Stock Code:1310

TAIWAN STYRENE MONOMER CORPORATION

Parent Company Only Financial Statements

With Independent Auditors’ Report for the Years Ended December 31, 2020 and 2019

Address: 8F.-1, No.6, Sec.1, Roosevelt Rd., Taipei City Telephone: (02)2396-6007

The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent company only financial statements, the Chinese version shall prevail.

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Parent Company Only Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses due to major disasters (11) Subsequent events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information List of major account titles	Page
	1 2 3 4 5 6 7 8 8 8～9 9～25 25～26 26～53 53～55 56 56 56 56 56～58 59～61 62 62 62 62 63～71

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Report
4. Balance Sheets
5. Statements of Comprehensive Income
6. Statements of Changes in Equity
7. Statements of Cash Flows
8. Notes to the Parent Company Only Financial Statements
(1)
Company history
(2)
Approval date and procedures of the financial statements
(3)
New standards, amendments and interpretations adopted
(4)
Summary of significant accounting policies
(5)
Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Commitments and contingencies
(10) Losses due to major disasters
(11) Subsequent events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in mainland China
(d) Major shareholders
(14) Segment information
List of major account titles

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax 傳真 + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet 網址 home.kpmg/tw

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 statements of financial position as of December 31, 2020 and 2019, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits 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, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and 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 audits 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.

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 the performance obligations 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.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

3-1

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 13.52% and 13.22% of total assets at December 31, 2020 and 2019, and the related share of profit of subsidiaries, associates and joint ventures accounted for using equity method constituting 32.61% and 10.87% of total profit before tax for the years then ended.

Responsibilities of Management and Those Charged with Governance for the 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.

3-2

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:

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.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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.
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.
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.

3-3

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 24, 2021

Notes to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China.

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

Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1170 Accounts receivable, net (note 6(c)) 1200 Other receivables (note 7) 130X Inventories (note 6(d)) 1410 Prepayments (note 6(e)) 1460 Non-current assets(or disposal groups) held for sale, net (note 6(f)) Total current assets Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (notes 6(g) and 7) 1550 Investments accounted for using equity method (notes 6(h), (i), (j) and 7) 1600 Property, plant and equipment (notes 6(k) and 7) 1755 Right-of-use assets (note 6(l)) 1780 Intangible assets (note 6(m)) 1840 Deferred tax assets (note 6(r)) 1920 Refundable deposits 1990 Other non-current assets, others (note 6(n)) Total non-current assets Total assets	December 31, 2020 Amount % $ 522,361 6 45,360 1 870,546 10 4,716 - 429,981 5 123,013 1 - - 1,995,977 23 756,428 9 2,906,269 34 2,775,535 33 9,023 - 9,570 - 16,644 - 3,382 - 60,603 1 6,537,454 77 $ 8,533,431 100	December 31, 2019
		Amount % 1,211,902 14 39,100 - 816,032 10 964 - 427,565 5 120,334 1 41,119 - 2,657,016 30 396,161 5 2,757,918 32 2,693,666 32 13,345 - 12,098 - 21,728 - 3,873 - 57,354 1 5,956,143 70 8,613,159 100

Liabilities and Equity Current liabilities: 2130 Current contract liabilities (note 6(u)) 2170 Accounts payable 2200 Other payables (note 6(o)) 2230 Current tax liabilities 2280 Current lease liabilities (note 6(p)) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2570 Deferred tax liabilities (note 6(r)) 2580 Non-current lease liabilities (note 6(p)) 2640 Net defined benefit liabilities, non-current (note 6(q)) Total non-current liabilities Total liabilities Equity:(note 6(s)) 3100 Capital stock 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other equity 3500 Treasury shares Total equity Total liabilities and equity		December 31, 2020		December 31, 2019 Amount % 7,829 - 1,089,348 13 173,161 2 66,621 1 4,851 - 2,025 - 1,343,835 16 174,654 2 8,173 - 64,445 1 247,272 3 1,591,107 19 5,278,698 61 42,418 - 531,249 6 430,668 5 1,320,268 15 2,282,185 26 (581,249) (6) - - 7,022,052 81 8,613,159 100
		Amount %
	7,829 - 783,481 9 207,982 2 35,781 - 4,301 - 2,384 - 1,041,758 11 174,071 2 4,542 - 59,208 1 237,821 3 1,279,579 14 5,278,698 62 48,224 1 610,435 7 581,249 7 581,961 7 1,773,645 21 168,463 2 (15,178) - 7,253,852 86 $ 8,533,431 100

See accompanying notes to financial statements.

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

Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

4000 Operating revenue (note 6(u)) 5000 Operating costs (notes 6(d), (k), (l), (m), (p), (q), (w)) Gross profit from operations Operating expenses (notes 6(c), (k), (l), (m), (p), (q), (w) and 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment loss (profit) Operating income Non-operating income and expenses (notes 6(g), (h), (j), (v) and 7): 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of subsidiaries, associates and joint ventures accounted for using equity method 9900 Profit before tax 7950 Less: Income tax expenses (note 6(r)) Net income 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 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, 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 Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation 8380 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, 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 8300 Other comprehensive income 8500 Comprehensive income Earnings per share(note 6(t)) Basic earnings per share Diluted earnings per share	2020 Amount % $ 7,899,885 100 7,576,668 96 323,217 4 56,946 1 85,723 1 6,371 - 3 - 149,043 2 174,174 2 2,120 - 39,621 1 94,618 1 (168) - 56,742 1 192,933 3 367,107 5 79,591 1 287,516 4 6,420 - 68,671 1 426,307 5 1,284 - 500,114 6 (1,813) - (12,930) - - - (14,743) - 485,371 6 $ 772,887 10 $ 0.55 $ 0.54	2019 Amount % 11,717,894 100 10,368,845 88 1,349,049 12 50,514 - 141,150 1 19,700 - (4) - 211,360 1 1,137,689 11 7,076 - 15,263 - 856 - (977) - (130,851) (1) (108,633) (1) 1,029,056 10 146,991 1 882,065 9 11,167 - (7,872) - (135,722) (1) 2,233 - (134,660) (1) (602) - (7,071) - - - (7,673) - (142,333) (1) 739,732 8 1.67 1.67

See accompanying notes to financial statements.

(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, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

	Retained	earnings		ther equity interes	Total equity 7,463,319 882,065 (142,333)
			Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income (419,559) - (144,001) (144,001) - - - - 27,278 (47,164) - 13,110 (570,336) - 494,853 494,853 - - - - 513 (2,756) 272,934 195,208
Legal reserve 409,609 - - - 121,640 - - - - - - - 531,249 - - - 79,186 - - - - - - 610,435	Special reserve 8,811 - - - - 421,857 - - - - - - 430,668 - - - - 150,581 - - - - - 581,249	Unappropriated retained earnings 2,127,643 882,065 9,341 891,406 (121,640) (421,857) (1,055,740) (28,295) (27,278) 47,164 - (91,135) 1,320,268 287,516 5,261 292,777 (79,186) (150,581) (526,830) - (513) 2,756 (276,730) 581,961
			(2,298) - (7,673) (7,673) - - - - - - (819) (123) (10,913) - (14,743) (14,743) - - - - 356 (1,260) (185) (26,745)
					739,732 - - (1,055,740) (29,861) - - (24,380) (71,018)
					7,022,052 287,516 485,371
					772,887 - - (526,830) (15,178) 3,548 (1,260) (1,367)
					7,253,852

See accompanying notes to financial statements.

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

Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss) Depreciation expense Amortization expense Expected credit impairment loss (gain) Interest expense Interest income Dividend income Share of loss (gain) of subsidiaries, associates and joint ventures accounted for using equity method Loss on disposal of property, plant and equipment Gain on disposal of non-current assets held for sale Gain on disposal of investments Impairment loss on non-financial assets Gain on lease modification Gain on reversal of impairment loss on investments accounted for using equity method Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Financial assets mandatorily measured at fair value through profit or loss Accounts receivable Other receivables Inventories Prepayments Total changes in operating assets Changes in operating liabilities: Contract liabilities Accounts payable Other payables Increase in other current liabilities Other current liabilities Net defined benefit liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Cash inflow generated from operations Interest received Dividends received Interest paid Dividends paid Income taxes paid Net cash flows (used in )from operating activities Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in refundable deposits Acquisition of intangible assets Increase in other non-current assets Increase in prepayments for equipment Dividends received Net cash flows used in investing activities Cash flows from financing activities: Repayments of long-term borrowings Payment of lease liabilities Cash dividends paid Payments to acquire treasury shares Net cash flows used in financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2020 $ 367,107 216,347 2,528 3 168 (2,120) (4,441) (56,742) - (71,578) (1,445) 84 (2) - 82,802 (6,260) (54,517) (3,900) (2,416) (2,763) (69,856) - (305,867) (5,373) 359 - 1,183 (309,698) (379,554) 70,355 2,268 4,441 (168) (83) (107,214) (30,401) (32,278) - 9,803 (38,832) 193,559 (253,158) - 491 - (3,249) - 11,170 (112,494) - (4,638) (526,830) (15,178) (546,646) (689,541) 1,211,902 $ 522,361	2019 1,029,056 210,539 2,198 (4) 977 (7,076) (2,791) 130,851 26,999 (3,057) (3,624) 144 (167) (8,766)
		346,223
		64,720 84,233 46,901 213,711 (34,296)
		375,269
		(89,679) (115,142) (98,553) - (1,484) 1,486
		(303,372)
		71,897
		1,447,176 7,158 2,791 (1,093) (172) (322,862)
		1,132,998
		- 2,493 3,475 (98,664) 110,118 (254,791) 3,301 15 (5,030) (20,598) (158) -
		(259,839)
		(199,980) (11,083) (1,055,740) -
		(1,266,803)
		(393,644) 1,605,546
		1,211,902

See accompanying notes to financial statements.

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

Notes to the Parent Company Only Financial Statements For the years ended December 31, 2020 and 2019

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

(1) Company history

Taiwan Styrene Monomer Corp. (the “Company”) was incorporated on November 16, 1979, under the approval of Ministry of Economic Affairs, Republic of China (ROC). Registered address is 8F.-1, No.6, Sec.1, Roosevelt Rd., Taipei City. The Company manufactures and sells styrene monomer.

(2) Approval date and procedures of the financial statements

These parent-company-only financial statements were authorized for issue by the Board of Directors on March 24, 2021.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its parent company only financial statements, from January 1, 2020:

●Amendments to IFRS 3 “Definition of a Business”
●Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”
●Amendments to IAS 1 and IAS 8 “Definition of Material”
●Amendments to IFRS 16 “COVID-19-Related Rent Concessions”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its parent company only financial statements:

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
－
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform Phase 2”
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The Company does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its parent company only financial statements:

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
－
●Amendments to IAS 16 “Property, Plant and Equipmentt Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018-2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”
●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”

(4) Summary of significant accounting policies

The significant accounting policies presented in the financial statements are summarized as follows. Except for those specifically indicated, the following accounting policies were applied consistently throughout the presented periods in the parent company only financial statements.

(a) Statement of compliance

These parent company only financial statements of the Company have been prepared in accordance with the Regulations Governing the preparation of Financial Reports by Securities Issuers (the "Regulations").

(b) Basis of preparation
(i) Basis of measurement

Except for the following significant accounts, the parent company only financial statements have been prepared on a historical cost basis:

1) Financial instruments measured at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value;
3) The defined benefit liabilities are measured at the present value of the defined benefit obligation less fair value of the plan assets.
(ii) Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which it operates. The parent company only financial statements are presented in New Taiwan Dollar, which is the Company’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(c) Foreign currencies

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the functional currency of the Company at exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translatedm into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currency using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for an investment in equity securities designated as at fair value through other comprehensive income, which are recognized in other comprehensive income.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the Company’s functional currency at exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of any part of its interest in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Company disposes of only part of investment in an associate of joint venture that includes a foreign operation, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current:

(i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current:

An entity shall classify a liability as current when:

(i) It is expected to be settled in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(f) Financial instruments

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI)

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, other receivabled and refundable deposits).

