Annual General Meeting Agenda, 2020, Taiwan Styrene Monomer Corporation (Translation)

Time: 9:30 am., May 27 (Wednesday), 2020

Venue: No.7, Indstrial 1 Rd., Linyuan Dist., Kaohsiung City(Kaohsiung Factory of the Company)

Attendees: the Company's total issued shares: 527,869,764 shares

The attended shareholders and the proxied shares are total: 336,869,252 shares, or 63.82% of the total shares.

Participated directors: Wen-Yuan Lin; Chiung-Fen Wang; Sheng-Tsheng Lee ;

Cheng-Yuan Liu; Po-Hao Huang

Participated independent directors: Chin-Chen Chien; Kao-Wei Hsu;

Participated executives: Wen-Yuan Lin; Pao-Yuan Chen; T.K Chung; Jason Chou

Participated: Mr. Lin Wu, CPA, KPMG Taiwan; Mr. Yang, Ju-Gang, Esq., D. C. Law firm

Chaired by: Chairman, Wen-Yuan Lin Recorded by: Jason Chou

Announcement of commencement: The aggregate shareholding of the shareholders presents constituted a quorum. The Chairman called the meeting to order.

Chairman's Address: omitted.

I. Reporting Items:

(I) To report the Business of 2019. Please review. Description: Year 2019 Business Reports is attached as Appendix 1.
(II) Audit Committee's 2019 Review Report. Please review. Description: Audit Committee's 2019 Review Report is attached as Appendix 2.
(III) To report 2018 employees' and directors' remuneration distribution. Please review. Description: Handled pursuant to Article 31, paragraph 1 and 2, the Articles of Association. It is intended to make an appropriation of 2.5% of the 2019 pre-tax earning before deducting the employees' and directors' remuneration as the directors' remuneration, 2% as the employees' remuneration, all distributed in cash as the following:

	Unit: NTD
Item	Amount
Pre-tax earning before deducting the employees' and directors'
remuneration as the directors' remuneration
(i.e. the earning before deducting the employees' and directors'	1,076,954,023
remuneration fro the pre-tax earning.)
An appropriation of 2.5% as directors' remuneration	26,923,851
An appropriation of 2% as the employees' remuneration	21,539,080
Net profit before tax	1,028,491,092

(IV) Report on the Establishment of the Code of Ethical Conduct. Please review.

Description:

I. Pursuant to the Letter of Taiwan Securities Exchange Co., Ltd,

Tai-Cheng-Chi-Li-Zhi No. 1040001716, dated January 28, 2015, which amended the "Guidelines for the Adoption of Codes of Ethical Conduct for TWSE/GTSM Listed Companies,"

II. The Company has established the "Code of Ethical Conduct" (please refer to Appendix 3).
(V) The Guidelines of Transferring Treasury Shares to Employees for 2020, and its Implementation. Please review.

Description:

I. The Guidelines of Transferring Treasury Shares to Employees (please refer to Appendix 4).
II. In order to transfer shares to the employees, it is intended to buyback the issued shares of the Company, pursuant to Article 28 Paragraph 2-1, Subparagraph 1 of the "Securities and Exchange Act."
III. Implementation:

Batch of buyback	4th batch
Resolved by the Board of Directors	March 23, 2020
Purpose of buyback	To transfer shares to the employees
Expected period of buyback	March 25, 2020 to May 22, 2020
Maximum amount of buyback	NT\$1,305,034,402
Type and quantity of expected buyback	7,000,000 common shares
Price Range of buyback	NT\$8.61 to NT\$25.77

The total amount of this buyback shall not exceed NT\$180,390,000.
1. Shall the price of the Company's share be lower than the lower limit of the defined range, the buyback will be continued.
1. This batch of treasury shares will be transferred within three years from the date of buyback, pursuant to the Guidelines of Transferring.

Supplementary description: as of May 22, the type and quantity of the bought-back shares:

10,040,000 common shares, amount of the bought-back shares: NT\$15,186,712

Reason for non-completion of the share repurchase at expiry of the repurchase period: Due to market mechanism and employee's willingness to subscribe shares.

II. Items to be Ratified

Case 1: Proposed by the Board of Directors

Subject: Proposal of ratifying the 2019 Business Report and Financial Report. Please ratify.

Description: the 2019 Business Report and Financial Report have been audited and attested by

Baker Tilly Clock & CO, and audited by the Audit Committee. Business Report (Appendix 1); Financial Report (Appendix 5).

Resolution: the poll of the proposal is as following:

Voting rights of the attended shareholders when conducting the poll: 332,395,252 votes

Poll outcome (e-votes included) (vote)		Percentage of the attended
		shareholders' voting rights (%)
Votes for:	321,897,839	96.84
Votes against:	91,657	0.02
Invalid votes:	0	0.00
Abstained/uncasted votes:	10,405,756	3.14

The above proposal hereby was adopted as proposed.

Case 2: Proposed by the Board of Directors

Subject: Proposal of ratifying the 2019 earning distribution. Please ratify.

Description:

I. The Company's 2019 after-tax net profit is NT\$882,064,694, and the distributable earning is NT\$1,320,268,122.
II. The aforementioned distributable earning is intended to be distributed as the following:
(I) Pursuant to the Company Act, appropriations of legal reserve NT\$79,186,191, as well as special reserve NT\$150,580,660 will be made.
(II) Cash dividends to shareholders are intended to be distributed as NT\$1.0 per share, for total NT\$527,869,764; the calculation is based on the shareholding percentage of these shareholders registered on the Shareholder Register on the base date of ex-dividend.
III. The remaining amount of NT\$562,631,507 after distribution will be treated as the retained earning.
IV. Before the base date of ex-dividend, if the Company's share capital changes, and thus the quantity of outstanding shares changes, which in turn changing the dividend rate, so

that the earning distribution shall be amended, it is suggested the Shareholders' Meeting authorize the Chairman the full power to handle the issue pursuant to the Company Acts or related laws and regulations.

V. The minimum unit of cash dividends is NT\$; the remaining amount less than NT\$1 will be reversed to the undistributed earning.
VI. 2019 Earning Distribution Table (please refer to Appendix 6).

Resolution: the poll of the proposal is as following:

Voting rights of the attended shareholders when conducting the poll: 332,395,252 votes

Poll outcome (e-votes included) (vote)		Percentage of the attended
		shareholders' voting rights (%)
Votes for:	322,052,824	96.88
Votes against:	107,671	0.03
Invalid votes:	0	0.00
Abstained/uncasted votes:	10,234,757	3.09

The above proposal hereby was adopted as proposed.

III. Discussion Items:

Subject: Proposal of discussing "Rules of Procedure for Shareholders Meetings." Please review and resolve. Proposed by the Board of Directors

Description:

I. The Company has amended the Rules of Procedure for Shareholders Meetings according to the TWSE amendment of the Company Act, with reference to the "Sample Template for XXX Co., Ltd Rules of Procedure for Shareholders Meetings."
II. Considering that the amendments are very large, the Company has reformulated the Rules of Procedure for Shareholders Meetings, and canceled the original rules of procedure.
III. The Company's "Rules of Procedure for Shareholders Meetings" are attached (please refer to General Meeting of Shareholders, 2020 )
IV. Newly established "Rules of Procedure for Shareholders Meetings" (please refer to Appendix 7).

Resolution: the poll of the proposal is as following:

Voting rights of the attended shareholders when conducting the poll: 332,395,252 votes

Poll outcome (e-votes included) (vote)		Percentage of the attended
		shareholders' voting rights (%)
Votes for:	321,989,918	96.86
Votes against:	109,520	0.03
Invalid votes:	0	0.00
Abstained/uncasted votes:	10,295,814	3.11

The above proposal hereby was adopted as proposed.

IV. Election:

Subject: By-election of director. Please conduct the election. Proposed by the Board of Directors

Description:

I. Resignation of the Company's legal person director, Meihao Industry Inc. By-election of one director who will immediately take office upon appointment in accordance with Article 192-1 of the Company Act and Article 21 of the Company's Articles of Incorporation, with the term of office from May 27, 2020 to January 30, 2022.
II. The list of director candidates has been reviewed and approved by the ninth board of directors of the 14th term on March 11, 2020, and directors shall be elected based on the list of director candidates.
III. The list of director candidates is as follows:

Serial No.	Category	Name	Education background	Experience	Current Job	Shares held Amount
1	Director	Chun Yu Works & Co., Ltd. Representative: Pao-Yuan Chen	MS,Graduate School of Chemistry, Illinois Institute of Technology, U.S.	China Steel Chemical Corporation General Manager	Taiwan Styrene Monomer Corporation General Manager	11,678,000

Election result: after the poll, the elected director is as the following:

Category	Shareholder No. or ID No.	Name of Shareholder	Votes
Director	257384	Chun Yu Works & Co., Ltd. Representative: Pao-Yuan Chen	265,497,070 votes

V. Extraordinary motion: none

VI. Adjournment (10:05 am.)

This meeting minutes is a summary of the meeting, with only the outcomes of proposals. Video records may be referenced for details of the event, the procedures, and shareholder statements.

