000 Sales revenue 5000 Operating costs 5900 Net operating margin 5910 Unrealized (profit) loss from sales 5950 Gross profit from operation Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating profit (loss) Non-operating income and losses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of associates and joint ventures accounted for using equity method 7000 Total non-operating income and losses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year 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 equity instruments at fair value through profit or loss 8330 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 9750 Basic earnings per share 9850 Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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

(Expressed in thousands of New Taiwan dollars)

Year ended December 31, 2019 Balance at January 1, 2019 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) Appropriation and distribution of 2018 earnings: Legal reserve Special reserve Cash dividends Balance at December 31, 2019 Year ended December 31, 2020 Balance at January 1, 2020 Profit for the year Other comprehensive income for the year Total comprehensive income Appropriation and distribution of 2019 earnings: Legal reserve Special reserve Cash dividends Capital surplus arising from donated assets Balance at December 31, 2020	Notes		Share capital - common stock				Capital surplus					Retained earnings	Retained earnings	Other equityinterest Financial statements translation differences of foreign operations Unrealized gains from financial assets measured at fair value through other comprehensive income	Other equityinterest Financial statements translation differences of foreign operations Unrealized gains from financial assets measured at fair value through other comprehensive income	Other equityinterest Financial statements translation differences of foreign operations Unrealized gains from financial assets measured at fair value through other comprehensive income	Total equity
					Treasury stock transactions		Gain on sale of assets	Capital surplus - donated assets received		Legal reserve		Special reserve Unappropriated retained earnings		Financial statements translation differences of foreign operations f
	6(19) 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

The accompanying notes are an integral part of these parent company only financial statements.

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CHENG SHIN RUBBER IND. CO., LTD.

PARENT COMPANY ONLY 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) Unrealised gain (loss) on inter-company Utransaction Depreciation Depreciation expense on right-of-use assets Depreciation on investment property Amortisation expense Net gain on financial assets or liabilities at fair Nvalue through profit or loss Gain on disposal of property, plant and Gequipment Share of profit of associates and joint ventures Saccounted for using equity method Interest income Interest expense Disaster loss Effect of exchange rate changes on cash and Ecash equivalents Changes in operating assets and liabilities Changes in operating assets Notes receivable, net Accounts receivable Accounts receivable - related parties Inventories Other current assets Changes in operating liabilities Contract liabilities - current Accounts payable Accounts payable - related parties Other payables Accrued pension liabilities Other current liabilities Cash inflow generated from operations Interest received Dividends received Interest paid Income tax paid Net cash flows from operating activities

Year ended December 31 Notes 2020 2019 $ 6,746,034 $ 4,498,490 133,967 ( 66,038 ) 6(7)(26) 1,586,627 1,517,236 6(8)(26) 49,640 49,790 6(9)(26) 606 611 6(10)(26) 42,088 45,506 6(2)(24) 755 2,383 6(24) ( 139,775 ) ( 150,244 ) ( 4,923,152 ) ( 3,398,541 ) 6(22) ( 82,028 ) ( 134,367 ) 6(25) 267,079 306,641 6(24) 279 - ( 188,697 ) ( 221,900 ) ( 10,871 ) 5,098 ( 145,760 ) 90,105 ( 446,354 ) 232,681 215,410 790,750 57,137 111,236 16,415 ( 27,785 ) 238,639 ( 265,217 ) 335,368 13,656 85,602 37,530 ( 156,356 ) ( 8,461 ) 6,776 383 3,689,429 3,429,543 83,030 114,370 3,141,139 3,290,468 ( 272,345 ) ( 337,126 ) ( 670,034 ) ( 1,285,843 ) 5,971,219 5,211,412

(Continued)

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CHENG SHIN RUBBER IND. CO., LTD. PARENT COMPANY ONLY 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 at fair value through Nprofit or loss Acquisition of investments accounted for using Aequity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and Pequipment Acquisition of investment properties Acquisition of intangible assets Increase in refundable deposits 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 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

Year ended December 31 Notes 2020 2019 ($ 1,575 ) $ 860 ( 2,689,340 ) - 6(7)(29) ( 1,392,925 ) ( 1,996,606 ) 61,719 138,313 6(9) ( 82 ) - 6(10) ( 10,195 ) ( 15,399 ) ( 391 ) ( 311 ) ( 4,032,789 ) ( 1,873,143 ) 6(30) 2,800,000 3,950,000 6(30) ( 3,850,000 ) ( 2,000,000 ) 6(30) ( 2,500,000 ) ( 4,800,000 ) 6(30) 6,800,000 6,050,000 6(30) ( 4,500,000 ) ( 7,460,000 ) 6(30) 1,746 ( 80 ) 6(30) ( 44,526 ) ( 29,095 ) 6(19)(30) ( 3,241,416 ) ( 3,565,557 ) 691 - ( 4,533,505 ) ( 7,854,732 ) 188,697 221,900 ( 2,406,378 ) ( 4,294,563 ) 6(1) 8,525,572 12,820,135 6(1) $ 6,119,194 $ 8,525,572

The accompanying notes are an integral part of these parent company only financial statements.

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

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

1. HISTORY AND ORGANIZATION

Cheng Shin Rubber Ind. Co., Ltd. (the “Company”) was incorporated on December 1969 and is primarily engaged in: (a) Processing, manufacturing and trading of bicycle tires, electrical vehicle tires, reclaimed rubber, various rubbers and resin and other rubber products. (b) Manufacturing and trading of various rubber products and relevant rubber machinery. The Company has been listed on the Taiwan Stock Exchange starting from December 1987.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE PARENT COMPANY ONLY

FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These parent company only financial statements have been authorized 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:

New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate bechmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Note：Earlier application from January 1, 2020 is allowed by FSC.

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

the Company

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

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New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform— Phase 2’	January 1, 2021 January 1, 2021

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

(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:

New Standards,Interpretations andAmendments Amendments to IFRS 3, ‘Reference to the conceptual framework’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendments to IAS 1, ‘Classification of liabilities as current or Anon-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

Effective date by International Accounting StandardsBoard

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 Company’s financial condition and financial performance based on the Company’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

The accompanying parent company only financial statements are prepared in conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers.

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(2) Basis of preparation

• A. Except for the following items, the parent company only 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 recognized 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 International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

• (3) Foreign currency translation

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The accompanying parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional 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 recognized 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 recognized 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 recognized 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 recognized 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’.

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B. Translation of foreign operations

The operating results and financial position of all the Company entities, associates 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 for each balance sheet presented 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 recognized in other comprehensive income.

(4) 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) Liabilities arising mainly from trading activities;

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

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) 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.

(6) 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 Company measures the financial assets at fair value and recognises the

~17~

transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(7) 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 Company 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 Company’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

• (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 Company measures the financial assets at fair value plus transaction costs. The Company 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 Company 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.

(8) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Company 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.

(9) Impairment of financial assets

The Company measured the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component on every balance sheet dates.

(10) Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

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– (11) Leasing arrangements (lessor) lease receivables/operating leases

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

• (12) Inventories

• Inventories are stated at the lower of cost and net realizable 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 realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(13) Investments accounted for using equity method / subsidiaries and associates

• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company 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.

• B. Unrealized gains or losses on transactions between the Company and subsidiaries have been eliminated. Accounting policies of the subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of subsidiaries’ post-acquisition profit or loss is recognized in the statement of comprehensive income, and its share of subsidiaries’ post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals to or exceeds its interest in the subsidiary, the Company shall recognize the loss proportional to its shares.

• 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 recognized directly in equity.

• E. When the Company loses control of a subsidiary, the Company 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 recognized in profit or loss. All amounts previously recognized 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 Company loses control of a subsidiary, all gains or losses previously recognized 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

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or loss when the related assets or liabilities are disposed of.

• F. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

• G. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• H. When changes in an associate’s equity that are not recognized in profit or loss or other comprehensive income of the associate and such changes not affecting the Company’s ownership percentage of the associate, the Company recognizes the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

• I. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• J. When the Company disposes its investment in an associate, if it loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it still retains significant influence over this associate, then the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• K. According to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, net income and other comprehensive income in the parent company only financial statements shall use the same allotments as the ones that are attributable to owners of the parent in the consolidated financial statements. Equity in parent company only financial statements should equal to equity attributable to owners of the parent in the consolidated financial statements.

• (14) Joint operation and investments accounted for using the equity method joint ventures

• The Company 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 recognized immediately. When the Company’s share of losses in a joint venture equals or exceeds its interest in the joint venture together with any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal

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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 capitalized.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost 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: 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 assets: 3~ 20years

(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 Company. For short-term leases or leases of low-value 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 Company 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

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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 recognize 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. 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 Company 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 recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing 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 amortized historical cost would have been if the impairment had not been recognized.

• (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.