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

The Company measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

‧ debt securities that are determined to have low credit risk at the reporting date; and

‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables is always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’ s historical experience and informed credit assessment as well as forwardlooking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 90 days past due or the debtor is unlikely to pay its credit obligations to the Company in full.

Lifetime ECL are the ECL that result from all possible default events over the expectedlife of a financial instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECL is the maximum contractual period over which the Company is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

‧ significant financial difficulty of the borrower or issuer;
‧ a breach of contract such as a default;

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧ it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧ the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

5) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instruments
1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading or it is designated as such on initial recognition.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

5) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using weighted-average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in process, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less, the estimated costs incurred upon completion and selling expenses.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(h) Non-current assets (or disposal groups) held for sale
(i) Non-current assets held for sale

Non-current assets or disposal groups comprising assets and liabilities that are highly probable to be recovered primarily through sale rather than through continuing use, are reclassified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Company’ s accounting policies. Thereafter, generally, the assets or disposal groups are measured at the lower of their carrying amount and fair value less costs to sell.

Any impairment loss on a disposal group is first allocated to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to assets not within the scope of IAS 36 – Impairment of Assets. Such assets will continue to be measured in accordance with the Company’s accounting policies.

Impairment losses on assets initially classified as held for sale and any subsequent gains or losses on remeasurement are recognized in profit or loss. Gains are not recognized in excess of the cumulative impairment loss that has been recognized.

Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortized or depreciated, and any equity-accounted investee is no longer equity accounted.

(ii) Discontinued operations

A discontinued operatin is a component of the Company’ s business that either has been disposed of or is classified as held for sale, and

－ represents a separate major line of business or geographic area of operations;
－ is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or
－
is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held for sale.

(i) Investments in associates

Associates are those entities in which the Company has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

The parent company only financial statements include the Company’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual significant influence.

Gains and losses resulting from transactions between the Company and an associate are recognized only to the extent of unrelated the Company’ s intereat in the associate.

When the Company’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized , only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

The Company discontinues the use of the equity method and measures the retained interest at fair value from the date when its investment ceases to be an associate. The difference between the fair value of retained interest and proceeds from disposing, and the carrying amount of the investment at the date the equity method was discontinued is recognized in profit or loss. The Company accounts for all the amounts previously recognized in other comprehensive income in relation to that investment on the same basis as would have been required if the associates had directly disposed of the related assets or liabilities. If a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss ( or retained earnings) on the disposal of the related assets or liabilities, the Company reclassifies the gain or loss from equity to profit or loss ( or retained earnings) when the equity method is discontinued. If the Company’ s ownership interest in an associate is reduced while it continues to apply the equity method, the Company reclassifies the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest to profit or loss.

When the Company subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment will differ from the amount of the Company’s proportionate interest in the net assets of the associate. The Company records such a difference as an adjustment to investments, with the corresponding amount charged or credited to capital surplus. The aforesaid adjustment should first be adjusted under capital surplus. If the capital surplus resulting from changes in ownership interest is not sufficient, the remaining difference is debited to retained earnings. If the Company’s ownership interest is reduced due to the additional subscription to the shares of the associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate will be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(j) Investment in subsidiaries

In preparing the parent company only financial statments of the Company, investees controlled by the Company are accounted for using equity method. Under equity method, profit or loss and other comprehensive income recognized in the parent company only financial statement are the same as the the profit or loss and other comprehensive income attributable to the owners in the consolidated financial statements. In addition, changes in equity recognized in parent company only financial statement is the same as changes in equity attributable to owners of parent in the consolidated financial statements.

Change in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions with owners.

(k) Property, plant and equipment
(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent cost

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

1)	Buildings and structures:	4~60 years
2)	Machinery and equipment:	6~20 years
3)	Transportation equipment:	5 years
4)	Other equipment:	3~20 years

Depreciation methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(l) Leases

(i) Identifying a lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and
2) the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the Company has the right to direct the use of the asset throughout the period of use only if either:
－ the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or
－ the relevant decisions about how and for what purpose the asset is used are predetermined and:
- － the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or
- － the customer designed the asset in a way that predetermines how and for whatt purpose it will be used throughout the period of use.

(ii) As a leasee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

Lease payments included in the measurement of the lease liability comprise the following:

－
fixed payments, including in-substance fixed payments;
－ variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
－
－
amounts expected to be payable under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

－
there is a change in future lease payments arising from the change in an index or rate; or
－ there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or
－
there is a change of its assessment on whether it will exercise a purchase option; or
－ there is a change in the lease term resulting from a change of its assessment on whether it will exercise an extension or termination option; or
－
there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for shortterm leases of transportation and office equipment that have a lease term of 12 months or less and leases of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

As a practical expedient, the Company elects not to assess whether all rent concessions that meets all the following conditions are lease modifications or not:

－
the rent concessions occurring as a direct consequence of the COVID-19 pandemic;
－ the change in lease payments that resulted in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

－ any reduction in lease payments that affects only those payments originally due on, or before June 30, 2021; and
－ there is no substantive change in other terms and conditions of the lease.

In accordance with the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

(iii) As a leasor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

(m) Intangible assets

(i) Recognition and measurement

Other intangible assets, that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

1) Technical royalty: 15 years
2) Computer software: 3~5 years

Amortization methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(n) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’ s recoverable amount is estimated.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. For non-financial assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(o) Revenue recognition

(i) Revenue from contract with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’ s main types of revenue are explained below.

1) Sale of goods

The Company manufactures and sells styrene monomer. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied. A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

2) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(p) Government grants

The Company recognizes an unconditional government grant related to operation in profit or loss as other income when the grant becomes receivable. Other government grants related to assets are initially recognized as deferred income at fair value if there is reasonable assurance that they will be received and the Company will comply with the conditions associated with the grant; they are then recognized in profit or loss as other income on a systematic basis over the useful life of the asset. Grants that compensate the Company for expenses or losses incurred are recognized in profit or loss on a systematic basis in the periods in which the expenses or losses are recognized.

(q) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(r) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payables or receivables in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

(i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
(ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
(iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
a) the same taxable entity; or
b) different taxable entitie which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(s) Earnings per share

The Company discloses basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

(t) Operating segments

The Company has disclosed information about operating segments in the consolidated financial statements. Therefore, no segmental information is disclosed in the parent company only financial statements.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the parent company only financial statements in conformity with the Regulations requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is judgment regarding control of subsidiaries. For related information, please refer to the consolidated financial statements for the year ended December 31, 2020.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic:

(a) Impairment assessment of investments accounted for using equity method

The Company compares the carrying amounts and the recoverable amount (the greater of its value in use and its fair value less costs to sell) of investments accounted for using equity method to determine whether there is any impairment. In the process of determining the recoverable amount, the Company rely on an appraisal report issued by an expert which had been prepared based on market approach and income approach. Any changes in economic conditions could result in significant impairment charges.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(b) Fair value measurements in level 3 equity instruments

If the fair value of financial assets recognized in balance sheets cannot be reached from the active market, the Company will measure the fair value of financial assets based on valuation technique, including market approach and asset-based approach. The measurement of fair value involves in assumptions, estimations and judgements, such as the selection of comparable company, comparable transaction or price of equity transaction, liquidity discount and valuation multiplier. The fluctuation of assumption used in measurements of fair value may influence the fair value of financial instruments recognized. Please refer to note 6(g) and (x) for relevant explanation.

The accounting policies and disclosure of the Company include the adoption of fair value measurement of its financial and non-financial assets and liabilities. The Company has established internal control policies for fair value measurement, including obtaining valuation report issued by external experts for the fair value measurement of significant level 3 equity instruments. The Company will evaluate the supporting evidence for expert's work, and determine if the valuation and the classification of fair value level comply with the rule set by IFRS.

The Company uses the market observable inputs as much as possible when measuring its assets and liabilities. The levels of fair value are classified with the inputs used in valuation technique as below:

(i) Level 1: The quoted prices in active market of the same assets or liabilities (not adjusted)
(ii) Level 2: Except for the quoted prices included in Level 1, the input parameter of assets or liabilities is directly (price) or indirectly (derive from price) observable.
(iii) Level 3: The input parameter of assets or liabilities is not based on observable market information (unobservable parameter).

(6) Explanation of significant accounts

(a) Cash and cash equivalents

Petty cash Deposits in bank Cash equivalents Bonds under resell agreements Time deposits due within one year b) Current financial assets at fair value through profit or loss Mandatorily measured at fair value through profit or loss: Listed stocks	December 31, 2020 $ 160 157,910 356,550 7,741 $ 522,361 December 31, 2020 $ 45,360	December 31, 2019
		160 557,281 600,000 54,461
		1,211,902
		December 31, 2019
		39,100

(b) Current financial assets at fair value through profit or loss

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(c) Accounts receivable

Accounts receivable Less: Loss allowance	December 31, 2020 $ 870,590 (44) $ 870,546	December 31, 2019 816,073 (41) 816,032

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information. The loss allowance provision was determined as follows:

December 31, 2020	December 31, 2020
Gross carrying amount Weighted- average loss rate $ 870,590 0.005% December 31, 2019		Loss allowance provision
		44

	Weighted- average loss rate 0.005%	Loss allowance provision
		41

The movement in the allowance for notes and accounts receivable was as follows:

Beginning balance Impairment losses (gains) recognized Ending balance	2020 $ 41 3 $ 44	2019 45 (4) 41

(d) Inventories

Finished goods By-product Semi-finished products Work in progress Raw materials Supplies	December 31, 2020 $ 56,249 6,724 141,737 26,821 180,942 17,508 $ 429,981	December 31, 2019
		185,730 3,579 52,523 39,264 89,012 57,457
		427,565

In 2020 and 2019, inventories recognized as cost of sales amounted to $7,576,668 thousand and $10,368,845 thousand, respectively.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

Except for the transfer of inventory to operating costs from sales, other losses directly included in operating costs are as follows:

Loss from decline (gain on recovery) in value of inventories $	2020 2019 (23,758) 20,845

None of the inventories of the Company was pledged as collateral on December 31, 2020 and 2019.

(e) Prepayments

Office supplies Prepayment for purchases Overpaid sales tax Others	December 31, 2020 $ 91,444 7,909 8,709 14,951 $ 123,013	December 31, 2019
		82,788 3,900 16,839 16,807
		120,334

(f) Non-current assets (or disposal groups) held for sale, net

As of December 24, 2019, the Company obtained an approval of the Board of Directors to sell all the shares of Lei-Ting Construction Corporation. The efforts of sale have commenced. Therefore, the Company reclassifed the investment to non-current assets (or disposal groups) held for sale.

The expected selling price less costs to sell is greater than the carrying amount; therefore, no impairment loss has been recognized.

(g) Non-current financial assets at fair value through other comprehensive income

Equity investments: Domestic non-listed stocks Foreign non-listed equity investments	December 31, 2020 $ 666,161 90,267 $ 756,428	December 31, 2019
		374,744 21,417
		396,161

(i) The Company designated the investments shown above at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term strategic purposes not for trading purposes. During 2020 and 2019, the dividends of $1,528 thousand and $74 thousand, respectively, related to equity investments at fair value through other comprehensive income held on the years then ended were recognized.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(ii) There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments for the year ended 2020. In April 2019, the Company sold its shares of Taiwan Insulation Material Industrial Co., Ltd., which were measured at fair value through other comprehensive income. The shares sold had a fair value of $2,493 thousand and the Company realized a loss of $90 thousand, which was already included in other comprehensive income. The aforementioned loss has been transferred to retained earnings.
(iii) For market risk; please refer to note 6(x).
(iv) None of the above-mentioned financial assets had been pledged as collateral as of December 31, 2020 and 2019.
(h) Investments accounted for using equity method

Investment accounted for useing the equity method were follows：

Subsidiaries Associates	December 31, 2020 $ 1,718,597 1,187,672 $ 2,906,269	December 31, 2019
		1,582,227 1,175,691
		2,757,918

(i) Subsidiaries

Please refer to the consolidated financial report for the years ended December 31, 2020 and 2019.