Attachment 1

Taiwan Styrene Monomer Corporation 2019 Business Report

(1)Result

The company produce Styren 357,719 tons this year and complete the sales of 355,644 tons, in a value of TWD: 10.8 billion and 40 million dollars, with the value added by side product, the sales reaches TWD 11.7 billion 10 million dollars. The net profit after tax is TWD 0.8 billion 80 million dollars.

(2) Budget implementation

Item Actual amount in 2019 Budget amount in 2019 Net value of operating income 1,171,789 1,485,703 Gross profit 134,905 131,676 Operating profit 113,769 106,185 Income before tax 102,906 91,099 Income after tax 88,206 69,944

(3) Earning power analysis

Analysis item	2019
Earning (loss) per share after tax/dollor	1.67
Rate of income after tax (%)	7.53%
Return on total assets (%)	9.62%
Return on equity for shareholders (%)	12.18%
Ratio of income before tax in paid-in capital (%)	19.49%

Unit: NT\$ 10,000

(4) R&D

The company mainly focuses on styrene. It not only removes bottlenecks from the production line, but also actively engages in research and development:

I. Develop by-product and derivatives for enhancing the Company's added value in order to realize the transformation of diversified high value-added industries.
II. Development of materials for the electronic and medical devices industry, R&D of powder raw materials that can be directly used in commercial powder coating machines, and has obtained Taiwan, China, the US and Japan

Patents for supplying raw materials. The developed products have been tested and recognized by many internationally renowned companies.

III. In addition to developing starting materials and products of the aforementioned raw materials, the Company also vertically integrates the processing of applied products in the hope to provide comprehensive compound products.

(5) Our vision

Looking forward to 2020, according to the 2019 International Monetary Fund (IMF) yearend report, the estimated global economic growth was trimmed from 3.6% to 3.5%. The report also stated that trade tensions and geopolitical risks may drag down economic growth, while the control of debts is another major focus of our concern.

Regarding the SM market, the expansion of SM production capacity in China in 2020 and 2021 are planned at 3.72 million tons and 3.17 million tons, respectively, which may lead to a serious impact on the SM market.

In response, the Company will improve its core businesses and perform SM debottlenecking to reduce production costs and enhance its core competitiveness. Meanwhile, an adjustment plan was carried out to rectify the transfer of investment businesses, eliminate the bad businesses while retaining the good ones in order to strengthen the Company's business structure.

Since the World Health Organization (WHO) declared COVID-19 a "Public Health Emergency of International Concern (PHEIC)" on January 30, 2020, which will have a negative spillover effect on the global economy. However, the experience in past epidemic show that although the global economy will be affected, it has always been a short-term effect, with no long term economic impact. Thus, the company's operating policy still adheres to the production and marketing strategy of "full production and sales", as well as the goals of "industrial safety and environmental protection first" for production management.

Chairperson: Wen-Yuan Lin General Manager: Pao-Yuan Chen Accounting manager: Jason Chou

Attachment 2

Verification Report by Auditor Committee

The Board has prepared the 2019 Business Report Financial Statement (separate and consolidated) and the earning distribution proposal. The financial statement has been verified by KPMG and the others has been reviewed by the Auditors Committee ofthe Company.They've concluded that the documents has been well prepared according to related Laws.

Taiwan Styrene Monomer Corporation

Convenor : Chin-Chen Chien

Attachment 3 Taiwan Styrene Monomer Corporation Code of Ethical Conduct

I. Purpose of and basis for adoption

In recognition of the necessity to assist the companies in Taiwan in their establishment of codes of ethical conduct, these Guidelines are adopted for the purpose of encouraging directors, supervisors, and managerial officers of TWSE listed and GTSM listed companies to act in line with ethical standards, and to help interested parties better understand the ethical standards of such companies.

II. The code of ethical conduct addresses at least the following eight matters:

(I) Prevention of conflicts of interest:

Conflicts of interest occur when personal interest intervenes or is likely to intervene in the overall interest of the company, as for example when a director, supervisor, or managerial officer of the company is unable to perform their duties in an objective and efficient manner, or when a person in such a position takes advantage of their position in the company to obtain improper benefits for either themselves or their spouse, parents, children, or relatives within the second degree of kinship. The company shall pay special attention to loans of funds, provisions of guarantees, and major asset transactions or the purchase (or sale) of goods involving the affiliated enterprise at which a director, supervisor, or managerial officer works. The company shall establish a policy aimed at preventing conflicts of interest, and shall offer appropriate means for directors, supervisors, and managerial officers to voluntarily explain whether there is any potential conflict between them and the company.

(II) Minimizing incentives to pursue personal gain:

The company shall prevent its directors, supervisors, or managerial officers from engaging in any of the following activities: (1) Seeking an opportunity to pursue personal gain by using company property or information or taking advantage of their positions. (2) Obtaining personal gain by using company property or information or taking advantage of their positions. (3) Competing with the company. When the company has an opportunity for profit, it is the responsibility of the directors, supervisors, and managerial officers to maximize the reasonable and proper benefits that can by obtained by the company.

(III) Confidentiality:

The directors, supervisors, and managerial officers of the company shall be bound by the obligation to maintain the confidentiality of any information regarding the company itself or its suppliers and customers, except when authorized or required by law to disclose such information. Confidential information includes any undisclosed information that, if exploited by a competitor or disclosed, could result in damage to the company or the suppliers and customers.

(IV) Fair trade:

Directors, supervisors, and managerial officers shall treat all suppliers and customers, competitors, and employees fairly, and may not obtain improper benefits through manipulation, nondisclosure, or misuse of the information learned by virtue of their positions, or through misrepresentation of important matters, or through other unfair trading practices.

(V) Safeguarding and proper use of company assets:

All directors, supervisors, and managerial officers have the responsibility to safeguard company assets and to ensure that they can be effectively and lawfully used for official business purposes; any theft, negligence in care, or waste of the assets will all directly impact the company's profitability.

(VI) Legal compliance:

The company shall strengthen its compliance with the Securities and Exchange Act and other applicable laws, regulations, and bylaws.

(VII) Encouraging reporting on illegal or unethical activities:

The company shall raise awareness of ethics internally and encourage employees to report to a company supervisor, managerial officer, chief internal auditor, or other appropriate individual upon suspicion or discovery of any activity in violation of a law or regulation or the code of ethical conduct. To encourage employees to report illegal conduct, the company shall establish a concrete whistle-blowing system and make employees aware that the company will use its best efforts to ensure the safety of informants and protect them from reprisals.

(VIII) Disciplinary measures:

When a director, supervisor, or managerial officer violates the code of ethical conduct, the company shall handle the matter in accordance with the disciplinary measures prescribed in the code, and shall without delay disclose on the Market Observation Post System (MOPS) the date of the violation by the violator, reasons for the violation, the provisions of the code violated, and the disciplinary actions taken. It is advisable that the company establish a relevant complaint system to provide the violator with remedies.

III. Procedures for exemption

The code of ethical conduct adopted by a company must require that any exemption for directors, supervisors, or managerial officers from compliance with the code be adopted by a resolution of the board of directors, and that information on the date on which the board of directors adopted the resolution for exemption, objections or reservations of independent directors, and the period of, reasons for, and principles behind the application of the exemption be disclosed without delay on the MOPS, in order that the shareholders may evaluate the appropriateness of the board resolution to forestall any arbitrary or dubious exemption from the code, and to safeguard the interests of the company by ensuring appropriate mechanisms for controlling any circumstance under which such an exemption occurs.

IV. Method of disclosure

A TWSE or GTSM listed company shall disclose the code of ethical conduct it has adopted, and any amendments to it, on its company website, in its annual reports and prospectuses and on the MOPS.

V. Enforcement

A company's code of ethical conduct, and any amendments to it, shall enter into force after it has been adopted by the board of directors, delivered to each supervisor, and submitted to a shareholders meeting.

The regulations have been set up on March 11, 2020.

Attachment 4

Taiwan Styrene Monomer Corporation Regulations Governing Share Repurchase to Be Transferred to Employees

Article I

These Regulations are duly enacted by the Company in accordance with Subparagraph 1, Paragraph 1, Article 28-2 of Securities and Exchange Act and the provisions set forth under the "Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies" promulgated by the Securities & Futures Institute (hereinafter referred to as Regulations for Transfer of Treasury Shares to Employees) in an effort to pep up employee morale and cohesion. These Regulations apply to all issues regarding the Company's repurchase and transfer of shares to employees unless otherwise specified in laws and ordinances concerned.

