TSRC - Annual Report 2021 | FinancialReports.eu

Stock Code:2103

TSRC CORPORATION

Parent Company Only Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2021 and 2020

Address: No.2, Singgong Rd., Dashe Dist., Kaohsiung City. Telephone: (07)351-3811

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

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

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’ Report

To the Board of Directors of TSRC Corporation:

Opinion

We have audited the parent company only financial statements of TSRC Corporation, which comprise the balance sheets as of December 31, 2021 and 2020, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the TSRC Corporation as of December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2021. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue recognition

Please refer to note 4(q) and 6(t) for disclosures related to revenue recognition.

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

Description of key audit matter:

Revenue is the key indicator used by investors and management while evaluating the TSRC Corporation’s finance or operating performance. The accuracy of the timing and amount of revenue recognized have significant impact on the financial statements, for which the assumptions and judgments of revenue measurement and recognition rely on subjective judgments of the management. Therefore, we consider it as the key audit matter.

How the matter was addressed in our audit:

Testing the effectiveness of design and implementing the internal control (both manual and system control) of sales and collecting cycle; reviewing the revenue recognition of significant sales contracts to determine whether the accounting treatment key judgment, estimation, and appropriate; analyzing the changes in top 10 customers from the most recent period and last year, and the changes in the price and quantity of each category of product line to determine whether if there are any significant misstatements; selecting sales transactions from a period of time before and after the balance sheet date, and verifying with the vouchers to determine the accuracy of the timing and amounts of revenue recognized; understanding whether if there is a significant subsequent sales return or discount; and reviewing whether the disclosure of revenue made by the management is appropriate.

2. Inventory measurement

Please refer to note 4(g), note 5(a), and note 6(f) for disclosures related to inventory measurement.

Description of key audit matter:

The inventory of TSRC Corporation includes various types of synthetic rubber and its raw material. Since there is an oversupply and a low market demand in the rubber manufacturing industry, which may result in a decline on the price of raw material, the carrying value of inventories may exceed its net realizable value. The measurement of inventory depends on the evaluation of the management based on evidence from internal and external, both subjective and objective. Therefore, we consider it as the key audit matter.

How the matter was addressed in our audit:

The key audit procedures performed is to understand management's accounting policy of inventory measurement and determine whether it is reasonable and is being implemented. The procedures include reviewing the inventory aging documents and analyzing its changes; obtaining the documents of inventory measurement and evaluating whether if the bases used for net realizable value is reasonable; selecting samples and verifying them with the vouchers to test the accuracy of the amount; and reviewing whether the disclosure of inventory measurement made by the management is appropriate.

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

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

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

3-2

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

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

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

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

3-3

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

The engagement partners on the audit resulting in this independent auditors’ report are Ming-Hung Huang and Lin Wu.

KPMG

Taipei, Taiwan (Republic of China) March 10, 2022

Notes to Readers

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

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) TSRC CORPORATION

Balance Sheets

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Financial assets at fair value through profit or loss－current (note 6(b)) 1150 Notes receivable, net (note 6(d)) 1170 Accounts receivable, net (note 6(d)) 1180 Account receivable－related parties (notes 6(d) and 7) 1200 Other receivables (notes 6(e) and 7) 1220 Current income tax assets 130x Inventories (note 6(f)) 1479 Other current assets Total current assets Non-current assets: 1518 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1550 Investments accounted for under equity method (notes 6(g) and 7) 1600 Property, plant and equipment (notes 6(h) and 9) 1755 Right-of-use assets (note 6(i)) 1760 Investment property (notes 6(j) and 6(n)) 1780 Intangible assets (note 6(k)) 1840 Deferred income tax assets (note 6(p)) 1900 Other non-current assets Total non-current assets Total assets	December 31, 2021 Amount % $ 140,115 1 713 - 1,857 - 1,398,583 5 203,040 1 202,063 1 - - 1,670,515 7 193,123 1 3,810,009 16 1,220,669 5 15,833,863 62 2,866,238 11 43,833 - 1,552,148 6 69,112 - 28,187 - 21,521 - 21,635,571 84 $ 25,445,580 100	December 31, 2020 Amount % 134,602 1 3,460 - 2,342 - 945,414 4 87,273 - 117,821 1 12,151 - 1,483,926 7 342,902 2 3,129,891 15 838,235 4 13,644,962 61 2,978,757 13 43,131 - 1,566,873 7 65,098 - 67,126 - 41,250 - 19,245,432 85 22,375,323 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(l)) 2322 Current portion of long-term borrowings (note 6(l)) 2120 Financial liabilities at fair value through profit or loss ─ current (note 6(b)) 2170 Accounts payables (note 7) 2230 Current income tax liabilities 2200 Other payable (notes 6(o), 6(s) and 7) 2280 Current lease liabilities (note 6(m)) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2541 Long-term bank borrowings (note 6(l)) 2542 Other long-term borrowings (note 6(l)) 2550 Provision liabilities－non-current (note 7) 2570 Deferred income tax liabilities (note 6(p)) 2580 Non-current lease liabilities (note 6(m)) 2600 Other non-current liabilities (notes 6(l) and 6(o)) Total non-current liabilities Total liabilities Equity attributable to shareholders of the company (notes 6(c), 6(o), 6(p), 6(q) and 6(w)): 3100 Common stock 3200 Capital surplus Retained earnings: 3310 Legal reserve 3350 Unappropriated earnings Other equity: 3410 Financial statement translation differences for foreign operations 3420 Unrealized gain on financial assets measured at fair value through other comprehensive income 3450 Gains (losses) on hedging instrument Total equity Total liabilities and equity	December 31, 2021 Amount % $ 2,205,053 9 400,000 2 93 - 789,029 3 33,039 - 726,615 3 38,323 - 33,550 - 4,225,702 17 1,745,756 7 349,922 1 27,757 - 959,693 4 6,124 - 104,676 - 3,193,928 12 7,419,630 29 8,257,099 32 50,725 - 4,073,680 16 5,080,942 20 9,154,622 36 (456,708) (2) 1,047,059 5 (26,847) - 563,504 3 18,025,950 71 $ 25,445,580 100	December 31, 2020 Amount % 2,697,482 12 2,100,000 9 81 - 674,118 4 12,201 - 509,913 3 29,417 - 14,639 - 6,037,851 28 973,718 4 349,341 2 31,819 - 739,404 3 15,034 - 89,036 - 2,198,352 9 8,236,203 37 8,257,099 37 49,531 - 4,068,862 18 1,483,970 7 5,552,832 25 (198,125) (1) 558,902 2 (81,119) - 279,658 1 14,139,120 63 22,375,323 100

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) TSRC CORPORATION

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

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

4000 Revenue (notes 6(t) and 7) 5000 Operating costs (notes 6(f), 6(h), 6(i), 6(k), 6(m), 6(o), 6(s) and 7) Gross profit from operations 5910 Less: Unrealized gain (loss) on affiliated transactions Gross profit 6000 Operating expenses (notes 6(d), 6(h), 6(i), 6(k), 6(m), 6(o), 6(s) and 7): 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Impairment loss (reversal of impairment loss) determined in accordance with IFRS 9 Total operating expenses 6500 Other income and expenses, net (notes 6(j), 6(n), 6(o), 6(u) and 7) 6900 Operating profit (loss) Non-operating income and expenses (notes 6(g), 6(h), 6(m) and 6(v) and 7): 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7375 Share of profit from the subsidiaries, the associates and joint ventures Total non-operating income and expenses 7900 Net income before tax 7950 Less: Income tax expenses (note 6(p)) Net income (loss) 8300 Other comprehensive income: 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that may be reclassified subsequently to profit or loss 8361 Financial statements translation differences for foreign operations 8380 Share of other comprehensive income of subsidiaries accounted for using equity method 8399 Less: Income tax related to components of other comprehensive income that will be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income Total comprehensive income 9710 Basic earnings (losses) per share (in New Taiwan dollars) (note 6(r)) 9810 Diluted earnings (losses) per share (in New Taiwan dollars) (note 6(r))	2021 Amount % $ 11,150,474 100 8,950,930 80 2,199,544 20 27,755 - 2,171,789 20 609,388 5 526,203 5 263,947 2 (455) - 1,399,083 12 321,475 3 1,094,181 11 5,107 - 59,252 1 1,011,054 9 (59,273) (1) 2,230,890 20 3,247,030 29 4,341,211 40 410,272 4 3,930,939 36 (31,893) - 382,434 3 127,068 1 21,345 - 456,264 4 (258,583) (2) 54,272 - - - (204,311) (2) 251,953 2 $ 4,182,892 38 $ 4.76 $ 4.73	2020 Amount % 8,344,155 100 7,865,980 94 478,175 6 (11,712) - 489,887 6 342,250 4 441,427 5 264,001 3 (138) - 1,047,540 12 210,685 2 (346,968) (4) 6,503 - 56,878 1 5,956 - (78,788) (1) 438,275 5 428,824 5 81,856 1 103,747 1 (21,891) - (14,247) - 20,122 - (87,991) (1) - - (82,116) (1) (221,508) (3) (593) - - - (222,101) (3) (304,217) (4) (326,108) (4) (0.03) (0.03)

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) TSRC CORPORATION

Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

	Retained earnings		Total other equity interest	Total other equity interest	Total equity
		Financial statements translation differences for foreign operations 23,383 - - - - (221,508) (221,508) - (198,125) - - - - (258,583) (258,583) (456,708)	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income 711,094 - - - - (67,869) (67,869) (84,323) 558,902 - - - - 488,157 488,157 1,047,059	Gains (losses) on effective portion of cash flow hedges (80,526) - - - - (593) (593) - (81,119) - - - - 54,272 54,272 (26,847)
Legal reserve 3,977,141 91,721 - - - - - - 4,068,862 4,818 - - - - - 4,073,680	Unappropriated retained earnings 1,940,361 (91,721) (412,855) - (21,891) (14,247) (36,138) 84,323 1,483,970 (4,818) (297,256) - 3,930,939 (31,893) 3,899,046 5,080,942
					14,875,692 - (412,855) 2,391 (21,891) (304,217)
					(326,108)
					-
					14,139,120 - (297,256) 1,194 3,930,939 251,953
					4,182,892
					18,025,950

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

TSRC CORPORATION

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Net income before tax Adjustments: Adjustments to reconcile profit and loss: Depreciation Amortization Impairment loss (reversal of impairment loss) determined in accordance with IFRS 9 Interest expense Interest income Dividend income Share of profit of subsidiaries accounted for under equity method Gain on disposal of property, plant and equipment Unrealized gain (loss) on affiliated transactions Amortization to operating costs and inventories Unearned revenue from technology provided to investee Total adjustments to reconcile profit and loss Changes in operating assets and liabilities: Net changes in operating assets: Financial assets at fair value through profit or loss Notes receivable Accounts receivable Accounts receivable－related parties Other receivables Inventories Other current assets Total changes in operating assets, net Net changes in operating liabilities: Financial liabilities at fair value through profit or loss Accounts payable Other payables Other current liabilities Net defined benefit liability Other non-current liabilities Total changes in operating liabilities, net Total changes in operating assets and liabilities, net Total adjustments Cash provided by operating activities Interest income received Interest 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 Acquisition of investments accounted for under equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in other non-current assets Dividends received Decrease (increase) in restricted assets Net cash flows from investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Payment of lease liabilities Cash dividends paid Over-aging unclaimed dividends Net cash used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period		2021 $ 4,341,211 300,450 20,108 (455) 59,273 (5,107) (59,252) (2,230,890) (1,011,238) 27,755 31,639 (2,608) (2,870,325) 2,747 485 (452,714) (115,767) (84,469) (186,589) 20,480 (815,827) 12 114,911 219,729 18,911 (16,086) (167) 337,310 (478,517) (3,348,842) 992,369 5,334 (59,246) (139,401) 799,056 - (64,462) (385,596) 1,213,830 19,729 59,252 129,299 972,052 18,098,954 (18,591,383) 1,673,109 (2,601,071) (49,157) (297,241) 1,194 (1,765,595) 5,513 134,602 $ 140,115	2020 81,856

			321,969 20,418 (138) 78,788 (6,503) (56,878) (438,275) - (11,712) 34,096 (53,496)
			(111,731)
			(3,446) 320 4,192 27,198 50,868 730,153 28,727
			838,012
			(147) (192,245) (104,719) (15,699) (54,978) 5,135
			(362,653)
			475,359
			363,628
			445,484 6,284 (78,642) (57,446)
			315,680
			135,404 - (529,145) - (11,101) 1,337,061 (254,987)
			677,232
			28,610,459 (29,048,540) 73,718 (450,000) (51,357) (412,421) 2,391
			(1,275,750)
			(282,838) 417,440
			134,602

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) TSRC CORPORATION

Notes to the Financial Statements

For the years ended December 31, 2021 and 2020

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

(1) Company history

TSRC Corporation (the original name was Taiwan Synthetic Rubber Corporation, hereinafter referred to as "the Company") was incorporated in the Republic of China (ROC) on November 22, 1973, as a corporation limited by shares in accordance with the ROC Company Act. In May 1999, Taiwan Synthetic Rubber Corporation was renamed TSRC Corporation as approved by the stockholders' meeting. In June 2016, the Company changed its registered address to be No.2, Singgong Rd., Dashe Dist., Kaohsiung City. The Company is mainly engaged in the manufacture, import, and sale of various types of synthetic rubber, and the import, export, and sale of related raw materials.

(2) Approval date and procedures of the financial statements

The parent company only financial statements were approved by the Board of Directors and published on March 10, 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 Company has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
－
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform Phase 2”

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from April 1, 2021:

●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its financial statements:

－
●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”

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or
Interpretations
Amendments to IAS 1
“Classification of Liabilities
as Current or Non-current”

Content of amendment
Effective date per
IASB
The
amendments
aim
to
promote
consistency in applying the requirements
by helping companies determine whether,
in the statement of balance sheet, debt and
other
liabilities
with
an
uncertain
settlement date should be classified as
current (due or potentially due to be settled
within one year) or non-current. The
amendments
include
clarifying
the
classification requirements for debt a
company might settle by converting it into
equity.
January 1, 2023

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

The Company does not expect the other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements.

(4) Summary of significant accounting policies

The significant accounting policies presented in the parent company only financial statements are summarized as follows. Except for those described otherwise, the accounting policies have been applied consistently to all periods presented in these parent company only financial statements, and have been applied consistently to the balance sheet as of reporting date.

(a) Statement of compliance

The financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the Regulations).