(ii) Associates

Associates of the Company consisted of the following:

Grand Cathay Venture Capital Co., Ltd. Wonderland Enterprise Co., Ltd. Yu-Jie Investment Co., Ltd. Gvision-USA, Inc. Functional Coating System Technologies Co., Ltd.	December 31, 2020 Amount Share- holding (%) $ 382,377 25.00 744,788 37.04 - - 34,112 44.44 26,395 34.88 $ 1,187,672	December 31, 2019
	Amount $ 382,377 744,788 - 34,112 26,395 $ 1,187,672	Amount Share- holding (%) 331,171 25.00 540,896 37.04 266,507 32.80 37,117 44.44 - - 1,175,691

Wonderland Enterprise Co., Ltd. conducted a capital increase by cash of $200,000 thousand on January 15, 2019. The Company did not participate in the capital increase proportionally, and its shares of the company dropped to 37.04%. The Company reduced the capital surplus of $4,217 thousand and retained earnings of $78,025 thousand, respectively, due to the decrease of its ownership. Meanwhile, the unrealized losses of $15,826 thousand from investments measured at fair value through other comprehensive income had been reclassified to retain earnings proportionally.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

On March 8, 2019, the Company sold all of its shares of Yuan-Yao Development Co. Ltd., at the price of $41,568 thousand, and the gain on disposal of investments amounted to $2,682 thousand, which was accounted for under the other gains and losses of the comprehensive income statements; meanwhile, the unrealized losses of $27,278 thousand from investments measured at fair value through other comprehensive income which shall not be reclassified to profit and loss, had been reclassified to retained earnings at the time of disposal.

Yuan-Jie Investment Co., Ltd. conducted a capital increase by cash of $517,000 thousand on December 31, 2019. The Company did not participated in the capital increase proportionally, and its shares of the company decreased to 19.09%. The Company increased the capital surplus of $11,347 thousand due to the increase of its ownership. Meanwhile, the unrealized gains of $2,716 thousand from investments measured at fair value through other comprehensive income which shall not be reclassified to profit and loss and exchange difference of $122 thousand has been reclassified to retain earnings and to profit and loss accordingly. The Company lost significant influence of the company and reclassified the investment to FVOCI.

Yu-Jie Investment Co., Ltd. conducted a capital increase by cash of $576,000 thousand on January 10, 2020. The Company did not participate in the capital increase proportionally, and its shares of the Company increase to 19.38%. The Company increased the capital surplus of $2,614 thousand due to the increase of its ownership. Meanwhile, the unrealized loss of $151,688 thousand from investments measured at fair value through other comprehensive income and exchange difference of $185 thousand, had been reclassified to retain earnings and to profit and loss accordingly. The Company lost significant influence of the Company and reclassified the investment to FVOCI.

The Company acquired 34.88% of total shares of Functional Coation System Technologies Co., Ltd. with $28,500 thousand, getting the significant infuluence in January 2020.

The Company's financial information for investments accounted for using equity method that are individually insignificant was as follows:

Attributable to the Company: Net income Other comprehensive income Total comprehensive income	2020 $ 131,729 133,224 $ 264,953	2019 109,713 (121,498) (11,785)

To assess the impairment of Grand Cathay Venture Capital Co., Ltd., an appraisal report issued by an expert had been prepared based on market approach and income approach. In 2019, an reversal of impairment loss amounted to $8,766 thousand was recognized.

None of the investments using equity method of the Company was pledged as collateral as of December 31, 2020 and 2019.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(i) Changes in ownership interests in subsidiaries

In 2020 March and 2020 August, the Company acquired an additional interest in Zung-Fu Co., Ltd. and YSIC Ltd. for $10,327 thousand and $5 thousand in cash, respectively, increasing its ownership from 89.16% and 99.99% to 99.00% and 99.99%, respectively. The Company did not have any transaction with non-controlling interests in 2019.

On June 30, 2019, Lei-Ting Construction Corporation issued new shares to merge with Jing-Shou Engineering Co., Ltd. and Lei-Ting Construction Corporation is the surviving company.

On April 23, 2019, Asia Carbons & Technology Inc. conducted a capital reduction of $450,000 thousand to make up for the deficit, and the company conducted a capital increase by cash of $100,097 thousand on May 28, 2019. The Company reduced the capital surplus of $15,062 thousand due to the aforementioned transactions.

(j) Loss control of subsidiaries

In December 2019, and May 2020, the Company obtained an approval of the Board of Directors to sell all the shares of Lei-Ting Construction Corporation and Zung-Fu Co., Ltd.. The transactions were completed on May 6 and June 30, 2020, at the total price of $193,559 thousand, and the gain on disposal of investments amounting to $71,578 thousand was included in other gains and losses of the comprehensive income statements. Meanwhile, the unrealized gains of $2,756 thousand from investments measured at fair value through other comprehensive income as well as exchange difference of $1,260 thousand previously recognized in other comprehensive income, had been reclassified to retain earnings and profit or loss, respectively.

Gvision-USA, Inc. conducted a capital injection in the form of cash worth 50,000 shares on May 6, 2019. The Company did not participate in the capital increase proportionally, and its shares of the company dropped to 44.44%. After the re-election of the Directors and Supervisors on May 21, 2019, the Company did not obtain more than half of the vote in the Board of Directors, so it lost control of the company. The Company reduced capital surplus by $8,499 thousand for the decrease of its ownership interest in Gvision-USA, Inc.. The exchange differences recognized under other comprehensive income were reclassified proportionally to profit and loss by $819 thousand.

The carrying amounts of assets and liabilities of Gvision-USA, Inc. on May 21, 2019 were as follows:

follows:
Cash and cash equivalents	$	23,280
Inventories		23,978
Accounts receivable, net		28,102
Prepayments		17,675
Property, plant and equipment		214
Right-of-use assets		6,559
Refundable deposits		588
Accounts payable and other payables		(3,274)
Lease liabilities		(6,679)
Guarantee deposits received		(1,129)
Carrying amount of net assets	$	89,314

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

In August 2019, the Company's board of directors approved to sell all of its shares in Taiwan United Medical Inc.. The transactions were completed on October 9, 2019 with a consideration of $68,550 thousand, and the gain on disposal of investments amounted to $3,057 thousand was recognized.

(k) Property, plant and equipment

The movements of the property, plant and equipment of the Company were as follows:

Cost: Balance as of January 1, 2020 Additions Disposals Reclassification Balance as of December 31, 2020 Balance as of January 1, 2019 Additions Disposals Reclassification Balance as of December 31, 2019 Accumulated depreciation: Balance as of January 1, 2020 Depreciation Disposals Balance as of December 31, 2020 Balance as of January 1, 2019 Depreciation Disposals Balance as of December 31, 2019 Carrying value: Balance as of December 31, 2020 Balance as of January 1, 2019 Balance as of December 31, 2019		Land $ 812,199 - - - $ 812,199 $ 812,199 - - - $ 812,199 $ - - - $ - $ - - - $ - $ 812,199 $ 812,199 $ 812,199	Land improvements 8,462 - - - 8,462 8,462 - - - 8,462 8,362 21 - 8,383 8,341 21 - 8,362 79 121 100	Buildings and structures 226,405 - - - 226,405 217,755 - - 8,650 226,405 100,812 6,092 - 106,904 94,589 6,223 - 100,812 119,501 123,166 125,593	Machinery and equipment 7,243,199 2,970 (91,661) 126,122 7,280,630 7,119,129 - (37,775) 161,845 7,243,199 5,747,296 174,748 (91,661) 5,830,383 5,627,842 157,229 (37,775) 5,747,296 1,450,247 1,491,287 1,495,903	Transportation equipment 8,261 - - - 8,261 9,482 - (1,221) - 8,261 7,864 119 - 7,983 8,711 179 (1,026) 7,864 278 771 397	Leased assets - - - - - 24,440 - (24,440) - - - - - - 2,062 2,633 (4,695) - - 22,378 -	Other equipment 491,740 148 (6,880) 26,707 511,715 492,248 - (24,160) 23,652 491,740 321,751 30,586 (6,880) 345,457 302,300 33,251 (13,800) 321,751 166,258 189,948 169,989	Construction in progress 89,485 290,317 - (152,829) 226,973 27,256 254,791 - (192,562) 89,485 - - - - - - - - 226,973 27,256 89,485	Total 8,879,751 293,435 (98,541) -

										9,074,645
										8,710,971 254,791 (87,596) 1,585
										8,879,751
										6,186,085 211,566 (98,541)
										6,299,110
										6,043,845 199,536 (57,296)
										6,186,085
										2,775,535
										2,667,126
										2,693,666

As of December 31, 2020 and 2019, the property, plant and equipment of the Company had been pledged as collateral for loans; please refer to note 8.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION

Notes to the Parent Company Only Financial Statements

(l) Right-of-use assets

The cost and accumulated depreciation of leased land, buildings and structures, and transportation equipment of the Company were as follows:

Cost: Balance as of January 1, 2020 Additions Lease modification Balance as of December 31, 2020 Balance as of January 1, 2019 after adjustments Additions Lease modification Balance as of December 31, 2019 Accumulated depreciation: Balance as of January 1, 2020 Depreciation Lease modification Balance as of December 31, 2020 Depreciation Lease modification Balance as of December 31, 2019 Carrying amount: Balance as of December 31, 2020 Balance January 1, 2019 after adjustments Balance as of December 31, 2020	Land $ 542 - (155) $ 387 $ 542 - - $ 542 $ 224 129 - $ 353 224 - $ 224 $ 34 $ 542 $ 318	Buildings and structures 822 503 (822) 503 50,413 - (49,591) 822 580 409 (822) 167 7,873 (7,293) 580 336 50,413 242	Transportation equipment 10,877 423 (1,731) 9,569 4,067 5,434 1,376 10,877 2,665 3,280 (1,419) 4,526 2,665 - 2,665 5,043 4,067 8,212	Office equipment 4,814 - - 4,814 - 4,814 - 4,814 241 963 - 1,204 241 - 241 3,610 - 4,573	Total 17,055 926 (2,708)
					15,273
					55,022 10,248 (48,215)
					17,055
					3,710 4,781 (2,241)
					6,250
					11,003 (7,293)
					3,710
					9,023
					55,022
					13,345

(m) Intangible assets

The movements of intangible assets of the Company were as follows:

Technical royalty Cost: Balance as of January 1, 2020 $ 14,623 Disposals - Balance as of December 31, 2020 $ 14,623 Balance as of January 1, 2019 $ 14,623 Acquisition - Balance as of December 31, 2019 $ 14,623	Computer software 6,030 (1,000) 5,030 1,000 5,030 6,030	Total 20,653 (1,000) 19,653 15,623 5,030 20,653

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

Technical royalty Accumulated amortization: Balance as of January 1, 2020 $ 6,499 Amortization 975 Disposals - Balance as of December 31, 2020 $ 7,474 Balance as of January 1, 2019 $ 5,524 Amortization 975 Balance as of December 31, 2019 $ 6,499 Carrying value: Balance as of December 31, 2020 $ 7,149 Balance as of January 1, 2019 $ 9,099 Balance as of December 31, 2019 $ 8,124 Other non-current assets Long-term prepaid expenses	Technical royalty

(n) Other non-current assets

Except catalysts shall be allocated by actual consumption, the rest of prepaid expenses will be expensed on a straight line basis over the economic lives.

(o) Other payables

Accrued payroll Compensation payable to directors Employee bonus payable Compensated absences Utility payable Payables on equipment Dividends payable Other payables－other Total	December 31, 2020 $ 38,357 6,979 5,583 23,264 15,111 65,243 9,787 43,658 $ 207,982	December 31, 2019
		31,236 23,949 23,949 20,000 14,107 24,966 9,870 25,084
		173,161

(p) Lease liabilities

Lease liabilities of the Company were as follows:

Current Non-current	December 31, 2020 $ 4,301 $ 4,542	December 31, 2019 4,851 8,173 (Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

For the maturity analysis, please refer to 6(x).