(Category of share transfer, contents and limitation of the rights of transfer)

Article II

The shares in the present transfer to employees are in the category of common shares and bear the rights & obligations exactly same as those outstanding common shares unless otherwise specified in laws and ordinances concerned and these Regulations.

(Duration of transfer)

Article III

During the specified duration for treasury share transfer, the repurchased shares shall be transferred to employees in in a lump-sum or in multi-stages. The duration and relevant issues regarding the respective transfer(s) shall be separately fixed by the chairman.

(Qualification requirements of a transferee)

Article IV

All employees serving with the Company and all the Company's auxiliary companies satisfactory to the specified conditions under internal and external control as of the target date of share subscription (To be duly handled in accordance with Decree Jin-Guan-Zheng-Fa-Zi 1070121068 dated December 27, 2018) or the subsidiaries in both in Taiwan and throughout the world holding more than 50% of the voting power are entitled to subscription to the shares in the volume as specified under Article V.

(Principles of distribution and procedures for transfer)

Article V

Number of shares which employees are entitled to subscribe to: The Company shall determine the number of shares to be subscribed to employees with reference to the employees´ position ranks, performance of duty or service seniority to be checked and verified by the chairman before the chairman reports such information to the Board of Directors to resolve the number of shares to be subscribed to employees. An employee who fails to subscribe to the entitled shares and complete the payment process upon expiry of the specified period of subscription is deemed as having waived his or her entitlement. For the balance after inadequate subscription, the chairman may approach other employee (s) to subscribe to.

Article VI

Operating procedures for treasury share transfer:

I. The Company shall duly promulgate and declare the shares having been repurchased within the specified timeframe of implementation exactly as resolved by the Board of Directors.
II. The chairman shall enact and promulgate the target date, standards/criteria for share subscription, timeframes to pay for subscription, contents of entitlement and conditions of restrictions exactly in accordance with these Regulations.
III. The Company shall work out statistics, the number of shares to be substantially subscribed to and proceed with ownership transfer registration for the shares.

(Specified share per share)

Article VII

For the shares in the present repurchase to be transferred to employees, the average price in the actual repurchase shall be taken as the price for transfer which is, nevertheless, subject to adjustment pro rata to the increase in the common shares issued by the Company prior to the target date of transfer.

(The post-transfer rights & obligations)

Article VIII

After the treasury shares are transferred to employees with ownership transfer registration duly completed in full, the treasury shares bear the rights & obligations exactly same as the original shares.

(Other issues linked up with the Company and employees in rights & obligations)

Article IX

After the treasury shares are transferred to employees, the relevant taxes shall be duly paid up according to laws and ordinances concerned in full before ownership transfer registration process.

Article X

All treasury shares repurchased by the Company to be transferred to employees shall be transferred in full within three (3) years starting from the date of repurchase. The treasury shares not transferred in full within the specified time limit shall be deemed as shares not issued by the Company for which the Company shall duly complete alteration registration to cancel them in full.

Article XI

Matters not specified in this Agreement, if any, shall be duly handled in accordance with laws and ordinances concerned.

Article XII

These Regulations shall be put into enforcement after being resolved by the Board of Directors and shall be reported to the latest shareholders´ meeting. This same provision is applicable mutatis mutandis to an event of amendment.

These Regulations are duly enacted on March 23, 2020.

These Regulations are duly revised on April 14, 2020.

Attachment 5

Independent Auditors' Report

To the Board of Directors of Taiwan Styrene Monomer Corporation:

Opinion

We have audited the parent company only financial statements of Taiwan Styrene Monomer Corporation ("the Company"), which comprise the balance sheet as of December 31, 2019, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audit and the reports of other auditors (please refer to Other Matter paragraph), the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and its financial performance and its cash flows for the year then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. 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 Certified Public Accountants Code of Professional Ethics in Republic of China ("the Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audit and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

1. Revenue recognition

Regarding accounting policies on revenue recognition, please refer to note 4(o) "Revenue recognition" to the parent company only financial statements.

Description of key audit matter:

The Company's sales revenue is recognized when a performance obligation is satisfied, which depends on the various trade terms agreed with customers. Therefore, the accuracy of revenue recognition is considered to be one of most significance in the audit.

How the matter was addressed in our audit:

Our principal audit procedures included assessing whether the accounting policies regarding to revenue recognition were inconformity with relevant accounting standards; obtaining understanding and testing the design and implement effectiveness of internal controls over revenue recognition; selecting samples and examining the transaction terms and vouchers; in addition, we also performed analytical procedures on primary customers and products to evaluate if there is any material abnormality.

Impairment assessment of investments accounted for using equity method

Refer to note $4(n)$ "Impairment of non-financial assets" and note 6 (h) " Investments accounted for using equity method" to the parent company only financial statements for details of accounting policies and relevant information about impairment assessment of investments accounted for using equity method".

Description of key audit matter:

The Company assesses impairment of investments accounted for using equity method in accordance with relevant accounting standards. Such assessment of impairment requires management to make judgments and assumptions, therefore, the assessment of impairment loss on investments accounted for using equity method is considered to be one of most significance in the audit.

How the matter was addressed in our audit:

Our principal audit procedures included obtaining understanding of the Company' s internal controls over impairment loss assessment; evaluating the appropriateness of assumptions adopted by management when determining the recoverable amount based on an appraisal report issued by a third party; and assessing the qualification and independence of the Certified Business Valuator.

Other Matter

We did not audit the financial statements of some equity-accounted investees of the Company. Those statements, which were prepared using a different financial reporting framework, were audited by other auditors, whose reports have been furnished to us. We have performed audit procedures on the conversion adjustments to the financial statements of those investees, which conform to those financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. Our opinion, insofar as it relates to the amounts included for those investees prior to the conversion adjustments, is based solely on the reports of other auditors. Investments accounted for using equity method on those investees constituting 13.22% of total assets at December 31, 2019, and the related share of profit of subsidiaries. associates and joint ventures accounted for using equity method constituting 10.87% of total profit before tax for the year then ended.

The parent company only financial statements of the Company as of and for the year ended December 31, 2018. were audited by another auditor, who expressed an unmodified opinion with other matters paragraph on March 11, 2019.

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

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

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

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

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

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

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

1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
1. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
1. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
1. 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 parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
1. Evaluate the overall presentation, structure and content of the parent company only financial statements. including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
1. Obtain sufficient appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on the parent company only 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 parent company only 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.

The engagement partners on the audit resulting in this independent auditors' report are Lin Wu and Yuan-Sheng Yin.

KPMG

Taipei, Taiwan (Republic of China) March 11, 2020

J in Chines - ally leem- tements Original Alland	IN STYRENE MONOMIER CORPORATION
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Balance Sheets
December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

		December 31, 2019		December 31, 2018			December 31, 2019	December 31, 2018
	Assets	Amount	$\left \cdot \right\rangle$	⊱ Amount		Liabilities and Equity	$\cdot$ Amount	৯ Amount
	Current assets:					Current liabilities:
	Cash and cash equivalents (note 6(a))	1,211,902 s	ᅼ	$\tilde{e}$ ,605,546	2130	Current contract liabilities (note 6(v))	7,829	97,508
$\frac{1}{2}$	Current financial assets at fair value through profit or loss (note 6(b))	39,100		103,820	2170	Accounts payable	≌ 1,089,348	,204,490
1170	Accounts receivable, net (note 6(c))	816,032	٥	900,261	2200	Other payables (notes 6(o) and 7)	173,161	272,002
1200	Other receivables (note 7)		964	47,947	2230	Current tax liabilities	66,621	238,236
130X	Inventories (note 6(d))	427,565		641,276	2280	Current lease liabilities (note 6(q))	4,851
1410	Prepayments (note 6(e))	120,334		86,182	2320	Long-term liabilities, current portion (notes 6(p) and 8)		88,880
1460	Non-current assets (or disposal groups) held for sale, net				2399	Other current liabilities (note 7)	2,025	3,509
	(note(6))	41.119				Total current liabilities	븨 1,343,835	$\frac{1}{2}$ 904,625
	Total current assets	2,657,016	$\frac{30}{2}$	$\overline{35}$ 3,385,032		Non-Current liabilities:
	Non-current assets:				2540	Long-term borrowings (notes 6(p) and 8)		111,100
1517	Non-current financial assets at fair value through other comprehensive				2570	Deferred tax liabilities (note 6(s))	174,654	173,509
	income (notes 6(g) and 7)	396,161		2 181,577	2580	Non-current lease liabilities (note 6(q))	8,173
1550	Investments accounted for using equity method (notes $6(h)$ , $(i)$ , $(j)$ and $7$ )	2,757,918	32	35 3,430,836	2640	Net defined benefit liabilities, non-current (note 6(r))	64,445	74,126
1600	Property, plant and equipment (notes 6(k), 7 and 8)	2,693,666	25	21 2,667,126	2650	Credit balance of investments accounted for using equity method (note 6(h))		7,863
1755	Right-of-use assets (note 6(I))	13,345				Total non-current liabilities	247,272	366,598
1780	Intangible assets (note 6(m))	12,098		9,266		Total liabilities	$\mathbb{E}$ 1,591,107	ମ୍ବ 2,271,223
1840	Deferred tax assets (note 6(s))	21,728		18,560		Equity: (note 6(t))
1920	Refundable deposits		3,873	3,962	3100	Capital stock	5 5,278,698	24 5,278,698
1990	Other non-current assets, others (note 6(n))	57,354		38,183	3200	Capital surplus	42,418	60,415
	Total non-current assets	5,956,143	$\approx$	65 6,349,510		Retained earnings:
					3310	Legal reserve	531,249	409,609
					3320	Special reserve	430,668	8,811
					3350	Unappropriated retained earnings	$\overline{5}$ ,320,268	$\overline{2}$ 2,127,643
							$\frac{5}{26}$ 2,282,185	$\frac{8}{3}$ 2,546,063
					3400	Other equity	$\circ$ (581, 249)	ङ् (421.857)
						Total equity	$\overline{\mathbf{S}}$ 7,022,052	$\overline{r}$ 7,463,319
	Total assets	8.613.159	뤠	휇 9,734,542		Total liabilities and equity	8,613,159 100	9,734,542 100