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• 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 Company measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Company 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 Company 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

Financial liability is derecognized when the obligation under the liability specified in 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 recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(26) Financial guarantee contracts

Financial guarantee contract is a contract that requires the Company to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. A financial guarantee contract is initially recognized at its fair value adjusted for transaction costs on the trade date. After initial recognition, the financial guarantee is measured at the higher of the initial fair value less cumulative amortization and the best estimate of the amount required to settle the present obligation on each balance sheet date.

(27) 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.

(28) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected

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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 plans

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

• (b) Defined benefit plans

  • 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 Company in current period or prior periods. The liability recognized 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 highquality 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 Company uses interest rates of government bonds (at the balance sheet date) instead.

  • ii. Remeasurement arising on defined benefit plans are recognized 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 tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized 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 where appropriate based on the amounts expected to be paid to the tax authorities. Additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the

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year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognized, 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 Company 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 realized or the deferred tax liability is settled.

• D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized 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 recognized amounts and there is an intention to settle on a net basis or realize 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 realize the asset and settle the liability simultaneously.

• F. A deferred tax asset shall be recognized 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 utilized.

• (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

Sales of goods

• A. The Company 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 Company has objective evidence that all criteria for

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acceptance have been satisfied.

• B. Sales revenue of the Company, which mainly consists of sale of various tires 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 of committed goods or service and the payment of customer does not exceed one year, the Company 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.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of the parent company only financial statements requires management to make critical judgements in applying the Company’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 are 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

Cash and cash equivalents
Cash on hand and revolving funds Checking deposits Demand deposits Foreign currency deposits Time deposits Interest rate range Time deposits	December31,2020 $ 550 1,728 1,368,747 4,684,693 63,476 6,119,194 $ 1.70%~2.20%	December31,2019
		$ 550 2,627 1,498,401 4,739,774 2,284,220
		8,525,572 $
		2.90%~3.15%

The Company 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

Item December 31, 2020 December 31, 2019 Current items: Financial assets mandatorily measured at fair value through profit or loss Derivative instruments $ 820 $ -

• A. The Company recognized net loss amounting to $755 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:

Derivativeinstruments Current items: Forward foreign exchange contracts ( USD exchange to NTD) Foreign exchange swap ( USD exchange to NTD)	December31,2020	December31,2020
	Contract amount (Notionalprincipal) USD 40,000 thousand USD60,000 thousand	Contract period
		2020/11/09~ 2021/03/22 2020/10/20~ 2021/11/08

The Company has no derivative instruments transaction on December 31, 2019.

The Company entered into forward foreign exchange contracts and foreign exchange swap to hedge exchange rate risk of import (export) proceeds. However, these 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 Company has elected to classify equity instruments investments 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 recognised in other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income		Year ended December 31,2020	Year ended December 31,2019
		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 receivables

Notes and accounts receivables
Notes receivable Less: Loss allowance Accounts receivable Less: Loss allowance	December31,2020 43,067 $ 9,277) (	December31,2019 32,196 $ 9,277) (
	33,790 $ 1,318,866 $ 11,718) ( 1,307,148 $	22,919 $ 1,173,106 $ 11,718) ( 1,161,388 $

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

Without past due Up to 30 days 31 -90 days 91 -180 days Over 180 days		Accounts receivable Notes receivable 1,156,459 $ 43,067 $ 124,191 - 23,146 - 7,046 - 8,024 - 1,318,866 $ 43,067 $ December31,2020	Accounts receivable Notes receivable 1,156,459 $ 43,067 $ 124,191 - 23,146 - 7,046 - 8,024 - 1,318,866 $ 43,067 $ December31,2020	Accounts receivable Notes receivable 1,156,459 $ 43,067 $ 124,191 - 23,146 - 7,046 - 8,024 - 1,318,866 $ 43,067 $ December31,2020		December31,2019	December31,2019	December31,2019
		Accounts receivable				Accounts receivable		Notes receivable
		1,156,459 $ 124,191 23,146 7,046 8,024 1,318,866 $		43,067 $ - - - - 43,067 $		952,599 $ 141,047 53,724 25,222 514 1,173,106 $		32,196 $ - - - - 32,196 $

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 accounts receivable and notes receivable from contracts with customers amounted to $2,912,394 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 Company’s notes and accounts receivable was $33,790 thousand and $22,919 thousand; $1,307,148 thousand and $1,161,388 thousand, respectively.

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• D. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

(5) Inventories

Inventories
Raw material Work in progress Finished goods Raw materials Work in progress Finished goods		December31,2020
	988,526 $ 725,376 598,073 2,311,975 $ Cost	Allowance for valuation loss - $ - 13,904) ( 13,904) ($ December31,2019	Bookvalue
			988,526 $ 725,376 584,169
			2,298,071 $
	Cost 1,005,520 $ 828,354 744,592 2,578,466 $		Bookvalue
			1,005,520 $ 828,354 730,688
			2,564,562 $

The cost of inventories recognized as expense for the period:

Cost of goods sold Unallocated overheads Others	Year ended December 31,2020 14,156,766 $ 88,566 16,729) ( 14,228,603 $	Year ended December 31,2019
		15,812,603 $ - 6,736) ( 15,805,867 $

On September 26, 2020, a plant located in Xizhou owned by the Company absorbed some fire damage. The book value of the buildings and equipment which were damaged by the fire amounted to $10,912 thousand. The Company 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.

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(6) Investments accounted for using equity method

Investments accounted for using equity method
Subsidiaries: MAXXIS International Co., Ltd. CST Trading Ltd. MAXXIS Trading Ltd. CHENG SHIN RUBBER USA, INC. PT MAXXIS International Indonesia CHENG SHIN RUBBER CANADA, INC. MAXXIS (Taiwan) Trading CO., LTD MAXXIS Tech Center Europe B.V. PT. MAXXIS TRADING INDONESIA Maxxis Europe B.V. MAXXIS INTERNATIONAL MEXICO S. de R.L. de C.V. MAXXIS RUBBER JAPAN CO., LTD. Associates: NEW PACIFIC INDUSTRY COMPANY LIMITED	December31,2020 42,371,102 $ 26,823,193 10,627,664 2,495,535 685,105 677,839 421,097 78,617 32,572 3,917 408 12,661 172,981 84,402,691 $	December31,2019
		40,069,847 $ 25,199,773 10,417,885 2,709,443 - 705,193 319,849 68,500 26,315 13,602 - - 157,489
		79,687,896 $

• A. As at December 31, 2020, the credit balance of long-term equity investments, shown as ‘other non-current liabilities’, is due to the Company continuously providing financial support.

Subsidiary: MAXXIS Rubber India Private Limited PT MAXXIS International Indonesia	December31,2020 484,002 $ - 484,002 $	December31,2019
		364,976 $ 186,886
		551,862 $

B. Subsidiary

Details of the Company’s subsidiaries are provided in Note 4(3) of the Company’s consolidated financial statements as of and for the year ended December 31, 2020.

C. Joint ventures

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

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

Share of profit of joint ventures accounted for using equity method Other comprehensive (loss) income - net of tax Total comprehensive income	Year ended December 31,2020		Year ended December 31,2019 6,653 $ 722 7,375 $
	18,520 $ 528) ( 17,992 $

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(7) Property, plant and equipment, net

Property, plant and equipment, net
						Year	endedDecember31,			2020
	Beginning ofperiod					Additions			Disposals			Transfer			End ofperiod
Cost
Land		$	3,925,468		$	-		$	-		$	-		$	3,925,468
Buildings and structures			6,390,907			47,784	(		7,234)			131,716			6,563,263
Machinery			12,717,065			414,320	(		184,248)			884,019			13,831,156
Testing equipment			771,319			21,749			-			26,850			819,918
Transportation equipment			198,861			650	(		2,710)			-			196,801
Office equipment			175,642			16,951			-			-			192,593
Other facilities			4,171,958			322,876	(		3,166)			123,986			4,615,654
Unfinished construction and
equipment under acceptance			1,673,323			368,710	(		810)	(		1,168,958)			872,265
		$	30,024,543		$	1,193,040	($		198,168)	($		2,387)		$	31,017,118
Accumulated depreciation
Buildings and structures	($		2,326,005)	($		180,888)		$	2,217		$	-	($		2,504,676)
Machinery	(		7,131,601)	(		743,640)			135,377	(		113)	(		7,739,977)
Testing equipment	(		669,399)	(		44,447)			-			-	(		713,846)
Transportation equipment	(		132,315)	(		18,263)			1,308			-	(		149,270)
Office equipment	(		110,539)	(		33,732)			-			-	(		144,271)
Other facilities	(		2,966,430)	(		565,657)			1,492			113	(		3,530,482)
	($		13,336,289)	($		1,586,627)		$	140,394		$	-	($		14,782,522)
		$	16,688,254											$	16,234,596