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets COVID-19-related rent concessions (recognized as other income)	For the year ended December 31, 2020 For the years ended December 31, $ 168 483 $ 424 830 $ 436 428 $ 14 -	For the year ended December 31, 2020 For the years ended December 31, $ 168 483 $ 424 830 $ 436 428 $ 14 -
		483
		830
		428
		-

The amounts recognized in the statement of cash flows was as follows:

Total cash outflow for leases	2020 $ 5,666	2019
		12,824

(q) Employee benefits

(i) Defined benefit plans

Reconciliations of defined benefit obligations at present value and plan assets at fair value are as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2020 $ 252,647 (193,439) $ 59,208	December 31, 2019
		265,784 (201,339)
		64,445

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Labor Pension Fund Supervisory Committee. With regard to the utilization of the funds, minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with interest rates offered by local banks.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

The Company’ s Bank of Taiwan labor pension reserve account balance amounted to $193,439 thousand as of December 31, 2020. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Labor Pension Fund Supervisory Committee.

2) Movements in the present value of defined benefit obligations

The movements in the present value of defined benefit obligations of the Company were as follows:

Defined benefit obligations at January 1 Current service costs and interest cost Remeasurements of defined benefit liabilities －Actuarial gains and losses arising from financial assumptions －Actuarial gains and losses arising from experience adjustments Benefits paid Defined benefit obligations at December 31	2020 $ 265,784 3,782 1,449 (1,374) (16,994) $ 252,647	2019 280,751 4,204 - (3,346) (15,825) 265,784

3) Movements in fair value of plan assets

The movements in the fair value of plan assets of the defined benefit the Company were as follows:

Fair value of plan assets at January 1 Interests income Remeasurements of defined benefit assets －Return on plan assets (excluding interest income) Contributions Benefits paid Fair value of plan assets at December 31	2020 $ 201,339 2,017 6,495 582 (16,994) $ 193,439	2019 206,625 2,070 7,821 648 (15,825) 201,339

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss of the Company were as follows:

Current service costs Net interest on defined benefit liabilities (assets)	2020 $ 1,124 641 $ 1,765	2019
		1,396 738
		2,134

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

Operating cost Operating expenses	2020 $ 1,320 445 1,765	2019
		1,543 591
		2,134

5) Remeasurement values of the defined benefit liabilities recognized in other comprehensive income

The remeasurement values of the defined benefit liabilities recognized in other comprehensive income of the Company were as follows:

Recognized during the period	2020 $ (6,420)	2019 (11,167)

6) Actuarial assumptions

Principal actuarial assumptions at the end of the reporting period were as follows:

Discount rate Future salary increase rate	2020 2019 0.80% 1.00% 1.50% 1.50%

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is $562 thousand.

The weighted-average lifetimetime of the defined benefit plans is 3.8 years.

7) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligations shall be as follows:

December 31, 2020 Discount rate(changed by 0.25%) Future salary increase rate(changed by 1%) December 31, 2019 Discount rate(changed by 0.25%) Future salary increase rate(changed by 1%)	Influence of defined benefit obligation Increase Decrease $ (1,807) 1,853 7,776 (7,192) (2,123) 2,186 9,178 (8,466)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

The calculation and assumptions used in the sensitivity analysis during the year were consistent with prior year.

(ii) Defined benefit plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $8,300 thousand and $8,423 thousand for the years ended December 31, 2020 and 2019, respectively.

(r) Income taxes

The components of income tax in the years ended 2020 and 2019 were as follows:

Current income tax expense: Current period Adjustment for prior periods Deferred income tax expense: Origination and reversal of temporary difference Change in unrecognized decluctible temporary differences Income tax expense	2020 $ 35,975 40,399 76,374 3,217 - 3,217 $ 79,591	2019 150,754 493 151,247 (3,913) (343) (4,256) 146,991

The amount of income tax recognized in other comprehensive income for 2020 and 2019 was as follows:

2020 Items that will not be reclassified subsequently to profit or loss: Remeasurement from defined benefit plans $ (1,284)	2019 (2,233)

(Continued)

TAIWAN STYRENE MONOMER CORPORATION

Notes to the Parent Company Only Financial Statements

Reconciliation of income tax and profit before tax for 2020 and 2019 is as follows:

Profit before tax Income tax using the Company’s domestic tax rate Investment tax credit Non-deductible expenses Tax-exempt income Investment loss Change in unrecognized temporary differences Adjustment for prior periods Total	2020 $ 367,107 $ 73,421 (795) 13,181 (3,328) (43,287) - 40,399 $ 79,591	2019 1,029,056 205,811 - 22,030 (558) (80,442) (343) 493 146,991

(iii) Deferred tax assets and liabilities

1) Recognized deferred tax assets and liabilities

Movements of recognized deferred tax assets and liabilities for the years ended December 31, 2020 and 2019 were as follows:

Deferred Tax Liabilities:

Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020 Balance at Jan 1, 2019 Recognized in profit or loss Balance at December 31, 2019)	Land value increment tax $ 173,509 - $ 173,509 $ 173,509 - $ 173,509	Other 1,145 (583) 562 - 1,145 1,145	Total 174,654 (583) 174,071 173,509 1,145 174,654

Deferred Tax Assets:

Decline in Value of Inventories Balance at January 1, 2020 $ 4,901 Recognized in profit or loss (4,751) Recognized in other comprehensive income - Balance at December 31, 2020 $ 150 Balance at January 1, 2019 $ 732 Recognized in profit or loss 4,169 Recognized in other comprehensive income - Balance at December 31, 2019 $ 4,901	Investments accounted for using the equity method - - - - 3,003 (3,003) - -	Defined benefit pension plans 12,889 236 (1,284) 11,841 14,825 297 (2,233) 12,889	Accumulated compensated absences 3,938 715 - 4,653 - 3,938 - 3,938	Total 21,728 (3,800) (1,284) 16,644 18,560 5,401 (2,233) 21,728

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

The Company's income tax return for the year 2018 had been examined by the tax authorities.

(s) Capital and other equity

(i) Ordinary shares

As of December 31, 2020 and 2019, the number of authorized ordinary shares were $6,750,000 thousand shares with par value of $10 per share. As of December 31, 2020 and 2019, of 527,870 thousand shares were issued. All issued shares were paid up upon issuance.

(ii) Capital surplus

The balances of capital surplus of the Company were as follows:

Difference arising from subsidiary's share price and its carrying value Changes in ownership interests in subsidiaries Changes in equity of investments in associates using equity method Total	December 31, 2020 $ 8,953 25,310 13,961 $ 48,224	December 31, 2019
		8,953 22,118 11,347
		42,418

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(iii) Retained earnings

The Company's Article of Incorporation stipulates that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

In general, cash dividends shall not be less than 30% of total dividends. However, based on the need to respond to changes in the industry, major investment plans and improve the financial structure, or in the case of sudden major capital needs, the cash dividend payout rate could be adjusted to 10% to 30%. If the cash dividend is less than $0.1 per share, it will not be issued, and the stock dividend will be paid instead.

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

2) Special reserve

In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

3) Earnings distribution

On May 27, 2020 and June 28, 2019, the shareholders’ meetings resolved to distribute the 2019 and 2018 earnings. These earnings were appropriated as follows:

Dividends distributed to ordinary shareholders: Cash	2019 $ 526,830	2018
		1,055,740

(iv) Other equity

Changes of other equity of the Company were as follows:

Balance as of January 1, 2020 Exchange differences on foreign operations Exchange differences on subsidiaries, associates and joint ventures accounted for using equity method Unrealized gains from financial assets measured at fair value through other comprehensive income Unrealized gains from financial assets measured at fair value through other comprehensive income, subsidiaries, associates and joint ventures accounted for using equity method Changes in ownership interests in associates Changes in ownership interests in subsidiaries Disposal of subsidiaries Balance as of December 31, 2020	Exchange differences on translation of foreign financial statements $ (10,913) (1,813) (12,930) - - (185) 356 (1,260) $ (26,745)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (570,336) - - 68,671 426,182 272,934 513 (2,756) 195,208	Total (581,249) (1,813) (12,930) 68,671 426,182 272,749 869 (4,016) 168,463

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

Balance as of January 1, 2019 Exchange differences on foreign operations Exchange differences on subsidiaries, associates and joint ventures accounted for using equity method Unrealized losses from financial assets measured at fair value through other comprehensive income Unrealized gains from financial assets measured at fair value through other comprehensive income Disposal of investments accounted for using equity method Changes in ownership interests in subsidiaries Cahnges in ownership interests in associates Cumulative gains reclassified to retained earnings on disposal of investments in equity instruments designated at fair value through other comprehensive income Balance as of Decemer 31, 2019	Exchange differences on translation of foreign financial statements $ (2,298) (602) (7,071) - - - (819) (123) - $ (10,913)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (419,559) - - (7,872) (136,129) 27,278 - 13,110 (47,164) (570,336)	Total (421,857) (602) (7,071) (7,872) (136,129) 27,278 (819) 12,987 (47,164) (581,249)

(v) Treasury stock

For the year ended December 31, 2020, in accordance with the requirements under section 28(2) of the Securities and Exchange Act, the Company repurchased 1,040 thousand shares in order to transfer shares to employees. As of December 31, 2020, total of 1,040 thousnad shares were not yet cancelled.

(t) Earning per share

The Company's basic earnings per share and diluted earnings per share were calculated as follows:

(i) Basic earnings per share

Profit attributable to the Company Weighted-average number of ordinary shares outstanding Earnings per share (NTD)	2020 $ 287,516 527,115 $ 0.55	2019
		882,065
		527,870
		1.67

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(ii) Diluted earnings per share Profit attributable to the Company(diluted) Weighted-average number of ordinary shares outstanding Effect of dilutive potential ordinary shares Employee remuneration in stock Weighted-average number of ordinary shares outstanding (diluted) Diluted earnings per share (NTD) (u) Revenue from contracts with customers (i) Disaggregation of revenue Primary geographical markets: Asia America Others Major products/services lines: Commodity sales revenue Other operating revenue (ii) Contract balances December 31, 2020 Contract liabilities-unearned sales revenue $ 7,829	(ii) Diluted earnings per share Profit attributable to the Company(diluted) Weighted-average number of ordinary shares outstanding Effect of dilutive potential ordinary shares Employee remuneration in stock Weighted-average number of ordinary shares outstanding (diluted) Diluted earnings per share (NTD) (u) Revenue from contracts with customers (i) Disaggregation of revenue Primary geographical markets: Asia America Others Major products/services lines: Commodity sales revenue Other operating revenue (ii) Contract balances December 31, 2020 Contract liabilities-unearned sales revenue $ 7,829	2020 $ 287,516 527,115 555 527,670 $ 0.54 2020 $ 7,856,041 26,834 17,010 $ 7,899,885 $ 7,899,885 - $ 7,899,885 December 31, 2019 7,829	2019
			882,065
			527,870 1,807
			529,677
			1.67
			2019
			11,645,136 47,142 25,616
			11,717,894
			11,696,449 21,445
			11,717,894
			January 1, 2019
	$ 7,829		97,508

For details on accounts receivable and allowance for impairment, please refer to note 6(c).