8 8,613,159 100 9,734,542 100

Total liabilities and equity

(English Translation of Financial Statements Originally Issued in Chinese)
TAIWAN STYRENE MONOMER CORPORATION

Statements of Comprehensive Income

For the years ended December 31, 2019 and 2018

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

% % Amount Amount 4000 Operating revenue (note 6(v)) \$11,717,894 100 14,806,544 100 5000 Operating costs (notes 6(d), (k), (l), (m), (q), (r), (x)) 10,368,845 12,829,579 88 87 Gross profit from operations 1,349,049 12 1,976,965 -13 Operating expenses (notes $6(c)$ , (k), (l), (m), (q), (r), (x) and 7): 6100 Selling expenses 50,514 52,089 6200 Administrative expenses 141,150 185,250 $\overline{2}$ ÷ 6300 Research and development expenses 19,700 43,865 6450 Expected credit impairment loss (profit) (4) 45 $\overline{2}$ 211,360 281,249 Operating income 1.137.689 11 1,695,716 $\overline{11}$ Non-operating income and expenses (notes $6(g)$ , (h), (q), (w) and 7): Other income 7010 22,339 22,274 7020 Other gains and losses (69, 513) 856 7050 Finance costs (977) (7,508) 7070 Share of profit of subsidiaries, associates and joint ventures accounted for using equity method (72, 198) (130.851) (1) (108.633) (1) (126.945) 9900 Profit before tax 1,029,056 10 1,568,771 11 7950 Less: Income tax expenses (note $6(s)$ ) 146,991 352,370 $\overline{2}$ -1 Net income 882.065 9 9 1,216,401 8300 Other comprehensive income (loss): 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Gains on remeasurements of defined benefit plans 11,167 20,931 8316 Unrealized losses from investments in equity instruments measured at fair value through other comprehensive income (7, 872) (5,050) 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, (135, 722) (193, 922) (1) (2) components of other comprehensive income that will not be reclassified to profit or loss 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 2,233 3,249 Components of other comprehensive income (loss) that will not be reclassified to profit or loss (1) (134, 660) (181.290) (2) 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation (602) 1.453 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, 8380 (7,07!) ٦ components of other comprehensive income that will be reclassified to profit or loss 8399 Less: Income tax related to components of other comprehensive income that will be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss (7.673) 1,456 8300 Other comprehensive income (142.333) (179, 834) (1) (2) 8500 Comprehensive income 739.732 8 1,036,567 Earnings per share (note $6(u)$ ) Basic earnings per share 1.67 2.30 Diluted earnings per share 2.30 1.67		2019	2018

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)
TAIWAN STYRENE MONOMER CORPORATION

Statements of Changes in Equity

For the years ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

								Other equity interest
				Retained earnings			differences on translation of Exchange	Unrealized gains measured at fair financial assets value through (losses) on	gains (losses) Unrealized
		Capital	Legal		Unappropriated retained		financial foreign	comprehensive nther	on available- for-sale
Balance at January 1, 2018	5,278.698 Common stock	68,142 surplus	307,466 reserve	Special reserve 157,923	1,378,191 earnings	1,843,580 Total	(3,754) statements	income	101.265 financial assets	$\frac{\text{Total}}{97,511}$	7,287,931 Total equity
Effects of retrospective application					281.392	281.392		(190.286)	(101.262)	(291, 551)	10159
Equity at beginning of period after adjustments	5,278,698	68,142	307,466	157,923	.659,583	2,124,972	(3.754)	(190, 286)		(194, 040)	7.277.772
Vet income					1,216,401	,216,40					1,216,401
Other comprehensive income					17,647	17,647	1,456	(198.937)		(197, 481)	(179, 834)
Total comprehensive income					1,234,048	1,234,048	1,456	(198, 937)		(197, 481)	1,036,567
Appropriation and distribution of retained earnings:
Legal reserve appropriated			102,143		(102, 143)
Cash dividends of ordinary share					(844, 592)	(844, 592)					(844, 592)
Reversal of special reserve				(149, 112)	149,112	ÿ
Changes in equity of associates and joint ventures
accounted for using equity method		$(1,073)$ $(6,654)$			1,272	1,272					199
Difference between consideration and carrying amount of subsidiaries acquired or disposed of											(6,654)
Disposal of investments in equity instruments					30,336	30,336		(30, 336)		(30,336)
measured at fair value through other comprehensive income
Other					51	21
Balance at December 31, 2018	5,278,698	60,415	409,609	8,811	2,127,643		(2,298)	(419, 559)		(421, 857)	7,463,319
Net income					882,065	2,546,063 882,065 9,341					882,065
Other comprehensive income					9.341		(7,673)	(144,001)		(151, 674)	(142, 333)
Total comprehensive income					891,406	891,406	(7,673)	(144,001)		(151, 674)	739,732
Appropriation and distribution of retained earnings:
Logal reserve appropriated			121,640		(121, 640)
Special reserve appropriated				421,857	(421, 857)
Cash dividends of ordinary share					(1,055,740)						(1,055,740)
Changes in equity of associates and joint ventures		(1,566)			(28, 295)	$(1,055,740)$ $(28,295)$					(29, 861)
Disposal of investments accounted for using equity accounted for using equity method
method	p				(27,278)	(27,278)		27,278		27,278
Disposal of investments in equity instruments
measured at fair value through other comprehensive income					47,164	47,164		(47, 164)		(47, 164)
Changes in ownership interests in subsidiaries		(23, 561)					(819)			(819)	(24,380)
Changos in ownership interests in investments
accounted for using equity method		7,130			(91,135)	(91, 135)	(123)	13,110		12,987	(71,018)
Balance at December 31, 2019	5,278,698	42,418	531,249	430,668	1320.268	2,282,185	(10.913)	(570.336)		(581,249)	7,022,052

(English Translation of Financial Statements Originally Issued in Chinese)
TAIWAN STYRENE MONOMER CORPORATION

