TSRC - Annual Report 2021 | FinancialReports.eu

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Home page
Table of Contents
Letter to the Shareholders
Company profile
Corporate governance report
Information on capital raising activities
Overview of business operations
Overview of financial status
Review and analysis of the Company's financial position and finan-
cial performance, and risk management
Special items to be included
Other disclosures
Any circumstances referred to in Paragraph 3(2) of Article 36 of the
Securities and Exchange Act which might materially affect share-
holders' equity or the price of the Company's securities
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Spokesman:Edward Wang Job title: Vice President TEL:02-37016000 E-mail:[email protected]

Deputy Spokesman:Cheng-Nan Lin Job title: Sr. Asst.Vice President TEL:02-37016000 E-mail:[email protected]

Head office:

No.2, Singgong Rd., Dashe Dist., Kaohsiung City, Taiwan R.O.C. Tel: 07-351 3811 http://www.tsrc.com.tw Taipei office 18F., No. 95, Sec. 2, Dunhua S. Rd., Taipei City, Taiwan R.O.C. Tel: 02-3701 6000 Fax: 02-3701 6868 Kaohsiung Factory: No.2, Singgong Rd., Dashe Dist., Kaohsiung City, Taiwan R.O.C. Tel: 07-351 3811 Fax: 07-351 4705 Gangshan Factory: No.39, Bengong 1st Rd., Gangshan Dist., Kaohsiung City, Taiwan R.O.C. Tel: 07-623 3005 Fax: 07-622 5481

Stock Agent:SinoPac Securities Co. Ltd. Stock division Head office:3F., No.17, Bo-ai Rd., Jhongjheng District, Taipei City 100, Taiwan R.O.C. TEL:02-23816288 http://www.sinotrade.com.tw

Financial Statement Auditing CPAs: Name of CPA: Po Shu Huang and Ming Hung Huang Office:KPMG Head office:68F., No.7, Sec. 5, Sinyi Rd., Sinyi District, Taipei City 110, Taiwan R.O.C. (TAIPEI 101) TEL:02-81016666 http://www.kpmg.com.tw

The name of any exchanges where the Company's securities are traded offshore, and the method by which to access information on said offshore securities: No

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		Page
Letter to the Shareholders		4
Company profile		6
I.	Date of incorporation	7
II.	Company history	7
Corporate governance report		8
I.	Company's organization	9
II.	Information on Board of Directors and Presidents	10
III.	The remuneration of directors and major managers	16
IV.	Status of corporate governance implementation	21
V.	Information on CPA professional fee	39
VI.	Information on replacement of CPA	39
VII.	Chairman, president, or managers in charge of the Company's finance or accounting matters	39
	in the most recent year held a position at the accounting firm of a CPA or any of its affiliated
	companies
VIII.	Information on equity for directors, managers and shareholders holding more than 10% of	39
	outstanding shares equity transfer and equity pledge movements
IX.	Relationship data among the top 10 shareholders with the highest shareholding ratio	40
X.	The total number of shares and total equity stake held in any single enterprise by the Com-	41
	pany, its directors, managers and any companies controlled either directly or indirectly by the
	Company
Information on capital raising activities		42
I.	Capital and shares	43
II.	Corporate Bonds Status	47
III.	Preferred stocks Status	47
IV.	Global depository receipts Status	47
V.	Employee stock warrants Status	47
VI.	New restricted employee shares Status	47
VII.	Status of issuance of new shares in connection with mergers or acquisitions or with acquisi-	47
	tions of shares of other companies
VIII.	Implementation of capital allocation plans	47

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		Page
Overview of business operations		48
I.	Description of business	49
II.	Analysis of the market as well as the production and marketing situation	53
III.	Employees information	56
IV.	Disbursements of environmental protections	56
V.	Labor relations	57
VI.	Material contracts	58
Overview of financial status		60
I.	Condensed balance sheet and statement of comprehensive income for the recent five fiscal	61
	years
II.	Financial analysis for the recent five fiscal years	65
III.	Audit committee's report	68
IV.	Consolidated financial statements and independent auditors' report for the most recent fiscal	69
	year
V.	Individual financial statements and independent auditors' report for the most recent fiscal	69
	year
VI.	The impact of financial difficulties in the Company and its affiliates on the Company's financial	69
	situation
Review and analysis of the Company's financial position and financial		70
performance, and risk management
I.	Financial position	71
II.	Financial performance	71
III.	Cash flow analysis	72
IV.	Impact of major capital expenditures within the most recent fiscal year on financial operations	73
V.	The Company's reinvestment policy for the most recent fiscal year, the main reasons for profit/	73
	loss generated thereby, the plan for improving re-investment profitability, and investment
	plans for the coming year
VI.	Analysis and assessment of risk management	73
VII.	Other important matters	75
Special items to be included		76
I.	Information related to the Company's affiliates	77
II.	State of the Company's conducting private placements of securities	85
III.	Holding or disposal of the Company's shares by the Company's subsidiaries	85
IV.	Other matters that require additional description	85
Other disclosures		86
An	y circumstances referred to in Paragraph 3(2) of Article 36 of the	87

Any circumstances referred to in Paragraph 3(2) of Article 36 of the Securities and Exchange Act which might materially affect shareholders' equity or the price of the Company's securities

Letter to the Shareholders

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Letter to the Shareholders

Petrochemical industry and its end markets experienced significant disruptions due to COVID-19 in 2020. In response to the pandemic, TSRC took swift actions and measures to safeguard employees’ health and safety, maintain business continuity, and ensure supply chain reliability for customers. Amid challenging market conditions, TSRC’s synthetic rubber business delivered strong performance by effectively leveraging the fast recovery of China automotive market, healthy price gap between natural rubber and butadiene, and pulled-in orders from Asian customers driven by the U.S. antidumping duty and countervailing duty investigations of passenger vehicle and light truck tires.

TPE business, with a higher presence in the U.S. and European markets, experienced more significant demand destruction and intensified pricing competition. In addition, the Advanced Shoe Materials (ASM) business was severely affected by weak market demand. Although some new sales opportunities arising from the pandemic were successfully captured, overall TSRC consolidated operating performance declined compared to 2019.

In terms of equity investments, Indian Synthetic Rubber Private Limited and ARLANXEO-TSRC (Nantong) Chemical Industrial Co., Ltd. contributed strong investment income reflecting the rapid recovery of downstream demand in India and China. At the same time, TSRC successfully avoided potential negative impacts of foreign exchange volatility and New Taiwan Dollar (NTD) appreciation through robust financial management. Complying with international accounting standards and practices, a one-time non-cash intangible asset impairment charge for TSRC’s U.S. subsidiary was taken in 2020.

In total, the shipment of synthetic rubber and TPE products was 528 thousand metric tons in 2020, an increase of 8% versus prior year. Consolidated revenue was NTD 24,024 million, a decrease of 17% compared to NTD 28,911 million in the prior year. Consolidated gross profit was down 13% to NTD 2,937 million and margin was 12%. Consolidated operating profit was NTD 822 million, a reduction of 24% from the previous year. As a result, 2020 net loss was NTD 22 million, representing a loss of NTD 0.03 per share.

Amid various restrictions and business challenges incurred by the pandemic, TSRC continued its strategic investment projects on specialty chemical and successfully completed building the advanced SEBS line in Nantong, China and ASM plant in Vietnam in 2020. TSRC also continued technological innovation and business development vis-à-vis rising demand of medical, ASM, and advanced automotive materials. Key research milestones in 2020 include the commercialization of new SSBR grades, new hydrogenated styrenic block copolymer (HSBC) product development for medical, hygiene, and viscosity modifier applications, breakthrough in ASM new foaming technology, and successful adoption of the newly developed process technologies in the new manufacturing assets. In 2020, 9 patents were granted to TSRC.

Global economy is recovering from the depths of COVID-19 crisis as the pandemic is gradually being controlled and large-scale economic stimulus have been implemented by governments and central banks. However, the pace of recovery is expected to vary across countries and industries while trade and geopolitical uncertainties remain a risk to the global economic recovery. TSRC plans to capture the growth momentum of economic recovery and continue its strategic direction focusing on new technology development and business model optimization to emerge stronger from the global crisis.

Chairman: Nita Ing

Company profile

Company profile

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I. Date of incorporation

July 27, 1973

I. Date of incorporation II. Company history

II. Company history

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2010's Globalization

Signed an SBS technology licensing contract with a Russian Company, which was the first technology outlicensing by TSRC.
Established a joint venture E-SBR plant with an annual output of 120 thousand metric tons in India and a joint venture NBR plant in Nantong, Jiangsu, China.
Acquired Dexco in the U.S.
Established a SIS plant with an annual output of 25 thousand metric tons in Nantong, Jiangsu, China.
Expanded the production line for Advanced Shoe Materials in Gangshan.
Upgraded the Technology Center and Semi-commercial Plant in Kaohsiung, Taiwan.

2000's Expansion of Production Lines

Successfully developed the second generation SEBS technology.
Established Compound plants in Songjian, Shanghai and Jinan, Shandong, respectively.
Established an SEBS plants with an annual output of 20 thousand metric tons and formed a joint venture-BR plant with an annual output of 50 thousand metric tons respectively in Nantong, Jiangsu, China.

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Raised stake in Indian joint venture (Indian Synthetic Rubber Private Ltd.) to 50%
Completed construction of new SEBS line in Nantong, China.
Incorporated Vietnam subsidiary. Completed construction of ASM plant in Vietnam.
Established TSRC Global Application Research Center in Shanghai, China.

1990's Rapid Regional Expansion

Established its second SBS production line in Kaohsiung.
Established Shen Hua Chemical Industrial in Nantong, Jiangsu, China and established an E-SBR plant with an annual output of 100 thousand metric tons. This Company is the first joint venture and overseas Company of TSRC.

1980's Early Growing Stage

Established a BR plant with an annual output of 40 thousand metric tons.

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Participated in a joint venture project of BR with an annual output of 50 thousand metric tons in Thailand.
Successfully developed the first generation of SEBS technology.
Relocated the Philips SBS Plant from Texas, USA to Kaohsiung.

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1970's Beginning

Taiwan Synthetic Rubber Corp. (TSRC) was established in 1973.
Established an E-SBR plant with an annual output of 100 thousand metric tons (the first E-SBR plant in Taiwan).

Corporate governance report

I. Company's organization

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I. Company's organization
Shareholders Meeting
Compensation Committee
Board of Directors
Chairman
Audit Committee
Secretariat Division of Board Directors Internal Auditing Office
CEO
Safety, Health &Environment Section
Tasks of principal divisions/departments/business
Secretariat Division of
Board Directors Planning and implementing matters of the Board of Directors for the smooth operation of the Board.
Planning and performing internal audit to ensure the effective operation of the internal system as well
Internal Auditing Office
as establishing corporate risk evaluation and risk management mechanisms.
Safety, Health & Environ- Stipulating, planning, supervising and promoting the safety and health management matters and di-
ment Section recting related departments in implementation.
Synthetic Rubber Divi- Responsible for planning and executing the synthetic rubber business development project, selling syn-
sion thetic rubber products, analyzing overall performance, and responsible for operation result.
Advanced Materials Divi- Responsible for planning and executing the development project for advanced material business, sell-
sion ing thermoplastic elastomer (TPE) and applied materials, analyzing overall performance, and responsi-
ble for operation result.
Responsible for managing the production of plants, supervising the system operation of the supply
Operations Division chains, dedicating to maintaining the operational safety of plants, improving quality, maximizing pro-
duction efficiency, and improving the competitiveness of products.
Developing own or introducing advanced technologies externally in cope with the long-term strategy
Research & Development
Division of TSRC, which allows the product quality of TSRC and technology to reach international level, improves
the overall competitiveness, and increases revenues to ensure the sustainability of TSRC.
Responsible for the stipulation of financial policy and accounting system, planning and managing funds, ac-
Finance Division counts, taxes, equities and financial of re-investing businesses, as well as assisting in the customer credit risk
management of all business units. Meanwhile, responsible for the overall planning of the information service
system of TSRC in order to improve the efficiency of operational management and decision-making.
Planning and establishing human resources policy, drafting plans and budget for employee selection,
Human Resources & Man- recruitment, cultivation, retainment, and employee relations, as well as shaping organizational culture
agement Department and promoting organizational management in order to fulfill the goal of the organization and operate
effectively.
Responsible for legal management and providing legal support to ensure the interests of TSRC are not
Legal Department harmed.
Stipulating the medium to long-term development strategy, integrating and allocating resources, su-
Corporate Development
pervising execution process of all projects, handling the promotion of corporate social responsibility
Department
and public relations.
yS H
Division Division Division Op Division Res Fin u Leg Cor
erations
Department
nthetic Rubber ance Division
al Department
Advanced Materials earch & Development man Resources & porate Development
Management Department
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II. Information on Board of Directors and Presidents

<1> Information on Board of Directors (1)

II. Information on Board of Directors and Presidents

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Shares currently
Nationality Term Shares held when Shares currently spouses and chil-held by their
elected held
or Place of Date of of Date of first dren of minor
Job title Name Gender
registra- elected con- elected age
tion tract
Share(s) % Share(s) % Share(s) %
Wei-Dar Devel-
Chair-man Republic of China opment Corpo-ration Female June 21, 2018 3 July 27, 1985 53,708,9230 6.50- 53,708,9230 6.50- 0 -
Representative:
Nita Ing
Han-De Con-
struction Co.,
Direc-tor Republic of China Representative: Ltd. Male June 21, 2018 3 June 06, 2012 31,093,108762 3.77- 63,093,108762 7.64- 0 -
Chin-Shan
Chiang
Han-De Con-
struction Co.,
Direc-tor Republic of China Representative: Ltd. Male June 21, 2018 3 June 21, 2018 31,093,1080 3.77- 63,093,1080 7.64- 0 -
Jing-Lung
Huang
Han-De Con-
struction Co.,
Direc-tor Republic of China Ltd. Male June 21, 2018 3 June 10, 2015 31,093,1080 3.77- 63,093,1080 7.64- 0 -
Representative:
John T. Yu
Inde-
pen-dent Republic of China Robert Hung Male June 21, 2018 3 June 06, 2012 0 - 0 - 0 -
Direc-
tor
Inde-
pen-dent Republic Sean Chao Male June 21, 3 June 21, 0 - 0 - 0 -
of China 2018 2018
Direc-
tor
Inde-
pen-dent Republic of China Rex Yang Male June 21, 2018 3 June 21, 2018 0 - 0 - 0 -
Direc-
tor
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Note: The relatives information of the chairman of the board of directors and the general manager or person of an equivalent post (the highest level manager) of a company are the same person, spouses, or relatives within the first degree of kinship.

December 31, 2020

II. Information on Board of Directors and Presidents

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Other officers, direc-
tors or supervisors
Shares held
who are their spous-
through nom- Position(s) currently held in the Company and/ es or relatives of 2nd Note
inees Principal work experience and Academic qualifica-
tion or in any other degree of relation- (Note)
Company ship
Rela-
Job
Share(s) % Name tion-
title
ship
Bachelors' Degree in Department of Economics,
University of California, Los Angeles
Chairman of Hao Ran Foundation
Vice Chairman of TSRC Corporation Chairman of Continental Holdings Corpora-
0 - Chairman of Taiwan High Speed Rail Corporation tion. No No No No
General Manager, Continental Engineering Cor- Chairman of Continental Engineering Com-
poration pany
Director of Continental Development Company
Director of American Bridge Holding Company
Masters' Degree in Department of Public Admin-
istration, NCU
Director of Wei-Dar Development Corpora-
tion,
Director of Taiwan High Speed Rail Corporation
0 - Senior Assistant GM,China Development Financial Director of Han-De Construction Co., Ltd. No No No No
Chairman, Metropolis Property Manage-
Holding Company
ment Corporation
Senior Assistant GM, China Development Indus- Director of Hao Ran Foundation
trial Bank
Assistant GM, Shanghai Mart
Managing Director of Pan Asia Corp
Chairman of Han-De Construction Co., Ltd
Chairman of Wei-Dar Development Corpo-
Bachelors' Degree in Department of Accounting, ration
NCKU
Chairman of Oriens Corporation
Chairman of MaoShi Corporation
Comptroller, Taiwan High Speed Rail Corporation
0 - President, Suzhou Standard Food Corporation Director of Continental Engineering Compa- No No No No
Comptroller, Philips Taiwan Affiliates ny
Director of Continental Development Com-
Chief Financial Officer, Blue Bell Group, Hong
Kong pany
Director of Continental Holdings Corpora-
Chief Financial Officer, Getz Bros. & Co., Inc.
tion
Director of CDC Commercial Development
Corporation
President, CTCI Corporation
Graduated from Advanced Management Class in Director, CTCI Corporation
Management Faculty, Harvard University, Bache- Chairman, CTCI Development Corporation
lors' Degree in Department of Electrical Engineer- Director, CTCI Overseas Corporation Limited
0 - ing, NTU Managing Director, CTCI Foundation No No No No
Director, Taiwan Cement Corporation
Chairman of CTCI Corporation Director, CTCI Education Foundation
General Manager, CTCI Corporation Director, Dynamic Ever Investments Limited.
Director, Ever Victory Global Limited.
Masters' Degree in Department of Economics, Illi-
nois State University, USA , Independent Director
of Wistron NeWeb Corporation
0 - No No No No No
Assistant GM, Bank of America Corporation
Chief Financial Officer, Taiwan High Speed Rail
Corporation
Chairman, Young Green Energy Corporation
Masters' Degree in Department of Business Ad-
ministration, University of Chicago, Bachelors' De-
gree in Department of Politics and International
Independent Director of HannStar Display
0 - Relations, NTU Corporation No No No No
Independent Director, NAFCO
Chief Executive Officer, Morgan Stanley Taiwan
President, UBS Group in Taiwan
Chairman, UBS Fund in Taiwan
Bachelors' Degree in Department of Business Ad-
ministration, Soochow University
0 - No No No No No
CFO, Continental Holdings Corporation
Chairman, TEAPO Electronic Corporation
CFO/CSO,Yageo Corporation
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Major shareholders of institutional shareholders December 31, 2020
Institutional shareholders Major institutional shareholders
Han-De Construction Co., Ltd. Mao Shi Corporation (99.8%)
Wei-Dar Development Corporation Mao Shi Corporation (99.8%)
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II. Information on Board of Directors and Presidents

Information on Board of Directors

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Whether they possess work experience of more than five years and the following professional qualifications
Conditions
At least lecturers of business, law,
Judges, prosecutors, attorneys, CPAs, or Experience in busi-
finance or accounting departments or
other professional and technical personnel ness, law, finance and
other relevant departments/divisions
possessing licenses after passing national accounting, and other
required by the Company's business
Name examinations as required by the Compa- work required by the
of public and private colleges/univer-
sities ny's business Company's business
Nita Ing √
Chin-Shan Chiang √
Jing-Lung Huang √
John T. Yu √
Robert Hung √
Sean Chao √
Rex Yang √
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Please tick“ √ ”in the following blank boxes, if the directors meets the following conditions within two years prior to the appointment and in the duration of the appointment.

(1) Who are not employees of the Company or its affiliates;
(2) Directors and corporate supervisors not belonging to the Company or its affiliates (However, except for the independent Directors who hold concurrent posts that are not subject to the limits for those companies and its parent companies or subsidiary companies belonged to their parent companies which are established by local regulations.).
(3) Who are not directors/supervisors, or the directors'/supervisors' spouses or minor children, or natural person shareholders who possess more than 1% of the Company's total issued shares in the name of another person, or top ten natural person shareholders;
(4) Managers who are not listed in (1) or their spouses,second-degree relatives of the listed members in (2) and (3) or direct blood relatives of the third-degree relatives.
(5) The directors, supervisors of the legal shareholders or employee who do not directly hold more than 5% of the total issued shares or on top 5 shareholdings or appointing the representatives to be the directors or supervisor of the Company as prescribed of Article 27 (1) or (2) of the Company Law (however, except for the independent Directors who hold concurrent posts that are not subject to the limits for the company and its parent company or subsidiary company belonged to their parent company which are established by local regulations.)
(6) More than half of shares that are not belonged to the Board of Directors or voting rights of the company shall controlled by the same person of his/her Directors, Supervisors or Employees in company (however, except for the independent Directors who hold concurrent posts that are not subject to the limits for the company and its parent company or subsidiary company belonged to their parent company which are established by local regulations.)
(7) The Directors, Supervisors or Employees of their company or institution who are not the company’s Directors, General Managers or equivalent position that are the same persons or spouses (but the independent Directors who hold concurrent posts that are not subject to the limits for the company and its parent company or subsidiary company belonged to their parent company which are established by local regulations.)

Major shareholders of major shareholders of institutional shareholders December 31, 2020	Major shareholders of major shareholders of institutional shareholders December 31, 2020
Institutional shareholders	Major institutional shareholders
Mao Shi Corporation	Jade Fortune Enterprises Inc.(100%)

II. Information on Board of Directors and Presidents

December 31, 2020

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compliance with the circumstances for independency
number of other public companies in
which he/she assumes an indepen-
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) dent director concurrently
√ √ √ √ √ √ √ 0
√ √ √ √ √ √ √ √ √ 0
√ √ √ √ √ √ √ 0
√ √ √ √ √ √ √ √ √ √ √ 0
√ √ √ √ √ √ √ √ √ √ √ √ 0
√ √ √ √ √ √ √ √ √ √ √ √ 2
√ √ √ √ √ √ √ √ √ √ √ √ 0
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(8) Directors, Supervisors, Managers or shareholders who hold more than 5% of shares in particular company or institution which do not have financial or business dealings with the company (however, if the particular company or institution holds more than 20% and below 50% of the total issued shares of the company, and the independent Directors who hold concurrent posts that are not subject to the limits for the company and its parent company or subsidiary company belonged to their parent company which are established by local regulations.)
(9) The professionals, sole proprietorships, partnerships, companies or institutions who do not provide audit services or have obtained remuneration grand total amount not exceeded to NT$500,000 in business, legal affairs, finance and accounting, or the business owners, partners, directors , supervisors, handlers and their spouses. However, members of Payroll Committee, Pubic Offer Review Committee or Special Committee on Mergers and Acquisitions are not subject to the limits for performing its functions according to the relevant regulations of the Securities and Exchange Act or Business Mergers and Acquisitions Act.
(10) Who are not spouses or relatives within 2nd degree of relationship of the other directors.
(11) Who are free from any of the circumstances referred to in Article 30 of the Company Act.
(12) Who are not the corporations or representatives defined in Article 27 of the Company Act.

II. Information on Board of Directors and Presidents

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<2> Information on presidents
Shares currently held
Shares held through
Shares currently held by their spouses and nominees
children of minor age
National- Gen-
Job title Name Date of elected
ity der
Share(s) % Share(s) % Share(s) %
CEO Singa- Joseph Chai Male November 01, 0 - 0 - 65,000 -
pore 2015
Sr. Vice Presi-
Advanced Ma-dent Canada Wing-Keung Hendrick Male July 16, 2004 0 - 0 - 0 -
Lam
terials Division
Vice President
Finance Divi- Republic Edward Male June 01, 2016 0 - 0 - 0 -
sion of China Wang
Vice President
Research & USA Qiwei Lu Male April 01, 2016 0 - 0 - 0 -
Development
Division
Vice President
Synthetic Rub- Republic of China Kevin Liu Male June 01, 2016 0 - 0 - 0 -
ber Division
Vice President
Operations Republic of China Chi-Wei Hsu Male January 01, 2020 0 - 0 - 0 -
Division
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Note : Whether the general manager or one in equivalent position is the same person as the chairman, the spouse of the chairman, or the firstdegree relative of the chairman.

II. Information on Board of Directors and Presidents

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December 31, 2020
Other officers, directors
or supervisors who are
their spouses or rela-
tives of 2nd degree of
Principal work experience and Aca- Position(s) currently held in the Company and/or in any other Compa- relationship 人 Note
demic qualification ny
Rela-
Posi-
Name tion-
tion
ship
Lubrizol Corporation Deputy Directors of Polybus Corporation. Pte Ltd., TSRC (Hong Kong)
Vice President of Asia Pacific/ Limited, Trimurti Holding Corporation., Hardison International No No No No
MBA, Case Western Reserve Corporation., Dymas Corporation., Triton International Hold-
University, USA ings Corporation.
Chairman of TSRC(Nantong) Industrial Ltd. and TSRC(Shang-
Financial Officers of Pacific hai) Industrial Ltd., TSRC(Vietnam)Co., Ltd.; Directors of TSRC
Industrial Co., Ltd., Assistant (USA) Investment Corporation. ,TSRC Specialty Materials LLC.
Vice President of First Pacific Co. ,Trimurti Holding Corporation. ,Hardison International Cor- No No No No
Ltd. and Shau Kei Wan Industrial poration. ,TSRC (Hong Kong) Limited. ,Dymas Corporation.
School, Hong Kong ,Polybus Corporation Pte Ltd.. ,TSRC (Lux.) Corporation S.à r.l.
,Asia Pacific Energy Development Company Limited.
Directors of Shen Hua Chemical Industrial Ltd. ,Polybus
Corporation Pte Ltd. ,Trimurti Holding Corporation . ,Triton
International Holdings Corporation. ,TSRC (Hong Kong)
Chief Financial Officer, HTC / Limited. ,TSRC (USA) Investment Corporation. ,TSRC Specialty
Master of Business, Administra- Materials LLC . ,TSRC (Lux.) Corporation S.à r.l. ,Indian Synthet- No No No No
tion, Tunghai University ic Rubber Private Limited . ,Asia Pacific Energy Development
Company Limited ；Supervisors of TSRC(Nantong) Industrial
Ltd. , TSRC (Shanghai) Industrial Ltd. , ARLANXEO- TSRC(Nan-
tong) Chemical Industrial Co. , Ltd.,TSRC (Vietnam) Co., Ltd.
Global Strategic Technology Offi-
cer, Lubrizol / Doctor in Material
None No No No No
Science and Engineering, Univer-
sity of Minnesota
Manager, Sales and Marketing,
Department, Asst. Vice President Chairman of Shen Hua Chemical Industrial Ltd. ,TSRC-UBE
Rubber Business Unit, TSRC. (Nantong) Chemical Industrial Co. Ltd., ; Director of Indian
Spokesperson and Assistant Vice Synthetic Rubber Private Ltd. ,Thai Synthetic Rubbers Co., Ltd. No No No No
President, Sales Department, , ARLANXEO- TSRC(Nantong) Chemical Industrial Co., Ltd.
China Synthetic Rubber Corp., ,Thai Synthetic Rubbers Co., Ltd. ,Nantong Qix Storage Co.,
and MSA, Cambridge College, Ltd.
USA
Asia Operations Director, Ele-
mentis Group
Plant Manager, Deuchem Co., Directors of Shen Hua Chemical Industrial Ltd. ,TSRC(Nantong)
Ltd. Industrial Ltd. ,TSRC (USA) Investment Corporation ,TSRC (Lux.) No No No No
Department of Chemical Engi- Corporation S.à r.l.
neering, National Taiwan Univer-
sity of Science and Technology
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III. The remuneration of directors and major managers

Job title	Name	Directors remuneration	Directors remuneration	Directors remuneration	Directors remuneration	Directors remuneration	Directors remuneration	Directors remuneration	Directors remuneration
		Base compensation (A)		Severance pay and pensions (B)		Remuneration to directors (C)(Note 2)		Business execution expenses(D)
		The Company	Compa- nies in Financial Report	The Company	Compa- nies in Financial Report	The Company	Compa- nies in Financial Report	The Company	Compa- nies in Financial Report
Chairman	Wei-Dar Development Co.,Ltd. Representative:Nita Ing	9,150	9,150	0	0	352	352	0	0
Director	Han-De Construction Co., Ltd. Representa- tive:Chin-Shan Chiang
Director	Han-De Construction Co., Ltd. Representative: Jing-Lung Huang
Director	Han-De Construction Co., Ltd. Representative:- John T. Yu
Independent Director	Robert Hung	6,750	6,750	0	0	264	264	500	500
Independent Director	Sean Chao
Independent Director	Rex Yang

Note: The payment criteria for the remuneration of independent directors in our company was referred to as an independent director renumber to be reviewed by the Renumeration Committee, thereby becoming a resolution to be determined by the Board of Directors. Note: The remuneration to directors is submitted to the 21th meeting of the 16[th] board of directors.

Company profile

III. The remuneration of directors and major managers

Unit: thousand NTD

==> picture [509 x 380] intentionally omitted <==

----- Start of picture text -----

Percentage of the Relevant remuneration received by directors who are also employees Percentage of total
total of A, B, C and of A, B, C, D, E, F and
D accounting for G accounting for Compen-
income after tax Salary, bonus and Severance pay and Employees' earnings (G) income after tax sation
special allowance(E) pensions (F)
paid to
directors
Companies in Finan-
The Company from
cial Report
Compa- Compa- Compa- Compa- non-con-
The nies in The nies in The nies in The Com- nies in solidated
Company Financial Company Financial Company Financial pany Financial affiliates
Report Report Report Cash Stock Cash Stock Report
(43.41) (43.41) 0 0 0 0 0 0 0 0 (43.41) (43.41) 0
(34.32) (34.32) 0 0 0 0 0 0 0 0 (34.32) (34.32) 0
----- End of picture text -----

III. The remuneration of directors and major managers


Remuneration paid to the various directors	Name of directors
	Total (A+B+C+D)		Total (A+B+C+D+E+F+G)
	The Company	Companies in Financial Re- port	The Company	Companies in Financial Report
1,000,000 below	Wei-Dar Develop- ment Co., Ltd. and Han-De Construction Co., Ltd.	Please refer to the left column.	Wei-Dar Develop- ment Co., Ltd. and Han-De Construction Co., Ltd.	Please refer to the left column.
1,000,000 (inclusive of 1,000,000)- 2,000,000(does not contain 2,000,000)	Chin-Shan Chiang, John T. Yu, Jing-Lung Huang	Please refer to the left column.	Chin-Shan Chiang, John T. Yu, Jing-Lung Huang	Please refer to the left column.
2,000,000 (inclusive of 2,000,000)- 3,500,000(does not contain 3,500,000)	Robert Hung, Rex Yang, Sean Chao	Please refer to the left column.	Robert Hung, Rex Yang, Sean Chao	Please refer to the left column.
3,500,000 (inclusive of 3,500,000)- 10,000,000(does not contain 5,000,000)	-	-	-	-
5,000,000 (inclusive of 5,000,000)- 10,000,000(does not contain 10,000,000)	Nita Ing	Please refer to the left column.	Nita Ing	Please refer to the left column.
10,000,000 (inclusive of 10,000,000)- 15,000,000(does not contain 15,000,000)	-	-	-	-
15,000,000 (inclusive of 15,000,000)- 30,000,000(does not contain 30,000,000)	-	-	-	-
30,000,000 (inclusive of 30,000,000)- 50,000,000(does not contain 50,000,000)	-	-	-	-
50,000,000 (inclusive of 50,000,000)- 100,000,000(does not contain 100,000,000)	-	-	-	-
100,000,000 above	-	-	-	-

<2> Presidents' and vice presidents' remuneration

Unit: thousand NTD

III. The remuneration of directors and major managers

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Percentage of
Severance Bonus and the total of A, B,
Salary(A) pay and special Employees' compensation C and D account- Compen-
pensions (B) allowance(C) amount (D) ing for income sation
after tax (%) paid to
directors
Job title Name Com- Com- Com- The Company Companies in Compa- from
The panies The panies The panies Financial Report The nies in non-con-
Com- in Com- in Com- in Compa- Finan- solidated
pany Finan-cial pany Finan-cial pany Finan-cial AmountCash AmountStock AmountCash AmountStock ny Reportcial affiliates
Report Report Report
Joseph
CEO Chai
(Note1)
Wing-
Keung
Sr. Vice Hendrick
President Lam
Vice
President [Kevin Liu]
Vice
Qiwei Lu
President
43,054 43,054 10,629 10,629 19,396 19,396 3,370 0 3,370 0 (349.23) (349.23) 0
Vice Edward
President Wang
Vice Chi-Wei
President Hsu
Vice R. L. Chiu
President (Note2)
Alison
Vice Tung
President (Note2)
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Note1: One leased vehicle and one driver assigned to CEO. The yearly rent for the leased vehicle is NTD 490 thousand and the remuneration paid to the driver is NTD 576 thousand and rental housing costs NTD 2,640 thousand .

Note2: R. L. Chiu retired on April 16, 2020 and Alison Tung resigned on October 2, 2020.

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Name of president and vice presidents
Remuneration paid to the president and vice
presidents
The Company Companies in Financial Report
- -
1,000,000 below
2,000,000(does not contain 2,000,000)1,000,000 (inclusive of 1,000,000)- - -
3,500,000(does not contain 3,500,000)2,000,000 (inclusive of 2,000,000)- - -
3,5,000,000 (inclusive of 3,500,000)-
Alison Tung Alison Tung
5,000,000(does not contain 5,000,000)
5,000,000 (inclusive of 5,000,000)- Wing-Keung Hendrick Lam, Edward Wing-Keung Hendrick Lam, Edward
10,000,000(does not contain 10,000,000) Wang, Qiwei Lu, Kevin Liu Wang, Qiwei Lu, Kevin Liu
10,000,000 (inclusive of 10,000,000)-
R. L. Chiu R. L. Chiu
15,000,000(does not contain 15,000,000)
15,000,000 (inclusive of 15,000,000)-
Joseph Chai Joseph Chai
30,000,000(does not contain 30,000,000)
50,000,000(does not contain 50,000,000)30,000,000 (inclusive of 30,000,000)- - -
----- End of picture text -----

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----- Start of picture text -----

Name of president and vice presidents
Remuneration paid to the president and vice
presidents
The Company Companies in Financial Report
100,000,000(does not contain 100,000,000)50,000,000 (inclusive of 50,000,000)- - -
- -
100,000,000 above
Total
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III. The remuneration of directors and major managers

<3> Employees' bonus paid to management team and allocation December 31, 2020

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----- Start of picture text -----

Percentage of
Cash Total
the total in-
Job title Name Stock (NTD in (NTD in
come after tax
thousands) thousands)
(%)
CEO Joseph Chai
Sr. Vice President Wing-Keung Hendrick Lam
Vice President Qiwei Lu
Vice President Edward Wang
Managers 0 3,370 3,370 (15.39)
Vice President Kevin Liu
Vice President Chi-Wei Hsu
Vice President R. L. Chiu (Note)
Vice President Alison Tung(Note)
----- End of picture text -----

Note : R. L. Chiu retired on April 16, 2020 and Alison Tung resigned on October 2, 2020.

<4> The total remuneration as a percentage of net income paid by the Company, and by each other Company included in the consolidated financial statements, during the past two fiscal years to its directors, supervisors, president and vice presidents and describe the remuneration policies, standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure.
Remuneration paid in the most recent two years

Unit: thousand NTD

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----- Start of picture text -----

The Company Companies in Financial Report
Job title
2020 2019 2020 2019
Director remuneration 17,016 23,732 17,016 23,732
Director remuneration percentage of net (77.73) 3.21 (77.73) 3.21
income after taxes(%)
CEO and vice president 76,449 67,428 76,449 67,428
CEO and vice president remuneration per- (349.23) 9.11 (349.23) 9.11
centage of net income after taxes(%)
----- End of picture text -----

The Company paid to the directors and personnel above the level of vice presidents remuneration policy standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure are as follows:
(1)The remuneration for the Board of Directors shall subject to the provisions of the Company's Articles of Incorporation. Such remuneration shall be determined by the Board of Directors in accordance with the participation and contribution of the Directors to the Company’s operations and with reference to industry standards; the remuneration for the Directors shall be based on the Company's profitability up to 1% and shall be approved by the Board of Directors.

(2)The remuneration for Vice Presidents and above is based on competitive salary levels, and is approved in accordance with the Company's Business Authority Regulations after considering the overall operational performance of the industry and the Company, individual performance and contribution, and future risks.

IV. Status of corporate governance implementation

<1> Operation of the board of directors

Board of Directors held 7 meetings in 2020. The attendance of directors in the meetings is specified as follows:

IV. Status of corporate governance implementation

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Frequency of Frequency of Actual atten-
Job title Name actual atten- proxy atten- dance rate Remark
dance dance (%)
Chairman Wei-Dar Development Co., Ltd. 7 0 100
Representative: Nita Ing
Han-De Construction Co., Ltd.
Director 7 0 100
Representative: Chin-Shan Chiang
Han-De Construction Co., Ltd.
Director 7 0 100
Representative: Jing- Lung Huang
The directors shall
Han-De Construction Co., Ltd. attend 7 Board
Director 7 0 100
Representative: John T. Yu meetings of direc-
tors.
Independent Director Robert Hung 7 0 100
Independent Sean Chao 7 0 100
Director
Independent Director Rex Yang 7 0 100
----- End of picture text -----

Other matters to be recorded:

Provisions of Article 14-3 of Securities and Exchange Act

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Date of Implementa-
Meeting Name of Meeting Major Resolutions tion
The 13 [th] meeting 1. In order to meet the capital needs of Dexco Polymers L.P., the
January of the 16 [th] Board of subsidiary of the Company financed the capital of Dexco Poly-
17, 2020
Directors mers L.P. by increasing capital and issuing new shares.
1. Amendments to the Company's "Procedures for Loaning Funds
to Other Parties".
2. Amendment to the Company's "Procedures for Endorsement
and Guarantee".
The 14 [th] meeting
March 17, of the 16 [th] Board of 3. To provide guarantee for the loan agreement between TSRC
2020 Directors (USA) Investment Corporation, a subsidiary of the Company,
and the bank.
4. Amendment to the Company's budget for the construction of
a butadiene storage tank at the Kaohsiung Intercontinental
Petrochemical Oil Center II.
All directors
were present
1. To provide guarantee for the loan agreement between Indian and the res-
Synthetic Rubber Private Limited, a subsidiary of the Company, olution was
The 15 [th] meeting and the bank.
May 7, 2020 of the 16 [th] Board of 2. To provide guarantee for the loan agreement between TSRC approved.
Directors (Vietnam) Company Limited, a subsidiary of the Company, and
the bank.
3. To discuss the 2019 remuneration of the Board of Directors.
The 16 [th] meeting 1. Amendments to the guarantee provided by the Company to
August 6, 2020 of the 16 [th] Board of its subsidiary, Indian Synthetic Rubber Private Limited, for the
Directors loan from the bank.
1. To appoint a certified public accountant to audit the 2021 fi-
Novem- The 17 [th] meeting nancial statements.
ber 3, of the 16 [th] Board of 2. To provide the guarantee for the financing and foreign ex-
2020 Directors change credit with banks for ARLANXEO-TSRC (Nantong)
Chemical Industrial Co., Ltd
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In addition to the previous events, other resolutions made by the Board of Directors that the Independent Directors opposed or reserved with a record or written statement: There were no resolutions that the Independent Directors opposed or reserved in 2020.
Implementation of Director's reclusion of interest resolutions:
- Implementation status of Directors' recusal in preventing from conflict of interests: At the 14[th] meeting of the 16[th] Board of Directors, Director Yu, Chun-Yen recused himself from the discussion and voting on the amendment of the Company's budget for the construction of a butadiene storage tank at the Kaohsiung Intercontinental Petrochemical Oil Center II in consideration of the construction of the project.
Implementation status of the Board of Directors' Self Evaluation:
IV. Status of corporate governance implementation

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Cycle Period Scope Method Content Result
Once January Board of Self - Eval- Self-Evaluation of the Board of Directors:
a year 1, 2020 - Directors, uation by Board of Directors and the The composition and structure of the Board
December Individual Board of Functional Committees: of Directors is diversified and professional.
31, 2020 Board Di- Directors ・ [Participation in the ] All directors have attended all the Board
rector and Company's operations meetings and participated fully in the dis-
Functional ・ [Enhancing the deci-] cussions, resulting in good quality deci-
Commit- sion-making quality of sion-making and effective internal control
tees the Board of Directors systems that are in line with sound corpo-
and the Committees. rate governance standards. The Company
・ [Understanding the ] will plan ahead in response to the fact that
structure and responsi- ESG is gaining international attention.
bilities of the Board of Functional Committees:
Directors and the Com- The Audit and Remuneration Committee is
mittees. composed with a high degree of profession-
・ [Selecting and continu-] alism and independence, fully awareness
ously training the Board of its responsibilities, having full atten-
and Committee mem- dance and participation in discussions at all
bers. meetings, making the quality of their deci-
・ [Internal Control.] sion-making rigorous, effectively evaluated
and supervised the internal control system
so that it functions properly.
Self-Evaluation of the indi- The evaluation results show that the Direc-
vidual board director: tors of the Company (including the indepen-
・ [Control over the Com-] dent Directors are professionally competent
pany's objectives and and their participation in the operation of
tasks. the Company is helpful to the Board of Di-
・ [Understanding the ] rectors in making decisions and strengthen-
responsibilities of the ing the operation of the Company.
Board of Directors.
・ [Participation in the ]
Company's operations.
・ [Management and com-]
munication of the inter-
nal relationship.
・ [Directors' professional ]
and continuous training
・ [Internal control.]
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The current and most recent year's objectives and implementation status for enhancing the Board of Directors' functions:
(1) The Company's Board of Directors operates in accordance with the Company Act and the Securities and Exchange Act and other relevant regulations. In order to strengthen the functions of the Company's Board of Directors and improve its supervisory role, the Audit Committee and the Remuneration Committee are established in accordance with the provisions of the laws and regulations, while each functional committee assists the Board of Directors in strengthening its corporate governance and supervisory responsibilities under its authority.
(2) The Board of Directors has continued to strengthen its functions and corporate governance operations in recent years. At the 8th meeting of the 16[th] Board of Directors on May 2, 2019, the Board of Directors resolved to adopt the "Standard Operating Procedures for Directors' Requests", which allows the Directors to receive supplementary materials in a timely manner through the agenda working group or to communicate with the management team when the meeting materials are insufficient or unclear, in order to strengthen the decision-making efficiency of the Board of Directors.
(3) At the 19[th] meeting of the 16[th] Board of Directors on December 21, 2020, the Company resolved to adopt the "SelfEvaluation or Peer Evaluation of the Board of Directors" and conduct a Board of Directors' evaluation in early 2021 to strengthen the functions of the Board of Directors through the feedback and suggestions from the Board of Directors.

<2> Operation of the Audit Committee

There are 3 members in the audit committee of this Company.
The Audit Committee convened a total of 6 meetings in 2020. The presence and attendance of the Independent Directors is as follows:
IV. Status of corporate governance implementation

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Job title Name Frequency of actu- Frequency of Actual attendance Remark
al attendance proxy attendance rate (%)
Independent Direc- Robert Hung 6 0 100
tor (Convener)
There are a total
Independent Direc-tor Rex Yang 6 0 100 of 6 meetings in
2020.
Independent Direc- Sean Chao 6 0 100
tor
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The highlights for FY 2020 are summarized as follows:
(1) To review the 2019 business report, financial report and earnings distribution.
(2) To review the financial reports for the 1st to 3rd quarters of 2020.
(3) To review the amendment to the procedures for loaning funds to other parties and endorsement guarantee.
(4) To review the provision of guarantees of the Company.
(5) To review the budget for FY 2021.
(6) To review the amendment of the 2020 audit plan and the 2021 audit plan.
Other matters that require reporting:
The matters listed in Article 14-5 of the Securities and Exchange Act:

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Date of Name of
Major Resolutions Implementation
Meeting Meeting
The 13 [th] 1. In order to meet the capital needs of Dexco Poly- All members of the Audit Com-
meeting mers L.P., the subsidiary of the Company financed mittee attended the meeting on
January 17, 2020 of the 16 [th] the capital of Dexco Polymers L.P. by increasing 2020/1/14, completed the review
Board of capital and issuing new shares. and submitted to the Board of Di-
Directors rectors for resolution.
The 14 [th] 1. To prepare the Company's 2019 annual financial All members of the Audit Com-
meeting report and business report. mittee attended the meeting on
of the 16 [th] 2. To propose the Company's 2019 earnings distri- 2020/3/10, completed the review
Board of bution. and submitted to the Board of Di-
Directors 3. To amend the "Procedures for Loaning Funds to rectors for resolution.
Other Parties" of the Company.
March 17,
4. To amend the "Procedures for Endorsement and
2020
Guarantee" of the Company.
5. To propose the 2019 Statement of Internal Con-
trol System.
6. To amend the Company's budget for the con-
struction of butadiene storage tank at Kaohsiung
Intercontinental Petrochemical Oil Center II.
The 15 [th] 1. To provide the guarantee for the loan agreement All members of the Audit Com-
meeting between the Indian Synthetic Rubber Private Lim- mittee attended the meeting on
May 7, of the 16 [th] ited and the Bank. 2020/4/30, completed the review
2020 Board of 2. To provide the guarantee for the loan agreement and submitted to the Board of Di-
Directors between TSRC (Vietnam) Company Limited, a rectors for resolution.
subsidiary of the Company, and the bank.
The 16 [th] 1. Amendments to the guarantee provided by the All members of the Audit Com-
meeting Company to its subsidiary, Indian Synthetic Rub- mittee attended the meeting on
August 6, 2020 of the 16 [th] ber Private Limited, for the loan from the bank. 2020/7/30, completed the review
Board of and submitted to the Board of Di-
Directors rectors for resolution.
The 17 [th] 1. To appoint a certified public accountant to audit All members of the Audit Com-
November meeting the 2021 financial statements. mittee attended the meeting on
of the 16 [th] 2. To provide the guarantee for the financing and 2020/10/27, completed the review
3, 2020
Board of foreign exchange credit with banks for ARLANX- and submitted to the Board of Di-
Directors EO-TSRC (Nantong) Chemical Industrial Co., Ltd rectors for resolution.
The 18 [th] 1. The FY 2021 Audit Plan. All members of the Audit Com-
December meeting mittee attended the meeting on
of the 16 [th] 2020/11/26, completed the review
3, 2020
Board of and submitted to the Board of Di-
Directors rectors for resolution.
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Other resolutions that have not been approved by the Audit Committee but have been approved by more than two-thirds of all directors: None
Implementation of Director's evasion of interest resolutions: None
The communication among the Independent Directors, the internal audit director and the accountant:
- (1) Internal auditing officers submit various internal audit reports to independent directors, attending the audit committee and board meetings to report on internal auditing.
- (2) Internal auditing officers and independent directors communicate via E-mail or meetings throughout the year when necessary.
- (3) The Company's CPA will report auditing or review results for the annual and quarterly financial statements as well as updates to related laws and regulations during the audit committee meetings
IV. Status of corporate governance implementation
(4) Communications between Independent Directors and Internal Auditing Officers in 2020:

==> picture [458 x 218] intentionally omitted <==

----- Start of picture text -----

Date Method Main Issue Results
Notified the committee and submitted to
January 14, 2020 audit committee Recent Audit Office report the Board of Directors.
Submitted to the Board of Directors for
2020 Declaration of Internal
March 10, 2020 audit committee discussion after being audited by the
Control System committee.
Notified the committee and submitted to
May 7, 2020 audit committee Recent Audit Office report the Board of Directors.
Notified the committee and submitted to
August 6, 2020 audit committee Recent Audit Office report the Board of Directors.
November 3, Notified the committee and submitted to
2020 audit committee Recent Audit Office report the Board of Directors.
Submitted to the Board of Directors for
December 3,
2020 audit committee 2021 annual auditing plan discussion after being audited by the
committee.
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(5) Summary of Communications between Independent Directors and CPAs in 2020:

==> picture [459 x 162] intentionally omitted <==

----- Start of picture text -----

Date Method Main Issue Results
1. 2019 financial reports
March 10, 2020 audit committee 2. The impacts of COVID-19 Notified the
3. Self-generated financial reports committee
4. Updates on important regulations
May 7, 2020 audit committee 1. First quarterly financial report in 2020.2. Updates on important regulations Notified the committee
August 6, 2020 audit committee 1. Second quarterly financial report in 2020.2. Updates on important regulations Notified the committee
November 3, 2020 audit committee 1. Third quarterly financial report in 2020. Notified the
2. Updates on important regulations committee
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<3> Status of implementation of corporate governance, any departure of such implementation from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and the reasons for any departure

IV. Status of corporate governance implementation

==> picture [549 x 781] intentionally omitted <==

----- Start of picture text -----

Status Any departure of such
implementation from
the Corporate Gover-
Assessment Items
nance Best-Practice
Yes No Abstract Description
Principles for TWSE/
TPEx Listed Companies
1. Has the Company abided by the" √ The Company has referred to the Corporate Gov- The Company has re-
Corporate Governance Best Practice ernance Best Practice Principles for TWSE/TPEx ferred to the Corporate
Principles for TWSE/GTSM Listed Listed Companies when establishing relevant cor- Governance Best Prac-
Companies" to formulate and dis- porate policies to implement and promote corpo- tice Principles for TWSE/
close the corporate governance best rate governance. TPEx Listed Companies
practice principles? when establishing
relevant policies in its
current practice. The
Company will amend
policies or establish
best-practice prin-
ciples subject to the
implementation of
corporate governance
practices and the reg-
ulations related to cor-
porate governance.
2. Equity structure and shareholders
right
(1) Has the Company formulated in- √ (1) The Company has provided the contact in- There are designated
ternal SOP for handling sharehold- formation on its company website and des- departments
ers' suggestions, doubts, disputes, ignated appropriate departments to handle responsible for han-
litigations and implemented them shareholder suggestions, concerns, disputes, dling shareholder-re-
according to the SOP? or litigation matters. In addition, there are rel- lated matters in cur-
evant functional departments for handling the rent practice.
suggestions, doubts, disputes and litigation
matters of the shareholders.
(2) Disclose the list of main shareholders in the No difference
(2) Does the Company hold a list of the √ Company and their ultimate controllers in ac-
Company's key shareholders and cordance with the law
their ultimate controllers?
(3) Has the Company established and √ (3) There is a clear distinction and proper firewall No difference
implemented risk control and fire- mechanism established for the management
wall mechanism with its affiliated goal and responsibilities of personnel, assets
companies? and finance between the Company and affil-
iates. In addition, the audit unit implements
measures for internal audits and internal con-
trol to ensure the risk control, management
√ and law compliance.
(4) Has the Company stipulated inter- (4) The Company establishes principles and ad- No difference
nal regulations prohibiting inside vocate or offer training for Codes of Ethical
personnel trading securities using Conduct and Codes of Conduct on a yearly
information that has not yet been basis.
disclosed on the market?
3. The organization of the Board of Di-
rectors and their duties
(1) Has the Company established a √ (1) In accordance with the Corporate Governance No difference
diversity policy for the composition Best Practice Principles for TWSE/TPEx Listed
of its Board of Directors and imple- Companies, the Company shall consider actu-
mented accordingly? al Company demands while electing directors
and implement diversified policies in consid-
eration of directors' professional skills (i.e.,
finance, accounting, risk management, busi-
ness management, etc.), experience (i.e., bank,
corporate finance, accounting, securities,
chemical engineering industries, construc-
tion, technology, etc.), and personal skills. The
board is comprised of 7 directors, of which 3
are independent directors (43% of the board)
and 1 is a female director (14% of the board).
Directors and independent directors have a
set of diverse professional domains, industry
backgrounds, personal skills, etc. and com-
plement each other accordingly. The strong
background and professional perspectives
ensure that the board and other functional
committees are effective.
----- End of picture text -----

IV. Status of corporate governance implementation
Status Any departure of such implementation from the Corporate Gover-
Assessment Items nance Best-Practice
Yes No Abstract Description Principles for TWSE/ TPEx Listed Companies
(2) Besides creating the Remuneration √ (2) Considering the needs of business operations, Considering the manCommittee and the Audit Committhe Company has set up functional commitagement of business tees according to the law, has the tees such as Audit Committee and Remuneraoperations, the ComCompany voluntarily established tion Committee. pany will not set up other functional committees? other functional com-
(3) Does the Company formulate the mittee for now. Regulations for the Performance √ (3) The Company has established measures for No difference Evaluation of the Board of Directors the evaluation of the board of directors in acand its evaluation method? Does cordance with the Taiwan Stock Exchange Corthe Company conduct performance poration Operation Directions for Compliance evaluations regularly every year, with the Establishment of Board of Directors and submit and report the results by TWSE Listed Companies and the Board's of the performance evaluations to Exercise of Powers. Results of the evaluations the Board of Directors, and take the have been submitted to the board and will results as a reference for the comserve as reference in determining additional pensation and nomination renewal office terms. of individual directors?
(4) Does the Company evaluate ac√ (4) The Company hires a CPA every year and evalNo difference countant independence on a reguuates the independence and suitability of the lar basis? CPA and the accounting firm. Independence evaluations include investigations into whether there are vested financial interests or loans existing between the CPA and the Company; whether the CPA has served at the Company or affiliated companies; or whether the CPA has been retained for auditing services for seven consecutive years, etc. Suitability evaluations include qualifications, background in audits, non-audit services and consultation, etc. The evaluation report will be submitted to the board with a Statement of Independence from the CPA for deliberation and hiring (Note)
1. Does the Company have an ade√ The Company has an adequate number of corpoCorporate governance quate number of corporate goverrate governance personnel in accordance with the officers are appointed nance personnel with appropriate Corporate Governance Best Practice Principles in accordance with the qualifications as well as a corporate for TWSE/TPEx Listed Companies to assist in corregulations. governance officer in charge of relporate governance matters. A corporate goverevant corporate governance matnance officer shall be appointed during the 21st ters (including but not limited to Meeting of the 16[th] Board of Directors to help providing data required for director directors carry out their duties, assist the board's and supervisor operations, assisting operations and legal compliance, strengthen the directors and supervisors with regCompany's governance structure, and ensure susulatory compliance, handling mattainable development under a strong framework. ters relating to board meetings and shareholders meetings according to laws, as well as producing minutes for such meetings)?
1. Does the Company maintain chan√ The Company has designated departments renels of communication with stakesponsible for communicating with stakeholders. No difference holders (including but not limited to The handling of stakeholders’ opinions is supershareholders, employees, customers vised by the Board of Directors. and suppliers) and designate a stakeholders section on its website as well as properly respond to critical corporate social responsibility issues that stakeholders are concerned with?
1. Has the Company commissioned √ We commissioned SinoPac Holdings to handle No difference professional securities institutions to the shareholders' meeting. handle shareholders' meetings?
1. Disclosures (1) The Company’s website is available in TraNo difference (1) Does the Company set up a website √ ditional Chinese, English, and Simplified to disclose financial business and Chinese. The Company regularly discloses corporate governance? annual report and company information and announces material information by the Company’s spokesperson on its website.

IV. Status of corporate governance implementation


	Status			Any departure of such implementation from the Corporate Gover- nance Best-Practice Principles for TWSE/ TPEx Listed Companies
Assessment Items	Yes	No	Abstract Description
(2) Does the Company also adopts other means for disclosure. (i.e. En- glish web site, personnel dedicated to collect and disclose Company information, establishment of a spokesperson policy, disclosure of the process of investor conference on Company web site, etc.) (3) Does the Company announce and declare the annual financial report within two months after the end of the fiscal year, and announce and declare the first, second and third quarter financial reports and op- erating conditions of each month before the limitation date provided?	√	√	(2) In order to enhance the information transpar- ency and services to investors, including add- ing financial information via properly utilizing public information systems and the official website of TSRC and implementing speaker systems, TSRC holds investor conferences an- nually and live streams important message to shareholders. (3) Taking into account the time and actual op- eration of the accountant audit operation of the Company, we announced and reported the annual financial report within the period provided by the acts. In the future, we will an- nounce and declare the first, second and third quarter financial reports and the operating conditions of each month according to the operation planning.	No difference Financial statement shall be announced within legal period, and the actual time may be adjusted in the future if necessary.
8. Is there any other important infor- mation that will facilitate the under- standing of the Company's corporate governance operations (including but not limited to employee rights, employee care, investor relations, sup plier relations, stakeholders' rights, further education of directors and supervisors, implementation of risk management policy and risk evaluation standards, client policy implementation, Company's liability insurance for its directors and super- visors and so on)?	√		The Company's governance covers employees’ rights and interests, employee assistance, in- vestor relations, supplier relations, stakeholder rights, and continuing professional education of directors and supervisors, implementation of risk management policies and risk evaluation stan- dards, implementation of customer policies, and liability insurances purchased by the Company for directors. All the above will be disclosed in annu- al reports and CSR reports through appropriate mechanisms. The Company has established important regula- tions such as the Rules Governing the Scope of Powers of the Board of Directors, Level of Author- ity Table for TSRC, and Measures for Delegation of Responsibilities to clearly define authorities bestowed to the board of directors, clarify delega- tion of powers and duties between the board and managers, and various risk control measures.	No difference
9. Please indicate the improvement in respect to the corporate governance evaluation results released by the Corporate Gover- nance Center of the Taiwan Stock Exchange Corporation, and propose priority enhancements and measures for those which have not improved. 1. Increase transparency of information disclosure, including website disclosure on corporate governance, board and committee operations, communication between independent directors, internal auditing officers, and CPAs, insider trading prevention, information on major shareholders, etc. 2. Continue to comply with the Corporate Governance 3.0 Blueprint to advance job functions of the board, improve information disclosure, and release financial statements and ESG information earlier.

Note:

2020 CPA Independence Evaluation Report

(1) Evaluation year: 2020.

(2) Evaluating CPA: KPMG Taiwan/Ming Hung Huang, Lin Wu

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Results
No. Item
Yes No
1 CPA does not have financial interest or business relations with the Company and therefore remains indepen- √
dent.
2 CPA has not served as director, supervisor, manager, or in any other positions of major influence in auditing √
within the past two years.
3 CPA does not serve in any management positions with an impact on corporate decisions in the Company. √
4 CPA does not regularly work at the Company or receive a fixed income from the Company. √
5 CPA did not accept any requests from management for inappropriate selection of accounting policies or inap- √
propriate disclosure on financial statements.
6 No loans between CPA and the Company and/or affiliated companies. √
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Results
No. Item
Yes No
7 CPA has not offered auditing services to the Company for seven consecutive years. √
8 CPA and audit team has issued a Statement of Independence in Fact. √
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<4> Information on Compensation Committee:

The major duties of the Remuneration Committee:

Stipulate and periodically review the performance evaluation of the directors and managers as well as the policy, system, standards, and structure of the remuneration.
Periodically evaluate and stipulate remuneration for directors and managers.
- (a) Information on Compensation Committee
IV. Status of corporate governance implementation

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Independent Independent Independent
The identity Director Director Director
Robert Hung Sean Chao Rex Yang
An instructor or higher position in a depart-
ment of commerce, law, finance, accounting,
or other academic departments
related to the business needs of the Company
Whether they in a public or private college or university
possess work ex-
A judge, prosecutor, attorney, Certified Public
perience of more
Accountant, or other professional or technical
than five years
specialist who has passed a national exam-
and the follow-
ination and been awarded a certificate in a
ing professional
profession necessary for the business of the
qualifications
Company
Has work experience in business, law, finance,
accounting, or otherwise necessary for the √ √ √
business of the Company
(1) √ √ √
(2) √ √ √
(3) √ √ √
(4) √ √ √
Compliance with
the circumstanc- (5) √ √ √
es for indepen- (6) √ √ √
dency
(7) √ √ √
(8) √ √ √
(9) √ √ √
(10) √ √ √
Number of other public companies in which he/she serves as an
0 2 0
independent director concurrently
Remarks
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Note1: For the identity, please fill in directors, independent directors or others.
Note: Please tick“ √”in the following blank boxes, if the member meets the following conditions within two years prior to the appointment and in the duration of the appointment.
(1) Who are not employees of the Company or its affiliates;
(2) The persons who are not the directors and supervisors of the Company or its affiliates (The regulation do not subject to the limitation to the independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent company or subsidiary or a subsidiary of the same parent company).
(3) Who are not directors/supervisors, or the directors'/supervisors' spouses or minor children, or natural person shareholders who possess more than 1% of the Company's total issued shares in the name of another person, or top ten natural person shareholders
(4) Managers who are not listed in (1) or the persons who are not the spouse, relatives within the second degree of kinship, or lineal relatives within the third degree of kinship of the listed staff in (2), (3).
(5) A director, supervisor, or employee of a corporate shareholder that do not directly hold 5% or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the Company under paragraph 1 or 2 of Article 27, of the Company Act.(The regulation do not subject to the limitation to the independent directors appointed in accordance with the Act or the laws and regulations of

the local country by, and concurrently serving as such at, a public company and its parent company or subsidiary or a subsidiary of the same parent company).
(6) If a majority of the company's director seats or voting shares are not controlled by the same person who is a director, supervisor, or employee of that other company. (The regulation do not subject to the limitation to the independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent company or subsidiary or a subsidiary of the same parent company).
(7) If the chairman, general manager, or person holding an equivalent position of the company are not the same person or are not spouse who is a director (or governor), supervisor, or employee of that other company or institution. (The regulation do not subject to the limitation to the independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent company or subsidiary or a subsidiary of the same parent company).

IV. Status of corporate governance implementation

  - (8) If a director, supervisor, manager, or shareholder holding five percent or more of the shares, of a specified company or institution that doesn’t have a financial or business relationship with the company. (Subject to the specified company or institution holding the Company’s shares more than 20% and less than 50%, the regulation do not subject to the limitation to the independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent company or subsidiary or a subsidiary of the same parent company).

  - (9) A professional individual, or an owner, partner, director, supervisor, or manager and their spouses of a sole proprietorship, partnership, company, or institution that doesn’t provide auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000. ; But this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Securities and Exchange Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

  - (10) Who are free from any of the circumstances referred to in Article 30 of the Company Act;

(b) Operational information of the Remuneration Committee
There are 3 members in the Remuneration Committee of the Company.
The term of the 16[th] committee members shall be from June 22[th] 2018 to June 21[th] , 2021. The 16[th] Remuneration Committee held 6 meetings in 2020. The attendance of members in the remuneration committee meetings is specified as follows:

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Frequency Frequency of Actual atten-
Job title Name of actual proxy atten- Remark
dance rate (%)
attendance dance
Independent Director Sean Chao 6 0 100
(Convener)
There are
a total of 6
Independent Director Robert Hung 6 0 100 meetings in
2020.
Independent Director Rex Yang 6 0 100
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Other matters that require reporting:

The Remuneration Committee held the meetings to review the evaluation of directors/managers' performance, remuneration, or employee compensation and benefits system in accordance with the authority of the Remuneration Committee, and submitted to the Board of Directors to discuss after the reviews.

Operating status of the Remuneration Committee in 2020:

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Implementation
Meeting Date Meeting Name Major Resolutions
Status
January 14, The 6 [th] meeting of 1. 2019 employee performance bonus plan.
2020 the 16 [th] session 2. 2020 employee remuneration plan.
3. The 2020 managerial performance plan.
1. Performance evaluation and bonus for the
March 10, The 7 [th] meeting of
2020 the 16 [th] session managers.
2. Manager's remuneration plan.
Reviewed and
April 30, The 8 [th] meeting of 2019 remuneration for the Company's direc- adopted by all
2020 the 16 [th] session tors. members pres-
ent and submit-
ted to the Board
October 27, The 9 [th] meeting of Amendments to the remuneration and wel- of Directors for
2020 the 16 [th] session fare system of the employees. discussion.
November The 10 [th] meeting of
26, 2020 the 16 [th] session Appointment of the Company's managers
December The 11 [th] meeting of Establishing the "Performance Evaluation Method of the Board of Directors" of the
21, 2020 the 16 [th] session
Company.
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Where the Board of Directors does not adopt or revise the recommendation from the Remuneration Committee, the minutes of the meeting shall specify the date and term of the directors' meeting, content of the issue, resolution of the directors' meeting, and the disposition on the opinion from the Remuneration Committee by the Company (where the remuneration approved by the Board of Directors is superior to the recommendation from the Remuneration Committee, the difference and reasons shall be specified): none.
If, with respect to any resolution of the remuneration committee, any member has a dissenting or qualified opinion that is on record or stated in a written statement, the minutes of the meeting shall specify the date and term of the meeting of the Remuneration Committee, content of issues, opinions of all members, and disposition on the opinions of members: none.

<5> Fulfillment of social responsibility

IV. Status of corporate governance implementation

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Status Deviations from
the Corporate
Social Responsi-
Assessment Items bility Best Practice
Principles for
Yes No Abstract Description TWSE/GTSM Listed
Companies and
Reasons
1. Does the company carry √ The Company performs risk management through existing depart- No difference
out risk assessments of ments or functional units in the organization, and based on external
environmental, social and issues, including economic / environmental / social aspects, identi-
corporate governance fies risks / events that may have an impact on business objectives.
related to the company's After evaluating, the Company determines appropriate response
operations in accordance measures to mitigate, transfer or avoid risks. Each functional depart-
with the materiality princi- ment of the Company reports the risk environment, main points of
ple, and establish relevant risk management, risk assessment and response measures to the
risk management policies management level in accordance with the evaluation operation of
or strategies? internal control system and management system review every year,
and then the audit unit reports regularly to the audit committee,
which gives opinions on the risk assessment and impact, and reports
to the Board of directors.
2. Has the Company estab- √ The Company has established a CSR Steering Committee led by the No difference
lished a dedicated (part- CEO to serve as the most senior steering unit for related systems,
time) unit for CSR, which is policies, and programs.
managed by senior exec- Functional committees such as the Corporate Governance
utives and authorized by Committee, Employee Assistance Committee, Environmental
the board of directors, and Campaign Committee, External Communications Committee, Social
reports to the board of di- Assistance Committee are established under the steering committee
rectors? to meet various CSR indicators and manage performance.
For CSR advocacy, the administration center is responsible for
compiling and issuing the annual report, regularly reporting
progress to the steering committee, and compiling CSR efforts
during the year to the board of directors.
3. Environmental Issues:
(1) Has the Company estab- √ (1) The Company's ISO 14001 Environmental Management System No difference
lished an environmental / ISO 50001 Energy Management System / QC 080000 (Hazard-
management system ac- ous Substances Process Management System) continue to be in
cording to the industry effective operation.
characteristics?
(2) Is the Company commit- √ (2) For the production process, The Company introduces the princi- No difference
ted to improving resource ple of "maximizing the utilization of energy and resources." The
efficiency and the use Company endeavors to minimize the consumption of energy
of renewable materials and resources required in production by improving the design
with low environmental of the production process and efficiency, and recycling raw ma-
impact? terials, as well as to continue to develop and produce new green
products. For the use of fuels for furnaces, The Company also
uses natural gas to replace fuel oils in order to reduce pollution.
(3) Does the Company eval- √ (3) The Company performs risk management through existing de- No difference
uate the potential current partments or functional units in the organization, and based on
and future climate change external issues, including economic / environmental / social as-
risks and opportunities pects, identifies risks / events that may have an impact on busi-
and take response mea- ness objectives. After evaluating, the Company determines ap-
sures? propriate response measures to mitigate, transfer or avoid risks.
The Company has long been concerned about climate change
issues, and has actively promoted water conservation measures
by increasing the process wastewater recovery rate and capacity
allocation, etc., to respond to global climate change and the re-
lated water shortages.
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Status Deviations from the Corporate Social ResponsiAssessment Items bility Best Practice Principles for Yes No Abstract Description TWSE/GTSM Listed Companies and Reasons (4) Does the Company col√ (4) 1. The Company established dedicated environmental manageNo difference lect data for greenhouse ment organization in accordance with the law, with dedicated gas emissions, water environmental management staff in charge of air pollution, usage and waste quantiwaste water, waste and toxic materials.

IV. Status of corporate governance implementation

(4) Does the Company col- lect data for greenhouse gas emissions, water usage and waste quanti- ty in the past two years, and set energy conser- vation, greenhouse gas emissions reduction, water usage reduction and other waste man- agement policies?	√

In terms of greenhouse gas reduction planning, the Company supports the national reduction targets and follows relevant authorities' policies to pass ISO 14064-1 (greenhouse gas inventory) verification in the year of 2011, 2013, and 2015-2020, and has registered on "National Greenhouse Gas Platform"; the Company is the first batch of industries that should report greenhouse gas emissions based on the announcement of the Environmental Protection Agency, and has completed the 2019 greenhouse gas inventory verification in August 2020.
The Environmental Protection Agency of the Executive Yuan has formally issued the “Guidelines for Greenhouse Gas Phase Control Objectives and Control Methods” on March 28, 2017. The first-phase control targets are from 2016 to 2020; The Environmental Protection Agency uniformly allocates different reduction quotas to different ministries under the Executive Yuan (The factory is currently planned under the Industrial Bureau of the Ministry of Economic Affairs), and requires that greenhouse gas emissions in 2020 be reduced by 2% compared to the base year (2005). In recent years, the reduction measures performed by our factory have reduced greenhouse gas emissions by about 15-17% compared with the base year, which meets the requirements of regulations.
Regarding the carbon/water trace of the product, three representative verification of ISO/DIS 14067 (carbon trace of the products) and water trace of the products are approved in 2012; in addition, the Company gets hold of the accounting ratio of greenhouse gas in each stages of product life cycles through the construction of carbon/water trace verification system and seeks for the opportunities for carbon reduction. Moreover, the Company selects low-carbon raw materials and parts during product production or development to reduce the burden of the environment.
To continue relevant measures of energy saving and carbon reduction, ISO 50001 energy management system was built in 2013 with SGS certification awarded. Energy efficiency has increased while operation costs and greenhouse gas emission have reduced steadily from 2014 to 2020. High energy consumption equipment and processes are improved through energy management system and external verification of energy management system is completed continuously every year. In the future, the system can help the Company to analyze the usage and consumption status of energy and seek the opportunities for improvement.
Related information on annual GHG emissions, water consumption, and total waste (in weight) are disclosed in the annual CSR reports which are audited by third-party agencies each year.

The Company's ISO 14001 Environmental Management System / ISO 50001 Energy Management System / QC 080000 (Hazardous Substances Process Management System) are still in effective operation. The Company sets up specific energy management methods and targets, and fulfills its environmental responsibility through auditing, training and communication. In terms of greenhouse gas emissions, establish a standard procedure for greenhouse gas verification and conduct greenhouse gas inventory. As for water resources, promote a systemic water-saving and recycling plan, and perform various water-saving measures to achieve water-saving goals. In addition, in order to effectively control various business wastes, the Company formulates reporting and tracking management methods for business wastes, establishes a strict classification and recycling system, performs removal, treatment or reuse of the wastes in accordance with local environmental protection laws and regulations, and then reports and confirms the operational status of business wastes within the time limit. Through ISO 14001 management system, continuously reduce waste and waste sludge.

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No difference
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IV. Status of corporate governance implementation

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Status Deviations from
the Corporate
Social Responsi-
Assessment Items bility Best Practice
Principles for
Yes No Abstract Description TWSE/GTSM Listed
Companies and
Reasons
4. Social Issues
(1) Does the Company es- √ (1) The Company uses the Labor Standards Act and related labor No difference
tablish relevant manage- laws as the basis for formulating employee attendance, leave
ment policies and pro- and overtime management regulations. Strict rules are enforced
cedures in accordance to prohibit forced labor, and all regulations are clearly docu-
with relevant regulations mented in the CSR manifesto.
and international human
rights conventions?
(2) Has the Company es- √ (2) The Company ensures reasonable salary and compensation by No difference
tablished well managed the remuneration committee and compensation management
employee welfare mea- policies. Performance is evaluated according to the appraisal
sures (include salary and system and reflected in the salary and compensation.
compensation, leave
and others), and linked
employee compensation
to operational perfor-
mance or achievements
?
(3) Does the Company pro- √ (3) In accordance with the Occupational Safety and Health Act, the No difference
vide the employees with Company regularly monitored the job site every six months to
safe and healthy work- identify employee exposure and manage according to risk lev-
ing environment and els; the Company strives to build a humanistic workplace and
carry out regular train- pursues targets of zero accidents and zero injuries through prin-
ing courses regarding ciples of technical, health and safety culture, responsibility, and
safety and health of the communication.
employees? The Company conducts regular emergency response, disaster
safety training, annual health checkups, health lectures, coun-
seling, safety monitoring of job sites, etc. to raise awareness of
health and safety among employees.
(4) Has the Company estab- √ (4) The policy and the direction set for the training program are No difference
lished effective career for the purpose of enhancing employee professional skills and
development training increasing competitiveness to respond to the changes in future
programs? market and business environment. Every year, the annual edu-
cation and training program is devised according to the internal
employee training regulation, Company's management guide-
line, organizational demand and relevant laws, where new em-
ployee and current employee general knowledge, professional
skill, management competency, qualification and certification
are organized. Furthermore, the goal of “lifelong learning” is
materialized through internal and external training.
(5) Has the Company stipu- √ (5) The customers whom the Company faces are not the end con- No difference
lated policies and com- sumers, but the downstream manufacturers.
plaint filing protocols to The Company ensures customers’ health and safety when
protect the consumers' using its products through annual interactive seminars and in-
rights throughout the terviews (email, telephone interview, questionnaire, etc.). In the
R&D, procurement, pro- event of receiving customer complaints on product quality or
duction, operations and hazardous substance, the Company’s Quality Assurance Sec-
service process? tion would convene relevant units/ departments to investigate
the issues and find solutions to improve the quality of product
and services.
In addition, the Company sets up a CSR-focused email account
([email protected]) along with a stakeholder section to com-
municate with various stakeholders and provide feedback.
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IV. Status of corporate governance implementation

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Status Deviations from
the Corporate
Social Responsi-
Assessment Items bility Best Practice
Principles for
Yes No Abstract Description TWSE/GTSM Listed
Companies and
Reasons
(6) Does the Company es- √ When selecting new subcontractors, assessments on quality and No difference
tablish a supplier man- supply capability shall be considered. New subcontractors are also
agement policy, requir- required to sign the Supplier Code of Conduct of TSRC Corporation
ing suppliers to follow or provide Enterprise Social Corporate Responsibility Report of the
relevant regulations on company as well as filling out CSR assessment form to ensure the
issues such as envi- CSR work effectiveness. Moreover, subcontractors offering raw ma-
ronmental protection, terials are required to provide quality assessment on HSF(hazardous
occupational safety and substance free) to ensure the environment safety in the raw materi-
health, or labor rights, als supply.
and their performing If the following circumstances, such as significant improper quality,
status? abnormal HSF quality, late delivery, severe violation of industrial
safety regulations or significant CSR deficiencies (media disclosure)
which are not improved within a year, happen to qualified suppliers
and cause an impact on the production, quality, HSF quality or CSR
image of the Company, such supplier shall be suspended for supply
if these deficiencies are not reviewed and improved.
5. Does the Company refer √ The Company's CSR report was written under the GRI Standards and No difference
to internationally accept- obtained third party TUV NORD AA1000 verification.
ed reporting standards or
guidelines for compiling
corporate non-financial
information reports, such
as on corporate social
responsibility? Does the
previous released report
obtain the assurance of
the third-party verifica-
tion unit?
6. Has the Company established the CSR implementation policy according to the Corporate Social Responsibility Best Practice Prin-
ciples for TWSE/GTSM-Listed Companies, describe the difference between the actual implementation and the regulations of the
Principle: The Company established CSR guidance committee in 2010 and promoted comprehensive CSR operations and execut-
ed them in accordance with “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies”.
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Other important in formation that is helpful to understand the operation of CSR :
Engaged external consultants with implementation and promotion of CSR.
Participating in the Taiwan Responsible Care Association and Chemical Awareness and Emergency Response Association, Taiwan, fulfilling member obligations and ensuring the safety and health of the community/society.
Through the association of companies in the industrial sector, the Company continues to promote neighboring and community support development events.
In terms of pipeline maintenance management and participation in the operation of the affiliated organizations, continue to perform in accordance with regulations to ensure the safe operation of the pipeline, and protect the public safety of the citizens and employees in the nearby underground industrial pipelines.
Results of the implementation of corporate social responsibility
- (1) Environmental side: The Company continues to reduce waste, save energy, improve and refine the production process through the implementation and execution of all management systems, and wishes to establish and produce environmentally friendly production processes and products.
- (2) Social side: By using the locations of factories as the basis, the Company gradually establishes the social care map. Through social participation and helping disadvantaged groups, the Company also continues to promote chemical educational programs in rural areas and applies products along with suppliers for social care. We expect to fulfill CSR through diverse charity events.
- (3) Corporate Governance side: Implement the requirements relating to corporate governance, announce the various ways and channels of communication for all interested parties on TSRC's official website

<6> Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
IV. Status of corporate governance implementation
Status Any departure of such implementation from the
Corporate Gover-
Assessment Items nance Best-Prac-
Yes No Abstract Description tice Principles for TWSE/TPEx Listed Companies
1. Define the program for operation in good faith √ 1. All of the Company’s directors and No difference (1) Does the Company clearly state the policy and employees carry out duties in complithe practice of ethical corporate management ance with the Code of Ethical Conduct in the regulations and external documents and Code of Conduct. The Company when formulating the ethical corporate manalso emphasizes its determination agement approved by the Board of Directors, and focus on business integrity in its and do the board of directors and senior manmission, vision, and core functions. agement level actively implement the ethical The Company clearly ruled that when corporate management policy? carrying out company affairs internally
(3) Does the Company establish an evaluation √ and externally based on designated mechanism for the risk of dishonesty behaviors, job functions, employees and directors regularly analyzes and evaluates business activmust deploy resources and assets efities with a higher risk of dishonesty behaviors ficiently, protect trade secrets, Prevent in the business scope. Based on the mechainsider trading, comply with anti-trust nism, does the Company formulate a plan for laws, ensure fair trade, prevent conflict preventing dishonesty behaviors, at least covof interest, prevent opportunities for ering the preventive measures in the second personal gains, ban briberies, regulate paragraph of Article 7 of “Ethical Corporate internet use, and regulate outside Management Best Practice Principles for TWSE/ part-time work. Punishments for vioGTSM listed companies?” lations will be handled in compliance
(3) Does the Company clearly set up the operating √ with the Company's Guidelines for Reprocedures, behavior guidelines, punishment ward and Punishment. and appeal system for violations in the plan of 2. The secretariat for the board of dipreventing dishonesty, implement it, and regrectors, corporate department, and ularly review and revise the above-mentioned human resources and management plan? department will be responsible for enforcing the guidelines against different stakeholders.
1. Fulfillment of operation in good faith 1. We make sure that we only conduct No difference (1) Has the Company assessed the ethical record of √ business with qualified suppliers its partners and stipulated the ethical behavior through the“Supplier Evaluation and clause in the contract? Management Regulation”, and we
(2) Does the company have a dedicated unit to √ announce our stance on refusing to promote ethical corporate management under collaborate with unethical companies the Board of Directors, and regularly (at least to our suppliers when enquire for quoonce a year) report to the Board of Directors tation. about its policy on ethical corporate manage2. All of the Company's directors and ment, plans to prevent dishonesty and monitor employees complied with the“Ethimplementation? ical Code”and“Code of Profes-
(3) Has the Company stipulated policies to pre√ sional Conduct”promulgated by vent the conflict of interest, provided adequate the Company when performing their complaint channel and ensured of its proper duty. Meanwhile, the Company also implementation? highlighted its determination to fulfill
(4) Does the Company establish an effective ac√ the operation in good faith in its encounting system and internal control system terprise cultural declarations about for the implementation of ethical corporate enterprise mission, enterprise view management, and the internal auditing sysand core competency, and expressly tem. Based on the results of the assessment of defined the disciplinary procedure for the risk of dishonesty behaviors, the audit unit violations in said codes in accordance should draw up relevant audit plans, and based with the Company's“Reward & Punon it, check if the plan of preventing dishonest ishment Policy”. behavior is followed, or commission an accoun3. The Company has developed annual tant to perform the check? audit plan every year to audit its oper-
(5) Has the Company regularly organized internal √ ation of accounting and internal conand external education and training concerning trol system. ethical management?

IV. Status of corporate governance implementation


	Status			Any departure of such implemen- tation from the Corporate Gover- nance Best-Prac- tice Principles for TWSE/TPEx Listed Companies
Assessment Items	Yes	No	Abstract Description
3. Status of the Company's reporting mechanism. (1) Has the Company stipulated a specific report- ing and reward system, established a conve- nient reporting channel and assigned appropri- ate personnel to the accused? (2) Does the Company establish standard oper- ating procedures of investigations to receive reports, follow-up measures after the investi- gation is completed, and related confidentiality mechanisms? (3) Has the Company taken measures to protect the reporter from being wrongfully treated?	√ √ √		The Company implements policies in ac- cordance with the “Regulations Govern- ing Employee Complaints Management” and collects employee input from its EIP system. The Company also clearly states the procedures of reporting and penalties for violation in its “Reward and Punish- ment Regulations”.	No difference
4. Enhance the disclosure of information Has the Company disclosed the performance of its ethical management on the Company web- site and the MOPS?	√		The Company has disclosed the Code of Conduct on its EIP system for all employ- ees to follow.	No difference
5. If the Company has defined its ethical corporate management practice in accordance with the Ethical Corporate Manage- ment Best Practice Principles for TWSE/GTSM-Listed Companies, please state the operation thereof and difference between the Principles and the practice defined by the Company: The Company executed the operation in accordance with the “Code of Ethical Conduct” and “Code of Conduct”, and there is no difference between them and said Principles.
6. Any other important information helpful to comprehend the Company's operation in good faith :None.

<7> Stipulations of Corporate Governance Best Practice Principles and related regulations

The Company has currently adopted the“Code of Ethical Conduct,”“Articles of Incorporation,” “Rules for Procedure for shareholders Meetings,”“Rules of Procedure for Board of Directors Meetings,” “Rules for Director Election,”“Procedures for the Handling Acquisition and Disposal of Assets,” “Procedures for Extending Loan to Others,”“Procedures for Granting Endorsements and Guarantees,” and so on. For more information, please visit our website (http://www.tsrc.com. tw).

<8> Other crucial information to better understand the implementation of corporate governance. 1. In-service Training

==> picture [474 x 186] intentionally omitted <==

----- Start of picture text -----

Date of
Job title Name Organizer Program(s) Hours
Training
Business strategies and corporate
Securities & Futures governance on coping with non- 3
Institute sustainability risks: a perspective
November 20,
Chairman Nita Ing 2020 from COVID-19 pandemic.
Securities & Futures
Institute Information security and risks 3
Business strategies and corporate
Securities & Futures governance on coping with non- 3
Chin- Institute sustainability risks: a perspective
November 20,
Director Shan from COVID-19 pandemic.
2020
Chiang
Securities & Futures
Institute Information security and risks 3
----- End of picture text -----

IV. Status of corporate governance implementation

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----- Start of picture text -----

Date of
Job title Name Organizer Program(s) Hours
Training
Business strategies and corporate
November Securities & Futures governance on coping with non- 3
20,2020 Institute sustainability risks: a perspective
Jing-
from COVID-19 pandemic.
Director Lung
Huang
Corporate governance 3.0
November 24, 2020 Governance AssociationTaiwan Corporate The blueprint for sustainable 3
development
Analysis on coping with financial
May 06, 2020 Governance AssociationTaiwan Corporate situation during stressed events- the case study on U.S. –China trade 3
John T.
Director war and COVID-19 pandemic.
Yu
August 05, Securities & Futures 5G key technology and business 3
2020 Institute opportunity
Business strategies and corporate
Securities & Futures governance on coping with non- 3
Inde- Institute sustainability risks: a perspective
Robert November 20,
pendent Director Hung 2020 from COVID-19 pandemic.
Securities & Futures
Institute Information security and risks 3
September Taiwan Association of Board The second forum for board of 3
11, 2020 Governance directors governance efficacy
Inde-
pendent Director ChaoSean September 29, 2020 Governance AssociationTaiwan Corporate Case study on contest for corporate control 3
October 22, Taiwan Corporate Antitrust law analysis: the case 3
2020 Governance Association study on HP v. Quanta Storage Inc.
Business strategies and corpo-
Securities & Futures rate governance on coping with 3
Inde- Institute non-sustainability risks: a perspec-
November 20,
pendent Rex Yang 2020 tive from COVID-19 pandemic.
Director
Securities & Futures
Institute Information security and risks 3
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2. Procedures for handling material inside information

The Company has implemented “Procedures for handling materials inside information” to establish a sound mechanism for the handling and disclosure of material inside information. The Procedures have been announced and made accessible internally, and apply to all directors, supervisors, managerial officers, and employees of the Company, and any other person who acquires knowledge of the Company's material inside information due to their position, profession, or relationship of control. The Company has also conducted educational campaigns or training programs to promote the awareness of these procedures and relevant laws and regulations.

<9> Implementation of the Company's internal control system

1. A statement of Internal Control

TSRC Corporation A statement of Internal Control

Date: March 11, 2021

In accordance with the result of self-evaluation of the internal control system in 2020, the Company hereby declares as follows:

IV. Status of corporate governance implementation
The Company acknowledges and understands that the establishment, implementation and maintenance of the internal control system are the responsibility of the Board of Directors and managerial officers, and that the Company has already established such a system. The purpose is to provide reasonable assurance regarding the achievement of objectives such as the effectiveness and efficiency of business operations (including profitability, performance, and security of assets), reliability, timeliness, transparency, and regulatory compliance of reporting, and compliance with applicable laws, regulations, and by laws.
There is limitation inherent to internal control system, no matter how perfect the design is. As such, effective internal control system may only reasonably ensure the achievement of the aforementioned goals Further, the operation environment and situation may vary, and hence the effectiveness of the internal controls system. The internal control system of the Company features the self-monitoring mechanism. Once identified, any shortcomings will be corrected immediately.
The Company judges the effectiveness of the internal control system in design and enforcement in accordance with the “Criteria for the Establishment of Internal Control System of Public Offering Companies” (hereinafter referred to as“the Criteria”) promulgated by the Securities and Futures Commission of the Ministry of Finance. The Criteria is instituted for judging the effectiveness of the design and enforcement of internal control system. There are five components of effective internal control as specified in the Criteria with which the procedure for effective internal control is composed by five elements, namely, 1. Control Environment 2. Risk Evaluation 3. Control Operation 4. Information and Communication and 5.Monitoring. Each of the elements in turn contains certain audit items, and shall be referred to the Criteria for detail.
The Company has adopted the above criteria for the internal control system to assess the effectiveness of the design and operation of its internal control system.
In accordance with the aforesaid evaluation result, the Company believes that the internal control system as of December 31, 2020 (supervision and management over subsidiaries), including understanding the effect of operation, the attainment rate and report of the efficiency goal are reliable, timely, and transparent, and the design and implementation of the internal control system are in compliance with the regulations and effective and reasonably ensure the attainment of the aforesaid goals.
This statement of declaration shall form an integral part of the annual report and prospectus on the Company and will be announced. If there is any fraud, concealment and illegal practice discovered in the content of the aforementioned information, the Company shall be liable to legal consequences under Article 20, Article 32, Article 171 and Article 174 of the Securities and Exchanges Act.
This statement of declaration has been approved by the Board on March 11, 2021 with presence of 7 directors at unanimous consent.

TSRC Corporation

Chairman: Nita Ing CEO: Joseph Chai

2. Hiring CPA to carry on a special audit of the internal control system: No

<10> If there has been any legal penalty against the company or its internal personnel, or any disciplinary penalty by the Company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, where the result of such penalty could have a material effect on shareholder equity or securities prices: no
<11> The important resolutions made by shareholders' regular meetings and board of directors' meeting in 2020 and until the annual report being published.

IV. Status of corporate governance implementation

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1. The important resolutions made by shareholders' regular
The status of implementation
meetings in 2020
(1) To adopt the 2019 Business Report and Financial State-
ments Resolutions adopted.
RESOLVED, by the Board of Directors, to set July 25, 2020 as
(2) To adopt the 2019 earnings distribution the ex-dividend date for the distribution of cash dividends of
NT$0.5 per share and the payment date is August 20, 2020.
(3) To approve the amendment to the "Articles of Incorpora- RESOLVED. The registration was approved by the competent
tion" authority on July 8, 2020.
RESOLVED. The resolution has been adopted and fully imple-
(4) To approve the amendment to the "Procedures for En- mented in accordance with the resolution of the sharehold-
dorsement and Guarantee"
ers' meeting.
RESOLVED. The resolution has been adopted and fully imple-
(5) To approve the amendment to the "Procedures for Loan- mented in accordance with the resolution of the sharehold-
ing Funds to Other Parties"
ers' meeting.
RESOLVED. The resolution has been adopted and fully imple-
(6) To approve the amendment to the " Rules for Election of mented in accordance with the resolution of the sharehold-
Directors"
ers' meeting.
2. Important resolutions made by board of directors' meetings
Date Important resolutions
Resolved to amend the agenda for the 2020 Annual Meeting of Shareholders.
May 07, 2020 The announcement was made in accordance with Article 25, Item 1, Paragraph 4 of the "Regulations
Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies".
June 30, 2020 Resolved the ex-dividend date and payment date for the cash dividends.
The consolidated financial statements for the 3rd quarter of 2020.
November 03, 2020
Resolved to remove the restriction of the competition prohibition for the managerial personnel.
December 03, 2020 Resolved to remove the restriction of the competition prohibition for the managerial personnel.
Resolved to adopt the consolidated financial statements for FY2020.
Resolved to adopt the 2021 annual meeting of shareholders.
Resolved to adopt the earnings distribution for FY2020.
March 11, 2021
Resolved to adopt the disposal of land and buildings.
Resolved to adopt the appointment of corporate governance personnel.
Resolved to remove the restriction of the competition prohibition for the managerial personnel.
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<12> Whether any director or supervisor has shown dissent against any important resolution made by the Board of Directors, which is also included in a written statement or recorded resolution in 2020 and until the annual report being published : None
<13> In the year of 2020 and as of the date of publication, the resignation and dismissal of the Company's chairman, chief executive officer, chief of accountant, chief financial officer, chief of internal audit, chief of corporate governance and chief of research and development: None

V. Information on CPA professional fee

<1> Information about audit fee and non-audit fee paid to CPA and accounting firms

Unit: thousand NTD

V. Information on CPA professional fee
VI. Information on replacement of CPA
VII. Chairman, president, or managers in charge of the Company's finance or accounting matters in the most recent year held a position at the accounting firm of a CPA or any of its affiliated companies
VIII. Information on equity for directors, managers and shareholders holding more than 10% of outstanding shares equity transfer and equity pledge movements

			Non-audit fee	Non-audit fee	Non-audit fee	Non-audit fee	Non-audit fee	CPA's audit period	Remarks
Name of the ac- counting firm	Name of the CPA	Audit fee	System design	Industrial & com- mercial registra- tion	Human resource	Other	Subtotal
KPMG Tai- wan	Ming Hung Huang	9,265	0	10	0	202	212	January 1, 2020 to December 31, 2020	Other non-audit fees include direct deduction for business tax and salary review fees for non-executive positions.
	Lin Wu

<2> Non-audit fees paid to the CPA, to the accounting firm, and/or to any affiliated enterprise of such accounting firm are one quarter or more of the audit fees paid thereto.: None
<3> The audit fees paid for changing the accounting firm and the change of the fiscal year has decreased compared to the previous year : Not applicable
<4> If the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by 10 percent or more : Not applicable

VI. Information on replacement of CPA-None

VII. Chairman, president, or managers in charge of the Company's finance or accounting matters has in the most recent year held a position at the accounting firm of a CPA or any of its affiliated Company-None
VIII. Information on equity of directors, managers and shareholders holding more than 10% of outstanding shares equity transfer and equity pledge movements

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2020 As of March 20, 2021
Job title Name Increase (de- Increase (de- Increase (de- Increase (de-
crease) in shares crease) in crease) in shares crease) in
held pledged shares held pledged shares
Chairman Nita Ing - - - -
the directorDirectorCorporate representative of Wei-Dar Development Co., Ltd.Nita Ing -- -- -- --
Director
Corporate representative of Han-De Construction - - -
7,996,000
the directorthe directorCorporate representative of Corporate representative of Co., Ltd. Jing-Lung HuangChin-Shan ChiangJohn T. Yu --- --- --- ---
the director
- - - -
Independent Director Robert Hung
Independent Director Sean Chao - - - -
- - - -
Independent Director Rex Yang
CEO Joseph Chai (Note1) - - - -
Sr. Vice President Wing-Keung Hendrick - - - -
Lam
Vice President Edward Wang - - - -
----- End of picture text -----

IX. Relationship data among the top 10 shareholders with the highest shareholding ratio

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2020 As of March 20, 2021
Job title Name Increase (de- Increase (de- Increase (de- Increase (de-
crease) in shares crease) in crease) in shares crease) in
held pledged shares held pledged shares
Vice President Qiwei Lu - - - -
Vice President Kevin Liu - - - -
Vice President Chi-Wei Hsu - - - -
Vice President R. L. Chiu (Note2) - - - -
Vice President Alison Tung (Note2) - - - -
Note 1 : Holding shares in the name of others.
Note 2 : R. L. Chiu retired on April 16, 2020 and Tong, Alison Tung resigned on October 2, 2020.
Information on the transfer or pledge of equity interests:
The counterparty in the above transfer or pledge of equity interests by a director, managerial officer, or major shareholder is not a
related party. Therefore, no information disclosure is required.
IX. Relationship data among the top 10 shareholders with the highest shareholding ratio
July 25, 2020
Shares cur-
rently held by Shares held in Names and relationship of any of the top
ten shareholders and their spouses or rela-
Share(s) held personally their spouses another per- tives of 2nd degree of relationship who are Re-
Name and children of son's name
related defined in the Statement marks
minor age
Share(s) (%) Share(s) (%) Share(s) (%) Name/name Relationship
Han-De Construc tion Co.,
Ltd.
industrial Com-Panama Banco 69,524,417 8.42 0 - 0 - Wei-Dar Development Corporation Related-
party
pany Tamerton Group Limited
Miriton Investment Cor-
poration
Chairman
Wei-Dar Development of the same
Corporation
person
Han-De Con-
struction Co., Wei-Dar Development
Ltd. 63,093,108 7.64 0 - 0 - Corporation
Chairman: Panama Banco industrial
Related-
Jing-Lung Huang Company
party
Tamerton Group Limited
Miriton Investment Cor-
poration
Chairman
Han-De Construction Co.,
of the same
Ltd.
person
Wei-Dar Devel-
opment Corpo- Han-De Construc tion Co.,
ration 53,708,923 6.50 0 - 0 - Ltd.
Chairman: Jing- Panama Banco industrial
Related-
Lung Huang Company
party
Tamerton Group Limited
Miriton Investment Cor-
poration
Formosa Plastics
Marine Corpora-
tion 41,201,000 4.99 0 - 0 - No No
Chairman:
Wen-Chao Wang
40
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X. The total number of shares and total equity stake held in any single enterprise by the Company, its directors, managers and any companies controlled either directly or indirectly by the Company

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----- Start of picture text -----

Shares cur-
rently held by Shares held in Names and relationship of any of the top
ten shareholders and their spouses or rela-
Share(s) held personally their spouses another per- tives of 2nd degree of relationship who are Re-
Name and children of son's name
related defined in the Statement marks
minor age
Share(s) (%) Share(s) (%) Share(s) (%) Name/name Relationship
Han-De Construc tion Co.,
Ltd.
Wei-Dar Development
Tamerton Group 34,578,143 4.19 0 - 0 - Corporation Related-
Limited Panama Banco industrial party
Company
Miriton Investment
Corporation
CITI Bank Taiwan
branch in custo-
dy for Govern- 34,028,332 4.12 0 - 0 - No No
ment of Singa-
pore Investment
Fund
Hao Ran Foun- 28,171,319 3.41 0 - 0 - No No
dation
CITI Bank Taiwan
branch in custo-
dy for Govern- 14,569,826 1.71 0 - 0 - No No
ment of Norges
Bank investment
account
Cathay Life In-
surance Co. Ltd. 14,546,373 1.8 0 - 0 - No No
Chairman:
Tiao-Huei Huang
Han-De Construc tion Co.,
Ltd.
Miriton Investment 14,151,148 1.7 0 - 0 - Wei-Dar Development Corporation Related-
Corporation Panama Banco industrial party
Company
Tamerton Group Limited
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X. The total number of shares and total equity stake held in any single enterprise by the Company, its directors, managers and any companies controlled either directly or indirectly by the Company

Unit: shares; %

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Investment by directors,
managers and enterpris-
Investment by the Compa- es directly or indirectly Total investment
ny
Investees (Note) controlled by the Com-
pany
Share(s) (%) Share(s) (%) Share(s) (%)
Trimurti Holding Corporation 86,920,000 100.00 - - 86,920,000 100.00
Hardison International Corporation 3,896,305 100.00 - - 3,896,305 100.00
Dymas Corporation 1,161,004 19.48 4,798,566 80.52 5,959,570 100.00
TSRC (Vietnam) Co., Ltd. Not applicable 100.00 - - Not applicable 100.00
----- End of picture text -----

Note: Long-term investments accounted for using equity method.

Information on capital raising activities

March 20, 2021

I. Capital and shares

<1> Source of capital stock

I. Capital and shares

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----- Start of picture text -----

Authorized stock capi-
Paid-in capital Remarks
tal
Issue
Year/
price
month (NTD) Shares(s) Amount Shares(s) Amount Property other
(1,000 (1,000 Source of stock capital than cash offset Other
(NTD1,000) (NTD1,000)
shares) shares) against capital
July 1973 10 20,000 200,000 5,100 51,000 Incorporation of Company
Technical coop-
eration remuner-
June
10 20,000 200,000 13,200 132,000 Increase of NTD 51,000,000 ation transferred
1974
to capital stock
NTD 30,000,000
Technical coop-
eration remuner-
February 10 20,000 200,000 20,000 200,000 Increase of NTD 61,928,000 ation transferred
1975
to capital stock
NTD 6,072,000
Novem- 10 40,000 400,000 30,000 300,000 [Increase of NTD ]
ber 1975 100,000,000
Decem- 10 40,000 400,000 40,000 400,000 [Increase of NTD ]
ber 1975 100,000,000
July 1976 10 60,000 600,000 50,000 500,000 [Increase of NTD ]
100,000,000
April 10 60,000 600,000 54,000 540,000 Increase of NTD 40,000,000
1977
NTD 14,000,000
July 1980 10 110,000 1,100,000 73,238 732,380 transferred from earnings
NTD 52,380,000
transferred from capital
Increase of NTD 16,980,000
Septem- 10 110,000 1,100,000 92,300 923,000 NTD 173,640,000 Issue date: May
ber 1981 18,1981
transferred from earnings
Increase of NTD
April 10 120,000 1,200,000 116,000 1,160,000 135,470,000 NTD Listed date:Sep-
1982 101,530,000 transferred tember 25, 1982
from capital
October 10 121,800 1,218,000 121,800 1,218,000 [NTD 58,000,000 ]
1983 transferred from capital
Septem- 10 145,000 1,450,000 127,890 1,278,900 [NTD 60,900,000 ]
ber 1984 transferred from capital
NTD 63,945,000
August 10 145,000 1,450,000 140,679 1,406,790 transferred from earnings
1985 NTD 63,945,000
transferred from capital
Increase of NTD 80,463,000
NTD 119,577,000
ber 1986Septem- 10 164,200 1,642,000 164,200 1,642,000 transferred from earnings
NTD 35,170,000
transferred from capital
NTD 344,820,000
July 1987 10 201,966 2,019,660 201,966 2,019,660 transferred from earnings
NTD 32,840,000
transferred from capital
August 10 238,319 2,383,199 238,319 2,383,199 [NTD 363,539,000 ]
1988 transferred from earnings
August 10 274,068 2,740,679 274,068 2,740,679 [NTD 357,480,000 ]
1989 transferred from earnings
----- End of picture text -----

I. Capital and shares

==> picture [540 x 663] intentionally omitted <==

----- Start of picture text -----

Authorized stock capi-
Paid-in capital Remarks
tal
Issue
Year/
price
month (NTD) Shares(s) Amount Shares(s) Amount Property other
(1,000 (1,000 Source of stock capital than cash offset Other
(NTD1,000) (NTD1,000)
shares) shares) against capital
October 10 306,956 3,069,560 306,956 3,069,560 [NTD 328,881,000 ]
1991 transferred from earnings
August 10 550,000 5,500,000 369,700 3,697,000 [NTD 627,440,000 ]
1995 transferred from earnings
July 1997 10 550,000 5,500,000 502,900 5,029,000 [NTD 1,332,000,000 ]
transferred from earnings
Authorized
stock capital in-
cludes convert-
July 1998 10 750,000 7,500,000 580,487 5,804,870 [NTD 775,870,000 ] ible corporate
transferred from earnings
bonds totaling
10 million
shares
June 29, 1999
Approved by
July 1999 10 750,000 7,500,000 609,511 6,095,114 [NTD 290,244,000 ] the official letter
transferred from earnings under (88) Tai-
Tsai-Cheng (1)
No. 59287
Approval by let-
ter under Chin-
June 10 750,000 7,500,000 649,909 6,499,095 [NTD 403,981,000 NTD ] Kuan-Cheng-Yi-Tze No.
2006 transferred from earnings 0950124967
dated June 20,
2006
Approval by let-
ter under Chin-
June 10 900,000 9,000,000 714,900 7,149,004 [NTD 649,909,000 ] Kuan-Cheng-Yi-Tze No.
2011 transferred from earnings 1000028593
dated June 22,
2011
Approval by let-
ter under Chin-
June 10 900,000 9,000,000 786,390 7,863,904 [NTD 714,900,000 ] Kuan-Cheng-Yi-Tze No.
2012 transferred from earnings 1010027239
dated June 19,
2012
Approval by let-
ter under Chin-
June 10 900,000 9,000,000 825,709 8,257,099 [NTD 393,195,000 ] Kuan-Cheng-Yi-Tze No.
2014 transferred from earnings 1030023928
dated June 25,
2014
June
10 1,200,000 12,000,000 825,709 8,257,099
2019
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----- Start of picture text -----

March 20, 2021
Authorized stock capital (shares)
Type of shares Remarks
Listed Shares Non-listed shares Total
Common stocks 825,709,978 374,290,022 1,200,000,000
Preferred stocks - - -
----- End of picture text -----

Information related to general report system-Not applicable

July 25, 2020

<2> Shareholders' structure

I. Capital and shares

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----- Start of picture text -----

Shareholder's Structure Government Financial Institu- Other juridical Individual Foreign Institu-tions & Natural Total
Quantity Agencies tions persons Persons
Number of persons 3 13 216 87,107 273 87,612
Share(s) 702,024 15,112,661 204,435,298 368,997,196 236,462,799 825,709,978
Stake(%) 0.08 1.83 24.76 44.69 28.64 100.00
----- End of picture text -----

<3> Diffusion of ownership

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Par value NTD10/ July 25, 2020
Range of shares held Number of shareholders Shares held Stake (%)
1- 999 38,165 7,083,735 0.86
1,000- 5,000 34,764 77,069,805 9.33
5,001- 10,000 7,501 55,889,109 6.78
10,001- 15,000 2,609 32,630,591 3.95
15,001- 20,000 1,415 25,751,408 3.12
20,001- 30,000 1,325 33,352,839 4.04
30,001- 50,000 920 36,578,844 4.43
50,001- 100,000 558 39,751,593 4.81
100,001- 200,000 194 26,509,341 3.21
200,001- 400,000 94 25,755,745 3.12
400,001- 600,000 18 9,037,708 1.09
600,001- 800,000 10 6,949,037 0.84
800,001- 1,000,000 5 4,762,886 0.58
1,000,001 above 34 444,587,337 53.84
Total 87,612 825,709,978 100.00
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Preferred stocks shares- The Company does not issue preferred stocks shares.

I. Capital and shares

Shares Shareholders	Shares held	Stake (%)
Panama Banco Industrial Company	69,524,417	8.42
Han-De Construction Co., Ltd.	63,093,108	7.64
Wei-Dar Development Corporation .	53,708,923	6.50
Formosa Plastics Marine Corporation	41,201,000	4.99
Tamerton Group Limited	34,578,143	4.19
CITI bank Taiwan branch in custody for Government of Singapore Invest- ment Fund	34,028,332	4.12
Hao Ran Foundation Statutory	28,171,319	3.41
CITI Bank Taiwan branch in custody for Government of Norges Bank in- vestment account	14,569,826	1.76
Cathay Life Insurance Co. Ltd.	14,546,373	1.76
Miriton Investment Corporation	14,151,148	1.71

<5> Share price, net worth per share, EPS, dividends per share and related information

Unit: NTD

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----- Start of picture text -----

Fiscal year 2020 2019 As of March
Item 20,2021
Maximum 24.30 29.60 30.00
Market price Minimum 12.90 23.80 19.50
per share
Average 18.94 26.41 24.77
Before distribution 17.12 18.02 -
Net worth per
share After distribution (Note 1) 17.52 -
Weighted average share(s) 825,709,978 825,709,978 825,709,978
Earnings per share Before adjustment (0.03) 0.90 -
EPS
After adjustment (Note 1) 0.90 -
Cash dividend (Note 1) 0.36 0.50 -
Dividend distributed from earnings 0 0 -
Dividends per Dividends
share (Note 1) Dividend distributed from additional paid-in capital - - -
- - -
Cumulative outstanding dividends(Note 2)
Price-earnings (P/E) ratio (Note 3) - 29.34 -
Cash dividend Price-dividend (P/D) ratio(Note 4) 52.61 52.82 -
yield
Cash dividend yield(Note 5) 1.90 1.89 -
----- End of picture text -----

Note 1: The dividends for 2020 have not yet resolved by the shareholders' meeting.

Note 2: Requirements for issue of securities provide that the unappropriated dividends in the current year may be cumulative and distributed in the year of earnings, and only the outstanding cumulative dividends in the current year shall be disclosed.

Note 3: P/E ratio=yearly average closing price per share/EPS

Note 4: P/D ratio=yearly average closing price per share/Cash dividend per share

Note 5: Cash dividend yield=cash dividend per share/yearly average closing price per share

<6> Company Dividend Policy and Implementation

Dividend policy
II. Corporate Bonds Status
III. Preferred stocks Status
IV. Global depository receipts Status
V. Employee stock warrants Status
VI. New restricted employee shares Status
VII. Status of issuance of new shares in connection with mergers or acquisitions or with acquisitions of shares of other companies
VIII. Implementation of capital allocation plans

The synthetic rubber industry that the Company participates in is a mature industry, and the Company is striving towards globalization and diversification in products and applications. To comply with the Company's long-term plans and to ensure sustainable growth, the Company has established the following dividend policies: After the annual fiscal closing, the Company shall, after losses are covered, all taxes and dues paid, first set aside ten percent of such profits as legal or special reserve. The remaining earnings after adjustment, the beginning retained earnings, are the distributable earnings to be distributed by a resolution proposed by the board of directors and adopted by the shareholders’ meeting. Cash dividends may be distributed by a resolution adopted by a majority vote of a meeting of the board of directors attended by two-thirds or more of all the directors. The board's resolution should be reported to the shareholders meeting.

  - If the Company allocates dividends for shareholders, the cash dividend shall exceed twenty percent of the total allocated amount.

Distribution of dividends scheduled at the shareholders' annual meeting Cash dividends to be distributed are NTD 0.36 per share.
<7> Effect upon business performance and EPS of stock dividend distribution plans drafted at the shareholders' annual meeting:Not applicable.

<8> Employees' compensation and directors' remuneration

In accordance with the Article 28 of 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' compensation, and less than 1% as directors remuneration. The related regulations on distribution of employees' compensation and directors' remuneration were approved by the board of directors.
The amount of the employee's compensation in 2020 is estimated at a certain ratio according to the profit and loss of the current year. The remuneration of the director is accounted for by the expected amount. If there is a discrepancy between the above-estimated amount and the actual issued amount, it will be treated according to the changes in accounting estimates and recorded in the year of issuance.。
Board of Director Resolutions on Compensations:
(1) According to resolutions from the 20th Board Meeting of the 16[th] Board of Directors, cash compensations to employees in 2020 will be NTD 40,750,000. According to resolutions from the 21st Board Meeting of the 16[th] Board of Directors, cash compensations to directors in 2020 will be NTD 616,000. All cash compensations are consistent with previous assessments.
(2) The Company will not issue equity compensation to employees in 2020.
Employee, Director, and Supervisor Compensation in 2019:

The Company issued NTD 53,614,000 in cash compensation to employees in 2019 and the amount was consistent with previous assessments. The maximum amount allowed by the Articles of Association, NTD 9,813,000 was allocated for director compensations. Considering sales performances and the regional market landscape in 2019, the board of directors resolved to issue NTD 4,907,000 in cash compensation for directors. Differences were registered in 2020 as part of the prior period adjustments.

<9> Share repurchases: None
II. Corporate bonds - None
III. Preferred shares - None
IV. Global depository receipts - None
V. Employee stock warrants- None
VI. New restricted employee shares - None
VII. Merger, acquisition and issuance of new shares due to acquisition of shares of the Company - None
VIII. Implementation of capital allocation plans- None

Overview of business operations

I. Description of businesses

<1> Business Scope

1. Major business and product lines:

The business focuses on developing, manufacturing and selling various synthetic materials, including: (1)Synthetic rubber and elastomers: E-SBR, S-SBR, BR and TPE (2)Applied Materials: Material Mixtures

Product Portfolio

Unit: thousand NTD

I. Description of business

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----- Start of picture text -----

Items Revenue in 2020 Total Turnover(%)
Synthetic rubber and elastomers 23,173,891 96.46
Applied materials 850,552 3.54
Total 24,024,443 100.00
----- End of picture text -----

3. Planned Developments of New Products

Continue to develop microstructure control technology for
1 the next generation S-SBR products used in eco-friendly, high performance EV tires.

==> picture [114 x 48] intentionally omitted <==

Continue research into BR platform, expand product applications, fulfill
2 customer demands for shoe materials and plastic modifications, and increase product performance.

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Develop differentiated HSBC products such as high-end medical
3 grade materials, hygiene product materials, lubricant viscosity modifiers, and other TPE products with high added-value.

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----- Start of picture text -----

4
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Develop functional film for medical and electronic products to satisfy different customers’ needs.

<2> Industry Overview:

1. Global Economic Environment

Major institutions such as International Monetary Fund (IMF), Organization of Economic Co-operation Development (OECD), and World Bank indicated that after being severely hit by the pandemic in 2020, global economy is projected to grow between 4.0% and 5.5% in 2021 as vaccine roll-out drives economic recovery. However, uncertainties surrounding the course of the pandemic, vaccine distribution, stimulus programs, and global trade may influence economic growth and cause the recovery to vary across countries.

The U.S. Federal Reserve (FED) announced that the interest rate will remain at 0% to 0.25%, and it will maintain accommodative monetary policy through increasing securities holdings until substantial progress has been made towards its employment, inflation, and price stability goals. European Central Bank (ECB) also announced that it will increase its bond-buying, provide loans to banks at low rates, and extend quantitative easing program. In addition, the European Union (EU) passed a series of stimulus plans to provide support beyond monetary easing. Among major economies, China is the only economy with positive GDP growth in 2020 and expected to have more significant growth in 2021 driven by the revival of consumer confidence and demand.

Emerging market economies are also projected to recover from contraction, in which India’s economy is expected to expand with continued policy support, though nonperforming loans that were already at high levels before the pandemic might hinder its economic recovery. As for Taiwan, the Directorate General of Budget, Accounting and Statistics (DGBAS) forecasted a 4.64% GDP growth in 2021 as exports and domestic demand are expected to improve with diminishing pandemic effects and government’s efforts in attracting foreign investment.

Although global economy is expected to rebound in 2021 from the 2020 low base, the recovery will largely depend on the vaccine distribution and effectiveness. Moreover, large-scale fiscal and monetary stimulus have increased government’s debt burden that once the scale of stimulus begins to decrease as economy improves, rising interest rates may pose additional debt repayment pressure to countries who had already taken on excessive debt prior to the pandemic. Finally, prolonged trade conflicts remain unresolved and serve as another risk to global economic prospects.

2. Relevance of the industry's upstream, midstream and downstream:

I. Description of business

==> picture [488 x 123] intentionally omitted <==

----- Start of picture text -----

Downstream customers
Upstream raw materials of (tires, adhesives, plastic
the petrochemical indus- modification, shoe mate-
try rials)
(crude oil, natural gas)
Midstream raw materials Synthetic rubber
of the petrochemical in- TPE
dustry (ethylene, propyl-
ene, butadiene, styrene)
----- End of picture text -----

Upstream raw materials of the industry are crude oil and natural gas. Midstream raw materials refer to raw materials produced by cracking “petrochemical primary raw materials” e.g. naphtha, followed by reactions such as polymerization, oxidation, and synthetization. The downstream of petrochemical industry processes midstream raw materials to produce plastics, chemical fibers, rubbers, and other chemical products such as tires, plastic modification, adhesives, shoe materials and other industrial goods.

3. Current Industry Status and Outlook:

The global automotive market shrank by 16% in 2020 due to COVID-19, as European, U.S. and Japanese markets declined by 22%, 17%, and 13% respectively. According to LMC Research, the global automotive industry might not return to normal levels until 2022-2023.

China’s automotive market has stabilized and recovered rapidly since May 2020 as the pandemic was brought under control in China sooner than other countries. In 2020, automotive sales in China reached 25.23 million units, representing an annual growth of -2%, better than the projection made in the beginning of the year. When the pandemic first began, the China Association of Automobile Manufacturers (CAAM) forecasted a 15~25% decline in China's automotive sales for the year; later on in June, the CAAM reduced the forecasted decline in automotive sales for the year to 10~20%, as the pandemic subsided and work resumed in China. By mid-December, the CAAM revised its estimate again to only 2% decline for the year.

As governments around the world took measures, such as lockdown to contain the pandemic, the economic activities and production output fell sharply. As a result, crude oil demand and price plunged to a record low level and the global synthetic rubber demand decreased by 10% in 2020. TSRC took swift actions and measures in responding to the pandemic. Amid challenging market conditions, TSRC’s synthetic rubber business delivered strong performance by effectively leveraging the fast recovery of China automotive market and continuing operations of major sites to support customers. However, the demand and price of thermoplastic elastomer (TPE) end-markets fell drastically due to the pandemic, and TPE industry profitability was significantly compressed. Although the demand of TPE gradually recovered starting the second half of 2020, the overall market demand still significantly below the pre-pandemic level. Moreover, as the new capacity addition starts to come on stream, TPE industry continues to be in oversupply situation with fierece competition.

The global economy is expected to grow in 2021 versus the low base of 2020. Global automotive sales are projected to increase by 10%, including 6% growth expected in China. Although the actual growth is hinged on the course of pandemic containment with uncertainty, new car sales will add to the number of automotive and increase the demand for replacement tires. Amid the growing tire market in 2021, the Company's synthetic rubber business plans to grow with the market and strengthen its portfolio by growing into green tire and non-tire applications.

As for TPE business, the supply and demand of the SEBS market have been growing steadily in the past five years. SEBS has a wide range of applications and serves as a strong alternative to other materials due to its relatively ease of processing downstream, excellent property after blending, and its environment-friendly recyclable features. However, the market has turned oversupplied in recent years with new production capacities and fierce price competition. The Company is actively transforming its business by targeting high-end applications such as automotive and medical, while optimizing its sales portfolio, to overcome the challenge of compressed profitability.

<3> Overview of technology and R&D

1. R&D expenses

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----- Start of picture text -----

Research and
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I. Description of business

==> picture [75 x 8] intentionally omitted <==

----- Start of picture text -----

Unit: thousand NTD
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2. Successfully developed technology or products

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----- Start of picture text -----

Item Result
Patents ・ [There are 9 patents granted for this year.]
・ [We have successfully optimized the quality for the existing products and ]
acquired more orders.
・ [Our customized products have been certified by the branded factories ]
S-SBR Products
worldwide and are now available in mass production.
・ [New generation products have been tested by the major brands and are ]
available for sale.
・ [We have completed the development of medical grade materials and ]
have provided to our customers for testing.
・ [We developed materials for hygiene products, such as elastic film and ]
elastic non-woven fabric, which are used in diapers, masks and hygiene
High value HSBC product development
care products; some of the products are now available for sale.
・ [The development of lubricant viscosity modifier for vehicle use has been ]
completed, the products meet the performance requirements and have
been provided to major manufacturers for certification.
・ [We have made a major breakthrough in the foaming technology and ]
achieved strict performance requirements for footwear; we have set up
New materials and formulas for high
a test workshop in order to meet customers' needs for quick sample de-
performance custom footwear materi-
als livery.
・ [The new generation of composite materials for footwear has passed the ]
first phase testing by branded manufacturers.
・ [We have finished developing new process technology to improve ]
Advanced process technology devel- product quality and stability; at the same time, we have introduced the
opment design and construction for the new plant and have completed the test
run.
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<4> Long-Term and Short-Term Business Development Plans

The Company focuses on research and development of high value-added products and technologies through advanced eco-friendly manufacturing processes to continue transforming towards a global specialty chemical company, as well as delivering customer satisfactions, solving customers’ inquiries in the application of rubbers, and creating mutual value. The business development plan includes:

Long-Term Plan:
- (1) The Company continues to develop innovative TPE technology platforms and applications to create differentiation as competitive advantage. In addition, the Company integrates the developments in downstream industries and customers’ demands and continues to develop application materials with high added values for medical applications, oligopoly HSBC and advanced shoe material market.
- (2) Target key end-market applications and collaborate with customers’ R&D teams to jointly develop high-value innovative products, serving as a total solution provider for the customers.
I. Description of business
(3) Upgrade manufacturing equipment and the utilization of raw materials to improve production efficiency and optimize production costs.
(4) Continue monitoring synthetic rubber market dynamics and customer needs while exploring opportunities in new products, market, and applications.
(5) Offer local supply and customer services for target market industries and supply chain in order to strengthen TSRC’s market position and expand customer base.
(6) Continue the technical exchanges and collaboration with academia and customers to enhance product value or conduct commissioned research under contracts with academia to improve process technology.
(7) Evaluate opportunities in vertical strategic alliance.

2. Short-Term Plan:

(1) Commercialize 20 thousand tons advanced SEBS line in Nantong, China and 7 thousand tons ASM line in Vietnam.
(2) New advanced SEBS production lines in Nantong, China and TPE production lines in Shanghai are in compliance with medical GMP. All products have been tested for biocompatibility with ISO10993-5 and USPVI tests.
(3) Strengthen technology platform and customer development based on business strategies and develop high value-added applications, e.g., high-end shoe materials, medical grade TPE, protective film, flexible non-woven fabric, etc. for more diverse products and penetration into new market segments.
(4) Differentiate from the competition through high quality, differentiation, and value-added products, and consequently enhance customers’ manufacturing process and product value chain.
(5) Continue exploring opportunities in new products, new markets and new business model and conduct feasibility assessment.
(6) In response to the promotion of tire label in countries including EU, Japan, and China, the Company has specifically formed a R&D team for S-SBR project for developing tires with low rolling resistance and wet scratch features to enhance S-SBR market shares.

II. Analysis of the market as well as the production and marketing situation

<1> Market Analysis

1. Major sales destinations

II. Analysis of the market as well as the production and marketing situation

Market Analysis 1. Major sales destinations
	Unit: thousand NTD/Metric Ton
Name of product	2020		Exported territories
	Sales volume	Sales amount
Synthetic rubber and elasto- mers	520,666	23,173,891	China, U.S.A., Thailand, Viet- nam, Turkey, Japan, Italy, Ma- laysia.
Applied materials	7,630	850,552	China, South East Asia.

2. Market share:

Synthetic rubber Asia is the major market accounting for 72% of the total sales, while Americas and Eurozone ac- and elastomers count for 15% and 11% of total sales respectively. Vietnam is the main market accounting for 52% of total sales, followed by Hong Kong and China Applied materials with 26% of the total sales.

3. Industry demand supply and market growth projection

According to LMC research institute, there will be no ESBR and BR capacity additions in Asia in 2021. Moreover, as the synthetic rubber industry has experienced oversupplied market in the past few years, some of the existing capacities have shifted to produce other products, allowing the supply-demand balance to gradually improve. However, the U.S. Department of Commerce released the preliminary anti-dumping results for passenger car and light truck tires from Taiwan, Korea, Thailand, and Vietnam at the end of 2020, ruling that the anti-dumping duties for the products from Taiwan are from 52.42% to 98.44%. If the final determinations of dumping and injury to domestic industry are made, the tire manufacturers in Taiwan are likely subject to the higher tariff. The Company will optimize its product portfolio, production allocation, and supply arrangement to mitigate the impact of anti-dumping duties.

As for TPE, though the market demand has been gradually improved driven by recovery in automotive, consumer goods, and adhesive, overall TPE market demand is expected to take 1-2 years to return to the pre-pandemic level. In addition, with the new round of production capacity expansion, a total of 270,000 tons of TPE facilities will be put into production and poses a severe challenge to the market supply and demand. Such large number of new capacities may lead to lower capacity utilization, acceleration of commoditization, and compressed profitability.

Looking further into the TPE market in 2021, the demand of SBS is expected to grow 4.1% while the capacity significantly increases by 175,000 tons from China and Russia. SIS demand is expected to increase by 4.1%, reflecting the recovery of adhesive demand. SIS capacity will also increase by 55,000 tons and is expected to aggravate the imbalance between supply and demand due to the integration of Isoprene and C5 petroleum resin by Jinhai Chenguang and Luhua. The demand for SEBS will increase sharply by 7.7%, while the capacity increases by 39,000 tons from new additions in China and Thailand. Moreover, SEBS market is expected to experience an intensified competition in the lower-end products as Zhongli actively expands its production since they entered the market in 2018.

4. Competitive positioning, future development factors and actions

E-SBR and BR are mature products that the difference among the products produced by different manufacturers is not significant, and thus the cost of raw materials is the key to profit margins. The Company does not possess upstream integration advantage, so its profitability is greatly affected by the cost of raw material, particularly butadiene. However, since there will be many new butadiene capacity additions in Asia in 2021, the difference of raw material cost between vertically integrated companies and non-vertically integrated companies will narrow, consequently helping the Company to increase sales. Moreover, to capture new sales opportunities, the Company is actively developing tire market in Southeast Asia and non-tire markets, at the same time expanding its sales in India via its joint venture ISRPL.

The Company has taken actions for immediate impacts and lasting benefits with the objective to increase sales and improve profitability. The Company diversifies its product portfolio and differentiates toward high-value applications to counter competition from new TPE capacity. Furthermore, the Company strengthens its capability in developing higher-end applications and enhancing profitability through the commercialization of its new advanced SEBS line and advanced shoe material production line.

<2> Important application and manufacturing processes of main products

1.Main product important use:

II. Analysis of the market as well as the production and marketing situation

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E-SBR General material for car tires, soles, conveyor belts, hoses, sport facilities, toys and other industrial prod-
ucts.
S-SBR Energy-saving (low rolling resistance) tires, high-function tires, snow tires and all-season tires.
BR High-speed tires, soles, sport facilities, High Impact polystyrene (HIPS) and other industrial products.
TPE Adhesives, hot-melt adhesive, plastic modification, medical firms, and other industrial products for spe-
cial applications.
Applied Advanced shoe materials, foamed shoe materials, toys, stationery, wire and cable, baby supplies, person-
Materials al care, hand tools covering, materials, car industry and other industries such as refrigeration.
----- End of picture text -----

2.Outline of production process:

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----- Start of picture text -----

E-SBR is produced in an emulsion polymerization system. Soap is used as the reaction agent for the po-
E-SBR lymerization of butadiene and styrene to produce high molecular glue. After the addition of anti-oxidant
and extender oil (for oil-extended rubber products), the coagulation crumb is then washed, dewatered,
dried, baled and packaged.
S-SBR is produced in a solution polymerization system. Soap is used as the reaction agent for the po-
S-SBR lymerization of butadiene and styrene to produce high molecular glue. After the addition of anti-oxidant
and extender oil (for oil-extended rubber products), the coagulation crumb is then washed, dewatered,
dried, baled and packaged.
BR BR is produced in a solution polymerization system. Crumb is made after polymerization of butadiene
(BD), and is condensed into pallets, ash content is washed off and then dewatered and packed.
TPE TPE is produced in a solution polymerization system. Crumb is made after polymerization of butadiene
and after being steamed to recall solvent, it is dewatered, pelleting and then packed.
Applied
Materials TPE products and other raw materials are mixed, blended and granulated.
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<3> Supply of main raw materials

The synthetic rubber produced by the Company is mainly polymerized from butadiene and styrene within the petrochemical products.

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----- Start of picture text -----

Item Main source Supply situation
Butadiene Domestic, Domestic butadiene is primarily supplied by CPC and FPCC and imported in the case of
imports the short supply.
Styrene Domestic Styrene is primarily supplied by TSMC, FCFC and GPPC
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<4> Suppliers (Customers) accounting for 10% or more of the Company's total procurement (sales) amount in either of the most recent two fiscal years, the amounts bought from (sold to) each, and the percentage of total procurement (sales) respectively, and reasons for increase/ decrease

There are no customers accounting for 10% or more of the Company's total sales value in the recent two fiscal years.

<5> Production volume for the most recent two fiscal years

[Unit: thousand NTD/Metric Ton]

II. Analysis of the market as well as the production and marketing situation

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2020 2019
Product
Capacity Output Output value Capacity Output Output value
Synthetic rubber
565,767 506,462 17,666,204 561,600 476,219 22,334,579
and elastomers
Applied materi-
23,910 15,067 582,242 26,533 20,635 1,267,134
als
Total 589,677 521,529 18,248,446 588,133 496,854 23,601,713
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<6> Volume of units sold for the most recent two fiscal years

Unit: thousand NTD/Metric Ton

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2020 2019
Product Domestic Export Domestic Export
Volume Value Volume Value Volume Value Volume Value
Synthetic rubber
379,987 17,024,568 140,679 6,149,323 336,019 19,140,916 138,663 7,967,385
and elastomers
Applied materials 4,319 371,885 3,311 478,667 5,279 419,173 8,265 1,383,249
Total 384,306 17,396,453 143,990 6,627,990 341,298 19,560,089 146,928 9,350,634
----- End of picture text -----

III. Employees information

IV. Disbursements of environmental protections

III.Employees information	III.Employees information
	Year 2020	2019	March 20, 2021
Direct workers 842		861	834
Indirect workers 745		747	747
Total	of employees 1,587	1,608	1,581
Average age 40.7(years old)		39.9(years old)	40.9(years old)
Average seniorities 10.6(years)		10.1(years)	10.7(years)
	Ph.D. 1	1	1
	Master 13	13	13
Education level (%)	Bachelor 65	66	65
	Senior high school 18	17	18
	Below senior high school 3	3	3
IV.Disbursements of environmental protections
Losses for environmentalpollution
	2020		Till March 20, 2021
	1. On 2020/9/11, the Environmental Protection Bureau of the Kaohsiung City Government
	discovered that the amount of M04 process material (CA-2) used in 2019 exceeded the
	approved amount granted by the stationary source operation permit, which violated
Pollution	Article 24, Item 2 of the Air Pollution Act, resulting	in a fine of NT$100,000.
(Type and	2. On 2020/9/24, the Air Quality and Noise Control Division of Kaohsiung City None
procedure)	Government randomly inspected the M05 process device and found that the VOC
	leakage value of the device exceeded the " Standards for Control and Emission of
	Volatile Organic Compounds of the Device in Kaohsiung City" and violated Article 20,
	Item 1 of the "Air Pollution Control Act", resulting in a fine of NT$450,000.
Counterpart, or authority imposing fines	Kaohsiung Environmental Protection Bureau		Kaohsiung Envi- ronmental Pro- tection Bureau
Compensa- tion and fines	NT$550,000		NT$270,000 (deferred for 2019)
	56

Till March 20, 2020 2021

As for the annual use of process materials (CA-2) in the M04 process exceeds the approved amount granted by the stationary source operation permit, we have developed an information program to collect data on the actual annual cumulative use of major raw materials and fuels/products in the SAP system for each process, and have established the "Usage alert report for raw materials and products in the process of the Kaohsiung plant" as an improvement measure. The SAP system automatically sends out Emails to the personnel in charge of the production units to receive the "Usage Statistics Alert Report" that provides the cumulative usage of process ma-

Adaption of

improvement terials and products, and takes early response to avoid the usage exceeding the apNone measures proved amount in the permit.

  2. The improvement measures for VOC leakage from M05 process devices are as follows:

     - (1) Review meeting for the VOC spill from the 53 gallon drums in each workshop was held by the Industrial Safety Division, and the implementation status for improvement measures will be tracked.

V. Labor relations
(2) The laboratory conducts the self-management for VOC components, and performs weekly leak detection for the VOC.
(3) Replacing the pneumatic pump with a small gear pump.

V. Labor relations

<1> Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and measures for preserving employees' rights and interests:
Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation:
- Regarding welfare measures, besides providing employees with cash gifts for the three major festivals (Dragon Boat Festival, Moon Festival, Chinese New Year), birthday and Labor day through Employee Welfare Committee, the Company also implements “cafeteria benefit”, a welfare project for employees to combine the “bonus points” satisfying their own welfare demands, including travel and leisure activities, education subsidy for their children, selfselected group buying of daily supplies from employee welfare club, etc., to truly implement the actual concepts of employee welfare.

As for the insurance, besides labor and health insurance, TSRC also provides free group insurance that covers employees and their family members. As for the labor pension system, TSRC conducts the business in accordance with the Labor Standards Act and labor pension system. TSRC allocates a pension to the pension accounts of employees based on the pension actuarial report provided by actuaries every year. The gap between the estimated pension and actual pension amount for personnel who are qualified for retirement by the end of every year is allocated by March 31 of every year in accordance with the regulations, in order to protect the right of retirement of employees.

TSRC hosts large annual gatherings and galas each year for better employee relationships (Note: due to the pandemic in 2020, annual galas in certain regions were held in smaller units to reduce risks from public gatherings); gives employees cash gifts for weddings, childbirth, injuries, and allowances for disease; has one nurse for each medical room; and offers medical consultation services with physicians. Regarding employees' training program, the training plans are set based on the Company's business policies, units' requirements, and relevant laws/regulations. The Company offers general knowledge, professional skills, and management programs for the newly recruited and existing employees. Meanwhile, the “life-time learning” goal is fulfilled through the training methods of OJT, Off-JT and SD. The total training fee in 2020 is NTD 6,243,000, in which the average training fee per person is NTD 4,000 and the training hour per person is 36 hours.

Measures for preserving employees' rights and interests:

Since the incorporation of the labor union, the Company has held meetings between employer and labor periodically, and negotiated for the laborers” interests and rights through formal meetings. In 2020, the Company held four meetings in total.

Furthermore, according to the Labor Standard Law and Accounting Handling Rules on Pension, the Company will contribute the pension fund to the employees' personal accounts in the Bank of Taiwan and Bureau of Labor Insurance on a monthly basis.

Meanwhile, the “Reserve Labor Pension Fund Supervisory Commission” will hold meetings to review the utilization of pension funds periodically to protect the retired employees' interests and rights.

<2> In 2020 and until the publication date, there is no loss suffered from labor disputes.

<3> Estimated loss suffered by the Company due to labor disputes currently and in the future, and explanation measures

Since the Company's incorporation with the union, the relationship between employees and the Company has remained fair through the good interaction and communication between employees and the Company. Therefore, no significant dispute over labor has occurred, let alone the loss thereof. Therefore, the Company and employees will abide by the communication models to create a win-win situation when proceeding with communication, and there is no likelihood of any monetary loss resulting from labor dispute.

VI. Material contracts

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----- Start of picture text -----

March 20, 2021
Nature Concerned party Duration Contents Restrictive terms
The joint venture for produc-
UBE Industries Ltd., October 20, 1995 until
Joint ven- tion and sale of BR with the an-
ture Marubeni Corporation termination of the co- nual capacity of 50 thousand No
UBE (Thailand) Co.,Ltd operative relationship metric tons of BR in Thailand
The joint venture for produc-
UBE Industries Ltd., October 26, 2006 until
Joint ven- Marubeni Petrochemicals termination of the co- tion and sale of BR plant with No
ture Investment B.V. operative relationship the annual capacity of 72 thou-sand metric tons in China
December 31, 2006
Technical support Trimurti Holding Corpo- ~until termination Authorize to use SEBS No
and ration technology
services of the cooperative
relationship
Authorize for production of
Technology license JSC VORONEZHSYN-THEZKAUCHUK May 27, 2009 until 10 years after the official thermoplastic elastomers with the annual capacity of 50 thou- No
production sand metric tons
The joint venture for produc-
Joint ven-ture Indian Oil Corporation April 3, 2010 until termination of the co- tion and sales of ESBR plant with the annual capacity of 120 No
operative relationship thousand metric tons in India
September 1, 2010
Technology Indian Synthetic Rubber until termination of A license for India Synthetic Rubber Private Limited. to use No
license Private Ltd. the cooperative rela-
ESBR technology
tionship
The joint venture for produc-
Joint ven-ture ARLANXEO Holding B.V May 7, 2010 until termination of the co- tion and sales of NBR plant with the annual capacity of 30 No
operative relationship thousand metric tons in China
December 1, 2010 un-
ARLANXEO–TSRC (Nan- A license for ARLANXEO-TSRC
Technology license tong) Chemical Industrial til termination of the cooperative relation- (Nantong) Chemical Industrial No
Co., Ltd Co Ltd. to use NBR technology
ship
Technology TSRC (Nantong) January 1, 2012 to Extend to a 35 thousand metric No
license Industrial Ltd. January 1, 2022 tons-SEBS technology licensing
Technology TSRC (Nantong) January 1, 2014 to Authorize to use SIS technolo- No
license Industrial Ltd. December 31, 2023 gy
September 1, 2017 to
within ten years start- Adding the permission for
Technology TSRC (Nantong) ing from the issuance SEBS authorized products with No
license Industrial Ltd. of the first invoice of the annual production of 20
the new production thousand metric tons
line
----- End of picture text -----

VI. Material contracts

Nature	Concerned party	Duration	Contents	Restrictive terms
Medi- um-and long-term loan	Bank of Taiwan	October 17, 2018 to November 23, 2021	Loaned NTD 1,500 million	Loan amount cannot be drawn again.
Medi- um-and long-term loan	Mega Bank	May 02, 2018 to October 23, 2023	Loaned NTD 500 million	Loan amount cannot be drawn again.
Medi- um-and long-term loan	MUFG Bank	March 21, 2018 to March 23, 2021	Loaned NTD 500 million	Loan amount cannot be drawn again.
Medi- um-and long-term loan	CTBC Bank	March 23, 2018 ~ March 28, 2023	Loaned NTD 850 million	Repaid amount of NTD 500,000,000 cannot be drawn again. The amount of NTD 50,000,000 is calculable mobility.
Medi- um-and long-term loan	E. Sun Bank	February 20, 2020 ~ August 15, 2027	Loaned NTD 478 million	Loan amount cannot be drawn again.
Medi- um-and long-term loan	Tai Shin Bank	Final maturity date is three years from first drawdown	Loaned NTD 500 million	Loan amount cannot be drawn again.

Overview of financial status

I. Condensed balance sheet and statement of comprehensive income for recent five fiscal years

<1> Condensed balance sheet

Unit: thousand NTD

I. Condensed balance sheet and statement of comprehensive income for the recent five fiscal years

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Fiscal year Financial information for the recent years
Individual
Item 2020 2019 2018 2017 2016
Current assets 3,129,891 4,024,296 4,200,063 3,709,562 3,885,668
Property, plant and equipment 2,978,757 2,727,714 2,789,755 2,760,238 2,699,834
Intangible assets 65,098 44,819 65,778 86,312 37,972
Other assets 16,201,577 17,494,817 17,248,237 16,104,401 16,125,052
Total assets 22,375,323 24,291,646 24,303,833 22,660,513 22,748,526
Before distribution 6,037,851 4,813,822 4,790,367 6,304,390 5,141,128
Current lia-
bility
After distribution 6,335,107(Note) 5,226,677 5,599,562 7,097,072 5,966,838
Non-current liability 2,198,352 4,602,132 4,202,463 1,478,607 2,266,177
Before distribution 8,236,203 9,415,954 8,992,830 7,782,997 7,407,305
Total liability
After distribution 8,533,459(Note) 9,828,809 9,802,025 8,575,679 8,233,015
Equity attributable to shareholders
14,139,120 14,875,692 15,311,003 14,877,516 15,341,221
of the parent
Common stock 8,257,099 8,257,099 8,257,099 8,257,099 8,257,099
Capital surplus 49,531 47,140 45,158 41,043 849
Before distribution 5,552,832 5,917,502 5,809,486 5,431,836 5,381,012
Retained
earnings
After distribution 5,255,576(Note) 5,504,647 5,000,291 4,639,154 4,555,302
Other equity 279,658 653,951 1,199,260 1,147,538 1,702,261
Treasury stock 0 0 0 0 0
Non-controlling interest 0 0 0 0 0
Total share- Before distribution 14,139,120 14,875,692 15,311,003 14,877,516 15,341,221
holders'
equity After distribution 13,841,864(Note) 14,462,837 14,501,808 14,084,834 14,515,511
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Note: the amount decided by the board of directors on March 11, 2021.

I. Condensed balance sheet and statement of comprehensive income for the recent five fiscal years

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Fiscal year Financial information for the recent years
Consolidated
Item 2020 2019 2018 2017 2016
Current assets 12,437,636 15,365,918 14,861,158 13,913,627 13,627,402
Property, plant and equipment 10,516,517 10,037,395 8,768,849 8,558,709 8,947,258
Intangible assets 1,012,405 1,669,885 1,851,601 1,942,350 2,179,937
Other assets 5,301,824 5,441,725 4,748,561 4,584,655 5,015,330
Total assets 29,268,382 32,514,923 30,230,169 28,999,341 29,769,927
Before distribution 9,893,767 9,300,535 8,172,613 10,811,273 9,963,898
Current lia-
bility
After distribution 10,191,023(Note) 9,713,390 8,981,808 11,603,955 10,789,608
Non-current liability 3,515,956 6,761,665 5,175,715 1,744,622 2,754,204
Before distribution 13,409,723 16,062,200 13,348,328 12,555,895 12,718,102
Total liability
After distribution 13,706,979(Note) 16,475,055 14,157,523 13,348,577 13,543,812
Equity attributable to shareholders of
14,139,120 14,875,692 15,311,003 14,877,516 15,341,221
the parent
Common stock 8,257,099 8,257,099 8,257,099 8,257,099 8,257,099
Capital surplus 49,531 47,140 45,158 41,043 849
Before distribution 5,552,832 5,917,502 5,809,486 5,431,836 5,381,012
Retained
earnings
After distribution 5,255,576(Note) 5,504,647 5,000,291 4,639,154 4,555,302
Other equity 279,658 653,951 1,199,260 1,147,538 1,702,261
Treasury stock 0 0 0 0 0
Non-controlling interest 1,719,539 1,577,031 1,570,838 1,565,930 1,710,604
Total share- Before distribution 15,858,659 16,452,723 16,881,841 16,443,446 17,051,825
holders'
equity After distribution 15,561,403(Note) 16,039,868 16,072,646 15,650,764 16,226,115
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Note: the amount decided by the board of directors on March 11, 2021.

Condensed statement of comprehensive income

Unit: thousand NTD

I. Condensed balance sheet and statement of comprehensive income for the recent five fiscal years

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Fiscal year
Financial information for the recent years
Individual
Item 2020 2019 2018 2017 2016
Operating revenue 8,344,155 10,856,945 10,834,520 11,254,655 8,831,537
Gross profit 489,887 1,072,357 1,107,890 896,998 869,843
Operating profit (346,968) 129,881 250,966 106,207 143,220
Non-operating income and expenses 428,824 788,028 1,077,163 790,340 928,346
Net income before tax 81,856 917,909 1,328,129 896,547 1,071,566
Net income (21,891) 740,316 1,192,186 874,107 988,352
Other comprehensive income (loss) (304,217) (368,414) 29,868 (552,296) (934,084)
Total comprehensive income (326,108) 371,902 1,222,054 321,811 54,268
Net income attributable to shareholders
(21,891) 740,316 1,192,186 874,107 988,352
of the parent
Net income attributable to non-con-
0 0 0 0 0
trolling interests
Total comprehensive income attributable
(326,108) 371,902 1,222,054 321,811 54,268
to shareholders of the parent
Total comprehensive income attributable 0 0 0 0 0
to non-controlling interests
EPS (Note) (0.03) 0.90 1.44 1.06 1.20
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Note: EPS (loss) is computed by income (loss) after tax divided by weighted average outstanding shares. The shares increased after earnings or additional paid-in capital transferred to capital should be computed retroactively.

[ Unit: thousand NTD]

I. Condensed balance sheet and statement of comprehensive income for the recent five fiscal years

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Fiscal year Financial information for the recent years
Consolidated
Item 2020 2019 2018 2017 2016
Operating revenue 24,024,443 28,910,723 29,751,218 31,766,237 26,955,090
Gross profit 2,937,269 3,377,284 3,488,714 3,328,879 3,880,881
Operating profit 822,315 1,084,861 1,301,814 1,202,526 1,764,946
Non-operating income and expenses (301,644) 169,777 328,629 (65,391) (157,636)
Net income before tax 520,671 1,254,638 1,630,443 1,137,135 1,607,310
Net income 215,261 817,120 1,233,670 849,717 1,093,607
Other comprehensive income (loss) (282,003) (439,025) (6,708) (568,595) (1,072,228)
Total comprehensive income (66,742) 378,095 1,226,962 281,122 21,379
Net income attributable to sharehold-
(21,891) 740,316 1,192,186 874,107 988,352
ers of the parent
Net income attributable to non-con-
237,152 76,804 41,484 (24,390) 105,255
trolling interests
Total comprehensive income attribut-
(326,108) 371,902 1,222,054 321,811 54,268
able to shareholders of the parent
Total comprehensive income attribut-
259,366 6,193 4,908 (40,689) (32,889)
able to non-controlling interests
EPS (Note) (0.03) 0.90 1.44 1.06 1.20
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Note: EPS (loss) is computed by income (loss) after tax divided by weighted average outstanding shares. The shares increased after earnings or additional paid-in capital transferred to capital should be computed retroactively.

CPA's name and auditor's opinion

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Fiscal year CPA's name Auditor's opinion
Ming Hung Huang
2020 Wu, Lin Unqualified opinion
2019 Ming Hung Huang Po Shu Huang Unqualified opinion (emphasis of matter)
2018 Po Shu HuangAnn Tine Yu Unqualified opinion
2017 Po Shu HuangAnn Tine Yu Unqualified opinion
2016 Po Shu HuangAnn Tine Yu Unqualified opinion
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II. Financial analysis for the recent five fiscal years

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II. Financial analysis for the recent five fiscal years
Financial analysis
Fiscal year Financial information for the recent years
Individual
Item
2020 2019 2018 2017 2016
Debt-asset ratio(%) 36.81 38.76 37.00 34.35 32.56
Financial
structure
Ratio of long-term capital to property, plant and equipment(%) 548.47 714.07 699.47 592.56 652.17
Current ratio(%) 51.84 83.60 87.68 58.84 75.58
Solvency Quick ratio(%) 26.47 35.99 34.79 23.76 35.57
Interest coverage ratio(%) 2.04 10.03 17.39 13.53 19.50
Receivables turnover rate (times) 7.94 9.92 9.88 9.21 7.27
Average collection days for receivables 45.97 36.79 36.94 39.63 50.21
Inventory turnover rate (times) 4.25 4.17 4.19 4.94 4.29
Operating Payables turnover rate (times) 10.21 10.97 11.90 11.26 9.49
ability
Average days of sales 85.88 87.53 87.11 73.89 85.08
Property, plant and equipment turnover rate (times) 2.92 3.94 3.90 4.12 3.28
Total assets turnover rate(times) 0.36 0.45 0.46 0.50 0.39
Return on assets(%) 0.18 3.38 5.36 4.11 4.59
Return on equity(%) (0.15) 4.90 7.90 5.79 6.26
Profitability Ratio of income before tax to paid-in capital (%) 0.99 11.12 16.08 10.86 12.98
Profit margin before tax (%) (0.26) 6.82 11.00 7.77 11.19
EPS (NTD) (0.03) 0.90 1.44 1.06 1.20
Cash flow ratio (%) 5.23 13.27 6.81 2.58 2.30
Cash flows Cash flow adequacy ratio(％） 24.82 32.18 28.13 41.77 41.65
Cash flow reinvestment ratio(%) (0.43) (0.67) (1.85) (3.02) (3.31)
Operating leverage (10.74) 37.22 15.65 30.93 21.22
Leveraging
Financial leverage 0.81 4.59 1.48 3.07 1.68
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The reasons for financial ratio changes in the last two years

The ratio of long-term capital to property, plant and equipment and current and quick ratio were due to the increase of longterm borrowings that turned into within one year long-term debts.
Times interest earned was due to the decrease in net income before tax.
The average days for cash receipts, turnover rate of property, plant and equipment and total assets' turnover rate were due to the decrease in revenue.
Profitability ratios were due to the decrease in net income after tax.
Cash flow ratios were due to the decrease in cash flow from operating activities.
Leverage was due to net operating loss.

II. Financial analysis for the recent five fiscal years

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Fiscal year Financial information for the recent years
Consolidated
Item
2020 2019 2018 2017 2016
Debt-asset ratio(%) 45.82 49.40 44.16 43.30 42.72
Financial
structure
Ratio of long-term capital to property, plant and equipment(%) 184.23 231.28 251.54 212.51 221.36
Current ratio(%) 125.71 165.22 181.84 128.70 136.77
Solvency Quick ratio(%) 67.35 92.98 102.14 72.44 82.41
Interest coverage ratio(%) 4.14 6.88 10.62 7.04 11.61
Receivables turnover rate (times) 6.86 8.19 8.21 8.19 7.59
Average collection days for receivables 53.20 44.56 44.45 44.56 48.08
Inventory turnover rate (times) 3.76 3.97 4.21 4.98 4.54
Operating Payables turnover rate (times) 10.30 12.88 15.71 15.75 14.71
ability
Average days of sales 97.07 91.93 86.69 73.29 80.39
Property, plant and equipment turnover rate (times) 2.34 3.07 3.43 3.63 2.86
Total assets turnover rate(times) 0.78 0.92 1.00 1.08 0.90
Return on assets(%) 1.02 3.09 4.62 3.42 4.08
Return on equity(%) 1.33 4.90 7.40 5.07 6.23
Profitability Ratio of income before tax to paid-in capital (%) 6.31 15.19 19.75 13.77 19.47
Profit margin before tax (%) 0.90 2.83 4.15 2.67 4.06
EPS (NTD) (0.03) 0.90 1.44 1.06 1.20
Cash flow ratio (%) 23.89 27.93 22.92 14.72 9.11
Cash flows Cash flow adequacy ratio(％） 78.25 91.81 99.39 109.82 103.78
Cash flow reinvestment ratio(%) 5.54 5.05 3.11 2.41 (0.18)
Operating leverage 7.47 5.95 8.52 8.23 5.76
Leveraging
Financial leverage 1.18 1.21 1.15 1.19 1.09
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The ratio of long-term capital to property, plant and equipment and the current and quick ratio were due to the increase of long-term borrowings that turned into within one year long-term debts.
Times interest earned was due to the decrease in net income before tax.
The turnover rate of accounts payable was due to the decrease in cost of goods sold.
The turnover rate of property, plant and equipment was due to the decrease in revenue.
Profitability ratios were due to the decrease in net income after tax.
Degree of operating leverage is caused by operating profit decreasing.

1. Financial structure:

(1) Debt-asset ratio ＝total liabilities ／total assets
(2) Ratio of long-term capital to property, plant and equipment ＝(total equity + non-current liabilities) ／ net worth of property, plant and equipment

2. Solvency:

(1) Current ratio ＝current assets ／current liabilities
(2) Quick ratio ＝(current assets －inventory －prepaid expenses) ／current liabilities
(3) Interest coverage ratio ＝income before income tax and interest expenses ／current interest expenses

3. Operating ability:

(1) Receivables (including accounts receivable and notes receivable arising from business operations) turnover rate = net sales ／average receivables (including accounts receivable and notes receivable arising from business operations) for each period
(2) Average collection days for receivables = 365 ／receivables turnover rate
(3) Inventory turnover rate = cost of sales ／average inventory
II. Financial analysis for the recent five fiscal years
(4) Payables (including accounts payable and notes payable arising from business operations) turnover rate = cost of sale ／ average payables (including accounts payable and notes payable arising from business operations) for each period
(5) Average days of sale = 365 ／inventory turnover rate
(6) Property, plant and equipment turnover rate = net sales ／average net worth of property, plant and equipment
(7) Total asset turnover rate = net sales ／average total assets

4. Profitability:

(1) Return on assets = [net income + interest expenses (1 －tax rate)] ／average total assets
(2) Return on equity = net income ／average total equity
(3) Profit margin before tax = net income ／net sales
(4) EPS ＝(profit and loss attributable to owners of the parent －dividends on preferred shares) ／weighted average number of issued shares

5. Cash flow:

(1) Cash flow ratio = net cash flow from operating activities ／current liabilities
(2) Net cash flow adequacy ratio = net cash flow from operating activities for the most recent five years ／(capital expenditures + inventory increase + cash dividend)
(3) Cash flow reinvestment ratio = (net cash flow from operating activities －cash dividend) ／gross property, plant and equipment value + long-term investment + other non-current assets + working capital)

6. Leveraging:

(1) Operating leverage = (net operating revenue －variable operating costs and expenses) ／operating income
(2) Financial leverage = operating income ／(operating income －interest expenses)

III. Audit Committee's Report

The Board of Directors has prepared and submitted the Company's 2020 Business Report, Financial Statements and earnings distribution proposal. The above Financial Statements have been audited by KPMG and an audit report is accordingly issued . The above Business Report, Financial Statements, and earnings distribution proposal have been examined and deemed as fairly presented by Audit Committee. This Audit Report is duly submitted in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act. Submission for perusal.

To:

The 2021 Annual Shareholders' Meeting

III. Audit committee's report

TSRC Corporation

The convener of Audit Committee Robert Hung

Date: March 11, 2021

IV. Consolidated financial statements and independent auditors' report for the most recent fiscal year- Please refer to Page 88.
V. Individual financial statements and independent auditors' report for the most recent fiscal year-Please refer to Page 158.
VI. The impact of financial difficulties in the Company and its affiliates on the Company's financial situation-None.
IV. Consolidated financial statements and independent auditors' report for the most recent fiscal year
V. Individual financial statements and independent auditors' report for the most recent fiscal year
VI. The impact of financial difficulties in the Company and its affiliates on the Company's financial situation

Review and analysis of the Company's financial position and financial performance, and risk management

Unit: thousand NTD

I. Financial position:

I. Financial position
II. Financial performance

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Fiscal year 2020 2019 Amount change Percentage change
Item (％)
Current assets 12,437,636 15,365,918 (2,928,282) (19.06)
Property, plant and equipment 10,516,517 10,037,395 479,122 4.77
Intangible assets 1,012,405 1,669,885 (657,480) (39.37)
Other assets 5,301,824 5,441,725 (139,901) (2.57)
Total assets 29,268,382 32,514,923 (3,246,541) (9.98)
Current liabilities 9,893,767 9,300,535 593,232 (6.38)
Non-current liabilities 3,515,956 6,761,665 (3,245,709) (48.00)
Total liabilities 13,409,723 16,062,200 (2,652,477) (16.51)
Capital stock 8,257,099 8,257,099 0 0.00
Capital Surplus 49,531 47,140 2,391 5.07
Retained earnings 5,552,832 5,917,502 (364,670) (6.16)
Total shareholders' equity 15,858,659 16,452,723 (594,064) (3.61)
----- End of picture text -----

Major changes and impacts:

The global economic downturn from COVID-19 has resulted in delayed shipments to customers, declining operating revenue and profits, and impairment loss. The decrease in intangible assets is a result of the impairment.
The decrease in non-current liabilities is from long-term liabilities being converted into long term liabilities due within one year.

II. Financial performance: Analysis and comparison of financial performance

Unit: thousand NTD

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Fiscal year 2020 2019 Amount change Percentage change
Item (％)
Revenue 24,024,443 28,910,723 (4,886,280) (16.90)
Operating cost 21,087,174 25,533,439 (4,446,265) (17.41)
Gross profit 2,937,269 3,377,284 (440,015) (13.03)
Operating expenses 2,297,813 2,459,898 (162,085) (6.59)
Other income and expenses 182,859 167,475 15,384 9.19
Operating profit 822,315 1,084,861 (262,546) (24.20)
Non-operating revenues and gains (301,644) 169,777 (471,421) (277.67)
Net income before tax 520,671 1,254,638 (733,967) (58.50)
Less: income tax expenses 305,410 437,518 (132,108) (30.19)
Net income 215,261 817,120 (601,859) (73.66)
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Fluctuations and impacts:

The decrease in operating profit is from declining demands for TPE and non-synthetic rubber.
The decrease in non-operating income and expenses is from impairment of intangible assets.
The decrease in income tax expenses is from lower profit.

Sales volume forecast and the basis there of

Unit: metric ton

Name of product	2021	2021
	Sales volume fore cast	Basis
Synthetic rubber and elastomers	518,058	Subject to the requirement of the market and customers
Applied Materials	10,302	Subject to the requirement of the market and customers fore- cast growth
Total	528,360

III. Cash flow analysis:

Unit: metric ton

III. Cash flow analysis

	Net cash flow from	f	The impact of		Remedy for insufficient cash	Remedy for insufficient cash
Cash balance at the beginning	operating activi- ties of the year	Cash inlow (out- flow) of the year	exchange rate fluctuation on cash	Remainder (deficit) of cash	Investment plan	Financial plan
4,695,280	2,363,983	(3,507,114)	(273,686)	3,278,463	-	-

<1> Analysis of change in cash flow in the current year:

Business activities: Mainly comes from the cash flow NT$ 2,083,786 thousand from the gains and losses, cash flow NT$ 743,158 thousand, net interest expenses NT$ 80,770 thousand and paid income tax NT$ 382,191 thousand from the net changes in operating assets and liabilities.
Investments: Net cash flow from investing activities is -NT$ 1,492,809 thousand; NT$1,437,939 thousand was invested into real estate, facilities, and equipment, NT$137,346 thousand was collected from dividends, NT$135,404 thousand from disposal of financial assets at fair value, NT$254,987 thousand from addition of restricted assets, and NT$49,091 thousand from addition of other non-current assets.
Fundraising activities: the net cash flow from fundraising activities is NT$ 2,014,305 thousand, which comes mainly from the increase in short-term borrowings NT$ 867,094 thousand, the increase in long-term borrowings NT$ 446,716 thousand, and the repayment of rent principal NT$ 173,607 thousand and distribution of cash dividends NT$ 529,279 thousand.

<2> Corrective measures to be taken in response to illiquidity: None

<3> Liquidity analysis for the coming year:

Unit: thousand NTD

Cash balance at the beginning(1)	Projected cash flow from operation of the year (2)	Estimated annual net cash flow from investing and fi- nancing activities(3)	Projected remain- der (deficit) of cash (1)+(2)-(3)	Remedy for insufficient cash	Remedy for insufficient cash
				Investment plan	Financial plan
3,278,463	1,461,000	(2,439,000)	2,300,463	-	-

IV. Impact of major capital expenditures within the most recent fiscal year on financial operations.

<1> Major capital expenditure condition and source of funding

Unit: thousand NTD

IV. Impact of major capital expenditures within the most recent fiscal year on financial operations
V. The Company's reinvestment policy for the most recent fiscal year, the main reasons for profit/loss generated thereby, the plan for improving re-investment profitability, and investment plans for the coming year

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Actual of Year
intended
Item Sources of funds Amount
completion
2020 2021
date
New lines of SEBS Self-owned capital and 2020 2,570,000 204,000 220,200
loads from banks
SIS Pelletizing Self-owned capital 2021 265,000 40,100 24,200
Production lines of ad- Self-owned capital and 2020 731,600 121,000 33,000
vanced shoe materials loads from banks
R&D center Self-owned capital 2020 224,000 221,000 3,000
BD Storage Tank Self-owned capital 2022 420,000 161,000 238,000
Production Line Optimi-zation Self-owned capital 2021 16,000 0 16,000
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<2> Benefits generated: Expected to increase profitability.

VI. Analysis and assessment of risk management
V. The Company's reinvestment policy for the most recent fiscal year, the main reasons for profit/loss generated thereby, the plan for improving re-investment profitability, and investment plans for the coming year:
To maintain a leading position in the synthetic rubber market, the Company continues its strategic investment projects on specialty rubber with higher value and profit margins to sustain operating performance of the Company.
VI. Analysis and assessment of risk management
<1> The effect of the change in interest rate and exchange rate and inflation on the profit and loss of the Company and future countermeasures

Unit: thousand NTD

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Accounting for the per- Accounting for the per-
2020 Amount centage of net operating centage of net profit before
revenues (%) taxation (%)
Net interest income
(76,646) (0.3) (14.7)
(expense)
Net exchange gain (loss) 22,075 0.1 4.2
----- End of picture text -----

Interest rate change:

The interest rate risk of the Company comes from the liabilities generated from the operating demand. If there are obvious fluctuations for the expected interest rate, the Company will adopt proper financial instruments, such as long-term liabilities with fixed interest rates, adjustment in the borrowing currency or loan period, to lower the costs of funds with the most suitable borrowing portfolio.

Exchange rate fluctuation:

The Company receives and pays in foreign currencies for part of its sales and purchases. Therefore, significant changes in foreign exchange rates will have an impact on the Company's operating revenues, cost of goods sold and operating income. The Company has conducted exchange rate hedges for foreign currency assets and liabilities held and scheduled to be traded in order to reduce the impact of exchange rate fluctuations on its operations.

Inflation:

The fluctuation of raw material prices may have an impact on the operation costs of the Company. The responding measures against the risk include the mechanism of bulk procurement and long-term contracts to lower the changes in costs. As for the sale price of products, the Company will make proper adjustments in accordance with costs and market conditions to manage the impact generated from inflation on the Company.

<2> Policy on high risk and high leverage investments, loans to others, guarantee and endorsement and derivative transactions, and the main reason for profit or loss, and response measure to be taken in the future

The Company has not engaged in any high-risk, high-leveraged investments, extending loans to others, or derivatives transactions. Granting endorsements and guarantees is limited to an investee Company accounted for under the equity method. The above transactions will be performed in accordance with relevant requirements prescribed in the Company's “Procedures for the Handling Acquiring or Disposal of Assets,” “Procedures for Extending Loan to Others,” “Procedures for Granting Endorsements and Guarantees.”

<3> R&D work to be carried out in the future and future expenditures expected for R&D work
IV. Impact of major capital expenditures within the most recent fiscal year on financial operations
V. The Company's reinvestment policy for the most recent fiscal year, the main reasons for profit/loss generated thereby, the plan for improving re-investment profitability, and investment plans for the coming year
VI. Analysis and assessment of risk management

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Unit: thousand NTD
Project name Expected R&D spending
New Generation and High Performance Tire Product Development 45,000
New Differentiated Polybutadiene Products 32,000
High Value-Added Thermoplastic Elastomer (TPE) Products 194,000
High Performance Materials and Formulas for Footwear 100,000
Advanced Process Technology Development 71,000
----- End of picture text -----

<4> Effect on the Company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response.

The Company has always complied with government's laws and regulations and monitored the change in government policies and laws at home and abroad. The change in government policies and laws in the country and overseas in the recent year did not cause any effect to the Company's finance and operations.

<5> Effect of changes in technology and industry dynamics on the Company's financial and business operations, as well as the measures to be taken in response:

As the industry technology develops, The Company has invested greatly in R&D and process technology, continued to build various technology platforms, and worked with customers to jointly develop new technologies and products. Through these activities, The Company was able to enhance its technology and provide new solutions for customers, strengthening The Company position in specialty materials applications and market segments. However, synthetic rubber business can be highly influenced by the external factors such as butadiene price, natural rubber price, synthetic rubber supply-demand balance, and intensified market competition caused by new capacity additions. The Company has a sales-production-procurement (SPP) coordination mechanism in place to periodically review those external factors to control upstream cost and reduce the impact of price fluctuations to the Company. In addition, The Company has expanded its global presence and continued developing products for high-value applications to reduce the risk of being held limited to a single geographic location or industrial area, further strengthening its ability in responding to market changes.

<6> Effect of changes in the Company's corporate image on the Company's crisis management, and measures to be taken in response:

The Company continues to be fully engaged in developing energy-saving materials and creating operational success in accordance with its Company value in corporate social responsibility (CSR) and sustainable business philosophy. The Company also continues to pursue improvement and innovation in the economic, environmental and social dimensions of CSR, endeavoring to serve as a good corporate citizen and a positive force to the society. Moreover, The Company attaches great importance to supporting the society through various activities in helping disadvantaged students in local communities and other disadvantaged groups. At the same time, The Company volunteers in schools to help with interactive chemistry education activities, demonstrating The Company attention to corporate contribution and creating value to the society.

Furthermore, The Company implements policies to protect its intellectual properties, confidential information, and personal information of its customers and employees. The Company expects to integrate CSR into its core operation process, fulfill sustainable growth, and become customers' long-term partners. In corporate governance, The Company regularly holds shareholder meetings and investor conferences to increase the transparency of its financial and operations. As for crisis management, The Company has existing procedures to respond to crisis events including natural disasters and workplace accidents, reducing operational uncertainty to the minimum level.

<7> Expected benefits and risks associated with merger and acquisitions, and mitigation measures being or to be taken:

To achieve corporate transformation and increase shareholders value, The Company continues to develop and assess equity investment, strategic alliance and merger and acquisitions (M&A)opportunities. The main risks of cross-border M&A include compliance with local M&A regulations and foreign investment requirements as well as post-M&A operation management. To ensure a smooth transition from transaction to post-deal integration, the Company would consult professional advisors with local expertise to set the deal structure conforming to both local and domestic regulations, while the management team would construct a global operating model to align with the Company's cross-border M&A strategy.

<8> Expected benefits and risks associated with plant expansion and mitigation measures being or to be taken:

To achieve organic growth and strengthen business portfolio via new products and geographic expansion, the new twenty-thousand-metric-tons-per-year advanced SEBS line in Nantong, China was commercialized in 2020 and the new seven-thousand-metric-tons-per-year advanced shoe materials (ASM) plant in Vietnam is expected to commercialize in 2021.These two production facilities will strengthen the Company's competitiveness, and such capacity expansion is for operational purpose and the decision was made with careful capital expenditure planning, thus the associated risks should be limited.

VII. Other important matters

<9> Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken:

Purchase: Capacity of the suppliers of butadiene, the Company's main raw materials, is limited. In order to stabilize the source of raw materials and in consideration of the acquisition cost, the Company entered into supply agreement with major domestic suppliers to secure the supply. In the event of force majeure experienced by the domestic suppliers, the Company can still purchase raw materials from foreign suppliers. Therefore, there is no likelihood of short supply of the raw materials.
- Sales: The Company’s main customers are world’s leading companies and the Company’s long-term partners. Most of them are contract customers with strong financial health. The Company’s business divisions also have control on the amount a customer can purchase while continue conducting credit investigation. Hence, there are no major risks on the business operations.
<10> Effect upon and risk to the Company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the Company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken:

In the case of directors, managers, or shareholders holding more than 10% of the Company's common share transferring a major quantity of shares or otherwise changed hands may result in the change of management of the Company or affecting the stock price of the Company. TSRC's directors, managers, and shareholders holding more than 10% of the Company's common share are required to report any changes in their shareholding to the competent authority. As of the date of this annual report, there have been no events of TSRC's directors, manager, or shareholders holding more than 10% of the Company's common share transferring a major quantity of shares or otherwise changed hands.

<11> Effect upon and risk to Company associated with any change in governance personnel or top management, and mitigation measures being or to be taken: No
<12> Litigious and non-litigious matters involved the Company and/or any Company director, any Company supervisor, the general manager, any person with actual responsibility for the firm, any major shareholder holding a stake of greater than 10 percent, and/or any Company or companies controlled by the Company: No
<13> Other important risks, and mitigation measures being or to be taken: No

VII. Other important matters - No

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Special items to be included

Special items to be included

I. Information related to the Company's affiliates

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I. Information related to the Company's affiliates
<1> Company's Affiliate Business Report
1.Organizational chart of affiliates
TSRC Corp.
100.00% 100.00% 100.00%
19.48%
Hardison International Corpo- TSRC (Vietnam)
ration Trimurti Holding Corporation Co., Ltd.
100.00% 80.52% 100.00% 100.00%
TSRC
Triton International Dymas Corporation Polybus Corporation (Hong Kong)
Holdings Corpora- Pte Ltd. Limited
tion
100.00% 55.00% 65.44% 100.00% 100.00%
TSRC (Nantong) TSRC-UBE (Nantong) Shen Hua Chemical TSRC (Shanghai)
TSRC (Lux.) Corpora-
Industries Ltd Chemical Industrial Industrial Co.,Ltd Industries Ltd tion
Company Limited S.à r.l.
100.00%
TSRC (USA)
Investment
Corporation
100.00%
TSRC Specialty
Materials LLC
----- End of picture text -----

I. Information related to the Company's affiliates

2. Profiles of the Company's affiliates	2. Profiles of the Company's affiliates
Name of enterprise	Date of incor- poration	Address	Actual received capitals	Major business or pro- duction items
Trimurti Holding Cor- poration	March 10,1994	Palm Grove House, P.O. Box 438, Road Town, Tortola, B.V.I.	USD 86,920,000	Investment corpora- tion
Hardison International Corporation	March 11,1994	Palm Grove House, P.O. Box 438, Road Town, Tortola, B.V.I.	USD3,896,000	Investment corpora- tion
Dymas Corporation	March 19,1991	Palm Grove House, P.O. Box 438, Road Town, Tortola, B.V.I.	USD5,960,000	Investment corpora- tion
Polybus Corporation Pte Ltd.	February 25, 1995	100 Peck Seah Street #09-16 Singapore 079333	SGD105,830,000	Trading and invest- ment corporation
TSRC (Hong Kong) Limited	March 19, 2008	15/F BOC Group Life Assurance Tower 136 Des Voeux Road Central	USD103,850,000	Investment corpora- tion
Triton International Holdings Corporation	May 24, 1993	Palm Grove House, P.O. Box 438, Road Town, Tortola, B.V.I.	USD50,000	Investment corpora- tion
TSRC (Lux.) Corpora- tion S.à r.l.	July 26, 2011	39-43 avenue de la Liberté, L-1931 Lux- embourg	EUR74,870,000	Trading and invest- ment corporation
TSRC(USA) Investment Corporation	January 27, 2011	2711 Centerville Road, Suite 400, Coun- try of New Castle, Wilmington, Dela- ware, 19808	USD96,050,000	Investment corpora- tion
TSRC Specialty Mate- rials LLC	February 20, 2002	12012 Wickchester Lane, Suite 280, Houston, TX 77079	Note	Production and sale of TPE
TSRC (Shanghai) In- dustries Ltd	February 22, 2001.	No. 1406, Yu Shu Road,Hi-tech Park Songjiang Zone, Shanghai,P.R.C	USD5,500,000	Production and sale of compounding materi- als
Shen Hua Chemical Industrial Co., Ltd	March 29, 1996.	NO.1 Shen Hua Road, Nantong Eco- nomic & Technology Development Area, Nantong Jiangsu, P.R.C.	USD41,220,000	Production and sale of synthetic rubber products
TSRC (Nantong) In- dustries Ltd	September 05, 2006	No. 22 Tong Wang Road, Nantong Eco- nomic & Technological Development Area, Nantong Jiangsu, P.R.C.	USD105,125,000	Production and sale of TPE
TSRC-UBE (Nantong) Chemical Industrial Company Limited	December 06, 2006	No. 22 Tong Wang Road, Nantong Eco- nomic & Technological Development Area, Nantong Jiangsu, P.R.C.	USD40,000,000	Production and sale of butadiene rubber
TSRC (Vietnam) Co., Ltd.	October 16, 2018	8 VSIP II-A Street 31, Vietnam Singa- pore Industrial Park II-A, Tan Uyen Town, Binh Duong Province, Vietnam	USD 9,000,000	Production and processing of plastic rubber granular, Ther- moplastic Elastomer and plastic compound
Note: In 2011, TSRC (USA) Investment Corporation acquired 100% ownership of Dexco Polymers Operating Company LLC and Dexco Polymers L.P.
with USD 192,617,000 through M&A. In 2020, the organization was simplified, merged, and renamed into TSRC Specialty Materials LLC.
		78

3. Companies presumed to have a relationship of control and subordination: No

4. The industries covered by the business operated by the affiliates and mutual dealings and division of work:

The company's overall relationship with the industries covered by the company's business operations is mainly based on the production and sales of synthetic rubber and TPE, and extends to the production and sales of plastic rubber masterbatch and plastic compounds.

5. Profiles of Directors, Supervisors and Presidents of the Company's affiliates:

I. Information related to the Company's affiliates

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Shares held
Name of enterprise Job title Name of representative
Share(s) Shareholding
Director Joseph Chai - -
Trimurti Holding Corporation Director Wing-Keung Hendrick Lam - -
Director Edward Wang - -
Director Joseph Chai - -
Hardison International Corporation
Director Wing-Keung Hendrick Lam - -
Director Joseph Chai - -
Dymas Corporation
Director Wing-Keung Hendrick Lam - -
Director Joseph Chai - -
Polybus Corporation Pte Ltd. Director Wing-Keung Hendrick Lam - -
Director Edward Wang - -
Director Joseph Chai - -
TSRC (Hong Kong) Limited Director Wing-Keung Hendrick Lam - -
Director Edward Wang - -
Director Wing-Keung Hendrick Lam - -
Director Edward Wang - -
TSRC (Lux.) Corporation S.à r.l. Director Chi-Wei Hsu - -
Director David Maria - -
President Christian Kafka - -
Director Wing-Keung Hendrick Lam - -
Director Edward Wang - -
TSRC (USA) Investment Corporation
Director Chi-Wei Hsu - -
President Wing-Keung Hendrick Lam - -
Director Joseph Chai - -
Triton International Holdings Corporation
Director Edward Wang - -
Director Wing-Keung Hendrick Lam - -
Director Edward Wang - -
TSRC Specialty Materials LLC
Director Kent Kvaal - -
President Kent Kvaal - -
----- End of picture text -----

I. Information related to the Company's affiliates


Name of enterprise	Job title	Name of representative	Shares held
			Share(s)	Shareholding
TSRC (Shanghai) Industries Ltd	Chairman	Wing-Keung Hendrick Lam	-	-
	Director	Huang-Cheng Kuo	-	-
	Director	Chin-Bao Lu	-	-
	Director	Cheng-Nan Lin	-	-
	Supervisor	Edward Wang	-	-
	President	Peter Lee	-	-
Shen Hua Chemical Industrial Co., Ltd	Chairman	Kevin Liu	-	-
	Director	Edward Wang	-	-
	Director	Chi-Wei Hsu	-	-
	Director	Cheng-Nan Lin	-	-
	Director	Chao Yang Jiang	-	-
	Director	Li Shen	-	-
	Director	SATOSHI OYAMA	-	-
	President	Shian-Chung Kuo	-	-
TSRC (Nantong) Industries Ltd	Chairman	Wing-Keung Hendrick Lam	-	-
	Director	Chao Yang Jiang	-	-
	Director	Chin-Bao Lu	-	-
	Supervisor	Edward Wang	-	-
	President	Chao Yang Jiang	-	-
TSRC-UBE (Nantong) Chemical Industrial Company Limited	Chairman	Kevin Liu	-	-
	Director	Cheng-Nan Lin	-	-
	Director	Chi-Wei Hsu	-	-
	Director	Tokoro Yasunobu	-	-
	Director	SATOSHI OYAMA	-	-
	Supervisor	Yokoo Hisaaki	-	-
	President	Jian Hui Lu	-	-
TSRC (Vietnam) Co., Ltd.	Chairman	Wing-Keung Hendrick Lam	-	-
	Director	Huang-Cheng Kuo	-	-
	Director	Cheng-Nan Lin	-	-
	Supervisor	Edward Wang	-	-
	President	Huang-Cheng Kuo	-	-

6. Overview of operation of affiliates

Unit: thousand NTD

I. Information related to the Company's affiliates

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Gain/loss
Operating
Total liabil- Operating current pe- EPS after
Name of enterprise Capital Total assets Net worth income
ities revenue riod (after tax (NTD)
(loss)
tax)
Trimutri Holding Corpo- 2,474,452 12,779,698 - 12,779,698 - (22,689) 395,611 4.55
ration
Hardison International 111,076 553,628 - 553,628 - (88) 60,952 15.64
Corporation
Dymas Corporation 169,895 606,618 - 606,618 - (127) 86,045 14.44
Polybus Corporation 2,052,576 8,217,336 85,056 8,132,280 295,619 8,957 794,946 7.51
Pte Ltd.
TSRC (Hong Kong) Lim- -
2,960,556 3,436,377 31,064 3,405,313 (523) (375,292) (3.61)
ited
TSRC (Lux.) Corporation
2,624,665 3,674,534 958,717 2,715,817 2,189,995 (17,215) (459,113) (6.13)
S.à r.l.
TSRC (USA) Investment -
2,738,193 3,117,339 438,948 2,678,391 (158,082) (436,828) (4.55)
Corporation
TSRC Specialty Materi- - 2,731,705 625,488 2,106,217 3,477,870 (85,276) (77,948) NA
als LLC
Triton International - -
1,425 59,006 59,006 (64) (8,247) (164.94)
Holdings Corporation
TSRC (Shanghai) 156,794 691,228 100,918 590,310 487,594 97,156 90,662 NA
Industries Ltd
Shen Hua Chemical
1,175,100 3,474,090 600,705 2,873,385 5,695,216 665,456 497,954 NA
Industrial Co., Ltd
TSRC (Nantong) 2,996,904 6,194,429 1,477,249 4,717,180 3,809,429 455,432 316,229 NA
Industries Ltd
TSRC-UBE (Nantong)
Chemical Industrial 1,140,320 1,974,132 359,694 1,614,438 2,319,763 225,124 144,576 NA
Company Limited
TSRC (Vietnam) Co., Ltd. 256,572 667,962 470,343 197,619 - (26,806) (35,049) NA
----- End of picture text -----

Note: Spot exchange rate on the balance sheet date under the title of assets=USD1:NTD 28.508. Spot exchange rate on the balance sheet date under the title of income=USD1:NTD 29.592.

<2> Consolidated financial statements of the affiliated companies

Representation Letter

The entities that are required to be included in the combined financial statements of TSRC Corporation as of and for the year ended December 31, 2020 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards No. 10, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, TSRC Corporation does not prepare a separate set of combined financial statements.

I. Information related to the Company's affiliates

Company name: TSRC Corporation Chairman: Nita Ing Date: March 11, 2021

<3> Relation Statement

Statement

The 2020 Relation Statement of the Company (from Jan. 1, 2020 to Dec. 31, 2020) was prepared in accordance with “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” and the disclosed information was in accordance with the relevant information in the consolidated financial statement during the aforementioned period without major incompliance.

Hereby specified

I. Information related to the Company's affiliates

Company name: TSRC Corporation Chairman: Nita Ing

Date: March 11, 2021

Letter

To TSRC Corporation:

The 2020 Relation Statement prepared by TSRC Corporation was in accordance with “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises”. The relevant financial information was reviewed according to the information disclosed in the notes of the consolidated financial statements during the aforementioned period by the accountants.

According to the review results from the accountants, the 2020 Relation Statement of TSRC Corporation disclosed relevant information in accordance with “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises”. Its financial contents are consistent with the consolidated financial statement. Hence, there is no need for major modification.

I. Information related to the Company's affiliates

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 11, 2021

1.Relation between the subordinate company and the controlling company

Unit: shares; %

II. State of the Company's conducting private placements of securities

III. Holding or disposal of the Company's shares by the Company's subsidiaries IV. Other matters that require additional description

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Employees sent by controlling
Shareholdings and pledges of the
Name of the controlling companies company as directors,
supervisors or managers
Controlling Controlled Reasons
Companies
Sharehold- Shareholding Pledged
Position Name
ings ratio shares
Wei-Dar Develop- 53,708,923 6.50 24,200,000 Chairman Nita Ing
ment Corporation
Jointly control subordi-
nate company with over
Han-De half of the board Chin-Shan Chiang
Construction Co., 63,093,108 7.64 15,546,000 Director Jing-Lung Huang
Ltd. John T. Yu
Controlling company of
Mao Shi Wei-Dar Development
Corporation Corporation and Han-De
Construction Co., Ltd.
Jade Fortune Controlling company of
Enterprises Inc. Mao Shi Corporation
Controlling company of
Palmy Corporation Jade Fortune Enterprises
Inc.
Pan Asia Controlling company of
Corporation Palmy Corporation
Vanteva Controlling company of
Corporation Pan Asia Corporation
Montrion Controlling company of
Corporation Vanteva Corporation
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2.Trade correspondences

The trade correspondences of the Company with controlling company in 2020 are as follows: (1) Import and sales trading: none.
(2) Property trading: none.
(3) Financing: none.
(4) Asset leasing: none.
(5) Others: none.

3. Endorsements/guarantees: none.

II. State of the Company's private placement of marketable securities: No.
III. Holding or disposal of the Company's shares by the Company's subsidiaries: No.
IV. Other matters that require additional description: No.

Other disclosures

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Other disclosures

<1> Employees' ethics

The Company established “Official Business Operation Code of Conduct” in 2002, followed by 6 amendments, clearly requesting the employees to use the resources and assets effectively, protect the business secrets, prevent insider trading and antitrust regulations, conduct fair trade, avoid conflict of interest between the Company and the individual, eliminate the opportunity to take private interests, prohibit bribery, follow the network access regulations, and comply with parttime job rules when executing relevant internal and external business within the scope of the work assigned by the Company. A corresponding punishment system is also available.

<2> Protection measures for working environment and employees' safety

The Company established “Safety and Health Policy” to strengthen its core value of human-focused. The Company will pursue the goal of zero accidents and zero injuries through the principles of “technology”, “safety and health culture”, “responsibility” and “communication”.

The Company organizes the emergency response, disaster-prevention and safety training, annual health examination, health workshops and psychological consultation, and safety operation environmental testing on a regular basis to ensure workplace security and employee safety.

The Company has also achieved ISO 45001 and CNS 45001 requirements for certificates of Occupational Health and Safety Management System, and gained the ISO14001 environmental management system certification to duly fulfill its environmental responsibilities.

Any circumstances referred to in Paragraph 3(2) of Article 36 of the Securities and Exchange Act which might materially affect shareholders' equity or the price of the Company's securities-None

Any circumstances referred to in Paragraph 3(2) of Article 36 of the Securities and Exchange Act which might materially affect shareholders' equity or the price of the Company's securities

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Consolidated financial statement

Representation Letter

The entities that are required to be included in the combined financial statements of TSRC Corporation as of and for the year ended December 31, 2020 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 by the Financial Supervisory Commission, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, TSRC Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: TSRC Corporation Chairman: Nita Ing Date: March 11, 2021

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Independent Auditors’ Report To the Board of Directors of TSRC Corporation:

Opinion

We have audited the consolidated financial statements of TSRC Corporation and its subsidiaries ("the Group"), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards ("IFRSs"), International Accounting Standards ("IASs"), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2020 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. Furthermore, we conducted our audit of the Consolidated financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, 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 Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year end December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue recognition
Please refer to note 4(q) and note 6(u) for disclosures related to revenue recognition. Description of key audit matter:

Revenue is the key indicator used by investors and management while evaluating the Group’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 reasonable; 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.

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Inventory measurement

Please refer to note 4(h), note 5(a), and note 6(f) for disclosures related to inventory measurement. Description of key audit matter:

The inventory of the Group 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 if it is reasonable and is being implement. The procedures includes 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.

Impairment of intangible assets

Refer to note 4(o), note5(b), and note6(k) disclosures related to the impairment of intangible assets Description of key audit matter:

According to the government regulations, intangible assets including goodwill and other intangible assets arising from past acquisition of subsidiaries, are subject to impairment test annually or at the time there are indications that goodwill and other intangible asset may have been impaired. Also, the impairment assessment is measured using the future cash flow of present discount value. Because the impairment assessment involved significant uncertainty and management's judgment, we consider it as the key audit matter.

How the matter was addressed in our audit:

In relation to the key audit matter above, we have performed certain audit procedures including, among others, assessing the basis used by management for identifying the cash generating units and evaluating the judgement made by the management in measuring the recoverable amount and the historical reasonableness of the management's estimates on business forecasts; verifying the key assumptions used by management to formulate future cash flow forecasts and calculate the recoverable amount; as well as performing a sensitivity analysis of key assumptions, and reviewing whether the relevant information has been properly disclosed.

Other Matter

TSRC Corporation has additionally prepared its parent company only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion.

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

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

In preparing the consolidated financial statements, management is responsible for assessing the the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

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Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

KPMG

Taipei, Taiwan (Republic of China) March 11, 2021

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TSRC CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2020 Amount % $ 3,278,463 12 3,460 - 571,220 2 2,802,351 10 146,171 - 12,151 - 4,772,464 16 851,356 3	December 31, 2020 Amount % $ 3,278,463 12 3,460 - 571,220 2 2,802,351 10 146,171 - 12,151 - 4,772,464 16 851,356 3	December 31, 2019
		Amount %
	12 - 2 10 - - 16 3	4,695,280 14 14 - 866,347 3 2,759,617 8 136,351 - 80 - 6,414,679 20 493,550 2
12,437,636	43	15,365,918 47
952,645 1,303,787 10,516,517 1,022,972 1,566,873 1,012,405 288,429 167,118	4 4 36 3 5 3 1 1	1,137,888 4 1,098,591 3 10,037,395 31 1,331,571 4 1,581,599 5 1,669,885 5 220,439 1 71,637 -
16,830,746	57	17,149,005 53

$ 29,268,382 100 32,514,923 100

Total assets

See accompanying notes to consolidated financial statements.

Chief Accountant:Ming-Huang Chen

Chairman:Nita Ing

Manager:Joseph Chai

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		December 31, 2020	December 31, 2020	December 31, 2020	December 31,	2019
Liabilities and Equity			Amount	%	Amount	%
Current liabilities:
Short-term borrowings (note 6(l))		$	3,789,276	13	4,729,148	15
Current portion of long-term borrowings	(notes 6(l) and 8)		2,784,129	10	287,235	1
Current financial liabilities at fair value through profit or loss (note 6(b))			32,628	-	5,672	-
Accounts payable			1,643,264	6	2,392,346	7
Accounts payable －related parties (note	7)		-	-	59,418	-
Current income tax liabilities			172,787	1	121,726	-
Other payables (notes 6(m), 6(p), 6(t) and	7)		1,204,135	4	1,309,810	4
Current lease liabilities (note 6(n))			139,263	-	175,942	-
Other current liabilities			128,285	-	219,238	1
Total current liabilities			9,893,767	34	9,300,535	28
Non-Current liabilities:
Long-term bank borrowings (notes 6(l) and 8)			1,679,735	5	4,672,705	15
Other long-term borrowings (note 6(l))			349,341	1	349,287	1
Non-current provision liabilities (note 7)			31,819	-	19,227	-
Deferred income tax liabilities (note 6(q))			807,700	3	855,481	3
Non-current lease liabilities (note 6(n))			492,827	2	685,689	2
Other non-current liabilities (notes 6(l), 6(p))			154,534	1	179,276	1
Total non-current liabilities			3,515,956	12	6,761,665	22
Total liabilities			13,409,723	46	16,062,200	50
Equity attributable to shareholders of the Company (notes 6(c), 6(p), 6(r) and 6(x)):
Common stock			8,257,099	28	8,257,099	25
Capital surplus			49,531	-	47,140	-
Retained earnings
Legal reserve			4,068,862	14	3,977,141	12
Unappropriated earnings			1,483,970	5	1,940,361	6
5,552,832				19	5,917,502	18
Other equity:
Financial statement translation differences for foreign operations			(198,125)	(1)	23,383	-
Unrealized gains or losses on financial assets measured at fair value through			558,902	2	711,094	2
other comprehensive income
Gains or losses on hedging instrument			(81,119)	-	(80,526)	-
279,658				1	653,951	2
Total equity attributable to shareholders of the Company			14,139,120	48	14,875,692	45
Non-controlling interests			1,719,539	6	1,577,031	5
Total equity			15,858,659	54	16,452,723	50
Total liabilities and equity		$	29,268,382	100	32,514,923	100
	See accompanying		notes to consolidated		financial statements.
Chairman:Nita Ing	Manager:Joseph Chai		Chief Accountant:Ming-Huang Chen
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Chairman:Nita Ing

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TSRC CORPORATION AND SUBSIDIARIES Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Share)

2020 Amount $ 24,024,443 21,087,174		2019
	%	Amount	%
	100 88	28,910,723 25,533,439	100 88
2,937,269	12	3,377,284	12
949,953 1,000,809 350,678 (3,627)	4 4 2 -	976,947 1,094,304 389,840 (1,193)	3 4 1 -
2,297,813	10	2,459,898	8
182,859	1	167,475	-
822,315	3	1,084,861	4
46,923 62,290 (588,796) (123,569) 301,508	- - (2) - 1	91,875 69,992 12,334 (188,550) 184,126	- - - - -
(301,644)	(1)	169,777	-
520,671 305,410	2 1	1,254,638 437,518	4 1
215,261	1	817,120	3
(14,247) (67,869) -	- - -	(20,478) 106,662 -	- - -
(82,116)	-	86,184	-
(247,989) 48,102 -	(1) - -	(499,164) (26,045) -	(2) - -
(199,887)	(1)	(525,209)	(2)
(282,003)	(1)	(439,025)	(2)
$ (66,742)	-	378,095	1
$ (21,891) 237,152	- 1	740,316 76,804	3 -
$ 215,261	1	817,120	3
$ (326,108) 259,366	(1) 1	371,902 6,193	1 -
$ (66,742)	-	378,095	1
$ (0.03)			0.90
$ (0.03)			0.89

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TSRC CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2020 and 2019
(Expressed in Thousands of New Taiwan Dollars)
			Equity attributable to owners ofparent
				Retained earnings
					Unappropri-
	Common		Capital sur-		ated retained
		stock	plus	Legal reserve	earnings	Total
Balance at January 1, 2019	$	8,257,099	45,158	3,857,922	1,951,564	5,809,486
Appropriation and distribution of retained earnings:
Legal reserve		-	-	119,219	(119,219)	-
Cash dividends		-	-	-	(809,195)	(809,195)
Other changes in capital surplus		-	1,982	-	-	-
Net income		-	-	-	740,316	740,316
Other comprehensive income (loss)		-	-	-	(20,478)	(20,478)
Total comprehensive income (loss)		-	-	-	719,838	719,838
Disposal of investments in equity instruments at fair
value through other comprehensive income		-	-	-	197,373	197,373
Balance at December 31, 2019		8,257,099	47,140	3,977,141	1,940,361	5,917,502
Appropriation and distribution of retained earnings:
Legal reserve		-	-	91,721	(91,721)	-
Cash dividends		-	-	-	(412,855)	(412,855)
Other changes in capital surplus		-	2,391	-	-	-
Net income (loss)		-	-	-	(21,891)	(21,891)
Other comprehensive income (loss)		-	-	-	(14,247)	(14,247)
Total comprehensive income (loss)		-	-	-	(36,138)	(36,138)
Disposal of investments in equity instruments at fair
value through other comprehensive income		-	-	-	84,323	84,323
Balance at December 31, 2020	$	8,257,099	49,531	4,068,862	1,483,970	5,552,832
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TSRC CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

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	Equity attributable to owner	Equity attributable to owner	s ofparent		Non-controlling interests
	Total other equity interest			Total equity attributable to owners of parent
Financial statements translation differences for foreign operations	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Gains (losses) on hedging instru- ments	Total
465,589 - - - - (442,206)	801,805 - - - - 106,662	(68,134) - - - - (12,392)	1,199,260 - - - - (347,936)	15,311,003 - (809,195) 1,982 740,316 (368,414)	1,570,838 - - - 76,804 (70,611)
(442,206)	106,662	(12,392)	(347,936)	371,902	6,193
-	(197,373)	-	(197,373)	-	-
23,383 - - - - (221,508)	711,094 - - - - (67,869)	(80,526) - - - - (593)	653,951 - - - - (289,970)	14,875,692 - (412,855) 2,391 (21,891) (304,217)	1,577,031 - (116,858) - 237,152 22,214
(221,508)	(67,869)	(593)	(289,970)	(326,108)	259,366
-	(84,323)	-	(84,323)	-	-
(198,125)	558,902	(81,119)	279,658	14,139,120	1,719,539

See accompanying notes to consolidated financial statements.

Chief Accountant:Ming-Huang Chen

Chairman:Nita Ing

Manager:Joseph Chai

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TSRC CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Consolidated net income before tax Adjustments: Adjustments to reconcile profit and loss: Depreciation Amortization Reversal of impairment loss determined in accordance with IFRS 9 Interest expense Interest income Dividend income Share of profit of associates and joint ventures accounted for under equity method Loss on disposal of property, plant and equipment Impairment loss on non-financial assets Amortization to operating costs and inventories Gain on lease modification 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 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 Accounts payable －related parties 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	2020 $ 520,671	2019
		1,254,638
	1,018,861 137,553 (3,627) 123,569 (46,923) (62,290) (301,508) 127,553 495,745 82,962 (8,780)	996,958 154,210 (1,193) 188,550 (91,875) (69,992) (184,126) 35,325 - 84,692 -
	1,563,115	1,112,549
	(3,446) 295,127 (39,107) (26,710) 1,642,215 (122,707)	665 (307,403) 115,469 (36,889) 34,684 (155,736)
	1,745,372	(349,210)
	26,956 (749,082) (59,418) (90,728) (90,953) (54,978) 15,989	3,606 877,824 59,418 (32,121) 31,676 (49,035) 4,392
	(1,002,214)	895,760
	743,158	546,550
	2,306,273	1,659,099
	2,826,944	2,913,737

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Interest income received Interest paid Income taxes paid Net cash flow 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 property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease (increase) in other non-current assets Dividends received Increase in restricted assets Net cash used in 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 Decrease in other long-term borrowings Repayments of lease liabilities Cash dividends paid Overaging unclaimed dividends Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2020 42,732 (123,502) (382,191)
	2,363,983
	135,404 (1,437,939) 1,904 (25,446) (49,091) 137,346 (254,987)
	(1,492,809)
	36,230,155 (37,097,249) 647,039 (1,093,755) - (173,607) (529,279) 2,391
	(2,014,305)
	(273,686)
	(1,416,817) 4,695,280
	$ 3,278,463

See accompanying notes to consolidated financial statements.

Chief Accountant:Ming-Huang Chen

Chairman:Nita Ing

Manager:Joseph Chai

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TSRC CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

(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 consolidated financial statements comprise the Company and its subsidiaries (the Group) and the interests of the Group in associate companies and in jointly controlled companies. The Group 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. Please refer to note 14.

<2> Approval date and procedures of the consolidated financial statements

The consolidated financial statements were approved by to the Board of Directors and published on March 11, 2021.

<3> New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.
The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2020:
[Amendments to IFRS 3 “Definition of a Business”]
[Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”]
[Amendments to IAS 1 and IAS 8 “Definition of Material”]
[Amendments to IFRS 16 “COVID-19-Related Rent Concessions”]
(b) The impact of IFRS issued by the FSC but not yet effective

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

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

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

Content of amendment	Effective date per IASB
The amendments aim to promote consistency in applying the requirements by helping companies determine wheth- er, in the statement of balance sheet, debt and other liabil- ities 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 re- quirements for debt a company might settle by converting it into equity.	January 1, 2023

Content of amendment

Effective date per
IASB

The amendments aim to promote consistency in applying
the requirements by helping companies determine wheth-
er, in the statement of balance sheet, debt and other liabil-
ities 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 re-
quirements for debt a company might settle by converting
it into equity.

January 1, 2023

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

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

The Group 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 consolidated financial statements:

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<4> Summary of significant accounting policies

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

(a) Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the Regulations) and the IFRSs endorsed by the FSC. (b) Basis of preparation

(i) Basis of measurement

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

(ii) Functional and presentation currency

The functional currency of each individual consolidated entity is determined based on the primary economic environment. The consolidated financial statements are presented in New Taiwan dollars, which is Company's functional currency. The assets and liabilities of foreign operations are translated to the Group's functional currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated to the Group's functional currency at the average rate. Foreign currency differences are recognized in other comprehensive income. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

(c) Basis of consolidation
(i) Principles of preparation of consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. The Company controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its control over the investee. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Transactions and balances, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. The comprehensive income from subsidiaries is allocated to the Company and its non-controlling interests, even if doing so causes the non-controlling interests to have a deficit balance.

When necessary, adjustments are made to the financial statements of the subsidiaries to bring their accounting policies into line with those used by the Group.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over its subsidiaries are accounted for as equity transactions. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the shareholders of the parent.

When the Group loses control of a subsidiary, the Group derecognizes the assets (including goodwill) and liabilities of the former subsidiary at their carrying amounts from the consolidated statement and re-measures the fair value of retained interest at the date when control is lost. A gain or loss is recognized in profit or loss and is calculated as the difference between:

1) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and
2) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any noncontrolling interest.

The Group shall apply the accounting treatment to all previously recognizes amount related to its subsidiary in its comprehensive income as if the related assets and liabilities were disposed by the Group directly.

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(ii) List of the subsidiaries included in the consolidated financial statements

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----- Start of picture text -----

Percentage of owner-
ship De-
Name of investor Name of investee Scope of business scrip-
December December
tion
31, 2020 31, 2019
TSRC Trimurti Holding Cor- Investment 100.00% 100.00%
----- End of picture text -----

Name of investor	Name of investee	Scope of business	Percentage of owner- ship	Percentage of owner- ship	De- scrip- tion
			December 31, 2020	December 31, 2019
TSRC	Trimurti Holding Cor-	Investment	100.00%	100.00%
	poration
TSRC	Hardison International Corporation	Investment	100.00%	100.00%
TSRC &Hardison Inter- national Corporation	Dymas Corporation	Investment	100.00%	100.00%	(note 1)
TSRC	TSRC (Vietnam) Co., Ltd.	Production and process- ing of rubber color mas- terbatch, thermoplastic elastomer and plastic compoundproducts	100.00%	100.00%
Trimurti Holding Cor- poration	Polybus Corporation Pte Ltd.	International commerce and investment	100.00%	100.00%
Trimurti Holding Cor- poration	TSRC (Hong Kong) Lim- ited	Investment	100.00%	100.00%
TSRC (Hong Kong) Limited	TSRC (Shanghai) Indus- tries Ltd.	Production and sale of reengineering plastic, plas- tic compound metal, and plastic elasticity engineer- ing products	100.00%	100.00%
TSRC (Hong Kong) Limited	TSRC (Lux.) Corporation S.à r.l.	International commerce and investment	100.00%	100.00%
TSRC (Lux.) Corpora- tion S.à r.l.	TSRC (USA) Investment Corporation	Investment	100.00%	100.00%
TSRC (USA) Investment Corporation	TSRC Specialty Materi- als LLC	Production and sale of TPE	100.00%	100.00%	(note 2)
Polybus Corporation Pte Ltd.	Shen Hua Chemical Industrial Co,. Ltd.	Production and sale of syn- thetic rubberproducts	65.44%	65.44%
Polybus Corporation Pte Ltd.	TSRC-UBE (Nantong) Chemical Industrial Co., Ltd.	Production and sale of butadiene rubber	55.00%	55.00%
Polybus Corporation Pte Ltd.	TSRC (Nantong) Indus- tries Ltd.	Production and sale of TPE	100.00%	100.00%
Hardison International Corporation	Triton International Holdings Corporation	Investment	100.00%	100.00%

Note1： 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%.

Note2： On November 3, 2020, Dexco Polymers Operating Company LLC (Dexco LLC) merged with TSRC Specialty Materials LLC, which is the surviving company, and Dexco LLC being the dissolved entity. Therefore, the company's name was changed from Dexco Polymers L.P. to TSRC Specialty Materials LLC, wherein the investment structure was simplified. TSRC (USA) Investment Corporation directly holds 100% of TSRC Specialty Materials LLC.

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(d) Foreign currency

Transactions in foreign currencies are translated to the respective functional currencies of Group 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:

・[an investment in equity securities designated as at fair value through other comprehensive income;]
・[a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is ] effective; or
・[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.

(e) 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.
(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.

(f) 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.

(g) 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 Group 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).

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

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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 Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

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

Dividend income derived from equity investments is recognized on the date that the Group’s right to receive payment is established, which in the case of quoted securities is normally the ex-dividend date.

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 Group 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 Group 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). The Group 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 Group 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 Group 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 Group’s historical experience and informed credit assessment, as well as forward-looking 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 Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group 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 Group recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

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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 Group 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 Group’s procedures for recovery of amounts due.

5) Derecognition of financial assets

The Group 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 Group 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 Group 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 Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value. On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

5) Offsetting of financial assets and liabilities

The Group presents financial assets and liabilities on a net basis when the Group 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 Group 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 revenue recognition policies set out below.

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(iii) Derivative financial instruments

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

(h) Inventories

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.

(i) Investment in associates

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

The equity of associates is incorporated in these consolidated 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 consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Group, from the date on which significant influence commences until the date on which significant influence ceases. The Group recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in the Group's proportionate share in the investee. Gains and losses resulting from transactions between the Group and an associate are recognized only to the extent of unrelated Group’s interests in the associate.

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

The Group adopts the acquisition method for changes in ownership interests of investment in associates. Goodwill is measured at the amount of fair value transferred out subtracted by the net amounts of the identifiable assets acquired and the liabilities assumed (normally measured at fair value) on the acquisition-date. If the balance after subtraction is negative, the Group shall first reassess if all the assets acquired and the liabilities are identified correctly, then the Group can recognizes gain from bargain purchase in profit or loss.

If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Group shall continue to apply the equity method without remeasuring the retained interest.

(j) Joint arrangements

A joint venture is a joint arrangement whereby the Group has joint control of the arrangement (i.e. joint ventures) in which the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. The Group 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 Group qualifies for exemption from that Standard. Please refer to note 4(i) for the application of the equity method.

The Group 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.

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(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 owneroccupied 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 Group.

(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.

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

1)	Land improvements	8~30 years
2)	Buildings	3~60 years
3)	Machinery	3~40 years
4)	Furniture and fixtures equipment	3~8 years

Depreciation methods, useful lives, and residual values are reviewed at each reporting date. If expectations differ from the previous estimates, the changes are accounted for as a change in an accounting estimate.

(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, use 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 term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

(m) Leases
(i) Identifying a lease

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

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

At inception or on reassessment of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

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(ii) As a leasee

The Group 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.

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 Group’s incremental borrowing rate. Generally, the Group 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 Group’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 Group 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 Group 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 Group 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 Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

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(iii) As a lessor

When the Group 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 Group 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 Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group 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 Group 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 Group applies IFRS15 to allocate the consideration in the contract.

(n) Intangible assets
(i) Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses. Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Group intends to, and has sufficient resources to, complete development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets, including customer relationships, patents and trademarks, that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

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

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straightline 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:

1)	Computer software	3 years
2)	Industrial technology and know-how	10~20 years
3)	Patent	20 years
4)	Non-compete agreement	3 years
5)	Customer relationship	18 years
6)	Trademark and goodwill	Uncertain useful lives

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 Group 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.

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.

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(p) Provisions

A provision is recognized if, as a result of a past event, the Group 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. A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognizes any impairment loss on the assets associated with that contract.

(q) Revenue

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group 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 Group’s main types of revenue are explained below.

(i) Sale of goods

The Group is mainly engaged in the manufacture and sale of various types of synthetic rubber. The Group recognizes revenue when control of the products has been transferred, being 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 Group is no longer engaged with the management of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract and the acceptance provisions have lapsed, or the Group 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 Group has a right to an amount of consideration that is unconditional.
(ii) Management services

The Group 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 Group 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 Group does not adjust any of the transaction prices for the time value of money.

(r) Government grants

The Group recognizes 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 Group will comply with the conditions associated with the grant; they are then recognized in profit or loss as other income on a systematic basis over the useful life of the asset. Grants that compensate the Group 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.

(s) 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 Group’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 Group, 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 Group 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.

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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 Group 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 Group 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.

(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.

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 Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
(iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

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:
1) the same taxable entity; or
2) 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.

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

(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 weightedaverage 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.

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(v) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group's chief operating decision maker to formulate a policy of resources allocation for the segment as well as assess its performance. Each operating segment consists of standalone financial information.

<5> Significant accounting assumptions and judgments, and major sources of estimation uncertainty

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

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 consolidated 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 Group 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 Group to make subjective judgments to identify cash-generating units and estimate the recoverable amount of relevant cash-generating 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

planation of significant accounts Cash and cash equivalents
	December 31, 2020		December 31, 2019
Cash on hand	$	432		415
Checking and savings deposits		961,937		973,695
Time deposits		2,316,094		3,571,170
Commercial paper with reverse repurchase agreements		-		150,000
Cash and cash equivalents per statements of cash flow	$	3,278,463		4,695,280
The disclosure of interest rate risk and sensitivity analysis for	the Group's financial assets and		liabilities is referred to
note 6(y).

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

December 31, 2020 $ 3,460 December 31, 2020 $ 32,628	December 31, 2019
	14
	December 31, 2019 5,672

Mandatorily measured at fair value through profit or loss: Derivative instruments not used for hedging Forward contracts/Swap contracts

Financial liabilities held for trading: Derivative instruments not used for hedging Forward contracts/Swap contracts

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

December 31, 2020	December 31, 2020
Contract amount (thousand dollars) EUR USD 450/ 551 NTD USD 238,846/ 8,500 EUR USD 21,050/ 24,753	Currency EUR/USD NTD/USD EUR/USD December 31, 2019	Maturity dates
		2021.2.19~2021.2.26 2021.1.15~2021.1.22 2021.1.6~2021.2.3
Contract amount (thousand dollars) EUR NTD 230/ 7,778 NTD USD 201,938/ 6,700 EUR USD 13,600/ 15,070	Currency	Maturity dates
	EUR/NTD NTD/USD EUR/USD	2020.01.20 2020.01.02 2020.01.08

Equity investments at fair value through other comprehensive in- come: Listed stocks (domestic) Unlisted stocks (domestic and overseas) Total	December 31, 2020 $ - 952,645 $ 952,645	December 31, 2019
		115,200 1,022,688
		1,137,888

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

The Group 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 Group sold the share of Taiwan High Speed Railway Co., Ltd. at the fair value for the years ended December 31, 2020 and 2019, the fair value at that time of disposal was $114,323 thousand and $267,383 thousand and accumulated gain on disposal was $84,323 thousand and $197,373 thousand, which has been transferred from other equity to retained earnings.

(ii) For dividend income, please refer to note 6(w).
(iii) For market risk, please refer to note 6(y).
(iv) The aforementioned financial assets were not pledged as collateral.
(v) The significant financial assets at fair value through other comprehensive income denominated in foreign currency were as follows:

Foreign currency

	Foreign currency
December 31, 2020 THB December 31, 2019 THB (d) Notes and accounts receivable Notes receivable Accounts receivable Less: allowance for impairment	amount (thousand dollars) $ 205,493 349,209 $	Exchange rate	NTD 196,370 352,631 December 31, 2019 866,347 2,768,552 8,935
		0.9556 1.0098 December 31, 2020
		571,220 2,807,545 5,194

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3,373,571

3,625,964

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The Group 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 was determined as follows:

	December 31, 2020
Gross carrying amount	Weighted-average expected credit loss rate 0.09%~0.17% 2.78%~5.18% December 31, 2019	Loss allowance provi- sion 4,055 1,139 5,194
$ 3,353,019 25,746
$ 3,378,765

Gross carrying amount	Weighted-average expected credit loss rate 0.13%~0.35% 1.03%~10.25% 10.98%~21.95%	Loss allowance provi- sion 5,078 1,778 2,079 8,935
$ 3,560,459 56,937 17,503
$3,634,899

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

Balance at beginning of period Impairment loss reversed Foreign exchange gain or loss Balance at end of period	For theyears ended December 31 2020 2019 $ 8,935 10,309 (3,627) (1,193) (114) (181) $ 5,194 8,935	For theyears ended December 31 2020 2019 $ 8,935 10,309 (3,627) (1,193) (114) (181) $ 5,194 8,935
		2019
		10,309 (1,193) (181)
		8,935

The aforementioned financial assets were not pledged as collateral. For other credit risk information, please refers to note 6(y).

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.

114

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(e) Other receivables (including related parties)

Other receivables (including related parties)
Other receivables －related parties Other	December 31, 2020 $ 39,572 106,599 $ 146,171	December 31, 2019
		42,490 93,861
		136,351

As of December 31, 2020 and 2019, the Group had no other receivables that were past due. Therefore, no provisions for doubtful debt were required after the management's assessment. For other credit risk information, please refers to note 6(y).

(f) Inventories

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

Raw materials Supplies Work in progress Finished goods Merchandise Total	December 31, 2020 $ 1,719,583 9,476 297,435 2,258,866 487,104	December 31, 2019 2,188,339 108,038 315,411 3,199,202 603,689 6,414,679
	$ 4,772,464

As of December 31, 2020 and 2019, the Group 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 cost were as follows:

2020 2019 Loss on (reversal of) decline in market value of inventory $ 63,242 (16,715) Income from sale of scrap (21,162) (33,354) Loss (gain) on physical count 6,165 5,144 Unallocated production overhead 433,063 108,156 Total $ 481,308 63,231 Investments accounted for under equity method The details of the investments accounted for under the equity method were as follows: December 31, 2020 December 31, 2019 Associates $ 732,531 635,619 Joint ventures 571,256 462,972 $ 1,303,787 1,098,591 (i) Associates The details of the significant associates are as follows: Name of associates Existing relationship with the Group The main oper- ating place / reg- ister country Proportion of equity and voting right December 31, 2020 December 31, 2019 ARLANXEO-TSRC (Nantong) Chemicals Industries Co., Ltd. Strategic alliance of produc- tion and sales of NBR China 50.00% 50.00% Asia Pacific Energy Develop- ment Co., Ltd. Strategic alliance of invest- ment Cayman Isiands 37.78% 37.78%	2019	2019
	(16,715) (33,354) 5,144 108,156
	63,231
	December 31, 2019
	635,619 462,972
	1,098,591
December 31, 2020 50.00% 37.78%		December 31, 2019
		50.00% 37.78%

(g) Investments accounted for under equity method

115

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A summaries were of the financial information of the significant associate as follows:

1) Summary of financial information of ARLANXEO-TSRC (Nantong) Chemicals Industries Co., Ltd.

Current assets Non-current assets Current liabilities Non-current liabilities Equity Equity attributable to the Group Revenue Net income (loss) of continued operations Other comprehensive income (loss) Total comprehensive income (loss) Total comprehensive income attributable to the Group Beginning balance of the equity of the associate attribut- able to the Group Current total comprehensive income (loss) of the associate attributable to the Group Other Ending balance of the equity of the associate attributable to the Group	December 31, 2020 $ 478,937 668,836 (471,579) (31,085)	December 31, 2019 474,992 749,274 (738,296) (31,907) 454,063 227,031 2019
	$ 645,109
	$ 332,554
	2020 $ 1,519,119 $ 180,927 - $ 180,927 $ 90,464 2020 $ 231,111 90,464 1,712 $ 323,287
		1,860,022
		39,130 -
		39,130
		19,565
		2019
		219,835 19,565 (8,289)
		231,111

2) Summary of financial information of Asia Pacific Energy Development Co., Ltd.

Current assets Non-current assets Current liabilities Non-current liabilities Equity Equity attributable to the Group Revenue Net income of continued operations Other comprehensive income (loss) Total comprehensive income (loss) Total comprehensive income attributable to the Group Beginning balance of the equity of the associate attribut- able to the Group Current total comprehensive income of the associate attrib- utable to the Group Other Ending balance of the equity of the associate attributable to the Group	December 31, 2020 $ 625,218 1,011,338 (529,361) (10,318) $ 1,096,877 $ 414,400 2020 $ 1,180,236 $ 208,822 - $ 208,822 $ 78,893 2020 $ 404,508 78,893 (74,157) $ 409,244	December 31, 2019
		546,710 1,070,964 (521,129) (12,202)
		1,084,343
		409,665
		2019
		1,348,543
		218,853 -
		218,853
		82,683
		2019
		408,632 82,683 (86,807)
		404,508

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Joint ventures
The details of the significant joint ventures are as follows:
			Proportion			of equity and
					voting right
			The main op-
Existing relationship with the			erating place / December			December
Name of joint ventures Group			register country 31,		2020	31, 2019
Indian Synthetic Rubber Strategic alliance of production and		India		50.00%			50.00%
Private Limited sales of synthetic rubber products
A summaries were of the financial information of the significant joint ventures as follows:
1) Summary of financial information of Indian Synthetic Rubber Private Limited
			December 31, 2020		December		31, 2019
Current assets	$		1,119,957			1,515,686
Non-current assets			3,089,725			3,445,188
Current liabilities			(1,252,076)			(1,986,515)
Non-current liabilities			(1,869,712)			(2,079,302)
Equity	$		1,087,894				895,057
Equity attributable to the Group	$		543,947				447,528
			2020			2019
Revenue	$		3,728,248			4,509,180
Net income of continued operations	$		280,563				148,699
Other comprehensive income (loss)			(13,179)				(29,776)
Total comprehensive income (loss)	$		267,384				118,923
Total comprehensive income attributable to the Group	$		133,692				59,462
			2020			2019
Beginning balance of the equity of the joint venture attribut-	$		396,539				363,141
able to the Group
Current total comprehensive income (loss) of the joint ven-			133,692				59,462
ture attributable to the Group
Other			(17,607)				(26,064)
Ending balance of the equity of the joint venture attributable	$		512,624				396,539
to the Group
2) Summary of respectively not significant joint ventures recognized under the equity method was as							follows:
			December 31, 2020		December		31, 2019
Balance of not significant joint venture's equity	$		58,632				66,433
			2020			2019
Attributable to the Group:
Income (loss) from continued operations	$		(8,130)				7,528
Other comprehensive income (loss)			-			-
Total comprehensive income (loss)	$		(8,130)				7,528

(ii) Joint ventures

(iii) Collateral

As of December 31, 2020 and 2019, the Group did not pledge any collateral on investments accounted for under the equity method.

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(h) Property, plant and equipment

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

Cost: Balance at January 1, 2020 Additions Disposals Reclassification Effect on changes in exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Additions Disposals Reclassification Effect on changes in exchange rates Balance at December 31, 2019 Depreciation and impairment loss: Balance at January 1, 2020 Depreciation Disposal Reclassification Effect on changes in exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Depreciation Disposal Effect on changes in exchange rates Balance at December 31, 2019 Carrying value: December 31, 2020 January 1, 2019 December 31, 2019	Land $ 614,101 140,061 - 88,441 (774) $ 841,829 $ 614,101 - - - - $ 614,101 $ - - - - - $ - $ - - - - $ - $ 841,829 $ 614,101 $ 614,101	Land improvements 143,699 - - 1,644 (3,175) 142,168 106,999 - - 37,174 (474) 143,699 90,293 5,232 - - (1,296) 94,229 88,237 2,525 - (469) 90,293 47,939 18,762 53,406	Buildings
			4,051,022 - (6,734) 591,761 36,320
			4,672,369
			3,998,164 - (476) 148,780 (95,446)
			4,051,022
			2,314,620 137,546 (3,490) (654) 16,451
			2,464,473
			2,236,682 129,079 (241) (50,900)
			2,314,620
			2,207,896
			1,761,482
			1,736,402

The Group performed the asset impairment test by estimating the future cash flows. Impairment loss was recognized thereon as the estimated amount of future cash flows was less than the carrying value.

Please refer to note 8 for the pledged and collateral information of the property, plant and equipment.

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Machinery 20,332,811 29,676 (503,925) 2,215,069 (90,622) 21,983,009 20,282,127 18,710 (174,326) 548,816 (342,516) 20,332,811 15,614,341 745,908 (378,626) (38) (124,490) 15,857,095 15,270,710 727,445 (139,256) (244,558) 15,614,341 6,125,914 5,011,417 4,718,470	Furniture and fixtures and other equipment 244,989 92 (9,135) 13,376 (2,264) 247,058 228,273 237 (7,985) 28,392 (3,928) 244,989 174,944 17,414 (8,221) (21) (1,951) 182,165 170,641 14,688 (7,166) (3,219) 174,944 64,893 57,632 70,045	Leased assets - - - - - - 94,596 - - (94,596) - - - - - - - - - - - - - - 94,596 -	Construction in prog- ress 2,844,971 1,256,316 - (2,835,265) (37,976) 1,228,046 1,210,859 2,436,899 - (770,629) (32,158) 2,844,971 - - - - - - - - - - - 1,228,046 1,210,859 2,844,971

119

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(i) Right-of-use assets

The Group leases its assets, including land, buildings, machinery and transportation equipment. Information about leases is presented below:

Cost: Balance at January 1, 2020 Additions Write-off Lease modification Reclassify to construction in progress Amortization to operating costs and inventories Effect on changes in foreign exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Additions Lease modification Amortization to operating costs and inventories Effect on changes in exchange rates Balance at December 31, 2019 Accumulated depreciation and impairment losses: Balance at January 1, 2020 Depreciation Write-off Lease modification Effect on changes in exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Depreciation Effect on changes in exchange rates Balance at December 31, 2019 Carrying value: December 31, 2020 January 1, 2019 December 31, 2019	Land $ 663,708 - - - (94,596) - 670 $ 569,782 $ 681,888 181 - - (18,361) $ 663,708 $ 130,190 13,798 - - 1,501 $ 145,489 $ 120,302 14,397 (4,509) $ 130,190 $ 424,293 $ 561,586 $ 533,518	Building 383,925 32,150 (3,695) (143,496) - (6,850) (6,567) 255,467 396,904 3,304 - (8,163) (8,120) 383,925 68,316 70,243 (3,695) (21,425) (1,673) 111,766 - 69,862 (1,546) 68,316 143,701 396,904 315,609	Machinery 471,843 57,174 - - - (76,112) 4,809 457,714 565,489 - (491) (76,529) (16,626) 471,843 14,551 3,576 - - (903) 17,224 - 14,946 (395) 14,551 440,490 565,489 457,292	Transporta- tion equipment 34,216 2,501 - (2,561) - - (1,329) 32,827 29,829 5,024 - - (637) 34,216 9,064 10,418 - (512) (631) 18,339 - 9,291 (227) 9,064 14,488 29,829 25,152	Total
					1,553,692 91,825 (3,695) (146,057) (94,596) (82,962) (2,417)
					1,315,790
					1,674,110 8,509 (491) (84,692) (43,744)
					1,553,692
					222,121 98,035 (3,695) (21,937) (1,706)
					292,818
					120,302 108,496 (6,677)
					222,121
					1,022,972
					1,553,808
					1,331,571

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nvestment property Cost: Balance as at January 1, 2020 Additions Balance as at December 31, 2020 Balance as at January 1, 2019 Additions Balance as at December 31, 2019 Depreciation: Balance as at January 1, 2020 Depreciation Balance as at December 31, 2020 Balance as at January 1, 2019 Depreciation Balance as at December 31, 2019 Carrying value: Balance as at December 31, 2020 Balance as at January 1, 2019 Balance as at December 31, 2019 Fair value: Balance as at December 31, 2020 Balance as at January 1, 2019 Balance as at December 31, 2019	Land $ 1,073,579 - $ 1,073,579 $ 1,073,579 - $ 1,073,579 $ - - $ - $ - - $ - $ 1,073,579 $ 1,073,579 $ 1,073,579	Buildings
		741,889 -
		741,889
		741,889 -
		741,889
		233,869 14,726
		248,595
		219,144 14,725
		233,869
		493,294
		522,745
		508,020

(j) Investment property

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(v) for further information.

The fair value of investment property (as disclosed in the financial statements) is based on a valuation by an independent
appraiser. The range of yields applied to the net annual rentals to determine the fair value of the property were as follows:
Region 2020 2019
Da'an Dist., Taipei City 2.10% 2.10%

The Group has rented out a parcel of vacant land, but has decided not to treat this property as investment property because it is not the Group's intention to hold it for capital appreciation or rental income. Accordingly, the property is still recorded under property, plant and equipment.

As of December 31, 2020 and 2019, the Group did not pledge any collateral on investment properties.

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(k) Intangible assets

The cost, amortization and impairment losses of the intangible assets of the Group were as follows:

Costs: Balance at January 1, 2020 Additions Reclassification Effect of changes in exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Disposals Reclassification Effect of changes in exchange rates Balance at December 31, 2019 Amortization and impairment losses: Balance at January 1, 2020 Amortization Impairment loss Effect of changes in exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Amortization Disposals Effect of changes in exchange rates Balance at December 31, 2019 Carrying value: December 31, 2020 January 1, 2019 December 31, 2019	Industrial technology and know-how $ 995,035 25,300 - (40,036) $ 980,299 $ 1,021,038 - - (26,003) $ 995,035 $ 491,771 48,157 66,582 (19,067) $ 587,443 $ 458,237 50,065 - (16,531) $ 491,771 $ 392,856 $ 562,801 $ 503,264	Computer software 246,832 146 14,069 948 261,995 244,543 (688) 5,529 (2,552) 246,832 234,745 11,363 - 974 247,082 219,742 18,197 (688) (2,506) 234,745 14,913 24,801 12,087	Goodwill
			206,793 - - (10,976)
			195,817
			211,100 - - (4,307)
			206,793
			- - 203,263 (7,446)
			195,817
			- - - -
			-
			-
			211,100
			206,793

(i) Amortization of intangible assets

For the years ended December 31, 2020 and 2019, the amortization of intangible assets are included in the statement of comprehensive income:

Operating costs Operating expenses	For theyears ended December 31 2020 2019 $ 5,256 6,081 132,297 148,129 $ 137,553 154,210	For theyears ended December 31 2020 2019 $ 5,256 6,081 132,297 148,129 $ 137,553 154,210
		2019
		6,081 148,129
		154,210

(ii) Impairment Testing

The goodwill and other intangible assets, which were mainly from the expected production of Dexco Polymers LP Synthetic rubber products' revenue growth in the United States and Europe market amounting to USD90,569 thousand, were generated and recognized by TSRC (USA) Investment Corporation when acquiring Dexco Polymers LP and Dexco Polymers Operating LLC in April 2010. In 2020, the global economic recession caused by COVID-19, as well as the delay of customers' shipments resulted in a decline in operations and profits, and indication of impairment.

For the purposes of impairment testing, goodwill is allocated to each of the acquirer’s cash-generating units that are expected to benefit from the synergies of the combination. TSRC (USA) Investment Corporation itself is a separate cash-generating unit that cannot generate independent cash inflows; therefore, the impairment of goodwill and other intangible assets (including technical know-hows, patents, trademarks and customer relationships) are calculated at fair value after the merger of Dexco Polymers LP by TSRC (USA) Investment Corporation, minus the cost of disposal and the book value of net assets, in assessing whether impairment should be recognized.

122

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Patent and trademark 592,543 - - (31,453) 561,090 604,885 - - (12,342) 592,543 200,235 23,059 141,733 (16,666) 348,361 180,282 24,274 - (4,321) 200,235 212,729 424,603 392,308	Customer relationship 1,080,805 - - (57,368) 1,023,437 1,103,315 - - (22,510) 1,080,805 525,372 54,974 84,167 (32,983) 631,530 475,019 61,674 - (11,321) 525,372 391,907 628,296 555,433	Non-compete agreement 9,032 - - (479) 8,553 9,220 - - (188) 9,032 9,032 - - (479) 8,553 9,220 - - (188) 9,032 - - -

123

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For the abovementioned impairment testing for the year ended December 31, 2020, the fair value of intangible assets, minus disposal costs, were lower than the book value of net assets, wherein the amount of impairment loss were recognized as follows:

Goodwill $ 203,263	Know-how 66,582	Patent 95,634	Trademark 46,099	Customer relationship 84,167	Total
					495,745

The cash-generating unit used the financial data of July 31, 2020 as the measurement base date, wherein the measurement of the recoverable amount was determined using the fair value, less disposal cost, based on the market and income approach. The amount of fair value, less disposal cost, was estimated by using the discounted cash flow. The measurement of fair value uses the significant unobservable input classified into the third level. The following are the key assumptions used in estimating the recoverable amount. The values of these key assumptions represent the management's assessment of the future trends of related industries and the consideration of historical information from internal and external sources.

consideration of historical information from internal and external sources.
Discount rate Revenue growth rate	2020.7.31
	10.2% 0.9%~7%

The discount rate and the cash flow were estimated based on the industry weighted average capital cost and the five-year financial forecast approved by the management, respectively. In addition, the cash flow over five years was estimated based on different growth rates for each product over the subsequent years. The intangible assets of the Group had not been impaired as of December 31, 2019.

(iii) The Group did not pledge any collateral on intangible assets.

(l) Short-term and long-term borrowings

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

(i) Short-term bank borrowings

December 31, 2020

Range of interest rates (%) 0.40~4.35	Year of maturity Amount 2021 $3,789,276 December 31, 2019	Year of maturity Amount 2021 $3,789,276 December 31, 2019	Year of maturity Amount 2021 $3,789,276 December 31, 2019	The unused credit facilities
				17,605,576

	Year of maturity Amount 2020 $ 4,729,148 December 31, 2020			The unused credit facilities
				16,600,631

Currency USD NTD USD CNY		Range of interest rates (%) 4.38 1.09~1.25 1.53~3.82 5.08	Year of maturity	Amount
			2021~2023 2021~2025 2021~2023 2022	$ 178,458 3,073,718 783,970 427,718
				$ 4,463,864
				$ 2,784,129 1,679,735
				$ 4,463,864

(ii) Long-term borrowings

124

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Secured loans Unsecured loans Unsecured loans Unsecured loans Total Current Non-current Total		December 31, 2019	December 31, 2019
	Currency USD NTD USD CNY	Range of interest rates (%) 4.38 1.12~1.45 3.22~3.55 5.08	Year of maturity 2021~2023 2020~2023 2021~2023 2020~2022

Among the increase in long-term borrowings is the participation of the Group in the federal government's Paycheck Protection Program, of which the amount of $56,796 thousand (USD1,950 thousand) bore the interest rate of 1%. According to the loan contract, if the Group., has maintained its number of employees and salary levels, and the relevant salary, rent, utility expenses, have met all the required ratios defined in the contract for eight weeks since the date of the loan signature, wherein the full forgiveness of loan balance can be applied. As of the reporting date, the relevant forgiveness amount has been applied to the bank for review. In addition, the Company applied for the “Taiwanese business return to Taiwan investment project loan” amounting to $478,000 thousand, on December 31, 2020, of which, the Company had used the amount of $75,727 with an interest rate measured and recognized based on the difference between the market interest rate of 1.2% and the actual interest rate 0.45% recognized as government subsidy which had been recorded under deferred income.

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

	December 31, 2020	Amount $ 350,000 659
Guarantee or accep- tance institution CTBC Bank	Range of interest rates (%)
	1.206 December 31, 2019
		$ 349,341

Guarantee or accep- tance institution	Range of interest rates (%)	Amount $ 350,000 713
CTBC Bank	1.327
		$ 349,287

The Group disclosed the related risk exposure to the financial instruments in note 6(y). (iii) Collateral of loans

The Group pledged certain assets for the loans. Please refer to note 8 for additional information. (m) Current provisions (recorded as other payables)

Balance at January 1, 2020 Increase in provisions Provisions recognized Reversal of unused provisions Effect on changes in exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Increase in provisions Provisions used Reversal of unused provisions Effect on changes in exchange rates Balance at December 31, 2019	Provision for defective products
	$ 18,017 17,805 (505) (22,542) (44)
	$ 12,731
	$ 27,128 25,936 (2,211) (32,434) (402)
	$ 18,017

125

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Lease liabilities
The Group's lease liabilities were as follow:
		December 31, 2020	December 31, 2019
Current	$	139,263		175,942
Non-current	$	492,827		685,689
For the maturity analysis, please refer to note 6(y).
The amounts recognized in profit or loss were as follows:
		2020	2019
Interest on lease liabilities	$	6,775		10,400
Expenses relating to short-term leases	$	17,264		3,012
Expenses relating to leases of low-value assets, excluding	$	18,499		24,763
short-term leases of low-value assets
The amounts recognized in the statement of cash flows for the Group were as follows:
		2020	2019
Total cash outflow for leases	$	216,145		233,346
Operating leases
The Group leases out its investment property. The Group 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 are as follows:
		December 31, 2020	December 31, 2019
Less than one year	$	68,159		55,154
One to two years		67,739		53,406
Two to three years		60,905		52,805
Three to four years		48,363		48,362
Four to five years		13,710		35,293
More than five years		63,568		9,953
Total undiscounted lease payments	$	322,444		254,973
In 2020 and 2019, the rental income from investment property amounted to 64,663 thousand and 33,529				thousand,
respectively.
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:
		December 31, 2020	December 31, 2019
The present value of the defined benefit obligations	$	606,090		615,154
Fair value of plan assets		(535,923)		(504,256)
The net defined benefit liability	$	70,167		110,898
The Group 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.
126

(n) Lease liabilities

(o) Operating leases

(p) Employee benefits

==> picture [397 x 842] intentionally omitted <==

1) Composition of plan assets

The Group 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 the two-year time deposits with the interest rates offered by local banks.

The Group's Bank of Taiwan labor pension reserve account balance amounted to $535,923 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 Labor.

2) Movements in present value of defined benefit plan obligation

The movements in present value of the Group's defined benefit plan obligation for the years ended December 31, 2020 and 2019 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 ex- pense) －Due to changes in financial assumption of actuarial gains or losses Benefits paid by the plan Defined benefit obligation as of 31 December	2020 $ 615,154 11,598 15,816 14,247 (50,725) $ 606,090	2019
		607,256 12,664 16,393 20,478 (41,637)
		615,154

3) Movements in fair value of defined benefit plan assets

The movements in the fair value of the defined benefit plan assets for the years ended December 31, 2020 and 2019, 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 ex- pense) Contributions made Benefits paid by the plan Fair value of plan assets as of December 31	2020 $ 504,256 4,867 15,816 61,709 (50,725) $ 535,923	2019
		467,801 5,111 16,393 56,588 (41,637)
		504,256

4) Expenses recognized in profit or loss

The expenses recognized on profit or loss for the years ended December 31, 2020 and 2019 were as follows:

	2020	2019
Current service cost	$ 5,645		6,009
Net interest on the defined benefit liability (asset)	1,086		1,544
	$ 6,731		7,553
he Group recognized pension costs of the defined benefit plans in profit or loss as follows:
	2020	2019
Operating costs	$ 4,008		4,573
Operating expenses	2,328		2,383
Other income and expenses	290		367
Other receivables	105		230
	$ 6,731		7,553

The Group recognized pension costs of the defined benefit plans in profit or loss as follows:

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5) Actuarial assumptions

The following are the Group's principal actuarial assumptions:

Discount rate Future salary increases rate	December 31, 2020 0.625% 1.500%	December 31, 2019
		1.000% 1.500%

The Group expects to make contributions of $17,323 thousand to the defined benefit plans in the next year starting from the reporting date of 2020.

The weighted average duration of the defined benefit plan is 10.11 years.

6) Sensitivity analysis

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

As of December 31, 2020 and 2019, the effects of the present value of the defined benefit obligation arising from changes in principal actuarial assumptions were as follows:

December 31, 2020 Discount rate Future salary increase rate December 31, 2019 Discount rate Future salary increase rate	The impact of defined benefit obligation	The impact of defined benefit obligation
	Increase 0.25% $ (11,785) 11,608 (12,334) 12,266	Decrease 0.25%
		12,142 (11,330) 12,751 (11,932)

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 is the same as those of the prior year.

(ii) Defined contribution plans

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

The Group has implemented the pension costs under the defined contribution plan and allocates retirement funds in according to the local regulation, and recognized the retirement funds in each period as current expenses.

The Group's pension costs under the defined contribution plan were $47,436 thousand and $108,450 thousand for the years 2020 and 2019, respectively. Payments were made to the Bureau of Labor Insurance and to local government for the overseas subsidiaries.

(iii) Short-term employee benefit liabilities

December 31, 2020 $ 48,138	December 31, 2019
	44,926

Compensated absence liabilities

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(q) Income tax

(i) Income tax expenses

The amounts of the Group's income tax for the years ended December 31, 2020 and 2019 were as follows:

Current income tax expense Current period Adjustment for prior periods Deferred tax expense (benefit) Origination and reversal of temporary differences Income tax expenses of continued operations	2020 $ 412,974 8,207 421,181 (115,771) $ 305,410	2019
		254,069 (230)
		253,839
		183,679
		437,518

Reconciliations of the Group's income tax expense (benefit) and the profit before tax for 2020 and 2019 were as follows:

ollows:
		2020	2019
Income before tax	$	520,671	1,254,638
Income tax calculated on pretax accounting income at statuto-	$	104,134	250,928
ry rate
Effect of tax rates in foreign jurisdiction		50,257	39,149
Dividend income		(10,516)	(11,625)
Adjustment for prior periods		8,207	(230)
Foreign investment income		75,088	125,766
R&D tax credits utilized		(17,824)	(9,000)
Surtax on unappropriated earnings		-	7,105
Withholding tax of revenue from overseas		41,840	33,630
Change in unrecognized temporary differences		14,419	1,883
Regulations Governing the Utilization and Taxation of Repatri-		34,589	-
ated offshore Funds
Others		5,216	(88)
Total	$	305,410	437,518
Recognized deferred tax assets and liabilities
1) Unrecognized deferred tax assets
The Group deferred tax assets have not been recognized in respect of the following items:
		December 31, 2020	December 31, 2019
Tax effect of deductible temporary differences	$	-	9,000
The carryforward of unused tax losses		83,695	60,276
	$	83,695	69,276

(ii) Recognized deferred tax assets and liabilities

1) Unrecognized deferred tax assets

Under the R.O.C. Income Tax Act, tax losses can be carried forward for ten years to offset taxable income after permitted by domestic tax authority. 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 Group can utilize the benefits therefrom.

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As of December 31, 2020, the amount of tax losses not yet recognized as deferred tax assets is as follows:

Year	Amount $ 32,583 51,112	Year of expiration
2016 2018		2026 2028
	$ 83,695

2) Recognized deferred income tax assets and liabilities

Changes in the amount of deferred income tax assets and liabilities for 2020 and 2019 were as follows: Deferred tax assets:

Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020 Balance at January 1, 2019 Recognized in profit or loss Balance at December 31, 2019	Defined benefit plans $ 13,731 (11,013) $ 2,718 $ 23,520 (9,789) $ 13,731	Allowance for inventory valuation 50,752 12,580 63,332 53,214 (2,462) 50,752	Loss carryforward 53,522 36,860 90,382 57,394 (3,872) 53,522	Others 102,434 29,563 131,997 110,191 (7,757) 102,434	Total
					220,439 67,990
					288,429
					244,319 (23,880)
					220,439

Deferred tax liabilities:

Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020 Balance at January 1, 2019 Recognized in profit or loss Balance at December 31, 2019	Foreign invest- ment income accounted for under equity method $ 586,688 55,408 $ 642,096 $ 427,475 159,213 $ 586,688	Depreciation difference between financial and tax report- ing 69,408 (15,992) 53,416 95,256 (25,848) 69,408	Land value increment tax 56,683 - 56,683 56,683 - 56,683	Others	Total 855,481 (47,781) 807,700 695,682 159,799 855,481
				142,702 (87,197)
				55,505
				116,268 26,434
				142,702

(iii) Assessment of tax

The tax returns of the Company have been assessed by the tax authorities through 2018.

(r) 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, 2020 and 2019, 825,709,978 shares of ordinary were issued.

(ii) Additional paid-in capital

The components of additional paid-in capital as of December 31, 2020 and 2019, were as follows:

Share premium Overaging unclaimed dividends	December 31, 2020 $ 849 48,682 $ 49,531	December 31, 2019
		849 46,291
		47,140

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 Issuer, the amount of capital surplus to increase share capital shall not exceed 10 percent of the actual share capital amount.

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(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 statements 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. In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, 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.

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, may draw up the allocation of the balance remaining as bonuses, dividends, retained earnings or otherwise. The allocation shall be proposed by the Board of Directors and shall be resolved at the shareholders' general meeting. However, dividends issued in cash may be passed by the Board of Directors with more than twothirds of the directors’ attendance, and be resolved by more than half of the directors, then be reported to the shareholders' general meeting.

In accordance with the original Company's articles of incorporation, when allocating the earnings for each fiscal year, the Company may, after offsetting losses from previous years, after paying taxes as per the law, and after 10% of the statutory surplus reserve is raised before the special surplus reserve is set up or turned over under the Securities and Exchange Act, the balances, when added to the unallocated surplus in the preceding period, are thereafter available for distribution and a surplus allocation proposal is submitted. 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 drawn up by the Board of Directors and shall be submitted to the shareholders' meeting for resolution.

The distribution of 2019 and 2018 earnings as dividends to stockholders that were approved by the Company's shareholders' general meetings on June 19, 2020 and June 6, 2019, respectively, were as follows:

Dividends distributed to ordinary stockholders: Cash (earnings)	2019 Amount per share (NTD) Total Amount $ 0.50 412,855	2018	2018
	Amount per share (NTD) $ 0.50	Amount per share (NTD) 0.98	Total Amount
			809,195

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On March 11, 2021, the Company's Board of Directors resolved to appropriate the 2020 earnings. These earnings were appropriated as follows:

Dividends distributed to common shareholders: Cash (iv) Other equities (net for tax) Foreign exchange differences arising from foreign oper- ations Balance as of January 1, 2020 $ 23,383 Foreign exchange differences arising from foreign operations (270,203) Exchange differences on translation financial state- ments from investments accounted for using equity method 48,695 Unrealized gains or losses from financial assets measured at fair value through other compre- hensive income - Disposal of investments in equity instruments des- ignated at fair value through other comprehen- sive income - Share of cash flow hedges of associates and joint ventures accounted for under equity method - Balance as of December 31, 2020 $ (198,125) Balance as of January 1, 2019 $ 465,589 Foreign exchange differences arising from foreign operations (428,553) Exchange differences on translation financial state- ments from investments accounted for using equity method (13,653) Unrealized gains or losses from financial assets measured at fair value through other comprehensive income - Disposal of investments in equity instruments des- ignated at fair value through other comprehen- sive income - Share of cash flow hedges of associates and joint ventures accounted for under equity method - Balance as of December 31, 2019 $ 23,383	2020 Amount per share (NT dollars) Total amount $ 0.36 297,256 Unrealized gains (losses) from finan- cial assets measured at fair val- ue through other com- prehensive income Gains (losses) on hedging instruments Total 711,094 (80,526) 653,951 - - (270,203) - - 48,695 (67,869) - (67,869) (84,323) - (84,323) - (593) (593) 558,902 (81,119) 279,658 801,805 (68,134) 1,199,260 - - (428,553) - - (13,653) 106,662 - 106,662 (197,373) - (197,373) - (12,392) (12,392) 711,094 (80,526) 653,951	2020	2020	2020
			Total amount
				297,256
				Total
				653,951 (270,203) 48,695 (67,869) (84,323) (593)
				279,658
				1,199,260 (428,553) (13,653) 106,662 (197,373) (12,392)
				653,951

(s) Earnings (losses) per share

The calculation of the Company's basic earnings (losses) per share and diluted earnings (losses) per share for the years ended December 31, 2020 and 2019 were asfollows:

(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 (NT Dollars)	2020 $ (21,891) 825,710 $ (0.03)	2019
		740,316
		825,710
		0.90

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Diluted earnings (losses) per share Net income (loss) attributable to common shareholders of the Company (diluted) Weighted-average number of common shares (basic) (in thou- sands) Impact on potential common shares Effect of employees' compensation (in thousands) Weighted-average number of shares outstanding (diluted) (in thousands) Diluted earnings (losses) per share (NT Dollars)	2020 $ (21,891) 825,710 - 825,710 $ (0.03)

(ii) Diluted earnings (losses) per share

(t) 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 employee 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, 2020 and 2019, the Company estimated its employees' compensation were $40,750 thousand and $53,614 thousand, respectively, and the estimated amounts of directors' remuneration were $616 thousand and $9,813 thousand, respectively. The estimated amounts mentioned above were according to the Company's 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. Expect the abovementioned remuneration of directors in 2019, the Board of Directors would consider the company’s operating performance and regional market standards, and Board of Directors decide to distribute $4,907 thousand, the difference from the previous provision was recognized under 2020 the profit and losses. There is no difference between the amount distributed by the Board of Directors and the estimated amount in the company's individual financial reports for the year of 2020 and 2019.

(u) Revenue from contracts with customers

Primary geographical markets: Asia Americas Europe Others Major product lines: Synthetic rubber / elastomers Applied materials Others Primary geographical markets: Asia Americas Europe Others Major product lines: Synthetic rubber / elastomers Applied materials Others	Synthetic rubber $ 16,586,438 3,475,775 2,515,967 595,711 $ 23,173,891 $ 22,355,033 - 818,858 $ 23,173,891 Synthetic rubber $ 18,949,295 4,163,464 3,111,948 883,594 $ 27,108,301 $ 26,047,706 - 1,060,595 $ 27,108,301	2020
		Non-synthetic rubber 843,653 6,870 29 - 850,552 - 837,387 13,165 850,552 2019	Total
			17,430,091 3,482,645 2,515,996 595,711
			24,024,443
			22,355,033 837,387 832,023
			24,024,443

		Non-synthetic rubber 1,788,382 14,040 - - 1,802,422 - 1,800,833 1,589 1,802,422	Total
			20,737,677 4,177,504 3,111,948 883,594
			28,910,723
			26,047,706 1,800,833 1,062,184
			28,910,723

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Other income and expenses
			2020	2019
Rental income		$	67,073	36,046
Royalty income			82,656	103,930
Net service income			24,211	10,185
Depreciation of investment properties			(14,726)	(14,725)
Net other income			23,645	32,039
Other income and expenses		$	182,859	167,475
Non-operating income and expenses
(i) Interest income
			2020	2019
Interest income from bank deposits		$	46,923	91,875
(ii) Other gains
			2020	2019
Dividend income		$	62,290	69,992
(iii) Other gains and losses
			2020	2019
Loss on disposal of property, plant and equipment		$	(127,553)	(35,325)
Foreign exchange gain (loss), net			60,615	15,977
Gains (losses) on financial assets (liabilities) at fair value through			(38,540)	29,546
profit or loss
Impairment loss on intangible assets			(495,745)	-
Other gains and losses			12,427	2,136
Other gains and losses, net		$	(588,796)	12,334
(iv) Finance costs
			2020	2019
Interest expense		$	123,569	188,550
eclassification of components of other comprehensive income
he changes in components of other comprehensive income were as follows:
			2020	2019
Effective portion of cash flow hedges:
Net gains (losses) for current year		$	(29,380)	(14,112)
Less: Adjustment of reclassification included in profit or loss			(28,787)	(1,720)
Net gains (losses) recognized in other comprehensive income		$	(593)	(12,392)
inancial instruments
(i) Credit risk
1) Credit risk exposure
The maximum credit risk exposure of the Group's financial		assets is	equal to their carrying	amount. As of
December 31, 2020 and 2019, the maximum credit risk exposure amounted to $7,837,492				thousand, and
$9,619,808 thousand, respectively.
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(v) Other income and expenses

(w) Non-operating income and expenses

(x) Reclassification of components of other comprehensive income

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

(y) Financial instruments

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2) Concentration of credit risk

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

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(ii) Liquidity risk

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

December 31, 2020 Non-derivative financial liabilities Short-term borrowings Accounts payable Other payables Long-term borrowings (including other long-term borrowings and current portion) Lease liabilities Deposits received Derivative financial liabilities Other swap contracts/other forward contracts: Outflow December 31, 2019 Non-derivative financial liabilities Short-term borrowings Accounts payable (including related parties) Other payables Long-term borrowings (including other long-term borrowings and current portion) Lease liabilities Deposits received Derivative financial liabilities Other swap contracts/other forward contracts: Outflow	Contractual cash flows $ 3,795,442 1,643,264 1,204,135 4,910,796 653,406 62,118 32,628 $ 12,301,789 $ 4,745,864 2,451,764 1,309,810 5,511,811 920,136 54,206 5,672 $ 14,999,263	Within 6 months
		3,675,788 1,643,264 1,204,135 1,239,315 71,505 - 32,628
		7,866,635
		4,468,550 2,451,764 1,309,810 188,214 91,830 - 5,672
		8,515,840

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

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6-12 months 119,654 - - 1,593,226 71,505 - - 1,784,385 277,314 - - 232,521 91,830 - - 601,665	1-2 years - - - 1,084,767 120,293 46,461 - 1,251,521 - - - 3,195,864 158,655 41,670 - 3,396,189	2-5 years - - - 993,488 191,367 12,536 - 1,197,391 - - - 1,895,212 310,188 12,536 - 2,217,936

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(iii) Currency risk

1) Risk exposure

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

Foreign currency

	Foreign currency
December 31, 2020 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR JPY December 31, 2019 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR JPY	(thousand dollars) $ 76,191 $ 8,197 $ 36,134 $ 22,490 $ 84,000 $ 6,212 $ 27,409 $ 56,148 $ 13,368 $ 89,008 $ 19,094 $ 55,402 $ 10,712 $ 66,081	Exchange rate 28.5080 35.0563 0.2765 4.3813 28.5080 35.0563 0.2765 30.1060 33.7488 0.2771 4.3231 30.1060 33.7488 0.2771	NTD
			2,172,053 287,356 9,991 98,535 2,394,672 217,770 7,579 1,690,392 451,154 24,664 82,545 1,667,933 361,517 18,311

2) Sensitivity analysis

The Group's exposure to foreign currency risk arose from cash and cash equivalents, accounts and other receivables, borrowings, and accounts and other payables that were denominated in foreign currencies. If the NTD against the forgin currencies had depreciated / appreciated by 1%, the Group's net income before tax would have decreased / increased by $(521) thousand and $2,010 thousand for the years ended December 31, 2020 and 2019, 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

Since the Group has many kinds of functional currencies, the information on foreign exchange gain (loss) on monetary items is disclosed by gross amount. For the years ended December 31, 2020 and 2019, foreign exchange gain (including realized and unrealized) amounting to $22,075 thousand and $45,523 thousand, respectively.

(iv) Interest rate risk analysis

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

The following sensitivity analysis is based on the risk exposure to interest rates of the non-derivative financial instruments at 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 Group's net income before tax would have decreased / increased by $86,025 thousand and $100,384 thousand for the years ended December 31, 2020 and 2019, respectively, with all other variable factors remaining constant. This is mainly due to the Group's borrowing at floating rates.

(v) Fair value

1) Hierarchy and fair value of financial instruments

Except for the followings, carrying amount of the Group's financial assets and liabilities are valuated approximately to their fair value. No additional fair value disclosure is required in accordance to the regulations.

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December 31, 2020	December 31, 2020	December 31, 2020
	Fair value
Level 1 Level 2 Level 3 - 3,460 - - - 952,645 - 3,460 952,645 - 32,628 - December 31, 2019
	Fair value
Level 1 - 115,200 - 115,200 115,200 -	Level 2 14 - - - 14 5,672	Level 3 - - 1,022,688 1,022,688 1,022,688 -

2) Valuation techniques and assumptions used in fair value determination

If the financial instruments held by the Group 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 Group 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. The liquidity discount is a significant unobservable input in valuing equity investment. 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, 2020 Total gains: Recognized in other comprehensive income Balance at December 31, 2020 Balance at January 1, 2019 Total gains: Recognized in other comprehensive income Balance at December 31, 2019	Unquoted equity instruments $ 1,022,688 (70,043)
	$ 952,645
	$ 994,175 28,513
	$ 1,022,688

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4) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehen- sive income-eq- uity investments without an active market	Valuation tech- nique Comparative listed company	Significant unobservable inputs ・Multipliers of price-to-earnings ratios as of December 31, 2020 and Decem- ber 31, 2019 was all 15.62~17.8 and 15.79~17.41, respectively ・Multipliers of equity ratios as of De- cember 31, 2020 and December 31, 2019 were 1.38 and 1.17, respectively ・Market liquidity discount rate as of December 31, 2020 and December 31, 2019 was all 20%	Inter-relationship be- tween significant unob- servable inputs and fair value measurement
			・the estimated fair val- ue would have been higher if the price-to- earnings and market- to-book ratios would be higher. ・the estimated fair val- ue would have been higher if the market liquidity discount would be lower.

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, 2020 Financial assets fair value through other comprehensive income Equity investments without an active market December 31, 2019 Financial assets fair value through other comprehensive income Equity investments without an active market	Input Liquidity discount at 20% Liquidity discount at 20%	Move up or down 1% 1%	Other comprehensive income	Other comprehensive income
			Favorable $ 11,912 $ 12,809	Unfavorable
				(11,912) (12,809)

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. (z) Financial risk management

(i) Overview

The Group 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 Group'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.

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(ii) Risk management framework

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

(iii) Credit risk

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

1) Accounts receivable and Notes Receivable

The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the demographics of the Group'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, The Group’s Accounts Receivable and Notes Receivable are mainly due from customers in China, accounting 26% of the total amount of the receivables as of December 31, 2020, and 2019, respectively. The sales department and the finance department of the Group has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Group's standard payment and delivery terms and conditions are offered. The Group'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 Group's benchmark creditworthiness may transact with the Group only on a prepayment basis.

Goods are sold subject to a retention of title clause so that in the event of non-payment, the Group may have a secured claim. The Group otherwise does not require collateral in respect of trade and other receivables. The Group 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 Group's finance department. Since those who transact with the Group 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 long-term credit rating. Hence, there is no significant credit risk.

3) Guarantees

The Group'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 by the Group as of December 31, 2020 and 2019, are disclosed in note 7 "Related-party Transactions."

(iv) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group'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 Group's reputation.

Generally, the Group ensures that it maintains sufficient cash and unused loans to meet expected operational expenses, including the fulfillment of financial obligations. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.

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

Foreign exchange gains and losses resulting from account and trade receivables held by the Group 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 Group'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 Group's operating cash flow, primarily consisting of NTD, EUR, USD, JPY, and CNY.

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

The Group does not hedge against investments of related parties.

2) Interest rate risk

The interest rates of the Group'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 Group's finance department monitors and measures potential changes in market conditions, entering into interest rate swaps to achieve a fixed interest rate on the Group's loans.

3) Other market price risk
- The Group does not enter into any commodity contracts other than to meet the Group's expected usage and sales requirements; such contracts are not settled on a net basis.
(aa) Capital management

The Group’s goal of capital management is to ensure the Group'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 Group'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 Group will adjust its capital structure by paying dividends, issuing new stock, purchasing treasury stock, increasing or decreasing loans, and issuing or purchasing bonds.

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

Total liabilities Total equity Total assets Debts ratio	December 31, 2020 $ 13,409,723 15,858,659 $ 29,268,382 46%	December 31, 2019
		16,062,200 16,452,723
		32,514,923
		49%

As of December 31, 2020, there were no material changes in the Group's debts ratio.

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

The Group did not have non-cash flow transactions on investing and financing activities for the years ended December 31, 2020 and 2019.

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(ac) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities arising from financing activities for the years ended December 31, 2020 and 2019 was as follows:

Non-cash changes Foreign exchange movement Amortization of commer- cial paper discount Others (49,360) - - - 54 - (72,778) - - (2,479) 6,775 (60,230) (124,617) 6,829 (60,230) Non-cash changes Foreign exchange movement Amortization of commer- cial paper discount Others (40,390) - - - 5,257 - (70,259) - - (22,363) 10,400 7,601 (133,012) 15,657 7,601	Non-cash changes Foreign exchange movement Amortization of commer- cial paper discount Others (49,360) - - - 54 - (72,778) - - (2,479) 6,775 (60,230) (124,617) 6,829 (60,230) Non-cash changes Foreign exchange movement Amortization of commer- cial paper discount Others (40,390) - - - 5,257 - (70,259) - - (22,363) 10,400 7,601 (133,012) 15,657 7,601	December 31, 2020
		4,463,864 349,341 3,789,276 632,090
		9,234,571
		December 31, 2019
Foreign exchange movement (40,390) - (70,259) (22,363) (133,012)	Amortization of commer- cial paper discount - 5,257 - 10,400 15,657
		4,959,940 349,287 4,729,148 861,631
		10,900,006

<7> Related-party transactions

(a) Parent company and ultimate controlling party

Montrion Corporation is the ultimate controlling party of the Group, which indirectly holds 14.14% of the company's outstanding common shares through Han-De Construction Co., Ltd, and Wei-Dar Development Co., Ltd. and controls more than half of board of directors members.

(b) Names and relationship with related parties

In this consolidated financial report, the related parties having transactions with the Group are listed as below: Name of related party Relationship with the Group Indian Synthetic Rubber Private Limited The Group recognized joint venture under equity method

The Group recognized joint venture under equity method

ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. The Group recognized associates under equity method Asia Pacific Energy Development Co., Ltd. 〃 Nantong Qix Storage Co., Ltd. The Group recognized joint venture under equity method Marubeni Corporation Corporate director of one consolidated entity UBE Industrial Ltd. 〃 Metropolis Property Management Corporation Other related parties of the Group Continental Engineering Corporation 〃 WFV Corporation 〃 UBE (Shanghai) Ltd. Subsidiary of corporate director of one consolidated entity (c) Significant transactions with related parties (i) Operating revenue The amounts of significant sales by the Group to related parties were as follows: 2020 2019 Associates $ 5,805 33,669

(c) Significant transactions with related parties
(i) Operating revenue

The sales price with related parties is not significantly different from normal transactions, and the payment terms were about one month.

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(ii) Purchases

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

follows:
2020 $ 102,188	2019
	369,341

Other related parties

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. (iii) Service income and expenses

The Group provided and received warehouse, management, technologies and IT services to associates, joint ventures, and other related parties. The amounts recognized as revenue other income and expenses were as follows:

2020 2019 Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. $ 143,637 149,375 Joint ventures Indian Synthetic Rubber Private Limited 42,370 53,466 Others 2,808 3,614 Other related parties Others (14,137) (12,971) $ 174,678 193,484 (iv) Lease －Rent income 2020 2019 Other related parties $ 4,472 4,445 The amount of rent is based on neighboring rent, and the rental is collected monthly from other related parties. (v) Receivables from related parties The details of the Group's receivables from related parties were as follows: Account Type of related parties December 31, 2020 December 31, 2019 Other receiv- ables Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. $ 22,154 24,403 Other receiv- ables Joint ventures Indian Synthetic Rubber Private Limited 17,183 17,541 Others 235 546 $ 39,572 42,490 (vi) Payables to related parties The details of the Group's payables to related parties were as follows: Account Type of relatedparties December 31, 2020 December 31, 2019 Accounts payable Other related parties $ - 59,418 Other payables Other related parties 1,226 910 $ 1,226 60,328	2020 $ 143,637 42,370 2,808 (14,137) $ 174,678 2020 $ 4,472	2019
		149,375 53,466 3,614 (12,971)
		193,484
		2019
		4,445
		59,418 910
		60,328

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(vii) Guarantees

The credit limits of the guarantees the Group provided on the bank loans of related parties were as follows:

		December 31, 2020	December 31, 2019
Associates
ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.	$	1,577,416	1,113,557
Joint ventures
Indian Synthetic Rubber Private Limited		949,316	1,431,541
	$	2,526,732	2,545,098
Accordingly, the amounts of the Group recognized provision	liabilities and investments		accounted for under th
quity method were as follows:
		December 31, 2020	December 31, 2019
Associates
ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.	$	733	4,080
Joint ventures
Indian Synthetic Rubber Private Limited		31,086	15,147
	$	31,819	19,227

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

(d) Key management personnel transactions

The compensation of the key management personnel comprised the following:

			2020	2019
Short-term employee benefits		$	117,037	111,402
Post-employment benefits			1,186	1,498
		$	118,223	112,900
Pledged assets
The carrying values of pledged assets were as	follows:
Pledged assets	Object		December 31, 2020	December 31, 2019
Restricted savings deposits (recorded as	Bank guarantee for elec-	$	1,173	1,233
other non-current assets)	tricity usage
Machinery etc. (recorded as property, plant	Guarantee for long-term		269,284	317,610
and equipment)	borrowings
		$	270,457	318,843
Commitments and contingencies
(a) The unused letters of credit outstanding
			December 31, 2020	December 31, 2019
The Group's unused letters of credit outstanding		$	1,284,162	1,898,743
(b) Total amounts and the cumulative payments of group’s signed construction and design				contracts with several
vendors as follows:
			December 31, 2020	December 31, 2019
The total amounts of construction in progress contracts		$	2,851,593	2,222,624
Cumulative payments		$	2,342,971	1,665,915

<8> Pledged assets

<9> Commitments and contingencies

<10> Losses Due to Major Disasters: None.

<11> Subsequent Events

On March, 11 2021, the Group intends to dispose its land and building located in Renwu District, Kaohsiung, to a non related party at a price of $1,220,000 thousands in order to activate its assets, with an estimated disposed propertied benefit of approximately $882,000 thousand.

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<12> Other

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

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----- Start of picture text -----

By function Year ended December 31, 2020 Year ended December 31, 2019
Operating Operating Operating Operating
Total Total
By nature costs expenses costs expenses
Employee benefits
Salary 777,728 625,709 1,403,437 762,770 646,758 1,409,528
Labor and health insurance 83,687 56,970 140,657 88,290 59,425 147,715
Pension 29,323 24,844 54,167 76,394 39,609 116,003
Others (note 1) 152,379 78,107 230,486 153,050 118,161 271,211
Depreciation (note 2) 814,422 189,713 1,004,135 811,953 170,280 982,233
Amortization 5,256 132,297 137,553 6,081 148,129 154,210
----- End of picture text -----

Note1： Other personnel expenses included meals, employee welfare, training expenses, employees' bonus and director's remuneration. Note2： Depreciation expenses for investment property recognized under other income and expenses amounting to $14,726 thousand and $14,725 thousand for the years ended December 31, 2020 and 2019 were excluded.

<13> Other disclosures

(a) Information on significant transactions:

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

(i) Loans to other parties:

No.	Name of lender	Name of borrower	Financial statement account	Related party	Highest balance of financing to other parties during the year	Ending balance
1	TSRC (Shanghai) Industries Ltd.	TSRC (Nantong) In- dustries Ltd.	Loan	Yes	265,847	87,626

Note1： The loan limit extended per party of TSRC (Shanghai) Industries Ltd. 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.

Note2： The maximum loan extended to all parties of TSRC (Shanghai) Industries Ltd. should not be over 40% of total equity. However, if the counterparty is a subsidiary 100.00% 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 . Note3： TSRC (Shanghai) Industries Ltd., and TSRC (Nantong) Industries Ltd. are 100.00% owned by TSRC. Note4： Credit period: The financing period should not be over one year. Note5： Loans to other parties numbering is as follows:

(1) if it's ordinary business relationship, the number is "1".
(2) if it needs short-term financial funds, the number is "2".

Note6： The transactions within the Group were eliminated in the consolidated financial statements.

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Unit: thousand NTD

Amount actually drawn	Range of interest rates	Purposes of fund financing for the borrowers	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral	Collateral	Financing limit for each borrowing company	Maximum financing limit for the lender
						Item	Value
-	-	2	-	Operating capital	-		-	295,155 (Note 1)	590,310 (Note2)

147

(ii) Guarantees and endorsements for other parties:

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Guarantees and endorsements for other parties:	Guarantees and endorsements for other parties:	Guarantees and endorsements for other parties:
	No. Name of Company Counter-party of guarantee and endorsement Limitation on amount of guarantees and endorse- ments for one party Highest balance for guarantees and endorse- ments during the year Ending balance of guarantees and endorse- ments Name Rela- tionship with the Compa- ny
	0	TSRC TSRC (USA) Investment Corpora- tion 4 (Note 2) 907,620 427,620
	0	TSRC ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. 6 (Note 2) 1,577,416 1,577,416
	0	TSRC Indian Synthetic Rubber Private Limited 6 (Note 2) 2,428,087 949,316
	0	TSRC TSRC (Vietnam) Co., Ltd. 4 (Note 2) 531,566 504,592
	0	TSRC TSRC Specialty Materials LLC 4 (Note 2) 303,300 285,080
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 securities 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 by the Company is limited to 60% of total equity amounting to $8,483,472 thousand.
Note		3: The aggregate amount of guarantee by the Company is limited to 1.5 times its stockholders' equity, amounting to $21,208,680
		thousand.
Note		4: The transactions within the Group were eliminated in the consolidated financial statements.
)	Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):
	Name of holder Nature and name of security Relationship with the security issuer Account name
	TSRC Evergreen Steel Corporation - Financial assets at fair value through other comprehensive income －non-current
	TSRC Thai Synthetic Rubbers Co., Ltd. - Financial assets at fair value through other comprehensive income －non-current
	TSRC Hsin-Yung Enterprise Corporation - Financial assets at fair value through other comprehensive income －non-current
	Dymas Corpo- ration Thai Synthetic Rubbers Co., Ltd. - Financial assets at fair value through other comprehensive income －non-current

(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:
		None.
		148

(iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

Unit: thousand NTD

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----- Start of picture text -----

Endorse-
Ratio of accumu- ments/
Property pledged lated amounts of Maximum allow- Parent company endorsement / Subsidiary en-dorsement / guarantees to
actually drawnAmount and endorsements on guarantees endorsements to net worth of the guarantees and able amount for guarantees and third parties on guarantees to third parties on guarantees to third parties behalf of on
(Amount) latest financial state- endorsements behalf of subsidi- behalf of parent Company
ments ary company in Mainland
China
353,499 - 3.02% (Note 3) Y
229,043 - 11.16% (Note 3) Y
949,316 - 6.71% (Note 3)
430,471 - 3.57% (Note 3) Y
178,458 - 2.02% (Note 3) Y
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Unit: thousand NTD

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----- Start of picture text -----

Ending balance Maximum
Number of shares Book value percentageHolding Market value investment in 2020 Remarks
12,148,000 413,517 3.04% 413,517 209,878
599,999 81,960 5.42% 81,960 65,143
5,657,000 342,758 3.90% 342,758 64,296
837,552 114,410 7.57% 114,410 54,424
952,645 952,645 393,741
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(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$300 million or 20% of the capital stock:

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----- Start of picture text -----

Name of Company Counter-party Relationship
TSRC (Lux.) Corporation S.à r.l. TSRC Parent and subsidiary com-
panies
TSRC TSRC (Lux.) Corporation S.à r.l. Parent and subsidiary com-
panies
TSRC Specialty Materials LLC TSRC Parent and subsidiary com-
panies
TSRC TSRC Specialty Materials LLC Parent and subsidiary com-
panies
Polybus Corporation Pte Ltd. TSRC (Nantong) Industries Ltd. Related parties
TSRC (Nantong) Industries Ltd. Polybus Corporation Pte Ltd. Related parties
TSRC (Lux.) Corporation S.à r.l. TSRC Specialty Materials LLC Related parties
TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.à r.l. Related parties
TSRC (Lux.) Corporation S.à r.l. TSRC (Nantong) Industries Ltd. Related parties
TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.à r.l. Related parties
----- End of picture text -----

Note 1: The transactions within the Group were eliminated in the consolidated financial statements.

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

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

150

Unit: thousand NTD

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----- Start of picture text -----

Status and reason for de-
Transaction details viation from arm's length Account / note receivable (payable)
transaction Re-
Percentage Percentage of total marks
Purchase / Credit peri-
Amount of total pur- Credit period Unit price Balance accounts / notes
Sale od
chases / sales receivable (payable)
Purchase 230,533 11.85% 70 days - (32,789) (19.05)%
Sale (230,533) (2.76)% 70 days - 32,789 3.16%
Purchase 176,654 9.02% 70 days - (28,863) (12.55)%
Sale (176,654) (2.12)% 70 days - 28,863 2.78%
Purchase 179,904 64.66% 40 days - (15,108) (80.58)%
Sale (179,904) (4.72)% 40 days - 15,108 3.36%
Purchase 638,188 32.81% 90 days - (48,424) (28.14)%
Sale (638,188) (18.35)% 90 days - 48,424 12.90%
Purchase 1,066,767 54.84% 70 days - (93,832) (54.53)%
Sale (1,066,767) (28.00)% 70 days - 93,832 20.85%
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(x) Business relationships and significant intercompany transactions:	(x) Business relationships and significant intercompany transactions:	(x) Business relationships and significant intercompany transactions:
No.	Name of Company	Name of counter party	Existing relationship with the counter- party
0	TSRC	TSRC (Nantong) Industries Ltd.	1
0	TSRC	TSRC (Nantong) Industries Ltd.	1
0	TSRC	TSRC (Lux.) Corporation S.à r.l.	1
0	TSRC	TSRC (Lux.) Corporation S.à r.l.	1
0	TSRC	Polybus Corporation Pte Ltd.	1
0	TSRC	TSRC Specialty Materials LLC	1
0	TSRC	TSRC (Nantong) Industries Ltd.	1
1	TSRC (Nantong) Industries Ltd.	TSRC (Shanghai) Industries Ltd.	3
1	TSRC (Nantong) Industries Ltd.	Polybus Corporation Pte Ltd.	3
1	TSRC (Nantong) Industries Ltd.	TSRC (Lux.) Corporation S.à r.l.	3
1	TSRC (Nantong) Industries Ltd.	TSRC (Lux.) Corporation S.à r.l.	3
1	TSRC (Nantong) Industries Ltd.	TSRC-UBE (Nantong) Industries Ltd.	3
2	TSRC Specialty Materials LLC	TSRC (Lux.) Corporation S.à r.l.	3
2	TSRC Specialty Materials LLC	TSRC (Lux.) Corporation S.à r.l.	3
3	TSRC (Lux.) Corporation S.à r.l.	TSRC	2
4	TSRC (Shanghai) Industries Ltd.	TSRC (Nantong) Industries Ltd.	3
Note1： Company numbering is as follows:
	(1) Parent company - 0.
	(2) Subsidiary starts from 1.
Note2： The number of the relationship with the transaction counterparty represents the following:
	(1) 1 represents downstream transactions.
	(2) 2 represents upstream transactions.
	(3) 3 represents midstream transactions.
Note3： For balance sheet items, over 0.1% of total consolidated assets, and for profit or loss items, over 0.1% of total consolidated
	revenue were selected for disclosure.
Note4： TSRC's guarantees for bank loans of investees.
Note5： The transactions within the Group were eliminated		in the consolidated financial statements.
		152

Unit: thousand NTD

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----- Start of picture text -----

Transaction details
Percentage of the total
Account name Amount Trading terms consolidated revenue
or total assets
Sales revenue 80,721 The transaction is not significantly different from normal trans- 0.34%
actions, and the collection terms were about two months
Other income and 45,871 〃 0.19%
expenses
Sales revenue 230,533 〃 0.96%
Accounts receivable 32,789 〃 0.11%
Sales revenue 48,988 〃 0.20%
Sales revenue 176,654 〃 0.74%
Other income and 40,934 The transaction is not significantly different from normal trans- 0.17%
expenses actions, and the collection terms were about six months
Sales revenue 42,166 The transaction is not significantly different from normal trans- 0.18%
actions, and the collection terms were about two months
Sales revenue 179,904 〃 0.75%
Sales revenue 1,066,767 〃 4.44%
Accounts receivable 93,832 〃 0.32%
Other income and 214,865 〃 0.89%
expenses
Sales revenue 638,188 The transaction is not significantly different from normal trans- 2.66%
actions, and the collection terms were about three months
Accounts receivable 48,424 〃 0.17%
Other income and 40,143 The transaction is not significantly different from normal trans- 0.17%
expenses actions, and the collection terms were about six months
Sales revenue 54,876 The transaction is not significantly different from normal trans- 0.23%
actions, and the collection terms were about two months
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(b) Information on investees:

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

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----- Start of picture text -----

Name of investor Name of investee Address Scope of business
TSRC Trimurti Holding Corporation Palm Grove House, P.O.BOX 438, Road Town, Tortola B.V.I Investment corporation
Hardison Interna- Palm Grove House, P.O.BOX 438, Road Town,
TSRC tional Corporation Tortola B.V.I Investment corporation
Palm Grove House, P.O.BOX 438, Road Town,
TSRC Dymas Corporation Tortola B.V.I Investment corporation
Production and processing
8 VSIP II-A Street 31, Vietnam Singapore In-
TSRC (Vietnam) Co., of rubber color masterbatch,
TSRC Ltd. dustrial Park II A, Tan Uyen Town, Binh Duong thermoplastic elastomer and
Province, Vietnam
plastic compound products
Trimurti Holding Polybus Corpora- 100 Peck Seah Street #09-16 Singapore International commerce and
Corporation tion Pte Ltd. 079333 investment corporation
Trimurti Holding TSRC (Hong Kong) 15/F BOC Group Life Assurance Tower 136 Des
Corporation Limited Voeux Road Central Investment corporation
Indian Synthetic Room No.702, Indian Oil Bhawan, 1 Sri Au-
Trimurti Holding Rubber Private Lim- robindo Marg, Yusuf Sarai, New Delhi 110016, Production and sale of syn-
Corporation ited India thetic rubber products
TSRC (Hong Kong) TSRC (Lux.) Corpo- 39-43 avenue de la Liberte L-1931 Luxem- International commerce and
Limited ration S.à r.l. bourg investment corporation
TSRC (Lux.) Corpo- TSRC (USA) Invest- 2711 Centerville Road, Suite 400, Country of
ration S.à r.l. ment Corporation New Castle, Wilmington, Delaware. ,19808. Investment corporation
TSRC (USA) Invest- TSRC Specialty Ma- 12012 Wickchester Lane, Suite 280, Houston, Production and sale of TPE
ment Corporation terials LLC TX77079
Triton International
Hardison Interna- Palm Grove House, P.O.BOX 438, Road Town,
tional Corporation Holdings Corpora-tion Tortola B.V.I Investment corporation
Hardison Interna- Palm Grove House, P.O.BOX 438, Road Town,
tional Corporation Dymas Corporation Tortola B.V.I Investment corporation
Asia Pacific Energy Consulting for electric power
Dymas Corpora-
tion Development Co., Cayman Islands facilities management and
Ltd. electrical system design
----- End of picture text -----

Note 1: Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD28.508; EUR1 to NTD35.0563).

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%.

Note 3: Transactions within the Group were eliminated in the consolidated financial statements.

(c) Information on investment in Mainland China:

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Cumulative invest-
Method of
Name of investee ment (amount)
in Mainland China Scope of business Issued capital investment from Taiwan as of
(Note 1)
January 1, 2020
Shen Hua Chemical Indus- Production and sale of synthetic rub- 1,175,100 -
(2)a.
tries Co., Ltd. ber products (USD41,220)
Changzhou Asia Pacific Power generation and sale of electrici- 658,535 109,243
(2)c.
Co-generation Co., Ltd. ty and steam (USD23,100) (USD3,832)
TSRC (Shanghai) Industries Production and sale of compounding 156,794 111,751
(2)b.
Ltd. materials (USD5,500) (USD3,920)
Nantong Qix Storage Co., Storehouse for chemicals 85,524 (2)d. 42,762
Ltd. (USD3,000) (USD1,500)
TSRC-UBE (Nantong) Indus- Production and sale of synthetic rub- 1,140,320 28,508
(2)a.
tries Ltd. ber products (USD40,000) (USD1,000)
TSRC (Nantong) Industries Production and sale of TPE 2,996,904 (2)a. 189,521
Ltd. (USD105,125) (USD6,648)
ARLANXEO-TSRC (Nantong) 1,277,158 -
Chemical Industries Co., Ltd. [Production and sale of NBR ] (USD44,800) (2)a.
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Unit: thousand NTD/thousand USD/thousand EUR

==> picture [485 x 367] intentionally omitted <==

----- Start of picture text -----

Original cost Ending balance Maximum
Net income Investment
investment
December 31, 2020 December 31, 2019 Shares Percentage of owner-ship Book value amount in 2020 investee(loss) of income (loss) Remarks
1,005,495 1,005,495 86,920,000 100.00% 12,779,698 1,005,495 395,611 395,611 Subsidiary
109,442 109,442 3,896,305 100.00% 553,628 109,442 60,952 60,952 Subsidiary
38,376 38,376 1,161,004 19.48% 114,017 38,376 86,045 16,761 [Subsidiary (note ]
2)
278,280 278,280 - 100.00% 197,619 278,280 (35,049) (35,049) Subsidiary
1,855,899 1,855,899 105,830,000 100.00% 8,132,280 1,855,899 794,946 794,946 [Indirectly owned ]
(USD65,101) (USD65,101) subsidiary
2,960,556 2,219,348 103,850,000 100.00% 3,405,313 2,960,556 (375,292) (375,292) [Indirectly owned ]
(USD103,850) (USD77,850) subsidiary
840,216 840,216 222,861,375 50.00% 512,624 840,216 280,563 140,281 -
(USD29,473) (USD29,473)
2,624,665 1,780,860 74,869,617 100.00% 2,715,817 2,624,665 (459,113) (459,113) [Indirectly owned ]
(EUR74,870) (EUR50,800) subsidiary
2,738,193 1,996,985 130 100.00% 2,678,391 2,738,193 (436,828) (436,828) [Indirectly owned ]
(USD96,050) (USD70,050) subsidiary
6,232,333 5,491,125 - 100.00% 2,106,217 6,232,333 (77,948) (77,948) [Indirectly owned ]
(USD218,617) (USD192,617) subsidiary
1,425 1,425 50,000 100.00% 59,006 1,425 (8,247) (8,247) [Indirectly owned ]
(USD50) (USD50) subsidiary
136,810 136,810 4,798,566 80.52% 492,601 136,810 86,045 69,284 [Indirectly owned ]
(USD4,799) (USD4,799) subsidiary
321,713 321,713 7,522,337 37.78% 409,244 321,713 208,822 78,893 -
(USD11,285) (USD11,285)
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----- Start of picture text -----

Unit: thousand NTD/thousand USD
Investment flow during Cumulative Direct /
current period investment Net income indirect Maximum Investment Accumulated
(amount) investment Book remittance of
Remittance amount amounttriation Repa- from Taiwan as of December 31, 2020 investee(loss) of percentageinvestment holding 2020in income (loss) value earnings in cur-rent period
- - - 497,954 65.44% 768,985 325,861 1,896,262 4,786,340
(Note 2) (Note 2)
- - 109,243 324,574 28.34% 186,629 91,984 382,844 358,308
(USD3,832) (Note 3) (Note 3)
- - 111,751 90,662 100.00% 156,794 90,662 590,310 -
(USD3,920) (Note 2) (Note 2)
- - 42,762 (16,260) 50.00% 42,762 (8,130) 58,632 74,060
(USD1,500) (Note 2) (Note 2)
- - 28,508 144,576 55.00% 627,176 79,517 887,941 -
(USD1,000) (Note 2) (Note 2)
- - 189,521 316,229 100.00% 2,996,904 316,229 4,717,180 440,864
(USD6,648) (Note 2) (Note 2)
- - - 180,927 50.00% 638,579 90,464 323,287 -
(Note 3) (Note 3)
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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 (Hing 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 NTD28.508).
Note 5: The transactions within the Group were eliminated in the consolidated financial statements.

(ii) Limitation on investment in Mainland China:

Limitation on investment in Mainland China:	Limitation on investment in Mainland China:	Limitation on investment in Mainland China:	Limitation on investment in Mainland China:
Unit: thousand NTD/thousand USD
Company name	Accumulated investment amount in Mainland China as of December 31, 2020	Investment (amount) approved by Investment Commission, Ministry of Economic Affairs	Maximum investment amount set by Investment Commission, Ministry of Economic Affairs
TSRC	481,785 (USD16,900)	5,340,546 (USD187,335) (Note 2)	- (Note 1)

Note1： 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 23, 2018. 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 20, 2018 to August 19, 2021.

Note2： This amount includes capital increase out of earnings, approved by the Investment Commission, MOEA.

Note3： Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD28.508).

(iii) Significant transactions:

Related information is provided in note 13(a).

<14> Segment information

(a) General information

There are two segments which should be reported: synthetic rubber and non-synthetic rubber others. The synthetic rubber segment produces and sells synthetic rubber and TPE products. The non-synthetic rubber segment produces and sells applied materials. The others segment provides storage service.

A reportable department is a strategic business unit providing different products and services. Because each strategic business unit requires different kinds of techniques and marketing tactics, it should be separately managed. Most of the strategic divisions were acquired separately. The management of the acquired divisions remains employed by the Group.

(b) Information on income and loss, assets, liabilities, basis of measurement, and the reconciliation for reportable

segments

The Group uses the internal management report that the chief operating decision maker reviews as the basis to determine resource allocation and make a performance evaluation. The internal management report includes profit before taxation, but not including any extraordinary activity. Because taxation and extraordinary activity are managed on a group basis, they are not able to be allocated to each reportable segment. In addition, not all profit or loss from reportable segments includes significant non-cash items such as depreciation and amortization. The reportable amount is consistent with that in the report used by the chief operating decision maker.

The operating segment accounting policies are consistent with those described in note 4 "Significant Accounting Policies".

The Group treated intersegment sales and transfers as third-party transactions. They are measured at market price. Information on reportable segments and reconciliation for the Group is as follows:

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$		2020	2020
	Synthetic rubber 23,173,891 40,734 23,214,625 117,527 1,074,551 230,745 354,059 -	Non-synthet- ic rubber Others 850,552 - 2,273 3,916 852,825 3,916 12,522 (6,480) 67,137 14,726 - 70,763 31,928 134,684 - - 2019
$
$
$
$
$
$
$ $
	Synthetic rubber 27,108,301 75,285 27,183,586 180,746 1,068,873 93,915 827,226 -	Non-synthet- ic rubber 1,802,422 2,993 1,805,415 13,503 67,570 - 322,279 -	Others - 13,597 13,597 (5,699) 14,725 90,211 105,133 -
$
$
$
$
$

Note: As the information on segment assets and liabilities was not provided to the chief operating decision maker, the information on segment assets and liabilities is not disclosed.

(c) Geographical information

In presenting information on the basis of geography, segment revenue is based on the geographical location of customers, and segment assets are based on the geographical location of the assets.

Geographical information	2020 $ 10,641,719 3,077,921 3,027,958 1,138,521 1,040,894 892,179 454,114 3,751,137	2019 12,016,138 3,575,084 3,392,860 1,493,596 1,420,734 1,339,558 604,319 5,068,434 28,910,723 December 31, 2019 7,424,648 4,544,863 2,337,074 1,484,093 15,790,678
Revenue from external customers: China United States Taiwan Germany Thailand Vietnam Japan Other countries Total Geographical information
	$ 24,024,443
	December 31, 2020 $ 7,355,792 4,734,394 1,881,946 1,617,540
Non-current assets: China Taiwan United States Other countries Total
	$ 15,589,672

Non-current assets include investment accounted for under the equity method, property, plant and equipment, right-of-use assets, investment property, intangible assets, and other assets, not including financial instruments, deferred tax assets.

(d) Information about major customers

For the years 2020 and 2019, the Group had no major customer who constituted 10% or more of net sales.

157

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Parent Company Only Financial Statements and independent auditors' report for the most recent fiscal year

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 parent company only balance sheets as of December 31, 2020 and 2019, and the parent company only 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 parent company only financial position of the TSRC Corporation as of December 31, 2020 and 2019, and its parent company only financial performance and its parent company only 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 of the parent company only financial statements as of and for the year ended December 31, 2020 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. Furthermore, we conducted our audit of the financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, 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 parent company only Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. 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, 2020. 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.

1. Revenue recognition

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

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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:

3. Impairment of investments accounted for using equity method

Refer to note 4(o), note 5(b), and note 6(g) disclosures related to the impairment of investments accounted for using equity method.

Description of key audit matter:

According to the government regulations, intangible assets including goodwill and other intangible assets arising from past acquisition of subsidiaries, which are included within the carrying amount of investments accounted for using equity method, are subject to impairment test annually or at the time there are indications that goodwill and other intangible asset may have been impaired. Also, the impairment assessment is measured using the future cash flow of present discount value. Because the impairment assessment involved significant uncertainty and management's judgment. we consider it as the 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

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.

Those charged with governance 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.

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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.

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 11, 2021

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TSRC CORPORATION

Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2020	December 31, 2020	December 31,	2019
Amount	%	Amount	%
$ 134,602 3,460 2,342 945,414 87,273 117,821 12,151 1,483,926 342,902	1 - - 4 - 1 - 7 2	417,440 14 2,662 949,468 114,471 189,551 80 2,214,079 136,531	2 - - 4 - 1 - 9 -
3,129,891	15	4,024,296	16
	4 61 13 - 7 - - -	932,437 14,719,161 2,727,714 177,841 1,581,599 44,819 71,630 12,149	4 61 11 1 7 - - -
19,245,432	85	20,267,350	84

$ 22,375,323 100 24,291,646 100

Total assets

See accompanying notes to parent company only financial statements.

Chairman:Nita Ing

Manager:Joseph Chai

Chief Accountant:Ming-Huang Chen

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			December 31, 2020	December 31, 2020	December 31, 2019	December 31, 2019
Liabilities and Equity			Amount	%	Amount	%
Current liabilities:
Short-term borrowings (note 6(l))		$	2,697,482	12	3,135,563	13
Current portion of long-term borrowings (note 6(l))			2,100,000	9	100,000	-
Financial liabilities at fair value through profit or loss ─ current (note 6(b))			81	-	228	-
Accounts payables (note 7)			674,118	4	866,363	4
Current income tax liabilities			12,201	-	-	-
Other payable (notes 6(m), 6(p), 6(t) and 7)			509,913	3	629,017	3
Current lease liabilities (note 6(n))			29,417	-	52,313	-
Other current liabilities			14,639	-	30,338	-
Total current liabilities			6,037,851	28	4,813,822	20
Non-Current liabilities:
Long-term bank borrowings (note 6(l))			973,718	4	3,350,000	14
Other long-term borrowings (note 6(l))			349,341	2	349,287	1
Provision liabilities －non-current (note 7)			31,819	-	19,227	-
Deferred income tax liabilities (note 6(q))			739,404	3	697,737	3
Non-current lease liabilities (note 6(n))			15,034	-	61,249	-
Other non-current liabilities (notes 6(l) and	6(p))		89,036	-	124,632	1
Total non-current liabilities			2,198,352	9	4,602,132	19
Total liabilities			8,236,203	37	9,415,954	39
Equity attributable to shareholders of the company (notes 6(c), 6(p), 6(r) and 6(x):
Common stock			8,257,099	37	8,257,099	34
Capital surplus			49,531	-	47,140	-
Retained earnings:
Legal reserve			4,068,862	18	3,977,141	16
Unappropriated earnings			1,483,970	7	1,940,361	8
			5,552,832	25	5,917,502	24
Other equity:
Financial statement translation differences for foreign operations			(198,125)	(1)	23,383	-
Unrealized gain on financial assets measured	at fair value through other		558,902	2	711,094	3
comprehensive income
Gains (losses) on hedging instrument			(81,119)	-	(80,526)	-
			279,658	1	653,951	3
Total equity			14,139,120	63	14,875,692	61
Total liabilities and equity		$	22,375,323	100	24,291,646	100
	See accompanying notes		to parent company only financial statements.
Chairman:Nita Ing	Manager:Joseph Chai		Chief Accountant:Ming-Huang Chen
	162

TSRC CORPORATION

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Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

2020 Amount % $ 8,344,155 100 7,865,980 94	2020 Amount % $ 8,344,155 100 7,865,980 94	2019
		Amount %
	8,344,155 100 7,865,980 94	10,856,945 100 9,764,551 90
	478,175 6 (11,712) -	1,092,394 10 20,037 -
	489,887 6	1,072,357 10
	342,250 4 441,427 5 264,001 3 (138) -	370,291 3 470,035 4 277,659 3 202 -
	1,047,540 12	1,118,187 10
	210,685 2	175,711 2
	(346,968) (4)	129,881 2
	6,503 - 56,878 1 5,956 - (78,788) (1) 438,275 5	8,887 - 63,426 1 21,259 - (101,610) (1) 796,066 7
	428,824 5	788,028 7
	81,856 1 103,747 1	917,909 9 177,593 2
	(21,891) -	740,316 7
	(14,247) - 20,122 - (87,991) (1) - -	(20,478) - 104,125 1 2,537 - - -
	(82,116) (1)	86,184 1
	(221,508) (3) (593) - - -	(442,206) (4) (12,392) - - -
	(222,101) (3)	(454,598) (4)
	(304,217) (4)	(368,414) (3)
$	(326,108) (4)	371,902 4
$	(0.03)	0.90
$	(0.03)	0.89

See accompanying notes to parent company only financial statements.

Chairman:Nita Ing

Manager:Joseph Chai

Chief Accountant:Ming-Huang Chen

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TSRC CORPORATION
Statements of Changes in Equity
For the years ended December 31, 2020 and 2019
				Retained earnings
					Unappropri-
			Capital sur-		ated retained
	Common stock		plus	Legal reserve	earnings	Total
Balance at January 1, 2019	$	8,257,099	45,158	3,857,922	1,951,564	5,809,486
Appropriation and distribution:
Legal reserve		-	-	119,219	(119,219)	-
Cash dividends		-	-	-	(809,195)	(809,195)
Other changes in capital surplus		-	1,982	-	-	-
Net income		-	-	-	740,316	740,316
Other comprehensive income (loss)		-	-	-	(20,478)	(20,478)
Total comprehensive income (loss)		-	-	-	719,838	719,838
Disposal of investments in equity instruments designat-
ed at fair value through other comprehensive income		-	-	-	197,373	197,373
Balance at December 31, 2019		8,257,099	47,140	3,977,141	1,940,361	5,917,502
Appropriation and distribution:
Legal reserve		-	-	91,721	(91,721)	-
Cash dividends		-	-	-	(412,855)	(412,855)
Other changes in capital surplus		-	2,391	-	-	-
Net loss		-	-	-	(21,891)	(21,891)
Other comprehensive income (loss)		-	-	-	(14,247)	(14,247)
Total comprehensive income (loss)		-	-	-	(36,138)	(36,138)
Disposal of investments in equity instruments at fair
value through other comprehensive income		-	-	-	84,323	84,323
Balance at December 31, 2020	$	8,257,099	49,531	4,068,862	1,483,970	5,552,832
		164

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(Expressed in Thousands of New Taiwan Dollars)

	Total other equity interest	Total other equity interest		Total equity
Financial statements translation differences for foreign operations	Unrealized gains (loss- es) on financial assets measured at fair value through other compre- hensive income	Gains (losses) on effec- tive portion of cash flow hedges	Total
465,589 - - - - (442,206)	801,805 - - - - 106,662	(68,134) - - - - (12,392)	1,199,260 - - - - (347,936)	15,311,003 - (809,195) 1,982 740,316 (368,414)
(442,206)	106,662	(12,392)	(347,936)	371,902
-	(197,373)	-	(197,373)	-
23,383 - - - - (221,508)	711,094 - - - - (67,869)	(80,526) - - - - (593)	653,951 - - - - (289,970)	14,875,692 - (412,855) 2,391 (21,891) (304,217)
(221,508)	(67,869)	(593)	(289,970)	(326,108)
-	(84,323)	-	(84,323)	-
(198,125)	558,902	(81,119)	279,658	14,139,120

See accompanying notes to parent company only financial statements.

Chairman:Nita Ing

Manager:Joseph Chai

Chief Accountant:Ming-Huang Chen

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TSRC CORPORATION

Statements of Cash Flows

For the years ended December 31, 2020 and 2019 (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 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	2020 $ 81,856	2019
		917,909
	321,969 20,418 (138) 78,788 (6,503) (56,878) (438,275) (11,712) 34,096 (53,496)	307,051 24,699 202 101,610 (8,887) (63,426) (796,066) 20,037 35,409 37,394
	(111,731)	(341,977)
	(3,446) 320 4,192 27,198 50,868 730,153 28,727	(14) (621) 112,625 (55,689) (34,095) 255,049 (1,602)
	838,012	275,653
	(147) (192,245) (104,719) (15,699) (54,978) 5,135	228 (47,859) 11,696 (20,246) (49,035) (3,138)
	(362,653)	(108,354)
	475,359	167,299

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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 property, plant and equipment Increase (decrease) in other non-current assets Dividends received 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 Decrease in other 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	2020 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.

Chief Accountant:Ming-Huang Chen

Chairman:Nita Ing

Manager:Joseph Chai

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TSRC CORPORATION

Notes to the Financial Statements

For the years ended December 31, 2020 and 2019

(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 11, 2021.

<3> New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.
The Company has initially adopted the following new amendments, which do not have a significant impact on its parent company only financial statements, from January 1, 2020:
・[Amendments to IFRS 3 “Definition of a Business”]
・[Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”]
・[Amendments to IAS 1 and IAS 8 “Definition of Material”]
・[Amendments to IFRS 16 “COVID-19-Related Rent Concessions”]
(b) The impact of IFRS issued by the FSC but not yet effective

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

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

Content of amendment

Effective date per IASB January 1, 2023

Interpretations

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

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.

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its parent company only financial position and parent company only 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 parent company only financial statements:

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<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.

(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.

(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 noncurrent.
- 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.
(ii) A liability is classified as current under one of the following criteria, and all other liabilities are classified as noncurrent.
- 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.

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(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

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).
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 forward-looking information.

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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.

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

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.

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.

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.

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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 and hedge accounting
- 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.

(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.

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(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

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

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.	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.
The estimated useful lives, for the current and comparative years, of significant items of property, plant and
equipment are as follows:
1) Land improvements	8~30 years
2) Buildings	3~60 years
3) Machinery	3~40 years
4) 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
(i) Identifying a lease

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

1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and

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2) the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3) the Company has the right to direct use of the asset when it has the decision-making rights that are most relevant to changing how, and for what purpose, the asset is used. In rare cases where the decision about how, and for what purpose, the asset is used is predetermined, the Company has the right to direct the use of an asset if either:
- ─the Company has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or
- ─the Company designed the asset in a way that predetermines how, and for what purpose, it will be used.
- At inception or on reassessment of a contract that contains a lease component, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.
(ii) As a leasee
The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The rightof-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 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 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.

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(iii) 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.

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.

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.

(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.

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(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.

(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.

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 as other income on a systematic basis over the useful life of the asset. Grants that compensate the Company for expenses or losses incurred are recognized in profit or loss on a systematic basis in the periods in which the expenses or losses are recognized.

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(t) Income tax

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.

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.

(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.

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<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.

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 cash-generating 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(g) for further description of the Impairment of intangible assets.

<6> Explanation of significant accounts

(a) Cash and cash equivalents

planation of significant accounts Cash and cash equivalents
		December 31, 2020		December 31, 2019
Checking and savings deposits	$	134,602		267,440
Commercial paper with reverse sell agreements			-	150,000
Cash and cash equivalents per statements of cash flow	$	134,602		417,440
The disclosure of interest rate risk and sensitivity analysis for the	Company's financial assets and			liabilities is referred to
note 6(y).
Financial assets and liabilities at fair value through profit or loss
		December 31, 2020		December 31, 2019
Mandatorily measured at fair value through profit or loss:
Derivative instruments not used for hedging
Forward contracts / Swap contracts	$	3,460		14
		December 31, 2020		December 31, 2019
Financial liabilities held for trading:
Derivative instruments not used for hedging
Forward contracts / Swap contracts	$	81		228

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

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		December 31, 2020
	Contract amount (thousand dollars) EUR 450/ USD 551 NTD 238,846/ USD 8,500	Currency EUR/TWD USD/TWD	Maturity dates
			2021.02.19~2021.02.26 2021.01.15~2021.01.22

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Forward contracts Swap contracts		December 31, 2019
	Contract amount (thousand dollars) EUR 230/ NTD 7,778 NTD 201,938/ USD 6,700	Currency EUR/NTD NTD/USD	Maturity dates
			2020.01.20 2020.01.20

Equity investments at fair value through other comprehensive income: Listed stocks (domestic) Unlisted stocks (domestic and overseas) Total	December 31, 2020	December 31, 2020	December 31, 2019 115,200 817,237
	$ $	- 838,235
		838,235	932,437

(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 and 2019, the fair value at that time of disposition was $114,323 thousand and $267,383 thousand and accumulated disposition benefit was $84,323 thousand and $197,373 thousand, the cumulative disposition benefits have been transferred from other equity to retained earnings.

(ii) For dividend income, please refer to note 6(w).
(iii) For market risk, please refer to note 6(y).
(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:

Foreign currency amount (thousand dollars) Exchange rate December 31, 2020 THB $ 85,768 0.9556 December 31, 2019 THB 145,752 1.0098 (d) Notes and accounts receivable (including related parties) December 31, 2020 Notes receivable $ 2,342 Accounts receivable 947,102 Accounts receivable －related parties 87,273 Less: allowance for impairment 1,688 $ 1,035,029	Foreign currency amount (thousand dollars) Exchange rate December 31, 2020 THB $ 85,768 0.9556 December 31, 2019 THB 145,752 1.0098 (d) Notes and accounts receivable (including related parties) December 31, 2020 Notes receivable $ 2,342 Accounts receivable 947,102 Accounts receivable －related parties 87,273 Less: allowance for impairment 1,688 $ 1,035,029	Foreign currency amount (thousand dollars) Exchange rate December 31, 2020 THB $ 85,768 0.9556 December 31, 2019 THB 145,752 1.0098 (d) Notes and accounts receivable (including related parties) December 31, 2020 Notes receivable $ 2,342 Accounts receivable 947,102 Accounts receivable －related parties 87,273 Less: allowance for impairment 1,688 $ 1,035,029	TWD
			81,960 147,180 December 31, 2019
	$ 2,342 947,102 87,273 1,688		2,662 951,294 114,471 1,826
	$ 1,035,029		1,066,601

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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, 2020
Gross carrying amount	Weighted-average expected credit loss rate 0.09%~0.17% December 31, 2019	Loss allowance provision 1,688
$ 1,036,717

Gross carrying amount	Weighted-average expected credit loss rate 0.13%~0.35% 1.03%~2.74%	Loss allowance provision 1,808 18
$ 1,067,755 672
$ 1,068,427		1,826

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	2020	2019 1,624 202
	$ 1,826 (138)
	$ 1,688	1,826

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

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 －related parties Other	December 31, 2020	December 31, 2019 157,587 31,964
	$ 104,489 13,332
	$ 117,821	189,551

As of December 31, 2020 and 2019, the Company had no other receivables that were past due. For other credit risk information, please refers to note 6(y).

(f) Inventories

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

Raw materials Supplies Work in progress Finished goods Merchandise Total	December 31, 2020	December 31, 2019 630,096 11,019 120,764 1,448,729 3,471
	$ 542,024 2,768 110,485 823,715 4,934
	$ 1,483,926	2,214,079

As of December 31, 2020 and 2019, 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 decline in market value of inventory Income from sale of scrap Unallocated production overhead Total	2020	2019 33,646 (23,850) 42,631
	$ 1,111 (12,063) 166,390
	$ 155,438	52,427

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(g) Investments accounted for under the equity method

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

were as follows:
December 31, 2020	December 31, 2019 14,719,161
$ 13,644,962

Subsidiaries

As of December 31, 2020 and 2019, the Company did not pledge any collateral on investments accounted for under the equity method.

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(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, 2020 Additions Disposals Reclassification Balance at December 31, 2020 Balance at January 1, 2019 Additions Disposals Reclassification Balance at December 31, 2019 Depreciation and impairment loss: Balance at January 1, 2020 Depreciation Disposal Balance at December 31, 2020 Balance at January 1, 2019 Depreciation Disposal Balance at December 31, 2019 Carrying value: December 31, 2020 December 31, 2019 January 1, 2019	Land $ 614,101 140,061 - 67,307 $ 821,469 $ 614,101 - - - $ 614,101 $ - - - $ - $ - - - $ - $ 821,469 $ 614,101 $ 614,101	Land improvements 85,030 - - - 85,030 83,755 - - 1,275 85,030 67,778 2,486 - 70,264 65,312 2,466 - 67,778 14,766 17,252 18,443	Buildings
			1,207,726 - - 7,958
			1,215,684
			1,204,304 - (188) 3,610
			1,207,726
			898,493 30,417 -
			928,910
			868,970 29,711 (188)
			898,493
			286,774
			309,233
			335,334

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

(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, 2020 Additions Write-off Reclassify to construction in progress Amortization to operating cost and inventories Balance at December 31, 2020 Balance at January 1, 2019 Additions Amortization to operating cost and inventories Balance at December 31, 2019	$ s $ $ s $	Land 95,998 - - (94,596) - 1,402 95,998 - - 95,998	Building 56,506 10,258 (3,695) - (6,850) 56,219 63,562 1,107 (8,163) 56,506	Machinery 38,689 - - - (27,246) 11,443 65,935 - (27,246) 38,689	Transporta- tion equip- ment 3,309 - - - - 3,309 3,309 - - 3,309	Total
						194,502 10,258 (3,695) (94,596) (34,096)
						72,373
						228,804 1,107 (35,409)
						194,502

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Machinery 9,049,463 - (52,138) 369,710 9,367,035 8,910,692 - (43,539) 182,310 9,049,463 7,646,885 248,143 (52,138) 7,842,890 7,455,398 235,026 (43,539) 7,646,885 1,524,145 1,402,578 1,455,294	Furniture and fixtures 101,582 - - 8,388 109,970 91,968 - - 9,614 101,582 70,680 9,921 - 80,601 62,218 8,462 - 70,680 29,369 30,902 29,750	Leased assets - - - - - 94,596 - - (94,596) - - - - - - - - - - - 94,596	Prepayments for equip- ment and construction in progress 353,648 350,038 - (401,452) 302,234 242,237 311,960 - (200,549) 353,648 - - - - - - - - 302,234 353,648 242,237

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						Transporta-
						tion
			Land	Building	Machinery	equipment	Total
Accumulated depreciation and
impairment losses:
Balance at January 1, 2020	$		280	15,262	-	1,119	16,661
Depreciation			281	14,876	-	1,119	16,276
Write-off			-	(3,695)	-	-	(3,695)
Balance at December 31, 2020	$		561	26,443	-	2,238	29,242
Balance at January 1, 2019	$		-	-	-	-	-
Depreciation			280	15,262	-	1,119	16,661
Balance at December 31, 2019	$		280	15,262	-	1,119	16,661
Carrying value:
December 31, 2020	$		841	29,776	11,443	1,071	43,131
December 31, 2019	$		95,718	41,244	38,689	2,190	177,841
January 1, 2019	$		95,998	63,562	65,935	3,309	228,804
(j) Investment property
			Land		Buildings	Total
Cost:
Balance as at January 1, 2020		$		1,073,579	741,889		1,815,468
Additions			-		-	-
Balance as at December 31, 2020		$		1,073,579	741,889		1,815,468
Balance as at January 1, 2019		$		1,073,579	741,889		1,815,468
Additions			-		-	-
Balance as at December 31, 2019		$		1,073,579	741,889		1,815,468
Depreciation:
Balance as at January 1, 2020		$	-		233,869		233,869
Depreciation			-		14,726		14,726
Balance as at December 31, 2020		$	-		248,595		248,595
Balance as at January 1, 2019		$	-		219,144		219,144
Depreciation			-		14,725		14,725
Balance as at December 31, 2019		$	-		233,869		233,869
Carrying value:
Balance as at December 31, 2020		$		1,073,579	493,294		1,566,873
Balance as at December 31, 2019		$		1,073,579	508,020		1,581,599
Balance as at January 1, 2019		$		1,073,579	522,745		1,596,324
Fair value:
Balance as at December 31, 2020					$		3,336,956
Balance as at December 31, 2019					$		3,334,675
Balance as at January 1, 2019					$		3,334,675
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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	2020 2.10%	2019
		2.10%

The Company has rented out a parcel of vacant land, but has decided not to treat this property as investment property because it is not the Company's intention to hold it for capital appreciation or rental income. Accordingly, the property is still recorded under property, plant and equipment.

As of December 31, 2020 and 2019, 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:

Industrial technology Computer software Costs: Balance at January 1, 2020 $ 73,913 172,706 Reclassification 25,300 15,397 Balance at December 31, 2020 $ 99,213 188,103 Balance at January 1, 2019 $ 73,913 168,966 Reclassification - 3,740 Balance at December 31, 2019 $ 73,913 172,706 Amortization: Balance at January 1, 2020 $ 38,044 163,756 Amortization 9,921 10,497 Balance at December 31, 2020 $ 47,965 174,253 Balance at January 1, 2019 $ 30,653 146,448 Amortization 7,391 17,308 Balance at December 31, 2019 $ 38,044 163,756 Carrying value: December 31, 2020 $ 51,248 13,850 December 31, 2019 $ 35,869 8,950 January 1, 2019 $ 43,260 22,518 (i) In 2020 and 2019, the amortization of intangible assets were as follows: 2020 Operating costs $ 4,403 Operating expenses 16,015 $ 20,418	Computer software	Total
	172,706 15,397	246,619 40,697
	188,103	287,316
	168,966 3,740	242,879 3,740
	172,706	246,619
	163,756 10,497	201,800 20,418
	174,253	222,218
	146,448 17,308	177,101 24,699
	163,756	201,800
	13,850	65,098
	8,950	44,819
	22,518	65,778
		2019
		5,486 19,213
		24,699

(ii) The Company did not pledge any collateral on intangible assets.

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(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, 2020	December 31, 2020	December 31, 2020
Range of interest rates (%) 0.78~1.05		Year of maturity Amount 2021 $ 2,697,482 December 31, 2019			The unused credit facilities
					6,235,530

Range of interest rates (%) 0.78~2.55 Currency NTD Currency NTD		Year of maturity Amount 2020 $3,135,563 December 31, 2020			The unused credit facilities
					6,581,097

	Currency		Range of interest rates (%) Year of maturity 1.09~1.25 2021-2025 December 31, 2019	Year of maturity	Amount $ 3,073,718 $ 2,100,000 973,718 $ 3,073,718
	NTD
	Currency		Range of interest rates (%) 1.12~1.45	Year of maturity	Amount $ 3,450,000 $ 100,000 3,350,000 $ 3,450,000
	NTD			2020-2023

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, 2020 the company has been used $75,727 with an interest rate measured and recognized based on the difference between the actually interest rate of 0.45% and the market interest rate 1.2%, recognized as government subsidy which had been recorded 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, 2020
Guarantee or accep- tance institution CTBC Bank	Range of interest rates (%) 1.206 December 31, 2019	Amount
		$ 350,000 659
		$ 349,341

Guarantee or accep- tance institution CTBC Bank	Range of interest rates (%) 1.327	Amount
		$ 350,000 713
		$ 349,287

(iv) Collateral of loans

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

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Current provisions (recorded as other payable)
	Provision for defective
		products
Balance at January 1, 2020	$	4,851
Increase in provisions		4,191
Reversal of unused provisions		(6,072)
Balance at December 31, 2020	$	2,970
Balance at January 1, 2019	$	4,750
Increase in provisions		6,838
Provisions recognized		(33)
Reversal of unused provisions		(6,704)
Balance at December 31, 2019	$	4,851

(m) Current provisions (recorded as other payable)

The Company may have losses caused by the defeats of new products that are not yet mass-produced and by the return and compensation that occurred after products were delivered to customers. The Company had estimated the provisions based on historical experience and had recognized the amount under operating cost. (n) Lease liabilities

The Company's lease liabilities were as follow:

December 31, 2020 Current $ 29,417 Non-current $ 15,034 For the maturity analysis, please refer to note 6(y). The amounts recognized in profit or loss were as follows: 2020 Interest on lease liabilities $ 1,166 Expenses relating to short-term leases $ 748 Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets $ 834 The amounts recognized in the statement of cash flows for the Company were as follows: 2020 Total cash outflow for leases $ 54,105	December 31, 2020 $ 29,417	December 31, 2019
		52,313
	$ 15,034	61,249
	2020 $ 1,166	2019
		2,195
	$ 748	640
	$ 834	1,979
		2019
		64,158

(o) 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, 2020 $ 66,587 66,167 59,333 46,791 12,138 56,232	December 31, 2019 53,603 51,854 51,253 46,811 33,742 -
	$ 307,248	237,263

In 2020 and 2019, the rental income from investment property amounted to $64,663 thousand and $33,529 thousand, respectively.

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(p) 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, 2020 $ 606,090 (535,923)	December 31, 2019
		615,154 (504,256)
	$ 70,167	110,898

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 $535,923 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, 2020 and 2019 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	2020 $ 615,154 11,598 15,816 14,247 (50,725)	2019
		607,256 12,664 16,393 20,478 (41,637)
	$ 606,090	615,154

3) Movements in fair value of plan assets

The movements in the fair value of the plan assets for the years ended December 31, 2020 and 2019 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	2020 $ 504,256 4,867 15,816 61,709 (50,725)	2019
		467,801 5,111 16,393 56,588 (41,637)
	$ 535,923	504,256

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4) Expenses recognized in profit or loss

The expenses recognized on profit or loss for the years ended December 31, 2020 and 2019 were as follows:

2020 2019 Current service cost $ 5,645 6,009 Net interest on the defined benefit liability (asset) 1,086 1,544 $ 6,731 7,553 2020 2019 Operating costs $ 4,008 4,573 Operating expenses 2,328 2,383 Other income and expenses 290 367 Other receivables 105 230 $ 6,731 7,553 Actuarial assumptions The following are the Company's principal actuarial assumptions at the reporting dates: December 31, 2020 December 31, 2019 Discount rate 0.625% 1.000% Future salary increases rate 1.500% 1.500%	2020 $ 5,645 1,086	2019
		6,009 1,544
	$ 6,731	7,553
	2020 $ 4,008 2,328 290 105	2019
		4,573 2,383 367 230
	$ 6,731	7,553
		1.000% 1.500%

5) Actuarial assumptions

The Company expects to make contributions of $17,323 thousand to the defined benefit plans in the next year starting from the reporting date of 2020.

The weighted average duration of the defined benefit plan is 10.11 years.

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, 2020 and 2019, the effects of the present value of the defined benefit obligation arising from changes in principle actuarial assumptions were as follows:

December 31, 2020 Discount rate Future salary increase rate December 31, 2019 Discount rate Future salary increase rate	Effects of defined benefit obligation Increase 0.25% Decrease 0.25% $ (11,785) 12,142 11,608 (11,330) (12,334) 12,751 12,266 (11,932)	Effects of defined benefit obligation Increase 0.25% Decrease 0.25% $ (11,785) 12,142 11,608 (11,330) (12,334) 12,751 12,266 (11,932)
		Decrease 0.25%
		12,142 (11,330) 12,751 (11,932)

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

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(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.

The Company's pension costs under the defined contribution plan were $26,818 thousand and $26,262 thousand for the years 2020 and 2019, 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, 2020 $ 28,541	December 31, 2019
		27,730

(q) Income tax

(i) Income tax expenses

The amount of the Company's income tax expenses for the years ended December 31, 2020 and 2019 were as follows:

ollows:
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	2020 $ 50,470 7,106	2019
		18,735 -
	57,576	18,735
	31,752 14,419	156,975 1,883
	46,171	158,858
	$ 103,747	177,593

Reconciliations of the Company's income tax expense (benefit) and the profit before tax for 2020 and 2019 were as follows:

Income before tax Income tax using the Company's domestic tax rate Dividend income Adjustment for prior periods Surtax on unappropriated earnings R&D tax credits utilized Change in unrecognized temporary differences Income basic tax Regulations Governing the Utilization, and Taxation of Repatri- ated Offshore Funds Others Total Recognized deferred tax assets and liabilities 1) Unrecognized deferred tax assets The Company deferred tax assets have not been recognized Tax effect of deductible Temporary Differences The carryforward of unused tax losses	2020 $ 81,856	2019
		917,909
	$ 16,371 (10,516) 7,106 - (17,824) 14,419 - 34,589 59,602	183,582 (11,625) - 7,105 (9,000) 1,883 7,147 - (1,499)
	$ 103,747	177,593
	in respect of the following items: December 31, 2020 December 31, 2019 $ - 9,000 83,695 60,276
		9,000 60,276
	$ 83,695	69,276

(ii) Recognized deferred tax assets and liabilities

1) Unrecognized deferred tax assets

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Under the income tax rate, tax losses can be carried forward for ten years to offset taxable income after permitted by domestic tax authority. 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.

As of December 31, 2020, the amount of tax losses not yet recognized as deferred tax assets is as follows:

Year 2016 2018	Amount $ 32,583 51,112 $ 83,695	Year of expiration
		2026 2028

2) Recognized deferred income tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2020 and 2019 were as follows: Deferred tax assets:

Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020 Balance at January 1, 2019 Recognized in profit or loss Balance at December 31, 2019	Defined benefit plans $ 13,731 (11,013) $ 2,718 $ 23,520 (9,789) $ 13,731	Allowance for inventory valuation 25,400 223 25,623 18,671 6,729 25,400	Loss carryforward 9,460 (9,460) - 8,626 834 9,460	Others 23,039 15,746 38,785 20,337 2,702 23,039	Total
					71,630 (4,504)
					67,126
					71,154 476
					71,630

Deferred tax liabilities:

Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020 Balance at January 1, 2019 Recognized in profit or loss Balance at December 31, 2019	Foreign investment income accounted for under equity method $ 586,688 55,408 $ 642,096 $ 427,475 159,213 $ 586,688	Capitaliza- tion of inter- est expense 36,246 (813) 35,433 36,980 (734) 36,246	Land value increment tax 56,683 - 56,683 56,683 - 56,683	Others 18,120 (12,928) 5,192 17,265 855 18,120	Total
					697,737 41,667
					739,404
					538,403 159,334
					697,737

(iii) Assessed of tax

The tax returns of the Company have been assessed by the tax authorities through 2018.

(r) 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, 2020 and 2019, 825,709,978 shares of ordinary were issued.

(ii) Additional paid-in capital

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

Share premium Over-aging unclaimed dividends	December 31, 2020 $ 849 48,682	December 31, 2019
		849 46,291
	$ 49,531	47,140

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.

191

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(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. In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, 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.

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 as bonuses, 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.

Dividends distributed to common shareholders: Cash	2019	Total amount 412,855	2018
	Amount per share (NT dollars) $ 0.50		Amount per share (NT dollars) 0.98	Total amount
				809,195

192

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On March 11, 2021, the Company's Board of Directors resolved to appropriate the 2020 earnings. These earnings were appropriated as follows:

Dividends distributed to common shareholders: Cash (iv) Other equities Balance as of January 1, 2020 Foreign exchange differences arising from foreign operation Unrealized gains or losses from financial assets measured at fair value through other comprehen- sive income Disposal of investments in equity instruments at fair value through other comprehensive income Share of other comprehensive income of associates and joint ventures accounted for under equity method, losses on effective portion of cash flow hedges Balance as of December 31, 2020 Balance as of January 1, 2019 Foreign exchange differences arising from foreign operation Unrealized gains or losses from financial assets measured at fair value through other comprehen- sive income Disposal of investments in equity instruments at fair value through other comprehensive income Share of other comprehensive income of associates and joint ventures accounted for under equity method, losses on effective portion of cash flow hedges Balance as of December 31, 2019	Foreign ex- change differ- ences arising from foreign	2020	2020	2020
			Total amount
				297,256
				Total
				653,951 (221,508) (67,869) (84,323) (593)
				279,658
				1,199,260 (442,206) 106,662 (197,373) (12,392)
				653,951

(s) Earnings (losses) per share

The calculation of the Company's basic earnings (losses) per share and diluted earnings (losses) per share for the years ended December 31, 2020 and 2019 were as follows:

(i) Basic earnings (losses) per share

Net income (loss) attributable to common shareholders of the Com- pany Weighted-average number of common shares (in thousands) Basic earnings (losses) per share (in NT dollars)	2020 $ (21,891)	2019
		740,316
	825,710	825,710
	$ (0.03)	0.90

193

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Diluted earnings (losses) per share
				2020		2019
Net income (loss) attributable to common		shareholders of the Com-
pany (diluted)			$		(21,891)	740,316
Weighted-average number of common shares (basic) (in thousands)					825,710	825,710
Impact of potential common shares
Effect of employees' compensation (in thousands)					-	2,686
Weighted-average number of shares	outstanding (diluted) (in thou-
sands)					825,710	828,396
Diluted earnings (losses) per share (in	NT dollars)		$		(0.03)	0.89
neration to employees and directors
cordance with the Company's articles of		incorporation, if there is profit for			the year, the Company should
ibute more than 1% of its profit as employees' remuneration,, and less than 1%					as directors' remuneration. The
d regulations on the distribution of remunerations to employees and			directors		will have to be	approved by the
of Directors.
he years ended December 31, 2020	and 2019, the Company estimated its employees' compensation were
50 thousand and $53,614 thousand,	respectively, and the estimated		amounts		of directors remuneration were
thousand and $9,813 thousand, respectively. The estimated amounts			mentioned above were			according to the
pany's articles of incorporation, and were recorded as operating cost or operating expenses						in the respective
ds. Related information would be available		at the Market Observation Post System website. Except for the above
ioned 2019 remuneration to directors, the		board would also consider	the Company’s operating performance
egional market standards. The board decided to distribute the difference from the previous provision of $4,907
sand, to be recognized under the 2020 profit and losses. There were no differences between the amounts
buted by the Board of Directors and the estimated amounts in the Company's				non-consolidated financial reports
e years of 2020 and 2019.
nue from contracts with customers
			2020
		Non-synthetic
		Synthetic rubber	rubber			Total
ary geographical markets:
sia	$	6,487,970		418,538		6,906,508
merica		798,675	-			798,675
rope		363,567	-			363,567
thers		275,405	-			275,405
	$	7,925,617		418,538		8,344,155
r product lines:
nthetic rubber / elastomers	$	7,156,298	-			7,156,298
pplied materials		-		418,004		418,004
thers		769,319			534	769,853
	$	7,925,617		418,538		8,344,155
			2019
		Non-synthetic
		Synthetic rubber	rubber			Total
ary geographical markets:
sia	$	7,564,835		1,311,012		8,875,847
merica		1,183,280	-			1,183,280
rope		311,742	-			311,742
thers		486,076	-			486,076
	$	9,545,933		1,311,012		10,856,945
r product lines:
nthetic rubber / elastomers	$	8,567,665	-			8,567,665
pplied materials		-		1,308,569		1,308,569
thers		978,268			2,443	980,711
	$	9,545,933		1,311,012		10,856,945
		194

(ii) Diluted earnings (losses) per share

(t) 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, 2020 and 2019, the Company estimated its employees' compensation were $40,750 thousand and $53,614 thousand, respectively, and the estimated amounts of directors remuneration were $616 thousand and $9,813 thousand, respectively. The estimated amounts mentioned above were according to the Company's 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. Except for the above mentioned 2019 remuneration to directors, the board would also consider the Company’s operating performance and regional market standards. The board decided to distribute the difference from the previous provision of $4,907 thousand, to be recognized under the 2020 profit and losses. There were no differences between the amounts distributed by the Board of Directors and the estimated amounts in the Company's non-consolidated financial reports for the years of 2020 and 2019.

(u) Revenue from contracts with customers

	2020
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 2019	Total
		6,906,508 798,675 363,567 275,405
		8,344,155
		7,156,298 418,004 769,853
		8,344,155

Synthetic rubber $ 7,564,835 1,183,280 311,742 486,076 $ 9,545,933 $ 8,567,665 - 978,268 $ 9,545,933	Non-synthetic rubber 1,311,012 - - - 1,311,012 - 1,308,569 2,443 1,311,012	Total
		8,875,847 1,183,280 311,742 486,076
		10,856,945
		8,567,665 1,308,569 980,711
		10,856,945

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(v) Other income and expenses

The components of the Company's other income and expenses for the years ended December 31, 2020 and 2019 were as follows:

Rental income Royalty income Net service income Depreciation of investment properties Net other income (losses) Other income and expenses Non-operating income and expenses (i) Interest income Interest income from bank deposits (ii) Other gains Dividend income	2020 $ 64,663 125,618 15,765 (14,726) 19,365 $ 210,685 2020	2019 33,529 152,824 6,954 (14,725) (2,871) 175,711 2019
	$ 6,503	8,887
	2020 $ 56,878	2019
		63,426

(w) Non-operating income and expenses
(iii) Other gains and losses

The components of the Company's other gains and losses for the years ended December 31, 2020 and 2019 were as follows:

2020 Foreign exchange gain, net $ 7,986 Gains (losses) on financial assets (liabilities) at fair value through profit or loss (1,871) Other loss (gain) (159) Other gains and losses, net $ 5,956 (iv) Finance costs 2020 Interest expense $ 78,788 eclassification of components of other comprehensive income he changes in components of other comprehensive income were as follows: 2020 Effective portion of cash flow hedges: Net gains (losses) for current year $ (29,380) Less: Adjustment of reclassification included in profit or loss (28,787) Net gains (losses) recognized in other comprehensive income $ (593)	2019
	20,588 135 536
	21,259
	2019
	101,610
	2019
	(14,112) (1,720)
	(12,392)

(x) Reclassification of components of other comprehensive income

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

(y) 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, 2020 and 2019, the maximum credit risk exposure amounted to $2,143,945 thousand and $2,611,947 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.

195

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(ii) Liquidity risk

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

December 31, 2020 Non-derivative financial liabilities Short-term borrowings Accounts payable Other payable Long-term borrowings (including other long-term borrowings and current portion) Lease liabilities Deposits received Derivative financial liabilities Other forward contracts: Outflow December 31, 2019 Non-derivative financial liabilities Short-term borrowings Accounts payable Other payable Long-term borrowings (including current portion) Lease liabilities Deposits received Derivative financial liabilities Other forward contracts: Outflow	Contractual cash flows $ 2,699,986 674,118 509,913 3,471,621 44,800 16,855 81 $ 7,417,374 $ 3,138,781 866,363 629,017 3,895,618 117,821 13,734 228 $ 8,661,562	Within 6 months
		2,699,986 674,118 509,913 1,065,410 15,062 - 81
		4,964,570
		3,138,781 866,363 629,017 76,667 26,781 - 228
		4,737,837

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

196

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6-12 months - - - 1,063,431 15,062 - - 1,078,493 - - - 74,329 26,781 - - 101,110	1-2 years - - - 412,877 14,385 1,198 - 428,460 - - - 2,476,328 33,608 1,198 - 2,511,134	2-5 years - - - 929,903 291 12,536 - 942,730 - - - 1,268,294 30,651 12,536 - 1,311,481

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(iii) Currency risk

1) Risk exposure

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

December 31, 2020 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR December 31, 2019 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR JPY	Foreign currency (thousand dollars) $ 34,923 $ 1,730 $ 1,016 $ 10,992 $ 45,110 $ 1,455 $ 29,434 $ 1,605 $ 6,329 $ 12,659 $ 33,097 $ 1,797 $ 829	Exchange rate 28.5080 35.0563 0.2765 4.3813 28.5080 35.0563 30.1060 33.7488 0.2771 4.3231 30.1060 33.7488 0.2771	NTD
			995,585 60,647 281 48,159 1,285,996 51,007 886,140 54,167 1,754 54,726 996,418 60,647 230

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 decreased / increased by $2,323 thousand and $605 thousand for the years ended December 31, 2020 and 2019, 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	2020 Foreign exchange gain (loss) Average exchange rate $ 7,986 -	2019	2019
	Foreign exchange gain (loss) $ 7,986	Foreign exchange gain (loss) 20,588	Average exchange rate
			-

198

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(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 non-derivative 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 decreased / increased by 1%, the Company's net income before tax would have decreased / increased by $61,205 thousand and $69,349 thousand for the years ended December 31, 2020 and 2019, respectively, with all other variable factors remaining constant. This is mainly due to the Company's borrowing at floating rates.

(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, 2020

Carrying amount $ 3,460 838,235 $ 841,695 $ 81		Fair value	Fair value
	Level 1 Level 2 Level 3 - 3,460 - - - 838,235 - 3,460 838,235 - 81 - December 31, 2019			Total
				3,460
				838,235 841,695
				81

Carrying amount $ 14 115,200 817,237 932,437 $ 932,451 $ 228		Fair value
	Level 1 - 115,200 - 115,200 115,200 -	Level 2 14 - - - 14 228	Level 3 - - 817,237 817,237 817,237 -	Total
				14
				115,200 817,237
				932,437
				932,451
				228

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.

199

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econciliation of Level 3 fair values	econciliation of Level 3 fair values
			Unquoted equity instruments
Balance at January 1, 2020			$	817,237
Total gains recognized:
In other comprehensive income (loss)				20,998
Balance at December 31, 2020			$	838,235
Balance at January 1, 2019			$	790,064
Total losses recognized:
In other comprehensive income (loss)				27,173
Balance at December 31, 2019			$	817,237
Quantified information on significant unobservable inputs (Level 3) used in fair value measurement
Quantified information of significant unobservable inputs				was as follows:
						Inter-relationship be-
					tween significant unob-
			Significant unobservable		servable inputs and fair
Item	Valuation technique			inputs			value measurement
Financial assets at fair	Comparative listed		・	Multipliers of	・		the estimated fair
value through other	company			price-to-earnings			value would have
comprehensive income －				ratios as of			been higher if the
equity investments without an active market				December 31, 2020 and 2019			price-to-earnings and market-to-
				were 15.62~17.8			book ratios would
				and 15.79~17.41,			be higher.
				respectively	・		the estimated fair
			・	Multipliers of			value would have
				equity ratios as			been higher if the
				of December 31,			market liquidity
				2020 and 2019			discount would be
				were 1.38 and 1.17,			lower.
				respectively
			・	Market liquidity
				discount rate as
				of December 31,
				2020 and 2019 was
				both 20%
air value measurements in Level 3 －sensitivity analysis of reasonably possible alternative assumptions
or fair value measurements in Level 3, changing one or more of the assumptions						would have the following
ffects on profit or loss and other comprehensive		income:
					Other comprehensive in-
							come
			Input Assumptions		Favorable Unfavorable
December 31, 2020
Financial assets fair value through other com-
prehensive income
Equity investments without an active market		Liquidity dis- 1% $					10,482 (10,482)
		count at		20%
December 31, 2019
Available-for-sale financial assets
Equity investments without an active market		Liquidity dis- 1%					10,243 (10,243)
		count at		20%
he favorable and unfavorable effects represent the changes in fair value, and					the		fair value is based on a
ariety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the
ffects of changes in a single input, and it does not include the interrelationships					with another input.
	200

3) Reconciliation of Level 3 fair values

4) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement Quantified information of significant unobservable inputs was as follows:

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, 2020 and 2019 were 15.62~17.8 and 15.79~17.41, respectively ・ Multipliers of equity ratios as of December 31, 2020 and 2019 were 1.38 and 1.17, respectively ・ Market liquidity discount rate as of December 31, 2020 and 2019 was both 20%	Inter-relationship be- tween significant unob- servable inputs and fair value measurement
			・ the estimated fair value would have been higher if the price-to-earnings and market-to- book ratios would be higher. ・ the estimated fair value would have been higher if the market liquidity discount would be lower.

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:

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(z) 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.

(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 2020 and 2019, 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 long-term credit rating. Hence, there is no significant credit risk.

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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, 2020 and 2019, 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 EUR, USD, 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, USD, EUR and JPY.

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.

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.

(aa) 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, 2020 $ 8,236,203 14,139,120 $ 22,375,323 39%	December 31, 2019
		9,415,954 14,875,692
		24,291,646
		39%

As of December 31, 2020, there were no material changes in the Company's debts ratio.

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(ab) 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, 2020 and 2019.

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

Reconciliation of liabilities arising from financing activities for the years ended December 31, 2020 and 2019 were as follows:

Cash flows (376,282) - (379,814) (51,357) (807,453) Cash flows	Non-cash changes Foreign exchange movement Amorti- zation of commer- cial paper discount Others - - - - 54 - (58,267) - - - 1,166 (18,920) (58,267) 1,220 (18,920) Non-cash changes Foreign exchange movement Amorti- zation of commer- cial paper discount Others - - - - 5,257 - (11,593) - - - 2,195 665 (11,593) 7,452 665	Non-cash changes Foreign exchange movement Amorti- zation of commer- cial paper discount Others - - - - 54 - (58,267) - - - 1,166 (18,920) (58,267) 1,220 (18,920) Non-cash changes Foreign exchange movement Amorti- zation of commer- cial paper discount Others - - - - 5,257 - (11,593) - - - 2,195 665 (11,593) 7,452 665	December 31, 2020 3,073,718 349,341 2,697,482 44,451 6,164,992 December 31, 2019



	Amorti- zation of commer- cial paper discount - 5,257 - 2,195 7,452	Others
(350,000) (155,663) 792,588 (59,344)		- - - 665	3,450,000 349,287 3,135,563 113,562
227,581		665	7,048,412

<7> Related-party transactions

(a) Parent company and ultimate controlling party

Montrion Corporation is the ultimate controlling party of the Company, which indirectly holds 14.14% of the company's outstanding common shares through Han-De Construction Co., Ltd. and Wei-Dar Development Co., Ltd. and controls more than half of board of directors members.

(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 relatedparty Trimurti Holding Corporation 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.)	Relationship with the Company
	The subsidiary of the Company 〃〃〃〃〃〃〃

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Name of relatedparty			Relationship with the Company	Relationship with the Company	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 Corporation		Other related parties of the Company
Continental Engineering Corporation				〃
WFV Corporation				〃
ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.		The subsidiary recognized associates under equity
		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.				〃
ignificant transactions with related parties
i) Revenue
The amounts of sales transactions with related parties were as follows:
			2020		2019
Subsidiaries		$		553,313	560,430
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:
			2020		2019
Subsidiaries		$		16,452	29,233
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.
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:
			2020		2019
Subsidiaries
TSRC (Nantong) Industries Ltd.		$		55,791	62,975
Other subsidiaries				32,707	46,403
Associates
Other associates				11,241	12,678
Joint ventures
Indian Synthetic Rubber Private Limited				42,370	53,466
		$		142,109	175,522
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,					2020 and 2019,
the services amounted to $69,775 thousand and $71,280 thousand, respectively, and were recorded under
operating costs and operating expenses.
	204

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

(ii) Purchases

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(iv) Leases －Rent income

2020 $ 4,472	2019
	4,445

Other related parties

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

(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, 2020 $ 21,909 32,789 28,862 3,713 87,273 63,830 13,996 9,479 17,184 104,489 $ 191,762	December 31, 2019
			17,362 34,574 55,015 7,520
			114,471
			107,146 22,207 10,693 17,541
			157,587
			272,058

(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:

follows:
Account Accounts payables Other payables Other payables Other payables	Type of relatedparties	December 31, 2020 $ 3,827	December 31, 2019 2,868 62,354 29,757 55 92,166 95,034
	Subsidiaries Subsidiaries TSRC (Lux.) Corporation S.'a r.l. Other subsidiaries Other related parties
		52,630 21,027 416
		74,073
		$ 77,900

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(vii) Guarantees

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

	follows:
			December 31, 2020		December 31, 2019
	Subsidiaries
	TSRC (Vietnam) Co., Ltd.	$		504,592	439,548
	TSRC (USA) Investment Corporation			427,620	451,590
	TSRC Specialty Materials LLC			285,080	301,060
	Associates
	ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.			1,577,416	1,113,557
	Joint ventures
	Indian Synthetic Rubber Private Limited			949,316	1,431,541
		$		3,744,024	3,737,296
	Accordingly, the amounts of the Company recognized provision		liabilities and the investment accounted for
	under the equity method were as follows:
			December 31, 2020		December 31, 2019
	Associates
	ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.	$		733	4,080
	Joint ventures
	Indian Synthetic Rubber Private Limited			31,086	15,147
		$		31,819	19,227
	(d) Key management personnel transactions
	The compensation of the key management personnel comprised the following:
				2020	2019
	Short-term employee benefits	$		86,175	89,439
	Post-employment benefits			565	596
		$		86,740	90,035
<8>	Pledged assets: None.
<9>	Commitments and contingencies
	(a) The unused letters of credit outstanding
		December 31, 2020			December 31, 2019
	The Company's unused letters of credit outstanding	$		893,828	842,720
	(b) Total amounts and the cumulative payments of Company's signed construction and design				contracts with severa
	vendors as follows:
		December 31, 2020			December 31, 2019
	The total amounts of construction in progress contracts	$		408,750	48,700
	Cumulative payments	$		179,653	37,340

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

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

<10> Losses Due to Major Disasters: None.

<11> Subsequent Events

On March, 11 2021, the Company intends to dispose its land and building located in Renwu District, Kaohsiung, to a non related party at a price of $1,220,000 thousands in order to activate its assets, with an estimated disposed propertied benefit of approximately $882,000 thousand.

206

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<12> Other

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

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----- Start of picture text -----

By function 2020 2019
Operating Operating Operating Operating
Total Total
costs expenses costs expenses
By nature
Employee benefits
Salary 325,722 355,675 681,397 336,171 334,495 670,666
Labor and health insurance 33,666 27,359 61,025 34,490 25,852 60,342
Pension (note 1) 17,037 14,863 31,900 17,874 14,059 31,933
Directors' remuneration - 6,276 6,276 - 22,879 22,879
Others (note 2) 38,367 44,630 82,997 44,629 53,359 97,988
Depreciation (note 3) 237,649 69,594 307,243 227,386 64,940 292,326
Amortization (note 4 ) 4,403 16,015 20,418 5,486 19,213 24,699
----- End of picture text -----

Note1： Pension expenses excluded expenses for employees on international assignments amounting to $1,649 thousand and $1,882 thousand for the years ended December 31, 2020 and 2019, respectively.

Note2： Other employee benefit includes meal expenses, employee welfare, training fees and employee compensation.

Note3： Depreciation expenses for investment property recognized under other income and expenses, amounting to $14,726 thousand and $14,725 thousand for the years ended December 31, 2020 and 2019, respectively.

The Company's number of employees for the years ended December 31, 2020 and 2019 and additional information on employee benefits are as follows :

mployee 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	2020 690 6 $ 1,253 $ 996 2.79% $ -	2019
		700
		8
		1,244
		969
		-

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

207

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responsibility regulations to review and approved.

<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:

No.	Name of lender	Name of borrower	Financial statement account	Related party	Highest balance of financing to other parties during the year	Ending balance
1	TSRC (Shanghai) Indus- tries Ltd.	TSRC (Nantong) In- dustries Ltd.	Loan	Yes	265,847	87,626

Note 1: The loan limit extended per party of TSRC (Shanghai) Industries Ltd. 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 of TSRC (Shanghai) Industries Ltd. 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: TSRC (Shanghai) Industries Ltd., and TSRC (Nantong) Industries Ltd. 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".

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----- Start of picture text -----

Counter-party of guarantee and endorsement
Limitation on
Name Rela- amount of Highest balance for guarantees Ending balance
No. of Com- tionship and endorse-guarantees and endorse- of guarantees and endorse-
pany Name with the ments for one ments during ments
Compa- the year
party
ny
0 TSRC TSRC (USA) Investment Corporation 4 (Note 2) 907,620 427,620
ARLANXEO-TSRC (Nantong) Chemi-
0 TSRC 6 (Note 2) 1,577,416 1,577,416
cal Industries Co., Ltd.
Indian Synthetic Rubber Private Lim-
0 TSRC 6 (Note 2) 2,428,087 949,316
ited
0 TSRC TSRC (Vietnam) Co., Ltd. 4 (Note 2) 531,566 504,592
0 TSRC TSRC Specialty Materials LLC 4 (Note 2) 303,300 285,080
----- End of picture text -----

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 $8,483,472 thousand.

208

[Unit: thousand NTD]

Amount actually drawn						Collateral	Collateral	Financing limit for each borrow- ing Company	Maximum fi- nancing limit for the lender
	Range of in- terest rates	Purposes of fund financ- ing for the borrowers (Note 5)	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Item	Value
-		2	-	Operating capital	-		-	295,155 (Note 1)	590,310 (Note 2)

Any circumstances referred to in Paragraph 3(2) of Article 36 of the

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----- Start of picture text -----

[Unit: thousand NTD]
Endorse-
Ratio of accumu-
actually drawnAmount and endorsements Property pledged on guarantees(Amount) latest financial state-endorsements tolated amounts of net worth of the guarantees and Maximum allow-able amount for guarantees and endorsements third parties on be-half of subsidiaryParent company endorsement / guarantees to of parent companydorsement /guar-parties on behalf antees to third Subsidiary en- ments/guar-third parties on behalf of in Mainland Company antees to
ments
China
353,499 - 3.02% (Note 3) Y
229,043 - 11.16% (Note 3) Y
949,316 - 6.71% (Note 3)
430,471 - 3.57% (Note 3) Y
178,458 - 2.02% (Note 3) Y
----- End of picture text -----

209

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Note 3: The aggregate amount of guarantee by the Company is limited to 1.5 times its stockholders' equity, amounting to $21,208,680 thousand.

(iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

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----- Start of picture text -----

Relation-
Name of holder Nature and name ship with Account name
of security the securi-
ty issuer
TSRC Evergreen Steel Corporation - Available-for-sale financial assets －non-current
TSRC Thai Synthetic Rubbers Co., Ltd. - Available-for-sale financial assets －non-current
TSRC Hsin-Yung Enterprise - Available-for-sale financial assets －non-current
Corporation
Dymas Corporation Thai Synthetic Rubbers Co., Ltd. - Available-for-sale financial assets －non-current
----- End of picture text -----

(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: None.

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

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----- Start of picture text -----

Name of Company Counter-party Relationship
TSRC (Lux.) Corporation S.à r.l. TSRC Parent and subsidary companies
TSRC TSRC (Lux.) Corporation S.à r.l.. Parent and subsidary companies
TSRC Specialty Materials LLC TSRC Parent and subsidary companies
TSRC TSRC Specialty Materials LLC Parent and subsidary companies
Polybus Corporation Pte Ltd. TSRC (Nantong) Industries Ltd. Related parties
TSRC (Nantong) Industries Ltd. Polybus Corporation Pte Ltd. Related parties
TSRC (Lux.) Corporation S.à r.l. TSRC Specialty Materials LLC Related parties
TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.à r.l.. Related parties
TSRC (Lux.) Corporation S.à r.l. TSRC (Nantong) Industries Ltd. Related parties
TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.à r.l. Related parties
----- End of picture text -----

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

210

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Unit: thousand NTD

==> picture [483 x 165] intentionally omitted <==

----- Start of picture text -----

Ending balance
Number of shares Book value Holding percent- Market value Remarks
age
12,148,000 413,517 3.04% 413,517
599,999 81,960 5.42% 81,960
5,657,000 342,758 3.90% 342,758
837,552 114,410 7.57% 114,410
952,645 952,645
----- End of picture text -----

Unit: thousand NTD

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----- Start of picture text -----

Status and reason for
Account / note receivable
Transaction details deviation from arm's
-length transaction (payable)
Percentage
of total Remarks
Purchase / Sale Amount of total pur-Percentage Credit period Unit price Credit peri-od Balance accounts / notes
chases / sales
receivable
(payable)
Purchase 230,533 11.85% 70 days - (32,789) (19.05)%
Sale (230,533) (2.76)% 70 days - 32,789 3.16%
Purchase 176,654 9.02% 70 days - (28,863) (12.55)%
Sale (176,654) (2.12)% 70 days - 28,863 2.78%
Purchase 179,904 64.66% 40 days - (15,108) (80.58)%
Sale (179,904) (4.72)% 40 days - 15,108 3.36%
Purchase 638,188 32.81% 90 days - (48,424) (28.14)%
Sale (638,188) (18.35)% 90 days - 48,424 12.90%
Purchase 1,066,767 54.84% 70 days - (93,282) (54.53)%
Sale (1,066,767) (28.00)% 70 days - 93,282 20.85%
----- End of picture text -----

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(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 2020 (excluding information on investees in Mainland China):

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----- Start of picture text -----

Name of investor Name of investee Address Scope of business
TSRC Trimurti Holding Corpo-ration Palm Grove House, P.O.BOX 438, Road Town, Tortola B.V.I Investment corporation
Hardison International Palm Grove House, P.O.BOX 438, Road
TSRC Corporation Town, Tortola B.V.I Investment corporation
Palm Grove House, P.O.BOX 438, Road
TSRC Dymas Corporation Investment corporation
Town, Tortola B.V.I
Production and processing
8 VSIP IIA Street 31, Vietnam Singapore
TSRC (Vietnam) Co., of rubber color masterbatch,
TSRC Ltd. Industrial Park IIA, Tan Uyen Town, Binh thermoplastic elastomer and
Duong Province, Vietnam plastic compound products.
Trimurti Holding Cor- Polybus Corporation Pte 100 Peck Seah Street #0916 Singapore International commerce and
poration Ltd. 079333 investment corporation
15/F BOC Group Life Assurance Tower 136
Trimurti Holding Cor-poration TSRC (Hong Kong) Limit-ed Des Voeux Road Central Investment corporation
Room No.702, Indian Oil Bhawan, 1 Sri
Trimurti Holding Cor-poration Indian Synthetic Rubber Private Limited Aurobindo Marg, Yusuf Sarai, New Delhi 110016, India Produchion and sale of ESBR
TSRC (Hong Kong) Lim- TSRC (Lux.) Corporation 39-43 avenue de la Liberte L1931 Luxem- International commerce and
ited S.à r.l. bourg investment corporation
2711 Centerville Road, Suite 400, Coun-
TSRC (Lux.) Corporation TSRC (USA) Investment
S.à r.l. Corporation try of New Castle, Wilmington, Delaware. ,19808. Investment corporation
TSRC (USA) Investment TSRC Specialty Materials 12012 Wickchester Lane, Suite 280, Hous- Produchion and sale of TPE
Corporation LLC ton, TX77079
Hardison International Triton International Palm Grove House, P.O.BOX 438, Road
Corporation Holdings Corporation Town, Tortola B.V.I Investment corporation
Hardison International Palm Grove House, P.O.BOX 438, Road
Corporation Dymas Corporation Town, Tortola B.V.I Investment corporation
Consulting for electric power
Asia Pacific Energy
Dymas Corporation Cayman Islands facilities management and
Development Co., Ltd.
electrical system design
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Note 1: Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD28.508; EUR1 to NTD35.0563).

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

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

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Cumulative
Method of investment
Name of investee
in Mainland China Scope of business Issued capital investment (amount) from
(Note 1) Taiwan as of
January 1, 2019
Shen Hua Chemical Industries Production and sale of synthetic rub- 1,175,100 -
(2)a.
Co., Ltd. ber products (USD41,220)
Changzhou Asia Pacific Power generation and sale of elec- 658,535 109,243
(2)c.
Co-generation Co., Ltd. tricity and steam (USD23,100) (USD3,832)
TSRC (Shanghai) Industries Production and sale of compound- 156,794 111,751
(2)b.
Ltd. ing materials (USD5,500) (USD3,920)
85,524 42,762
Nantong Qix Storage Co., Ltd. Storehouse for chemicals (2)d.
(USD3,000) (USD1,500)
TSRC-UBE (Nantong) Indus- Production and sale of synthetic rub- 1,140,320 28,508
(2)a.
tries Ltd. ber products (USD40,000) (USD1,000)
2,996,904 189,521
TSRC (Nantong) Industries Ltd. Production and sale of TPE (2)a.
(USD105,125) (USD6,648)
ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. Production and sale of NBR (USD44,800)1,277,158 [(2)a.] -
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212

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Unit: thousand NTD/thousand USD/thousand EUR

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Original cost Ending balance
Net income Investment
Remarks
December 31, December 31, Shares Percentage of Book value (loss) of investee income (loss)
2020 2019 ownership
1,005,495 1,005,495 86,920,000 100.00% 12,779,698 395,611 395,611 Subsidiary
109,442 109,442 3,896,305 100.00% 553,628 60,952 60,952 Subsidiary
38,376 38,376 1,161,004 19.48% 114,017 86,046 16,761 [Subsidiary ]
(note 2)
278,280 278,280 - 100.00% 197,619 (35,049) (35,049) Subsidiary
(USD65,101)1,855,899 (USD65,101)1,855,899 [ 105,830,000] 100.00% 8,132,280 794,946 794,946 [sub-subsidi-] ary
(USD103,850)2,960,556 (USD77,850)2,219,348 [ 103,850,000] 100.00% 3,405,313 (375,292) (375,292) [sub-subsidi-] ary
(USD29,473)840,216 (USD29,473)840,216 [ 222,861,375] 50.00% 512,624 280,563 140,281 -
2,624,665 1,780,860 74,869,617 100.00% 2,715,817 (459,113) (459,113) [sub-subsidi-]
(EUR74,870) (EUR50,800) ary
2,738,193 1,996,985 130 100.00% 2,678,391 (436,828) (436,828) [sub-subsidi-]
(USD96,050) (USD70,050) ary
6,232,333 5,491,125 - 100.00% 2,106,217 (77,948) (77,948) [sub-subsidi-]
(USD218,617) (USD192,617) ary
1,425 1,425 50,000 100.00% 59,006 (8,247) (8,247) [sub-subsidi-]
(USD50) (USD50) ary
136,810 136,810 4,798,566 80.52% 492,601 86,045 69,284 [sub-subsidi-]
(USD4,799) (USD4,799) ary
321,713 321,713 7,522,337 37.78% 409,244 208,822 78,893 -
(USD11,285) (USD11,285)
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Unit: thousand NTD/thousand USD

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Investment flow during Cumulative
current period investment Net income Direct / indirect Accumulated
(amount) investment Investment Book remittance of
Remittance amount triation Repa- of December 31, from Taiwan as (losses) ofinvestee percentageholding income (losses) value current periodearnings in
amount 2020
- - - 497,954 65.44% 325,861 1,896,262 4,786,340
(Note 2)
- - 109,243 324,574 28.34% 91,984 382,844 358,308
(USD3,832) (Note 3)
- - 111,751 90,662 100.00% 90,662 590,310 -
(USD3,920) (Note 2)
- - 42,762 (16,260) 50.00% (8,130) 58,632 74,060
(USD1,500) (Note 2)
- - 28,508 144,576 55.00% 79,517 887,941 -
(USD1,000) (Note 2)
- - 189,521 316,229 100.00% 316,229 4,717,180 440,864
(USD6,648) (Note 2)
- - - 180,927 50.00% 90,464 323,287 -
(Note 3)
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213

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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 NTD28.508).

(ii) Limitation on investment in Mainland China:

Accumulated investment amount in Mainland China as of December 31, 2020	Investment (amount) approved by Investment Commission, Ministry of Economic Affairs	Maximum investment amount set by Investment Commission, Ministry of Economic Affairs
481,785 (USD16,900)	5,340,546 (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 23, 2018. 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 20, 2018 to August 19, 2021.

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 NTD28.508).

(iii) Significant transactions:

1) Sales and accounts receivable

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

		2020
TSRC (Shanghai) Industries Ltd.	$		7,751
TSRC (Nantong) Industries Ltd.			80,721
Shen Hua Chemical Industries Co., Ltd.			8,666
	$		97,138
The related accounts receivable resulting from the above transactions			as of December 31, 2020 as follows:
		December 31,	2020
TSRC (Shanghai) Industries Ltd.	$		1,993
TSRC (Nantong) Industries Ltd.			21,909
	$		23,902

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.

2) Purchases and accounts payable

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

		2020
TSRC (Nantong) Industries Ltd.	$	16,452
The related accounts payable resulting from the above		transactions as of December 31, 2020 as follows:
		December 31, 2020
TSRC (Nantong) Industries Ltd.	$	3,827

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

214

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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 2020 $ 3,875 55,791 862 7,921 11,241 $ 79,690

3) Service income

4) Guarantees

As of December 31, 2020, guarantees provided by the Company for the bank loans of investees in Mainland China was as follows:

China was as follows:	China was as follows:
ARLANXEO-TSRC (Nantong) Chemical Industrial Co., Ltd. Major shareholders:		2020 $ 1,577,416
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-Dar Development Co., Ltd.	53,708,923		6.50%

(d) Major shareholders:

<14> Segment information

Please refer to the year 2020 consolidated financial statements.

215

AI assistant

TSRC — Annual Report 2021

51969_rns_2021-08-11_c7554dba-80e4-4ae6-bf45-737d4af60859.pdf

Letter to the Shareholders

Letter to the Shareholders

Letter to the Shareholders

Letter to the Shareholders

Company profile

I. Date of incorporation

II. Company history

2010's Globalization

2000's Expansion of Production Lines

1990's Rapid Regional Expansion

1980's Early Growing Stage

1970's Beginning

Corporate governance report

Corporate governance report

II. Information on Board of Directors and Presidents

<1> Information on Board of Directors (1)

Information on Board of Directors

Company profile

<2> Presidents' and vice presidents' remuneration

IV. Status of corporate governance implementation

<1> Operation of the board of directors

<2> Operation of the Audit Committee

<4> Information on Compensation Committee:

<5> Fulfillment of social responsibility

<7> Stipulations of Corporate Governance Best Practice Principles and related regulations

2. Procedures for handling material inside information

<9> Implementation of the Company's internal control system

1. A statement of Internal Control

TSRC Corporation A statement of Internal Control

2. Hiring CPA to carry on a special audit of the internal control system: No

V. Information on CPA professional fee

VI. Information on replacement of CPA-None

Information on capital raising activities

Information on capital raising activities

I. Capital and shares

<2> Shareholders' structure

<3> Diffusion of ownership

<5> Share price, net worth per share, EPS, dividends per share and related information

<6> Company Dividend Policy and Implementation

<8> Employees' compensation and directors' remuneration

Overview of business operations

Overview of business operations

I. Description of businesses

<1> Business Scope

1. Major business and product lines:

3. Planned Developments of New Products

<2> Industry Overview:

1. Global Economic Environment

2. Relevance of the industry's upstream, midstream and downstream:

3. Current Industry Status and Outlook:

<3> Overview of technology and R&D

1. R&D expenses

2. Successfully developed technology or products

<4> Long-Term and Short-Term Business Development Plans

2. Short-Term Plan:

II. Analysis of the market as well as the production and marketing situation

<1> Market Analysis

1. Major sales destinations

2. Market share:

3. Industry demand supply and market growth projection

4. Competitive positioning, future development factors and actions

<2> Important application and manufacturing processes of main products

1.Main product important use:

2.Outline of production process:

<3> Supply of main raw materials

V. Labor relations

<3> Estimated loss suffered by the Company due to labor disputes currently and in the future, and explanation measures

VI. Material contracts

Overview of financial status

Overview of financial status

I. Condensed balance sheet and statement of comprehensive income for recent five fiscal years

<1> Condensed balance sheet

Condensed statement of comprehensive income

CPA's name and auditor's opinion

1. Financial structure:

2. Solvency:

3. Operating ability:

TSRC Annual Report 2021