The major change in the balance of contract assets and contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(v) Non-operating income and expenses

(i) Other income

Details of other income of the Company were as follows:

Rent income Dividend income Government grants Others Total (ii) Other gains and losses Foreign exchange gains Gains on disposals of non-current assets (or disposal groups) held for sale Gains on disposals of investments Gains (losses) on financial assets at fair value through profit or loss Losses on disposals of property, plant and equipment Reversal of impairment loss Gain on lease modification Others Total (iii) Finance costs Interest expense	2020 $ 76 4,441 12,200 22,904 $ 39,621 2020 $ 6,940 71,578 1,445 14,849 - (84) 2 (112) $ 94,618 2020 $ 168	2019 1,684 2,791 - 10,788 15,263 2019 5,109 3,057 3,624 7,373 (26,999) 8,622 167 (97) 856 2019 977

(w) Employee compensation and directors and supervisors' remuneration

According to the Article of Incorporation, once the Company has annual profit, it should appropriate 1%~5% of the profit to its employees and 2.5% or less to its directors and supervisors as remuneration (since January 31, 2019, the Audit Committee has been set up to replace the supervisors' authority). However, if the Company still has accumulated deficit, the profit should be reserved to offset the deficit.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

For the years ended December 31, 2020 and 2019, the renumerations to employees amounted to $5,583 thousand and $23,949 thousand, respectively, and the remuneration to directors amounted to $6,979 thousand and $23,949 thousand, respectively. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees and directors of each period, multiplied by the percentage of remuneration to employees and directors as specified in the Company's articles. These remunerations were expensed under operating costs or operating expenses during 2020 and 2019. Related information would be available at the Market Observation Post System website. If there are any subsequent adjustments to the actual remuneration amounts, the adjustment will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year. The differences between the amount as stated before and the actual distribution to employees and directors for year 2019 were $(2,410) thousand and $2,975 thousand, respectively, which already recognized- in profit or loss in is 2020.

(x) Financial instruments
(i) Credit risk
- 1) Credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

As of December 31, 2020 and 2019, the Company reviewed the concentrations of credit risk arising from the major top ten customers, and it was 96% and 84% of the total accounts receivable, respectively. The concentrations of credit risk of the remaining accounts receivable is relatively small.

3) Credit risk of receivables

For credit risk exposure of note and trade receivables, please refer to note 6(c). Other financial assets at amortized cost include time deposits and other receivables, etc. The allowance for the receivables is measured by lifetime expected credit losses. The remaining financial assets are measured by 12-month expected credit losses.

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments.

December 31, 2020 Non-derivative financial liabilities Accounts payable Lease liabilities	Carrying amount		Contractual cash flows		Within 1 year		1-2 years		2-5 years	Over 5 years
	$ 975,649 8,843 $ 984,492		975,649 9,014		975,649 4,405		- 3,041		- 1,568 1,568	- -
			984,663		980,054		3,041			-

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

December 31, 2019 Non-derivative financial liabilities Accounts payable Lease liabilities	Carrying amount		Contractual cash flows		Within 1 year		1-2 years		2-5 years	Over 5 years
	$ 1,260,834 13,024 $ 1,273,858		1,260,834 13,346		1,260,834 5,010		- 3,920		- 4,416 4,416	- -
			1,274,180		1,265,844		3,920			-

The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Market risk

1) Currency risk

The Company’s significant exposure to foreign currency risk was as follows:

Financial assets Monetary items USD Financial liabilities Monetary items USD	December 31, 2020 Foreign currency Exchange rate NTD $ 6,177 28.480 175,927 11,385 28.480 324,236	December 31, 2020 Foreign currency Exchange rate NTD $ 6,177 28.480 175,927 11,385 28.480 324,236	December 31, 2019	December 31, 2019
	Foreign currency $ 6,177 11,385	Exchange rate 28.480 28.480	Foreign currency 2,662 14,685	Exchange rate NTD 29.980 79,807 29.980 440,256

The Company's exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, accounts payable and other payables that are denominated in foreign currency. A strengthening (weakening) of 1% of the NTD against the USD as at December 31, 2020 and 2019, for the years ended December 31, 2020 and 2019, respectively, would have increased (decreased) net profit before tax by $1,483 thousand and $3,604 thousand. The analysis is performed on the same basis.

For years 2020 and 2019, foreign exchange gain (loss) (including realized and unrealized portions) amounted to $6,940 thousand and $5,109 thousand, respectively.

2) Interest rate risk

Please refer to the notes on liquidity risk management and interest rate exposure of the Company's financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding through the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to management internally, which also represents the management's assessment of the reasonably possible interest rate change.

There is no financial liabilities at variable rates as of December 31, 2020 and 2019.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

3) Other market price risk

If the securities price at the reporting date changes (the analysis is performed on the same basis and all other variable factors remaining constant), the effect for comprehensive income is illustrated below:

Prices of securities at the reporting date	2020	2019 Other comprehensive income after tax Net income 3,962 391 (3,962) (391)	2019 Other comprehensive income after tax Net income 3,962 391 (3,962) (391)
	Other comprehensive income after tax $ 7,564 $ (7,564)	Other comprehensive income after tax 3,962 (3,962)
Increasing 1% Decreasing 1%
			(391)

(iv) Fair value information
1) Types and fair value of financial instruments

Financial assets measured at fair value through profit or loss and financial assets at fair value through other comprehensive income are measured at fair value on the basis of repeatability. The carrying amount and fair value of the financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

	December 31, 2020	December 31, 2020	December 31, 2020
Book value $ 45,360 756,428 522,361 870,546 4,716 3,382 1,401,005 $ 2,202,793		Fair value
	Level 1 45,360 - - - - - - 45,360	Level 2 - - - - - - - -	Level 3 - 756,428 - - - - - 756,428	Total
				45,360 756,428 - - - -
				-
				801,788

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020
Book value $ 783,481 192,168 8,843 $ 984,492		Fair value
	Level 1 Level 2 Level 3 - - - - - - - - - - - - December 31, 2019			Total
				- - -
				-

Book value $ 39,100 396,161 1,211,902 816,032 964 3,873 2,032,771 $ 2,468,032 $ 1,089,348 171,486 13,024 $ 1,273,858		Fair value
	Level 1 39,100 - - - - - - 39,100 - - - -	Level 2 - - - - - - - - - - - -	Level 3 - 396,161 - - - - - 396,161 - - - -	Total
				39,100 396,161 - - - -
				-
				435,261
				- - -
				-

2) Valuation techniques for financial instruments measured at fair value

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. Whether transactions are taking place ‘regularly’ is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using valuation technique that can be extrapolated from either similar financial instruments or discounted cash flow method or other valuation techniques, including models, is calculated based on available market data at the reporting date. For example, yield curve of Taipei Exchange and average interest rate of commercial paper quoted by Reuters.

3) Transfers between Level 1 and Level 2

There is no transfer for the years ended December 31, 2020 and 2019.

4) Reconciliation of Level 3 fair values

Opening balance, January 1, 2020 Total gains and losses recognized Other comprehensive income Reclassification Purchase Capital reduction by cash Ending Balance, December 31, 2020 Opening balance, January 1, 2019 Total gains and losses recognized Other comprehensive income Reclassification Capital reduction by cash Disposal/redemption Ending Balance, December 31, 2019	Fair value through other comprehensive income
	Unquoted equity instruments $ 396,161 68,671 269,121 32,278 (9,803) $ 756,428 $ 181,577 (7,872) 228,424 (3,475) (2,493) $ 396,161

Above-mentioned total gains and losses were included in unrealized gains and losses from financial assets at fair value through other comprehensive income. Among those related to the assets still held on December 31, 2020 and 2019 were as follows:

Total gains and losses recognized: In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”	2020 2019 68,671 (7,872) (Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

In other comprehensive income, and presented in “ unrealized gains and losses from financial assets at fair value through other comprehensive income”

5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Company’ s financial instruments that use Level 3 inputs to measure fair value include financial assets measured at fair value through profit or loss-equity investments.

The Company’ s equity investments without an active market which are classified as Level 3 have numerous unobservable inputs. The significant unobservable inputs of equity instrument investments are not correlated to each other.

Quantified information of significant unobservable inputs was as follows:

Item	Valuation technique Market approach (Comparable listed company method and comparable transaction method)	Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement ‧ Price to book ratio (0.66~1.35 and 0.49~1.41 as of December 31, 2020 and 2019) ‧ Lack of market liquidity discount (10%~30% December 31, 2020 and 2019) ‧ The fair value would increase if price to book ratio increase ‧ The fair value would decrease if lack of market liquidity discount increase
Financial assets at fair value through other comprehensive income - equity investments without an active market

6) Fair value measurements in Level 3– sensitivity analysis of reasonably possible alternative assumptions

The fair value measurement of financial instruments by the Company is reasonable, but the use of different evaluation models or evaluation parameters may result in different evaluation results. For financial instruments classified as Level 3, changing the price to book ratio or liquidity discount would have the following effects on other comprehensive income:

December 31, 2020 Financial assets at fair value through other comprehensive income December 31, 2019 Financial assets at fair value through other comprehensive income	Inputs Price to book ratio Liquidity discount Price to book ratio Liquidity discount	Increase/ Decrease 10% 10% 10% 10%	Other comprehensive income Favorable Unfavorable 75,643 (75,643) 13,899 (13,899) 959 (959) 1,098 (1,098)

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(y) Financial risk management

(i) Overview

The Company have exposures to the following risks from its financial instruments:

1) credit risk
2) liquidity risk
3) market risk

The following likewise discusses the Company’ s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying consolidated financial statements.

(ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The financial department of the Company provides services and coordinates the operation of the financial market. And the important activities are subject to the Board of Directors' approval. The Company must be abided by the financial risk management and operation. Internal Audit undertakes reviews of risk management controls and procedures, the results of which are reported to the Board of Directors regularly.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investments in debt securities.

1) Accounts receivable and other receivable

The financial department has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’ s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, when available, and bank references. Purchase limits are established for each customer and represent the maximum open amount without requiring approval from the financial department; these limits are reviewed quarterly. Customers that fail to meet the Company’ s benchmark creditworthiness may transact with the Company only on a prepayment basis.

The customers of the Company covered many types and regions. In order to reduce credit risk, the Company review financial status and recoverable of account receivable each customer regularly and accounted loss allowance.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

The Company has allowance for impairment losses account to reflect the estimated loss of account receivable and other receivables. The main components of the allowance account include specific loss components related to individual significant risks, and combined loss components established for similar asset groups that have occurred but have not yet been identified. Portfolio loss allowance accounts are determined based on historical payment statistics for similar financial assets.

2) Investments

The exposure to credit risk for the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Company’ s finance department. The Company only deals with financial institutions with good credit rating. The Company does not concentrate on specific counterparty hence there is no significant credit risk arising therefrom.

(iv) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’ s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’ s reputation.

The Company manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Company’ s management supervises the banking facilities and ensures compliance with the terms of loan agreements.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Company’ s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Company is exposed to currency risk on sales and purchases are denominated in a currency other than the respective functional currenciy of the Company. The currency used in these transactions is USD. The Company adopts a natural hedging strategy. When the net assets and liabilities imbalances occur in the short-term, the Company buys or sells foreign currencies to maintain exposures at an acceptable level.

2) Interest rate risk

Interest rate risk is the risk of changes in the fair value of financial instruments caused by changes in market interest rates or the risk of changes in cash flows of financial instruments caused by changes in market interest rates. The interest rate risk of the financial assets and liabilities is described in the note of liquidity risk management.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

3) Other market price risk

The Company is exposed to equity price risk due to the investments in equity securities. The Company actively monitors the performance of this investment portfolios using fair value basis. This is a strategic investment and is not held for trading. The Company does not actively trade in these investments.

(z) Capital management

The Company plan the capital which need in the future (including research and development costs and repayment) based on the characteristics of operating and development, and considering factors such as changes in the external environment to protect sustainable development of the Company, give back to shareowners and maintain the best structure to enhance value. Overall, the Company adopts a prudent risk management strategy.

(aa) Investing and financing activities not affecting current cash flows

There is no non-cash investing activities for the years ended December 31, 2020 and 2019.

Reconciliation of liabilities arising from financing activities in 2020 and 2019 were as follows:

Lease liabilities Lease liabilities	January 1, 2020 $ 13,024 January 1, 2019 $ 55,022	Cash flows (4,638) Cash flows (11,083)	Non-cash changes Lease modification Lease additions (469) 926 Non-cash changes Lease modification Lease additions (41,089) 10,174	December 31, 2020 8,843
				December 31, 2020 13,024
			Lease modification (41,089)

(7) Related-party transactions

(a) Names and relationship with related parties

Name of related party

YSIC Ltd.