Statements of Cash Flows

For the years ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

	2019	2018
Cash flows from operating activities: Profit before tax
Adjustments:	\$ 1,029,056	1,568,771
Adjustments to reconcile profit (loss)
Depreciation expense	210,539	193,468
Amortization expense	2,198	57,990
Expected credit impairment loss (gain)	(4)	45
Net loss on financial assets at fair value through profit or loss		49,084
Interest expense Interest income	977	7,508
Dividend income	(7,076) (2,791)	(4,168) (7, 881)
Share of loss of subsidiaries, associates and joint ventures accounted for using equity method	130,851	72,198
Loss on disposal of property, plant and equipment	26,999
Gain on disposal of non-current assets as held for sale	(3,057)
Loss (gain) on disposal of investments accounted for using equity method	(3,624)	21,204
Impairment loss on non-financial assets	144	522
Gain on lease modification Gain on reversal of impairment loss on investments accounted for using equity method	(167)
Total adjustments to reconcile profit (loss)	(8, 766) 346,223	(19, 834) 370,136
Changes in operating assets and liabilities:
Changes in operating assets:
Financial assets mandatorily measured at fair value through profit or loss	64,720	(68, 179)
Accounts receivable	84,233	340,558
Other receivables Inventories	46,901	(28, 897)
Prepayments	213,711 (34, 296)	(56, 183) 605,461
Total changes in operating assets	375,269	792,760
Changes in operating liabilities:
Contract liabilities	(89, 679)	97,508
Notes payable Accounts payable	(115, 142)	(5, 835) 99,757
Other payables	(98, 553)	66,508
Advance receipts		(7, 830)
Other current liabilities	(1, 484)	(243)
Net defined benefit liabilities	1,486	2,137
Total changes in operating liabilities Total changes in operating assets and liabilities	(303, 372)	252,002
Cash inflow generated from operations	71,897 1,447,176	1.044,762 2,983,669
Interest received	7,158	3,900
Dividends received	2,791
Interest paid	(1,093)	(7,906)
Dividends paid	(172)	(162)
Income taxes paid Net cash flows from operating activities	(322, 862) i.132.998	(304, 177) 2,675,324
Cash flows from investing activities:
Acquisition of financial assets at fair value through other comprehensive income		(71, 690)
Proceeds from disposal of financial assets at fair value through other comprehensive income	2,493
Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity method	3,475	6,273
Proceeds from disposal of investments accounted for using equity method	(98, 664) 110, 118
Acquisition of property, plant and equipment	(254,791)	(127, 191)
Proceeds from disposal of property, plant and equipment	3,301
Decrease in refundable deposits	15	10,000
Increase in other receivables from related parties		(9, 492)
Acquisition of intangible assets Increase in other non-current assets	(5,030) (20, 598)	(5, 554)
Increase in prepayments for equipment	(158)	(9, 283)
Net cash flows used in investing activities	(259, 839)	(206, 937)
Cash flows from financing activities:
Repayments of long-term borrowings Payment of lease liabilities	(199,980)	(461, 956)
Cash dividends paid	(11,083)
Other financing activities	(1,055,740)	(844, 592) 26
Net cash flows used in financing activities	(1, 266, 803)	(1,306,522)
Net (decrease) increase in cash and cash equivalents	(393, 644)	1,161,865
Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	1,605,546	443,681
	1,211,902 S	1,605,546

Independent Auditors' Report

To the Board of Directors of Taiwan Styrene Monomer Corporation:

Opinion

We have audited the consolidated financial statements of Taiwan Styrene Monomer Corporation and its subsidiaries (the "Group"), which comprise the consolidated balance sheet as of December 31, 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended. and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audit and the reports of other auditors (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2019, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards ("IFRSs"), International Accounting Standards ("IASs"), Interpretations developed by the International Financial Reporting Interpretations Committee ("IFRIC") or the former Standing Interpretations Committee ("SIC") endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China ("the Code"), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audit and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the Consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

1. Revenue recognition

Regarding accounting policies on revenue recognition, please refer to note 4(p) "Revenue recognition" to the consolidated financial statements.

Description of key audit matter:

The Group's sales revenue is recognized when a performance obligation is satisfied, which depends on the various trade terms agreed with customers. Therefore, the accuracy of revenue recognition is considered to be one of most significance in the audit.

How the matter was addressed in our audit:

Impairment assessment of investments accounted for using equity method

Refer to note 4(o) "Impairment of non-financial assets" and note 6 (i) " Investments accounted for using equity method" to the consolidated financial statements for details of accounting policies and relevant information about impairment assessment of investments accounted for using equity method".

Description of key audit matter:

The Group assesses impairment of investments accounted for using equity method in accordance with relevant accounting standards. Such assessment of impairment requires management to make judgments and assumptions, therefore, the assessment of impairment loss on investments accounted for using equity method is considered to be one of most significance in the audit.

How the matter was addressed in our audit:

Our principal audit procedures included obtaining understanding of the Group's internal controls over impairment loss assessment; evaluating the appropriateness of assumptions adopted by management when determining the recoverable amount based on an appraisal report issued by a third party; and assessing the qualification and independence of the Certified Business Valuator.

Impairment assessment of property, plant and equipment

Refer to note 4(1) "Property, plant and equipment" and note 4(o) "Impairment of non-financial assets" to consolidated financial statements for accounting polices about property, plant and equipment; regarding explanation of property, plant and equipment impairment, please refer to note $6(k)$ .

Description of key audit matter:

Assessing recoverable amount and identifying impairment indication require management to make judgments and assumptions, which are subjective and are with uncertainty, therefore, is considered to be one of most significance in the audit.

How the matter was addressed in our audit:

Our principal audit procedures included obtaining understanding of the Group's internal controls over asset impairment assessment; if there is any indication of impairment, acquiring an assessment prepared by management or an independent valuation report issued by an external expert; evaluating the reasonability of assumptions used, including whether market value indicators are referred to; assessing the qualification and independence of the expert; as well as evaluating related disclosures made by management.

Other Matter

We did not audit the financial statements of some equity-accounted investees of the Group. Those statements, which were prepared using a different financial reporting framework, were audited by other auditors, whose reports have been furnished to us. We have performed audit procedures on the conversion adjustments to the financial statements of those investees, which conform to those financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, IFRIC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our opinion, insofar as it relates to the amounts included for those investees prior to the conversion adjustments. is based solely on the reports of other auditors. Investments accounted for using equity method on those investees constituting 12.95% of consolidated total assets at December 31, 2019, and the related share of profit of associates and joint ventures accounted for using equity method constituting 9.62% of consolidated total profit before tax for the year then ended.

The consolidated financial statements of the Group as of and for the year ended December 31, 2018, were audited by another auditor, who expressed an unmodified opinion with other matters paragraph on March 11, 2019.

Taiwan Styrene Monomer Corporation has prepared its parent-company-only financial statements as of and for the year ended December 31, 2019, on which we have issued an unmodified opinion with other matters paragraph.

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

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

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

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

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

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

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

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

The engagement partners on the audit resulting in this independent auditors' report are Lin Wu and Yuan-Sheng Yin.

KPMG

Taipei, Taiwan (Republic of China) March 11, 2020

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

		December 31, 2019		December 31, 2018				December 31, 2018 December 31, 2019
	Assets	Amount	℅	Amount	వ్		Liabilities and Equity	☆ Amount Ş Amount
	Current assets:						Current liabilities:
$\frac{8}{1100}$	Cash and cash equivalents (note 6(a))	1,477,082 s	$\tilde{e}$	2,122,960	$\mathfrak{a}$	2100	Short-term borrowings (notes 6(q) and 8)	312,885 317,500
$\frac{10}{11}$	Current financial assets at fair value through profit or loss (notes 6(b) and 8)	203,070		141,830		2130	Current contract liabilities (note 6(y))	128,851 40,531
1150	Notes receivable, net (note 6(c)	33		$\vec{a}$		2150	Notes payable	9,678 11,381
$\frac{170}{2}$	Accounts receivable, net (notes 6(c) and 7)	854,834		947,584		2170	Accounts payable (note 7)	,229,326 ,097,57
1200	Other receivables (note 7)	3,290		35,647		2200	Other payables (note 6(r))	344,116 227,973
1220	Current tax assets	F		$\frac{181}{2}$		2230	Current tax liabilities	243,073 69,184
130X	Inventories (note 6(d))	133,637		709,853		2280	Current lease liabilities (note 6(t))	7,903
1410	Prepayments (note 6(e)	162,264		154,522		2260	Liabilities related to non-current assets (or disposal groups)	6,248
1460	Non-current assets (or disposal groups) held for sale, net (note 6(f))	39,777					held for sale (note 6(f))
1470	Other current assets	524		308		2320	Long-term liabilities, current portion (notes 6(s) and 8)	115,164 26,284
1476	Other current financial assets (notes 6(g) and 8)	45,958		16,937		2399	Other current liabilities	10,270 4,473
	Total current assets	3,220,542	$\overline{37}$	129,843	39		Total current liabilities	$\mathbb{E}$ 2,393,363 $\frac{9}{2}$ 809,054
	Non-current assets:						Non-Current liabilities:
1510	Non-current financial assets at fair value through profit or loss (notes 6(b))	13,650		17,144		2540	Long-term borrowings (notes $6(s)$ and $8$ )	140,902 3,519
1517	Non-current financial assets at fair value through other comprehensive					2570	Deferred tax liabilities (note 6(v))	173,509 175,634
	income (notes 6(h) and 7)	504,147		304,917		2581	Non-current lease liabilities (note 6(t))	11,110
550	Investments accounted for using equity method (notes $6(i)$ , (j) and 7)	,242,335		,587,855	⊵	2640	Net defined benefit liabilities, non-current (note 6(u))	74,126 64,445
1600	Property, plant and equipment (notes 6(k), 7 and 8)	1,982,140		1,133,895	ុ	2600	Other non-current liabilities	10,732 11,320
1755	Right-of-use assets (note 6(1)	22,630					Total non-current liabilities	$\mathbf{r}$ 399,269 266,028
1760	(nvestment property, net (note 6(m))	139,091		144,361			Total liabilities	27 2,792,632 $\frac{2}{2}$ 2,075,082
1780	Intangible assets (note 6(n))	12,098		16,099			Equity attributable to owners of parent (note $6(w)$ ):
1840	Deferred tax assets (note 6(v))	37,068		33,172		3100	Capital stock	ຊ 5,278,698 57 5,278,698
1915	Prepayments for equipment			20,439		5200	Capital surplus	60,415 42,418
1970	Other long-term investments, net (note 6(o))	34,681		38,436			Retained earnings:
1920	Refundable deposits	5,032		7,670		3310	Legal reserve	409,609 531,249
990	Other non-current assets (notes 6(p) and (u))	90,928		76,215		3320	Special reserve	8,811 430,668
	Total non-current assets	6,083,800	S3	6,380,203	5	3350	Unappropriated retained earnings	$\overline{5}$ 2,127,643 긔 1,320,268
								24 2,546,063 25 2,282,185
						3400	Other equity	E (421, 857) $\circledcirc$ (581.249)
							Total equity attributable to owners of parent	$\overline{r}$ 7,463,319 76 7,022,052
						36XX	Non-controlling interests	254,095 $\overline{\phantom{0}}$ 207,208
							Total equity	ଅ 7,717,414 $\frac{8}{2}$ 7,229,260
	Total assets	S-9.304.342	≊	10,510,046	$ \Xi $		Total liabilities and equity	의 10,510,046 $\frac{8}{2}$ 9,304,342

