Stock Code:1310

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report for the Nine Months Ended September 30, 2022 and 2021

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

The independent auditors’ review report and the accompanying consolidated 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’ review report and consolidated financial statements, the Chinese version shall prevail.

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated 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	Page
	1 2 3 4 5 6 7 8 8 8～9 9～10 10～11 11～38 39 39 39 40 40 40 41～43 43 44 44 45～46

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Review Report
4. Consolidated Balance Sheets
5. Consolidated Statements of Comprehensive Income
6. Consolidated Statements of Changes in Equity
7. Consolidated Statements of Cash Flows
8. Notes to the Consolidated Financial Statements
(1)
Company history
(2)
Approval date and procedures of the consolidated 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

Page

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KPMG

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

Independent Auditors’ Review Report

To the Board of Directors of Taiwan Styrene Monomer Corporation:

Introduction

We have reviewed the accompanying consolidated balance sheets of Taiwan Styrene Monomer Corporation and its subsidiaries as of September 30, 2022 and 2021, the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2022 and 2021, as well as the changes in equity and cash flows for the nine months ended September 30, 2022 and 2021, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with Statement of Auditing Standard 65, “ Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect total assets amounting to $287,522 thousand and $661,078 thousand, constituting 3.37% and 7.12% of consolidated total assets as of September 30, 2022 and 2021, respectively, total liabilities amounting to $4,199 thousand and $32,160 thousand, constituting 0.27% and 2.02% of consolidated total liabilities as of September 30, 2022 and 2021, respectively, and total comprehensive income (loss) amounting to $(20,223) thousand, $(4,938) thousand, $(34,829) thousand and $17,749 thousand, constituting 9.33%, 3.49%, 10.10% and 3.73% of consolidated total comprehensive income (loss) for the three months and nine months ended September 30, 2022 and 2021, respectively.

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

Furthermore, as stated in note 6(i), the equity accounted investments of Taiwan Styrene Monomer Corporation and its subsidiaries in its investee companies of $1,259,768 thousand and $1,357,011 thousand as of September 30, 2022 and 2021, respectively, and the related share of profit (loss) of associates and joint ventures accounted for using equity method on these investee companies of $5,952 thousand, $(10,894) thousand, $(12,699) thousand and $41,426 thousand for the three months and nine months ended September 30, 2022 and 2021, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of Taiwan Styrene Monomer Corporation and its subsidiaries as of September 30, 2022 and 2021, and of its consolidated financial performance for the three months and nine months ended September 30, 2022 and 2021, as well as its consolidated cash flows for the nine months ended September 30, 2022 and 2021 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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

KPMG

Taipei, Taiwan (Republic of China) November 9, 2022

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated 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 review such consolidated financial statements are those generally accepted and applied in the Republic of China.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of September 30, 2022 and 2021

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2022, December 31 and September 30, 2021

(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 1220 Current tax assets 130X Inventories (note 6(d)) 1410 Prepayments (note 6(e)) 1460 Non-current assets (or disposal groups) held for sale (note 6(f)) 1470 Other current assets 1476 Other current financial assets (notes 6(g) and 8) Total current assets Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note 6(h)) 1550 Investments accounted for using equity method (note 6(i)) 1600 Property, plant and equipment (notes 6(j), 7 and 8) 1755 Right-of-use assets (note 6(k)) 1760 Investment property, net (note 6(l)) 1780 Intangible assets (note 6(m)) 1840 Deferred tax assets 1970 Other long-term investments, net (note 6(n)) 1920 Refundable deposits 1990 Other non-current assets (note 6(o)) Total non-current assets Total assets	September 30, 2022 Amount % $ 571,344 7 233,923 3 880,483 10 5,776 - 4,876 - 385,505 5 207,109 2 - - 39 - 30,844 - 2,319,899 27 6,372 - 924,523 11 1,259,768 15 3,674,350 43 17,704 - 56,756 1 6,491 - 188,261 2 29,136 - 3,818 - 46,090 1 6,213,269 73 $ 8,533,168 100	December 31, 2021 Amount % 253,124 3 317,929 3 917,966 10 5,850 - 1,749 - 826,641 9 149,645 2 64,744 1 8 - 159,466 2 2,697,122 30 5,756 - 1,016,623 11 1,395,848 15 3,853,008 41 9,965 - 57,015 1 7,932 - 130,868 1 30,576 - 3,587 - 90,890 1 6,602,068 70 9,299,190 100	September 30, 2021 Amount % 645,592 7 188,204 2 1,038,871 11 4,376 - 1,472 - 385,248 4 146,815 2 63,957 1 43 - 130,459 1 2,605,037 28 6,142 - 1,160,804 13 1,357,011 15 3,877,597 41 10,666 - 57,102 1 7,674 - 79,667 1 30,204 - 3,598 - 88,754 1 6,679,219 72 9,284,256 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (notes 6(p) and 8) 2130 Current contract liabilities (note 6(y)) 2150 Notes payable 2170 Accounts payable 2200 Other payables (note 6(q)) 2230 Current tax liabilities 2250 Current provisions 2280 Current lease liabilities (note 6(s)) 2320 Long-term liabilities, current portion (notes 6(r) and 8) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2540 Long-term borrowings (notes 6(r) and 8) 2570 Deferred tax liabilities 2581 Non-current lease liabilities (note 6(s)) 2640 Net defined benefit liability, non-current 2600 Other non-current liabilities Total non-current liabilities Total liabilities Equity attributable to owners of parent (note 6(v)): 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 attributable to owners of parent 36XX Non-controlling interests Total equity Total liabilities and equity	September 30, 2022		December 31, 2021		September 30, 2021
				Amount %		Amount %		Amount %
						353,259 4 51,023 - 2 - 977,716 10 178,497 2 31 - 349 - 4,069 - 8,349 - 40,879 - 1,614,174 16 68,686 1 174,659 2 5,729 - 64,100 1 716 - 313,890 4 1,928,064 20 5,278,698 57 46,300 - 612,264 7 - - 1,167,693 13 1,779,957 20 56,031 1 (13) - 7,160,973 78 210,153 2 7,371,126 80 9,299,190 100		110,000 1 49,937 - - - 937,388 9 143,812 2 917 - 349 - 4,802 - 8,315 - 22,078 - 1,277,598 12 70,788 1 174,564 2 5,885 - 59,891 1 823 - 311,951 4 1,589,549 16 5,278,698 57 52,670 1 612,264 7 - - 1,309,172 14 1,921,436 21 234,634 3 (13) - 7,487,425 82 207,282 2 7,694,707 84 9,284,256 100

See accompanying notes to financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2022 and 2021

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

4000 Operating revenue (notes 6(i) and (y)) 5000 Operating costs(notes 6(d), (j), (k), (l), (m), (s), (t), (w) and (aa)) Gross profit (loss) from operations Operating expenses (notes 6(c), (j), (k), (l), (m), (s), (t), (w) and (aa)): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment loss (gain) Operating income (loss) Non-operating income and expenses (notes 6(f), (i), (s) and (z)): 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Shares of profit (loss) of associates and joint ventures accounted for using equity method 9900 Profit (loss) before tax 7950 Less: Income tax expenses (benefits) (note 6(u)) Net income (loss) 8300 Other comprehensive income (loss): 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8320 Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 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 8370 Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss Components of other comprehensive income (loss) that will be reclassified to profit or loss 8300 Other comprehensive income, net 8500 Comprehensive income Profit attributable to: 8610 Owners of parent 8620 Non-controlling interests Comprehensive income attributable to: 8710 Owners of parent 8720 Non-controlling interests Earnings per share (note 6(x)) Basic earnings per share Diluted earnings per share	For the three months e	nded September 30		For the nine months e	nded September 30 2021 Amount % 8,856,418 100 8,496,137 96 360,281 4 46,091 1 122,100 1 1,723 - (81) - 169,833 2 190,448 2 3,011 - 26,915 - 14,057 - (1,931) - 46,822 1 88,874 1 279,322 3 (60,623) (1) 339,945 4 66,667 1 80,950 1 147,617 2 (11,368) - (907) - (12,275) - 135,342 2 475,287 6 341,165 4 (1,220) - 339,945 4 477,879 5 (2,592) - 475,287 5 0.65 0.65
	2022 Amount % $ 3,040,831 100 3,237,480 106 (196,649) (6) 17,355 1 35,708 - 771 - (57) - 53,777 1 (250,426) (7) 1,503 - 27,982 1 (4,237) - (2,469) - 8,329 - 31,108 1 (219,318) (6) (43,884) (1) (175,434) (5) (41,056) (1) (21,905) (1) (62,961) (2) 21,070 1 484 - 21,554 1 (41,407) (1) $ (216,841) (6) $ (176,017) (5) 583 - $ (175,434) (5) $ (219,558) (8) 2,717 - $ (216,841) (8) $ (0.33) $ (0.33)	2021		2022 Amount % 10,398,523 100 10,591,873 102 (193,350) (2) 52,155 1 102,301 1 1,878 - (80) - 156,254 2 (349,604) (4) 3,919 - 51,234 - 104,257 1 (4,841) - (7,022) - 147,547 1 (202,057) (3) (12,832) - (189,225) (3) (120,955) (1) (80,976) (1) (201,931) (2) 45,163 - 1,102 - 46,265 - (155,666) (2) (344,891) (5) (227,866) (3) 38,641 - (189,225) (3) (388,235) (4) 43,344 - (344,891) (4) (0.43) (0.43)
		Amount % 3,288,328 100 3,418,925 104 (130,597) (4) 17,757 1 25,125 1 482 - (77) - 43,287 2 (173,884) (6) 1,040 - 3,178 - (2,906) - (647) - (9,397) - (8,732) - (182,616) (6) (33,152) (1) (149,464) (5) 2,005 - 7,169 - 9,174 - (1,043) - (137) - (1,180) - 7,994 - (141,470) (5) (147,875) (5) (1,589) - (149,464) (5) (139,524) (4) (1,946) - (141,470) (4) (0.28) (0.28)