Yuan-Shin Materials Technology Co., Ltd. Yangmingshan Tien Lai Resort & SPA Asia Carbons & Technology Inc. Gvision-USA, Inc. Wonderland Enterprise Co., Ltd. Yuan-Yao Development Co., Ltd Globaltop Technology Inc. Lei-Ting Construction Corporation Zung-Fu Co., Ltd.

OFCO Industrial Corporation

Relationship with the Company

Subsidiary Subsidiary Subsidiary Subsidiary

An associate (A subsidiary before May 21, 2019) An associate

An associate An associate of a subsidiary

A subidiary before May 6, 2020

A substantive related party (A subsidiary before June 30, 2020)

A substantive related party

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(b) Significant transactions with related parties
(i) Receivables from related parties

The amounts of receivables from related parties were as follows:

Accounts	Types of related parties	December 31, 2020 $ 840	December 31, 2019
Other receivables	Asia Carbons & Technology Inc.		-

(ii) Rental income

Asia Carbons & Technology Inc. Other subsidiary Other related parties		For the years ended December 31	For the years ended December 31
			2019
			1,636 48 -
			1,684

(iii) Operating expense

The Company engaged a related party in a R&D program of boron nitride. The amounts of expenses were as follows:

Asia Carbons & Technology Inc.

2020 $ -	2019
	426

(iv) Property transactions
1) Disposals of property, plant and equipment

The disposals of property, plant and equipment to related parities are summarized as follow:

Related parties	2020 Disposal price Gain (loss) from disposal $ - -	2019	2019
	Disposal price $ -	Disposal price 3,301	Gain (loss) from disposal
Globaltop Technology Inc.			892

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

2) Acquisition of Financial assets

The acquisition of financial assets from related parties are summarized as follows:

Related parties Zung-Fu Co., Ltd. Zung-Fa Co., Ltd. Zung-Fu Co., Ltd. Lei-Ting Construction Corporation	Account Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Investment accounted for using equity method		2020
		Number of shares 591,945 760,000 589,000 2,461,351

3) Disposals of securities

The disposals of financial assets to related parties are summarized as follows:


Number of shares Investees Disposal price 24,751 Zung-Fu Co., Ltd. $ 150,000 - - - - $ 150,000	Disposal price - 41,568 2,493 44,061	Gain (loss) on disposal
		- 2,682 -
		2,682

Short-term employee benefits Post-employment benefits	2020 $ 21,875 492 $ 22,367	2019
		23,383 695
		24,078

Short-term employee benefits include the estimated employee compensation. Please refer to note 6(w) for the estimated method.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(8) Pledged assets:None

(9) Commitments and contingencies:

(a) Letter of credit issued but not expired

Letter of credit outstanding for the import of raw materials	December 31, 2020 December 31, 2019 $ 867,570 969,835 (including USD161 thousand and EUR1,570 thousand) (including USD807 thousand and EUR317 thousand)

(10) Losses due to major disasters: None.

(11) Subsequent events: None.

(12) Other:

(a) A summary of employee benefits, depreciation, and amortization, by function, is as follows:

By Function By item	2020	2020		2019	2019	2019
	Operating cost	Operating expense	Total	Operating cost	Operating expense	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	$ 172,394 13,459 7,955 - 7,489 213,474 2,528	48,887 3,701 2,110 11,254 9,891 2,873 -	221,281 17,160 10,065 11,254 17,380 216,347 2,528	206,909 15,231 8,128 - 7,622 191,812 2,031	65,455 1,633 2,429 25,712 13,955 18,727 167	272,364 16,864 10,557 25,712 21,577 210,539 2,198

The information about employees and salary of the Company for the years ended December 31, 2020 and 2019 are as bellow:

Employees Non-employee directors Average employee benefits Average salary Average salary adjustment Remuneration of supervisors

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

Information regarding the Company's remuneration policy (including directors, managers, employees) is shown below:

An Audit Committee which is composed of all independent directors is set up according to Security and Exchange Act and replaces the functions of supervisors.

Remuneration policies for Directors and Managers are described as follows:

(i) The policies, standards and portfolio of remunerating Directors, process of formulating the remuneration, and the connection between operating performance and future risks:
1) Remuneration policies, standards and portfolio

Director's (including independent director) remuneration and compensation are handled according to the Articles of Incorporation and "Director's transportation expense/ attendance fee/ remuneration standards" approved by the Board of Directors.

a) Directors compensation: Depending on their level of participating in the Company's operation and the value of contribution, compensation is determined based on the general payment level in the same industry and should take into account if the Board members attend Board meetings in person, hold a position in Remuneration Committee, Audit Committee or other functional committees, and the degree of risks they take.
b) Remuneration for Directors: When the Company profits, remunerates is paid based on rate stated in the Article of Incorporation.
2) Process of formulating the remuneration
a) As required by the Article of Incorporation, the remuneration should not exceed 2.5% of the Company’s profit. If the Company still has accumulated deficit, the profit should be reserved to offset the deficit.
b) Fixed compensation for directors is handled according to "Director's transportation expense/ attendance fee/ remuneration standards".
3) The connection between operating performance and future risks

According to the Article of Incorporation, Directors’ compensation is determined based on the level of profit of the Company and depend on the value of contribution to the Company's operation, which can be evaluated by "performance review policy of the Board of Directors" .

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(ii) The policies, standards and portfolio of remunerating managers and employees, process of formulating the remuneration, and the connection between operating performance and future risks:
1) Remuneration policies, standards and portfolio

Salary is formed by monthly wage, year-end bonus, and employee remuneration. The amount of year-end bonus and employee remuneration depend on their contribution to the Company's operation and their performance evaluation. Managers' year-end bonus is proposed by Remuneration Committee and approved by the Board of Directors.

2) Process of formulating the remuneration
a) As required by the Article of Incorporation, the remuneration should appropriate 1% to 5% of the Company's profit. If the Company still has accumulated deficit, the profit should be reserved to offset the deficit.
b) The amount of year-end bonus is based on yearly operational performance.
3) The connection between operating performance and future risks

According to the Article of Incorporation, remuneration is based on the profit of the Company. The Company's Remuneration Committee evaluates the rationality of managers remuneration on a regular basis, and will report to the Board of Directors

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company for the year ended December 31, 2020:

(i) Lending to other parties: None.
(ii) Guarantees and endorsements for other parties: None.
(iii) Information regarding securities held at the reporting day (excluding investment in subsidiaries, associates and joint ventures):

(In Thousand of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with the security issuer	Account	Ending balance	Ending balance	Ending balance	Ending balance
				Shares	Carrying value	Percentage of ownership (%)	Fair value
The Company	Test Research Inc.	-	Current financial assets at fair value through profit or loss	500,000	28,900	% 0.21	28,900
The Company	Gloria Material Technology Corp.	-	Current financial assets at fair value through profit or loss	957,000	16,460	% 0.21	16,460
The Company	Universal Venture Capital Investment Corporation	-	Non-current investment in equity instrument at FVOCI	8,400,000	53,066	% 6.98	53,066
The Company	Euroc Venture Capital Corp.	-	Non-current investment in equity instrument at FVOCI	145,464	1,385	% 2.38	1,385
The Company	Euroc III Venture Capical Corp.	-	Non-current investment in equity instrument at FVOCI	155,925	1,733	% 5.00	1,733
The Company	Global Investment Holding Co., Ltd	-	Non-current investment in equity instrument at FVOCI	10,233,608	81,538	% 5.82	81,538
The Company	Faith Alliance Corporation	-	Non-current investment in equity instrument at FVOCI	25,720	69	% 0.06	69
The Company	Multilayer P. C. B.& Assembly Manufacturer	-	Non-current investment in equity instrument at FVOCI	912	9	% 0.01	9
The Company	Leadwell Cnc Machines Mfg,Corp.	-	Non-current investment in equity instrument at FVOCI	37,352	1,160	% 0.06	1,160
The Company	Crownpo Technology Inc.	-	Non-current investment in equity instrument at FVOCI	709	5	% 0.01	5
The Company	Infomedia Inc.	-	Non-current investment in equity instrument at FVOCI	200,000	715	% 0.11	715
The Company	Vxis Technology Corp.	-	Non-current investment in equity instrument at FVOCI	72,480	688	% 0.61	688
The Company	Asia Global Venture Capital II Co., Ltd	-	Non-current investment in equity instrument at FVOCI	770,000	23,464	% 10.00	23,464
The Company	Shieh-Tai Biochemical Technology Co., Ltd		Non-current investment in equity instrument at FVOCI	120,339	-	% 0.32	-
The Company	Lof Solar Corp.		Non-current investment in equity instrument at FVOCI	2,000,000	-	% 4.48	-
The Company	Yuan-Jie Investment Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	21,000,000	227,430	% 19.09	227,430
The Company	Yu-Jie Investment Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	21,320,000	277,800	% 19.38	277,800
The Company	Deng Yun Co., Ltd		Non-current investment in equity instrument at FVOCI	591,945	66,803	% 3.09	66,803
The Company	Lidien Inc.	-	Non-current investment in equity instrument at FVOCI	760,000	12,981	% 19.00	12,981
The Company	Yu Chie Inc.	-	Non-current investment in equity instrument at FVOCI	589,000	7,582	% 19.00	7,582
YSIC Ltd.	Topco Scientific Co.,Ltd.	-	Current financial assets at fair value through profit or loss	20,000	2,390	% 0.01	2,390
YSIC Ltd.	Merry Electronics Co., Ltd	-	Current financial assets at fair value through profit or loss	10,000	1,465	% -	1,465
YSIC Ltd.	Lintes Technology Co,.Ltd..	-	Current financial assets at fair value through profit or loss	5,000	638	% 0.01	638
YSIC Ltd.	Formosa Plastics Corp	-	Current financial assets at fair value through profit or loss	15,000	1,446	% -	1,446
YSIC Ltd.	Nan Ya Plastics Corporation	-	Current financial assets at fair value through profit or loss	25,000	1,797	% -	1,797

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to Consolidated Financial Statements

Name of holder	Category and name of security	Relationship with the security issuer	Account	Ending balance	Ending balance	Ending balance	Ending balance
				Shares	Carrying value	Percentage of ownership (%)	Fair value
YSIC Ltd.	Zilltek Technology Corp	-	Current financial assets at fair value through profit or loss	5,000	1,055	% 0.01	1,055
YSIC Ltd.	AURAS Technology Co., Ltd.	-	Current financial assets at fair value through profit or loss	15,000	3,210	% 0.02	3,210
YSIC Ltd.	Taita Chemical Co., Ltd.	-	Current financial assets at fair value through profit or loss	30,000	1,168	% 0.01	1,168
YSIC Ltd.	Unimicron Technology Corp.	-	Current financial assets at fair value through profit or loss	10,000	874	% -	874
YSIC Ltd.	Hycon Technology Corporation	-	Current financial assets at fair value through profit or loss	15,000	1,382	% 0.05	1,382
YSIC Ltd.	United Microelectronics Corporation	-	Current financial assets at fair value through profit or loss	50,000	2,357	% -	2,357
YSIC Ltd.	Ardentec Technology Inc.	-	Current financial assets at fair value through profit or loss	30,000	1,160	% 0.01	1,160
YSIC Ltd.	Evergreen Marine Corp.	-	Current financial assets at fair value through profit or loss	100,000	4,070	% -	4,070
YSIC Ltd.	Taiwan Semiconductor Manufacturing Company Limited	-	Current financial assets at fair value through profit or loss	3,000	1,590	% -	1,590
YSIC Ltd.	Winbond Electronics Corporation	-	Current financial assets at fair value through profit or loss	20,000	581	% -	581
YSIC Ltd.	Vanguard International Semiconductor Corporation	-	Current financial assets at fair value through profit or loss	10,000	1,160	% -	1,160
YSIC Ltd.	Delta Electronics, Inc.	-	Current financial assets at fair value through profit or loss	4,000	1,052	% -	1,052
YSIC Ltd.	Powerchip Semiconductor Manufacturing Corporation	-	Current financial assets at fair value through profit or loss	20,000	992	% -	992
YSIC Ltd.	AMPACS Corporation.	-	Current financial assets at fair value through profit or loss	3,000	390	% -	390
YSIC Ltd.	Pan Jit International Inc.		Current financial assets at fair value through profit or loss	20,000	1,082	% 0.01	1,082
YSIC Ltd.	Gigabyte Technology		Current financial assets at fair value through profit or loss	10,000	778	% -	778
YSIC Ltd.	Wan Hai Lines Limited.		Current financial assets at fair value through profit or loss	10,000	529	% -	529
YSIC Ltd.	Hon Hai Precision Industry Co., Ltd.		Current financial assets at fair value through profit or loss	30,000	2,760	% -	2,760
YSIC Ltd.	UPC Technology Corporation.		Current financial assets at fair value through profit or loss	40,000	768	% -	768
YSIC Ltd.	Leadtrend Technology Corporation.		Current financial assets at fair value through profit or loss	10,000	696	% 0.02	696
YSIC Ltd.	Sinphar Pharmaceutical Co.,Ltd.		Current financial assets at fair value through profit or loss	10,000	309	% 0.01	309
YSIC Ltd.	Sinbon Electronics Co., Ltd.		Current financial assets at fair value through profit or loss	10,000	2,160	% -	2,160
YSIC Ltd.	TA-I Technology Co.,Ltd.		Current financial assets at fair value through profit or loss	10,000	860	% 0.01	860
YSIC Ltd.	Walsin Lihwa Corporation		Current financial assets at fair value through profit or loss	20,000	386	% -	386
YSIC Ltd.	Actron Technology Corporation.		Current financial assets at fair value through profit or loss	10,000	1,190	% 0.01	1,190
YSIC Ltd.	Fittech Co., Ltd.		Current financial assets at fair value through profit or loss	15,000	2,505	% 0.02	2,505
YSIC Ltd.	Shin Kong Chi- Shin Money- Market Fund		Current financial assets at fair value through profit or loss	3,900,000	60,867	% -	60,867
YSIC Ltd.	Cjw International Co., Ltd.		Non-Current financial assets at fair value through profit or loss	676,413	6,933	% 0.65	6,933
YSIC Ltd.	CYCA. International Co., Ltd.		Non-current investment in equity instrument at fair value through profit or loss	200,000	250	% 0.63	250
YSIC Ltd.	Mcm Stamping Co., Ltd.		Non-current investment in equity instrument at FVOCI	72,480	688	% 0.61	688
YSIC Ltd.	Vxis Technology Corp.		Non-current investment in equity instrument at FVOCI	650,000	2,324	% 0.35	2,324

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to Consolidated Financial Statements

Name of holder	Category and name of security	Relationship with the security issuer	Account	Ending balance	Ending balance	Ending balance	Ending balance
				Shares	Carrying value	Percentage of ownership (%)	Fair value
YSIC Ltd.	Infomedia Inc.		Non-current investment in equity instrument at FVOCI	100,000	1,083	% 0.09	1,083
YSIC Ltd.	Yuan-Jie Investment Co., Ltd.		Non-current investment in equity instrument at FVOCI	103,000	1,342	% 0.09	1,342
YSIC Ltd.	Yu-Jet Co., Ltd.		Non-current investment in equity instrument at FVOCI	101,677	-	% -	-
Grand Capital Co., Ltd.	Deng Yun Co., Ltd	-	Non-current investment in equity instrument at FVOCI	3,082,453	347,864	% 16.10	347,864

(iv) Information regarding purchase or sale of securities for the period exceeding NTD300 million or 20% of the Company's paid-in capital: None
(v) Information on acquisition of real estate with purchase amount exceeding NTD300 million or 20% of the Company's paid-in capital: None
(vi) Information regarding receivables from disposal of real estate exceeding NTD300 million or 20% of the Company's paid-in capital: None
(vii) Information regarding related-parties purchases and/or sales exceeding NTD100 million or 20% of the Company's paid-in capital: None
(viii) Information regarding receivables from related-parties exceeding NTD100 million or 20% of the Company's paid-in capital: None
(ix) Information regarding trading in derivative financial instruments: None

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2020 (excluding information on investees in Mainland China):

				(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Name of investor	Name of investee	Location	Main businesses and products	Original investment amount		Balance as of December 31, 2020			Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2020	December 31, 2019	Shares	Percentage of ownership	Carrying value
The Company	Grand Cathay Venture Capital Co., Ltd.	Taiwan	Investment business	400,000	400,000	40,000,000	% 25.00	382,377	129,541	32,385
The Company	Wonderland Enterprise Co.,Ltd.	Taiwan	General investment business	325,230	325,230	29,629,597	% 37.04	744,788	277,131	102,641
The Company	Yu-Jie Investment Co., Ltd.	Taiwan	General investment business	-	223,539	-	% -	-	-	-
The Company	Gvision-USA, Inc.	USA	Sale and distribution of liquid crystal displays	56,266	56,266	666,667	% 44.44	34,112	(2,685)	(1,193)
The Company	Functional Coating System Technologies Co., Ltd.	Taiwan	OEM of Semiconductor and components conformal coating	28,500	-	1,744,186	% 34.88	26,395	(6,034)	(2,104)
The Company	Zung-Fu Co., Ltd.	Taiwan	Building cleaning and maintenance, Sewage treatment, Air conditioning equipment maintenance	-	522,032	-	% -	-	(31,147)	(29,889)	It was a subsidiary before June 30,2020
The Company	YSIC Ltd.	Taiwan	Residential building and industrial plant development rental businesse	1,638,169	1,638,164	103,976,646	% 99.99	977,525	(40,196)	(35,963)	Subsidiary
The Company	Yuan-Shin Materials Technology Corp. Ltd	Taiwan	Basic precision chemicalmaterials and plastic raw material manufacturing	145,900	145,900	5,000,000	% 100.00	42,319	712	712	Subsidiary
The Company	Yangmingshan Tien Lai Resort & SPA	Taiwan	General hotel industry	630,555	630,555	25,865,618	% 65.07	697,258	6,880	2,163	Subsidiary
The Company	Lei-Ting Construction Corporation	Taiwan	Operating civil and construction engineering business	-	71,383	-	% -	-	(3,935)	(3,296)	It was a subsidiary before May 6,2020
The Company	Asia Carbon & Technology Inc.	Taiwan	Electronic component manufacturing	291,064	291,064	9,866,389	% 98.58	1,495	(3,863)	(8,714)	Subsidiary
Zung-Fu Co., Ltd.	Grand Captial Co., Ltd.	Seychelles	General investment business	-	2,500	-	% -	-	(8)	(2)	subsidiary
Zung-Fu Co., Ltd.	Globaltop Technology Inc.	Taiwan	GPS Module, GPS Handheld System and GPS Antenna.	-	20,000	-	% -	-	(34,782)	4
YSIC Ltd.	Kun Shan Internationl Ltd	Seychelles	General investment business	122,572	122,572	3,702,718	% 62.03	135,989	3,710	2,301	Subsidiary
YSIC Ltd.	Grand Captial Co., Ltd.	Seychelles	General investment business	90,182	88,090	2,698,002	% 100.00	349,966	70	72	Subsidiary
YSIC Ltd..	Yangmingshan Tien Lai Resort & SPA	Taiwan	General hotel industry	110,836	110,836	4,807,774	% 12.10	119,198	6,880	473	Subsidiary
YSIC Ltd.	Globaltop Technology Inc.	Taiwan	GPS Module, GPS Handheld System and GPS Antenna.	162,643	155,449	7,962,803	% 31.85	54,505	(40,618)	(13,897)
YSIC Ltd.	Lei-Ting Construction Corporation	Taiwan	Operating civil andconstruction engineering business	-	99,380	-	% -	-	(3,935)	-	It was a subsidiary before May 6,2020
YSIC Ltd.	Tien Lai Co., Ltd.	Taiwan	Piping engineering	5,000	5,000	500,000	% 50.00	1,715	(660)	(330)	Subsidiary

(Continued)

TAIWAN STYRENE MONOMER CORPORATION Notes to Consolidated Financial Statements

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2020	Balance as of December 31, 2020	Balance as of December 31, 2020	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2020	December 31, 2019	Shares	Percentage of ownership	Carrying value
YSIC Ltd.	Yu-Jie Investment Co., Ltd.	Taiwan	General investment business	-	1,000	-	% -	-	-	-
Lei-Ting Construction Corporation	Zung-Fu Co., Ltd.	Taiwan	Building cleaning andmaintenance, Sewagetreatment, Air conditioning equipment maintenance	-	59,670	-	% -	-	(31,147)	(948)	It was a subsidiary before May 6,2020

(c) Information on investment in mainland China:
(i) The names of investees in Mainland China, the main businesses and products, and other information:

					(In Thousand of New Taiwan Dollars)	(In Thousand of New Taiwan Dollars)	(In Thousand of New Taiwan Dollars)	(In Thousand of New Taiwan Dollars)	(In Thousand of New Taiwan Dollars)	(In Thousand of New Taiwan Dollars)	(In Thousand of New Taiwan Dollars)	(In Thousand of New Taiwan Dollars)
Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2020	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2020	Net income (losses) of the investee (Note 2)	Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Kun Shan Yu-Fu Technology Education Consuting Co., Ltd.	Educational consulting, information operation consulting, software and data storage consultation	98,781 (USD 3,468)	( 2 )	103,952 (USD 3,650)	-	-	103,952 (USD 3,650)	5,699 (USD 142)	62.03%	3,535	94,374	-
Kun Shan Jia-An Technology Education Consuting Co., Ltd.	Educational consulting, information operation consulting, software and data storage consultation	69,252 (USD 2,432)	( 2 )	(Note 4)	-	-	-	(1,752) (USD -69)	62.03%	(1,087)	40,389	-

Note1: The investment methods are divided into the following three types: (1) Direct investment in Mainland China. (2) Indirect investment in Mainland China through a holding company established in other countries. (3) Others.

Note2: The investment income (losses) recognized in the current period were calculated based on the financial statements that have not been reviewed.

Note3: The foreign currency transactions have been translated into New Taiwan Dollar at the exchange rate at the end of the financial reporting date and the average exchange rate (USD1= NTD28.48, USD1=NTD29.5844).

Note4: Kun Shan Yu-Fu Technology Education Consulting Co., Ltd. had been spinned-off as Kun Shan Yu-Fu Technology Education Consulting Co., Ltd. and Kun Shan Jia-An Technology Education Consulting Co., Ltd.

(ii) Upper limit on investment in Mainland China:

Accumulated Investment in Mainland China as of December 31, 2020	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note)
103,952 (USD 3,650)	103,952 (USD 3,650)	586,595

Note: The investment limit was calculated based on the official document 10804600980 announced by the MOEAIC on August 29, 2008.

(iii) Significant inter-company transactions with the subsidiary in Mainland China: None.
(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Taiwan Steel Group United Co., Ltd.	35,645,000	% 6.75
Frank.C.Chen Foundation for Culture and Education	28,750,000	% 5.44

(14) Segment information:

The Company has provided the operating segments disclosure in the consolidated financial statements.

TAIWAN STYRENE MONOMER CORPORATION

Statement of Cash and Cash Equivalents

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Petty cash Deposits in bank Deposits in bank Bonds under resell agreements Bonds under resell agreements Bonds under resell agreements Time deposits due within one year Total	Description Demand deposits in NTD Demand deposits in USD253@ 28.48 Due on 2021.1.5, interest rates at 0.19% Due on 2021.1.15, interest rate 0.20~0.21% Bonds under resell agreements in foreign currencies Due on 2021.1.13, interest rate 0.36% [email protected] Time deposits in [email protected] Due on 2021.1.20 interest rate 0.33%	Amount
		$ 160 150,695 7,215 100,000 250,000 6,550 7,741 $ 522,361

〜 63 〜

TAIWAN STYRENE MONOMER CORPORATION

Statement of Financial Assets Measured at Fair Value through Profit or Loss - Current

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Name of investee	Beginning balance	Beginning balance	Addition	Addition	Decrease	Decrease
	Shares	Amount	Shares	Amount	Shares 400,000 - 1,535,000	Amount
E Ink Holdings Inc. Test Research, Inc. Gloria Material Technology Corp.	400,000 500,000 -	$ 12,500 26,600 - $ 39,100	- - 2,492,000	- - 34,561		21,903 - 21,289
				34,561		43,192

〜 64 〜

TAIWAN STYRENE MONOMER CORPORATION

Statement of Accounts Receivable

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Client Name Description Non-related parties: Company A Payment for goods Company B " Company C " Company D " Company E " Others " Less: Loss allowance Total	Amount	Note
	$ 446,744 162,070 71,703 57,660 33,127 99,286 (44) $ 870,546	Note

Note: The amount of individual client in others does not exceed 5% of the account balance.

Statement of Inventories

Item Description Finished goods SM and PDEB By-product Toluene Semi-finished products Ethylbenzene Work in progress Ethylbenzene Raw materials Benzene, Ethylene Supplies Energy, Chemicals Less：Allowance for inventory decline in value	Description
		Cost $ 56,249 6,769 141,737 26,821 180,942 18,209 (746) $ 429,981

Note：Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs incurred upon completion and selling expenses.

〜 65 〜

TAIWAN STYRENE MONOMER CORPORATION

Statement of Changes in Financial Assets Measured at Fair Value through Other Comprehensive Income - Non-current

For the year ended December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Name of investee Universal Venture Capital Investment Corporation Euroc Venture Capital Corp. Euroc III Venture Capical Corp. Global Investment Holding Co., Ltd Faith Alliance Corporation Multilayer P. C. B. & Assembly Manufacturer Leadwell Cnc Machines Mfg.,Corp. Crownpo Technology Inc. Infomedia Inc. Vxis Technology Corp. Asia Global Venture Capital II Co., Ltd Shieh-Tai Biochemical Lof Solar Corp. Yuan-Jie Investment Co., Ltd. Yu-Jie Investment Co., Ltd. Deng Yun Co., Ltd. Lidien Inc. Yu Chie Inc.	Beginning balance Shares Amount	Beginning balance Shares Amount	Addition Shares Amount (Note1) - - - - - - - 933 - - - - - 293 - - - 536 - 75 - 9,356 - - - - - - 21,320,000 277,800 591,945 66,803 760,000 12,981 589,000 7,582 376,359	Decrease Shares Amount (Note2) - 3,379 145,464 2,807 103,950 1,539 667,912 - - 39 - 11 - - - 14 - - - - 230,000 7,309 - - - - - 994 - - - - - - - - 16,092	Ending balance Shares Fair Value 8,400,000 53,066 145,464 1,385 155,925 1,733 10,233,608 81,538 25,720 69 912 9 37,352 1,160 709 5 200,000 715 72,480 688 770,000 23,464 120,339 - 2,000,000 - 21,000,000 227,430 21,320,000 277,800 591,945 66,803 760,000 12,981 589,000 7,582 756,428	Accumulated impairment	Collateral Note Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
	Shares		Shares - - - - - - - - - - - - - - 21,320,000 591,945 760,000 589,000	Shares - 145,464 103,950 667,912 - - - - - - 230,000 - - - - - - -	Shares 8,400,000 145,464 155,925 10,233,608 25,720 912 37,352 709 200,000 72,480 770,000 120,339 2,000,000 21,000,000 21,320,000 591,945 760,000 589,000
	8,400,000 290,928 259,875 10,901,520 25,720 912 37,352 709 200,000 72,480 1,000,000 120,339 2,000,000 21,000,000 - - - -	$ 56,445 4,192 3,272 80,605 108 20 867 19 179 613 21,417 - - 228,424 - - - - $ 396,161				NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA NA

Note1: The amount of addition included reclassified from investments accounted for using the equity method $269,121 thousand, purchase of $32,278 thousand and gain on financial assets at fair value $74,960 thousand.

Note2: The amount of decrease included capital reduction in returns of cash $9,803 thousand, and loss on financial assets at fair value $6,289 thousand.

〜 66 〜

TAIWAN STYRENE MONOMER CORPORATION

Statement of Changes in Investments Accounted for Using the Equity Method

For the year ended December 31, 2019

(Expressed in Thousands of New Taiwan Dollars)

Name of investee Yangmingshan Tien Lai Resort & SPA Zung-Fu Co., Ltd. YSIC Ltd. Yuan-Shin Materials Technology Corp. Ltd Asia Carbon & Technology Inc. Grand Carhay Venture Capital Co., Ltd. Wonderland Enterprise Co.,Ltd. Yu-Jie Investment Co., Ltd. GVISION-USD INC. Funtional Coating System Technology Co., Ltd.	Beginning balance Shares Amount 25,865,618 $ 694,989 22,289,256 103,787 103,975,894 731,635 5,000,000 41,607 9,866,389 10,209 40,000,000 331,171 29,629,597 540,896 21,320,000 266,507 666,667 37,117 - - $ 2,757,918	Addition (Note1) Shares Amount - 2,269 2,461,351 10,327 752 281,853 - 712 - - - 53,486 - 216,577 - 2,614 - - 1,744,186 28,500 596,338	Addition (Note1) Shares Amount - 2,269 2,461,351 10,327 752 281,853 - 712 - - - 53,486 - 216,577 - 2,614 - - 1,744,186 28,500 596,338	Decrease (Note2) Shares Amount - - 24,750,607 114,114 - 35,963 - - - 8,714 - 2,280 - 12,685 21,320,000 269,121 - 3,005 - 2,105 447,987	Decrease (Note2) Shares Amount - - 24,750,607 114,114 - 35,963 - - - 8,714 - 2,280 - 12,685 21,320,000 269,121 - 3,005 - 2,105 447,987	Ending balance	Ending balance	Amount 697,258 - 977,525 42,319 1,495 382,377 744,788 - 34,112 26,395 2,906,269	Market Value or Net Assets Value Unit price Total amount - 697,258 - - - 977,525 - 42,319 - 1,495 - 382,377 - 744,788 - - - 34,112 - 26,395 2,906,269	Collateral Note Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil
	Shares	Shares		Shares		Shares 25,865,618 - 103,976,646 5,000,000 9,866,389 40,000,000 29,629,597 - 666,667 1,744,186	Percentage of ownership % 65.07 % - % 99.99 % 100.00 % 98.58 % 25.00 % 37.04 % - % 44.44 % 34.88		Unit price - - - - - - - - - -
	25,865,618 22,289,256 103,975,894 5,000,000 9,866,389 40,000,000 29,629,597 21,320,000 666,667 -	- 2,461,351 752 - - - - - - 1,744,186		- 24,750,607 - - - - - 21,320,000 - -

Note1: The amount of addition included investment income $137,902 thousand, other comprehensive income $413,442 thousand, addition of investment $38,832 thousand, and changes in ownership interests in investments $6,162 thousand.

Note2: The amount of decrease included investment losses $81,160 thousand, other comprehensive loss $1,878 thousand, dividend received $11,170 thousand, disposal of investments accounted for using the equity method and reclassification $349,983 thousand, and changes in ownership interests in investments $3,796 thousand.

〜 67 〜

TAIWAN STYRENE MONOMER CORPORATION

Statement of Accounts Payables

December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Non-related parties: Company F Company G Company H Company I Others Total	Decrease Payment for goods " " " "	Amount	Note
		$ 390,429 174,132 48,418 109,476 61,026 $ 783,481	Note

Note: The amount of individual vendor in others does not exceed 5% of the account balance.

〜 68 〜

TAIWAN STYRENE MONOMER CORPORATION

Statement of Operating Costs

For the year ended December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Cost of sales from manufacturing Direct raw materials Balance at 1 January Purchases of raw materials Balance at 31 December Indirect supplies Balance at 1 January Purchases of indirect supplies Less: transfer to other prepayments and other non-current assets Balance at 31 December Direct labor Manufacturing overhead Manufacturing cost Work-in -process inventory, January 1 Work-in process inventory, December 31 Cost of goods manufactured Finished goods, January 1 Finished goods, December 31 Loss of disposal from inventory Gain on recovery in value of inventories Total operating costs	Amount	Amount	Amount
	Subtotal		Total
	$ 101,435 6,200,749 (180,942) 57,811 726,182 (46,019) (18,209)	6,121,242 719,765 48,604 649,541 7,539,152 94,670 (168,558) 7,465,264 198,153 (63,018) 27 (23,758) $ 7,576,668

〜 69 〜

TAIWAN STYRENE MONOMER CORPORATION

Statement of Selling Expenses

For the year ended December 31, 2020

(Expressed in Thousands of New Taiwan Dollars)

Item Export expense Shipping expenses Salaries Others Total	Description	Amount Note $ 11,342 32,323 9,336 3,945 Note $ 56,946

Note: The amount of individual item in others does not exceed 5% of the account balance.

Statement of Administrative Expenses

Item Salaries Employee welfare Depreciation (common parts) Entertainment Others Total	Amount Note $ 48,235 8,138 2,874 686 25,790 Note $ 85,723

Note: The amount of individual item in others does not exceed 5% of the account balance.

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Statement of Prepayments: Note 6(e) Statement of Changes in Property, Plant and Equipment: Note 6(k) Statement of Changes in Accumulated Depreciation of Property, Plant and Equipment: Note 6(k) Statement of Changes in Right-of-use assets: Note 6(l) Statement of Changes in Accumulated Depreciation of Right-of-use assets: Note 6(l) Statement of Changes in Intangible Assets: Note 6(m) Statement of Deferred Tax Assets: Note 6(r) Statement of Other Non-current Assets: Note 6(n) Statement of Other Payables: Note 6(o) Statement of Lease Liabilities: Note 6(q) Statement of Deferred Tax Liabilities: Note 6(r) Statement of Operating Revenue: Note 6(u) Statement of the Net Amount of Other Revenues(Gains) and Expenses(Losses): Note 6(v) Statement of Finance Costs: Note 6(v) Statement of Current Period Employee Benefits, Depreciation, and Amortization by Function: Note 12

〜 71 〜

AI assistant

T.S.M.C. — Annual Report 2020

51769_rns_2020-11-23_577ce6af-0415-483a-8739-df7563536684.pdf

TAIWAN STYRENE MONOMER CORPORATION

Parent Company Only Financial Statements

Table of contents

KPMG

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Other Matter

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

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

Notes to Readers

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

Balance Sheets

December 31, 2020 and 2019

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

Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

Statements of Changes in Equity

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

Statements of Cash Flows

For the years ended December 31, 2020 and 2019

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

Notes to the Parent Company Only Financial Statements For the years ended December 31, 2020 and 2019

(1) Company history

(2) Approval date and procedures of the financial statements

(3) New standards, amendments and interpretations adopted:

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(4) Summary of significant accounting policies

(a) Statement of compliance

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(c) Foreign currencies

(ii) Foreign operations

(d) Classification of current and non-current assets and liabilities

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(e) Cash and cash equivalents

(f) Financial instruments

(i) Financial assets

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

2) Equity instrument

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

3) Treasury shares

4) Financial liabilities

5) Derecognition of financial liabilities

(g) Inventories

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(ii) Discontinued operations

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(j) Investment in subsidiaries

(ii) Subsequent cost

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(l) Leases

(ii) As a leasee

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(m) Intangible assets

(ii) Subsequent expenditure

(n) Impairment of non-financial assets

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(o) Revenue recognition

(i) Revenue from contract with customers

1) Sale of goods

2) Financing components

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(p) Government grants

(q) Employee benefits

(i) Defined contribution plans

(ii) Defined benefit plans

(iii) Short-term employee benefits

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(r) Income taxes

TAIWAN STYRENE MONOMER CORPORATION Notes to the Parent Company Only Financial Statements

(s) Earnings per share

T.S.M.C. Annual Report 2020