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2019 and 2018

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

		2019		2018
		Amount	$\frac{9}{6}$	Amount	$\%$
4000	Operating revenue (notes $6(y)$ and $7$ )	12,219,389 s	100	15,382,654	100
5000	Operating costs (notes $6(d)$ , (k), (l), (m), (n), (t), (u) and (aa))	10,827,452	89	13,405,660	87
	Gross profit from operations	1,391,937	11	1,976,994	13
	Operating expenses (notes $6(c)$ , (k), (l), (m), (n), (t), (u) and (aa)):
6100	Selling expenses	58,522		60,180
6200	Administrative expenses	241,201	$\overline{c}$	345,196	3
6300	Research and development expenses	20,820		36,390
6450	Expected credit impairment loss	714		229
		321,257	$\mathbf{2}$	441,995
	Operating income	1.070.680	9	1,534,999	10
	Non-operating income and expenses (notes $6(i)$ , $(j)$ , $(k)$ , $(n)$ , $(t)$ , $(z)$ and $7)$ :
7010	Other income	39,756		48,808
7020	Other gains and losses	(175, 649)	(1)	(63, 285)
7050	Finance costs	(8,338)	ä,	(18,516)
7060	Share of profit of associates and joint ventures accounted for using equity method	108,311		45,659
		(35.920)	$\sim$	12.666
9900	Profit before tax	1,034,760	9	1,547,665	10
7950	Less: Income tax expenses (note $6(v)$ )	153,004	-1	360,871	2
	Net income	881,756	8	1,186,794
8300	Other comprehensive income (loss):
8310	Components of other comprehensive income (loss) that will not be reclassified to profit or loss
8311	Gains on remeasurements of defined benefit plans	11,644		20,896
8316	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income	(22, 594)	×.	25,711
8320	Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss	(121, 432)	(1)	(224, 600)
8349	Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss	2.268		3.250
	Components of other comprehensive income (loss) that will not be reclassified to profit or loss	(134, 650)	(1)	(181, 243)	(1)
8360	Components of other comprehensive income (loss) that will be reclassified to profit or loss
8361	Exchange differences on translation	(9,699)		1,183
8370	Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss	207		(426)
8399	Less: Income tax related to components of other comprehensive income that will be reclassified to profit or loss
	Components of other comprehensive income (loss) that will be reclassified to profit or loss	(9, 492)		757
8300	Other comprehensive income	(144.142)	(1)	(180.486)	$\left(1\right)$
8500	Comprehensive income	737,614	7	1,006,308
	Profit attributable to:
8610	Owners of parent	\$ 882,065	8	1,216,401
8620	Non-controlling interests	(309) 881,756	8	(29.607 1,186,794	Я
	Comprehensive income attributable to:
8710	Owners of parent	\$ 739.732	6	1,036,567
8720	Non-controlling interests	(2.118)		(30, 259)
		737,614	6	1,006,308
	Earnings per share (note $6(x)$ )
	Basic earnings per share		1.67		2.30
	Diluted earnings per share		1.67		2.30

$(\mathbb{C} \mathfrak{n} \mathfrak{gl} \mathfrak{sh} \sqcap \mathfrak{n}$ ranslation of Consolidated Financial Statements Originally Issued in Chinese) TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

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								Other equity interest
								Unrealized gains losses) on
				Retained earnings			differences on translation of Exchange	measured at fair financial assets value through	gains (losses) Unrealized		Total equity
		Capital	Legal		Unappropriated retained		financial foreign	comprehensive other	on available- $for-sale$		attributable to owners of	controlling Non-
Balance at January 1, 2018	5,278,698 $Common stocks = 5,278,698$	68,142 surplus	307,466 restrye	Special reserve 157,923	1,378,191 earnings	1,843,580 Total	(3,754) statements	income	101,265 financial assets	97.511 Total	7,287,931 parent	284,331 interests	7,572,262 Total equity
Effects of retrospective application					281.392	281,392		(190, 286)	(101, 265)	(291, 551)	(10.159)		(10, 136)
Equity at beginning of period after adjustments	5,278,698	68,142	307,466	157,923	1.659.58	2.124.972	(3.754)	(190, 286)		(194,040)	7,277,772	284,354	7.562.126
Net income					1,216,401	1,216,401					1,216,401	(29, 607)	1,186,794
Other comprehensive income					17,647	17,647	1,456	(198.937)		(197.481)	(179.834)	(652)	(180, 486)
Total comprehensive income					234,048	1,234,048	1,456	(198.937)		(197, 481)	1,036,567	(30,259)	1,006,308
Appropriation and distribution of retained carnings:
Legal reserve appropriated			102,143		(102, 143)
Cash dividends of ordinary share					(844, 592)	(844, 592)					(844, 592)		(844, 592)
Reversal of special reserve				(149, 112)	149,112						ċ
Changes in equity of associates and joint ventures
accounted for using equity method		(1,073)			1,272	1,272					199		199
Difference between consideration and carrying amount of subsidiaries acquired or disposed of		(6, 654)									(6, 654)		(6, 654)
measured at fair value through other comprehensive Disposal of investments in equity instruments					30,336	30,336		(30,336)		(30,336)
income
Other					57	21					$\overline{z}$
Balance at December 31, 2018	5,278,698	60,415	409,609	8,811	2,127,643	2,546,063	(2,298)	(419, 559)		(421, 857)	7,463,319	254,095	7,717,414
Net income					882,065	882,065					882,065	(309)	881,756
Other comprehensive income					9.341	9.341	(7,673)	(144,001)		(151, 674)	(142, 333)	(1, 809)	(144, 142)
l'otal comprehensive income					891,406	891,406	(7,673)	(144, 001)		(151, 674)	739,732	(2.118)	737.614
Appropriation and distribution of retained earnings:
Legal reserve appropriated			121,640		$(121,640)$ $(421,857)$
Special reserve appropriated				421,857
Cash dividends of ordinary share					(1,055,740)	(1,055,740)					(1,055,740)		(1,055,740)
Changes in equity of associates and joint ventures accounted for using equity method		(1,566)			(28, 295)	(28, 295)					(29, 861)		(29, 861)
Disposal of investments accounted for using equity
method					(27,278)	(27,278)		27,278		27,278
measured at fair value through other comprehensive Disposal of investments in equity instruments
income					47,164	47,164		(47,164)		(47, 164)
Changes in ownership interests in subsidiaries		(23,561)					(819)			(819)	(24,380)	40,442	16,062
Changes in ownership interests in investments Other-effect of consolidation changes accounted for using equity method		7,130			(91, 135)	(91, 135)	(123)	13,110		12,987	(71, 018)	(85.211) ï	$(71,018)$ $(85.211)$
Balance at December 31, 2019	5,278,698	42,418	531,249	430,668	1,320,268	2,282,185	(10,913)	(570,336)		(581,249)	7,022,052	207,208	7,229,260