See accompanying notes to financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

				Equity attri	butable to owners	of parent					Total equity 7,463,726 339,945 135,342
Ordinary shares $ 5,278,698 - - - - - - - - - $ 5,278,698 $ 5,278,698 - - - - - - - - - - $ 5,278,698	Capital surplus 48,224 - - - - - - 13 4,433 - 52,670 46,300 - - - - - - 24,585 - - (3) 70,882		Retained	earnings	Total 1,773,645 341,165 - 341,165 - (263,917) - - - 70,543 1,921,436 1,779,957 (227,866) - (227,866) - - (79,156) - 504 6,030 - 1,479,469		O	ther equity interes	t Total 168,463 - 136,714 136,714 - - - - - (70,543) 234,634 56,031 - (160,369) (160,369) - - - - (504) (6,030) - (110,872)	Treasury shares (15,178) - - - - - - (13) 15,178 - (13) (13) - - - - - - - - - 13 -
						Exchange differences on translation of foreign financial statements		Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income 195,208 - 147,617 147,617 - - - - - (70,543) 272,282 90,665 - (201,927) (201,927) - - - - (504) (6,030) - (117,796)
		Legal reserve 610,435 - - - 1,829 - - - - - 612,264 612,264 - - - 27,023 - - - - - - 639,287	Special reserve 581,249 - - - - - (581,249) - - - - - - - - - 8,811 - - - - - 8,811	Unappropriated retained earnings 581,961 341,165 - 341,165 (1,829) (263,917) 581,249 - - 70,543 1,309,172 1,167,693 (227,866) - (227,866) (27,023) (8,811) (79,156) - 504 6,030 - 831,371
						(26,745) - (10,903) (10,903) - - - - - - (37,648) (34,634) - 41,558 41,558 - - - - - - - 6,924
											475,287
											- (263,917) - - 19,611 -
											7,694,707
											7,371,126 (189,225) (155,666)
											(344,891)
											- - (79,156) 24,585 - - 10
											6,971,674

See accompanying notes to financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

	For the nine months ended	For the nine months ended	September 30	September 30
		2022	2021
Cash flows from operating activities:
Profit (loss) before tax	$	(202,057)	279,322
Adjustments:
Adjustments to reconcile profit
Depreciation expense		206,857	185,638
Amortization expense		1,441		1,896
Expected credit impairment gain		(80)		(81)
Interest expense		4,841		1,931
Interest income		(3,919)		(3,011)
Dividend income		(21,967)		(7,863)
Share-based payments		-		4,472
Share of loss (profit) of associates and joint ventures accounted for using
equity method		12,699	(41,426)
Gain on disposal of property, plant and equipment		(172)		(460)
Gain on disposal of non-current assets held for sale		(133,363)	-
Impairment loss on non-financial assets		84	-
Gain on bargain purchase transaction		-		(403)
Gain on lease modification		(6)	-
Loss from decline (gain from recovery) in value of inventories		(125,320)		13,227
Total adjustments to reconcile profit		(58,905)	153,920
Changes in operating assets and liabilities:
Changes in operating assets:
Financial assets mandatorily measured at fair value through profit or loss		83,390	(38,386)
Accounts receivable		37,363	(160,994)
Other receivables		685		921
Inventories		566,456		32,815
Prepayments		3,517	(30,556)
Other current assets		(31)		80
Other financial assets		128,622	(87,016)
Total changes in operating assets		820,002	(283,136)
Changes in operating liabilities:
Current contract liabilities		(15,755)		4,920
Notes payable		(2)	-
Accounts payable		(375,195)	139,083
Other payables		(55,378)	(25,598)
Provisions		(331)	-
Other current liabilities		(38,285)		19,290
Net defined benefit liabilities		581		683
Total changes in operating liabilities		(484,365)	138,378
Total changes in operating assets and liabilities		335,637	(144,758)

See accompanying notes to financial statements.

7-1

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the nine months ended September 30, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash inflow generated from operations Interest received Dividends received Interest paid Dividends paid Income taxes paid Net cash flows from operating activities Cash flows from (used in) investing activities: 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 non-current assets classified as held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in other long-term investment Dividends received Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Repayments of long-term borrowings Payment of lease liabilities Decrease in other non-current liabilities Cash dividends paid Proceeds from disposal of treasury shares Proceeds from transfer of treasury shares to employees Net cash (used in) from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the nine months ended September 30 2022 2021 $ 74,675 288,484 5,052 2,989 20,534 7,863 (4,614) (1,931) (38) (41) (45,930) (36,621) 49,679 260,743 1,873 - - 8,134 - (17,273) 202,912 - (62,191) (173,544) 233 460 (231) (33) 1,440 - 45,291 24,312 189,327 (157,944) 1,965,000 197,500 (1,803,259) (185,000) (6,196) (9,675) (4,861) (4,298) (56) (127) (79,156) (263,917) 10 - - 15,139 71,482 (250,378) 7,732 149 318,220 (147,430) 253,124 793,022 $ 571,344 645,592
	2022 $ 74,675 5,052 20,534 (4,614) (38) (45,930) 49,679 1,873 - - 202,912 (62,191) 233 (231) 1,440 45,291 189,327 1,965,000 (1,803,259) (6,196) (4,861) (56) (79,156) 10 - 71,482 7,732 318,220 253,124 $ 571,344

Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Dividends paid
Income taxes paid
Net cash flows from operating activities
Cash flows from (used in) investing activities:
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 non-current assets classified as held for sale
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Decrease in other long-term investment
Dividends received
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Increase in short-term borrowings
Decrease in short-term borrowings
Repayments of long-term borrowings
Payment of lease liabilities
Decrease in other non-current liabilities
Cash dividends paid
Proceeds from disposal of treasury shares
Proceeds from transfer of treasury shares to employees
Net cash (used in) from financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

For the nine months ended September 30
2022
2021
$ 74,675
288,484
5,052
2,989
20,534
7,863
(4,614)
(1,931)
(38)
(41)
(45,930)
(36,621)
49,679
260,743
1,873
-
-
8,134
-
(17,273)
202,912
-
(62,191)
(173,544)
233
460
(231)
(33)
1,440
-
45,291
24,312
189,327
(157,944)
1,965,000
197,500
(1,803,259)
(185,000)
(6,196)
(9,675)
(4,861)
(4,298)
(56)
(127)
(79,156)
(263,917)
10
-
-
15,139
71,482
(250,378)
7,732
149
318,220
(147,430)
253,124
793,022
$
571,344
645,592

2022
$ 74,675
5,052
20,534
(4,614)
(38)
(45,930)
49,679
1,873
-
-
202,912
(62,191)
233
(231)
1,440
45,291
189,327
1,965,000
(1,803,259)
(6,196)
(4,861)
(56)
(79,156)
10
-
71,482
7,732
318,220
253,124
$
571,344

See accompanying notes to financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2022 and 2021

(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. Please refer to note 4(b) for the major business activities of the Company and its subsidiaries (together referred to as the "Group").

(2) Approval date and procedures of the consolidated financial statements

The consolidated financial statements were authorized for issue by the Board of Directors on November 9, 2022.

(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. which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2022:

●Amendments to IAS 16 “Property, Plant and Equipment—Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018–2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2023, would not have a significant impact on its consolidated financial statements:

●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”
●Amendments to IAS 12 “ Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group 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 consolidated 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”
●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
●Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information “
●IFRS16 “Requirements for Sale and Leaseback Transactions”

(4) Summary of significant accounting policies

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulation Governing the Preparation of Financial Reports by Securities Issuers (the “Regulation”) and IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect by FSC, and do not include all of the information required by the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of the annual consolidated financial statements.

Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2021. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2021.

(b) Basis of consolidation
(i) List of subsidiaries in the consolidated financial statements:

Name of investor	Name of subsidiary	Principal activity	Shareholding (%) September 30, 2022 December 31, 2021 September 30, 2021 Note	Shareholding (%) September 30, 2022 December 31, 2021 September 30, 2021 Note	Shareholding (%) September 30, 2022 December 31, 2021 September 30, 2021 Note
			September 30, 2022	December 31, 2021
The Company The Company The Company The Company YSIC Ltd.	YSIC Ltd. Yuan-Shin Materials Technology Co., Ltd. Yangmingshan Tien Lai Resort & SPA Asia Carbons & Technology Inc. Grand Capital Co., Ltd.	Residential building and industrial plant development rental business Basic chemical materials and plastic raw material manufacturing Hotel Electronic component manufacturing Investment	99.99 100.00 65.07 98.58 100.00	99.99 100.00 65.07 98.58 100.00	99.99 - 100.00 Note 1 65.07 Note 2 98.58 Note 1 100.00 Note 1

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of investor	Name of subsidiary	Principal activity	Shareholding (%) September 30, 2022 December 31, 2021 September 30, 2021 Note	Shareholding (%) September 30, 2022 December 31, 2021 September 30, 2021 Note	Shareholding (%) September 30, 2022 December 31, 2021 September 30, 2021 Note
			September 30, 2022	December 31, 2021
YSIC Ltd. YSIC Ltd. Kun Shan International Ltd. Kun Shan International Ltd.	Tien Lai Co., Ltd. Kun Shan International Ltd. Kun Shan Yu-Fu Technology Education Consulting Co., Ltd. Kun Shan Jia-an Technology Education Consulting Co., Ltd.	Piping engineering Investment Educational consulting, information consulting, software and data storage consultation Educational consulting, information consulting, software and data storage consultation	50.00 62.03 100.00 100.00	50.00 62.03 100.00 100.00	50.00 Notes 1 and 3 62.03 - 100.00 - 100.00 -

Note 1: Non-significant subsidiaries for which the financial statements have not been reviewed by independent auditors.
Note 2: The Company and YSIC Ltd. (holding 12.10% of common shares) totally hold 77.17% of common shares of Yangmingshan Tien Lai Resort & SPA.
Note 3: The Group does not directly or indirectly hold more than half of the total shares of Tien Lai Co., Ltd., but because the chairman of the company is designated by the Group and the Group has control over the company, it is incorporated into consolidation.