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

The financial statements have been prepared on a historical cost basis except for those otherwise explained in the accounting policies in the notes.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(ii) Functional and presentation currency

The functional currency of each entity is determined based on the primary economic environment. The Company's financial statements are presented in New Taiwan dollars, which is the Company's functional currency. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

Transactions in foreign currencies are translated to the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are remeasured to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortized cost in the functional currency at the beginning of the year adjusted for the effective interest and payments during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of the year.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

(i) an investment in equity securities designated as at fair value through other comprehensive income;
(ii) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
(iii) qualifying cash flow hedges to the extent that the hedges are effective.

When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign currency gains and losses arising from such items are considered to form part of a net investment in the foreign operation and are recognized in other comprehensive income, and presented in the translation reserve in equity.

(d) Classification of current and non-current assets and liabilities
(i) An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.
- 1) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
- 2) It holds the asset primarily for the purpose of trading;
- 3) It expects to realize the asset within twelve months after the reporting period; or
- 4) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(ii) A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.
1) It expects to settle the liability in its normal operating cycle;
2) It holds the liability primarily for the purpose of trading;
3) The liability is due to be settled within twelve months after the reporting period even if refinancing or a revised repayment plan is arranged between the reporting date and the issuance date of the financial statements; or
4) It does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(e) Cash and cash equivalents

Cash and cash equivalents comprise cash balances, time deposits, and short-term investments with high liquidity that are subject to an insignificant risk of changes in their fair value.

The time deposits with maturity of one year or less from the acquisition date are listed in cash and cash equivalents because they are held for the purpose of meeting short-term cash commitments instead of investment or other purposes, are readily convertible to a fixed amount of cash, and are subject to an insignificant risk of changes in value.

(f) Financial instruments

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

(i) Financial assets

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

Financial assets are classified into the following categories: measured at amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL).

(Continued)

TSRC CORPORATION Notes to the Financial Statements

The Company shall reclassify all affected financial assets only when it changes its business model in managing its financial assets.

1) Financial assets measured at amortized cost

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

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

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

2) Fair value through other comprehensive income (FVOCI )

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

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

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets and accounts receivable (except for those presented as accounts receivable but measured at FVTPL). On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

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

4) Impairment of financial assets

The Company recognizes its loss allowances for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivable and guarantee deposit paid).

(Continued)

TSRC CORPORATION Notes to the Financial Statements

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

●debt securities that are determined to have low credit risk at the reporting date; and
●other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

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

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

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

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

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

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

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is recognized in other comprehensive income instead of reducing the carrying amount of the asset. The Company recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

5) Derecognition of financial assets

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

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

Debt or equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual agreement.

2) Equity instrument

Equity instruments refer to surplus equities of the assets after the deduction of all the debts for any contracts. Equity instruments issued are recognized as the amount of consideration received less the direct cost of issuing.

3) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

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

4) Derecognition of financial liabilities

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

(Continued)

TSRC CORPORATION Notes to the Financial Statements

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

5) Offsetting of financial assets and liabilities

The Company presents financial assets and liabilities on a net basis when the Company has the legally enforceable right to offset, and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

6) Financial guarantee contract

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder of a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.

A financial guarantee contract not designated as at fair value through profit or loss issued by the Company is recognized initially at fair value plus any directly attributable transaction cost. After initial recognition, it is measured at the higher of: (a) the amount of the loss allowance determined in accordance with IFRS 9; and (b) the amount recognized initially less, where appropriate, cumulative amortization recognized in accordance with the IFRS 15.

(iii) Derivative financial instruments

The Company holds derivative financial instruments to hedge its foreign currency exposures. Derivatives are recognized initially at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are recognized in profit or loss.

(g) Inventories

The cost of inventories consists of all costs of purchase, costs of conversion, and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories includes an appropriate share of fixed production overhead based on normal capacity and allocated variable production overhead based on actual output. However, unallocated fixed production overhead arising from lower or idle capacity is recognized in cost of goods sold during the period. If actual capacity is higher than normal capacity, fixed production overhead should be allocated based on actual capacity. The method of valuing inventories is the weighted-average method.

Inventories are measured at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses at the end of the period. When the cost of inventories is higher than the net realizable value, inventories are written down to net realizable value, and the write-down amount is charged to current year's cost of goods sold. If net realizable value increases in the future, the cost of inventories is reversed within the original write-down amount, and such reversal is treated as a reduction of cost of goods sold.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(h) Investment in associates

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

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

The financial statements include the Company's share of the profit or loss and other comprehensive income of equity accounted investees after adjustments to align the accounting policies with those of the Company, from the date that significant influence commences until the date that significant influence ceases. When changes in an associate's equity are not recognized in profit or loss or other comprehensive income of the associate and such changes do not affect the Company's ownership percentage of the associate, the Company recognizes the changes in ownership interests of the associate in capital surplus in proportion to its ownership interests.

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

When the Company's share of losses exceeds its interest in associates, the carrying amount of the investment, including any long-term interests that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Company has an obligation or has made payments on behalf of the investee.

(i) Investment in subsidiaries

When preparing the Company's financial statements, investments in subsidiaries which are controlled by the Company using the equity method. Under the equity method, the net income, other comprehensive income, and equity in the financial statements are equivalent to those attributable to the shareholders of the parent company in the parent company only financial statements.

Changes in ownership of a subsidiary that do not result in loss of control are accounted for as equity transactions.

If the investment in shares is not made by cash but in exchange with providing service or other assets, the cost of the investment is determined by either the fair value of shares purchased, the fair value of the service provided, or the fair value of the assets exchanged, which ever can be determined more objectively. If the investment in subsidiary is in exchange with service to be provided in the future, the account "investment in equity method" should be credited and reversed to recognized investment income based on the timing of the service provided under a reasonable accounting system.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(j) Joint arrangement

A joint venture is a joint arrangement whereby the Company has joint control of the arrangement (i.e. joint venturers) in which the Company has rights to the net assets of the arrangement , rather than rights to its assets and obligations for its liabilities. The Company recognizes its interest in a joint venture as an investment and accounts for that investment using the equity method in accordance with IAS 28 “ Investments in Associates and Joint Ventures” , unless the Company qualifies for exemption from that Standard. Please refer to note 4(i) for the application of the equity method.

The Company determines the type of joint arrangement in which it is involved by considering the structure and form of the arrangement, the separate legal vehicle, the terms agreed by the parties in the contractual arrangement and other facts and circumstances. When the facts and circumstances change, the Company reevaluates whether the classification of the joint arrangement has changed.

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

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

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

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

(ii) Reclassification to investment properties

Property is reclassified to investment property at its carrying amount when the use of the property changes from owner-occupied to investment property.

(iii) Subsequent cost

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

(iv) Depreciation

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

Land has an unlimited useful life and therefore is not depreciated.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

The estimated useful lives, for the current and comparative years, of significant items of property, plant and equipment are as follows:

Land improvements	8~30 years
Buildings	3~60 years
Machinery	3~50 years
Furniture and fixtures equipment	3~8 years

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

(l) Investment property

Investment property is property held either to earn rental income or for capital appreciation, or for both, but not for sale in the ordinary course of business used in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other revenue on a straight line basis over the lease term. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

(m) Leases

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

(i) As a leasee

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

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

(Continued)

TSRC CORPORATION Notes to the Financial Statements

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

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

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

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

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

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

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

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

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

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(ii) As a lessor

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

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

(n) Intangible assets

Intangible assets comprise computer software and industrial technology and are measured at cost less accumulated amortization and accumulated impairment losses.

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

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

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

(i) Computer software 3 years (ii) Industrial technology 10 years

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

－ (o) Impairment non-financial assets

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

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

(Continued)

TSRC CORPORATION Notes to the Financial Statements

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

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(p) Provisions

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

(q) Revenue

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

(i) Sale of goods

The Company is mainly engaged in the manufacture and sale of various types of synthetic rubber. The Company recognizes revenue when control of the products has been transferred. When the products are delivered to the customer, the ownership of the significant risks and rewards of the products have been transferred to the customer, and the Company is no longer engaged with the management of the products. Delivery occurs being when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract and the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(ii) Management services

The Company is engaged in providing management services. Revenue from providing services is recognized in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognized based on the actual service provided at the end of the reporting period as a proportion of the total services to be provided. The proportion of services provided is determined based on surveys of work performed.

(iii) Financing components

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

(r) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

(ii) Defined benefit plans

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

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

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

(Continued)

TSRC CORPORATION Notes to the Financial Statements

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

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

(s) Government grants

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

(t)

Income tax

Income tax expenses include both current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes shall be recognized in profit or loss.

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

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes shall not be recognized for the exceptions below:

(i) Assets and liabilities that are initially recognized but are not related to the business combination and have no effect on net income or taxable gains (losses) during the transaction;
(ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

(iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets and liabilities shall be measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates that have been enacted or substantively enacted by the end of the reporting period.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

Deferred tax assets and liabilities may be offset against each other if the following criteria are met:

(i) The entity has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
i. the same taxable entity; or
ii. different taxable entities which intend annually either to settle current tax liabilities and assets on a net basis or to realize the assets and settle the liabilities, simultaneously.

A deferred tax asset should be recognized for unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profit will be available against which they can be utilized. Such deferred tax assets shall also be reviewed at each reporting date, and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(u) Earnings per share

Earnings per share (EPS) of common stock are calculated by dividing net income (or loss) for the reporting period attributable to common stockholders by the weighted-average number of common shares outstanding during that period. The weighted-average number of common shares outstanding is adjusted retroactively for the increase in common shares outstanding from stock issuance arising from the capitalization of retained earnings, or additional paid-in capital.

If the Company may settle the obligation by cash, by issuing shares, or in combination of both cash and shares, profit sharing to employees which will be settled in shares should be included in the weighted average number of shares outstanding in calculation of diluted EPS, if the shares have a dilutive effect. The number of shares is estimated by dividing the amount of profit sharing to employees in stock by the closing price (after considering the dilutive effect of dividends) of the common shares on the balance sheet date. Such dilutive effect of the potential shares needs to be included in the calculation of diluted EPS until the shares of profit sharing to employees are resolved in the board of directors meeting in the following year.If profit sharing is resolved to be distributed to employees in stock, the number of shares is determined by dividing the amount of profit sharing by fair value, which is the closing price (after considering the effect of dividends) of the shares on the day preceding the board meeting.

(v) Operating segments

The Company has disclosed information about operating segments in its consolidated financial statements. Hence no further information is disclosed in the financial statements.

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

The preparation of the parent company only financial statements in conformity with the Regulations by Securities Issuers 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)

TSRC CORPORATION Notes to the Financial Statements

The Management will continually review the estimates and basic assumptions. Changes in accounting estimates will be recognized in the period of change and the future period of their impact.

There are no critical judgments in applying the accounting policies that have a significant effect on the amounts recognized in the parent company only financial statements.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows:

(a) Inventory measurement

Since inventory is measured by the lower of cost and net realizable value, the Company evaluated the inventory based on the selling price of the product line and price fluctuation of raw material, and written down the book value to net realizable value. Please refer to note 6(f) for inventory measurement.

(b) Impairment of investments accounted for using equity method

The assessment of impairment of intangible assets requires the company to make subjective judgments to identify cash-generating units and estimate the recoverable amount of relevant cashgenerating units. Any changes in these estimates based on changed economic conditions or business strategies could result in significant adjustments in future years. Refer to note 6(k) for further description of the Impairment of intangible assets.

(6) Explanation of significant accounts

(a) Cash and cash equivalents

Cash and cash equivalents
Checking and savings deposits Commercial paper with reverse sell agreements Cash and cash equivalents per statements of cash flow	December 31, 2021 $ 110,115 30,000 $ 140,115	December 31, 2020
		134,602 -
		134,602

The disclosure of interest rate risk and sensitivity analysis for the Company's financial assets and liabilities is referred to note 6(x).

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

Mandatorily measured at fair value through profit or loss: Derivative instruments not used for hedging Forward contracts / Swap contracts	December 31, 2021 $ 713	December 31, 2020
		3,460

(Continued)

TSRC CORPORATION Notes to the Financial Statements

Financial liabilities held for trading: Derivative instruments not used for hedging Forward contracts / Swap contracts	December 31, 2021 $ 93	December 31, 2020
		81

The Company uses derivative financial instruments to manage the exposures due to fluctuations of foreign exchange risk from its operating activities. The Company reported the following derivatives financial instruments as financial assets and liabilities at fair value through profit or loss without the application of hedge accounting.

Forward contracts Swap contracts Swap contracts Forward contracts Swap contracts	December 31, 2021	December 31, 2021
	Contract amount (thousand dollars) Currency Maturity dates EUR USD 1,830 / 2,081 EUR/USD 2022.01.12~2022.03.11 EUR USD 1,100 / 1,255 EUR/USD 2022.01.12~2022.03.11 JPY USD 16,411 / 144 JPY/USD 2022.01.12 December 31, 2020
	Contract amount (thousand dollars) EUR USD 450 / 551 NTD USD 238,846 / 8,500	Currency Maturity dates EUR/USD 2021.02.19~2021.02.26 NTD/USD 2021.01.15~2021.01.22

－ (c) Financial assets at fair value through other comprehensive income non-current

Equity investments at fair value through other comprehensive income: Listed stocks (domestic) Unlisted stocks (domestic and overseas) Total	December 31, 2021 $ 668,140 552,529 $ 1,220,669	December 31, 2020
		- 838,235
		838,235

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(i) Equity investments at fair value through other comprehensive income

The Company held equity instrument investment for long-term strategic purposes, not held for trading purposes, which have been designated as measured at fair value through other comprehensive income.

Due to the financial asset activation, the Company sold the share of Taiwan High-speed Railway Co., Ltd. at the fair value in the 2020, the fair value at that time of disposition was $114,323 thousand and accumulated disposition benefit was $84,323 thousand, the cumulative disposition benefits have been transferred from other equity to retained earnings.

(ii) For dividend income, please refer to note 6(v).
(iii) For market risk, please refer to note 6(x).
(iv) The Company did not hold any collateral for the collectible amounts.
(v) The significant financial assets at fair value through other comprehensive income denominated in foreign currency were as follows:

December 31, 2021 THB December 31, 2020 THB	Foreign currency amount (thousand dollars) $ 205,905 85,768	Exchange rate NTD 0.8347 171,869 0.9556 81,960

(d) Notes and accounts receivable (including related parties)

Notes and accounts receivable (including related parties)
Notes receivable Accounts receivable Accounts receivable－related parties Less: allowance for impairment	December 31, 2021 $ 1,857 1,399,816 203,040 1,233 $ 1,603,480	December 31, 2020
		2,342 947,102 87,273 1,688
		1,035,029

(Continued)

TSRC CORPORATION Notes to the Financial Statements

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected credit 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 were determined as follows:

December 31, 2021	December 31, 2021
Gross carrying amount Weighted- average expected credit loss rate $ 1,591,657 0.05%~0.14% 13,056 2.44% $ 1,604,713 December 31, 2020		Loss allowance provision
		914 319
		1,233

	Weighted- average expected credit loss rate 0.09%~0.17%	Loss allowance provision
		1,688

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

Balance at beginning of period Impairment losses recognized (reversed) Balance at end of period	2021 $ 1,688 (455) $ 1,233	2020 1,826 (138) 1,688

The Company did not hold any collateral for the collectible amounts. For other credit risk please refers to note 6(x).

The carrying amounts of notes and accounts receivable with short maturity are not discounted under the assumption that the carrying amount approximates the fair value.

(e) Other receivables (including related parties)

Other receivables (including related parties)
Other receivables－related parties Other	December 31, 2021 $ 194,635 7,428 $ 202,063	December 31, 2020
		104,489 13,332
		117,821

As of December 31, 2021 and 2020, the Company had no other receivables that were past due. For other credit risk information, please refers to note 6(x).

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(f) Inventories

The components of the Company's inventories were as follows:

Raw materials Supplies Work in progress Finished goods Merchandise Total	December 31, 2021 $ 388,812 4,738 108,696 1,155,198 13,071 $ 1,670,515	December 31, 2020
		542,024 2,768 110,485 823,715 4,934
		1,483,926

As of December 31, 2021 and 2020, the Company did not pledge any collateral on inventories.

Except for operating costs arising from the ordinary sale of inventories, other gains and losses directly recorded under operating costs were as follows:

Loss on (reversal of) decline in market value of inventory Income from sale of scrap Unallocated production overhead Total	2021 $ (69,924) (21,880) 87,509 $ (4,295)	2020 1,111 (12,063) 166,390 155,438

(g) Investments accounted for under the equity method

The details of the investments accounted for under the equity method were as follows:

December 31, 2021 Subsidiaries $ 15,833,863	December 31, 2020
	13,644,962

As of December 31, 2021 and 2020, the Company did not pledge any collateral on investments accounted for under the equity method.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(h) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company were as follows:

Cost or deemed cost: Balance at January 1, 2021 Additions Disposals Reclassification Balance at December 31, 2021 Balance at January 1, 2020 Additions Disposals Reclassification Balance at December 31, 2020 Depreciation and impairment loss: Balance at January 1, 2021 Depreciation Disposal Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Disposal Balance at December 31, 2020 Carrying value: December 31, 2021 December 31, 2020 January 1, 2020		Land $ 821,469 - (201,665) - $ 619,804 $ 614,101 140,061 - 67,307 $ 821,469 $ - - - $ - $ - - - $ - $ 619,804 $ 821,469 $ 614,101	Land improvements 85,030 - - - 85,030 85,030 - - - 85,030 70,264 2,485 - 72,749 67,778 2,486 - 70,264 12,281 14,766 17,252	Buildings 1,215,684 - - 14,093 1,229,777 1,207,726 - - 7,958 1,215,684 928,910 29,276 - 958,186 898,493 30,417 - 928,910 271,591 286,774 309,233	Machinery 9,367,035 - (64,349) 183,741 9,486,427 9,049,463 - (52,138) 369,710 9,367,035 7,842,890 228,578 (63,422) 8,008,046 7,646,885 248,143 (52,138) 7,842,890 1,478,381 1,524,145 1,402,578	Furniture and fixtures 109,970 - (336) 140 109,774 101,582 - - 8,388 109,970 80,601 9,479 (336) 89,744 70,680 9,921 - 80,601 20,030 29,369 30,902	Leased assets - - - - - - - - - - - - - - - - - - - - -	Prepayments for equipment and construction in progress 302,234 384,013 - (222,096) 464,151 353,648 350,038 - (401,452) 302,234 - - - - - - - - 464,151 302,234 353,648	Total 11,901,422 384,013 (266,350) (24,122)

									11,994,963
									11,411,550 490,099 (52,138) 51,911
									11,901,422
									8,922,665 269,818 (63,758)
									9,128,725
									8,683,836 290,967 (52,138)
									8,922,665
									2,866,238
									2,978,757
									2,727,714

To optimize the Company’s asset, the Company disposed its real estate located in Kaohsiung City, Renwu Dist. to a non-related party for $1,220,000 thousands, with a book value of $201,665 thousand based on the resolution approved during the board meeting held on March 11, 2021. All relevant transactions amounting to $909,118 thousands, recognized as gain, had been completed in July 2021.

The Company did not pledge any collateral on property, plant and equipment.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(i) Right-of-use assets

The Company leases its assets including its land, buildings, machinery and transportation equipment. Information about leases, for which the Company is the lessee, is presented below:

Cost: Balance at January 1, 2021 Additions Write-off Amortization to operating costs and inventories Balance at December 31, 2021 Balance at January 1, 2020 Additions Write-off Reclassify to construction in progress Amortization to operating costs and inventories Balance at December 31, 2020 Accumulated depreciation and impairment losses: Balance at January 1, 2021 Depreciation Write-off Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Write-off Balance at December 31, 2020 Carrying value: December 31, 2021 December 31, 2020 January 1, 2020 (j) Investment property Cost: Balance as at January 1, 2021 Additions Balance as at December 31, 2021 Balance as at January 1, 2020 Additions Balance as at December 31, 2020 Depreciation: Balance as at January 1, 2021 Depreciation Balance as at December 31, 2021 Balance as at January 1, 2020 Depreciation Balance as at December 31, 2020	La	La	nd Building 1,402 56,219 641 10,547 - - - (4,486) 2,043 62,280 95,998 56,506 - 10,258 - (3,695) (94,596) - - (6,850) 1,402 56,219 561 26,443 203 14,636 - - 764 41,079 280 15,262 281 14,876 - (3,695) 561 26,443 1,279 21,201 841 29,776 95,718 41,244 Land $ 1,073,579 - $ 1,073,579 $ 1,073,579 - $ 1,073,579 $ - - $ - $ - - $ -	Machinery Transportation equipment 11,443 3,309 36,075 985 - (1,070) (27,153) - 20,365 3,224 38,689 3,309 - - - - - - (27,246) - 11,443 3,309 - 2,238 - 1,068 - (1,070) - 2,236 - 1,119 - 1,119 - - - 2,238 20,365 988 11,443 1,071 38,689 2,190 Buildings 741,889 - 741,889 741,889 - 741,889 248,595 14,725 263,320 233,869 14,726 248,595	Machinery Transportation equipment 11,443 3,309 36,075 985 - (1,070) (27,153) - 20,365 3,224 38,689 3,309 - - - - - - (27,246) - 11,443 3,309 - 2,238 - 1,068 - (1,070) - 2,236 - 1,119 - 1,119 - - - 2,238 20,365 988 11,443 1,071 38,689 2,190 Buildings 741,889 - 741,889 741,889 - 741,889 248,595 14,725 263,320 233,869 14,726 248,595	Total 72,373 48,248 (1,070) (31,639) 87,912 194,502 10,258 (3,695) (94,596) (34,096) 72,373 29,242 15,907 (1,070) 44,079 16,661 16,276 (3,695) 29,242 43,833 43,131 177,841 Total 1,815,468 - 1,815,468 1,815,468 - 1,815,468 248,595 14,725 263,320 233,869 14,726 248,595
	$ $ $ $ $ $ $ $ $ $ $

(Continued)

TSRC CORPORATION Notes to the Financial Statements

Carrying value: Balance as at December 31, 2021 Balance as at December 31, 2020 Balance as at January 1, 2020 Fair value: Balance as at December 31, 2021 Balance as at December 31, 2020 Balance as at January 1, 2020	Land $ 1,073,579 $ 1,073,579 $ 1,073,579	Buildings Total 478,569 1,552,148 493,294 1,566,873 508,020 1,581,599 $ 3,336,956 $ 3,336,956 $ 3,334,675	Total
			1,552,148
			1,566,873
			1,581,599

Investment property comprises a number of commercial properties that are leased to third parties. Each of the leases contains an initial non-cancellable period of 1~5 years. Subsequent renewals are negotiable with the lessee, and no contingent rents are charged. Please refer to note 6(u) for further information.

The fair value of investment property is based on a valuation by an independent appraiser. The range of yields applied to the net annual rentals to determine fair value of property were as follows:

Region Da'an Dist., Taipei City	2021 2020 2.10% 2.10%

As of December 31, 2021 and 2020, the Company did not pledge any collateral on investment properties.

(k) Intangible assets

The cost and amortization of the intangible assets of the Company were as follows:

Costs: Balance at January 1, 2021 Reclassification Balance at December 31, 2021 Balance at January 1, 2020 Reclassification Balance at December 31, 2020 Amortization: Balance at January 1, 2021 Amortization Balance at December 31, 2021 Balance at January 1, 2020 Amortization Balance at December 31, 2020	Industrial technology $ 99,213 8,000 $ 107,213 $ 73,913 25,300 $ 99,213 $ 47,965 10,388 $ 58,353 $ 38,044 9,921 $ 47,965	Computer software 188,103 16,122 204,225 172,706 15,397 188,103 174,253 9,720 183,973 163,756 10,497 174,253	Total
			287,316 24,122
			311,438
			246,619 40,697
			287,316
			222,218 20,108
			242,326
			201,800 20,418
			222,218

(Continued)

TSRC CORPORATION Notes to the Financial Statements

Carrying value: December 31, 2021 December 31, 2020 January 1, 2020	Industrial technology $ 48,860 $ 51,248 $ 35,869	Computer software 20,252 13,850 8,950	Total
			69,112
			65,098
			44,819

(i) In 2021 and 2020, the amortization of intangible assets were as follows: 2021 Operating costs $ 5,493 Operating expenses 14,615 $ 20,108	2020
	4,403 16,015
	20,418

(ii) The Company did not pledge any collateral on intangible assets.
(l) Short-term and long-term borrowings

The details of the Company's short-term and long-term borrowings were as follows:

(i) Short-term borrowings

	December 31, 2021
Range of interest rates (%)	Year of maturity	The unused credit facilities
0.73~0.88		6,924,557

Range of interest rates (%)	Year of maturity	The unused credit facilities
0.78~1.05	2021	6,235,530

(ii) Long-term borrowings

Unsecured loans Current Non-current Total		December 31, 2021	December 31, 2021
	Currency	Range of interest rates (%)	Year of maturity Amount 2022~2025 $ 2,145,756 $ 400,000 1,745,756 $ 2,145,756
	NTD	0.95~1.25

(Continued)

TSRC CORPORATION Notes to the Financial Statements

Unsecured loans Current Non-current Total		December 31, 2020	December 31, 2020
	Currency	Range of interest rates (%)	Year of maturity Amount 2021~2025 $ 3,073,718 $ 2,100,000 973,718 $ 3,073,718
	NTD	1.09~1.25

The Company applied the “Welcoming the Return of Taiwanese Investment Initiative Act” loan of $478,000 thousand from the bank in 2020. As of December 31, 2021 and 2020, the Company has used the amounts of $148,837 thousand and $75,727 thousand, which were measured and recognized based on the market interest rate of 1.2%; and the difference between the actually interest rate of 0.45% and the market interest rate of 1.2% had been recorded as government subsidy under deferred income.

(iii) Long-term commercial paper payable ( recorded as long-term borrowings )

The details of the Company's long-term commercial paper payable were as follows:

December 31, 2021	December 31, 2021	December 31, 2021
Guarantee or acceptance institution Range of interest rates (%) Amount CTBC Bank 1.164 $ 350,000 78 $ 349,922 December 31, 2020

Guarantee or acceptance institution CTBC Bank	Range of interest rates (%) Amount 1.206 $ 350,000 659 $ 349,341	Amount

(iv) Collateral of loans

The Company did not provide assets as pledge assets for the loans and long-term commercial paper payable.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(m) Lease liabilities

The Company's lease liabilities were as follow:

Current Non-current	December 31, 2021 $ 38,323 $ 6,124	December 31, 2020
		29,417
		15,034

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

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets	2021 $ 905 $ 686 $ 638	2020
		1,166
		748
		834

The amounts recognized in the statement of cash flows for the Company were as follows:

Total cash outflow for leases	2021 $ 51,386	2020
		54,105

(n) Operating leases

The Company leases out its investment property. The Company has classified these leases as operating leases, because it does not transfer substantially all of the risks and rewards incidental to the ownership of the assets; please refer to note 6(j).

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date is as follows:

Less than one year One to two years Two to three years Three to four years Four to five years More than five years Total undiscounted lease payments	December 31, 2021 $ 66,190 58,553 46,791 12,138 13,241 42,990 $ 239,903	December 31, 2020
		66,587 66,167 59,333 46,791 12,138 56,232
		307,248

In 2021 and 2020, the rental income from investment property amounted to $73,422 thousand and $64,663 thousand, respectively.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(o) Employee benefits

(i) Defined benefit plans

The following table shows a reconciliation between the present value of the defined benefit obligation and the fair value of plan assets:

The present value of the defined benefit obligations Fair value of plan assets The net defined benefit liability	December 31, 2021 $ 605,909 (519,935) $ 85,974	December 31, 2020 606,090 (535,923) 70,167

The Company established the pension fund account for the defined benefit plan in Bank of Taiwan. The plan, under the Labor Standards Law, provides benefits based on an employee's length of service and average monthly salary for the six-month period prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, ministry of Labors. Minimum annual distributions of the funds by the Bureau shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company's Bank of Taiwan labor pension reserve account balance amounted to $519,935 thousand at the end of the current reporting period. For information on the utilization of the labor pension fund assets including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labors.

2) Movements in present value of defined benefit obligation

The movements in present value of the Company's defined benefit obligation for the years ended December 31, 2021 and 2020 were as follows:

Defined benefit obligation as of 1 January Current service costs and interest Remeasurements of net defined benefit liability (asset) －Return on plan assets (excluding current interest expense) －Due to changes in financial assumption of actuarial gains (losses) Benefits paid by the plan Defined benefit obligation as of 31 December	2021 $ 606,090 8,891 6,392 31,893 (47,357) $ 605,909	2020 615,154 11,598 15,816 14,247 (50,725) 606,090

(Continued)

TSRC CORPORATION Notes to the Financial Statements

3) Movements in fair value of plan assets

The movements in the fair value of the plan assets for the years ended December 31, 2021 and 2020 were as follows:

Fair value of plan assets as of January 1 Expected return Remeasurements of net defined benefit liability (asset) －Return on plan assets (excluding current interest expense) Contributions made Benefits paid by the plan Fair value of plan assets as of December 31	2021 $ 535,923 3,241 6,392 21,736 (47,357) $ 519,935	2020 504,256 4,867 15,816 61,709 (50,725) 535,923

4) Expenses recognized in profit or loss

The expenses recognized on profit or loss for the years ended December 31, 2021 and 2020 were as follows:

Current service cost Net interest on the defined benefit liability (asset) Operating costs Operating expenses Other income and expenses Other receivables	2021 $ 5,226 424 $ 5,650 2021 $ 3,402 1,972 276 - $ 5,650	2020
		5,645 1,086
		6,731
		2020
		4,008 2,328 290 105
		6,731

5) Actuarial assumptions

The following are the Company's principal actuarial assumptions at the reporting dates:

Discount rate Future salary increases rate	December 31, 2021 December 31, 2020 % 0.500 % 0.625 % 1.500 % 1.500

(Continued)

TSRC CORPORATION Notes to the Financial Statements

The Company expects to make contributions of $18,773 thousand to the defined benefit plans in the next year starting from the reporting date of 2021.

The weighted average duration of the defined benefit plan is 9.69 years for the year ended December 31, 2021.

6)

Sensitivity analysis

When calculating the present value of the defined benefit obligation, the Company uses judgments and estimations to determine the related actuarial assumptions, including discount rates, employee turnover rates and future salary changes, as of balance sheet date. Any changes in the actuarial assumptions may significantly impact the amount of the defined benefit obligation.

As of December 31, 2021 and 2020, the effects on the present value of the defined benefit obligation arising from changes in principle actuarial assumptions were as follows:

December 31, 2021 Discount rate Future salary increase rate December 31, 2020 Discount rate Future salary increase rate	Effects on defined benefit obligation Increase 0.25% Decrease 0.25% $ (11,357) 11,661 11,132 (10,893) (11,785) 12,142 11,608 (11,330)

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

The method and assumptions used on current sensitivity analysis are the same as those of the prior year.

(ii) Defined contribution plans

The Company has made monthly contributions equal to 6% of each employee's monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under this defined contribution plan, the Company contributes a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligations.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

The Company's pension costs under the defined contribution plan were $27,619 thousand and $26,818 thousand for the years 2021 and 2020, respectively. Payments were made to the Bureau of Labor Insurance.

(iii) Short-term employee benefit liabilities

Short-term employee benefit liabilities
Compensated absence liabilities	December 31, 2021 $ 29,339	December 31, 2020
		28,541

(p) Income tax
(i) Income tax expenses

The amounts of the Company's income tax expenses for the years ended December 31, 2021 and 2020 were as follows:

Current income tax expense Current period Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Change in unrecognized temporary differences Income tax expenses of continued operations	2021 $ 256,034 50 256,084 237,883 (83,695) 154,188 $ 410,272	2020
		50,470 7,106
		57,576
		31,752 14,419
		46,171
		103,747

The amounts of the Company's income tax expenses recognized under other comprehensive income for the years ended December 31, 2021 and 2020 were as follows:

Items that will not be reclassified subsequently to profit or loss: Unrealized gains (losses) on equity instruments at fair value through other comprehensive income	2021 $ 21,345	2020
		-

(Continued)

TSRC CORPORATION Notes to the Financial Statements

Reconciliations of the Company's income tax expense (benefit) and the profit before tax for 2021 and 2020 were as follows:

Income before tax Income tax using the Company's domestic tax rate Tax exempt income Adjustment for prior periods Foreign investment income R&D tax credits utilized Change in unrecognized temporary differences Regulations Governing the Utilization, and Taxation of Repatriated Offshore Funds Land value increment tax Others Total	2021 $ 4,341,211 $ 868,242 (213,172) 50 (245,433) (21,529) (83,695) - 103,118 2,691 $ 410,272	2020 81,856 16,371 (10,516) 7,106 - (17,824) 14,419 34,589 - 59,602 103,747

(ii) Recognized deferred tax assets and liabilities

1) Unrecognized deferred tax liabilities

The Company is able to control the timing of the reversal of the temporary differences associated with investments in subsidiaries as of December 31, 2021. Also, management considers it probable that the temporary differences will not reverse in the foreseeable future. Hence, such temporary differences are not recognized under deferred tax liabilities. Details are as follows:

future. Hence, such temporary differences are liabilities. Details are as follows:	not recognized
Aggregate amount of temporary differences related to investments in subsidiaries Unrecognized deferred tax liabilities	December 31, 2021
	$ 1,227,164 $ 245,433

2) Unrecognized deferred tax assets

The Company's deferred tax assets have not been recognized in respect of the following items:

The carryforward of unused tax losses	December 31, 2021 $ -	December 31, 2020
		83,695

Under the income tax rate, tax losses can be carried forward for ten years to offset taxable income. Deferred income tax assets have not been recognized in respect of these items because it is not probable that the future taxable profit will be available, against which, the Company can utilize the benefits therefrom.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

As of December 31, 2021, the Company didn't have any unrecognized deferred tax assets for taxable losses.

3) Recognized deferred income tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2021 and 2020 were as follows:

Deferred tax assets:

Balance at January 1, 2021 Recognized in profit or loss Balance at December 31, 2021 Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020	Defined benefit plans $ 2,718 (2,718) $ - $ 13,731 (11,013) $ 2,718	Allowance for inventory valuation 25,623 (14,001) 11,622 25,400 223 25,623	Loss carryforward - - - 9,460 (9,460) -	Others 38,785 (22,220) 16,565 23,039 15,746 38,785	Total
					67,126 (38,939)
					28,187
					71,630 (4,504)
					67,126

Deferred tax liabilities:

Balance at January 1, 2021 Recognized in profit or loss Recognized in other comprehensive income Balance at December 31, 2021 Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020	Foreign investment income accounted for under equity method $ 642,096 201,284 - $ 843,380 $ 586,688 55,408 $ 642,096	Capitalization of interest expense 35,433 (1,033) - 34,400 36,246 (813) 35,433	Land value increment tax 56,683 - - 56,683 56,683 - 56,683	Others 5,192 (1,307) 21,345 25,230 18,120 (12,928) 5,192	Total
					739,404 198,944 21,345
					959,693
					697,737 41,667
					739,404

(iii) Assessed of tax

The tax returns of the Company have been assessed by the tax authorities through 2019.

(q) Capital and other equity

(i) Capital

In accordance with the Company’s articles of incorporation, the capital share of the company amounted to $12,000,000 thousand, divided into 1,200,000,000 shares, at NT$10 per share.

As of December 31, 2021 and 2020, 825,709,978 shares of ordinary were issued.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(ii) Additional paid-in capital

The components of additional paid-in capital, were as follows:

Share premium Over-aging unclaimed dividends	December 31, 2021 $ 849 49,876 $ 50,725	December 31, 2020
		849 48,682
		49,531

In accordance with the ROC Company Act, realized capital surplus can be used to increase share capital or to distribute as cash dividends after offsetting losses. The aforementioned capital surplus includes share premiums and donation gains. In accordance with the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the amount of capital surplus to increase share capital shall not exceed 10 percent of the actual share capital amount.

(iii) Retained earnings

1) Legal reserve

The ROC Company Act stipulates that companies must retain 10% of their annual net earnings, as defined in the Act, until such retention equals the amount of issued share capital. When a company incurs no loss, it may, pursuant to a resolution to be adopted by the shareholders' meeting as required, distribute its legal reserve by issuing new shares or cash. Only the portion of legal reserve which exceeds 25% of the issued share capital may be distributed. In accordance with Rule No. 10802432410 issued by Ministry of Economic Affairs, R.O.C on January 9, 2020, the Company has to apply the profit distribution based on its financial statement in 2020, wherein the Company shall use the amount of net profit after tax, plus, those net amounts other than the net profits, which are recognized as undistributed surplus earnings, as the basis for the legal reserve.

2) Special earnings reserve

By choosing to apply exemptions granted under IFRS 1 First-time Adoption of International Financial Reporting Standards during the Company's first-time adoption of the IFRSs endorsed by the FSC, unrealized revaluation increments and cumulative translation adjustments (gains) under shareholders' equity were reclassified to retained earnings at the adoption date. An increase in retained earnings due to the first-time adoption of the IFRSs endorsed by the FSC shall be reclassified as a special earnings reserve during earnings distribution. However, when adjusted retained earnings due to the first-time adoption of the IFRSs endorsed by the FSC are insufficient for the appropriation of a special earnings reserve at the transition date, the Company may appropriate a special earnings reserve up to the amount of increase in retained earnings. Upon the use, disposal, or reclassification of related assets, the Company may reverse the special earnings reserve proportionately. As a result of elections made according to IFRS 1, the Company has reclassified $(103,035) thousand to retained earnings and is not required to appropriate a special earnings reserve.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

A portion of current-period earnings and undistributed prior-period earnings shall be reclassified as a special earnings reserve during earnings distribution. The amount to be reclassified should be equal to the difference between the total net current-period reduction of special earnings reserve resulting from the first-time adoption of IFRSs and the carrying amount of other shareholders' equity as stated above. Similarly, a portion of undistributed prior-period earnings shall be reclassified as a special earnings reserve (which does not qualify for earnings distribution) to account for cumulative changes to other shareholders' equity pertaining to prior periods due to the first-time adoption of IFRSs. Amounts of subsequent reversals pertaining to the net reduction of other shareholders' equity shall qualify for additional distributions.

3) Distribution of retained earnings

In accordance with the Company's articles of incorporation amended on June 19, 2020, when allocating the earnings for each fiscal year, the Company may, after offsetting losses from previous years, and paying taxes, and setting aside any statutory and appropriated retained earnings of 10% by ordinary resolution, allocate the remaining balance dividends, retained earnings or otherwise. The allocation shall be proposed by the Board of Directors for a resolution at the shareholders' general meeting. However, dividends issued in cash may be approved by the Board of Directors with more than two thirds of the directors’ attendance, and be resolved by more than half of the directors, thereafter, to be reported during the shareholders' general meeting.

In accordance with the original Company's articles of incorporation, if the Company incur profit for the year, the profit should first be used to pay taxes, then offset the previous year’ s deficit; thereafter, 10% of the remainder will be reserved as special surplus, which can be increased or reversed based on the Securities and Exchange Act. Any remaining balances, together with the previous year’ s undistributed retained earnings, will be deemed as distributable.

For the distribution based on the above of paragraph, the cash dividend shall not be less than 20% of the total distribution.

The above mentioned distribution of surplus shall be decided by the Board of Directors; thereafter, to be submitted to the shareholders' meeting for approval.

The distribution of 2020 and 2019 earnings as dividends to stockholders that were approved by the Company's shareholders' general meetings on August 4, 2021 and June 19, 2020, respectively, were as follows:

Dividends distributed to common shareholders: Cash	2020 Amount per share (NTD) Total amount $ 0.36 297,256	2019	2019
	Amount per share (NTD) $ 0.36	Amount per share (NTD) 0.50	Total amount
			412,855

(Continued)

TSRC CORPORATION Notes to the Financial Statements

On March 10, 2022, the Company's Board of Directors resolved to appropriate the 2021 earnings as follows:

earnings as follows:
				2021
			Amount
			per share
			(NTD)		Total	amount
Dividends distributed to common		shareholders:
Cash			$	2.40		1,981,704
Other equities (net for tax)
			Unrealized
			gains (losses)
			from financial
			assets
		Foreign	measured at
		exchange	fair value
		differences	through other	Gains (losses)
		arising from	comprehensive	on hedging
		foreign	income	instruments		Total
Balance as of January 1, 2021	$	(198,125)	558,902	(81,119)		279,658
Foreign exchange differences arising from
foreign operation		(258,583)	-	-		(258,583)
Unrealized gains or losses from financial assets
measured at fair value through other
comprehensive income		-	488,157	-		488,157
Share of other comprehensive income of
associates and joint ventures accounted for
under equity method, losses on effective
portion of cash flow hedges		-	-	54,272		54,272
Balance as of December 31, 2021	$	(456,708)	1,047,059	(26,847)		563,504
Balance as of January 1, 2020	$	23,383	711,094	(80,526)		653,951
Foreign exchange differences arising from
foreign operation		(221,508)	-	-		(221,508)
Unrealized gains or losses from financial assets
measured at fair value through other
comprehensive income		-	(67,869)	-		(67,869)
Disposal of investments in equity instruments at
fair value through other comprehensive
income		-	(84,323)	-		(84,323)
Share of other comprehensive income of
associates and joint ventures accounted for
under equity method, losses on effective
portion of cash flow hedges		-	-		(593)	(593)
Balance as of December 31, 2020	$	(198,125)	558,902	(81,119)		279,658

(iv) Other equities (net for tax)

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(r) Earnings (losses) per share

The calculations of the Company's basic earnings (losses) per share and diluted earnings (losses) per share for the years ended December 31, 2021 and 2020 were as follows:

(i) Basic earnings (losses) per share

Net income (loss) attributable to common shareholders of the Company Weighted-average number of common shares (in thousands) Basic earnings (losses) per share (in NTD) (ii) Diluted earnings (losses) per share Net income (loss) attributable to common shareholders of the Company (diluted) Weighted-average number of common shares (basic) (in thousands) Impact on potential common shares Effect on employees' compensation (in thousands) Weighted-average number of shares outstanding (diluted) (in thousands) Diluted earnings (losses) per share (in NTD)	2021 $ 3,930,939 825,710 $ 4.76 2021 $ 3,930,939 825,710 4,515 830,225 $ 4.73	2020 (21,891) 825,710 (0.03) 2020 (21,891) 825,710 - 825,710 (0.03)

(s) Remuneration to employees and directors

In accordance with the Company's articles of incorporation, if there is profit for the year, the Company should contribute more than 1% of its profit as employees' remuneration,, and less than 1% as directors' remuneration. The related regulations on the distribution of remunerations to employees and directors will have to be approved by the Board of Directors.

For the years ended December 31, 2021 and 2020, the Company recognized the employees' compensation of $171,609 thousand and $40,750 thousand, respectively, and the directors' remuneration of $22,677 thousand and $616 thousand, respectively. The amounts were estimated based on the profit-sharing percentages set by the Articles of Incorporation and were recorded as operating cost or operating expenses in the respective periods. Related information would be available at the Market Observation Post System website. There were no differences between the amounts distributed by the Board of Directors and the estimated amounts in the Company's financial reports for the years of 2021 and 2020.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(t) Revenue from contracts with customers

	2021
Synthetic rubber $ 8,763,012 1,248,520 394,225 199,909 $ 10,605,666 $ 10,326,233 - 279,433 $ 10,605,666	Non-synthetic rubber 544,808 - - - 544,808 - 540,101 4,707 544,808 2020	Total
		9,307,820 1,248,520 394,225 199,909
		11,150,474
		10,326,233 540,101 284,140
		11,150,474

Synthetic rubber $ 6,487,970 798,675 363,567 275,405 $ 7,925,617 $ 7,156,298 - 769,319 $ 7,925,617	Non-synthetic rubber 418,538 - - - 418,538 - 418,004 534 418,538	Total
		6,906,508 798,675 363,567 275,405
		8,344,155
		7,156,298 418,004 769,853
		8,344,155

(u) Other income and expenses

The components of the Company's other income and expenses for the years ended December 31, 2021 and 2020 were as follows:

Rental income Royalty income Net service income Depreciation of investment properties Net other income (losses) Other income and expenses	2021 $ 73,422 238,820 6,358 (14,725) 17,600 $ 321,475	2020 64,663 125,618 15,765 (14,726) 19,365 210,685 (Continued)

TSRC CORPORATION Notes to the Financial Statements

(v) Non-operating income and expenses

(i) Interest income

Interest income from bank deposits (ii) Other gains Dividend income	2021 $ 5,107 2021 59,252	2020
		6,503
		2020
		56,878

(iii) Other gains and losses

The components of the Company's other gains and losses for the years ended December 31, 2021 and 2020 were as follows:

Gain on disposal of property, plant and equipment, net Foreign exchange gain (loss), net Gains (losses) on financial assets (liabilities) at fair value through profit or loss Other gain (loss) Other gains and losses, net Finance costs Interest expense	2021 $ 1,011,238 (4,113) 2,629 1,300 $ 1,011,054 2021 $ 59,273	2020 - 7,986 (1,871) (159) 5,956 2020 78,788

(iv) Finance costs

(w) Reclassification of components of other comprehensive income

The changes in components of other comprehensive income were as follows:

Effective portion of cash flow hedges: Net gains (losses) for current year Less: Adjustment of reclassification included in profit or loss Net gains (losses) recognized in other comprehensive income	2021 $ 29,376 (24,896) $ 54,272	2020 (29,380) (28,787) (593)

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(x) Financial instruments

(i) Credit risk

1) Credit risk exposure

The maximum credit risk exposure of the Company's financial assets is equal to their carrying amount. As of December 31, 2021 and 2020, the maximum credit risk exposure amounted to $3,181,838 thousand and $2,143,945 thousand, respectively.

2) Concentration of credit risk

The Company's cash and cash equivalents and accounts receivable are the main source of potential credit risk. The Company deposits its cash and cash equivalents in different financial institutions and has no concentration of credit risk on an individual customer. Therefore, the Company concluded that it is not exposed to credit risk.

The Company guarantees bank loans for investees. The Company concluded that it is not exposed to credit risk for these transactions.

(ii) Liquidity risk

The following are the contractual maturities of financial liabilities, including estimated interest payments but excluding the impact of netting agreements.

Contractual cash flows December 31, 2021 Non-derivative financial liabilities Short-term borrowings $ 2,207,590 Accounts payable 789,029 Other payable 726,615 Long-term borrowings (including other long- term borrowings and current portion) 2,549,024 Lease liabilities 44,841 Deposits received 16,854 Derivative financial liabilities Other forward contracts: Outflow 93 $ 6,334,046 December 31, 2020 Non-derivative financial liabilities Short-term borrowings $ 2,699,986 Accounts payable 674,118 Other payable 509,913 Long-term borrowings (including current portion) 3,471,621 Lease liabilities 44,800 Deposits received 16,855 Derivative financial liabilities Other forward contracts: Outflow 81 $ 7,417,374	Within 6 months 2,207,590 789,029 726,615 212,871 24,760 - 93 3,960,958 2,699,986 674,118 509,913 1,065,410 15,062 - 81 4,964,570	6-12 months - - - 212,385 13,864 - - 226,249 - - - 1,063,431 15,062 - - 1,078,493	1-2 years - - - 888,769 4,491 2,487 - 895,747 - - - 412,877 14,385 1,198 - 428,460	2-5 years - - - 1,234,999 1,322 11,247 - 1,247,568 - - - 929,903 291 12,536 - 942,730	Over 5 years
					- - - - 404 3,120 -
					3,524
					- - - - - 3,121 -
					3,121

(Continued)

TSRC CORPORATION Notes to the Financial Statements

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

(iii) Currency risk
1) Risk exposure

The Company's financial assets and financial liabilities exposed to significant currency risk were as follows:

December 31, 2021 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR JPY December 31, 2020 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR	Foreign currency (thousand dollars) $ 53,938 $ 2,912 $ 29,731 $ 17,975 $ 55,916 $ 3,128 $ 16,415 $ 34,923 $ 1,730 $ 1,016 $ 10,992 $ 45,110 $ 1,455	Exchange rate NTD 27.6900 1,493,543 31.3035 91,156 0.2404 7,147 4.3446 78,094 27.6900 1,548,314 31.3035 97,917 0.2404 3,946 28.5080 995,585 35.0563 60,647 0.2765 281 4.3813 48,159 28.5080 1,285,996 35.0563 51,007

(Continued)

TSRC CORPORATION Notes to the Financial Statements

2) Sensitivity analysis

The Company's exposure to foreign currency risk arose from cash and cash equivalents, accounts and other receivables, loans and borrowings, and accounts and other payables that were denominated in foreign currencies. If the NTD against the foreign currency had depreciated / appreciated by 1% and all the factors are remaining unchanged. The Company's net income before tax would have increased / decreased by $198 thousand for the year ended December 31, 2021, the Company's net income before tax would have decreased / increased by $2,323 thousand for the year ended December 31, 2020, respectively, with all other variable factors remaining constant, the analysis was performed on the same basis for both periods.

3) Foreign exchange gain and loss on monetary item

The amount, expressed in functional currency, of foreign exchange gain and loss (including realized and unrealized portion) of the Company's monetary items, and the exchange rate used to translate the original amount to the Company's functional currency, NTD (also the expressed currency), were as follows:

NTD	2021 Foreign exchange gain (loss) Average exchange rate $ (4,113) -	2020
	Foreign exchange gain (loss) $ (4,113)	Foreign exchange gain (loss) Average exchange rate 7,986 -

(iv) Interest rate risk analysis

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

The following sensitivity analysis is based at the risk exposure to interest rates of the nonderivative financial instruments on the reporting date. For floating-rate instruments, the sensitivity analysis assumes the floating-rate liabilities as of the reporting date are outstanding for the whole year.

If the interest rate had increased / decreased by 1%, the Company's net income before tax would have decreased / increased by $47,007 thousand and $61,205 thousand for the years ended December 31, 2021 and 2020, respectively, with all other variable factors remaining constant. This is mainly due to the Company's borrowing at floating rates.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(v) Fair value
1) Categories and fair value of financial instruments

Except for the followings, carrying amount of the Company's financial assets and liabilities are valuated approximately to their fair value, and are not based on observable market data and the value measurements which are not reliable. No additional fair value disclosure is required in accordance to the regulations.

	December 31, 2021	December 31, 2021	December 31, 2021
Carrying amount $ 713 668,140 552,529 $ 1,221,382 $ 93		Fair value
	Level 1 Level 2 Level 3 - 713 - 668,140 - - - - 552,529 668,140 713 552,529 - 93 - December 31, 2020			Total
				713
				668,140 552,529
				1,221,382
				93

		Fair value
	Level 1 - - - -	Level 2 3,460 - 3,460 81	Level 3 - 838,235 838,235 -	Total
				3,460
				838,235
				841,695
				81

(Continued)

TSRC CORPORATION Notes to the Financial Statements

2) Valuation techniques and assumptions used in fair value determination

If the financial instruments held by the Company have the quoted market price in active market, the fair value of the assets is based on the quoted market price. However, if the instruments have no quoted market price in active market, the Company uses market comparison approach to evaluate the fair value. The main assumption is based on the investee’s earnings after tax and the listed (over the counter) company’s earnings used in computing the market price. The estimated price has been discounted due to the price of the securities lacks the liquidity. Forward Exchange Contracts are normally priced based on the exchange rates provided by the World Agencies.

3) Reconciliation of Level 3 fair values

Balance at January 1, 2021 Total gains recognized: In other comprehensive income (loss) Transfer into level 1 Balance at December 31, 2021 Balance at January 1, 2020 Total gains recognized: In other comprehensive income (loss) Balance at December 31, 2020	Unquoted equity instruments $ 838,235 297,884 (583,590) $ 552,529 $ 817,237 20,998 $ 838,235

(Continued)

TSRC CORPORATION Notes to the Financial Statements

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

Quantified information of significant unobservable inputs was as follows:

Inter-relationship between significant unobservable inputs and fair value measurement

Item Financial assets at fair value through other comprehensive income－equity investments without an active market	Valuation technique Comparative listed company	Significant unobservable inputs
		‧ Multipliers of price- to-earnings ratios as of December 31, 2021 and 2020 were 9.45~20.31 and 15.62~17.8, respectively ‧ Multipliers of equity ratios as of December 31, 2020 were 1.38

‧ the estimated fair value would have been higher if the price-to-earnings and market-tobook ratios would be higher.
‧ ‧ Multipliers of equity the estimated fair ratios as of December value would have 31, 2020 were 1.38 been higher if the
‧ Market liquidity market liquidity discount rate as of discount would December 31, 2021 be lower. and 2020 was both 20%

Since Evergreen Steel Corporation was listed in April 2021, its fair value measurement was transferred from the level 3 to level 1.

－
5) Fair value measurements in Level 3 sensitivity analysis of reasonably possible alternative assumptions

For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on profit or loss and other comprehensive income:

December 31, 2021 Financial assets fair value through other comprehensive income Equity investments without an active market December 31, 2020 Financial assets fair value through other comprehensive income Equity investments without an active market	Input Liquidity discount at 20% Liquidity discount at 20%	Other comprehensive income Assumptions Favorable Unfavorable 1% $ 6,905 (6,905) 1% 10,482 (10,482)

(Continued)

TSRC CORPORATION Notes to the Financial Statements

The favorable and unfavorable effects represent the changes in fair value, and the fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

(y) Financial risk management
(i) Overview

The Company is exposed to the following risks arising from financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

This note discloses information about the Company's exposure to the aforementioned risks, and its goals, policies, and procedures regarding the measurement and management of these risks. For additional quantitative disclosures of these risks, please refer to the notes regarding each risk disclosed throughout the financial report.

(ii) Risk management framework

The Company's finance department is responsible for the establishment and management of the Company's risk management framework and policies. It is overseen by and reports to management, the Audit Committee, and the Board of Directors regarding the framework's operations.

The Company's risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company's Audit Committee oversees how management monitors compliance with the Company's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company's Audit Committee is assisted in its oversight role by Internal Audit, which undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(iii) Credit risk

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

1) Trade and other receivables

The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Company's customer base, including the default risk of the industry and country in which customers operate, as these factors may have an influence on credit risk, particularly during deteriorating economic circumstances. In 2021 and 2020, there was no geographical concentration of credit risk regarding the Company's revenue.

The sales department and the finance department of the Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company's standard payment and delivery terms and conditions are offered. The Company's review includes the history of transactions with the counter-party, its financial position, and geographic considerations. Purchase limits are established for each customer, which represent the maximum open amount without requiring approval; these limits are reviewed on a periodic basis. Customers that fail to meet the Company's benchmark creditworthiness may transact with the Company only on a prepayment basis.

Goods are sold subject to a retention of title clause so that in the event of non-payment, the Company may have a secured claim. The Company otherwise does not require collateral in respect of trade and other receivables.

The Company has established an allowance for doubtful accounts to reflect its actual and estimated potential losses resulting from uncollectible accounts and trade receivables. The allowance for doubtful accounts consists primarily of specific losses regarding individual customers and estimates of potential losses based on the use of lifetime expected credit loss provision.

2) Investments

The credit risk exposure in the bank deposits and other financial instruments is measured and monitored by the Company's finance department. Since those who transact with the Company are banks and other external parties with good credit standing, financial institutions with a credit rating above investment grade, and government agencies, there are no non-compliance issues. With regard to investment in a financial institution with a credit rating above investment grade, an investment limit is set according to the longterm credit rating. Hence, there is no significant credit risk.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

3) Guarantees

The Company's policy allows it to provide financial guarantees to business partners or to related parties and jointly controlled entities according to its percentage ownership in these entities. Financial guarantees provided to subsidiaries, associates, and jointly controlled entities by the Company as of December 31, 2021 and 2020, are disclosed in note 7 "Related-party Transactions."

(iv) Liquidity risk

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

The Company also monitors the level of expected cash outflows on trade and other payables. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

(v) Market risk

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

1) Currency risk

The Company is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than the respective functional currency of the Company. The currencies used in these transactions are USD, EUR, JPY and CNY.

Foreign exchange gains and losses resulting from account and trade receivables held by the Company in a currency other than the respective functional currencies are used to offset foreign exchange gains and losses resulting from short-term loans denominated in a foreign currency. Hence, the Company's risk exposure to foreign exchange risk is reduced.

Interest expenses are denominated in the same currency as that of the principal. Generally, the currency of loans matches that of the Company's operating cash flow, primarily NTD and USD.

With regard to monetary assets and liabilities denominated in a foreign currency, when a short-term risk exposure exists, the Company relies on immediate foreign exchange transactions to ensure the net exposure to foreign exchange risk is maintained at an acceptable level.

The Company does not hedge against investments in subsidiaries.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

2) Interest rate risk

The interest rates of the Company's long-term and short-term borrowings are floating. Hence, changes in market conditions will cause fluctuations in the effective interest rate of the aforementioned loans. The Company's finance department monitors and measures potential changes in market conditions, entering into interest rate swaps to achieve a fixed interest rate on the Company's loans.

3) Other market price risk

The Company does not enter into any commodity contracts other than to meet the Company's expected usage and sales requirements; such contracts are not settled on a net basis.

(z) Capital management

The Company goal of capital management is to ensure the Company's continuing operating capacity, and to continuously provide remuneration to the shareholders and benefits to other equity holders. To ensure that the above-mentioned goal is achieved, the Company's management reviews its capital structure periodically. In consideration of the overall economic situation, financing cost and sufficiency of cash in-flows generated by operating activities, the Company will adjust its capital structure by paying dividends, issuing new stock, purchasing treasury stock, increasing or decreasing loans, and issuing or purchasing bonds.

The Company's capital structure at the end of the reporting period were as follows:

Total liabilities Total equity Total assets Debts ratio	December 31, 2021 $ 7,419,630 18,025,950 $ 25,445,580 % 29	December 31, 2020
		8,236,203 14,139,120
		22,375,323
		% 39

As of December 31, 2021, the debts ratio decreased is mainly resulted from increasing profit and loan repayments.

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

The Company did not have any non-cash flow transactions on investing and financing activities for the years ended December 31, 2021 and 2020.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(ab) Reconciliation of liabilities arising from financing activities

Reconciliations of liabilities arising from financing activities for the years ended December 31, 2021 and 2020 were as follows:

Long-term borrowings (including current portion) Other long-term borrowings Short-term borrowings Lease liabilities Total liabilities from financing activities Long-term borrowings (including current portion) Other long-term borrowings Short-term borrowings Lease liabilities Total liabilities from financing activities	January 1, 2021 $ 3,073,718 349,341 2,697,482 44,451 $ 6,164,992 January 1, 2020 $ 3,450,000 349,287 3,135,563 113,562 $ 7,048,412	Cash flows (927,962) - (459,971) (49,157) (1,437,090) Cash flows (376,282) - (379,814) (51,357) (807,453)	N Foreign exchange movement - - (32,458) - (32,458) N Foreign exchange movement - - (58,267) - (58,267)	on-cash changes	Others - - - 48,248 48,248 Others - - - (18,920) (18,920)	December 31, 2021 2,145,756 349,922 2,205,053 44,447
				Amortization of commercial paper discount - 581 - 905 1,486 on-cash changes
						4,745,178
						December 31, 2020 3,073,718 349,341 2,697,482 44,451
				Amortization of commercial paper discount - 54 - 1,166 1,220
						6,164,992

(7) Related-party transactions

(a) Parent company and ultimate controlling party

Montrion Corporation is the ultimate controlling party of the Company. It indirectly controls Han-De Construction Co., Ltd. and Wei-Dar Development Co., Ltd., who held more than half of the members of the directors of the Company through their shares.

(b) Names and relationship with related parties

In this financial report, the related parties having transactions with the Company and subsidiaries were listed as below:

Name of related party	Relationship with the Company
Trimurti Holding Corporation	The subsidiary of the Company
Hardison International Corporation	〃
Dymas Corporation	〃
TSRC (Hong Kong) Limited	〃
TSRC (Shanghai) Industries Ltd.	〃
TSRC (Lux.) Corporation S.A R.L.	〃
TSRC (USA) Investment Corporation	〃
TSRC Specialty Materials LLC (Formerly	〃
known as Dexco Polymers L.P.)

(Continued)

TSRC CORPORATION Notes to the Financial Statements

Name of related party	Relationship with the Company
Polybus Corporation Pte Ltd.	The subsidiary of the Company
Shen Hua Chemical Industries Co., Ltd.	〃
TSRC-UBE (Nantong) Industries Co., Ltd.	〃
TSRC (Nantong) Industries Ltd.	〃
Triton International Holdings Corporation	〃
TSRC (Vietnam) Co., Ltd.	〃
Metropolis Property Management	Other related parties of the Company
Corporation
Continental Engineering Corporation	〃
WFV Corporation	〃
ARLANXEO-TSRC (Nantong) Chemical	The subsidiary recognized associates under equity
Industries Co., Ltd.	method
Asia Pacific Energy Development Co., Ltd.	〃
Indian Synthetic Rubber Private Limited	The subsidiary recognized joint venture under equity
	method
Nantong Qix Storage Co., Ltd.	〃

(c) Significant transactions with related parties
(i) Revenue

The amounts of sales transactions with related parties were as follows:

Subsidiaries	2021 $ 731,671	2020
		553,313

There were no significant differences between the pricing of sales transactions with related parties and that with other customers. The payment terms ranged from two to three months, which were similar to those given to other customers.

(ii) Purchases

The amounts of purchase transactions with related parties were as follows:

Subsidiaries	2021 $ 33,624	2020
		16,452

There were no significant differences between the pricing of purchase transactions with related parties and that with other suppliers. The payment terms ranged from one to two months, which were similar to other suppliers.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(iii) Service income and expenses

1) The Company provided warehouse, management, technologies and IT services to its subsidiaries, associates, and joint ventures. The amounts recognized as other income and expenses were as follows:

Subsidiaries TSRC (Nantong) Industries Ltd. TSRC (Vietnam) Co., Ltd. Other subsidiaries Associates Other associates Joint ventures Indian Synthetic Rubber Private Limited	2021 $ 84,344 24,821 31,783 16,538 71,255 $ 228,741	2020
		55,791 7,147 25,560 11,241 42,370
		142,109

2) The Company received consulting services such as marketing, research environmental, security and agency services from its subsidiaries and other related parties. For the years ended December 31, 2021 and 2020, the services amounted to $119,027 thousand and $69,775 thousand, respectively, and were recorded under operating costs and operating expenses.
－
(iv) Leases Rent income

Leases－Rent income
Other related parties	2021 $ 4,472	2020
		4,472

The amount of rent is in reference to neighboring rent, and the rental is collected monthly from other related parties.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(v) Receivables from related parties

The details of the Company's receivables from related parties were as follows:

Account Accounts receivable－ related parties Accounts receivable－ related parties Accounts receivable－ related parties Accounts receivable－ related parties Other receivables Other receivables Other receivables Other receivables	Type of related parties Subsidiaries TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.A R.L. TSRC Specialty Materials LLC Other subsidiaries Subsidiaries TSRC (Nantong) Industries Ltd. Other subsidiaries Associates Other associates Joint ventures Indian Synthetic Rubber Private Limited	December 31, 2021 $ 20,791 71,287 94,756 16,206 203,040 146,230 16,572 14,036 17,797 194,635 $ 397,675	December 31, 2020
			21,909 32,789 28,862 3,713
			87,273
			63,830 13,996 9,479 17,184
			104,489
			191,762

(vi) Payables to related parties

As the result of the aforementioned transactions, the details of the Company's payables to related parties were as follows:

Account Accounts payables Other payables Other payables Other payables Other payables	Type of related parties Subsidiaries Subsidiaries TSRC (Lux.) Corporation S.A R.L. Other related parties Joint ventures Indian Synthetic Rubber Private Limited Other related parties	December 31, 2021 $ 8,134 47,795 24,909 1,246 469 74,419 $ 82,553	December 31, 2020
			3,827
			52,630 21,027 - 416
			74,073
			77,900

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(vii) Guarantees

The credit limits of the guarantees the Company had provided to the bank for related parties were as follows:

Subsidiaries TSRC (Vietnam) Co., Ltd. TSRC (USA) Investment Corporation TSRC Specialty Materials LLC Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. Joint ventures Indian Synthetic Rubber Private Limited	December 31, 2021 $ 628,563 830,700 276,900 500,576 922,077 $ 3,158,816	December 31, 2020
		504,592 427,620 285,080 1,577,416 949,316
		3,744,024

Accordingly, the amounts of the Company recognized provision liabilities and the investment accounted for under the equity method were as follows:

Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. Joint ventures Indian Synthetic Rubber Private Limited	December 31, 2021 $ 1,782 25,975 $ 27,757	December 31, 2020
		733 31,086
		31,819

(d) Key management personnel transactions

The compensation of the key management personnel comprised the following:

Short-term employee benefits Post-employment benefits	2021 $ 106,415 604 $ 107,019	2020
		86,175 565
		86,740

(8) Pledged assets: None.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(9) Commitments and contingencies

(a) The unused letters of credit outstanding

The Company's unused letters of credit outstanding	December 31, 2021 $ 555,290	December 31, 2020 893,828

(b) Total amounts and the cumulative payments of Company's signed construction and design contracts with several vendors as follows:

The total amounts of construction in progress contracts Cumulative payments	December 31, 2021 $ 365,300 $ 299,896	December 31, 2020 408,750 179,653

(10) Losses Due to Major Disasters: None.

(11) Subsequent Events: None.

(12) Other

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

By function By nature	2021	2021		2020	2020	2020
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits
Salary (note 1)	332,580	377,413	709,993	325,722	355,675	681,397
Labor and health insurance	34,513	29,898	64,411	33,666	27,359	61,025
Pension (note 2)	16,578	15,138	31,716	17,037	14,863	31,900
Directors' remuneration	-	34,432	34,432	-	6,276	6,276
Others (note 3)	104,134	153,600	257,734	38,367	44,630	82,997
Depreciation (note 4)	214,198	71,527	285,725	237,649	69,594	307,243
Amortization	5,493	14,615	20,108	4,403	16,015	20,418

Note 1: Salary includes base salary, overtime pay, performance bonus, year-end bonus and pay in lieu of untaken annual leave, etc.
Note 2: Pension expenses excluded expenses for employees on international assignments amounting to $1,553 thousand and $1,649 thousand for the years ended December 31, 2021 and 2020, respectively.

Note 3: Other employee benefit includes meal expenses, employee welfare, training fees and employee compensation.

Note 4: Depreciation expenses excluded expenses for investment property recognized under other income and expenses, amounting to $14,725 thousand and $14,726 thousand for the years ended December 31, 2021 and 2020, respectively.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

The Company's number of employees for the years ended December 31, 2021 and 2020 and additional information on employee benefits are as follows :

Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages The average of employee salary cost adjustment as follows Supervisor remuneration

The Company's salary and remuneration policy (including directors, managers and employees) are as follows:

(a) Directors' remuneration: The remuneration of the directors of the Company is in accordance with the Articles of Incorporation. The remuneration of directors is determined by the Board of Directors based on the directors' participation and contribution to the Company's operations, and also with reference to the level of the industry; directors' remuneration is allocated 1% based on the Company's profitability. The following is approved by the board of directors.
(b) Managers and employees' remuneration: Base on the market competitive salary levels as well as the reference to the same industry and the overall operating performance, individual performance, and comprehensive contribution considerations, etc., to set the payment principal, then the Company would base on the sales representative responsibility regulations to review and approved.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(13) Other disclosures

(a) Information on significant transactions:

The following is the information on significant transactions required by the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" for the Company:

(i) Loans to other parties:

Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:
													Unit: thousand NTD
No.	Name of lender	Name of borrower	Financial statement account	Related party	Highest balance of financing to other parties during the year	Ending balance	Amount actually drawn	Range of interest rates	Purposes of fund financing for the borrowers (Note 5)	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral		Financing limit for each borrowing company (Note 1)	Maximum financing limit for the lender (Note 2)
													Item	Value
1	TSRC (Shanghai) Industries Ltd.	TSRC (Nantong) Industries Ltd.	Loan	Yes	231,631	230,264	-	3.698%	2	-	Operating capital	-		-	176,149	352,298
2	Polybus Corporation Pte Ltd.	TSRC	Account receivable －related parties	Yes	684,744	664,560	-	0.288%	2	-	Operating capital	-		-	4,570,861	9,141,721
3	TSRC (Hong Kong) Limited	TSRC	Account receivable －related parties	Yes	171,186	166,140	-	0.284%	2	-	Operating capital	-		-	1,836,168	3,672,336
4	TSRC (Hong Kong) Limited	TSRC (VIETNAM) CO., LTD.	Account receivable －related parties	Yes	110,760	110,760	-		2	-	Operating capital	-		-	1,836,168	3,672,336
5	TSRC Specialty Materials LLC	TSRC (USA) Investment Corporation	Account receivable －related parties	Yes	427,965	415,350	235,365	0.12%~ 0.33%	2	-	Operating capital	-		-	1,181,518	2,363,035

Note 1: The loan limit extended per party should not be over 10% of total equity. However, if the counterparty is a subsidiary 100% owned, directly or indirectly by TSRC, the loan limit extended per party should not be over 50% of the total equity of the most recent financial statements audited or reviewed by a CPA.

Note 2: The maximum loan extended to all parties should not be over 40% of total equity. However, if the counterparty is a subsidiary 100% owned, directly or indirectly by TSRC, the total loan limit should not be over 100% of total equity of the most recent financial statements audited or reviewed by a CPA .

Note 3: The fund of loan are 100% owned by TSRC.

Note 4: Credit period: The financing period should not be over one year.

Note 5: Nature of financing activities is as follows:

(1) if there are transactions between these two parties, the number is "1".

(2) if it is necessary to loan to other parties, the number is "2".

(ii) Guarantees and endorsements for other parties:

		Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD
No.	Name of company	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for one party	Highest balance for guarantees and endorsements during the year	Ending balance of guarantees and endorsements	Amount actually drawn	Property pledged on guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum allowable amount for guarantees and endorsements	Parent company endorsement / guarantees to third parties on behalf of subsidiary	Subsidiary endorsement / guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of company in Mainland China
		Name	Relationship with the company
0	TSRC	TSRC (USA) Investment Corporation	4	(Note 2)	835,980	830,700 (Note 4)	107,991	-	% 4.61	(Note 3)	Y
0	TSRC	ARLANXEO- TSRC (Nantong) Chemical Industries Co., Ltd.	6	(Note 2)	1,561,828	500,576 (Note 4)	13,103	-	% 2.78	(Note 3)			Y
0	TSRC	Indian Synthetic Rubber Private Limited	6	(Note 2)	950,082	922,077	491,498	-	% 5.12	(Note 3)
0	TSRC	TSRC (Vietnam) Co., Ltd.	4	(Note 2)	631,287	628,563	382,122	-	% 3.49	(Note 3)	Y
0	TSRC	TSRC Specialty Materials LLC	4	(Note 2)	285,310	276,900	118,064	-	% 1.54	(Note 3)	Y

Note 1: The guarantee's relationship with the guarantor is as follows:

(1) A company with which it does business.

(2) A company in which the public company directly and indirectly holds more than 50 percent of the voting shares.
(3) A company that directly and indirectly holds more than 50 percent of the voting shares in the public company.
(4) A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.
(5) A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.
(6) A company that all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages.

(7) Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

Note 2: The guaranteed amount is limited to sixty percent of issued capital, amounting to $10,815,570 thousand.

Note 3: The aggregate amount of guarantee by the Company is limited to 1.5 times its stockholders' equity, amounting to $27,038,925 thousand.

Note 4: Party of guarantee and endorsement: The board of director approved the contract renewal before the old contract expired. During the board of director approval date to the new contract effective date, the balance of guarantees was calculated repeatedly. If the repeated amounts were excluded, the ending balance of guarantees of TSRC (USA) Investment Corporation and ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. amounted to $415,350 thousand and $457,130 thousand, respectively.

(Continued)

TSRC CORPORATION

Notes to the Financial Statements

(iii) Securities held as of December 31, 2021 (excluding investment in subsidiaries, associates and joint ventures):

							Unit: thousand NTD	Unit: thousand NTD
Name of holder	Nature and name of security	Relationship with the security issuer	Account name		Ending balance			Remarks
				Number of shares	Book value	Holding percentage	Market value
TSRC TSRC TSRC Dymas Corporation	Evergreen Steel Corporation Thai Synthetic Rubbers Co., Ltd. Hsin-Yung Enterprise Corporation Thai Synthetic Rubbers Co., Ltd.	- - - -	Available-for-sale financial assets－non-current Available-for-sale financial assets－non-current Available-for-sale financial assets－non-current Available-for-sale financial assets－non-current	12,148,000 599,999 5,657,000 837,552	668,140 171,869 380,660 239,917 1,460,586	2.89 % 5.42 % 3.90 % 7.57 %	668,140 171,869 380,660 239,917 1,460,586

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:

Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD
Name of company	Type of property	Transaction date	Acquisition date	Book value	Transaction amount	Amount actually receivable	Gain from disposal	Counter- party	Nature of relationship	Purpose of disposal	Price reference	Other terms
TSRC	Kaohsiung City, Renwu district's land and property	2021.03.11	1999.07.29	201,665	1,220,000	According to th signing contract o the sale an purchase of rea estate	e f d l 909,118	CHEN TA HSIUNG DEVELOPME NT CO., LTD.	Non-related parties	Activates its assets	Appraisal of real estate report	None

(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Unit: thousand NTD

Name of company	Counter-party	Relationship	Transaction details	Transaction details	Transaction details	Transaction details	Status and deviation f length tr	reason for rom arm's- ansaction	Account / note receivable (payable	Account / note receivable (payable	) Remarks
			Purchase / Sale	Amount	Percentage of total purchases / sales	Credit period	Unit price	Credit period	Balance	Percentage of total accounts / notes receivable (payable)
TSRC (Lux.) Corporation S.A R.L. TSRC TSRC Specialty Materials LLC TSRC TSRC-UBE (Nantong) Industries Co., Ltd. Shen Hua Chemical Industries Co., Ltd. Polybus Corporation Pte Ltd. TSRC (Nantong) Industries Ltd. Polybus Corporation Pte Ltd. Shen Hua Chemical Industries Co., Ltd. TSRC (Lux.) Corporation S.A R.L.	TSRC TSRC (Lux.) Corporation S.A R.L. TSRC TSRC Specialty Materials LLC Marubeni Corporation Marubeni Corporation TSRC (Nantong) Industries Ltd. Polybus Corporation Pte Ltd. Shen Hua Chemical Industries Co., Ltd. Polybus Corporation Pte Ltd. TSRC Specialty Materials LLC	Parent and subsidary companies Parent and subsidary companies Parent and subsidary companies Parent and subsidary companies A director of TSRC-UBE (Nantong) Industries Co., Ltd. A director of Shen Hua Chemical Industries Co., Ltd. Related parties Related parties Related parties Related parties Related parties	Purchase Sale Purchase Sale Purchase Purchase Purchase Sale Purchase Sale Purchase	282,161 (282,161) 298,138 (298,138) 127,037 177,767 254,450 (254,450) 367,934 (367,934) 655,296	11.35 % (2.53) % 10.78 % (2.67) % 6.28 % 3.11 % 38.20 % (4.48) % 55.24 % (4.59) % 26.36 %	70 days 70 days 70 days 70 days 14 days 14 days 40 days 40 days 40 days 40 days 90 days	- - - - - - - - - - -		(71,287) 71,287 (94,756) 94,756 1,315 - (53,175) 53,175 (72,295) 72,295 (165,389)	% (13.41) % 4.44 % (28.12) % 5.90 % 1.08 - % (38.32) % 6.97 % (52.10) % 4.86 % (31.12)

(Continued)

TSRC CORPORATION Notes to the Financial Statements

Name of company	Counter-party	Relationship	Transaction details	Transaction details	Transaction details	Transaction details	Status and reason for deviation from arm's- length transaction	Status and reason for deviation from arm's- length transaction	Account / note receivable (payable)	Account / note receivable (payable)	Remarks
			Purchase / Sale	Amount	Percentage of total purchases / sales	Credit period	Unit price	Credit period	Balance	Percentage of total accounts / notes receivable (payable)
TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.A R.L. TSRC (Nantong) Industries Ltd.	TSRC (Lux.) Corporation S.A R.L. TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.A R.L.	Related parties Related parties Related parties	Sale Purchase Sale	(655,296) 1,545,396 (1,545,396)	(15.33) % 62.15 % (27.22) %	90 days 70 days 70 days	- - -		165,389 (303,804) 303,804	% 28.82 % (57.16) % 39.83

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

					Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD
Name of related party	Counter-party	Relationship	Balance of receivables from related party	Turnover rate	Overdue amount		Amounts received in subsequent period (Note 1)	Allowances for bad debts
					Amount	Action taken
TSRC (Nantong) Industries Ltd.	TSRC (Lux.) Corporation S.A R.L.	Related parties	303,804	7.78	-		214,637	-
TSRC Specialty Materials LLC	TSRC (Lux.) Corporation S.A R.L.	Related parties	165,389	6.13	-		119,595	-
TSRC Specialty Materials LLC	TSRC (USA) Investment Corporation	Related parties	235,365	-	-		235,365	-

Note 1: Until March 10, 2022.

(ix) Trading in derivative instruments: Please refer to note 6(b).

(b) Information on investees:

The following is the information on investees for the year 2021 (excluding information on investees in Mainland China):

				Unit: thousand NTD/thousand USD/thousand EUR	Unit: thousand NTD/thousand USD/thousand EUR	Unit: thousand NTD/thousand USD/thousand EUR	Unit: thousand NTD/thousand USD/thousand EUR	Unit: thousand NTD/thousand USD/thousand EUR	Unit: thousand NTD/thousand USD/thousand EUR	Unit: thousand NTD/thousand USD/thousand EUR	Unit: thousand NTD/thousand USD/thousand EUR
Name of investor	Name of investee	Address	Scope of business	Original cost		Ending balance			Net income (losses) of investee	Investment income (losses)	Remarks
				December 31, 2021	December 31, 2020	Shares	Percentage of ownership	Book value
TSRC TSRC TSRC TSRC Trimurti Holding Corporation Trimurti Holding Corporation Trimurti Holding Corporation TSRC (Hong Kong) Limited TSRC (Lux.) Corporation S.A R.L. TSRC (USA) Investment Corporation Hardison International Corporation Hardison International Corporation Dymas Corporation	Trimurti Holding Corporation Hardison International Corporation Dymas Corporation TSRC (Vietnam) Co., Ltd. Polybus Corporation Pte Ltd. TSRC (Hong Kong) Limited Indian Synthetic Rubber Private Limited TSRC (Lux.) Corporation S.A R.L. TSRC (USA) Investment Corporation TSRC Specialty Materials LLC Triton International Holdings Corporation Dymas Corporation Asia Pacific Energy Development Co., Ltd.	Palm Grove House, P.O. BOX 438, Road Town, Tortola, B.V.I. Palm Grove House, P.O. BOX 438, Road Town, Tortola, B.V.I. Palm Grove House, P.O. BOX 438, Road Town, Tortola, B.V.I. 8 VSIP II-A Street 31, Vietnam Singapore Industrial Park II-A, Tan Uyen Town, Binh Duong Province, Vietnam 100 Peck Seah Strect #09-16 Singapore 079333 15/F Boc Group Life Assurance Tower 136 Dses Voeus Road Central Room No.702, Indian Oil Bhawan, 1 Sri Aurobindo Marg, Yusuf Sarai, New Delhi 110016, India 34-36 avenue de la Liberte, L-1931, Luxembourg 2711 Centerville Road, Suite 400, County of New Castle, Wilmington, Delaware, USA 12012 Wickchester Lane, Suite 280, Houston, TX, USA Palm Grove House, P.O. BOX 438, Road Town, Tortola, B.V.I. Palm Grove House, P.O. BOX 438, Road Town, Tortola, B.V.I. Cayman Islands	Investment corporation Investment corporation Investment corporation Production and processing of rubber color masterbatch, thermoplastic elastomer and plastic compound products. International commerce and investment corporation Investment corporation Produchion and sale of ESBR International commerce and investment corporation Investment corporation Produchion and sale of TPE Investment corporation Investment corporation Consulting for electric power facilities management and electrical system design	1,005,495 109,442 38,376 342,742 1,802,647 (USD65,101) 2,875,607 (USD103,850) 816,107 (USD29,473) 2,343,681 (EUR74,870) 2,659,625 (USD96,050) 6,053,505 (USD218,617) 1,385 (USD50) 132,884 (USD4,799) 312,482 (USD11,285)	1,005,495 109,442 38,376 278,280 1,802,647 (USD65,101) 2,875,607 (USD103,850) 816,107 (USD29,473) 2,343,681 (EUR74,870) 2,659,625 (USD96,050) 6,053,505 (USD218,617) 1,385 (USD50) 132,884 (USD4,799) 312,482 (USD11,285)	86,920,000 3,896,305 1,161,004 - 105,830,000 103,850,000 222,861,375 74,869,617 130 - 50,000 4,798,566 7,522,337	% 100.00 % 100.00 % 19.48 % 100.00 % 100.00 % 100.00 % 50.00 % 100.00 % 100.00 % 100.00 % 100.00 % 80.52 % 37.78	14,810,412 666,055 141,941 215,455 9,141,721 3,672,336 1,130,197 2,911,736 2,762,795 2,363,035 56,136 608,022 339,063	2,249,887 16,980 24,112 (40,674) 1,297,441 364,704 1,207,138 285,684 163,233 321,142 (2,368) 24,112 44,847	2,249,887 16,980 4,697 (40,674) 1,297,441 364,704 603,569 285,684 163,233 321,142 (2,368) 19,415 16,943	Subsidiary Subsidiary Subsidiary (note 2) Subsidiary Indirectly owned subsidiary Indirectly owned subsidiary - Indirectly owned subsidiary Indirectly owned subsidiary Indirectly owned subsidiary Indirectly owned subsidiary Indirectly owned subsidiary -

Note 1: Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD27.690; EUR1 to NTD31.3035).

Note 2: TSRC directly owns 19.48% of Dymas's equity and indirectly owns 80.52% via Hardison International Corporation, total directly and indirectly owns of equity are 100%.

(Continued)

TSRC CORPORATION Notes to the 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:

					Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD
Name of investee in Mainland China	Scope of business	Issued capital	Method of investment (Note 1)	Cumulative investment (amount) from Taiwan as of January 1, 2021	Investment flow during current period		Cumulative investment (amount) from Taiwan as of December 31, 2021	Net income (losses) of investee	Direct / indirect investment holding percentage	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Remittance amount	Repatriation amount
Shen Hua Chemical Industries Co., Ltd.	Production and sale of synthetic rubber products	1,141,382 (USD41,220)	(2)a.	-	-	-	-	1,002,175	65.44 %	655,824 (note 2)	2,371,007	4,786,340
Changzhou Asia Pacific Co- generation Co., Ltd.	Power generation and sale of electricity and steam	639,639 (USD23,100)	(2)c.	106,108 (USD3,832)	-	-	106,108 (USD3,832)	135,274	28.34 %	38,337 (note 3)	338,468	358,308
TSRC (Shanghai) Industries Ltd.	Production and sale of compounding materials	152,295 (USD5,500)	(2)b.	108,545 (USD3,920)	-	-	108,545 (USD3,920)	89,300	100.00 %	89,300 (note 2)	352,298	-
Nantong Qix Storage Co., Ltd.	Storehouse for chemicals	83,070 (USD3,000)	(2)d.	41,535 (USD1,500)	-	-	41,535 (USD1,500)	(4,642)	50.00 %	(2,321) (note 2)	55,819	74,060
TSRC-UBE (Nantong) Industries Ltd.	Production and sale of synthetic rubber products	1,107,600 (USD40,000)	(2)a.	27,690 (USD1,000)	-	-	27,690 (USD1,000)	415,589	55.00 %	228,574 (note 2)	1,043,614	-
TSRC (Nantong) Industries Ltd.	Production and sale of TPE	2,910,911 (USD105,125)	(2)a.	184,083 (USD6,648)	-	-	184,083 (USD6,648)	276,512	100.00 %	276,512 (note 2)	4,302,489	440,864
ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.	Production and sale of NBR	1,240,512 (USD44,800)	(2)a.	-	-	-	-	367,700	50.00 %	183,850 (note 3)	505,494	-

Note 1: The method of investment is divided into the following four categories:

(1) Remittance from third-region companies to invest in Mainland China.

(2) Through the establishment of third-region companies then investing in Mainland China.
a. Through the establishment of Polybus Corporation Pte. Ltd. then investing in Mainland China.
b. Through the establishment of TSRC (Hong Kong) Limited then investing in Mainland China.

c. Through the establishment of Asia Pacific Energy Development Co., Ltd. then investing in Mainland China.

d. Through the establishment of Triton International Holdings Corporation then investing in Mainland China.
(3) Through transferring the investment to third-region existing companies then investing in Mainland China.
(4) Other methods: EX: delegated investments.

Note 2: The investment income (losses) were recognized under the equity method and based on the financial statements audited by the auditor of the Company.

Note 3: The investment income (losses) were recognized under the equity method and based on the financial statements audited by international accounting firms.

Note 4: Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD27.690).

(ii) Limitation on investment in Mainland China:

Accumulated investment amount in Mainland China as of December 31, 2021	Investment (amount) approved by Investment Commission, Ministry of Economic Affairs	Maximum investment amount set by Investment Commission, Ministry of Economic Affairs
467,961 (USD16,900)	5,187,306 (USD187,335) (Note 2)	- (Note 1)

Note 1: In accordance with the "Regulations on Permission for Investment or Technical Cooperation in Mainland China" and the "Principles for Examination of Applications for Investment or Technical Cooperation in Mainland China" amended and ratified by the Executive Yuan on August 22, 2008, the Company met the criteria for operational headquarters under the Statute for Industrial Innovation and obtained approval from the Industrial Development Bureau, Ministry of Economic Affairs, on August 18, 2021. As it has an operational headquarters status, the Company is not subject to the limitation as to the amount of investment in Mainland China during the period from August 12, 2021 to August 11, 2024.

Note 2: This amount includes capital increase out of earnings, approved by the Investment Commission, MOEA.

Note 3: Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD27.690).

(Continued)

TSRC CORPORATION Notes to the Financial Statements

(iii) Significant transactions:
1) Sales and accounts receivable

Sales to related parties in Mainland China are summarized as follows:

TSRC (Shanghai) Industries Ltd. TSRC (Nantong) Industries Ltd.	2021
	$ 8,450 99,524 $ 107,974

The related accounts receivable resulting from the above transactions as of December 31, 2021 are as follows:

The related accounts receivable resulting from the 2021 are as follows:	above transactions
TSRC (Shanghai) Industries Ltd. TSRC (Nantong) Industries Ltd.	December 31, 2021
	$ 2,846 20,791 $ 23,637

2) Purchases and accounts payable

Purchase from related parties in Mainland China are summarized as follows:

TSRC (Nantong) Industries Ltd.	2021
	$ 33,624

The related accounts payable resulting from the above transactions as of December 31, 2021 are as follows:

TSRC (Nantong) Industries Ltd.	December 31, 2021
	$ 8,134

There were no significant differences between the pricing of purchases transactions with related parties and that with other suppliers. The payment terms ranged from one to two months, which were similar to other suppliers.

(Continued)

TSRC CORPORATION Notes to the Financial Statements

3) Service income

Nature Management and technology services Management and technology services & technology licensing Management and technology services Management and technology services Technology licensing	Name Shen Hua Chemical Industries Co., Ltd. TSRC (Nantong) Industries Ltd. TSRC-UBE (Nantong) Industries Ltd. TSRC (Shanghai) Industries Ltd. ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.	Service income in 2021 $ 5,298 84,344 803 11,669 16,538 $ 118,652	Accounts receivable as of December 31, 2021 1,061 146,230 - 2,790 14,036 164,117

4) Guarantees

As of December 31, 2021, guarantees provided by the Company for the bank loans of investees in Mainland China was as follows:

investees in Mainland China was as follows:
ARLANXEO-TSRC (Nantong) Chemical Industrial Co., Ltd. Major shareholders:	December 31, 2021 $ 500,576
Shareholding Shareholder’s Name		Shares	Percentage
Panama Banco industrial company		69,524,417	% 8.41
Han-De Construction Co.,Ltd.		63,093,108	% 7.64
Wei Dah Development Co., Ltd.		53,708,923	% 6.50

(d) Major shareholders:

(14) Segment information

Please refer to the year 2021 consolidated financial statements.

TSRC Corporation

Statement of cash and cash equivalents

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

		Type	Description		Amount
Bank deposits			Checking deposits	$	5,920
Demand deposits					9,945
			Foreign currency deposits
(USD3,173 thousand,＠27.690)					87,859
(JPY3,224 thousand,＠0.2404)					775
(EUR179 thousand,＠31.3035)					5,614
(RMB1 thousand,＠4.3446)					2
Commercial paper with reverse sell agreements			Commercial paper		30,000
				$	140,115
		Statement	of notes receivable
	Customer		Description	Amount	Note
Non-related parties:
A Company		Arising from operating leases		$	1,857

TSRC Corporation

Statement of trade receivables

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Customer Related parties: TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.A R.L. TSRC (Nantong) Industries Ltd. Polybus Corporation Pte Ltd TSRC (Shanghai) Industries Ltd. Non-related parties: B Company C Company D Company Other (Individually less than 5%) Subtotal Less: Allowance for Impairment	Description Arising from operating activities 〃〃〃〃 Arising from operating activities 〃〃〃	Amount Note $ 94,756 71,287 20,791 13,360 2,846 203,040 190,115 84,858 77,323 1,047,520 1,399,816 1,233 1,398,583 $ 1,601,623

TSRC Corporation

Statement of other receivables

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Type Other receivables-related parties Other	Description Accrued revenue from management and payment on behalf of others	Amount Note $ 194,635 7,428 $ 202,063

Statement of inventories

Type Raw materials Supplies Work-in-process Finished goods Merchandise Total Less: Allowance for Inventory Write-down	Amount Cost Net realizable value Note $ 402,706 388,812 29,009 4,738 108,696 108,696 1,175,142 1,433,983 13,071 13,071 1,728,624 1,949,300 58,109 $ 1,670,515
	Cost $ 402,706 29,009 108,696 1,175,142 13,071 1,728,624 58,109 $ 1,670,515

TSRC Corporation

Statement of other current assets

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Type Tax receivable Other prepayment Other	Description Sales tax return Restricted deposits etc.	Amount Note $ 50,981 36,084 106,058 $ 193,123

TSRC Corporation

Statement of financial assets measured at fair value through other

comprehensive income - non-current

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Balance, Beginning of

	Balance, Beginning of
Company Evergreen Steel Corporation Thai Syuthetic Rubbers Co., Ltd. Hsin-Yung Enterprise	Period Shares Fair value 12,148,000 $ 413,517 599,999 81,960 5,657,000 342,758 $ 838,235	Increase Shares Amount - 254,623 - 89,909 - 37,902 382,434	Decrease Shares Amount - - - - - - -	Balance, End of Period Shares Fair value 12,148,000 668,140 599,999 171,869 5,657,000 380,660 1,220,669	Accumulated impairment - - - -	Pledged as Collateral Note None 〃〃
	Shares	Shares - - -	Shares - - -	Shares 12,148,000 599,999 5,657,000
	12,148,000 599,999 5,657,000

TSRC Corporation

Statement of changes in investments accounted for using the equity method

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Company Trimurti Holding Corporation Hardison International Corporation Dymas Corporation TSRC (Vietnam) Co., Ltd.	Balance, Beginning of Period Shares Amount 86,920,000 $ 12,779,698 3,896,305 553,628 1,161,004 114,017 - 197,619 $ 13,644,962	Increase Shares Amount - 2,030,714 (Note 1) - 112,427 (Note 1) - 27,924 (Note 1) - 17,836 (Note 1) 2,188,901	Decrease Shares Amount - - - - - - - - -	Balance, End of Period Shares Ownership (％) Amount 86,920,000 100.00 14,810,412 3,896,305 100.00 666,055 1,161,004 100.00 141,941 - 100.00 215,455 15,833,863	Balance, End of Period Shares Ownership (％) Amount 86,920,000 100.00 14,810,412 3,896,305 100.00 666,055 1,161,004 100.00 141,941 - 100.00 215,455 15,833,863	Market Value or Book Value Unit price Gross value - 14,846,711 - 666,055 - 147,097 - 215,455 15,875,318	Pledged as Collateral Note None 〃〃〃
	Shares	Shares - - - -	Shares - - - -	Shares 86,920,000 3,896,305 1,161,004 -	Ownership (％) 100.00 100.00 100.00 100.00	Unit price - - - -
	86,920,000 3,896,305 1,161,004 -

Note 1: The sum of $2,188,901 thousand is derived from $64,462 thousand, of capital increase of TSRC (Vietnam) Co., Ltd., $2,230,890 thousand of investment income from subsidiaries, associates, and joint ventures, $(258,583) thousand of translation effects from foreign operations, $(4,062) thousand of changes in adjustments of guarantees and endorsements, $(25,146) thousand of adjustments in deferred credits and unrealized profits, and $127,068 thousand of adjustments from unrealized gains of financial assets measured at fair value through other comprehensive income, and $54,272 thousand in the effective portion of changes in the fair value of derivatives designated and qualified as cash flow hedges.

TSRC Corporation

Statement of changes in property, plant and equipment

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

－ Please refer to (6) Description of Significant Accounts (h) Property, plant, and equipment.

Statement of changes in accumulated depreciation of property, plant and equipment

－ Please refer to (6) Description of Significant Accounts (h) Property, plant, and equipment.

Statement of changes in right-of-use assets

－ Please refer to note (6) Description of Significant Accounts (i) right-of-use assets.

Statement of changes in accumulated depreciation of right-of-use assets

－ Please refer to note (6) Description of Significant Accounts (i) right-of-use assets.

TSRC Corporation

Statement of changes in investment property

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

－ Please refer to note (6) Description of Significant Accounts (j) Investment Property.

Statement of changes in accumulated depreciation of investment property

－ Please refer to note (6) Description of Significant Accounts (j) Investment Property.

Statement of changes in intangible assets

－ Please refer to note (6) Description of Significant Accounts (k) Intangible Assets.

TSRC Corporation

Statement of other non-current assets

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Type Refundable deposits Long-term unamortized expenses	Description Rent deposit	Amount Note $ 14,798 6,723 $ 21,521

Statement of short-term borrowings

Type Unsecured Loans Unsecured Loans Unsecured Loans Unsecured Loans Unsecured Loans Unsecured Loans Unsecured Loans	Lender Hua Nan Commercial Bank Mega International Commercial Bank Mizuho Bank HSBC Bank (Taiwan) Limited MUFG Bank Bank of China Taishin International Bank	Ending Balance $ 99,684 721,995 335,000 249,210 502,295 250,000 46,869 $ 2,205,053	Term Within one year Within one year Within one year Within one year Within one year Within one year Within one year	Interest Rate (％) 0.83 0.85~0.884 0.75 0.80 0.79~0.81 0.77 0.73~0.82	Line of Credit 1,000,000 1,799,850 415,350 553,800 830,700 600,000 300,000 5,499,700	Collateral Note - - - - - - -

TSRC Corporation

Statement of trade payables

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Customer Related parties: TSRC (Nantong) Industries Ltd. Non-related parties: E Company F Company G Company H Company I Company J Company K Company Other (Individually less than 5%)	Description Arising from operating activities 〃〃〃〃〃〃〃〃	Amount Note $ 8,134 $ 143,800 69,048 58,817 54,452 44,526 39,123 37,201 333,928 $ 789,029

Statement of other payables

Type Compensation due to employees Accrued annual bonuses Sales transportation fees Other payables－related parties Other (Individually less than 5%)	Description Amount $ 171,609 88,332 74,453 74,419 317,802 $ 726,615

TSRC Corporation

Statement of other current liabilities

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Type Contract liabilities Other	Description Receipts under custody and suspense receipts, etc.	Amount Note $ 28,069 5,481 $ 33,550

Statement of other non-current liabilities

Type Net defined benefit liability Guarantee deposits Other	Description	Amount Note $ 85,974 16,854 1,848 $ 104,676

TSRC Corporation

Statement of long-term borrowings

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Creditor E. SUN Commercial Bank Mega International Commercial Bank MUFG Bank CTBC Bank Taishin International Bank Less: Long-term debt due	Description Medium-to-long- term debt Medium-to-long- term debt Medium-to-long- term debt Medium-to-long- term debt Medium-to-long- term debt within one year	Line of Credit $ 145,756 400,000 600,000 500,000 500,000 400,000 $ 1,745,756	Term Interest Rate (％) Within five years 1.20 Within five years 1.25 Within five years 0.95 Within five years 1.18 Within five years 1.04	Collateral Note None " " " "

Statement of operating revenue For the year ended December 31, 2021

Type SBR (Synthetic Rubber) BR (Synthetic Rubber) TPE (Synthetic Rubber) Compounds Other	Quantity (in tons)	Amount Note $ 5,082,305 3,118,101 2,148,878 544,809 256,381 $ 11,150,474
	100,835 55,471 28,492 3,548 -

TSRC Corporation

Statement of operating costs

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Type
Cost of goods sold (in-house manufacturing):
Direct raw material
Beginning raw material inventory
Add: Raw material purchased
Less: Ending raw material inventory
Raw materials sold
Transferred to manufacturing and operating expenses
Subtotal
Direct labor
Manufacturing expenses
Manufacturing costs
Add: Beginning work-in-process
Less: Ending work-in-process
Transferred to manufacturing and operating expenses
Cost of finished goods
Add: Beginning finished goods
Less: Ending finished goods
Transferred to manufacturing and operating expenses
Total: cost of goods sold (in-house manufacturing)
Cost of goods sold (purchase from suppliers):
Beginning merchandise
Add: Merchandise purchased
Less: Ending merchandise
Transferred to manufacturing and operating expenses
Total: cost of goods sold(purchase from suppliers)
Total: cost of goods sold
Reversal of decline in market value of inventory
Costs of raw material sold
Other costs
Sale of scrap
Operating costs

Amount
Subtotal
Total
$ 545,409
7,074,120
402,706
269,896
44,105
6,902,822
246,516
1,356,168
8,505,506
110,485
108,696
3,263
8,504,032
924,093
1,175,142
4,137
8,248,846
4,934
32,471
13,071
37
24,297
8,273,143
(69,924)
269,896
499,695
(21,880)
$
8,950,930

TSRC Corporation

Statement of selling expenses

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Type Shipping charges Salaries Commission Other	Description	Amount Note $ 468,787 74,128 39,840 26,633 $ 609,388

Statement of administrative expenses

Type Salaries Service expenses Depreciation and Amortization Computer software Insurance expenses Taxation Other	Description	Amount Note $ 315,651 28,851 31,393 20,864 19,107 9,945 100,392 $ 526,203

TSRC Corporation

Statement of reseach and development expenses

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Type Salaries Research expenses Depreciation and Amortization Other	Description	Amount Note $ 132,933 28,761 52,252 50,001 $ 263,947

AI assistant

TSRC — Annual Report 2021

51969_rns_2021-11-05_1b9dd563-45ec-476c-a9f4-1ffb3973cbea.pdf

TSRC CORPORATION

Parent Company Only Financial Statements

Table of contents

KPMG

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

Description of key audit matter:

2. Inventory measurement

Description of key audit matter:

How the matter was addressed in our audit:

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

KPMG

Notes to Readers

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) TSRC CORPORATION

Balance Sheets

December 31, 2021 and 2020

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) TSRC CORPORATION

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

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

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) TSRC CORPORATION

Statements of Changes in Equity

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

TSRC CORPORATION

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

Notes to the Financial Statements

For the years ended December 31, 2021 and 2020

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

(1) Company history

(2) Approval date and procedures of the financial statements

(3) New standards, amendments and interpretations adopted:

TSRC CORPORATION Notes to the Financial Statements

(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

(4) Summary of significant accounting policies

(a) Statement of compliance

TSRC CORPORATION Notes to the Financial Statements

(ii) Functional and presentation currency

TSRC CORPORATION Notes to the Financial Statements

(e) Cash and cash equivalents

(f) Financial instruments

(i) Financial assets

TSRC CORPORATION Notes to the Financial Statements

TSRC CORPORATION Notes to the Financial Statements

TSRC CORPORATION Notes to the Financial Statements

5) Derecognition of financial assets

2) Equity instrument

3) Financial liabilities

4) Derecognition of financial liabilities

TSRC CORPORATION Notes to the Financial Statements

5) Offsetting of financial assets and liabilities

6) Financial guarantee contract

(iii) Derivative financial instruments

(g) Inventories

TSRC CORPORATION Notes to the Financial Statements

(h) Investment in associates

(i) Investment in subsidiaries

TSRC CORPORATION Notes to the Financial Statements

(j) Joint arrangement

(ii) Reclassification to investment properties

(iv) Depreciation

TSRC CORPORATION Notes to the Financial Statements

(l) Investment property

(m) Leases

(i) As a leasee

TSRC CORPORATION Notes to the Financial Statements

TSRC CORPORATION Notes to the Financial Statements

(ii) As a lessor

(n) Intangible assets

－ (o) Impairment non-financial assets

TSRC CORPORATION Notes to the Financial Statements

(p) Provisions

(q) Revenue

(i) Sale of goods

TSRC Annual Report 2021