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

	2019	2018
Cash flows from operating activities:
Profit before tax	\$ 1,034,760	1,547,665
Adjustments:
Adjustments to reconcile profit (loss)
Depreciation expense	274,461	266,527
Amortization expense	2,927	78,876
Expected credit impairment loss	714	229
Interest expense	8,338	18,516
Interest income	(9,873)	(7,514)
Dividend income	(5,626)	(11, 554)
Share of profit of associates accounted for using equity method	(97, 350)	(39, 280)
Loss (gain) on disposal of property, plant and equipment	23,142	(2,048)
Gain on disposal of investment properties		(7, 440)
Loss (gain) on disposal of investments	(3,624)	21,204
Gain on disposal of non-current assets held for sale	(3,057)
Gain on reversal of impairment loss on investments accounted for using
equity method	(8,766)	(19, 834)
Impairment loss on non-financial assets	174,929	3,858
Gain on lease modification	(168)
Others		(10, 116)
Total adjustments to reconcile profit (loss)	356,047	291,424
Changes in operating assets and liabilities:
Changes in operating assets:
Financial assets mandatorily measured at fair value through profit or loss	(57,746)	153,329
Notes receivable	(12)	2,286
Accounts receivable	63,934	381,928
Construction contract receivables		2,935
Other receivables	32,762	(18, 839)
Inventories	252,238	(57, 492)
Prepayments	(47,880)	591,392
Other current assets	(3, 597)	1,012
Other financial assets	(31,039)	21,786
Total changes in operating assets	208,660	1,078,337
Changes in operating liabilities:
Current contract liabilities	(88,320)	128,851
Notes payable	1,720	(12, 499)
Accounts payable	(128, 440)	87,724
Other payables	(113,606)	52,277
Advance receipts		(45, 867)
Other current liabilities	(85)	(1,440)
Net defined benefit liabilities	1,963	2,137
Total changes in operating liabilities	(326, 768)	211,183
Total changes in operating assets and liabilities	(118, 108)	1,289,520

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the years ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

		2019	2018
	\$	1,272,699	3,128,609
Cash inflow generated from operations
Interest received		9,468	8,099
Dividends received		5,626	2,618
Interest paid		(8,933)	(19,665)
Dividends paid		(172)	(162)
Income taxes paid		(330, 888)	(309, 370)
Net cash flows from operating activities		947,800	2,810,129
Cash flows from investing activities:
Acquisition of financial assets at fair value through other comprehensive income			(215)
Proceeds from disposal of financial assets at fair value through other comprehensive income		2,493	16,262
Proceeds from capital reduction of financial assets at fair value through other comprehensive income		3,475	6,273
Proceeds from disposal of investments accounted for using equity method		41,568
Loss control of subsidiaries		(54, 636)
Acquisition of property, plant and equipment		(288, 685)	(200, 158)
Proceeds from disposal of property, plant and equipment		11,865	2,175
Decrease in refundable deposits		174	38,997
Increase in other receivables from related parties			(4,934)
Acquisition of intangible assets		(5,030)	(1,905)
Proceeds from disposal of intangible assets		3
Proceeds from disposal of investment properties			89,321
Increase in prepayments for equipment		(956)	(14,268)
Increase in other prepayments			(5,553)
Dividends received			1,054
Other investing activities			(1, 553)
Net cash flows used in investing activities		(289, 729)	(74, 504)
Cash flows from financing activities:
Increase in short-term borrowings		620,000
Decrease in short-term borrowings		(615, 385)	(44, 614)
Repayments of long-term borrowings		(226, 263)	(754, 299)
Increase in guarantee deposits received			1,120
Payment of lease liabilities		(14, 366)
Increase in other non-current liabilities		588	190
Cash dividends paid		(1,055,740)	(844, 592)
Change in non-controlling interests		16,881
Other financing activities			27
Net cash flows used in financing activities		(1,274,285)	(1,642,168)
Effect of exchange rate changes on cash and cash equivalents		81	(841)
Net (decrease) increase in cash and cash equivalents		(616, 133)	1,092,616
Cash and cash equivalents at beginning of period		2,122,960	1,030,344
Cash and cash equivalents at end of period	S	1,506,827	2,122,960
Components of cash and cash equivalents
Cash and cash equivalents reported in the statement of financial position	\$	1,477,082	2,122,960
Reclassification to non-current assets (or disposal groups) held for sale		29,745
Cash and cash equivalents at end of period	S	1,506,827	2,122,960

Attachement 6

Taiwan Styrene Monomer Corporation Disposition of Net Earnings 2019

Unit: NT\$

Item	Amount
Retained earnings to be distributed at the beginning of the term:	\$ 528,406,210
Plus:Income after tax	882,064,694
Other comprehensive income (actuarial gains and losses on defined benefit plan)	9,341,010
Change in affiliates and joint ventures accounted for using equity method	(28,294,210)
Disposal of financial assets measured at FVOCI	(27,277,839)
Cash dividends on returned payment for odd lots	47,163,726
Changes in ownership interests in the investment by equity method	(91,135,469)
Total of distributable earnings	1,320,268,122
Legal reserves	(79,186,191)
Recognized special capital reserve	(150,580,660)
Deduction: distribution items
Shareholder bonus (Cash dividends 1 TWD per share)	527,869,764
Retained earnings to be distributed at the end of the term	\$ 562,631,507

Note:

The smallest cash dividend shall be 1 TWD. The total of odd lots of which the dividends are respectively less than 1 TWD will be returned to retained earnings.
According to the provision of Chin-Kuan-Cheng-Fa-Tzu No. 1010012865, after you start to prepare financial statements with the adoption of International Financial Reporting Standards, you shall recognize a special capital reserve from the income and retained earning to be distributed with the same amount as the net value of the deduction items of other recognized shareholder's equity generated in the fiscal year (e.g. the accumulated amount of exchange differences on translating the financial statements of foreign operations, unrealized gain or loss on available-for-sale financial assets, gain or loss on hedge instruments which are effective in cash flow hedges). For the deduction amount of other shareholders' equity accumulated in the last term, you shall recognize the same amount of special capital reserve without distribution from the distributable retained earnings in the last term. However, for a company that has recognized the special capital reserve following the former paragraph, it shall further draw a supplementary special capital reserve which equals to the difference between its recognized amount and the net value of the decution items of other equity. Later when the balance of other shareholders' equity decution items can be reversed, earnings can thus be distributed based on the part of reversal.

Chairperson: Wen-Yuan Lin General Manager: Pao-Yuan Chen Accounting manager: Jason Chou

Attachement 7

Taiwan Styrene Monomer Corporation Rules of Board Meeting Minutes(Draft)

Article 1

To establish a strong governance system and sound supervisory capabilities for this Corporation's shareholders meetings, and to strengthen management capabilities, these Rules are adopted pursuant to the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies.

Article 2

The rules of procedures for this Corporation's shareholders meetings, except as otherwise provided by law, regulation, or the articles of incorporation, shall be as provided in these Rules.

Article 3 (Convening shareholders meetings and shareholders meeting notices)

Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be convened by the board of directors.

This Corporation shall prepare electronic versions of the shareholders meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the Market Observation Post System (MOPS) before 30 days before the date of a regular shareholders meeting or before 15 days before the date of a special shareholders meeting. This Corporation shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS before 21 days before the date of the regular shareholders meeting or before 15 days before the date of the special shareholders meeting. In addition, before 15 days before the date of the shareholders meeting, this Corporation shall also have prepared the shareholders meeting agenda and supplemental meeting materials and made them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at this Corporation and the professional shareholder services agent designated thereby as well as being distributed on-site at the meeting place.

The reasons for convening a shareholders meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form.

Election or dismissal of directors or supervisors, amendments to the articles of incorporation, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1 shall be set out in the notice of the reasons for convening the shareholders meeting. None of the above matters may be raised by an extraordinary motion. Its main content may be disclosed on the website designated by the competent authority or the Company, and the website shall be stated in the meeting notice.

The full election of directors and the date which he/she will assume office was set out in the notice of the reasons for convening the shareholders meeting. After the election was completed, None of the above matters may be raised by an extraordinary motion or other means.

A shareholder holding 1 percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda. Nonetheless, a shareholder proposal proposed under Paragraph One for urging a company to promote public interests or fulfill its social responsibilities may still be included in the list of proposals to be discussed at a regular meeting of shareholders by the board of directors. In addition, when the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda.

Prior to the book closure date before a regular shareholders meeting is held, this Corporation shall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days.

Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. The shareholder making the proposal shall be present in person or by proxy at the regular shareholders meeting and take part in discussion of the proposal.

Prior to the date for issuance of notice of a shareholders meeting, this Corporation shall inform the shareholders who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. At the shareholders meeting the board of directors shall explain the reasons for exclusion of any shareholder proposals not included in the agenda.