(c) Employee benefits

The pension cost in the interim period was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year.

(d) Income taxes

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Accounting Standards 34, Interim Reporting.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period by the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period (and allocated to current and deferred taxes based on its proportionate size).

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

The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and endorsed by the FSC) 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.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Except for the following, the preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2021. For related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2021.

(6) Explanation of significant accounts

Except for the following disclosures, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2021. Please refer to notes 6 (a) to (ag) of the 2021 annual consolidated financial statements.

(a) Cash and cash equivalents

Cash on hand Petty cash Deposits in bank Cash equivalents Time deposits due within one year b) Financial assets at fair value through profit Mandatorily measured at fair value through profit or loss: Current: Listed stocks Funds Derivative instruments not used for hedging-foreign exchange swap contracts Non-current: Listed stocks Total	September 30, 2022 $ 722 964 368,636 201,022 $ 571,344 or loss September 30, 2022 $ 197,107 29,221 7,595 6,372 $ 240,295	December 31, 2021 724 1,014 251,386 - 253,124 December 31, 2021 266,352 51,577 - 5,756 323,685	September 30, 2021
			403 1,022 545,753 98,414
			645,592
			September 30, 2021
			128,579 59,625 - 6,142
			194,346

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

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group uses derivative financial instruments to hedge certain foreign exchange risk exposures arising from its operating activities. The following derivative instruments, without the application of hedge accounting, were classified as mandatorily measured at fair value through profit or loss financial assets and liabilities:

Buy USD / Sell TWD (c) Accounts receivable Accounts receivable Less: Loss allowance	September 30, 2022 Contract amount ( in thousand) Maturity dates USD 8,000 2022.10 September 30, 2022 December 31, 2021 September 30, 2021 $ 882,882 920,432 1,041,347 (2,399) (2,466) (2,476) $ 880,483 917,966 1,038,871	September 30, 2022 Contract amount ( in thousand) Maturity dates	September 30, 2022 Contract amount ( in thousand) Maturity dates
		Contract amount ( in thousand)
			2022.10 September 30, 2021 1,041,347 (2,476) 1,038,871

The Group 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:

September 30, 2022	September 30, 2022
Gross carrying amount Weighted- average loss rate $ 880,182 0.005% 103 1% 123 2% 75 2% 2,399 50%~100% $ 882,882 December 31, 2021		Loss allowance provision
		43 1 2 1 2,352
		2,399

	Weighted- average loss rate 0.005% 1% 2% 2% 50%~100%	Loss allowance provision
		46 4 2 2 2,412
		2,466

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

September 30, 2021	September 30, 2021
Gross carrying amount $ 1,038,268 281 214 94 2,490 $ 1,041,347	Weighted- average loss rate 0.005% 1% 2% 2% 50%~100%	Loss allowance provision
		52 3 4 2 2,415
		2,476

The movements in the allowance for accounts receivable were as follows:

Beginning balance Reversal of impairment loss Effect of exchange rate changes Ending balance	For the nine months ended September 30 2022 2021 $ 2,466 2,565 (80) (81) 13 (8) $ 2,399 2,476
	2022 $ 2,466 (80) 13 $ 2,399

(d) Inventories

				September 30,	December 31,	September 30,
				2022	2021	2021
Merchandise inventory			$	1,338	1,665	928
Finished goods				129,989	241,732	71,840
By-product				7,192	7,160	5,348
Semi-finished products				62,317	79,182	143,219
Work in progress				37,424	46,133	42,036
Raw materials				127,017	422,913	100,798
Supplies				20,228	27,856	21,079
			$	385,505	826,641	385,248
Except for the transfer	of	inventory to	operating costs from		sales, other losses (gains) directl
included in operating costs		are as follows:
		For the three months ended For			the nine months ended September
		September 30			30
		2022		2021	2022	2021
Loss from decline (gain
from recovery) in value
of inventories	$	(22,781)		13,001	(125,320)	13,227

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

None of the inventories of the Group was pledged as collateral on September 30, 2022, December 31 and September 30, 2021.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Prepayments

Prepayment for purchases Supplies Overpaid sales tax Others	September 30, 2022 $ - 109,493 68,051 29,565 $ 207,109	December 31, 2021 719 87,837 55,529 5,560 149,645	September 30, 2021
			4,159 95,408 19,953 27,295
			146,815

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

On January 22, 2021, the Group obtained an approval from the Board of Directors to dispose the partial property, plant and equipment, right-of-use assets and investment property held by Kun Shan Yu-Fu Technology Education Consulting Co., Ltd. and Kun Shan Jia-an Technology Education Consulting Co., Ltd. Therefore, the Group reclassified them as non-current assets (or disposal groups) held for sale, which amounting to $65,008 thousand. The Group completed the disposal in February 2022 and recognized the gain on disposal amounting to $133,363 thousand.

(g) Other current financial assets

Time deposits maturing over three months Restricted deposits in bank	September 30, 2022 $ 29,000 1,844 $ 30,844	December 31, 2021 155,067 4,399 159,466	September 30, 2021
			123,473 6,986
			130,459

The above assets of the Group had been pledged as collateral; please refer to note 8.

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

Equity investments: Domestic non-listed stocks Foreign non-listed equity investments	September 30, 2022 $ 608,325 316,198 $ 924,523	December 31, 2021 696,898 319,725 1,016,623	September 30, 2021
			724,612 436,192
			1,160,804

(i) The Group designated the investments shown above at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term strategic purposes not for trading purposes. During the three months and nine months ended September 30, 2022 and 2021, the dividends of $18 thousand, $19 thousand, $13,132 thousand and $3,261 thousand, respectively, were recognized.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) In May, 2022, the Group disposed its shares held in Yu-Chie Inc., as a result of the completion of the liquidation. The shares disposed had a fair value of $1,873 thousand and the Group realized a gain of $504 thousand, which was recognized as other comprehensive income, and thereafter, was reclassified to retained earnings. There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments for the nine months ended September 30, 2021.
(iii) For market risk; please refer to note 6(ab).
(iv) None of the above-mentioned financial assets had been pledged as collateral as of September 30, 2022, December 31 and September 30, 2021.
(i) Investments accounted for using equity method
(i) Associates

Associates of the Group consisted of the following:

September 30, 2022 Amount Share- holding (%) Grand Cathay Venture Capital Co., Ltd.$ 405,726 25.00 Wonderland Enterprise Co., Ltd. 765,072 37.04 Globaltop Technology Inc. 44,653 23.89 Gvision-USA, Inc. - - Functional Coating System Technologies Co., Ltd. 25,921 34.88 Universal Investments Limited 18,396 40.00 $ 1,259,768	December 31, 2021 Amount Share- holding (%) 467,450 25.00 835,959 37.04 49,332 23.89 - - 26,069 34.88 17,038 40.00 1,395,848	September 30, 2021
	Amount 467,450 835,959 49,332 - 26,069 17,038 1,395,848	Amount Share- holding (%) 444,192 25.00 788,491 37.04 48,981 31.85 31,638 44.44 26,436 34.88 17,273 40.00 1,357,011

The Group acquired 40% of the shares of Universal Investments Limited with $17,273 thousand, getting the significant influence in February 2021. The identifiable net equity on the purchase date was greater than the purchase price, the Group has therefore recognized gain on bargain purchase of $403 thousand as other income in the consolidated statement of comprehensive income.

Gvision-USA, Inc. conducted a capital increase by cash of USD2,000 thousand on October 25, 2021. The Group did not participate in the capital increase proportionally, and its shares of the company dropped to 19.61%. The Group lost the significant influence on the company and reclassified the investment to financial assets at fair value through other comprehensive income.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Attributable to the Group: Net income (loss) Other comprehensive income Total comprehensive income	For the three months ended September 30 2022 2021 $ 5,952 (10,894) (21,421) 7,032 $ (15,469) (3,862)	For the nine months ended September 30	For the nine months ended September 30
	2022 $ 5,952 (21,421) $ (15,469)	2022 (12,699) (79,874) (92,573)	2021 41,426 80,043
			121,469

(ii) Pledge to secure

None of the investments using equity method of the Group was pledged as collateral.

(iii) The unreviewed financial statements of investments accounted for using equity method

The investments accounted for using equity method and the share of the profit or loss and other comprehensive income were calculated based on the financial statements that had not been reviewed.

(j) Property, plant and equipment

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

Land $ 1,576,740 - - - -	Land improvements 8,462 - - - -	Buildings and structures 621,630 - - - -	Machinery and equipment 7,307,108 3,680 (68,936) 291,152 -	Transportation equipment 4,276 - (1,333) - 32	Leased assets - - - - -	Other equipment 844,220 2,708 (920) 5,763 -	Construction in progress 298,058 33,551 - (313,180) -	Total 10,660,494 39,939 (71,189) (16,265) 32
$ 1,576,740	8,462	621,630	7,533,004	2,975	-	851,771	18,429	10,613,011
$ 1,577,303 - - - -	8,462 - - - -	621,630 - - - -	7,280,629 - (356) 10,371 -	10,887 - (6,606) - (18)	- - - - -	946,252 6,751 (7,000) 41,715 -	232,174 102,565 - (52,086) -	10,677,337 109,316 (13,962) - (18)
$ 1,577,303	8,462	621,630	7,290,644	4,263	-	987,718	282,653	10,772,673
$ - - - -	8,404 16 - -	244,208 10,831 - -	6,008,783 156,134 (68,936) -	4,004 90 (1,333) 29	- - - -	542,087 35,203 (859) -	- - - -	6,807,486 202,274 (71,128) 29
$ -	8,420	255,039	6,095,981	2,790	-	576,431	-	6,938,661
$ - - - -	8,383 16 - -	229,758 10,838 - -	5,830,382 133,818 (356) -	10,474 108 (6,606) (17)	- - - -	649,155 36,123 (7,000) -	- - - -	6,728,152 180,903 (13,962) (17)
$ -	8,399	240,596	5,963,844	3,959	-	678,278	-	6,895,076

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Land $ 1,576,740	Land improvements 58	Machinery and equipment 1,298,325	Transportation equipment 272	Leased assets -	Other equipment 302,133	Construction in progress 298,058	Total 3,853,008
$ 1,576,740	42	1,437,023	185	-	275,340	18,429	3,674,350
$ 1,577,303	79	1,450,247	413	-	297,097	232,174	3,949,185
$ 1,577,303	63	1,326,800	304	-	309,440	282,653	3,877,597

As of September 30, 2022, December 31 and September 30, 2021, there was no recognized accumulated impairment losses of property, plant and equipment.

As of September 30, 2022, December 31 and September 30, 2021, the property, plant and equipment of the Group had been pledged as collateral for loans; please refer to note 8.

(k) Right-of-use assets

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

Cost: Balance as of January 1, 2022 Additions Lease modification Disposals Balance as of September 30, 2022 Balance as of January 1, 2022 Additions Disposals Balance as of September 30, 2021 Accumulated depreciation: Balance as of January 1, Balance as of January 1, 2022 Depreciation Disposals Balance as of September 30, 2022 Balance as of January 1, 2021 Depreciation Disposals Balance as of September 30, 2021 Carrying amount: Balance as of January 1, 2022 Balance as of September 30, 2022 Balance as of January 1, 2021 Balance as of September 30, 2021	Land $ 4,064 - 84 - $ 4,148 $ 387 4,064 (387) $ 4,064 $ 87 161 - $ 248 $ 353 69 (387) $ 35 $ 3,977 $ 3,900 $ 34 $ 4,029	Buildings and structures 1,254 424 - (426) 1,252 1,429 - - 1,429 354 470 (426) 398 635 536 - 1,171 900 854 794 258	Transportation equipment 12,769 11,555 - (11,769) 12,555 12,769 - - 12,769 10,328 2,972 (11,769) 1,531 6,130 3,148 - 9,278 2,441 11,024 6,639 3,491	Office equipment 4,814 - - - 4,814 4,814 - - 4,814 2,167 721 - 2,888 1,203 723 - 1,926 2,647 1,926 3,611 2,888	Total 22,901 11,979 84 (12,195) 22,769 19,399 4,064 (387) 23,076 12,936 4,324 (12,195) 5,065 8,321 4,476 (387) 12,410 9,965 17,704 11,078 10,666

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Investment property

Cost: Balance as of September 30, 2022 (Balance as of January 1, 2022) Balance as of September 30, 2021 (Balance as of January 1, 2021) Accumulated depreciation: Balance as of January 1, 2022 Depreciation Balance as of September 30, 2022 Balance as of January 1, 2021 Depreciation Balance as of September 30, 2021 Carrying value: Balance as of January 1, 2022 Balance as of September 30, 2022 Balance as of January 1, 2021 Balance as of September 30, 2021	Land $ 46,101 $ 46,101 $ - - $ - $ - - $ - $ 46,101 $ 46,101 $ 46,101 $ 46,101	Buildings and structures 17,625 17,625 6,711 259 6,970 6,365 259 6,624 10,914 10,655 11,260 11,001	Total
			63,726
			63,726
			6,711 259
			6,970
			6,365 259
			6,624
			57,015
			56,756
			57,361
			57,102

The fair value of the investment property was not significantly different from those disclosed in note 6(n) of the annual consolidated financial statements for the year ended December 31, 2021. For other relevant information, please refer to note 6(n) of the consolidated financial statements of 2021.

None of the investment property was pledged as collateral as of September 30, 2022, December 31 and September 30, 2021.

(m) Intangible assets

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

Technical royalty Cost: Balance as of January 1, 2022 $ 22,242 Disposals - Balance as of September 30, 2022 $ 22,242 Balance as of September 30, 2021 (Balance as of January 1, 2021) $ 22,242	Computer software 6,061 (4,100) 1,961 5,146	Total 28,303 (4,100) 24,203 27,388

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Accumulated amortization: Balance as of January 1, 2022 Amortization Disposals Balance as of September 30, 2022 Balance as of January 1, 2021 Amortization Balance as of September 30, 2021 Carrying value: Balance as of January 1, 2022 Balance as of September 30, 2022 Balance as of January 1, 2021 Balance as of September 30, 2021 Other long-term investment, net Construction and operation of student dormitory	Technical royalty $ 16,068 731 - $ 16,799 $ 15,093 731 $ 15,824 $ 6,174 $ 5,443 $ 7,149 $ 6,418 September 30, 2022 $ 29,136	Computer software 4,303 710 (4,100) 913 2,725 1,165 3,890 1,758 1,048 2,421 1,256 December 31, 2021 30,576	Total 20,371 1,441 (4,100) 17,712 17,818 1,896 19,714 7,932 6,491 9,570 7,674 September 30, 2021 30,204
	$

(n) Other long-term investment, net

The period of rights of investment in construction and operation of student dormitory is 30 years. The subsidy and management income will be recovered annually according to the agreement to July 31, 2035.

(o) Other non-current assets

Long-term prepaid expenses Net defined benefit assets	September 30, 2022 $ 40,601 5,489 $ 46,090	December 31, 2021 85,401 5,489 90,890	September 30, 2021
			83,476 5,278
			88,754

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Short-term borrowings

Short-term borrowings of the Group were as follows:

Unsecured bank loans Secured bank loans Total Unused short-term credit lines Range of interest rate	September 30, 2022 $ 400,000 115,000 $ 515,000 $ 1,192,653 1.475~1.749%	December 31, 2021 235,759 117,500 353,259 559,617 0.75~1.20%	September 30, 2021
			110,000 -
			110,000
			1,419,553
			1.20%

For the collateral for short-term borrowings, please refer to note 8.

(q) Other payables

Other payables of the Group were as follows:

Accrued payroll Employee bonus payable Compensation payable to directors Compensated absences Other accrued expenses payable Payables on equipment Dividends payable Other payables-other Total	September 30, 2022 $ 8,761 392 78 17,015 36,379 1,995 452 11,399 $ 76,471	December 31, 2021 19,192 441 128 28,602 73,081 24,247 9,730 23,076 178,497	September 30, 2021
			10,499 7,657 7,576 28,320 58,702 3,091 9,746 18,221
			143,812

(r) Long-term borrowings

Long-term borrowings of the Group were as follows:

Secured bank loans Less: current portion Total Unused long-term credit lines		September 30, 2022	September 30, 2022
	Currency NTD	Range of interest rate 1.885- 2.010%	Due year Amount 2030 $ 70,839 8,264 $ 62,575 $ 16,861

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2021	December 31, 2021	December 31, 2021
Currency NTD	Range of interest rate Due year Amount 1.51% 2030 $ 77,035 8,349 $ 68,686 $ 10,665 September 30, 2021

Currency NTD	Range of interest rate 1.51%	Due year Amount 2030 $ 79,103 8,315 $ 70,788 $ 8,597	Amount

For the collateral for long-term borrowings, please refer to note 8.

(s) Lease liabilities

Lease liabilities of the Group were as follows:

Current Non-current	September 30, 2022 $ 5,691 $ 11,303	December 31, 2021 4,069 5,729	September 30, 2021
			4,802
			5,885

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

The amounts recognized in profit or loss were as follows:

For the three months ended September 30 2022 2021 $ 49 38 $ 94 57 $ 151 253	For the nine months ended September 30	For the nine months ended September 30
2022	2022 123 262 494	2021
$ 49 $ 94 $ 151		113
		513
		559

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The amounts recognized in the statements of cash flows were as follows:

Total cash outflow for leases	For the nine months ended September 30	For the nine months ended September 30
	2022 $ 5,740	2021
		5,483

(t) Employee benefits

(i) Defined benefit plans

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2021 and 2020.

The expenses recognized in profit or loss for the Group were as follows:

For the three months ended September 30 2022 2021 $ 245 294 84 100 $ 329 394	For the nine months ended September 30	For the nine months ended September 30
2022 $ 245 84 $ 329	2022 777 283 1,060	2021
		886 301
		1,187

(ii) Defined contribution plans

The Group’ s expenses under the pension plan cost to Bureau of Labor Insurance were as follows:

For the three months ended September 30 2022 2021 $ 2,151 1,974 739 700 $ 2,890 2,674	For the nine months ended September 30	For the nine months ended September 30
2022 $ 2,151 739 $ 2,890	2022 6,368 2,243 8,611	2021
		6,122 2,369
		8,491

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(u) Income tax

The components of income tax expense (benefit) of the Group were as follows:

For the three months ended September 30 2022 2021 Current income tax expense Current period $ 1,044 1,257 Adjustment for prior periods - - Deferred income tax benefit Origination and reversal of temporary difference (44,928) (34,409) Income tax expense $ (43,884) (33,152)	For the three months ended September 30	For the three months ended September 30		For the nine months ended September 30 2022 2021 34,789 1,368 8,890 146 (56,511) (62,137) (12,832) (60,623)
		2021		2022 34,789 8,890 (56,511) (12,832)
		1,257 - (34,409) (33,152)

The Company’s income tax return for the year 2019 had been examined by the tax authorities.

(v) Capital and other equity

Except for the following disclosure, there was no significant change for capital and other equity for the nine months ended September 30, 2022 and 2021. Please refer to note 6(x) of the consolidated financial statements for the year ended December 31, 2021.

(i) 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 Treasury share transactions Donation from shareholders Overdue dividends not received by shareholders Total	September 30, 2022 $ 8,953 26,307 6,594 4,430 13 24,585 $ 70,882	December 31, 2021 8,953 26,307 6,594 4,433 13 - 46,300	September 30, 2021
			8,953 25,310 13,961 4,433 13 -
			52,670

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) 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.

On June 22, 2022 and July 7, 2021, the shareholders’ meeting resolved to distribute the 2021 and 2020 earnings. These earnings were appropriated as follows:

2021 Dividends distributed to ordinary shareholders Cash $ 79,156 (iii) Other equity	2020
	263,917

Balance as of January 1, 2022 Exchange differences on foreign operations Exchange differences on associates and joint ventures accounted for using equity method Unrealized losses from financial assets measured at fair value through other comprehensive income Unrealized losses from financial assets measured at fair value through other comprehensive income on associates and joint ventures accounted for using equity method Cumulative gains reclassified to retained earnings on disposal of investments in equity instruments designated at fair value through other comprehensive income Cumulative gains reclassified to retained earnings on associates disposal of investments in equity instruments designated at fair value through other comprehensive income Balance as of September 30, 2022	Exchange differences on translation of foreign financial statements $ (34,634) 40,456 1,102 - - - - $ 6,924	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 90,665 - - (120,951) (80,976) (504) (6,030) (117,796)	Total 56,031 40,456 1,102 (120,951) (80,976) (504) (6,030) (110,872)

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance as of January 1, 2021 Exchange differences on foreign operations Exchange differences on 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 on associates and joint ventures accounted for using equity method Cumulative gains reclassified to retained earnings on associates disposal of investments in equity instruments designated at fair value through other comprehensive income Balance as of September 30, 2021 (iv) Treasury stock	Exchange differences on translation of foreign financial statements $ (26,745) (9,996) (907) - - - $ (37,648)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 195,208 - - 66,667 80,950 (70,543) 272,282	Total 168,463 (9,996) (907) 66,667 80,950 (70,543) 234,634

In accordance with the requirements under section 28(2) of the Securities and Exchange Act, the Company repurchased 1,040 thousand shares of treasury stock in order to transfer hares to employees. As of September 30, 2022, a total of 1,040 thousand shares were all transferred to employees.

(w) Share-based payment

A resolution was decided during the Board meeting held on March 24, 2021 to award 1,040 thousand shares of employee stock options to employees. These employees with the employee stock option are entitled to purchase shares at the price of $14.6 per share, the Group therefore recognized related remuneration cost of $4,472 thousand.

The Group used Black-Scholes option pricing model in measuring the fair value of the share-based payment at the grant date. The measurement inputs were as follows:

Fair value at grant date (NT dollars per share) Share price at grant date Exercise price Expected volatility (%) Expected life (years) Expected dividend (%) Risk-free interest rate (%)	For the nine months ended September 30, 2021
	Treasury stock transferred to employees
	4.3 19.05 14.60 % 25.91 0.12 % 2.83 % 0.76

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Details of the employee stock options and the transfer of treasury stock were as follows:

(in thousand)

Granted during the year (number) Exercised during the year (number) Outstanding at end of period	For the nine months ended September 30, 2021 Weighted average exercise price (dollars) Number of options 14.6 1,040 14.6 (1,040) - -
	Weighted average exercise price (dollars) 14.6 14.6 -

(x) Earnings per share

The Group’s basic earnings per share and diluted earnings per share were calculated as follows:

(i) Basic earnings per share

For the three months ended September 30 2022 2021 Profit (loss) attributable to the Company $ (176,017) (147,875) Weighted-average number of ordinary shares outstanding 527,870 527,869 Earnings per share (NTD) $ (0.33) (0.28) Diluted earnings per share For the three months ended September 30 2022 2021 Profit (loss) attributable to the Company (diluted) $ (176,017) (147,875) Weighted-average number of ordinary shares outstanding 527,870 527,869 Effect of dilutive potential ordinary shares Employee remuneration in stock - - Weighted-average number of ordinary shares outstanding (diluted) 527,870 527,869 Diluted earnings per share (NTD) $ (0.33) (0.28)	For the nine months ended September 30	For the nine months ended September 30
	2022 2021 (227,866) 341,165 527,870 527,393 (0.43) 0.65 For the nine months ended September 30	2021
		341,165
		527,393
		0.65
	2022 (227,866) 527,870 - 527,870 (0.43)	2021
		341,165
		527,393 697
		528,090
		0.65

(ii) Diluted earnings per share

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(y) Revenue from contracts with customers
(i) Disaggregation of revenue

For the three months ended September 30 2022 2021 $ 3,007,444 3,283,754 - 13,496 39,632 - $ 3,047,076 3,297,250 $ 2,997,713 3,281,799 45,554 11,508 3,809 3,943 $ 3,047,076 3,297,250	For the nine months ended September 30 2022 2021 10,234,789 8,826,413 145,148 13,496 46,899 11,615 10,426,836 8,851,524 10,305,345 8,771,259 112,022 70,561 9,469 9,704 10,426,836 8,851,524	For the nine months ended September 30 2022 2021 10,234,789 8,826,413 145,148 13,496 46,899 11,615 10,426,836 8,851,524 10,305,345 8,771,259 112,022 70,561 9,469 9,704 10,426,836 8,851,524
2022 $ 3,007,444 - 39,632 $ 3,047,076 $ 2,997,713 45,554 3,809 $ 3,047,076	2022 10,234,789 145,148 46,899 10,426,836 10,305,345 112,022 9,469 10,426,836
		8,826,413 13,496 11,615
		8,851,524
		8,771,259 70,561 9,704
		8,851,524

(ii) Contract balances

Contract liabilities-travel service contract Contract liabilities-unearned sales revenue Total	September 30, 2022 $ 7,867 27,401 $ 35,268	December 31, 2021 38,155 12,868 51,023	September 30, 2021
			19,633 30,304
			49,937

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

The amount of revenue recognized for the three months and nine months ended September 30, 2022 and 2021 that were included in the contract liability balance at the beginning of the period were $1,217 thousand, $492 thousand, $12,922 thousand, and $3,921 thousand, respectively.

The major change in the balance of 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 AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(z) Non-operating income and expenses
(i) Other income

Details of other income of the Group were as follows:

For the three months ended September 30 2022 2021 Rent income $ 281 277 Gain from bargain purchase transactions - - Dividend income 4,974 1,668 Others 22,727 1,233 Total $ 27,982 3,178 (ii) Other gains and losses For the three months ended September 30 2022 2021 Foreign exchange gains $ 17,186 140 Gains (losses) on financial assets at fair value through profit or loss (21,804) (3,309) Gains on disposals of non-current assets (or disposal groups) held for sale 218 - Gains on disposals of property, plant and equipment 172 270 Impairment losses - - Gains on lease modification - - Others (9) (7) Total $ (4,237) (2,906) (iii) Finance costs For the three months ended September 30 2022 2021 Interest expense $ 2,469 647	For the nine months ended September 30 2022 2021 835 831 - 403 20,878 5,287 29,521 20,394 51,234 26,915 For the nine months ended September 30 2022 2021 23,693 6,716 (52,149) 6,913 133,363 - 172 460 (84) - 6 - (744) (32) 104,257 14,057 For the nine months ended September 30 2022 2021 4,841 1,931
	2022 4,841

For the three months ended
September 30
2022
2021
Rent income
$ 281
277
Gain from bargain
purchase
transactions
-
-
Dividend income
4,974
1,668
Others
22,727
1,233
Total
$
27,982
3,178
(ii)
Other gains and losses
For the three months ended
September 30
2022
2021
Foreign exchange
gains
$ 17,186
140
Gains (losses) on
financial assets at
fair value through
profit or loss
(21,804)
(3,309)
Gains on disposals
of non-current
assets (or disposal
groups) held for
sale
218
-
Gains on disposals
of property, plant
and equipment
172
270
Impairment losses
-
-
Gains on lease
modification
-
-
Others
(9)
(7)
Total
$
(4,237)
(2,906)
(iii) Finance costs
For the three months ended
September 30
2022
2021
Interest expense
$
2,469
647

For the nine months ended
September 30
2022
2021
835
831
-
403
20,878
5,287
29,521
20,394
51,234
26,915
For the nine months ended
September 30
2022
2021
23,693
6,716
(52,149)
6,913
133,363
-
172
460
(84)
-
6
-
(744)
(32)
104,257
14,057
For the nine months ended
September 30
2022
2021
4,841
1,931

2022
4,841

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(aa) Remunerations to employees and directors

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 as remuneration. However, if the Company still has accumulated deficit, the profit should be reserved to offset the deficit.

For the nine months ended September 30, 2022, there was no appropriation of remunerations to employees and directors because of net loss before tax.

For the three and nine months ended September 30, 2022, the renumerations to employees amounted to $(4,135) thousand and $7,576 thousand, respectively, and the remunerations to directors amounted to $(4,135) thousand and $7,576 thousand, respectively. These amounts were calculated using the Company's net income before tax without the remunerations to employees and directors for each period, multiplied by the proposed percentage which is stated under the Company's proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period. If there are any subsequent adjustments to the actual remuneration amounts after the annual shareholders' meeting, the adjustment will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year. Shares distributed to employees as employees' remuneration are calculated based on the closing price of the Company's shares on the day before the approval by the Board of Directors.

For the years ended December 31, 2021 and 2020, the remunerations to employees amounted to $49 thousand and $5,583 thousand, respectively. The remunerations to directors amounted to $49 thousand and $6,979 thousand, respectively. The differences between the amount as stated before and the actual distribution to employees and directors in 2021 and 2020 were $(49) thousand, $(49) thousand, $3,909 thousand and $2,513 thousand, respectively, which already recognized in profit or loss in 2022 and 2021. The information is available on the Market Observation Post System Website.

(ab) Financial instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Group’s financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to note 6(ad) of the consolidated financial statements for the year ended December 31, 2021.

(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 September 30, 2022, December 31 and September 30, 2021, the Group reviewed the concentrations of credit risk arising from the major top ten customers, and it was 94%, 96% and 95%, respectively, of the total accounts receivable. The concentrations of credit risk of the remaining accounts receivable are relatively small.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Credit risk of receivables

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

(ii) Liquidity risk

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

Carrying amount	Contractual cash flows	Within 1 year	1-2 years	2-5 years	Over 5 years
$ 515,000 678,290 70,839 660 16,994 $ 1,281,783 $ 353,259 1,149,068 77,035 716 9,798 $ 1,589,876 $ 110,000 1,077,209 79,103 823 10,687 $ 1,277,822	516,488 678,290 76,510 660 17,865	516,488 678,290 9,615 - 5,953	- - 9,615 350 5,028	- - 28,865 310 3,715 32,890 - - 28,363 366 1,217 29,946 - - 27,982 823 1,717 30,522	- - 28,415 - 3,169
	1,289,813	1,210,346	14,993		31,584
	353,746 1,149,068 82,255 716 10,438	353,746 1,149,068 9,454 - 4,181	- - 9,454 350 1,692		- - 34,984 - 3,348
	1,596,223	1,516,449	11,496		38,332
	110,503 1,077,209 86,181 823 11,353	110,503 1,077,209 8,411 - 4,922	- - 8,667 - 1,367		- - 41,121 - 3,347
	1,286,069	1,201,045	10,034		44,468

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

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Market risk

1) Currency risk

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

Financial assets Monetary items USD CNY EUR Financial liabilities	Financial assets Monetary items USD CNY EUR Financial liabilities	September 30, 2022 Foreign currency Exchange rate NTD $ 11,911 31.750 378,174 60,862 4.472 272,175 39 31.260 1,219 219 31.750 6,953 742 4.472 3,318	September 30, 2022 Foreign currency Exchange rate NTD $ 11,911 31.750 378,174 60,862 4.472 272,175 39 31.260 1,219 219 31.750 6,953 742 4.472 3,318	December 31, 2021 Foreign currency Exchange rate NTD 10,593 27.680 293,214 40,119 4.347 174,397 - - - 16,189 27.680 448,112 1,502 4.347 6,529	December 31, 2021 Foreign currency Exchange rate NTD 10,593 27.680 293,214 40,119 4.347 174,397 - - - 16,189 27.680 448,112 1,502 4.347 6,529	September 30, 2021	September 30, 2021
		Foreign currency $ 11,911 60,862 39 219 742	Exchange rate 31.750 4.472 31.260 31.750 4.472	Foreign currency 10,593 40,119 - 16,189 1,502	Exchange rate 27.680 4.347 - 27.680 4.347	Foreign currency 13,291 36,054 - 10,451 1,445	Exchange rate NTD 27.850 370,154 4.294 154,825 - - 27.850 291,060 4.294 6,205
	Monetary items USD CNY

The Group’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, other financial assets, accounts payable and other payables that are denominated in foreign currency. A weakening (strengthening) of 1% of the NTD against the USD, CNY and EUR as of September 30, 2022 and 2021, would have increased (decreased) net profit before tax by $6,413 thousand and $2,277 thousand for the nine months ended September 30, 2022 and 2021, respectively. The analysis is performed on the same basis.

Since the Group has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For the nine months ended September 30, 2022 and 2021, foreign exchange gain (loss) (including realized and unrealized portions) amounted to gain of $23,693 thousand and $6,716 thousand, respectively.

2) Interest rate risk

Please refer to the notes on liquidity risk management and interest rate exposure of the Group’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.

If the interest rate had increased/decreased by 1%, the Group’s profit (loss) before tax would have decreased/increase by $4,394 thousand and $1,418 thousand for nine months ended September 30, 2022 and 2021, respectively, with all other variable factors remaining constant. This is mainly due to the Group’s loan at variable rates.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated 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 the profit and loss is illustrated below:

Prices of securities at the reporting date	For the nine months ended September 30 2022 2021 Other comprehensive income after tax Net income Other comprehensive income after tax Net income $ 9,245 2,327 11,608 1,943 $ (9,245) (2,327) (11,608) (1,943)	For the nine months ended September 30 2022 2021 Other comprehensive income after tax Net income Other comprehensive income after tax Net income $ 9,245 2,327 11,608 1,943 $ (9,245) (2,327) (11,608) (1,943)	For the nine months ended September 30 2022 2021 Other comprehensive income after tax Net income Other comprehensive income after tax Net income $ 9,245 2,327 11,608 1,943 $ (9,245) (2,327) (11,608) (1,943)
	2022	Net income 2,327 (2,327)
	Other comprehensive income after tax $ 9,245 $ (9,245)		Other comprehensive income after tax 11,608 (11,608)
Increasing 1% Decreasing 1%

(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:

	September 30, 2022	September 30, 2022
Book value $ 203,479 29,221 7,595 924,523 571,344 880,483 5,776 30,884 3,818 1,492,305 $ 2,657,123		Fair value	Total 203,479 29,221 7,595 924,523 - - - - -
	Level 1 203,479 29,221 - - - - - - - - 232,700	Level 2 - - 7,595 - - - - - - - 7,595
			-
			1,164,818

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	September 30, 2022	September 30, 2022	September 30, 2022
Book value $ 515,000 602,521 75,769 70,839 660 16,994 $ 1,281,783		Fair value
	Level 1 Level 2 Level 3 - - - - - - - - - - - - - - - - - - - - - December 31, 2021			Total - - - - - -
				-

		Fair value
	Level 1 272,108 51,577 - - - - - - - 323,685 - - - - - - - -	Level 2 - - - - - - - - - - - - - - - - - -	Level 3 - - 1,016,623 - - - - - - 1,016,623 - - - - - - - -	Total 272,108 51,577 1,016,623 - - - - -
				-
				1,340,308
				- - - - - - -
				-

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

September 30, 2021	September 30, 2021	September 30, 2021
	Fair value
Level 1 134,721 59,625 - - - - - - - 194,346 - - - - - - -	Level 2 - - - - - - - - - - - - - - - - -	Level 3 - - 1,160,804 - - - - - - 1,160,804 - - - - - - -	Total
			134,721 59,625 1,160,804 - - - - -
			-
			1,355,150
			- - - - - -
			-

2) Valuation techniques for financial instruments measured at fair value

A. Non-derivative financial instruments

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 AND SUBSIDIARIES Notes to the Consolidated 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.

Measurements of fair value of equity investments without an active market nor quoted market price are based on comparable listed company method. This method is based on the estimated earnings before interest, taxes, depreciation and amortization and the multipliers that are extrapolated from comparable listed company quoted prices. The estimated fair values are adjusted to the discounting effect of lack of market liquidity.

B. Derivative financial instruments

Measurement of the fair value of derivative instruments is based on the valuation techniques generally accepted by market participants such as the discounted cash flow or option pricing models. Fair value of currency swap contract is usually determined by the forward currency exchange rate.

3) Transfers between Level 1 and Level 2

There were no transfers for the nine months ended September 30, 2022 and 2021.

4) Reconciliation of Level 3 fair values

Opening balance, January 1, 2022 Total gains and losses recognized Other comprehensive income Disposals Effect of exchange rate changes Ending Balance, September 30, 2022	Fair value through other comprehensive income
	Unquoted equity instruments $ 1,016,623 (120,955) (1,873) 30,728 $ 924,523

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Opening balance, January 1, 2022
Total gains and losses recognized
Other comprehensive income
Disposals
Effect of exchange rate changes
Ending Balance, September 30, 2022
Opening balance, January 1, 2021
Total gains and losses recognized
Other comprehensive income
Capital reduction by cash
Effect of exchange rate changes
Ending Balance, September 30, 2021
Opening balance, January 1, 2021
Total gains and losses recognized
Other comprehensive income
Capital reduction by cash
Effect of exchange rate changes
Ending Balance, September 30, 2021

Fair value through other
comprehensive income

Unquoted equity
instruments
$ 1,016,623
(120,955)
(1,873)
30,728
$
924,523
$ 1,109,979
66,667
(8,134)
(7,708)
$
1,160,804
$ 1,109,979
66,667
(8,134)
(7,708)
$
1,160,804

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 September 30, 2022 and 2021 were as follows:

For the three months ended September 30 2022 2021 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”$ (41,056) 2,005	For the nine months ended September 30 2022 2021 (120,955) 66,667	For the nine months ended September 30 2022 2021 (120,955) 66,667
		2021
		66,667

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The Group’s financial instruments that use Level 3 inputs to measure fair value include financial assets measured at fair value through other comprehensive income-equity investments.

The Group’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 method (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 (0.93~1.90, 0.96~2.01 and 0.95~2.05 as of September 30, 2022, December 31 and September 30, 2021) ‧ Lack of market liquidity discount (10%~30%, 3%~43% and 10%~30% as of September 30, 2022, December 31 and September 30, 2021) ‧ 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 Group 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:

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

September 30, 2022 Financial assets at fair value through other comprehensive income December 31, 2021 Financial assets at fair value through other comprehensive income September 30, 2021 Financial assets at fair value through other comprehensive income	Inputs Price to book ratio Liquidity discount Price to book ratio Liquidity discount Price to book ratio Liquidity discount	Increase/ Other comprehensive income Decrease Favorable Unfavorable 10% $ 887 (887) 10% 19,000 (19,000) 10% 898 (898) 10% 21,553 (21,553) 10% 116,093 (116,093) 10% 23,072 (23,072)

The favorable and unfavorable changes of the Group refer to the fluctuation of fair value, and the fair value is calculated by valuation techniques based on the unobservable input parameters of different degrees.

(ac) Financial risk management

There were no significant changes in the Group’ s financial risk management and policies as disclosed in note 6(ae) of the consolidated financial statements for the year ended December 31, 2021.

(ad) Capital management

Management believes that the objectives, policies and processes of capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2021. Please refer to note 6(af) of the consolidated financial statements for the year ended December 31, 2021 for further details.

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

There were no non-cash investing activities for the nine months ended September 30, 2022 and 2021 . Reconciliation of liabilities arising from non-cash financing activities for the nine months ended September 30, 2022 and 2021 were as follows:

Non-cash changes	Non-cash changes	September 30, 2022 16,994
Lease modification Effect of consolidation changes 78 - Non-cash changes
		September 30, 2021 10,687
Lease modification -	Effect of consolidation changes -

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(7) Related-party transactions

(a) Key management personnel compensation

For the three months ended September 30	For the three months ended September 30	For the nine months ended September 30 2022 2021 23,193 23,707 1,164 694 24,357 24,401	For the nine months ended September 30 2022 2021 23,193 23,707 1,164 694 24,357 24,401
2022 $ 7,693 327 $ 8,020	2021	2022 23,193 1,164 24,357
	8,178 161		23,707 694
	8,339		24,401

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

(8) Pledged assets

The carrying amounts of pledged assets were as follows:

Pledged assets	Object	September 30, 2022 $ 1,844 584,107 $ 585,951	December 31, 2021 1,843 587,889 589,732	September 30, 2021
Cash in banks (other financial assets) Land, buildings and structures	Performance guarantee Borrowings			4,430 589,712 594,142

(9) Commitments and contingencies

(a) Letter of credit issued but not expired

Letter of credit outstanding for the import of raw materials	September 30, 2022 $ 966,412 (including USD285 thousand and EUR140 thousand)	December 31, 2021 September 30, 2021 1,168,086 1,756,326 (including USD256 thousand) (including USD18,360 thousand)

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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:

		For the	three months ended September 30	three months ended September 30	three months ended September 30	three months ended September 30
By Function By item		2022		2021
	Operating cost	Operating expense	Total	Operating cost	Operating expense	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	$ 33,545 4,635 2,396 - 2,395 66,421 319	17,705 1,923 823 330 3,309 2,699 47	51,250 6,558 3,219 330 5,704 69,120 366	37,566 4,206 2,268 - 2,057 59,823 633	11,390 1,184 800 (3,899) 4,049 2,389 -	48,956 5,390 3,068 (3,899) 6,106 62,212 633

		For the nine months		ended September 30
By Function By item		2022		2021
	Operating cost	Operating expense	Total	Operating cost	Operating expense	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	$ 117,795 13,308 7,145 - 7,225 198,981 1,301	53,306 4,395 2,526 941 12,152 7,876 140	171,101 17,703 9,671 941 19,377 206,857 1,441	140,235 13,502 7,008 - 6,430 178,594 1,896	68,374 3,667 2,670 11,093 10,693 7,044 -	208,609 17,169 9,678 11,093 17,123 185,638 1,896

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES 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 Group for the nine months ended September 30, 2022:

(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 Thousands 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	475,000	29,545	% 0.20	29,545
The Company	Gloria Material Technology Corp.	-	Current financial assets at fair value through profit or loss	170,000	5,024	% 0.04	5,024
The Company	Solar Applied Materials Technology Corp.	-	Current financial assets at fair value through profit or loss	2,842,000	84,976	% 0.48	84,976
The Company	Universal Venture Capital Investment Corporation	-	Non-current investment in equity instrument at FVOCI	8,400,000	57,353	% 6.98	57,353
The Company	Euroc Venture Capital Corp.	-	Non-current investment in equity instrument at FVOCI	19,000	144	% 2.38	144
The Company	Euroc III Venture Capital Corp.	-	Non-current investment in equity instrument at FVOCI	15,000	228	% 5.00	228
The Company	Global Investment Holding Co., Ltd	-	Non-current investment in equity instrument at FVOCI	10,233,608	86,738	% 5.82	86,738
The Company	Faith Alliance Corporation	-	Non-current investment in equity instrument at FVOCI	25,720	49	% 0.06	49
The Company	Excellence Electronic Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	912	8	% 0.01	8
The Company	Leadwell Cnc Machines Mfg., Corp.	-	Non-current investment in equity instrument at FVOCI	37,352	1,140	% 0.06	1,140
The Company	Crownpo Technology Inc.	-	Non-current investment in equity instrument at FVOCI	709	17	% 0.01	17
The Company	Infomedia Inc.	-	Non-current investment in equity instrument at FVOCI	200,000	1,275	% 0.11	1,275
The Company	Vxis Technology Corp.	-	Non-current investment in equity instrument at FVOCI	72,480	939	% 0.61	939
The Company	Asia Global Venture Capital II CO., Ltd.	-	Non-current investment in equity instrument at FVOCI	531,300	18,378	% 10.00	18,378
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	600,000	-	% 3.64	-
The Company	Yuan-Jie Investment Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	21,000,000	198,421	% 19.09	198,421
The Company	Yu-Jie Investment Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	21,320,000	241,427	% 19.38	241,427
The Company	Deng Yun Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	591,945	43,567	% 3.09	43,567
The Company	Lidien Inc.	-	Non-current investment in equity instrument at FVOCI	760,000	13,035	% 19.00	13,035
The Company	GVISION-USA, INC.	-	Non-current investment in equity instrument at FVOCI	666,667	27,384	% 19.05	27,384
YSIC Ltd.	Senao Networks, Inc.	-	Current financial assets at fair value through profit or loss	60,000	10,200	% 0.12	10,200
YSIC Ltd.	Actron Technology Corp.	-	Current financial assets at fair value through profit or loss	20,000	5,450	% -	5,450
YSIC Ltd.	Handa Pharmaceuticals, Inc.	-	Current financial assets at fair value through profit or loss	46,000	2,433	% 0.04	2,433

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES 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.	Eson Precision Ind Co., Ltd.	-	Current financial assets at fair value through profit or loss	30,000	1,806	% 0.02	1,806
YSIC Ltd.	Turvo International Co., Ltd.	-	Current financial assets at fair value through profit or loss	20,000	1,988	% 0.03	1,988
YSIC Ltd.	Oneness Biotech Co., Ltd.	-	Current financial assets at fair value through profit or loss	70,000	17,675	% 0.02	17,675
YSIC Ltd.	OBI Pharma, Inc.	-	Current financial assets at fair value through profit or loss	170,032	12,157	% 0.07	12,157
YSIC Ltd.	BizLink Holding Inc.	-	Current financial assets at fair value through profit or loss	20,000	5,610	% 0.01	5,610
YSIC Ltd.	MPI Corporation	-	Current financial assets at fair value through profit or loss	10,000	827	% 0.01	827
YSIC Ltd.	Yulon Finance Corporation	-	Current financial assets at fair value through profit or loss	20,000	2,870	% -	2,870
YSIC Ltd.	Chunghwa Precision Test Tech Co., Ltd.	-	Current financial assets at fair value through profit or loss	10,000	3,856	% 0.03	3,856
YSIC Ltd.	Shin Kong Chi- Shin Money- Market Fund	-	Current financial assets at fair value through profit or loss	1,800,000	28,224	% -	28,224
YSIC Ltd.	Fubon Taiwan High Dividend 30 ETF	-	Current financial assets at fair value through profit or loss	100,000	997	% -	997
YSIC Ltd.	Cjw International Co., Ltd.	-	Non-current financial assets at fair value through profit or loss	676,413	6,372	% 0.65	6,372
YSIC Ltd.	Cyca International	-	Non-current financial assets at fair value through profit or loss	101,677	-	% -	-
YSIC Ltd.	Mcm Stamping Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	200,000	359	% 0.63	359
YSIC Ltd.	Vxis Technology Corp.	-	Non-current investment in equity instrument at FVOCI	72,480	939	% 0.61	939
YSIC Ltd.	Infomedia Inc.	-	Non-current investment in equity instrument at FVOCI	650,000	4,142	% 0.35	4,142
YSIC Ltd.	Yuan-Jie Investment Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	100,000	945	% 0.09	945
YSIC Ltd.	Yu-Jie Investment Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	103,000	1,166	% 0.09	1,166
Grand Capital Co., Ltd.	Deng Yun Co., Ltd	-	Non-current investment in equity instrument at FVOCI	3,082,453	226,869	% 16.10	226,869
Yuan-Shin Materials Technology Co.,Ltd.	Yuanta Financial Holding Co., Ltd.	-	Current financial assets at fair value through profit or loss	309,000	6,041	% -	6,041
Yuan Shin Materials Technology Co., Ltd.	Wei Kong Industrial Co., Ltd.	-	Current financial assets at fair value through profit or loss	40,000	1,020	% 0.01	1,020
Yuan Shin Materials Technology Co., Ltd.	Wah Lee Industrial Corp.	-	Current financial assets at fair value through profit or loss	20,000	1,670	% 0.01	1,670
Yuan Shin Materials Technology Co., Ltd.	China General Plastics Corp.	-	Current financial assets at fair value through profit or loss	50,000	1,025	% 0.01	1,025
Yuan Shin Materials Technology Co., Ltd.	Asustek Computer Inc.	-	Current financial assets at fair value through profit or loss	6,000	1,404	% -	1,404
Yuan Shin Materials Technology Co., Ltd.	Giga-Byte Technology Co., Ltd.	-	Current financial assets at fair value through profit or loss	4,000	352	% -	352
Yuan Shin Materials Technology Co., Ltd.	Supreme Electronics Co., Ltd.	-	Current financial assets at fair value through profit or loss	30,000	1,021	% 0.01	1,021
Yuan Shin Materials Technology Co., Ltd.	Chang Wah Electromaterial Inc.	-	Current financial assets at fair value through profit or loss	5,000	157	% -	157

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(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: Please refer to note 6(b).
(x) Significant transactions and business relationship between the parent company and its subsidiaries for the nine months ended September 30, 2022: None

(b) Information on investees:

The following is the information on investees for the nine months ended September 30, 2022 (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 September 30, 2022			Net income (losses) of investee	Share of profits/losses of investee	Note
				September 30, 2022	December 31, 2021	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	405,726	(29,536)	(7,384)
The Company	Wonderland Enterprise Co., Ltd.	Taiwan	General investment business	325,230	325,230	29,629,597	% 37.04	765,072	2,529	937
The Company	Functional Coating System Technologies Co., Ltd.	Taiwan	OEM of semiconductor and components conformal coating	28,500	28,500	1,744,186	% 34.88	25,921	(424)	(148)
The Company	Universal Investments Limited	British Cayman Islands	Real estate investment business	17,273	17,273	80	% 40.00	18,396	(647)	(427)
The Company	YSIC Ltd.	Taiwan	Residential building and industrial plant development rental business	1,638,169	1,638,169	72,446,838	% 99.99	901,856	28,666	28,660	Subsidiary
The Company	Yuan Shin Materials Technology Co., Ltd.	Taiwan	Basic precision chemical materials and plastic raw material manufacturing	145,900	145,900	5,000,000	% 100.00	48,421	(2,317)	(2,317)	Subsidiary
The Company	Yangmingshan Tien Lai Resort & SPA	Taiwan	General hotel industry	630,555	630,555	25,865,618	% 65.07	688,548	(970)	(2,366)	Subsidiary
The Company	Asia Carbon & Technology Inc.	Taiwan	Electronic component manufacturing	291,064	291,064	9,866,389	% 98.58	(816)	(1,457)	(1,436)	Subsidiary
YSIC Ltd.	Kun Shan International Ltd.	Seychelles	General investment business	122,572	122,572	3,702,718	% 62.03	210,704	102,801	63,771	Subsidiary
YSIC Ltd.	Grand Capital Co., Ltd.	Seychelles	General investment business	90,182	90,182	2,698,002	% 100.00	228,862	(189)	(189)	Subsidiary
YSIC Ltd.	Yangmingshan Tien Lai Resort & SPA	Taiwan	General hotel industry	110,836	110,836	4,807,774	% 12.10	117,703	(970)	(387)	Subsidiary
YSIC Ltd.	Globaltop Technology Inc.	Taiwan	Aluminum Nitride Powder	162,643	162,643	5,255,553	% 23.89	44,653	(23,764)	(5,677)
YSIC Ltd.	Tien Lai Co., Ltd.	Taiwan	Pipe Lines Construction	5,000	5,000	500,000	% 50.00	1,290	(301)	(151)	Subsidiary

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

					(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 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, 2022	Investment flows		Accumulated outflow of investment from Taiwan as of September 30, 2022	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 Consulting Co., Ltd.	Educational consulting, information operation consulting, software and data storage consultation	110,122 (USD 3,468)	( 2 )	115,888 (USD 3,650)	-	-	115,888 (USD 3,650)	82,013 (USD 2,806)	62.03%	50,876	126,797	-
Kun Shan Jia-An Technology Education Consulting Co., Ltd.	Educational consulting, information operation consulting, software and data storage consultation	72,203 (USD 2,432)	( 2 )	(Note 3)	-	-	-	24,726 (USD 846)	62.03%	15,338	55,691	-

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 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= NTD31.75, USD1=NTD29.2275).

Note3: Kun Shan Yu-Fu Technology Education Consulting Co., Ltd. had been spun-off as Kun Shan Yu-Fu Technology Education Consulting Co., Ltd. and Kun Shan JiaAn Technology Education Consulting Co., Ltd.

(ii) Upper limit on investment in Mainland China:

Accumulated Investment in Mainland China as of September 30, 2022	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note)
115,888 (USD 3,650)	115,888 (USD 3,650)	541,189

Note: The investment limit was calculated based on the official document 10804600980 announced by the MOEAIC on March 12, 2019.

(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.	41,794,000	% 7.91
Frank.C. Chen Foundation for Culture and Education	28,750,000	% 5.44

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Segment information:

(a) Plasticization segment: manufacturing and domestic/international sales of styrene monomer, manufacturing and sales of chemical materials and plastic materials.
(b) Investment segment: investment business.
(c) Other segment: the revenues of the segments that have not reached the quantitative threshold are hotel and general service business.

The Group’s operating segment information and reconciliation are as follows:

Revenue Revenue from external customers Intersegments revenues Total revenue Reportable segment profit or loss Revenue Revenue from external customers Intersegments revenues Total revenue Reportable segment profit or loss Revenue Revenue from external customers Inter-segment revenues Total revenue Reportable segment profit or loss	For the three months endedSeptember 30, 2022 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 2,997,713 (3,005) 46,123 - 3,040,831 - 126 1,387 (1,513) - $ 2,997,713 (2,879) 47,510 (1,513) 3,040,831 $ (221,817) (5,967) 1,046 7,420 (219,318) For the three months endedSeptember 30, 2021 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 3,281,799 (4,850) 11,379 - 3,288,328 - (1,893) 1,325 568 - $ 3,281,799 (6,743) 12,704 568 3,288,328 $ (177,101) (9,260) (14,728) 18,473 (182,616) For the nine months endedSeptember 30, 2022 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 10,305,345 (21,128) 114,306 - 10,398,523 - (258) 3,073 (2,815) - $ 10,305,345 (21,386) 117,379 (2,815) 10,398,523 $ (277,803) 102,635 (2,728) (24,161) (202,057)	For the three months endedSeptember 30, 2022 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 2,997,713 (3,005) 46,123 - 3,040,831 - 126 1,387 (1,513) - $ 2,997,713 (2,879) 47,510 (1,513) 3,040,831 $ (221,817) (5,967) 1,046 7,420 (219,318) For the three months endedSeptember 30, 2021 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 3,281,799 (4,850) 11,379 - 3,288,328 - (1,893) 1,325 568 - $ 3,281,799 (6,743) 12,704 568 3,288,328 $ (177,101) (9,260) (14,728) 18,473 (182,616) For the nine months endedSeptember 30, 2022 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 10,305,345 (21,128) 114,306 - 10,398,523 - (258) 3,073 (2,815) - $ 10,305,345 (21,386) 117,379 (2,815) 10,398,523 $ (277,803) 102,635 (2,728) (24,161) (202,057)	For the three months endedSeptember 30, 2022 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 2,997,713 (3,005) 46,123 - 3,040,831 - 126 1,387 (1,513) - $ 2,997,713 (2,879) 47,510 (1,513) 3,040,831 $ (221,817) (5,967) 1,046 7,420 (219,318) For the three months endedSeptember 30, 2021 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 3,281,799 (4,850) 11,379 - 3,288,328 - (1,893) 1,325 568 - $ 3,281,799 (6,743) 12,704 568 3,288,328 $ (177,101) (9,260) (14,728) 18,473 (182,616) For the nine months endedSeptember 30, 2022 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 10,305,345 (21,128) 114,306 - 10,398,523 - (258) 3,073 (2,815) - $ 10,305,345 (21,386) 117,379 (2,815) 10,398,523 $ (277,803) 102,635 (2,728) (24,161) (202,057)	For the three months endedSeptember 30, 2022 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 2,997,713 (3,005) 46,123 - 3,040,831 - 126 1,387 (1,513) - $ 2,997,713 (2,879) 47,510 (1,513) 3,040,831 $ (221,817) (5,967) 1,046 7,420 (219,318) For the three months endedSeptember 30, 2021 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 3,281,799 (4,850) 11,379 - 3,288,328 - (1,893) 1,325 568 - $ 3,281,799 (6,743) 12,704 568 3,288,328 $ (177,101) (9,260) (14,728) 18,473 (182,616) For the nine months endedSeptember 30, 2022 Plasticization segment Investment segment Other segments Reconciliation and elimination Total $ 10,305,345 (21,128) 114,306 - 10,398,523 - (258) 3,073 (2,815) - $ 10,305,345 (21,386) 117,379 (2,815) 10,398,523 $ (277,803) 102,635 (2,728) (24,161) (202,057)
	Plasticization segment Investment segment Other segments Reconciliation and elimination $ 3,281,799 (4,850) 11,379 - - (1,893) 1,325 568 $ 3,281,799 (6,743) 12,704 568 $ (177,101) (9,260) (14,728) 18,473 For the nine months endedSeptember 30, 2022
	Plasticization segment $ 10,305,345 - $ 10,305,345 $ (277,803)	Investment segment (21,128) (258) (21,386) 102,635	Other segments 114,306 3,073 117,379 (2,728)	Reconciliation and elimination - (2,815) (2,815) (24,161)

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the nine months endedSeptember 30, 2021	For the nine months endedSeptember 30, 2021	For the nine months endedSeptember 30, 2021	For the nine months endedSeptember 30, 2021
Plasticization segment $ 8,771,259 - $ 8,771,259 $ 298,203	Investment segment 12,485 (1,807) 10,678 2,582	Other segments 72,674 1,983 74,657 (19,299)	Reconciliation and elimination - (176) (176) (2,164)	Total
				8,856,418 -
				8,856,418
				279,322

AI assistant

T.S.M.C. — Interim / Quarterly Report 2022

51769_rns_2022-12-05_04e9f548-935f-461b-958e-0479811e2585.pdf

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

KPMG

Notes to Readers

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2022, December 31 and September 30, 2021

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months and nine months ended September 30, 2022 and 2021

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2022 and 2021

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the nine months ended September 30, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2022 and 2021

(1) Company history

(2) Approval date and procedures of the consolidated financial statements

(3) New standards, amendments and interpretations adopted

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies

(a) Statement of compliance

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Employee benefits

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

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Prepayments

(g) Other current financial assets

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) Property, plant and equipment

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Right-of-use assets

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Investment property

(m) Intangible assets

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Short-term borrowings

(q) Other payables

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(s) Lease liabilities

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(u) Income tax

(v) Capital and other equity

(i) Capital surplus

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Retained earnings

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(w) Share-based payment

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(aa) Remunerations to employees and directors

1) Credit risk exposure

2) Concentration of credit risk

T.S.M.C. Interim / Quarterly Report 2022