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						Year	endedDecember31,	endedDecember31,	endedDecember31,	2019	2019
	Beginning ofperiod					Additions			Disposals			Transfer			End ofperiod
Cost
Land		$	3,925,468		$	-		$	-		$	-		$	3,925,468
Buildings and structures			6,186,836			79,387			-			124,684			6,390,907
Machinery			12,261,955			376,909	(		94,988)			173,189			12,717,065
Testing equipment			739,482			25,348	(		668)			7,157			771,319
Transportation equipment			164,352			6,024			-			28,485			198,861
Office equipment			158,901			16,741			-			-			175,642
Other facilities			3,714,830			443,712	(		2,024)			15,440			4,171,958
Unfinished construction and
equipment under acceptance			1,053,091			970,057			-	(		349,825)			1,673,323
		$	28,204,915		$	1,918,178	($		97,680)	($		870)		$	30,024,543
Accumulated depreciation
Buildings and structures	($		2,151,582)	($		174,423)		$	-		$	-	($		2,326,005)
Machinery	(		6,488,194)	(		690,620)			57,998	(		10,785)	(		7,131,601)
Testing equipment	(		624,138)	(		45,935)			668			6	(		669,399)
Transportation equipment	(		113,161)	(		19,154)			-			-	(		132,315)
Office equipment	(		81,022)	(		29,517)			-			-	(		110,539)
Other facilities	(		2,420,635)	(		557,587)			1,013			10,779	(		2,966,430)
	($		11,878,732)	($		1,517,236)		$	59,679		$	-	($		13,336,289)
		$	16,326,183											$	16,688,254

On September 26, 2020, a plant located in Xizhou owned by the Company absorbed some fire damage. The book value of the buildings and equipment which were damaged by the fire amounted to $51,367 thousand. The Company 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.

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－ (8) Leasing arrangements lessee

• A. The Company leases various assets including land, buildings, business vehicles, and multifunction printers. Rental contracts are typically made for periods of 1 to 10 years. Lease terms are negotiated on an individual basis and contain a wide range of different 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 forklift trucks and stacking machines. Low-value assets comprise of defibrillators.

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

Land Buildings and structures Transportation equipment Office equipment Other equipment Land Buildings and structures Transportation equipment Office equipment Other equipment	December31,2020 Bookvalue 41,159 $ 3,788 37,976 4,854 14,296 102,073 $ Year ended December 31,2020 Depreciationexpense 16,925 $ 3,125 23,526 1,798 4,266 49,640 $	December31,2019 Bookvalue 58,085 $ 2,272 25,414 4,944 16,579 107,294 $ Year ended December 31,2019
		Depreciationexpense
		19,022 $ 3,750 21,048 1,664 4,306 49,790 $

• D. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets amounted to $44,419 thousand and $21,140 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 December 31,2020 990 $ 3,019 87 8,953 13,049 $	Year ended December 31,2019
			1,035 $ 3,230 87 1,725 6,077 $

• F. For the years ended December 31, 2020 and 2019, the Company’s total cash outflow for leases amounted to $45,516 thousand and $42,867 thousand, respectively.

• G. Variable lease payments

• (a) Some of the Company’s lease contracts contain variable lease payment terms that are linked to

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the stored amount of tires. For the aforementioned lease contracts, up to 14.28% and 3.08% of lease payments are on the basis of variable payment terms and are accrued based on the stored amount of tires for the years ended December 31, 2020 and 2019, respectively. Variable payment terms are used for a variety of reasons. Various lease payments that depend on the stored amount of tires are recognized 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 $90 thousand and $17 thousand for the years ended December 31, 2020 and 2019, respectively.

(9) Investment property, net

Year ended December 31, 2020

								Closing net
		Opening net						book
	book amount as							amount as at
		at January1		Additions		Transfer	December31
Cost
Land	$	336,339	$	82	$	-	$	336,421
Buildings and structures		27,766		-		-		27,766
	$	364,105	$	82	$	-	$	364,187
Accumulated depreciation
Buildings and structures	($	23,116)	($	606)	$	-	($	23,722)
Accumulated impairment
Land	($	51,038)	$	-	$	-	($	51,038)
	$	289,951					$	289,427
			YearendedDecember31,2019
								Closing net
		Opening net						book
	book amount as							amount as at
		at January1		Additions		Transfer	December31
Cost
Land	$	336,339	$	-	$	-	$	336,339
Buildings and structures		27,766		-		-		27,766
	$	364,105	$	-	$	-	$	364,105
Accumulated depreciation
Buildings and structures	($	22,505)	($	611)	$	-	($	23,116)
Accumulated impairment
Land	($	51,038)	$	-	$	-	($	51,038)
	$	290,562					$	289,951

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A. Rental income from investment property is shown below:

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year		Year ended December 31,2020	Year ended December 31,2019
		$8,725 $ 606	$7,998 $ 611

• B. The fair value of the investment property held by the Company as at December 31, 2020 and 2019 was $557,821 thousand and $539,710 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 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) Intangible assets

Cost Software Accumulated amortisation Software Cost Software Accumulated amortisation Software				Year ended December	Year ended December	Year ended December	Year ended December	31,2020
	Opening net book amount as at January1			Additions				Transfer - $ - $ 31,2019		Closing net book amount as atDecember31
	$ 128,454 87,821) ($		10,195 $ 42,088) ($						$126,108 ($117,368) 8,740 $
		40,633 $
	Opening net book amount as at January1			Additions	Disposals			Transfer		Closing net book amount as atDecember31
	$ 124,455 53,715) ($		15,399 $ 45,506) ($		11,400) ($			- $ - $	$128,454 ($ 87,821) 40,633 $
						11,400 $
	70,740 $

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Details of amortization on intangible assets are as follows:

Operating costs Administrative expenses Research and development expenses		Year ended December 31,2020		Year ended December 31,2019
		1,016 $ 29,481 11,591 42,088 $		582 $ 32,159 12,765 45,506 $

(11) Short-term borrowings

Short-term borrowings
Type ofborrowings	December31,2020			Interestrate	range		Collateral
Bank borrowings
Bank unsecured borrowings	$	1,400,000		0.45%~0.74%			None
Type ofborrowings	December31,2019			Interestrate	range		Collateral
Bank borrowings
Bank unsecured borrowings	$	2,450,000		0.70%~0.86%			None
Other payables
			December31,2020			December31,2019
Employee compensation payable		$		232,596	$		194,306
Wages and salaries payable				518,769			520,424
Payable on machinery and equipment				127,850			327,645
Compensation due to directors and supervisors				91,611			61,089
Others				658,781			647,174
		$		1,629,607	$		1,750,638
Other current liabilities
			December31,2020			December31,2019
Long-term liabilities due within one year			$	7,658,333		$	5,270,000
Receipts under custody				69,158			63,078
Others				3,481			2,786
		$		7,730,972	$		5,335,864
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

(12) Other payables

(13) Other current liabilities

(14) Bonds payable

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• 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:

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:

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

• (15) Long term borrowings

Long-term borrowings
Type ofborrowings	Borrowing period andrepayment term	Interest rate range	Collateral	December 31, 2020
Installment-repayment borrowings Unsecured borrowings Type ofborrowings Less: Current portion	Principal is repayable in installment until October, 2025. Borrowing period andrepayment term	0.70%~1.00% Interest rate range	None Collateral	12,200,000 $ 1,658,333) ( $10,541,667 December 31, 2019
Installment-repayment borrowings Unsecured borrowings Less: Current portion	Principal is repayable in installment until February, 2024.	1.00%~1.21%	None	9,900,000 $ 2,770,000) ( $7,130,000

According to the borrowing contract, the Company 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.

(16) Pensions

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

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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:

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

• (c) Movements in net defined benefit liabilities are as follows:

Year ended December 31, 2020 Balance at January 1 Current service cost Interest expense (income) Remeasurements: Change in financial assumptions Experience adjustments Return on plan asset (excluding amounts included in interest income or expense) Pension fund contribution Paid pension Balance at December 31		Present value of defined benefit obligations	Fair value of planassets		Net defined benefitliability
	1,351,590 $ 15,530 9,461 1,376,581 47,926 25,410) ( - 22,516 - 120,181) ( $1,278,916		653,508) ($ - 4,575) ( 658,083) ( - - 23,783) ( 23,783) ( 125,044) ( 111,597 ($ 695,313)	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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Year ended December 31, 2019 Balance at January 1 Current service cost Interest expense (income) Remeasurements: Change in financial assumptions Experience adjustments Return on plan asset (excluding amounts included in interest income or expense) Pension fund contribution Paid pension Balance at December 31		Present value of defined benefit obligations	Fair value of planassets		Net defined benefitliability
	1,389,880 $ 18,362 13,899 1,422,141 39,375 18,760) ( - 20,615 - 91,166) ( $1,351,590		680,510) ($ - 6,805) ( 687,315) ( - - 25,435) ( 25,435) ( 23,824) ( 83,066 ($ 653,508)	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 utilization 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 has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan asset 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.

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

Discount rate Future salary increases	Year ended December 31,2020	Year ended December 31,2020	Year ended December 31,2019
		0.30% 3.00%	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.

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

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

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 Company for the year ending December 31, 2021 amounts to $18,853 thousand.

• (g) As of December 31, 2020, the weighted average duration of that retirement plan is 10 years. The analysis of timing of the weighted average duration of the future pension payment was as follows:

Within 1 year 2-5 year(s) 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 for the years ended December 31, 2020 and 2019 were $152,470 thousand and $156,102 thousand, respectively.

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(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 amountcould 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 Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed of or reclassified subsequently.

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• E. The Company recognised 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 proposed 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).

(20) Other equity items

At January 1 Valuation adjustment – Company Currency translation differences: – Subsidiaries and associates – Tax on subsidiaries and associates At December 31 At January 1 Valuation adjustment – Company Currency translation differences: – Subsidiaries and associates – Tax on subsidiaries and associates At December 31			2020

(21) Operating revenue

Operating revenue
Revenue from contracts with customers		Year ended December 31,2020	Year ended December 31,2019
		$18,926,294	$19,497,888

A. Disaggregation of revenue from contracts with customers

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

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	YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
Revenue from external contracts Inter-segment revenue Total segment revenue	Sale oftires based on location			Others 5,953,795 $ 888,960 $ 6,842,755	Total 9,389,533 $ 9,536,761 $18,926,294
	Taiwan China US 1,955,732 $ 258,970 $ 1,221,036 $ 3,798,690 85,560 4,763,551 $ 5,754,422 $ 344,530 $ 5,984,587 YearendedDecember31,2019
Revenue from external contracts Inter-segment revenue Total segment revenue	Sale oftires based on location			Others 6,504,651 $ 1,648,691 $ 8,153,342	Total 9,903,395 $ 9,594,493 $19,497,888
	Taiwan 2,148,713 $ 3,745,078 $ 5,893,791	China 155,301 $ 87,253 $242,554	US 1,094,730 $ 4,113,471 $ 5,208,201

B. Contract liabilities

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

Contract liabilities: Advance sales receipts Advance sales receipts Year ended December 31,2020 $81,161 December31,2019 $99,878 Year ended December 31,2019 $102,773 January1,2019 $127,663 Revenue recognised that was included in the contract liability balance at the beginning of the period: December31,2020 $116,293	Contract liabilities: Advance sales receipts Advance sales receipts Year ended December 31,2020 $81,161 December31,2019 $99,878 Year ended December 31,2019 $102,773 January1,2019 $127,663 Revenue recognised that was included in the contract liability balance at the beginning of the period: December31,2020 $116,293	Contract liabilities: Advance sales receipts Advance sales receipts Year ended December 31,2020 $81,161 December31,2019 $99,878 Year ended December 31,2019 $102,773 January1,2019 $127,663 Revenue recognised that was included in the contract liability balance at the beginning of the period: December31,2020 $116,293	Contract liabilities: Advance sales receipts Advance sales receipts Year ended December 31,2020 $81,161 December31,2019 $99,878 Year ended December 31,2019 $102,773 January1,2019 $127,663 Revenue recognised that was included in the contract liability balance at the beginning of the period: December31,2020 $116,293
		$81,161	$102,773

(22) Interest income

Interest income from bank deposits Interest income endorsements/guarantees		Year ended December 31,2020		Year ended December 31,2019
		64,822 $ 17,206 82,028 $		108,245 $ 26,122 134,367 $

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(23) Other income

Other income
Revenue from patent royalties Revenue from trademark royalties Revenue from commission Revenue from dividend Revenue from per diem Others		Year ended December 31,2020		Year ended December 31,2019
		454,383 $ 322,076 183,359 17,694 10,700 242,988 $1,231,200		533,531 $ 388,000 232,529 18,361 54,783 120,670 $1,347,874

(24) Other gains and losses

Net currency exchange loss Gain on disposal of property, plant and equipment Loss on financial assets and liabilities at fair value through profit or loss Casualty loss Miscellaneous disbursements	Year ended December 31,2020	Year ended December 31,2019
	299,383) ($ 139,775 755) ( 279) ( 15,920) ( ($176,562)	161,641) ($ 150,244 2,383) ( - 4,991) ( ($18,771)

(25) Finance costs

Finance costs
Interest expense: Bank borrowings Corporate bonds Lease liability-interest expense		Year ended December 31,2020		Year ended December 31,2019
		119,706 $ 146,383 990 $267,079		118,052 $ 187,554 1,035 $ 306,641

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(26) Expenses by nature

Employee benefits costs 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 Employee benefits costs 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 December 31,2020	Year ended December 31,2020	Year ended December 31,2020
	Operatingcosts Operatingexpense Total 2,663,121 $ 1,373,297 $ 4,036,418 $ 249,375 124,210 373,585 112,404 60,482 172,886 - 95,691 95,691 86,328 20,384 106,712 3,111,228 $ 1,674,064 $ 4,785,292 $ 7,544,078 $ - $ 7,544,078 $ 1,395,316 $ 191,311 $ 1,586,627 $ 21,187 $ 28,453 $ 49,640 $ - $ 606 $ 606 $ 1,016 $ 41,072 $ 42,088 $ Year ended December 31,2019		Total
			4,036,418 $ 373,585 172,886 95,691 106,712
			4,785,292 $
			7,544,078 $
			1,586,627 $
			49,640 $
			606 $
			42,088 $
	Operatingcosts 2,775,000 $ 259,478 122,234 - 89,410 3,246,122 $ 8,851,494 $ 1,332,861 $ 19,162 $ - $ 582 $	Operatingexpense 1,298,640 $ 119,832 59,324 57,224 27,404 1,562,424 $ - $ 184,375 $ 30,628 $ 611 $ 44,924 $	Total
			4,073,640 $ 379,310 181,558 57,224 116,814
			4,808,546 $
			8,851,494 $
			1,517,236 $
			49,790 $
			611 $
			45,506 $

Note: As at December 31, 2020 and 2019, the Company had 5,904 and 6,435 employees, respectively, of which 9 and 7 directors, respectively, were not the Company’s employee.

• 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.-Average employee benefit costs for the year ended December 31, 2020 was $796 thousand ((Total employee benefit costs for the year ended December 31, 2020– Total directors’ remuneration for the year ended December 31, 2020) / (Number of employees for the year ended December 31,

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2020 – Number of non-employee directors for the year ended December 31, 2020)). Average employee benefit costs for the year ended December 31, 2019 was $739 thousand ((Total employee benefit costs for the year ended December 31, 2019 – Total directors’ remuneration for the year ended December 31, 2019) / (Number of employees for the year ended December 31, 2019 – Number of non-employee directors for the year ended December 31, 2019)).

• C.-Average employee wages and salaries for the year ended December 31, 2020 were $685 thousand (Total employee wages and salaries for the year ended December 31, 2020 / (Number of employees for the year ended December 31, 2020 – Number of non-employee directors for the year ended December 31, 2020)). Average employee wages and salaries for the year ended December 31, 2019 were $634 thousand (Total employee wages and salaries for the year ended December 31, 2019 / (Number of employees for the year ended December 31, 2019 – Number of non-employee directors for the year ended December 31, 2019)).

• D. Changes of average employee wages and salaries was 8.04% ((Average employee wages and salaries for the year ended December 31, 2020 - Average employee wages and salaries for the year ended December 31, 2019) / Average employee wages and salaries for the year ended December 31, 2019).

• (a) The Company has set up an audit committee, so there are no supervisors.

• (b) The compensation policy and payment were determined by the Remuneration Committee of the Company in accordance with the market average of each position, and the duties and responsibilities of such position, as well as personal contribution to the Company’s operation target. Besides taking overall operating performance of the Company into consideration, personal achievements and contributions made to business operations are also evaluated during the remuneration determination process. The Board of Directors would then approve the remuneration that is fair and reasonable.

  • The Company’s independent director remuneration is delegated to the Board to decide and will be decided according to their participation procedure and contribution to the Company’s operation and the common standard in the industry. The independent directors receive a fixed amount of remuneration and the traveling expenses of attending meetings. They do not receive other forms of remuneration and may not participate in the distribution of the Company’s director remuneration.

  • The employees’ emolument of the Company mainly includes salary, bonus, employee compensation, etc. The payment standard is set according to the industry salary standard, the Company’s operating conditions, employees’ personal performance, the position held and the responsibility assumed as well as in compliance with the laws and regulations. The employees’ compensation is distributed according to the Company’s Articles of Incorporation and distributable profit of the year. The employees’ emolument do not vary according to age, gender, race, religion, political affiliation, marital status and union membership.

• E. 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

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accrued based on 2% and 1.313% of distributable profit of current year for the year ended December 31, 2020.

For 2019, the employees’ compensation and directors’ and supervisors’ remuneration of 2019, as resolved at the meeting of Board of Directors amounting to $93,053 thousand and $61,089 thousand, were in agreement with those amounts recognized 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:
Current tax: Current tax on profits for the period Prior year income tax overestimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax expense	Year ended December 31,2020	Year ended December 31,2019
	1,261,903 $ 196,115) ( 1,065,788 308,456) ( 757,332 $	1,193,484 $ 74,638) ( 1,118,846 87,183) ( 1,031,663 $

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

follows:
Generated during the period: Currency translation differences Remeasurement of defined benefit obligations Total generated during the period Income tax from other comprehensive income	Year ended December 31,2020	Year ended December 31,2019
	72,267) ($ 253) ( 72,520) ( 72,520) ($	426,749 $ 964) ( 425,785 425,785 $

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B. Reconciliation between income tax expense and accounting profit

Tax calculated based on profit before tax and statutory tax rate Effects from items disallowed by tax regulation Income from investing overseas subsidiaries not recognized as deferred tax liabilities Temporary differences not recognised as deferred tax assets Tax exempt income by tax regulation Effect from investment tax credits Prior year income tax overestimation Income tax expense	Year ended December31,2020	Year ended December31,2019
	1,349,207 $ 81,147 820,398) ( 550,979 51,193) ( 156,295) ( 196,115) ( 757,332 $	899,698 $ 89,713 545,723) ( 694,213 31,600) ( - 74,638) ( 1,031,663 $

C. Amounts of deferred tax assets or liabilities as a result of temporary difference are as follows:

2020

				2020
Temporary differences: - Deferred tax assets: Unrealized gain on inter -affiliated accounts Remeasurement of defined benefit obligations Exchange differences on translation of foreign financial statements Unrealised exchange loss Others Subtotal - Deferred tax liabilities: Gain on foreign long-term investments Adjustment of land value increment tax Others Subtotal Total		January1	Recognised in profit or loss	Recognised in other comprehensive income		December31
	146,333 $ 165,802 1,209,061 64,214 33,132 1,618,542 $ 738,159) ($ 514,733) ( 40,959) ( 1,293,851) ($ 324,691 $		9,901 $ - - 4,604 17,371) ( 2,866) ($ 288,875 $ - 22,447 311,322 $ 308,456 $	- $ 253) ( 72,267) ( - - 72,520) ($ - $ - - - $ 72,520) ($	156,234 $ 165,549 1,136,794 68,818 15,761 1,543,156 $ 449,284) ($ 514,733) ( 18,512) ( 982,529) ($ 560,627 $

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Temporary differences: - Deferred tax assets: Unrealized gain on inter -affiliated accounts Remeasurement of defined benefit obligations Exchange differences on translation of foreign financial statements Unrealised exchange loss Others Subtotal - Deferred tax liabilities: Gain on foreign long-term investments Adjustment of land value increment tax Unrealized evaluation gains on financial assets and liabilities Others Subtotal Total				2019		December31
		January1	Recognised in profit or loss	Recognised in other comprehensive income
	169,527 $ 166,766 782,312 19,289 15,597 1,153,491 $ 767,625) ($ 514,733) ( 649) ( 58,761) ( 1,341,768) ($ 188,277) ($		23,194) ($ - - 44,925 17,535 39,266 $ 29,466 $ - 649 17,802 47,917 $ 87,183 $	- $ 964) ( 426,749 - - 425,785 $ - $ - - - - $ 425,785 $	146,333 $ 165,802 1,209,061 64,214 33,132 1,618,542 $ 738,159) ($ 514,733) ( - 40,959) ( 1,293,851) ($ 324,691 $

• D. 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.

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(28) 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

Amount Weighted average number of ordinary shares outstanding Earnings per share aftertax (sharesinthousands) (indollars) 5,988,702 $ 3,241,416 1.85 $ 5,988,702 3,241,416 5,988,702 $ 3,245,451 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 3,466,827 $ 3,244,217 1.07 $ - 2,801 YearendedDecember31,2020 - 4,035 YearendedDecember31,2019

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(29) Supplemental cash flow information

Investing activities with partial cash payments

Supplemental cash flow information Investing activities with partial cash payments
Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the period	Year ended December 31,2020	Year ended December 31,2019
	1,193,130 $ 327,645 127,850) ( 1,392,925 $	1,918,178 $ 406,073 327,645) ( 1,996,606 $

(30) Changes in liabilities from financing activities

At January 1 Changes in cash flow from financing activities Interest paid Additions Amortisation of interest expense At December 31 At January 1 Changes in cash flow from financing activities Interest paid Additions Amortisation of interest expense At December 31				2020			Liabilities from financing activities-gross
	Short-term borrowings	Long-term borrowings	Bonds payable	Dividends payable	Lease liability	Guarantee deposits received
	2,450,000 $ 1,050,000) ( - - - 1,400,000 $ Short-term borrowings	9,900,000 $ 2,300,000 - - - 12,200,000 $	17,000,000 $ 2,500,000) ( - - - 14,500,000 $	647 $ 3,241,416) ( - 3,241,416 - 647 $ 2019	104,141 $ 45,516) ( 990) ( 43,563 990 102,188 $	7,050 $ 1,746 - - - 8,796 $	29,461,838 $ 4,535,186) ( 990) ( 3,284,979 990 28,211,631 $ Liabilities from financing activities-gross
		Long-term borrowings	Bonds payable	Dividends payable	Lease liability	Guarantee deposits received
	500,000 $ 1,950,000 - - - 2,450,000 $	11,310,000 $ 1,410,000) ( - - - 9,900,000 $	21,800,000 $ 4,800,000) ( - - - 17,000,000 $	647 $ 3,565,557) ( - 3,565,557 - 647 $	123,217 $ 29,095) ( 1,035) ( 10,019 1,035 104,141 $	7,130 $ 80) ( - - - 7,050 $	33,740,994 $ 7,854,732) ( 1,035) ( 3,575,576 1,035 29,461,838 $

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Information on investee companies and indirect investments in Mainland China are described in Notes 13(2) and 13(3).

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(2) Significant related party transactions

A. Operating revenue

Sales of goods: – Subsidiaries MAXXIS (Taiwan) Trading CO., LTD. CHENG SHIN RUBBER USA, INC. Others – Other related parties		Year ended December 31,2020		Year ended December 31,2019
		3,798,690 $ 4,763,551 974,520 54,148 9,590,909 $		3,745,078 $ 4,113,471 1,735,944 63,318 9,657,811 $

The Company’s sales price to related parties was approximately the same as third parties. Credit term for exporting sales amount was the same as third parties, which was collected after 60 days to 90 days.

B. Purchases

term for exporting sales amount was the same as to 90 days. Purchases	third parties, which was	collected after 60 days
Sales of goods: Subsidiaries	Year ended December 31,2020	Year ended December 31,2019
	961,007 $	363,606 $

The credit term for purchases from related parties is the same with third parties. Except for Maxxis (Thailand) is paid 30 days after the purchase, other payments are the same with third parties, which are 90 days after the purchase.

C. Property transactions

(a) Proceeds from sales of property and gain (loss) on disposal:

Ending balance of receivables from sales of property: Sales amount Gain on disposal Sales amount Gain on disposal Subsidiaries 158,098 $ 59,445 $ 297,213 $ 103,632 $ YearendedDecember31,2020 YearendedDecember31,2019 December 31,2020 December 31,2019 Subsidiaries 61,619 $ 100,374 $		YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020		YearendedDecember31,2019	YearendedDecember31,2019	YearendedDecember31,2019
		Sales amount		Gain on disposal		Sales amount		Gain on disposal
							100,374 $

(b) Ending balance of receivables from sales of property:

Abovementioned payments from sales of fixed assets to related parties are collected 60~90 days after the sales of equipment.

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D. Revenue from patent royalties (listed other income) and other receivables (shown as ‘Other current

assets’)

(a) Revenue from patent royalties:

Ending balance of royalty receivables from technology: Year ended December 31,2020 Subsidiaries 454,383 $ December 31,2020 Subsidiaries 158,688 $		Year ended December 31,2020	Year ended December 31,2019
			533,531 $ December 31,2019
	158,688 $		152,458 $

• (b) Ending balance of royalty receivables from technology:

Abovementioned royalty revenue for technology was calculated by applying the agreed upon ratio to net sales amounts, and payment was originally collected yearly and was changed to quarterly since 2014.

E. Interest income-endorsements/guarantees (listed other income) and other receivables (shown as

‘Other current assets’)

• (a) Interest income-endorsements/guarantees:

Subsidiaries		Year ended December 31,2020	Year ended December 31,2019
		17,206 $	26,122 $

• (b) Ending balance of interest receivables from endorsements and guarantees:

Subsidiaries	December31,2020 31,715 $	December31,2019
		23,660 $

Abovementioned interest income from endorsements and guarantees was calculated by applying the agreed ratio to the amount guaranteed and payment was originally collected yearly but was changed to quarterly since 2014.

F. Revenue from commission (listed other income) and other receivables (shown as ‘Other current assets’)

(a) Revenue from commission:

(b) Ending balance of receivables from commission: Year ended December 31,2020 Subsidiaries 183,359 $ December31,2020 Subsidiaries 56,675 $		Year ended December 31,2020		Year ended December 31,2019
				232,529 $ December31,2019 55,155 $

Abovementioned commission revenue was determined at certain rate of sales amounts and payment was originally collected yearly but was changed to quarterly since 2014.

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G. Revenue from trademark royalties (listed other income) and other receivables (shown as ‘Other current assets’)

(a) Revenue from trademark royalties:

(b) Ending balance of receivables from trademark Subsidiaries Subsidiaries	royalties: Year ended December 31,2020 322,076 $ December31,2020 97,518 $	Year ended December 31,2019
		388,000 $ December31,2019 93,873 $

Abovementioned revenue from trademark royalties was determined at certain rate of sales and was originally collected yearly but was changed to quarterly since 2014. H. Revenue from per diem (listed other income) and other receivables (shown as ‘Other current assets’)

• (a) Revenue from per diem:

assets’) (a) Revenue from per diem:
(b) Ending balance of receivables from per diem: Subsidiaries Subsidiaries	Year ended December 31,2020 10,700 $ December 31,2020 32,801 $	Year ended December 31,2019
		54,783 $ December 31,2019 39,570 $

The aforementioned per diem income is based on agreed per diem rate multiplied by traveling days. Collection terms have been revised from yearly to quarterly since year 2014.

I. Accounts receivable

	December31,2020	December31,2020	December31,2019	December31,2019
Accounts receivable
–Subsidiaries
CHENG SHIN RUBBER USA, INC.	$	1,121,502	$	654,683
MAXXIS (Taiwan) Trading CO., LTD.		433,464		355,857
CHENG SHIN RUBBER CANADA, INC.		179,366		203,503
Others		71,178		145,108
–Other related parties		20,052		20,057
	$	1,825,562	$	1,379,208
J.Other receivables (shown as‘Other current assets’)
	December 31,2020		December 31,2019
Subsidiaries	$	61,619	$	100,374

Other receivables mainly arose from supplies and packaging material sold to related parties and

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payment on behalf of related parties.

K. Accounts payable

Other payables Subsidiaries Associates Subsidiaries Associates	December31,2020 380,533 $ - 380,533 $ December31,2020 125,550 $ 191 125,741 $	December31,2019
		45,017 $ 148
		45,165 $
		December31,2019
		160,346 $ -
		160,346 $

L. Other payables

Abovementioned payments are advertisement expense and sponsorship to racing drivers paid by related parties on behalf of the Company.

M. Information about guarantees

As of December 31, 2020 and 2019, the Company and the financial institutions agreed that the Company’s subsidiaries may apply for loans within the following credit lines as stated in the letter of credit with a local branch of the aforementioned financial institutions. The Company will be responsible for the guarantee. Details is as follows:

Obligee Subsidiaries Obligee Subsidiaries	Guaranteedline ofcredit USD 613,100 thousand THB 2,000,000 thousand INR 1,450,000 thousand Guaranteedline ofcredit USD 638,800 thousand THB 2,000,000 thousand RMB 450,000 thousand INR 1,450,000 thousand	Used amounts as of December31,2020
		USD 481,899 thousand THB 571,680 thousand INR 1,434,048 thousand Used amounts as of December31,2019
		USD 587,039 thousand THB 1,257,280 thousand RMB 169,677 thousand INR 0 thousand

As of December 31, 2020 and 2019, the Company’s endorsements/guarantees have not exceeded the limit.

(3) Key management compensation

the limit. Key management compensation
Short-term employee benefits Post-employment benefits		Year ended December 31,2020		Year ended December 31,2019
		216,350 $ 2,038 218,388 $		186,049 $ 2,561 188,610 $

8. PLEDGED ASSETS

None.

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Contingencies

Information about related parties’ guarantees is provided in Note 7.

(2) Commitments

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

December 31, 2020 December 31, 2019 Property, plant and equipment $ 226,155 $ 350,192 B. Amount of letter of credit that has been issued but not yet used: December 31, 2020 December 31, 2019 Amount of letter of credit that has been issued but not yet used $ 570 $ 9,541

10. SIGNIFICANT DISASTER LOSS

On September 26, 2020, a fire damaged a plant located in Xizhou owned by the Company and destroyed some buildings, equipment and inventories inside 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 Company, the construction project to engage others to build the ATV plant on its own land 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 Company’s objectives when managing capital are to safeguard the Company’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 Company 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 Company’s strategy was unchanged from 2019. The gearing ratios at December 31, 2020 and 2019 were as follows:

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Financial instruments A. Financial instruments by category December31,2020 December31,2019 Total liabilities 34,546,755 $ 35,460,275 $ Total equity 80,437,095 $ 77,395,683 $ Less : Intangible assets 8,740) ( 40,633) ( Tangible equity 80,428,355 $ 77,355,050 $ Debt-equity ratio 42.95% 45.84% 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 6,119,194 8,525,572 Notes receivable, net 33,790 22,919 Accounts receivable (including related parties) 3,132,710 2,540,596 Guarantee deposits paid 1,689 1,297 9,376,207 $ 11,174,506 $ Financial liabilities Financial liabilities at amortised cost Short-term borrowings 1,400,000 $ 2,450,000 $ Accounts payable (including related parties) 1,667,033 1,093,026 Other accounts payable 1,629,607 1,750,638 Corporate bonds payable (including current portion) 14,500,000 17,000,000 Long-term borrowings (including current portion) 12,200,000 9,900,000 Guarantee deposits received 8,796 7,050 31,405,436 $ 32,200,714 $ Lease liabilities (including current portion) 102,189 $ 104,141 $	Financial instruments A. Financial instruments by category December31,2020 December31,2019 Total liabilities 34,546,755 $ 35,460,275 $ Total equity 80,437,095 $ 77,395,683 $ Less : Intangible assets 8,740) ( 40,633) ( Tangible equity 80,428,355 $ 77,355,050 $ Debt-equity ratio 42.95% 45.84% 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 6,119,194 8,525,572 Notes receivable, net 33,790 22,919 Accounts receivable (including related parties) 3,132,710 2,540,596 Guarantee deposits paid 1,689 1,297 9,376,207 $ 11,174,506 $ Financial liabilities Financial liabilities at amortised cost Short-term borrowings 1,400,000 $ 2,450,000 $ Accounts payable (including related parties) 1,667,033 1,093,026 Other accounts payable 1,629,607 1,750,638 Corporate bonds payable (including current portion) 14,500,000 17,000,000 Long-term borrowings (including current portion) 12,200,000 9,900,000 Guarantee deposits received 8,796 7,050 31,405,436 $ 32,200,714 $ Lease liabilities (including current portion) 102,189 $ 104,141 $	Financial instruments A. Financial instruments by category December31,2020 December31,2019 Total liabilities 34,546,755 $ 35,460,275 $ Total equity 80,437,095 $ 77,395,683 $ Less : Intangible assets 8,740) ( 40,633) ( Tangible equity 80,428,355 $ 77,355,050 $ Debt-equity ratio 42.95% 45.84% 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 6,119,194 8,525,572 Notes receivable, net 33,790 22,919 Accounts receivable (including related parties) 3,132,710 2,540,596 Guarantee deposits paid 1,689 1,297 9,376,207 $ 11,174,506 $ Financial liabilities Financial liabilities at amortised cost Short-term borrowings 1,400,000 $ 2,450,000 $ Accounts payable (including related parties) 1,667,033 1,093,026 Other accounts payable 1,629,607 1,750,638 Corporate bonds payable (including current portion) 14,500,000 17,000,000 Long-term borrowings (including current portion) 12,200,000 9,900,000 Guarantee deposits received 8,796 7,050 31,405,436 $ 32,200,714 $ Lease liabilities (including current portion) 102,189 $ 104,141 $
		- $ 25,935 58,187 8,525,572 22,919 2,540,596 1,297
		11,174,506 $
		2,450,000 $ 1,093,026 1,750,638 17,000,000 9,900,000 7,050
		32,200,714 $
		104,141 $

(2) Financial instruments

A. Financial instruments by category

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• B. Financial risk management policies

• (a) The Company’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 Company’s overall risk management programmer focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial position and financial performance.

• (b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the board of directors. Company treasury identifies, evaluates and hedges financial risks in close cooperation with the Company’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 Company 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, recognized assets and liabilities.

• ii.The Company hedges foreign exchange rate by using forward exchange contracts. However, the Company does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss.

• iii.The Company’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:

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(Foreign currency: functional currency) Financial assets Monetary items USD：TWD EUR：TWD RMB：TWD JPY：TWD Financial assets Non-monetary items USD：TWD RMB：TWD IDR：TWD CAD：TWD EUR：TWD JPY：TWD Financial liabilities Monetary items USD：TWD Non-monetary items USD：TWD			December31,2020	December31,2020
	Foreign currency amount (thousands) 226,440 $ 17,025 68,727 588,719 121,147 $ 356,953 353,535,820 30,328 19,130 1,668,213 33,170 $ 3,520 $	28.480 35.020 4.377 0.276 28.480 4.377 0.002 22.350 35.020 0.276 28.480 28.480 Exchangerate	Book value (TWD inthousands) 6,449,011 $ 596,216 300,818 162,486 3,450,267 $ 1,562,383 717,678 677,831 669,933 460,427 944,682 100,250		Sensitivity analysis
				Degree of variation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on other Effect on profit comprehensive or loss income 64,490 $ - $ 5,962 - 3,008 - 1,625 - 9,548 $ 24,955 $ 15,624 - - 7,177 - 6,778 5,827 872 4,410 194 9,447 $ - 1,003 $ -

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December 31, 2019

(Foreign currency: functional currency) Financial assets Monetary items USD：TWD EUR：TWD JPY：TWD RMB：TWD GBP：RMB Financial assets Non-monetary items USD：TWD EUR：TWD JPY：TWD RMB：TWD CAD：TWD Financial liabilities Monetary items USD：TWD IDR：TWD INR：TWD	Foreign currency amount (Inthousands)	Exchangerate	Book value (TWD inthousands)			Effect on profit or loss Effect on other comprehensive income 45,331 $ - $ 12,266 - 4,323 - 31,260 - 1,298 - 9,173 $ 27,094 $ 3,957 821 3,752 - 12,391 - - 7,052 4,951 $ - - 1,606 - 3,650 Sensitivity analysis	Effect on profit or loss Effect on other comprehensive income 45,331 $ - $ 12,266 - 4,323 - 31,260 - 1,298 - 9,173 $ 27,094 $ 3,957 821 3,752 - 12,391 - - 7,052 4,951 $ - - 1,606 - 3,650 Sensitivity analysis
					Degree of variation	Effect on profit or loss
	151,203 $ 36,518 1,566,265 726,140 3,299 120,971 $ 14,223 1,359,503 287,835 30,704 16,513 $ 73,656,588 864,873	29.980 33.590 0.276 4.305 39.360 29.980 33.590 0.276 4.305 22.968 29.980 0.002 0.422	4,533,066 $ 1,226,640 432,289 3,126,033 129,849 3,626,711 $ 477,751 375,223 1,239,130 705,209 495,060 160,571 364,976		1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	45,331 $ 12,266 4,323 31,260 1,298 9,173 $ 3,957 3,752 12,391 - 4,951 $ - -	- $ - - - - 27,094 $ 821 - - 7,052 - 1,606 3,650

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• iv. The exchange (loss) gain including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019 amounted to ($299,383) thousand and ($161,641) thousand, respectively.

Price risk

• i. The Company’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 Company 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 Company’s main interest rate risk arises from long-term and short-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During the years ended December 31, 2020 and 2019, the Company’s borrowings at variable rate were denominated in the TWD.

• ii. The Company’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. At December 31, 2020 and 2019, if interest rates on TWD denominated borrowings at that date had been 0.1% higher/lower with all other variables held constant, post-tax profit for the years ended December 31, 2020 and 2019 would have been $10,880 thousand and $9,880 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 Company 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 Company’s credit policy, each local entity in the Company 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 Company adopts the assumptions under IFRS 9, the default occurs when the contract,payments are past due over 30 days.

• iv. The Company 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.

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• 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;

• (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 Company wrote-off the financial assets, which cannot be reasonably expected to be.recovered, after initiating recourse procedures. However, the Company will continue.executing the recourse procedures to secure their rights. As at December 31, 2020 and 2019,.the Company have no written-off financial assets that are still under recourse procedures.

• vii. The Company used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. 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 December31,2019 Without past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	Expectedlossrate 0.00% 1.90% 4.99% 38.90% 68.08% Expectedlossrate 0.00% 0.59% 3.79% 33.82% 62.21%	Totalbookvalue 1,156,459 $ 124,191 23,146 7,046 8,024 1,318,866 $ Totalbookvalue 952,599 $ 141,047 53,724 25,222 514 1,173,106 $	Loss allowance
			- $ 2,360 1,155 2,741 5,463
			11,718 $
			Loss allowance
			- $ 832 2,036 8,530 320
			11,718 $

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

At January 1 and December 31_IFRS 9 At January 1 and December 31_IFRS 9	2020
	11,718 $
	2019
	11,718 $

• (c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the

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Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’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 Company treasury. Company 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 Company’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 Accounts payable (including related parties) Other payables Lease liabilities Guarantee deposits received Long-term borrowings Bonds payable Non-derivative financial liabilities December 31, 2019 Short-term borrowings Accounts payable (including related parties) Other payables Lease liabilities Guarantee deposits received Long-term borrowings Bonds payable Non-derivative financial liabilities	Less than 90days 1,401,460 $ 1,667,033 1,346,222 21,311 - 150,630 - Less than 90days 2,452,362 $ 1,093,026 1,539,548 20,868 - 151,131 -	Between 91 Between 181 and 180days and365days - $ - $ - - - 143,841 7,086 13,580 - - 25,630 1,582,144 - 6,133,350 Between 91 Between 181 and 180days and365days - $ - $ - - - 118,037 4,972 8,661 - - 135,766 2,580,301 - 2,651,100	- $ - 139,544 60,212 8,796 10,655,521 8,601,300 Over 1year - $ - 93,053 69,640 7,050 7,217,216 14,734,650 Over 1year	Total
				1,401,460 $ 1,667,033 1,629,607 102,189 8,796 12,413,925 14,734,650 Total
				2,452,362 $ 1,093,026 1,750,638 104,141 7,050 10,084,414 17,385,750

As at December 31, 2020 and 2019, there was no financial derivative liabilities transaction.

(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

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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 Company’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 Company’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 Company’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

• (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, accounts payable, other payables and long-term borrowings (including current portion) are approximate to their fair values.

Financial liabilities: Bonds payable Financial liabilities: Bonds payable		December31,2020	December31,2020
	Carrying amount 14,500,000 $		Fairvalue
		Level 1 Level 2 - $ 14,546,679 $ December31,2019		Level3
				- $
	Carrying amount 17,000,000 $		Fairvalue
		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:

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Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income - Derivative instruments Financial assets at fair value through profit or loss -Equity securities Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income - Equity securities		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 Company used to measure fair value are as follows:

     - i. For Level 1, the Company used market quoted prices as their fair values according to the 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 Company 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 Company was affected by the COVID19 pandemic. Since early 2020, production of some of the subsidiaries’ factories had stopped and orders had been delayed. However, all factories have resumed operations in the second quarter of 2020. Additionally, although the Company’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 Company’s assessment.

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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), (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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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.

Expressed in thousands of NTD

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

December 31, 2020

Table 3

(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）	January1,2020 Balance as at	January1,2020 Balance as at	（Note 3） Addition	（Note 3） Addition		（Note 3） Disposal	（Note 3） Disposal		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) Expressed in thousands of NTD
					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

Number (Note1) Table 7	Companyname	Counterparty	Relationship (Note2)		Transaction (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
				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	(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 Expressed in thousands of NTD
					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	(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 Expressed in thousands of NTD
					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

Shares

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

CHENG SHIN RUBBER IND. CO., LTD. STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 1

Table 1
Item	Description		Amount
Cash on hand and petty cash Bank deposits Check deposits Demand deposits Foreign currency deposits Time deposits	USD 143,906 thousand Exchange rate 28.48 EUR 8,670 thousand Exchange rate 35.02 JPY 422,026 thousand Exchange rate 0.276 GBP 939 thousand Exchange rate 38.90 RMB 29,582 thousand Exchange rate 4.377 RMB 14,502 thousand Exchange rate 4.377 Period Interest rate 2020.12.29~2021.1.14 1.70% ~ 2.20%		550 $ 1,728 1,368,747 4,684,693 6,119,194 $ 63,476

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Table 1,Page1

CHENG SHIN RUBBER IND. CO., LTD. STATEMENT OF ACCOUNTS RECEIVABLE, NET DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 2

Table 2
Name ofCustomer	Description		Amount	Remark
Maxxis International GMBH Polaris Industries Inc. T&R Imports Trust Nissan North America, Inc. Others Less: Allowance for bad debts		167,798 $ 131,166 85,960 71,677 862,265 1,318,866 11,718) ( 1,307,148 $		None of the balances of each remaining accounts is greater than 5% of this account balance.

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Table 2,Page1

CHENG SHIN RUBBER IND. CO., LTD. STATEMENT OF INVENTORIES

DECEMBER 31, 2020

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

Table 3

Table 3
Item	Description		Amount			Remark
			Cost		Marketprice	Method for determiningmarketprice
Raw materials Work in process Finished goods Less: Allowance for loss for obsolete and slow-moving inventories and market value decline		988,526 $ 725,376 598,073 2,311,975 13,904) ( 2,298,071 $			1,013,369 $ 682,320 759,945 2,455,634 $	Net realisable value Net realisable value Net realisable value

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Table 3,Page1

								Guarantee or	pledge as	collaterals		None	None	None		None		None		None				None			None		None	None		None			None		None
CHENG SHIN RUBBER IND. CO., LTD.		MOVEMENT SUMMARY OF INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD		FOR THE YEAR ENDED DECEMBER 31, 2020		(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)	Table 4	As of January 1, 2020 Addition Deductions As of December 31, 2020 Market price or net in equity		No. of shares Amount No. of shares Amount No. of shares Amount No. of shares Amount Unit price Total Investee	MAXXIS International	Co., Ltd. 35,050,000 40,069,847 $ - 3,573,666 $ - 1,272,411) ($ Note 1 35,050,000 42,371,102 $ 1,209 $ 42,371,102 $	CST Trading Ltd. 72,900,000 25,199,773 - 2,941,776 - 1,318,356) ( Note 1 72,900,000 26,823,193 268 26,823,193	MAXXIS Trading Ltd. 237,811,720 10,417,885 - 532,776 - 322,997) ( Note 1 237,811,720 10,627,664 45 10,627,664	PT MAXXIS	International Indonesia 79,997,000 186,886) ( 59,997,750 871,991 - - 139,994,750 685,105 5 685,105	Cheng Shin Rubber USA,	Inc. 1,800,000 2,709,443 - 125,258) ( - 88,650) ( Note 1 1,800,000 2,495,535 1,386 2,495,535	MAXXIS Rubber India	Private Limited 649,994,730 364,976) ( 224,998,176 119,026) ( - - 874,992,906 484,002) ( Note 2 1) ( 484,002) (	PT.MAXXIS TRADING	INDONESIA 9,990 26,315 - 6,257 - - 9,990 32,572 3,260 32,572	Cheng Shin Rubber	Canada, Inc. 1,000,000 705,193 - 27,354) ( - - 1,000,000 677,839 678 677,839	NEW PACIFIC	INDUSTRY	COMPANY LIMITED 5,000,000 157,489 - 18,520 - 3,028) ( Note 1 5,000,000 172,981 35 172,981	MAXXIS Tech Center	Europe B.V. 1,000,000 68,500 - 10,117 - - 1,000,000 78,617 79 78,617	Maxxis Europe B.V. 500,000 13,602 - 9,685) ( - - 500,000 3,917 8 3,917	Maxxis (Taiwan) Trading	Co., LTD. 10,000,000 319,849 - 237,472 - 136,224) ( Note 1 10,000,000 421,097 42 421,097	MAXXIS	INTERNATIONAL	MEXICO S. de R.L. de C.V. - - - 408 - - - 408 - 408	MAXXIS RUBBER JAPAN	CO., LTD. - - 5,000 12,661 - - 5,000 12,661 2,532 12,661		79,136,034 $ 7,924,321 $ 3,141,666) ($ 83,918,689 $ 83,918,689 $	Note 1: The deduction amount is the amount of cash dividends distributed for the year ended December 31, 2020.	Note 2: Credit balance of long-term equity investments, shown as ‘other non-current liabilities’, is due to the Company continuously providing financial support to investee company accounted for using equity method.	Table 4,Page1

CHENG SHIN RUBBER IND. CO., LTD. STATEMENT OF LONG-TERM BORROWINGS DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 5

Table 5
Creditor		Amount of borrowings	Contract period	InterestRate	Pledges or collaterals	Remark
FIRST COMMERCIAL BANK CO., LTD. HUA NAN COMMERCIAL BANK LTD. CHANG HWA COMMERCIAL BANK, LTD. Mega International Commercial Bank The Bank of Tokyo- Mitsubishi UFJ, Ltd. Taiwan Cooperative Bank Mizuho Bank, Ltd. Export - Import Bank of the Republic of China Less: maturity at one year	$ 4,000,000 2,200,000 1,550,000 1,000,000 1,000,000 500,000 1,300,000 650,000 12,200,000 1,658,333) ( 10,541,667 $		2020.09.11~ 2025.09.11 2019.03.11~ 2022.07.15 2014.07.31~ 2023.04.23 2018.12.24~ 2021.12.24 2020.07.20~ 2023.05.05 2020.09.23~ 2023.09.23 2020.09.23~ 2022.06.16 2019.01.11~ 2024.01.11	Note Note Note Note Note Note Note Note	None None None None None None None None

Note: For the year ended December 31, 2020, interest rate of borrowing ranged between 0.70%~1.00%.

Table 5,Page1

CHENG SHIN RUBBER IND. CO., LTD. STATEMENT OF SALES REVENUE, NET YEAR ENDED DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 6

Table 6
Item	Quantity (in thousands oftires)		Amount	Remark
Radial cover tires for passenger cars Cover tires for motorcycles Cover tires for automobiles Cover tires for bicycles Radial ply truck tyres Cover tires for industrial use Tubes for bicycles Others Less: Sales returns and discounts	5,870 5,774 2,578 7,630 206 552 5,157 -	8,045,892 $ 4,186,213 2,465,259 2,347,787 1,219,249 330,678 263,117 114,526 18,972,721 46,427) ( 18,926,294 $		None of the balances of each remaining accounts is greater than NT$100 million.

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Table 6,Page1

CHENG SHIN RUBBER IND. CO., LTD. STATEMENT OF COST OF GOODS SOLD YEAR ENDED DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 7 Item Direct material Opening balance of materials Add: Purchases in the period Gain on physical inventory for raw materials Less: Materials sold Transfer to expenses Scrapping of raw material Ending balance of raw materials Materials used during the period Direct labour Manufacturing overhead Manufacturing costs Add: Opening balance of work in process Work in process purchased Amortisation of difference Less: Work in process sold Transferred to expenses Loss on physical inventory for work in process Scrapping of inventory Ending balance of work in progress Cost of finished goods Add: Opening balance of finished goods Finished goods purchased Amortisation of difference Less: Transferred to expenses Scrapping of finished goods Loss on physical inventory for finished goods Ending balance of finished goods Cost of manufacturing and sales of goods for the period Cost of materials sold Cost of work in process sold Cost of production and sales of goods Add: Unallocated overheads Scrapping of inventory Loss on physical inventory Less: Revenue from sale of scraps Disaster loss Total cost of sales

Amount

895,621 $ 7,332,900 1 88,114) ( 182,200) ( 327) ( 763,140) ( 7,194,741 1,378,009 5,436,968 14,009,718 828,354 483,749 36,823 55,593) ( 655,561) ( 439) ( 819) ( 725,376) ( 13,920,856 744,592 414,716 9,013 462,415) ( 3,820) ( 898) ( 598,073) ( 14,023,971 88,114 55,593 14,167,678 88,566 4,966 1,336 23,031) ( 10,912) ( 14,228,603 $

Table 7,Page1

CHENG SHIN RUBBER IND. CO., LTD. STATEMENT OF MANUFACTURING OVERHEAD YEAR ENDED DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 8

Table 8
Item	Description		Amount	Note
Depreciation Wages and salaries Utilities expense Repairs and maintenance expense Other expenses			1,416,503 $ 1,520,840 549,047 421,363 1,617,781 5,525,534 $	None of the balances of each remaining accounts is greater than 5% of this account balance.

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Table 8,Page1

CHENG SHIN RUBBER IND. CO., LTD. STATEMENT OF OPERATING EXPENSES YEAR ENDED DECEMBER 31, 2020

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 9

Table 9
Item	Description	Sellingexpenses			General and administrative expenses		Research expenses	Remark
Taxes Advertisement expense Wages and salaries Freight Import/export (customs) expense Repairs and maintenance expense Depreciation Insurance Commissioned research Other expenses			412,250 $ 249,917 373,405 146,940 142,926 - - - - 363,805 1,689,243 $		- $ - 525,039 - - 55,795 49,922 - - 181,518 812,274 $		- $ - 631,025 - - - 80,614 62,909 210,176 119,169 1,103,893 $	None of the balances of each remaining accounts is greater than 5% of this account balance.

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Table 9,Page1