Article 4

For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by this Corporation and stating the scope of the proxy's authorization.

A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders meeting, and shall deliver the proxy form to this Corporation before 5 days before the date of the shareholders meeting. When duplicate proxy forms are delivered, the one received earliest shall prevail, unless a declaration is made to cancel the previous proxy appointment.

After a proxy form has been delivered to this Corporation, if the shareholder intends to attend the meeting in person or to exercise voting rights by correspondence or electronically, a written notice of proxy cancellation shall be submitted to this Corporation before 2 business days before the meeting date. If the cancellation notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.

Article 5 (Principles determining the time and place of a shareholders meeting)

The venue for a shareholders meeting shall be the premises of this Corporation, or a place easily accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting.

Article 6 (Preparation of documents such as the attendance book)

This Corporation shall specify in its shareholders meeting notices the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel assigned to handle the registrations.

Shareholders and their proxies (collectively, "shareholders") shall attend shareholders meetings based on attendance cards, sign-in cards, or other certificates of attendance. This Corporation may not arbitrarily add requirements for other documents beyond those showing eligibility to attend presented by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for verification.

This Corporation shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in.

This Corporation shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors or supervisors, pre-printed ballots shall also be furnished.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

Article 7 (The chair and non-voting participants of a shareholders meeting)

If a shareholders meeting is convened by the board of directors, the meeting shall be chaired by the chairperson of the board. When the chairperson of the board is on leave or for any reason unable to exercise the powers of the chairperson, the vice chairperson shall act in place of the chairperson; if there is no vice chairperson or the vice chairperson also is on leave or for any reason unable to exercise the powers of the vice chairperson, the chairperson shall appoint one of the managing directors to act as chair, or, if there are no managing directors, one of the directors shall be appointed to act as chair. Where the chairperson does not make such a designation, the managing directors or the directors shall select from among themselves one person to serve as chair.

When a managing director or a director serves as chair, as referred to in the preceding paragraph, the managing director or director shall be one who has held that position for six months or more and who understands the financial and business conditions of the company. The same shall be true for a representative of a juristic person director that serves as chair.

It is advisable that shareholders meetings convened by the board of directors be chaired by the chairperson of the board in person and attended by a majority of the directors, at least one supervisor in person, and at least one member of each functional committee on behalf of the committee. The attendance shall be recorded in the meeting minutes.

If a shareholders meeting is convened by a party with power to convene but other than the board of directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.

This Corporation may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders meeting in a non-voting capacity.

Article 8 (Documentation of a shareholders meeting by audio or video)

This Corporation, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures.

The recorded materials of the preceding paragraph shall be retained for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

Article 9

Attendance at shareholders meetings shall be calculated based on numbers of shares. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in plus the number of shares whose voting rights are exercised by correspondence or electronically.

The chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned.

If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders meeting shall be convened within 1 month.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders meeting pursuant to Article 174 of the Company Act.

Article 10 (Discussion of proposals)

If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting.

The provisions of the preceding paragraph apply mutatis mutandis to a shareholders meeting convened by a party with the power to convene that is not the board of directors.

The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders meeting. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the board of directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call for a vote.

Article 11 (Shareholder speech)

Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair.

A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.

Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.

When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chair shall stop any violation.

When a juristic person shareholder appoints two or more representatives to attend a shareholders meeting, only one of the representatives so appointed may speak on the same proposal.

After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.

Article 12 (Calculation of voting shares and recusal system)

Voting at a shareholders meeting shall be calculated based the number of shares.

With respect to resolutions of shareholders meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of this Corporation, that shareholder may not vote on that item, and may not exercise voting rights as proxy for any other shareholder.

The number of shares for which voting rights may not be exercised under the preceding paragraph shall not be calculated as part of the voting rights represented by attending shareholders.

With the exception of a trust enterprise or a shareholder services agent approved by the competent securities authority, when one person is concurrently appointed as proxy by two or more shareholders, the voting rights represented by that proxy may not exceed 3 percent of the voting rights represented by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.

Article 13

A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Article 179, paragraph 2 of the Company Act.

When this Corporation holds a shareholders meeting, it may allow the shareholders to exercise voting rights by correspondence or electronic means. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting; it is therefore advisable that this Corporation avoid the submission of extraordinary motions and amendments to original proposals.

A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written declaration of intent to this Corporation before 2 days before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent.

After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to this Corporation, by the same means by which the voting rights were exercised, before 2 business days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall prevail.

Except as otherwise provided in the Company Act and in this Corporation's articles of incorporation, the passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the chair or a person designated by the chair shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the MOPS.

When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of this Corporation.

Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

Article 14 (Election of directors and supervisors)

The election of directors or supervisors at a shareholders meeting shall be held in accordance with the applicable election and appointment rules adopted by this Corporation, and the voting results shall be announced on-site immediately, including the names of those elected as directors and supervisors and the numbers of votes with which they were elected.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

Article 15

Matters relating to the resolutions of a shareholders meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form.

This Corporation may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS.

The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the duration of the existence of this Corporation.

Article 16 (Public disclosure)

On the day of a shareholders meeting, this Corporation shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at the place of the shareholders meeting.

If matters put to a resolution at a shareholders meeting constitute material information under applicable laws or regulations or under Taiwan Stock Exchange Corporation (or Taipei Exchange) regulations, this Corporation shall upload the content of such resolution to the MOPS within the prescribed time period.

Article 17 (Maintaining order at the meeting place)

Staff handling administrative affairs of a shareholders meeting shall wear identification cards or arm bands.

The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."

At the place of a shareholders meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by this Corporation, the chair may prevent the shareholder from so doing.

When a shareholder violates the rules of procedure and defies the chair's correction, obstructing the proceedings and refusing to heed calls to stop, the chair may direct the proctors or security personnel to escort the shareholder from the meeting.

Article 18 (Recess and resumption of a shareholders meeting)

When a meeting is in progress, the chair may announce a break based on time considerations. If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

If the meeting venue is no longer available for continued use and not all of the items (including extraordinary motions) on the meeting agenda have been addressed, the shareholders meeting may adopt a resolution to resume the meeting at another venue.

A resolution may be adopted at a shareholders meeting to defer or resume the meeting within 5 days in accordance with Article 182 of the Company Act.

Article 19

These Rules, and any amendments hereto, shall be implemented after adoption by shareholders meetings. The regulations will be formulated in May 27, 2020.

AI assistant

T.S.M.C. — AGM Information 2020

51769_rns_2020-06-02_e9f70a3b-d792-4a3a-9388-b22940712dc2.pdf

Annual General Meeting Agenda, 2020, Taiwan Styrene Monomer Corporation (Translation)

I. Reporting Items:

II. Items to be Ratified

III. Discussion Items:

IV. Election:

V. Extraordinary motion: none

VI. Adjournment (10:05 am.)

Attachment 1

Taiwan Styrene Monomer Corporation 2019 Business Report

(1)Result

(2) Budget implementation

(3) Earning power analysis

(4) R&D

(5) Our vision

Attachment 2

Verification Report by Auditor Committee

Attachment 3 Taiwan Styrene Monomer Corporation Code of Ethical Conduct

I. Purpose of and basis for adoption

II. The code of ethical conduct addresses at least the following eight matters:

III. Procedures for exemption

IV. Method of disclosure

V. Enforcement

Attachment 4

Taiwan Styrene Monomer Corporation Regulations Governing Share Repurchase to Be Transferred to Employees

Article I

Article II

Article III

Article IV

Article V

Article VI

Article VII

Article VIII

Article IX

Article X

Article XI

Article XII

Attachment 5

Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

1. Revenue recognition

Description of key audit matter:

Other Matter

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

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

Balance SheetsDecember 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Financial Statements Originally Issued in Chinese)TAIWAN STYRENE MONOMER CORPORATION

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

(English Translation of Financial Statements Originally Issued in Chinese)TAIWAN STYRENE MONOMER CORPORATION

Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

1. Revenue recognition

Other Matter

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

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

Consolidated Balance Sheets

December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

For the years ended December 31, 2019 and 2018

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the years ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars)

Attachement 6

Taiwan Styrene Monomer Corporation Disposition of Net Earnings 2019

Attachement 7

Taiwan Styrene Monomer Corporation Rules of Board Meeting Minutes(Draft)

T.S.M.C. AGM Information 2020

Balance Sheets
December 31, 2019 and 2018

(English Translation of Financial Statements Originally Issued in Chinese)
TAIWAN STYRENE MONOMER CORPORATION

(English Translation of Financial Statements Originally Issued in Chinese)
TAIWAN STYRENE MONOMER CORPORATION

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES