TSRC - Annual Report 2021 | FinancialReports.eu

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Spokesman:Edward Wang Job title: Vice President TEL:02-37016000 E-mail:[email protected]

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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

		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 regarding TSRC’s audit fees	45
VI.	Information on replacement of CPA	45
VII.	Chairman, president, or managers in charge of the Company's finance or accounting matters	45
	in the most recent year held a position at the accounting firm or any of its affiliated companies
VIII.	Information on directors, managers and shareholders holding more than 10% of outstanding	45
	shares transfer equity or equity pledge movements
IX.	Disclosure of Interrelationship among top 10 largest shareholders	46
X.	Equity investment and shareholding information held by the Company, its directors, managers	47
	and directly/indirectly owned subsidiaries
Information on capital raising activities		48
I.	Capital and shares	49
II.	Corporate Bonds Status	53
III.	Preferred stocks Status	53
IV.	Global depository receipts Status	53
V.	Employee stock warrants Status	53
VI.	Restricted Stock Awards Status	53
VII.	Status of issuance of new shares for mergers or acquisitions of other companies	53
VIII.	Status of capital utilization	53

		Page
Overview of business operations		54
I.	Business overview	55
II.	Market overview and production/sales analysis	59
III.	Employees information	61
IV.	Disbursements of environmental protections	62
V.	Labor relations	63
VI.	Cybersecurity Management	64
VII.	Material contracts	64
Overview of financial status		66
I.	Condensed balance sheet and statement of comprehensive income for the recent five fiscal	67
	years
II.	Financial analysis for the recent five fiscal years	71
III.	Audit committee's report	74
IV.	Consolidated financial statements and independent auditors' report for the most recent fiscal	75
	year
V.	Individual financial statements and independent auditors' report for the most recent fiscal	75
	year
VI.	The impact of financial difficulties in the Company and its affiliates on the Company's financial	75
	situation
Review and analysis of the Company's financial position and financial		76
performance, and risk management
I.	Financial position	77
II.	Financial performance	77
III.	Cash flow analysis	78
IV.	Impact of major capital expenditures within the most recent fiscal year on financial operations	79
V.	The Company's reinvestment policy for the most recent fiscal year, the main reasons for profit/	79
	loss generated thereby, the plan for improving re-investment profitability, and investment
	plans for the coming year
VI.	Analysis and assessment of risk management	79
VII.	Other important matters	81
Special items to be included		82
I.	Information related to the Company's affiliates	83
II.	State of the Company's conducting private placements of securities	91
III.	Holding or disposal of the Company's shares by the Company's subsidiaries	91
IV.	Other matters that require additional description	91
Other disclosures		91

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

Letter to the Shareholders

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Letter to the Shareholders

TSRC delivered outstanding performance in 2021 and continued to ensure the health and safety of our employees as our outmost priority during the pandemic. Despite the challenges imposed by port congestions, supply chain disruptions, coronavirus transmission, and Dual Control Policy in mainland China, TSRC achieved record revenue & profit in the past decade by leveraging favorable market dynamics, such as downstream demand recovery, widening price spread between natural rubber and butadiene and strained synthetic rubber supply, and responding to the rapid market changes with operation resilience and close customer collaboration. In terms of equity investments, Indian Synthetic Rubber Private Limited and ARLANXEO-TSRC (Nantong) Chemical Industrial Co., Ltd. also delivered strong profit growth, reflecting the market recovery in India and China.

In 2021, the sales volume was 545 thousand metric tons, an increase of 3% versus 2020. Consolidated revenue was NTD 32,533 million, an increase of 35% compared to NTD 24,024 million in 2020. Gross profit grew 132% to NTD 6,800 million and gross margin was 21%. Operating profit was NTD 3,928 million, an increase of 378% from 2020, and operating profit margin was 12%. As a result, 2021 net income was NTD 3,931 million, inclusive of a one-time land disposal gain of NTD 910 million, and with an EPS (earnings per share) of NTD 4.76.

Staying on course to become a global specialty chemical enterprise, TSRC continues to advance its strategic growth projects, such as increasing the commercial sales volume of solution styrene-butadiene rubber (SSBR) products to global tire brands for advanced green tires and gaining customer qualification for specialty hydrogenated styrenic block copolymer (HSBC) for medical application. In the area of R&D innovation, TSRC had 16 patents granted in 2021. TSRC established its second global R&D center in Texas USA, also its first R&D center outside Taiwan, to accelerate application development and product commercialization of specialty chemical polymers via an expanded international footprint.

Moving into 2022, the International Monetary Fund (IMF) downgraded the global economic growth forecast to 4.4% from 5.9% in 2021 and projected a moderate market growth. The economic outlook is expected to be impacted by challenges from inflation, supply disruptions, trade and geopolitical conflicts, and new coronavirus variants. TSRC plans to continue driving business growth momentum with effective sales and operation planning (S&OP) and business execution. In addition, significant resources and execution focus will be dedicated to key investment projects, such as the Shenhua relocation project, to strengthen our competitive advantages and leading market position. In advancing the Environmental, Social and Governance (ESG) initiative, TSRC will establish corporate targets in key areas including carbon emission reduction, renewable energy adoption, and water resource recycling, as well as detailed action plans to fulfill TSRC’s mission in sustainability and steadfast commitment to transformation.

Chairman: Nita Ing

Company profile

Company profile

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I. Date of incorporation
II. Company history

I. Date of incorporation

July 27, 1973

II. Company history

2020's High-Value Transformation and Sustainable Operation

Establishment of the Global R&D Center in Texas, the U.S.A.
Relocation and plant expansion of Shen Hua Chemical and ARLANXEO-TSRC

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2010's Globalization

Signed an SBS technology licensing contract with a Russian Company, which was the first technology out-licensing 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.
Participated in a joint venture project of BR with an annual output of 50 thousand metric tons in Thailand.

1980's Early Growing Stage

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

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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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Company's organization Shareholders Meeting
Compensation Committee
Board of Directors
Chairman
Audit Committee
Secretariat Division of Board
Corporate Governance Officer
Directors
Internal Auditing Office Chairman’s Office
CEO
Safety, Health &Environment Section
Division yS Division Division pO Division Fina gLe
erations
Department
nthetic Rubber nce Division
al Department
Advanced Materials Research & Development Management Department Human Resources & Corporate Development
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I. Company's organization

Tasks of principal divisions/departments/business

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Corporate Chief officer who is responsible for affairs related to corporate governance, assisting Directors in executing their duties,
Governance Officer reinforcing the operations of the Board, and legal compliance.
Internal Auditing Planning and performing internal audit to ensure the effective operation of the internal system as well as establishing
Office corporate risk evaluation and risk management mechanisms.
Secretariat Division
of Board Directors Planning and implementing matters of the Board of Directors for the smooth operation of the Board.
Chairman’s Office Manage Chairman’s relevant administrative affairs.
Safety, Health & Prepare, plan for, supervise, and promote management matters of safety and health, as well as environmental protec-
Environment Section tion, and supervise relevant departments in implementation.
Synthetic Rubber Responsible for planning and executing the synthetic rubber business development project, selling synthetic rubber
Division products, analyzing overall performance, and responsible for operation result.
Advanced Materials Responsible for planning and executing the development project for advanced material business, selling thermoplastic
Division elastomer (TPE) and applied materials, analyzing overall performance, and responsible for operation result.
Responsible for managing the production of plants, supervising the system operation of the supply chains, dedicating
Operations Division to maintaining the operational safety of plants, improving quality, maximizing production efficiency, and improving
the competitiveness of products.
Research & Developing own or introducing advanced technologies externally in cope with the long-term strategy of TSRC, which
Development allows the product quality of TSRC and technology to reach international level, improves the overall competitiveness,
Division and increases revenues to ensure the sustainability of TSRC.
Responsible for the stipulation of financial policy and accounting system, planning and managing funds, accounts, taxes,
Finance Division 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 effi-
ciency of operational management and decision-making.
Human Resources Planning and establishing human resources policy, drafting plans and budget for employee selection, recruitment,
& Management cultivation, retainment, and employee relations, as well as shaping organizational culture and promoting organization-
Department al management in order to fulfill the goal of the organization and operate effectively.
Legal Department Responsible for legal management and providing legal support to ensure the interests of TSRC are not harmed.
Corporate
Stipulating the medium to long-term development strategy, integrating and allocating resources, supervising execu-
Development
tion process of all projects, handling the promotion of corporate social responsibility and public relations.
Department
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II. Information on Board of Directors and Presidents

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II. Information on Board of Directors and Presidents
<1> Information on Board of Directors (1)
Shares currently
Nationality or Place of Gender/ Date of Term of Date Shares held when elected Shares currently held held by their spouses and
Job title Name of first children of
registra- Age elected contract
tion elected minor age
Share(s) % Share(s) % Share(s) %
Wei-Dar Devel-
Female
Chair-man Republic of China opment Corpo-ration 61 ~ August 4, 2021 3 July 27, 1985 53,708,9230 6.50- 53,708,9230 6.50- 0 -
Representative: 70
Nita Ing
Wei-Dar Devel-
opment Corpo- Male
Director Republic of China Representative: ration 61 ~ August 4, 2021 3 June 21, 2018 53,708,9230 6.50- 53,708,9230 6.50- 0 -
Jing-Lung 70
Huang
Han-De Con-
struction Co., Male
Director Republic of China Representative: Ltd. 61 ~ August 4, 2021 3 June 06, 2012 63,093,108 762 7.64- 63,093,108762 7.64- 0 -
Chin-Shan Chi- 70
ang
Han-De Con-
Male
struction Co.,
Director Republic of China Ltd. 71 ~ August 4, 2021 3 June 10, 2015 63,093,1080 7.64- 63,093,1080 7.64- 0 -
Representative: 75
John T. Yu
Male
Inde-
pendent Republic of China Robert Hung 71 ~ August 4, 2021 3 June 06, 2012 0 - 0 - 0 -
Director
75
Male
Inde-
pendent Republic of China Sean Chao 61 ~ August 4, 2021 3 June 21, 2018 0 - 0 - 0 -
Director
70
Male
Inde-
pendent Republic of China Rex Yang 61 ~ August 4, 2021 3 June 21, 2018 0 - 0 - 0 -
Director
70
Note1：relieved its office on January 17, 2022.。Note2：relieved its office on January 19, 2022. Note3：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.
Major shareholders of institutional shareholders December 31, 2021
Institutional shareholders Major institutional shareholders
Han-De Construction Co., Ltd. Mao Shi Corporation (99.37%), Wei-Dar Development Corporation (0.43%), Kayvan Corp. (0.20%)
Wei-Dar Devel opment Corpo ration Mao Shi Corporation (99.59%), Han-De Construction Co., Ltd. (0.21%), Kayvan Corp. (0.20%)
10
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December 31, 2021

II. Information on Board of Directors and Presidents

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Other officers, direc-
Shares held tors or supervisors Note
through Position(s) currently held in the who are their spouses
(
nominees Principal work experience and Academic qualification Company and/or in any other or relatives of 2 [nd] Note
Company degree of relationship
3 )
Job Rela-
Share(s) % Name
title tionship
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
0 - Chairman of Taiwan High Speed Rail Corporation Corporation. No No No No
General Manager, Continental Engineering Corporation Chairman of Continent Engineering
Director of Continent Development Company Company(Note1)
Director of American Bridge Holding Company
Bachelors' Degree in Department of Accounting, NCKU
Chief Auditor, Taiwan High Speed Rail Corporation
Director of Continent Engineering
President, Suzhou Standard Food Corporation
Company (Note1),
Chief Auditor, Philips Taiwan Affiliates
Director of Continent Development
Chief Financial Officer, Blue Bell Group, Hong Kong
0 - Chief Financial Officer, Getz Bros. & Co., Inc. Company(Note2), No No No No
Director of Continental Holdings
Managing Director of Pan Asia Corp,
Corporation
Chairman of Han-De Construction Co., Ltd,
Director of CDC Commercial Devel-
Chairman of Wei-Dar Development Corporation
opment Corporation
Chairman of Xi Hui Corporation
Chairman of Mao Shi Corporation
Masters' Degree in Department of Public Administration,
NCU
Director of Taiwan High Speed Rail Corporation
Chairman, Metropolis Property
0 - Senior Assistant GM,China Development Financial Management Corporation No No No No
Senior Assistant GM, China Development Industrial Bank Director of Hao Ran Foundation
Assistant GM, Shanghai Mart
Director of Wei-Dar Development Corporation,
Director of Han-De Construction Co., Ltd.
President, CTCI
Director of CTCI Corporation
Chairman of Xing Li Development
Company
Graduated from Advanced Management Class in Man-
Director of CTCI Overseas Corpora-
agement Faculty, Harvard University, Bachelors' Degree in tion Limited
0 - Department of Electrical Engineering, NTU Director of CTCI Education Founda- No No No No
Chairman of CTCI Corporation, tion
General Manager, CTCI Corporation
Director of TCC Managing Director of CTCI Founda-
tion
Director, Dynamic Ever Investments
Limited
Director, Ever Victory Global Limited
Masters' Degree in Department of Economics, Illinois State
University, USA , Independent Director of Wistron NeWeb
0 - Corporation 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 Administra-
tion, University of Chicago, Bachelors' Degree in Depart-
ment of Politics and International Relations, NTU Independent Director of Hann Star
0 - Chief Executive Officer, Morgan Stanley Taiwan Corporation No No No No
President, UBS Group in Taiwan Independent Director, NAFCO
Chairman, UBS Fund in Taiwan,
Vice President, UBS (Taiwan)
Bachelors' Degree in Department of Business Administra-
tion, Soochow University
CFO, Continental Holdings Corporation
0 - Chairman, TEAPO Electronic Corp( now Kaimei Electronic No No No No No
Corp.)
CFO/CSO,Yageo Corporation
Chief of Finance, Far Eastern New Century Corporation
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Major shareholders of major shareholders of institutional shareholders December 31, 2021

Institutional shareholders	Major institutional shareholders
Mao Shi Corporation	Jade Fortune Enterprises Inc.(100%)

Disclosure of Directors’ Professional Qualification and the Independent Status of Independent Directors

Number of Public Companies in which the Director is Concurrently An Independent Director

II. Information on Board of Directors and Presidents

Con-
dition Professional Qualification and ExperiIndependent Status
ence
Name ・ The Director possesses professional back・ The Director, its spouse, or any relative of 2[nd] degree of relationship is not an employee of the grounds related to business, finance, investCompany of its affiliates. ment holding, and construction, and over 30 ・ The Director, its spouse, or minor child(or in other’s name) is not a natural person shareyears of experiences in business manageholder who hold 1% of the total issued shares of the Company or above or has the top 10
Chair-man ment; currently, the Director is also the chair-man of Continental Holdings Corporation and the chairman of Hao Ran Foundation; ・ shareholding.The Director is not a director, supervisor, managerial officer, or shareholder with 5% of share-holding or above of particular companies or institutions possessing financial or business No Nita Ing she was previously the chairman of Contidealings with the Company. nental Engineering Company and Taiwan ・ The Director has not obtained compensation for the provision of business, legal, financial, or High Speed Rail Corporation. accounting services to the Company or its affiliate in the most recent two years.
・ There is no circumstance stated in Article 30 ・ The Director is not a spouse or a relative of the 2[nd] degree of relationship with any other di-
of the Company Act. rectors.
・ The Director possesses professional back・ The Director, its spouse, or any relative of 2[nd] degree of relationship is not an employee of the grounds related to business, finance, and Company of its affiliates. accounting, and over 20 years of experiences ・ The Director, its spouse, or minor child(or in other’s name) is not a natural person sharein financial and corporate operation audit; holder who hold 1% of the total issued shares of the Company or above or has the top 10
Director currently, the Director is also the director of shareholding. Jing-Lung Continental Holdings Corporation; he was previously the comptroller of Taiwan High ・ The Director is not a director, supervisor, managerial officer, or shareholder with 5% of share-holding or above of particular companies or institutions possessing financial or business No Huang Speed Rail Corporation, president of Suzhou dealings with the Company. Standard Food Corporation, and the comp・ The Director has not obtained compensation for the provision of business, legal, financial, or troller of Philips Taiwan Affiliates. accounting services to the Company or its affiliate in the most recent two years.
・ There is no circumstance stated in Article 30 ・ The Director is not a spouse or a relative of the 2[nd] degree of relationship with any other di-
of the Company Act. rectors.
・ The Director possesses professional back・ The Director, its spouse, or any relative of 2[nd] degree of relationship is not an employee of the grounds related to business, finance, and Company of its affiliates. public relations, and over 20 years of experi・ The Director, its spouse, or minor child(or in other’s name) is not a natural person shareences in public affairs, strategical marketing, holder who hold 1% of the total issued shares of the Company or above or has the top 10 and management; currently, the Director is shareholding.
Director also the director of Hao Ran Foundation and ・ The Director is not a director, supervisor, or employee of other companies with more than half Chin-Shan the chairman of Metropolis Property Man-agement Corporation; he was previously the ・ of Directors or number of shares with voting rights being controlled by the same person.The Director is not a director, supervisor, managerial officer, or shareholder with 5% of shareNo Chiang director of Taiwan High Speed Rail Corpoholding or above of particular companies or institutions possessing financial or business ration, and used to provide services as the dealings with the Company. management of financial institutions. ・ The Director has not obtained compensation for the provision of business, legal, financial, or
・ There is no circumstance stated in Article 30 accounting services to the Company or its affiliate in the most recent two years. of the Company Act. ・ The Director is not a spouse or a relative of the 2[nd] degree of relationship with any other directors.
・ The Director possesses professional back・ The Independent Director, its spouse, or any relative of 2[nd] degree of relationship is not a digrounds related to business and electrical rector, supervisor, or employee of the Company of its affiliates. engineering, and over 30 years of experi・ The Director, its spouse, or minor child(or in other’s name) is not a natural person shareences in engineering design, construction, holder who hold 1% of the total issued shares of the Company or above or has the top 10 and management; due to his outstanding shareholding. business management performances, he ・ The Director is not a director, supervisor, or employee of other companies with more than half
Director received the highest honor of “Technology of Directors or number of shares with voting rights being controlled by the same person. John T. Management Award” from the Chinese ・ The Director is not a director, supervisor, managerial officer, or shareholder with 5% of shareNo Yu Society for Management Of Technology; holding or above of particular companies or institutions possessing financial or business currently, the Director is also the president dealings with the Company. of CTCI Corporation, director of CTCI Cor・ The Director has not obtained compensation for the provision of business, legal, financial, or poration, and director of multiple investees accounting services to the Company or its affiliate in the most recent two years. of CTCI; he is the key figure who leads CTCI ・ The Director is not a spouse or a relative of the 2[nd] degree of relationship with any other diGroup to the international stage. rectors.
・ There is no circumstance stated in Article 30 of the Company Act.
・ The Independent Director possesses pro・ The Independent Director complies with the independence stated in the Regulations Governfessional backgrounds related to business ing Appointment of Independent Directors and Compliance Matters for Public Companies. and finance, and over 30 years of extensive ・ No government, corporate, or its representative stated in Article 27 of the Company Act was experiences in finance and economics; he elected. possesses in-depth understanding regard・ The Independent Director, its spouse, or any relative of 2[nd] degree of relationship is not a di-
Indeing relevant industrial trends and the develrector, supervisor, or employee of the Company of its affiliates. pendent opment of international finance and eco・ The Independent Director, its spouse, or any relative of 2nddegree of relationship is not a Director nomics; he was previously the independent director, supervisor, or employee of any affiliate or companies having particular relationships No Robert director of Wistron NeWeb Corporation, with the Company. Hung assistant GM of Bank of America Corpora・ The Independent Director, its spouse, or any relative of 2[nd] degree of relationship does not tion, chairman of Young Green Energy Corporation, and CFO of Taiwan High Speed Rail hold any share of the Company. Corporation. ・ The Independent Director has not obtained compensation for the provision of business, legal,
・ There is no circumstance stated in Article 30 financial, or accounting services to the Company or its affiliate in the most recent two years. of the Company Act. ・ The Independent Director is not a spouse or a relative of 2[nd] degree of relationship of any other Directors.
・ The Independent Director possesses profes・ The Independent Director complies with the independence stated in the Regulations Governsional backgrounds related to business and ing Appointment of Independent Directors and Compliance Matters for Public Companies. finance, and over 20 years of experiences; ・ No government, corporate, or its representative stated in Article 27 of the Company Act was he is familiar with professional fields ranging elected.
Indefrom investment banking, asset manage・ The Independent Director, its spouse, or any relative of 2[nd] degree of relationship is not a dipendent ment, and private banking; he currently is rector, supervisor, or employee of the Company of its affiliates. DirectorSean also the independent director of HannStar Display Corporation and NAFCO, he was ・ The Independent Director, its spouse, or any relative of 2[nd] degree of relationship is not a 2 Chao previously the CEO of Morgan Stanley Taidirector, supervisor, or employee of any affiliate or companies having particular relationships wan, president of UBS Group in Taiwan, and with the Company. chairman of UBS Fund in Taiwan. ・ The Independent Director, its spouse, or any relative of 2[nd] degree of relationship does not
・ There is no circumstance stated in Article 30 hold any share of the Company. of the Company Act. ・ The Independent Director has not obtained compensation for the provision of business, legal, financial, or accounting services to the Company or its affiliate in the most recent two years.

II. Information on Board of Directors and Presidents

Con- dition Name	Professional Qualification and Experi- ence	Independent Status	Number of Public Compa- nies in which the Director is Concurrently An Indepen- dent Director
		・The Independent Director is not a spouse or a relative of 2nddegree of relationship of any oth- er Directors.
Inde- pendent Director Rex Yang	・The Independent Director possesses profes- sional backgrounds related to business and finance, and over 20 years of experiences in finance and management; he was previously the CFO of Continental Holdings Corpora- tion, CFO of Yageo Corporation, and chair- man of TEAPO Electronic Corporation. ・There is no circumstance stated in Article 30 of the Company Act.	・The Independent Director complies with the independence stated in the Regulations Govern- ing Appointment of Independent Directors and Compliance Matters for Public Companies. ・No government, corporate, or its representative stated in Article 27 of the Company Act was elected. ・The Independent Director, its spouse, or any relative of 2nddegree of relationship is not a di- rector, supervisor, or employee of the Company of its affiliates. ・The Independent Director, its spouse, or any relative of 2nddegree of relationship is not a director, supervisor, or employee of any affiliate or companies having particular relationships with the Company. ・The Independent Director, its spouse, or any relative of 2nddegree of relationship does not hold any share of the Company. ・The Independent Director has not obtained compensation for the provision of business, legal, financial, or accounting services to the Company or its affiliate in the most recent two years. ・The Independent Director is not a spouse or a relative of 2nddegree of relationship of any oth- er Directors.	No

Board Diversity

The Company introduces the idea of diversity in its “Corporate Governance Best Practice Principles.” Members of the Board shall possess knowledge, experiences, and abilities required for the execution of their duties; furthermore, the composition of the Board shall possess diversity and comply with laws and regulations, with reference to the characteristic, operations, market, and future development requirements of the Company. The Board shall, in general, possess the abilities of making business judgments, accounting and financial analysis, business management, emergency management, as well as industrial knowledge, and leadership, decision-making capacity, and international vision required for cross-nation operations.

The Board of the Company comprises seven Directors, including one female Director (accounting for 14%) and three Independent Directors (accounting for 43%);two of the Independent Directors have been re-appointed for two sessions, and one of the Independent Directors have been re-appointed for three sessions; however, as the Independent Director possesses extensive financial backgrounds and industrial experiences that are significantly beneficial for the future business development of the Company. In addition, there is no Director who is concurrently a managerial officer of the Company.

Members of the Board are from different fields of expertise, used to be the senior management in international enterprises, and possess knowledge, skills, leadership and decision-making capacity, and international market vision; abilities of members of the Board, in general, comply with the diversity policy and the requirements of the Company’s future business development; relevant implementation status is as follows:

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Term of
Office as An
Industrial Experiences and Abilities
Independent
Diversity Item Director
Name Years4~6 Years7~9 Professional Background Compli-Legal ance Finance Busi-ness neering struc-Engi-Con-and Opera-tional Judg-ment AnalysisFinan-cial mentMan-Busi-age-ness gency Emer-mentMan-age- - makingDecision ship and Leader- Interna-Market Visiontional
tion
Chairman - - Economics - - √ √ √ √ √ √ √ √
Nita Ing
Director - - Public Admin- √ - √ - √ √ √ √ √ √
Jing-Lung Huang istration
Director - - Accounting √ - √ - √ √ √ √ √ √
Chin-Shan Chiang
Director - - Business Man- - - √ √ √ √ √ √ √ √
John T. Yu agement
Independent Director - √ Economics - √ √ - √ √ √ √ √ √
Robert Hung
Independent Director √ - Business Man- - √ √ - √ √ √ √ √ √
Sean Chao agement
Independent Director √ - Business Man- - - √ - √ √ √ √ √ √
Rex Yang agement
----- End of picture text -----

Independence of the Board

The Board comprises seven Directors, including three Independent Directors (accounting for 43%); the Directors are not the employees of the Company or its affiliates, and no Director is a spouse or a relative of the 2nd degree relationship with another Director; there is no circumstance stated in paragraphs 3 and 4, Article 26-3 of the Securities Exchange Act; the Board, in general, is independent.

II. Information on Board of Directors and Presidents

<2> Information on presidents	<2> Information on presidents	<2> Information on presidents	<2> Information on presidents	<2> Information on presidents	<2> Information on presidents	<2> Information on presidents	<2> Information on presidents	<2> Information on presidents	<2> Information on presidents	<2> Information on presidents
Job title	Nation- ality	Name	Gender	Date of elected	Shares currently held		Shares currently held by their spouses and children of minor age		Shares held through nominees
					Share(s)	%	Share(s)	%	Share(s)	%
CEO	Singa- pore	Joseph Chai	Male	November 01, 2015	0	-	0	-	65,000	-
Sr. Vice Presi- dent Advanced Ma- terials Division	Canada	Wing- Keung Hendrick Lam	Male	July 16, 2004	0	-	0	-	0	-
Vice President Finance Divi- sion	Repub- lic of China	Edward Wang	Male	June 01, 2016	0	-	0	-	0	-
Vice President Research & Development Division	USA	Qiwei Lu	Male	April 01, 2016	0	-	0	-	0	-
Vice President Synthetic Rub- ber Division	Repub- lic of China	Kevin Liu	Male	June 01, 2016	0	-	0	-	0	-
Vice President Operations Division	Re- public of China	Chi-Wei Hsu	Male	January 01, 2020	0	-	0	-	0	-
Human Resources &Manage- ment Depart- ment Vice President	Re- public of China	De-Bei Wang	Female	January 01, 2021	0	-	0	-	0	-
Corporate Governance Officer	Re- public of China	Chao- Cheng Tsai	Male	March 12, 2021	0	-	0	-	0	-

December 31, 2021

II. Information on Board of Directors and Presidents

==> picture [500 x 668] intentionally omitted <==

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

Other officers, directors
or supervisors who
are their spouses or
relatives of 2nd degree
Principal work experience and Academic qualifi- Position(s) currently held in the Company and/or in any other of relationship Note
cation Company
Rela-
Posi-
Name tion-
tion
ship
Lubrizol Corporation Deputy Vice Presi- Directors of Polybus Corporation. Pte Ltd., TSRC (Hong
dent of Asia Pacific/ Kong) Limited, Trimurti Holding Corporation., Hardi- No No No No
MBA, Case Western Reserve University, son International Corporation., Dymas Corporation.,
USA Triton International Holdings Corporation.
Chairman of TSRC(Nantong) Industrial Ltd. and
TSRC(Shanghai) Industrial Ltd., TSRC(Vietnam)Co.,
Financial Officers of Pacific Industrial Co., Ltd.; Directors of TSRC (USA) Investment Corporation.
Ltd., Assistant Vice President of First Pa- ,TSRC Specialty Materials LLC. ,Trimurti Holding Cor- No No No No
cific Co. Ltd. and Shau Kei Wan Industrial poration. ,Hardison International Corporation. ,TSRC
School, Hong Kong (Hong Kong) Limited. ,Dymas Corporation. ,Polybus
Corporation Pte Ltd.. ,TSRC (Lux.) Corporation S.à r.l.
,Asia Pacific Energy Development Company Limited.
Directors of Shen Hua Chemical Industrial Ltd. ,Poly-
bus Corporation Pte Ltd. ,Trimurti Holding Corpo-
ration . ,Triton International Holdings Corporation.
,TSRC (Hong Kong) Limited. ,TSRC (USA) Investment
Chief Financial Officer, HTC / Master of Corporation. ,TSRC Specialty Materials LLC . ,TSRC
Business, Administration, Tunghai Univer- (Lux.) Corporation S.à r.l. ,Indian Synthetic Rubber No No No No
sity Private Limited . ,Asia Pacific Energy Development
Company Limited ；Supervisors of TSRC(Nantong)
Industrial Ltd. , TSRC (Shanghai) Industrial Ltd. , AR-
LANXEO- TSRC(Nantong) Chemical Industrial Co. ,
Ltd.,TSRC (Vietnam) Co., Ltd.
Global Strategic Technology Officer,
Lubrizol / Doctor in Material Science and None No No No No
Engineering, University of Minnesota
Manager, Sales and Marketing, Depart- Chairman of Shen Hua Chemical Industrial Ltd. ,TS-
ment, Asst. Vice President Rubber Busi- RC-UBE (Nantong) Chemical Industrial Co. Ltd., ;
ness Unit, TSRC. Director of Indian Synthetic Rubber Private Ltd. ,Thai
Spokesperson and Assistant Vice Presi- Synthetic Rubbers Co., Ltd. , Shen Hua Chemical No No No No
dent, Sales Department, China Synthetic Industrial Ltd. ,ARLANXEO- TSRC(Nantong) Chemical
Rubber Corp., and MSA, Cambridge Col- Industrial Co., Ltd. ,Thai Synthetic Rubbers Co., Ltd.
lege, USA ,Nantong Qix Storage Co., Ltd.
Asia Operations Director, Elementis Group
Plant Manager, Deuchem Co., Ltd. Directors of Shen Hua Chemical Industrial Ltd. ,TS-
Department of Chemical Engineering, RC(Nantong) Industrial Ltd. ,TSRC (USA) Investment No No No No
National Taiwan University of Science and Corporation ,TSRC (Lux.) Corporation S.à r.l.
Technology
Chief of human resources of Sandleford
Limited (Ireland) in Asia and manager of
human resources of Corning Display Tech- None No No No No
nologies Taiwan Co, Ltd.
EMBA, National Taiwan University
Chief of legal affairs of Glaxosmithkline
Far East B.V., Taiwan Branch (Netherlands),
senior lawyer of Eiger Law, deputy director
of Mediatek Inc., legal affair manager of
Mosel Vitelic Inc., reorganizer of Chinese Corporate governance officer of Continental Holdings No No No No
Automobile Company, and partner of Corporation
WTW-Taipei Commercial Law Firm ,Prac-
tising lawyer in the Republic of China
,Graduated from the College of Law, Na-
tional Taiwan University
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III. The remuneration of directors and major managers

III.The remuneration of directors and major managers	III.The remuneration of directors and major managers	III.The remuneration of directors and major managers	III.The remuneration of directors and major managers	III.The remuneration of directors and major managers	III.The remuneration of directors and major managers
<1> Directors' remuneration
					Directors remuneration(Note 1)
		Base compensation (A)			Severance pay and pensions (B)		Remuneration to directors (C)		Business execution expenses(D)
Job title	Name	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
Director	Wei-Dar Development Co.,Ltd. Representative:Jing-Lung Huang
Director	Han-De Construction Co., Ltd. Representative:Jing-Lung Huang(Note2)	9,159		9,159	0	0	12,958	12,958	0 0
Director	Han-De Construction Co., Ltd. Representative: Chin- Shan Chiang
Director	Han-De Construction Co., Ltd. Representative:John T. Yu
Independent Director	Robert Hung
Independent Director	Sean Chao	6,769		6,769	0	0	9,719	9,719	1,000 1,000
Independent Director	Rex Yang
Note1： Independent Directors of the Company are members of				the Audit Committee and Remuneration Committee; apart from duties assumed by
Independent Directors, the level of participation, number of meetings each year, and extra time invested are also considered for the payment of
remunerations, and reasonable compensations are provided based on the Company’s business performance and the general standards within
the industry.
Note2： A general re-election took place at the annual shareholders’ meeting in 2021; the representative of the corporate Director was relieved its office
on August 4, 2021.
				16

Unit: thousand NTD

III. The remuneration of directors and major managers

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----- 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 Salary, bonus and Severance pay and G accounting for Compen-
income after tax special allowance(E) pensions (F) Employees' earnings (G) income after tax sation
paid to
Companies in Finan- directors
The Company cial Report from
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
22,117 22,117 22,117 22,117
0 0 0 0 0 0 0 0 0
/0.56 /0.56 /0.56 /0.56
17,488 17,488 17,488 17,488
0 0 0 0 0 0 0 0 0
/0.44 /0.44 /0.44 /0.44
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III. The remuneration of directors and major managers


		Name of directors
Remuneration paid to the various directors	Total (A+B+C+D) Total (A+B+C+D+E+F+G) The Company Companies in Financial Report The Company Companies in Financial Report
1,000,000 below	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.
1,000,000 (inclusive of 1,000,000)- 2,000,000(does not contain 2,000,000)	-	- -	-
2,000,000 (inclusive of 2,000,000)- 3,500,000(does not contain 3,500,000)	-	- -	-
3,500,000 (inclusive of 3,500,000)- 10,000,000(does not contain 5,000,000)	Wei-Dar Develop- ment Co., Ltd.	Please refer to the left column. Wei-Dar Develop- ment Co., Ltd.	Please refer to the left column.
5,000,000 (inclusive of 5,000,000)- 10,000,000(does not contain 10,000,000)	Nita Ing, Robert Hung, Rex Yang, Sean Chao ,Han-De Con- struction Co., Ltd.	Please refer to the left column. Nita Ing, Robert Hung, Rex Yang, Sean Chao ,Han-De Con- struction Co., Ltd.	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	-	- -	-
	18

<2> Presidents' and vice presidents' remuneration

Unit: thousand NTD

III. The remuneration of directors and major managers

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Percentage
of the total of
Severance Bonus and
Salary(A) pay and special Employees' compensation A, B, C and D Com-
pensions (B) allowance(C) amount (D) accounting for pen-
income after tax sation
(%) paid to
Job title Name Companies in directors
Compa- Compa- Compa- The Company Financial Re- Compa- from
The nies in The nies in The nies in port The nies in non-con-
Compa- Finan- Compa- Finan- Compa- Finan- Compa- Finan- solidated
ny cial ny cial ny cial Cash Stock Cash Stock ny cial affiliates
Report Report Report Amount Amount Amount Amount Report
Joseph
CEO Chai
(Note1)
Wing-
Keung
Sr. Vice Hendrick
President Lam
Vice
Kevin Liu
President
Vice
Qiwei Lu
President
92,196 92,196
44,165 44,165 0 0 33,797 33,797 14,234 0 14,234 0 0
Vice Edward /2.35 /2.35
President Wang
Vice Chi-Wei
President Hsu
Vice De-Bei
President Wang
Chao-
Corporate
Gover- Cheng
nance Tsai
Officer (Note2)
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Note1： One leased vehicle and one driver assigned to the CEO. The yearly rent for the leased vehicle is NTD 513 thousand and the remuneration paid to the driver is NTD 610 thousand and rental housing costs NTD 2,640 thousand.

Note2： March 12, 2022 Head of Corporate Governance.

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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
1,000,000 (inclusive of 1,000,000)-
Chao-Cheng Tsai Chao-Cheng Tsai
2,000,000(does not contain 2,000,000)
3,500,000(does not contain 3,500,000)2,000,000 (inclusive of 2,000,000)- - -
5,000,000(does not contain 5,000,000)3,5,000,000 (inclusive of 3,500,000)- - -
5,000,000 (inclusive of 5,000,000)- De-Bei Wang、Kevin Liu, De-Bei Wang、Kevin Liu, Qiwei
10,000,000(does not contain 10,000,000) Qiwei Lu Lu
10,000,000 (inclusive of 10,000,000)- Edward Wang, Wing-Keung Edward Wang, Wing-Keung
15,000,000(does not contain 15,000,000) Hendrick Lam, Chi-Wei Hsu Hendrick Lam, Chi-Wei Hsu
30,000,000(does not contain 30,000,000)15,000,000 (inclusive of 15,000,000)- - -
----- End of picture text -----

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Name of president and vice presidents
Remuneration paid to the president and vice presidents
The Company Companies in Financial Report
30,000,000 (inclusive of 30,000,000)-
Joseph Chai Joseph Chai
50,000,000(does not contain 50,000,000)
100,000,000(does not contain 100,000,000)50,000,000 (inclusive of 50,000,000)- - -
- -
100,000,000 above
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Bonus paid to management team and allocation December 31, 2021

III. The remuneration of directors and major managers

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Percentage
Cash Total
of the total
Job title Name Stock (NTD in (NTD in
income after
thousands) thousands)
tax (%)
CEO Joseph Chai
Wing-Keung
Sr. Vice President
Hendrick Lam
Vice President Qiwei Lu
Vice President Edward Wang
Managers 0 14,234 14,234 0.36
Vice President Kevin Liu
Vice President Chi-Wei Hsu
Vice President De-Bei Wang
Corporate Governance Chao-Cheng
Officer Tsai
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<4> The total remuneration as a percentage of net income paid by the Company, and by each Companies 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

==> picture [494 x 154] intentionally omitted <==

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

The Company Companies in Financial Report
Job title
2021 2020 2021 2020
Director remuneration 39,605 17,016 39,605 17,016
Director remuneration percentage of net 1.01 (77.73) 1.01 (77.73)
income after taxes(%)
CEO and vice president 92,196 76,449 92,196 76,449
CEO and vice president remuneration per- 2.35 (349.23) 2.35 (349.23)
centage of net income after taxes(%)
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Remuneration policies, standards, and packages for its Directors, CEO, and Vice Presidents, 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 9 meetings in 2021. The attendance of directors in the meetings is specified as follows:

IV. Status of corporate governance implementation

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

Frequency of Frequency of Actual atten-
Job title Name actual atten- proxy atten- dance rate Remark
dance dance (%)
Chairman Wei-Dar Development Co., Ltd. 9 0 100 Re-appointed
Representative: Nita Ing
Director Wei-Dar Development Co., Ltd. 4 0 100 Newly elected
Representative: Jing- Lung Huang
Han-De Construction Co., Ltd.
Director 5 0 100 Formerly elected
Representative: Jing- Lung Huang
Han-De Construction Co., Ltd.
Director 9 0 100 Re-appointed
Representative: Chin-Shan Chiang
Han-De Construction Co., Ltd.
Director 9 0 100 Re-appointed
Representative: John T. Yu
Independent Director Robert Hung 9 0 100 Re-appointed
Independent Director Sean Chao 9 0 100 Re-appointed
Independent Director Rex Yang 9 0 100 Re-appointed
----- End of picture text -----

Four Board meetings were convened since the re-election of the 17[th] Board on August 4, 2021. Other matters to be recorded:

Provisions of Article 14-3 of Securities and Exchange Act

==> picture [485 x 307] intentionally omitted <==

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Resolution Results
and Measures
Date of Adopted to Addressed
Name of Meeting Resolutions under Article 14-3 of the Securities Exchange Act
Meeting the Opinions of
Independent
Directors
1. To dispose of the lands and buildings located at Chu yuen
Section, Renwu Dist., Kaohsiung.
March 11, 21 [st] meeting of the 2. To release the non-competition restrictions for the 17 [th]
2021 16 [th] Board Board of Directors of the Company.
3. To discuss the 2020 remuneration of the Directors of the
Company.
22 [nd] meeting of the 1. To discuss the capital increase in cash of subsidiary TSRC
May 6, 2021 16 [th] Board (Vietnam) Co., Ltd.
1. All directors were
August 3, 24 [th] meeting of the 1. To provide guarantee for the loan agreement of TSRC (USA) present and the resolution was
2021 16 [th] Board Investment Corporation.
approved.
2. Independent Di-
October 12, 2 [nd] meeting of the 1. To discuss the plant relocation of the subsidiary Shen Hua
rectors expressed
2021 17 [th] Board Chemical Industries Co., Ltd.
no opinion
1. To appoint a certified public accountant for the certifica-
tion of the 2022 financial statements.
2. To provide guarantee for the loan agreement between
November 3 [rd] meeting of the the subsidiary TSRC (Vietnam) Company Limited and the bank.
4, 2021 17 [th] Board
3. To provide the guarantee for the financing and foreign
exchange credit with banks for investee ARLANXEO-TSRC
(Nantong)Chemical Industrial Co., Ltd.
4. To discuss the change in the Company’s chief accountant
----- End of picture text -----

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 2021.
Implementation of Director's reclusion of interest resolutions(the name of Director, resolution, reason of such recusals, and the participation in voting shall be described):

In 2021,none of the Directors has any interest in the resolutions that required their recusal.

<2> Implementation status of the Board of Directors' Self Evaluation:

The self-evaluation was performed according to the “Self-Evaluation or Peer Evaluation of the Board of Directors” established after been approved at the 19[th] meeting of the 16[th] Board in 2020. To the results of the evaluation of the Board in 2021, please refer to the “(III) Implementation status of corporate governance, Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof” on page 27 of the annual report.

IV. Status of corporate governance implementation

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Cycle Period Scope Method Content
Once January ・ [Board of ] Self-evaluation ・ [Evaluation of the Board:]
a year 1, 2021 ~ Directors the Board 1. Level of participation in the Company’s oper-
December ations
・ [Functional ]
31, 2021 Commit- 2. Improvement of the Board’s decision-making
tees quality
3. Awareness of the Board’s composition and
duties
4. Election of Board members and continual edu-
cation
5. Internal control
・ [Evaluation of functional committees:]
1. Level of participation in the Company’s oper-
ations
2. Improvement of the functional committee’s
decision-making quality
3. Awareness of the functional committee’s
composition and duties
4. Election of functional committee members and
continual education
5. Internal control
Individual Self-evaluation ・ [Self-Evaluation of the individual board director:]
Board mem- of Board mem- 1. Control over the Company's objectives and
ber bers tasks.
2. Understanding the responsibilities of the
Board of Directors.
3. Participation in the Company's operations.
4. Management and communication of the inter-
nal relationship.
5. Directors' professional and continuous training
6. 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 Board of the Company convenes meetings and performs discussions and resolution-making according to the Company Act and the Securities Exchange Act, as well as standards announced by the competent authority. To reinforce the functions of the Company’s Board and improve the supervising function, the Company established its Audit Committee and Remuneration Committee according to laws and regulations; functional committees assist the Board in reinforcing corporate governance and supervisory duties based on their function.
(2) To continue improving the functions of the Board and the operation of corporate governance, the Board approved the “Corporate Governance Best Practice Principles,”“Ethical Corporate Management Best Practice Principles,”“Risk Management Policy,” and“Regulations for Conflicts of Interests Management” in 2021, and the Company has duly observed such regulations.
(3) Article 21 of the Company’s “Corporate Governance Best Practice Principles” states the idea of Board diversity, where members of the Board shall possess knowledge, experiences, and abilities required for the execution of their duties with reference to the business characteristics, operations, and future development requirements of the Company; for the policy related to the abilities of all Board members in compliance with diversity and the requirements of the Company’s future development, please refer to “Board Diversity” on page 13 of the annual report.
(4) Based on the “Self-Evaluation or Peer Evaluation of the Board of Directors,” the Company carried out the evaluations of the Board, functional committees, and individual Board members at the beginning of 2022 to enhance the functions of the Board by adopting opinions and recommendations provided by Directors as the basis for examination and improvement; the results of such evaluations were submitted to the Board for report.
(5) The Company set up its Corporate Governance Officer for relevant corporate governance affairs according to the requirements in 2021.

<3> Operation of the Audit Committee

There are 3 members in the audit committee of this Company.
The Audit Committee convened a total of 8(A) meetings in 2021. 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 actual Frequency of Actual attendance rate (%) Remark
attendance(B) proxy attendance (B/A)
Independent Director Robert Hung 8 0 100 Re-appointed
Independent Director Rex Yang 8 0 100 Re-appointed
Independent Director Sean Chao 8 0 100 Re-appointed
Three meetings were convened after the re-election of the 17th Audit Committee on August 4, 2021.
----- End of picture text -----

The highlight of the Audit Committee in 2021 is summarized as follows:
(1) To review the 2020 business report, financial report and earnings distribution.
(2) To review the financial reports for the 1[st] to 3[rd] quarters of 2021.
(3) To review the provision of guarantees of the Company.
(4) To appoint a certified public accountant for the certification of the 2022 financial statements.
(5) To review the budget for 2022.
(6) To review the 2022 audit plan.

Other matters that require reporting:

The matters listed in Article 14-5 of the Securities and Exchange Act:

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Resolution Result of the Audit
Date of Name of
Resolutions under Article 14-3 of the Securities Exchange Act Committee Meeting and the
Meeting Meeting
Implementation
17 [th] meet- 1. To propose the2020 Declaration of Internal Control System All members of the Audit Com-
ing of the 2. To propose the Company's 2020 earnings distribution. mittee attended the meeting
March 4,
2021 16 [th] Audit 3. To propose the Company's 2020 earnings distribution. completed the review and
Committee 4. To dispose of the lands and buildings located at Chu yuen submitted the proposal to the
Section, Renwu Dist., Kaohsiung Board for discussion.
18 [th] meet- 1. To release the non-competition restrictions for the 17 [th] All members of the Audit Com-
ing of the Board of Directors of the Company mittee attended the meeting
March 11,
2021 16 [th] Audit completed the review and
Committee submitted the proposal to the
Board for discussion.
19 [th] meet- 1. To discuss the capital increase in cash of subsidiary TSRC All members of the Audit Com-
ing of the (Vietnam) Co., Ltd. mittee attended the meeting
April 29, 2021 16 [th] Audit 2. To propose the Q1 consolidated financial statements of completed the review and
Committee the Company in 2021 submitted the proposal to the
Board for discussion.
20 [th] meet- 1. To propose the Q2 consolidated financial statements of All members of the Audit Com-
ing of the the Company in 2021 mittee attended the meeting
July 29, 2021 16th Audit 2. To provide guarantee for the loan agreement of TSRC (USA) completed the review and
Committee Investment Corporation submitted the proposal to the
Board for discussion.
1 [st] meeting 1. To discuss the plant relocation of the subsidiary Shen Hua All members of the Audit Com-
of the 17 [th] Chemical Industrial Co.,Ltd. mittee attended the meeting
October 6,
2021 Audit Com- completed the review and
mittee submitted the proposal to the
Board for discussion.
2nd meet- 1. To propose the Q3 consolidated financial statements of All members of the Audit Com-
ing of the the Company in 2021. mittee attended the meeting
17 [th] Audit 2. To appoint a certified public accountant for the completed the review and
Committee certification of the 2022 financial statements. submitted the proposal to the
3. To provide guarantee for the loan agreement between the Board for discussion.
October 28,
2021 subsidiary TSRC (Vietnam) Company Limited and the bank.
4. To provide the guarantee for the financing and foreign
exchange credit with banks for investing ARLANXEO-TSRC
(Nantong) Chemical Industrial Co., Ltd.
5. To discuss the change in the Company’s chief accoun-
tant.
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----- Start of picture text -----

Resolution Result of the Audit
Date of Name of
Resolutions under Article 14-3 of the Securities Exchange Act Committee Meeting and the
Meeting Meeting
Implementation
3 [rd] meeting 1. To propose the 2022 audit plan All members of the Audit Com-
November of the 17 [th] mittee attended the meeting
Audit Com- completed the review and
25, 2021
mittee submitted the proposal to the
Board for discussion.
----- End of picture text -----

Except for the above-mentioned matters, other matters not approved by the Audit Committee but received consent from more than two-thirds of the Directors: No such circumstances in 2021.
For the recusal of Independent Directors regarding resolutions of interests, please describe the name of the Independent Director, resolution, the reason for recusal due to conflict of interest, and the participation in voting: There was no Independent Director required to recuse themselves for the conflict of interest with the resolution in 2021.
The communication among the Independent Directors, the internal audit director and the accountant:
IV. Status of corporate governance implementation
(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) The internal auditing officer shall at least submit an audit report to the Independent Directors once every one to two months and respond to their questions, and communicate with Independent Directors directly via e-mails or meetings according to the business requirements.
(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
(4) Communications between Independent Directors and Internal Auditing Officers in 2021:

==> picture [474 x 245] intentionally omitted <==

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

Date Method Main Issue Results
January 27, audit com- Recent Audit Office Agreed and acknowledged by all members of the Audit Commit-
2021 mittee report tee attended, and submitted to the Board for report.
2020 Declaration of
March 4, audit com- Agreed and acknowledged by all members of the Audit Commit-
2021 mittee Internal Control Sys-tem tee attended, and submitted to the Board for approval.
April 29, audit com- Recent Audit Office Agreed and acknowledged by all members of the Audit Commit-
2021 mittee report tee attended, and submitted to the Board for report.
audit com- Recent Audit Office Agreed and acknowledged by all members of the Audit Commit-
July 29, 2021 mittee report tee attended, and submitted to the Board for report.
October 28, audit com- Recent Audit Office Agreed and acknowledged by all members of the Audit Commit-
2021 mittee report tee attended, and submitted to the Board for report.
1. The Recent Audit Office Report was agreed and acknowledged
Recent Audit Office by all members of the Audit Committee attended, and submit-
November audit com- report ted to the Board for a report.
25, 2021 mittee 2022 annual auditing 2. The 2022 annual audit plan was agreed and acknowledged by
plan all members of the Audit Committee attended, and submitted
to the Board for approval.
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(5) Summary of Communications between Independent Directors and CPAs in 2021:

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Date Method Main Issue Results
1. Description of the audit on 2020 business re-
audit port and financial statements Agreed and acknowledged by all members of
March 4,
2021 commit- 2. Description of key audit matters the Audit Committee attended, and submit-
tee 3. Matters concerned by the competent author- ted to the Board for approval.
ity and material laws and regulations
audit Agreed and acknowledged by all members of
April 29, commit- 1. First quarterly financial report in 2021. the Audit Committee attended, and submit-
2021 tee 2. Updates on important regulations ted to the Board for approval.
audit Agreed and acknowledged by all members of
July 29, commit- 1. Second quarterly financial report in 2021. the Audit Committee attended, and submit-
2021 tee 2. Updates on important regulations ted to the Board for approval.
October commit-audit 1. Third quarterly financial report in 2021. Agreed and acknowledged by all members of the Audit Committee attended, and submit-
28,2021 tee 2. Updates on important regulations ted to the Board for approval.
Independent Directors held no dissenting or qualified opinion regarding the above mentioned matters.
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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
Status Deviations from the Sustainable
Development Best
Assessment Items Practice Principles Yes No Abstract Description for TWSE/TPEx Listed Companies and Reasons Thereof
I. Has the Company abided by √ The Company has established its “Corporate Governance No difference the" Corporate Governance Best Practice Principles” according to the “Corporate Best Practice Principles Governance Best-Practice Principles for TWSE/TPEx Listed for TWSE/TPEx Listed Companies,” which was approved at the 2[nd] meeting of the Companies" to formulate 17[th] Board and disclosed on the Company’s website and the and disclose the corporate MOPS. governance best practice principles?
II. Equity structure and shareholders right
(1) Has the Company √ (1) The Company has a spokesperson and acting spokesNo difference formulated internal SOP person in place, and provides the contact section on the for handling shareholders' Company’s website to handle shareholders' recommensuggestions, doubts, dations and questions; the Company also has relevant disputes, litigations departments that address disputes and litigations with and implemented them shareholders. according to the SOP? (2) The Company owns the list of the final controllers of subNo difference
(2) Does the Company hold a √ stantial shareholders who control the Company according list of the Company's key to laws and regulations. shareholders and their ultimate controllers? (3) There are regulations in place to control related party No difference
(3) Has the Company √ transactions, endorsement/guarantee, and loans to others established and between the Company and its affiliates; the Company also implemented risk control established its internal control system and “Regulations and firewall mechanism with for Investee Management and Monitoring”; the audit deits affiliated companies? partment shall execute measures related to internal audit and internal control, and the rights and responsibilities of which shall be explicitly separated from the management rights and responsibilities of affiliates to ensure the risk control system.
(4) The Company established its “Code of Ethical Con-
(4) Has the Company stipulated √ duct,”“Ethical Corporate Management Best PrinciNo difference internal regulations ples,”“Procedures for the Prevention of Insider Trading,” prohibiting inside personnel and “Procedures for Whistle-blowing Management” to trading securities using prohibit internal parties from using information not disinformation that has not closed in the market to trade securities; we also regularly yet been disclosed on the organize internal communications each year and make market? disclosures on our corporate website. The Company organized a training course,“Understand Insider Trading,”and notified internal parties of the Company from time to time regarding matters of notice for material information in 2021.
III. The organization of the Board √ (1) Article 21 of the Company’s “Corporate Governance No difference of Directors and their duties Best Practice Principles” states the idea of Board diversity,
(1) Does the Board establish the where members of the Board shall possess knowledge, exdiversity policy, substantial periences, and abilities required for the execution of their management targets, and duties with reference to the business characteristics, opermake implementations ations, and future development requirements of the Comappropriately? pany. The Board shall, in general, possess the abilities to make business judgments, accounting and financial analysis, business management, emergency management, as well as industry knowledge, leadership, decision-making capacity, and international vision required for cross-nation operations.
The Board of the Company comprises seven Directors, including one female Director (accounting for 14%) and three Independent Directors (accounting for 43%); two of the Independent Directors have been re-appointed for two sessions, and one of the Independent Directors have been re-appointed for three sessions; however, as the Independent Director possesses extensive financial backgrounds and industrial experiences that are significantly beneficial for the future business development of the Company.

IV. Status of corporate governance implementation

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Status Deviations from
the Sustainable
Development Best
Assessment Items Practice Principles
Yes No Abstract Description for TWSE/TPEx Listed
Companies and
Reasons Thereof
2. For the age distribution of Board members, those un-
der 65 accounted for 14%, those between 65 to 70
accounted for 57%, and those above 70 accounted for
29%.
3. In addition, there is no Director who is concurrently a
managerial officer of the Company.
Members of the Board are from different fields of exper-
tise, used to be the senior management in international
enterprises, and possess knowledge, skills, leadership and
decision-making capacity, and international market vision;
abilities of members of the Board, in general, comply with
the diversity policy and the requirements of the Compa-
ny’s future business development; for relevant imple-
mentation status, please refer to “Board Diversity” on
page 13 of the annual report.
(2) Besides creating the √ (2) The Company established its Audit Committee and Remu- Considering the
Remuneration Committee neration Committee according to the law with reference to management of
and the Audit Committees its operating requirements. business operations,
according to the law, has the Company will
the Company voluntarily not set up other
established other functional functional committee
committees? (3) The “Self-Evaluation or Peer Evaluation of the Board of for now.
(3) Does the Company √ Directors” was established after being approved at the No difference
formulate the Regulations 19 [th] meeting of the 16 [th] Board in 2020, which stated that
for the Performance an external evaluation shall be executed at least once ev-
Evaluation of the Board ery three years. The Company performed the evaluation in
of Directors and its 2021 according to the requirements; self-evaluation ques-
evaluation method? Does tionnaire was adopted, and the agenda working group
the Company conduct was responsible for the execution; the evaluation period
performance evaluations was from January 1, 2021 to December 31, 2021, and the
regularly every year, and evaluation scope includes the “Board of Directors,”
submit and report the “functional committees,” and “individual Directors.”
results of the performance The results for the 2021 Board evaluation are summarized
evaluations to the Board as follows:
of Directors, and take the 1. The overall evaluation result of the Board is “complying
results as a reference for with expectations”The system of the Board is com-
the compensation and plete, and the information transparency complies with
nomination renewal of the regulations. All Directors highly recognizes the ex-
individual directors? pertise and diversity of the current Board composition
and structure. All Directors attended the previous Board
meetings and sufficiently participated in the discus-
sions; the Board provided directions for improvement
and risk issues to be aware of, duly fulfill its responsibil-
ity for supervising our corporate strategies, complying
with Directors’ expectations.
2. The overall evaluation result of the functional commit-
tees is “complying with expectations”
The composition of the Audit Committee and the
Remuneration Committee is highly professional and
independent; members fully understand their duties.
All members attended previous meetings and partic-
ipated in discussions sufficiently to assist the Board in
decision-making. Independent Directors exhibit their
independence and professional performance to effec-
tively evaluate and monitor the internal control system,
provide recommendations and reminders, offering
great benefits for the Board in decision-making, which
effectively improve the functions of the Board.
3. The overall evaluation result of individual Directors is
“complying with expectations”
Board members recognizes the comprehensive cor-
porate system, information transparency, and the pro-
vision of sufficient information for them to grasp the
operating status of the Company; they also highly rec-
ognize the professional abilities of the Board members
and their contributions to the Company’s operating
and management and decision-making quality based
on their expertise and experiences.
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IV. Status of corporate governance implementation

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Status Deviations from
the Sustainable
Development Best
Assessment Items Practice Principles
Yes No Abstract Description for TWSE/TPEx Listed
Companies and
Reasons Thereof
The above mentioned evaluation results were reported at No difference
the 6 [th] meeting of the 17 [th] Board and the declaration was
completed; such results were included as the reference for
the nomination of the renewal of Directors.
(4) Does the Company evaluate √ (4) The Company regularly evaluates the independence and
accountant independence adequacy of its CPAs (Note) each year. In 2021, the CPA
on a regular basis? evaluation result was approved at the 3 [rd] meeting of the
17 [th] Board; CPAs Ming Hung Huang and Lin Wu from
KPMG Taiwan both complied with the evaluation stan-
dards of the Company; the CPA firm also issued the State-
ment of independence.
IV. Does the Company have √ Mr. Chao-Cheng Tsai was appointed as the Corporate Gover- No difference
an adequate number of nance Officer of the Company through the resolution passed
corporate governance at the 21 [st] meeting of the 16 [th] Board. Mr. Chao-Cheng Tsai is a
personnel with appropriate qualified lawyer and has held senior positions in departments
qualifications as well as related to legal affairs in public companies for three years and
a corporate governance above.
officer in charge of relevant The scope of duties of the Corporate Governance Officer
corporate governance includes “handling matters related to Board meetings and
matters (including but not shareholders’ meetings according to the law," “preparing
limited to providing data meeting minutes for Board meetings and shareholders’
required for director and meetings,”“ assisting Directors in on-boarding and con-
supervisor operations, tinual education,” “providing information required for the
assisting directors and execution of business to Directors,” “assisting Directors in
supervisors with regulatory legal compliance,” and “other matters stated in the Articles
compliance, handling matters of Incorporation or contracts.” Meanwhile, it shall make co-
relating to board meetings ordination between relevant departments and promote the
and shareholders meetings planning and execution of corporate governance operations,
according to laws, as well as allowing the Company to achieve sustainable development
producing minutes for such under a healthy governance structure.
meetings)? For the continuing education status of the Corporate Gover-
nance Officer in 2021, please refer to the continual education
status on page 42 of the annual report.
V. Does the Company maintain √ The Company has “Contact Information for Stakeholders” No difference
channels of communication and “Whistle-blowing Mailbox” on the Company’s web-
with stakeholders site and has established contact windows with various stake-
(including but not limited holders to communicate with stakeholders through various
to shareholders, employees, channels; also, the Company regularly reports to the Board
customers and suppliers) regarding the communication status with stakeholders. The
and designate a stakeholders communication status with stakeholders in 2021 was report-
section on its website as ed at the 24 [th] meeting of the 16 [th] Board. For issues concerned
well as properly respond by stakeholders and our responses, please refer to the sus-
to critical corporate social tainability report of the Company.
responsibility issues that
stakeholders are concerned
with?
VI. Has the Company √ We commissioned SinoPac Securities to handle the share- No difference
commissioned professional holders' meeting.
securities institutions
to handle shareholders'
meetings?
VII. Disclosures
(1) Does the Company set up a √ (1) The Company’s website has the “Investor Relation” No difference
website to disclose financial section that covers financial information, financial reports,
business and corporate and corporate governance information; it also regularly
governance? updates the content of the website, and the spokesperson
of the Company announces material information to exter-
nal parties according to the law.
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IV. Status of corporate governance implementation

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Status Deviations from
the Sustainable
Development Best
Assessment Items Practice Principles
Yes No Abstract Description for TWSE/TPEx Listed
Companies and
Reasons Thereof
(2) Does the Company also √ (2) The Company has established its websites in Traditional No difference
adopts other means for Chinese, English, and Simplified Chinese, and there is
disclosure. (i.e. English dedicated personnel being responsible for the informa-
web site, personnel tion disclosure and updates. The spokesperson releases
dedicated to collect information regarding material matters to external parties
and disclose Company at once. The Company provides briefing and real-time
information, establishment scenarios of its investor conference on the website.
of a spokesperson policy,
disclosure of the process
of investor conference on
Company web site, etc.)
(3) Does the Company √ (3) The Company announces and declares its annual, quar- Adjustments will be
announce and declare the terly financial reports and announces its monthly oper- made according to
annual financial report ating status according to the period stated in laws and the requirements in
within two months after regulations. the future.
the end of the fiscal year,
and announce and declare
the first, second and third
quarter financial reports and
operating conditions of each
month before the limitation
date provided?
VIII. Is there any other important √ (1) Employees’ rights and care for employees: The Compa- No difference
information that will ny complies with regulations where its operations locate
facilitate the understanding and protect employees’ rights; it values employees’
of the Company's physical and mental;health, provides health inspections
corporate governance and group insurance, and has established its Employee
operations (including but Benefits Committee to plan for various benefit measures
not limited to employee and recreational events. For the environment, we are
rights, employee care, committed to providing safe and healthy work environ-
investor relations, supplier ments for our employees, minimizing the risk of occupa-
relations, stakeholders' tional disasters, and reinforcing employees’ awareness
rights, further education of of their rights protection through educational training.
directors and supervisors, Please refer to “V. Labor Relations” on page 63 of the
implementation of risk annual report.
management policy and risk (2) Investor relations: The Company discloses material infor-
evaluation standards, client mation on the MOPS and declares information related to
policy implementation, corporate governance and finance according to the law,
Company's liability allowing investors to keep abreast of information at all
insurance for its directors times; we also set up a spokesperson system in place to
and supervisors and so on)? maintain investor relations; we have a contact section on
our website to provide smooth communication channels.
(3) Supplier relations: The Company has established its
“Supplier Evaluation and Management Regulation” to
ensure our partners may implement the “Code of Con-
duct for Partners of TSRC Corporation,” protecting the
legal interests of both parties.
(4) Stakeholders’ interests: Please refer to the stakeholder
section on the corporate website.
(5) Continual education of Directors: The Company actively
encourages Directors to participate in relevant courses or-
ganized by the competent authority. All Directors regular-
ly participate in continual education programs each year
for over six hours and above. Please refer to “Continual
Education of Directors” on page 42 of the annual report.
(6) Execution of risk management policies and risk mea-
surement standards: The Company approved the estab-
lishment of the “Risk Management Policy” at the 4 [th]
meeting of the 17 [th] Board in 2021 to build the system,
procedures, and scope for risk management to confirm
the rights and responsibilities of the organization and
regulate relevant execution and monitoring systems.
Regarding the execution status for risk management in
2021, please refer to the corporate governance section on
the Company’s website.
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IV. Status of corporate governance implementation

	Status	Status	Status
Assessment Items	Yes	No	Abstract Description
			(7) Execution of the customer policy: The Company ensures the health and safety of customers when using products of the Company through annual satisfaction surveys, in- teractive seminars, interviews, and other communication channels, and carries out examinations regarding the is- sues to propose improvement recommendations, so as to improve the quality of products and services. (8) Purchase of liability insurance for Directors and supervi- sors by the Company: The Company purchases liability insurance for Directors and managerial officers for the scope of business execution and reports to the Board each year.
IX. Please indicate the improvement in respect to the corporate governance evaluation results released by the Corporate Governance Center of the Taiwan Stock Exchange Corporation, and propose priority enhancements and measures for those which have not improved. 1.Established and disclosed the Corporate Governance Best Practice Principles, Risk Management Policy, Ethical Corporate Man- agement Best Practice Principles, “Procedures for the Prevention of Insider Trading,” and “Procedures for Whistle-blowing Management” that are approved by the Board. 2.Established and disclosed the Board diversity policy and the diversity status. 3.Has a Corporate Governance Officer in place that is approved by the Board. 4.The Company has evaluated the risks of environmental, social, or corporate governance issues related to the operations of the Company and evaluated the current and future potential risks and opportunities of climate change to the Company and dis- closed them on the corporate website.

Note: 2021 CPA Independence and Adequacy Evaluation Form (1) Evaluation year: 2021.
(2) Evaluating CPA: KPMG Taiwan/CPAs Ming Hung Huang and Lin Wu

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Results
Evaluation Item
Yes/ No/Non-
Compliance compliance
1.CPA does not have any financial interest or business relations with the Company and therefore √
remains independent.
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 poli- √
cies or inappropriate disclosure of financial statements.
6.No loans between CPA and the Company and/or affiliates. √
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. √
9. CPA’s qualifications. √
10. CPA’s experiences. √
11. CPA’s level of cooperation. √
12. CPA’s level of profession/ √
13. Services provided by CPA. √
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<4> Information on Compensation Committee:

Information on Compensation Committee December 31, 2021
IV. Status of corporate governance implementation

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Number of Public
Companies
in which the
The identity Professional Qualification and Director is
Independence Status
Experience Concurrently A
Identity/Name Member of the
Remuneration
Committee
Please refer to Table “Disclo- Please refer to Table “Disclo-
sure of the Professional Qual- sure of the Professional Qual-
Independent Sean ification of Directors and the ification of Directors and the
Director 2
Chao Independence of Independent Independence of Independent
(Convener)
Directors” on page 12 of the Directors” on page 12 of the
annual report. annual report.
Please refer to Table “Disclo- Please refer to Table “Disclo-
sure of the Professional Qual- sure of the Professional Qual-
Independent Robert ification of Directors and the ification of Directors and the 0
Director Hung Independence of Independent Independence of Independent
Directors” on page 12 of the Directors” on page 12 of the
annual report. annual report.
Please refer to Table “Disclo- Please refer to Table “Disclo-
sure of the Professional Qual- sure of the Professional Qual-
Independent Rex ification of Directors and the ification of Directors and the 0
Director Yang Independence of Independent Independence of Independent
Directors” on page 13 of the Directors” on page 13 of the
annual report. annual report.
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Operational information of the Remuneration Committee
(a) There are 3 members in the Remuneration Committee of the Company.
(b) The term of the 17[th] committee members shall be from August 4th 2021 to August 3th, 2024. The 17th Remuneration Committee held 5(A) meetings in 2021. The attendance of members in the remuneration committee meetings is specified as follows:

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Frequency Frequency Actual
Job title Name of actual of proxy attendance rate Remark
attendance(B) attendance (%)(B/A)
Convener Sean Chao 5 0 100 Re-appointed
Member Robert Hung 5 0 100 Re-appointed
Member Rex Yang 5 0 100 Re-appointed
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The primary scope of duties of the Remuneration Committee is as follows:
(a) Regularly examine the Charter of Remuneration Committee and propose amendment recommendations
(b) Stipulate and regularly examine the annual and long-term performance targets of Directors and managerial officers and the policies, system, standards, and structures of remuneration

(c) Regularly evaluate the achievement of the performance targets of Directors and managerial officers and establish their respective content and amount of remuneration
Other matters to be stated:
Operating status of the Remuneration Committee in 2021:
IV. Status of corporate governance implementation

==> picture [430 x 309] intentionally omitted <==

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Meeting
Meeting Name Major Resolutions Implementation Status
Date
1. 2020 employee performance bonus plan.
The 12 [th] meet- 2. 2021 employee remuneration adjustment Approved by all members at-
January ing of the 16 [th] plan. tended and submitted to the
27, 2021
session 3. Determination of the performance plan of Board for discussion.
managerial officers for 2021
1. 2020 evaluation report for the Board
2. Performance evaluation and bonus for
March 4, 2021 The 13ing of the 16session [th] meet- [th] 3. 4. managerial officersManager's remuneration planAppointment of the Corporate Governance Approved by all members at-tended and submitted to the Board for discussion.
Officer
5. 2020 remuneration for the Company's Di-
rectors.
The 14 [th] meet- Approved by all members at-
April 29, 2021 ing of the 16 [th] Amendments to the Company’s “Charter of Remuneration Committee” tended and submitted to the
session Board for discussion.
The 15 [th] meet- Approved by all members at-
July 29, 2021 ing of the 16 [th] Promotion of the Company’s managerial officers tended and submitted to the
session Board for discussion.
October The 1 [th] meet- Approved by all members at-
ing of the 17 [th] Change in the Company’s chief accountant tended and submitted to the
28, 2021
session Board for discussion.
The above mentioned matters were approved by the Remuneration Committee; there is no dissenting or quali-
fied opinion expressed by Independent Directors attended.
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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): No such circumstances in 2021.
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: No such circumstances in 2021.

<5> Promotion of Sustainable Development, Deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof
IV. Status of corporate governance implementation

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Status(Noet1) Deviations
from the
Sustainable
Development
Best Practice
Promotion Item Principles
Yes No Summarized Description for TWSE/
TPEx Listed
Companies
and Reasons
Thereof
I. Has the Company √ 1. The Board is the highest governance institution for the sustainable devel- No differ-
established a opment of the Company that executes the monitoring duties; it regularly ence
governance structure examines the execution achievements of the sustainable corporate de-
for the promotion velopment and ESG strategies. An ESG Steering Committee is established
of sustainable under the Board; the Committee is formed by the operating team, and the
development CEO is the convener of the Committee, which is responsible for the overall
and established a planning and execution of the sustainable corporate development and ESG
dedicated (part-time) strategies and the regular report to the Board regarding the ESG execution
unit for the promotion strategies and recommendations for development.
of sustainable 2. To allow the cooperation and execution of ESG among all functional depart-
development? Has the ments and the effective implementation in subsidiaries for the innovative
Board authorized the momentum, an ESG workforce is established under the ESG Steering Com-
senior management to mittee. With the leadership and authorization of the ESG Steering Commit-
handle such matters tee, the workforce plans for the ESG strategies and executes ESG targets
under its supervision? and actions plans through the three major aspects of ESG, and duly imple-
ment major aspects based on the long-term development of the Company.
Meanwhile, to reinforce the relationship with stakeholders, the Company
has established and maintained effective communication channels; the
workforce regularly reports to the ESG Steering Committee regarding the
ESG promotion and execution status.
II. Does the Company √ 1. The Company performs detailed assessments and materiality categoriza- No differ-
carry out risk tion regarding the environment, social, and corporate governance issues ence
assessment regarding related to its corporate operations, carries out effective management and
the environment, control based on the materiality principles, and establishes relevant policies,
social, and corporate strategies, or procedures, and make disclosures in the sustainability report
governance issues according to GRI, SASB, and relevant specification.
related to its corporate 2. For descriptions related to the material aspects of the Company, please re-
operations based fer to the 2021 Sustainability Report of the Company and our website.
on the materiality
principles and
established relevant
risk management
policies or strategies?
III. Environmental Issues: 1. The Company operates in the chemical industry. Based on the industry cat- No differ-
(1) Has the Company √ egory, except for complying with local laws and regulations, the Company ence
established an has established comprehensive environment management systems for its
environmental internal management and control, and regularly examines its execution sta-
management tus.
system according 2. The Company actively responds to the international trend of net zero emis-
to the industry sions, has establishes the short-term, mid-term, and long-term carbon
characteristics? dioxide reduction targets and increases the use ratio of renewable energy;
the Company continues reducing GHG emissions, reinforces the energy
consumption efficiency of its procedures, and improves the energy con-
sumption of products.
3. For the external audit of the environmental aspect, our production and
manufacturing plants (including Kaohsiung Plant, Gangshan Plant, Nantong
Plant III, and Shanghai Plant) have been certified underISO-14001environ-
ment management system; Kaohsiung Plant was certified under ISO-50001
energy management system and ISO-14064 greenhouse gases inventory
check; it is estimated that all subsidiaries substantially in operation would
complete the certification of ISO14064 greenhouse gases inventory check.
4. For descriptions of the Company’s ESG environmental strategies, execu-
tion status, and management systems, please refer to the Company’s 2021
Sustainability Report and our website.
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IV. Status of corporate governance implementation
Status(Noet1) Deviations from the
Sustainable
Development Best Practice
Promotion Item Principles Yes No Summarized Description for TWSE/ TPEx Listed Companies
and Reasons Thereof
(2) Is the Company √ 1. For the use of energy, the Company continues improving its production No differcommitted to procedures, replaces its high-energy consumption equipment, improves ence improving energy the energy use efficiency, and improves the energy consumption of various use efficiency and products through innovation and R&D. the use of renewable 2. The Company actively sets its short-term, mid-term, and long-term carbon materials with low dioxide reduction targets, and performs examinations for Scope 1 and environmental Scope 2, respectively, to effectively reduce the carbon dioxide emissions impact? and reinforce the energy use efficiency; it continues to increase the use ratio of renewable energy for all plants.
1. To reduce the reliance of petrochemical materials and minimize impacts on the environment, the Company continues exploring and developing suppliers of renewable materials (including agricultural produce, bio-feeds, and recyclable products), and evaluates the customers’ demand and market supply/demand for timely supply.
(3) Has the Company √ 1. In response to global climate change, the Company promotes the initiaNo differevaluated the current tives for GHG reduction and values the adjustments for climate change. ence and future risks We commenced the promotion of financial impact evaluations related to and opportunities climate in 2021 and adopted the “Recommendations of the Task Force of climate change on Climate-related Financial Disclosures(TCFD)” to carry out the scenario to enterprises and analysis of financial disclosures related to climate change. Based on the adopted relevant climate risks, we identified transition risks and physical risks, determined countermeasures? 13 climate risk, 5 climate opportunities, and prepared quantitative financial data regarding impacts brought by risks, and disclosed the level of impacts of climate change on the Company and response policies and relevant measures; in addition, based on the core elements in the disclosure recommendations under the TCFD, we performed relevant operations and made disclosures in terms of governance, strategies, risk management, indicators, and targets.
For relevant details, please refer to the Company’s 2021 Sustainability Report and our website.
(4) Does the Company √ 1. The Company has established comprehensive environmental protection No differcollect data for policies and management policies. Except for establishing policies related ence greenhouse gas to the ISO50001 Energy Management System, ISO14001 Environmental emissions, water Management System, ISO14064-1 Greenhouse Gases Inventory Check, usage and waste and QC08000 Zero Toxic Substance certified by a third party, regarding quantity in the past ESG strategies, the Company has formulated targets for reinforcement for two years, and set environmental protection and responded to carbon neutral, and set 2021 energy conservation, as the base year for establishing the GHG and carbon dioxide reduction greenhouse gas targets; we also increased our wastewater recycling ratio, reduced our water emissions reduction, consumption, and increased the use ratio of recycled water; for the latest water usage targets, please refer to the sustainability report and our corporate website. reduction and other 2. In 2021, the GHG inventory check was updated to ISO14064-1:2018, and we waste management had obtained the third-party certification; according to the requirements, policies? KPMG performed the assurance operation for the environmental data in
In 2021, the GHG inventory check was updated to ISO14064-1:2018, and we had obtained the third-party certification; according to the requirements, KPMG performed the assurance operation for the environmental data in the sustainability report, issued the opinion, and carried out the verification according to SGS and issued the certification report for GHGs, water consumption, the total weight of wastes.
Data on GHG emissions, water consumption, and total weight of wastes for the past two years is as follows:
- (a) Total GHG emissions of TSRC Group over the years (unit: MT Co2e)

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Greenhouse gas (GHG) emissions 2020 2021
Scope 1(direct greenhouse gas emission) 232,531 115,463
Scope 2(energy indirect greenhouse gas
326,765 455,535
emission)
Total 559,296 570,998
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IV. Status of corporate governance implementation

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Status(Noet1) Deviations
from the
Sustainable
Development
Best Practice
Promotion Item Principles
Yes No Summarized Description for TWSE/
TPEx Listed
Companies
and Reasons
Thereof
Total GHG emissions of TSRC Group over the
2020 2021
years
Total GHG output (MT) 521,529 562,138
GHG emission intensity (MT of Co2e/MT) 1.07 1.02
(b) Total water consumption of TSRC Group(unit: 1,000 MT)
Year 2020 2021
Total water consumption 5,243 4,796
(c) Weight of different wastes of TSRC Group (unit: MT)
Weight of different wastes
2020 2021
(unit: MT)
Total General Business Waste (including 2114 2603
general garbage)
Total Hazardous Business Waste 1,927 1363
Total 4,041 3966
Output 521,529 562138
Waste volume for per unit of pro- 7.75 7.06
duct(MT/1,000 MT)
IV. Social Issues 1. To realize the protection to personnel, the Company has established its No differ-
(1) Does the Company √ personnel interest protection policies and procedures, complies with reg- ence
establish relevant ulations where our business branches operates worldwide, and safeguards
management policies the rights of employees, practitioners of long-term contractors, and other
and procedures in personnel (the “personnel”); the Company supports and makes refer-
accordance with ence to the human rights standards recognized internationally under the
relevant regulations International Labor Office Tripartite Declaration of Principles, The OECD
and international Guidelines for Multinational Enterprises, UN Universal Declaration of
human rights Human Rights, and The UN Global Compact. We respect interests of
conventions? workplace personnel, prohibit all forms of discrimination, ban forced labor
and child labor, ND incurs no interference with employee’s freedom of
association. With respect to the environment, the Company is committed to
providing a safe and healthy workplace for its employees; it complies with
relevant regulations and continues improving the safety and health of the
workplace, prevents the occurrence of accidents, minimizes risks of occu-
pational disasters, protects employees’ safety and facilitates their physical
and mental health, as well as enhancing the awareness of the employee's
regarding personnel interest protection through educational training.
2. “People-oriented mindset” is the core value of the Company; we seek to
achieve the target of zero disaster and zero injury through the operation of
principles related to technologies, safety and health culture, responsibility,
and communication. To mitigate the risk of personnel interest protection,
TSRC Corporation actively carries out substantial planning to create premi-
um workplaces. We carry out internal and external audits annually to elimi-
nate the occurrence of risks related to personnel interest protection.
3. Regarding the evaluation of personnel interest protection, risk mitigation
measures, and personnel protection training practices, please refer to the
2021 Sustainability Report and our website.
34
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Status(Noet1) Deviations from the Sustainable Development Best Practice Promotion Item Principles Yes No Summarized Description for TWSE/ TPEx Listed Companies and Reasons Thereof

IV. Status of corporate governance implementation

(2) Does the √ 1. For employees’ remuneration and benefits, except for remuneration No differCompany establish policies and management regulations in place, the Company established ence appropriately relevant regulations for employees’ leave-taking and other benefits. managed employee Meanwhile, we referred to the international market trend and employees’ welfare measures requirements, we established targets and action plans for the target related (include salary and to improving employees’ happiness for our ESG strategies and make reincompensation, forcement and effective promotion on a yearly basis. leave and others), 2. For the retirement system, we appropriate retirement pension to employand link operational ees’ personal account at the Bank of Taiwan and the Labor Insurance Buperformance or reau according to the “Labor Standard Act,” “Labor Pension Act,” and achievements with implementation rules, and the accounting standards for retirement pension employee salary and for employees in Taiwan, and we regularly hold meetings to review the use compensation? of retirement pension through the “Reserve Labor Pension Fund Supervi-
For the retirement system, we appropriate retirement pension to employees’ personal account at the Bank of Taiwan and the Labor Insurance Bureau according to the “Labor Standard Act,” “Labor Pension Act,” and implementation rules, and the accounting standards for retirement pension for employees in Taiwan, and we regularly hold meetings to review the use of retirement pension through the “Reserve Labor Pension Fund Supervisory Commission” to protect employees’ retirement interests. In Mainland China, the Company and employees jointly pay the basic endowment insurance, basic medical insurance, work injury insurance, unemployment insurance, maternity insurance, and housing provident fund according to ratios stated in relevant requirements under the “Social Insurance Law” in Mainland China. After the retirement, employees may collect the retirement pension uniformly distributed by the national labor and social security department. In the U.S.A., the Company provides various insurance and retirement pension according to local social security regulations, and also offers401(k).
The Company has its labor union in place; the Company has held meetings between employer and labor periodically, and negotiated for the laborers’ interests and rights through formal meetings after sufficient communication and negotiation. Meanwhile, through the CEO Communication Meeting, CEO interacts with employees and understand their demands; employees also understand the mid-to-long-term strategies and business development of the Company through the meeting. All subsidiaries also possess smooth labor-capital communication channels.
With regarding to the annual operating status, market competition, and annual performance evaluations of employees, the Company provides remuneration rewards and the salary adjustment system for employees, given the compliance with the Company’s Articles of Incorporation and local laws and regulations. Except for appropriately reflecting our operating achievements in employees’ remuneration, the Company also values talent retention and gender equality.
The Company offers much rounder insurance package than the regulations (i.e., group insurance/group insurance for spouse and children) to safeguard employees’ work and life safety. For meal subsidies, year-end dinner, annual health inspection, annual company trip, employee’s longterm service award, and gift money for marriage, nursery, injury/sickness, bereavement, or subsidies, we provide various benefits, and the Company also provide discretional subsidies during Chinese New Year or festivals for employees with financial difficulties. In Mainland China, we also offer high temperature subsidy to protect employees’ interests and retirement benefits.
For relevant descriptions, please refer to the 2021 Sustainability Report and our website.

Status(Noet1) Deviations from the Sustainable Development Best Practice Promotion Item Principles Yes No Summarized Description for TWSE/ TPEx Listed Companies and Reasons Thereof

IV. Status of corporate governance implementation
(3) Does the Company √ 1. The Company adheres to the spirit of occupational safety and health manNo differprovide the agement to establish its management regulations and “Workplace Health ence employees with safe and Safety Rules” that stipulate the health and safety of all employees. In and healthy working addition, we stated the rights and obligations related to safety standards, environment and educational training, health instructions, first-aid and rescue, and event recarry out regular porting for employees and contractors in relevant regulations. training courses 2. To safeguard the safety and health of employees and protect interests of regarding safety stakeholders, the Company has introduced or established relevant systems and health of the (including ISO 14001 environment management system as well as ISO45001 employees? and CNS45001 occupational safety and health management system)for
To safeguard the safety and health of employees and protect interests of stakeholders, the Company has introduced or established relevant systems (including ISO 14001 environment management system as well as ISO45001 and CNS45001 occupational safety and health management system)for its subsidiaries in Taiwan and China. Furthermore, inheriting the spirit of responsible care committees established by the majority of the companies in the chemical chemistry, TSRC participates in TRCA and Renda Safety and Health Promotion Association to observe and learn from others in terms of health and environmental protection, so as to improve the level of protection regarding operators’ safety and health; the Company regularly organizes fire drills and occupational safety educational training each year to cultivate employee's emergency management and self-safety management abilities. In response to the leakage of materials and supplies arising from operating activities, fire/explosion/earthquake, and other emergencies, the Company stipulates the emergency management procedures.
The Company established the “Regulations for Identification and Risk Evaluation for Occupational Safety Hazards” in the ISO45001 occupational safety and health management system to execute significant occupational safety and health risk evaluations; for not acceptable risks and acceptable improvement opportunities, the Company include them into the targets and action plans to effectively control risks. In addition, according to the “Regulations for Anomaly Handling Procedures,” the reporting specifications are stated regarding all levels of safety and health events (including false alarm). In 2021, there were a total of five occupational injury cases, with the number of injured employees amounting to five in total; there was no material damage occurred. The total number of employees in the Group was 1,604 (the working hours of employees were 3,186,023 hours in total). After analyzing the cause of the accidents, the Company will continue improving the consultation and drills to ensure the safety of employees.
The Company continues to make improvements in safety and health, as well as fire prevention works, including “permitted operation control, safety observation and patrol inspection, chemical management, auto-inspection, emergency management, contractor management, operating environment testing, as well as safety and health educational training,” and seeks to achieve the target of zero disaster and zero injury.
The Company organizes physical health inspection for all employees once a year and carries out follow-up management for employees with material anomalies in their health inspection results with the assistance from nurse practitioners, under the condition that none of the requirement of the personal information regulations is violated.
Regarding the educational training in 2021, please refer to the 2021 Sustainability Report.
(4) Has the Company √ 1. The Company has established its strategies for employees’ educational No differestablished effective training, which effectively and continuously strengthens the development ence career development of employees’ functions. Except for new employee training that ensures training programs? the completion of the basic training for different duties step by step, each functional department also plans for continual programs regarding employees’ functions each year to reinforce their professional abilities. At the same time, the Company holds multiple sessions of exchange seminars for employees to have the opportunities to learn non-professional knowledge and gain further knowledge on the Company’s long-term development.
To connect to the international standards, strengthening English proficiency is one of the abilities that the Company values in its employees; the Company provides online self-learning channels for employees and promotes self-learning; furthermore, it arranges programs related to leadership for the middle and senior management to improve the management functions.

IV. Status of corporate governance implementation

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Status(Noet1) Deviations
from the
Sustainable
Development
Best Practice
Promotion Item Principles
Yes No Summarized Description for TWSE/
TPEx Listed
Companies
and Reasons
Thereof
3. In response to the transition to the low-carbon dioxide era, the Company
continues nurturing sustainability talents for the transition; it established
short-term, mid-term, and long-term targets and corresponding action
planes to make planned promotions, which not only attracts talents but
also strengthen the human capital of the Company.
4. For the descriptions related to employees’ educational training and the
sustainability talent cultivation plant of the Company, please refer to the
2021 Sustainability Report or the corporate website.
(5) Does the Company √ 1. The Company has evaluated all stages within the life cycle of our products No differ-
have its product regarding health and safety impacts and imposes control. For the market- ence
and service comply ing of products, the Company evaluates the competitive niche of products
with regulations in terms of health and safety under the industrial trend, and actively exhib-
and international its the products advantages during exhibitions and communications with
rules related to customers. Meanwhile, considering the increasing awareness of environ-
customers’ health mental protection and energy-saving worldwide that gave rise to the green
and safety, privacy, development trend of synthetic rubber, the Company started developing
sales, and labelling, environmental rubber and made active promotions to and communica-
and set policies to tions with customers. In addition, we emphasizes and communicates with
protect consumers’ customers regarding the business concepts of our sustainable products on
rights and consumer our website, during visits to customers, or at public events (i.e. seminars or
appeal procedures? product launch presentation).
2. Given the effects of products on the environment , human health and safety
in different stages within the life cycles, upon the development of all prod-
ucts, the Company adopts laws and regulations related to environment and
chemical substance safety management worldwide as its standards; mass
production and shipping are subject to the compliance with such standards.
The Company sets out the specifications, nature, and usage instructions for
rubber products it provided in the COA and safety data sheet to allow cus-
tomers to understand the safe usage; we also state our consultation line to
assist customers in obtaining the information required with our best efforts.
We enclose SDS for the first shipment made to each customer; the SDS
specifies the information of the substances, waste processing method, and
using conditions. The SDS is available on our website and is also provided
upon request by our customers at all times.
3. Products of the Company comply with the requirements related to SVHC
information transmission under REACH regulations, and the Company con-
tinues to update the HSF supporting information of suppliers. The Com-
pany has established its Regulations for Processing Customer Complaints
and Regulations for Finished Good Safety Data Sheet to effectively process
customer complaints and after-sale services of products.
4. The Company has established its “Ethical Corporate Management Best
Principles” to prevent our products or services from harming stakeholders
and join forces with all functional units to improve the customers’ satisfac-
tion, providing convenient services for customers and focusing on protec-
tion related to privacy and transaction safety.
5. In 2021, there is no infringement arising from violating health and safety
regulations related to products or violating marketing regulations, or aris-
ing from product responsibilities.
(6) Does the Company √ 1. The Company has established its PCC, including categories of environment, No differ-
establish a supplier occupational safety and health, human rights/ethical and labor policies, to ence
management policy, encourage suppliers in observing national and other applicable laws and
requiring suppliers regulations and becoming companies with leading positions in terms of
to follow relevant sustainability. We also encourage suppliers to establish their own code of
regulations on issues conducts and further expand such acts to the entire supply chain.
such as environmental 2. The Company requires our partners to observe local laws and regulations
protection, regarding banning forced/exploited laborers, as well as legal working hours,
occupational safety and disclosures of salaries and benefits. Our evaluations of suppliers in-
and health, or labor clude ISO 9001,RoHS(HSF),QC 080000,ISO 14001,ISO45001, and CNS45001,
rights, and their as well as material indicators of corporate social responsibility. We require
performing status? suppliers to comply with the freedom of assembly and association, no child
labor, and elimination of forced labor to maintain basic human rights. In
2021, according to the survey results by using the CSR evaluation table for
raw material suppliers, there is no violation of the above mentioned mat-
ters.
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IV. Status of corporate governance implementation

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Status(Noet1) Deviations
from the
Sustainable
Development
Best Practice
Promotion Item Principles
Yes No Summarized Description for TWSE/
TPEx Listed
Companies
and Reasons
Thereof
3. Except for strictly forbidding the use of child labor by partners, the Compa-
ny also investigates suppliers by using the CSR evaluation table. The Com-
pany requires partners to respect and encourage employ; in compliance
with local laws, we encourage them to develop and engage in the overall
benefits of employees. Upon acknowledging the violation of the above
mentioned matters by any suppliers, the Company will make arrangements
according to the Regulations for the Management of Contractors.” In
2021, according to the re-evaluation plan for raw material suppliers, we
performed the written review for suppliers. According to the results of the
audit, all suppliers were qualified.
4. For details, please refer to the 2021 Sustainability Report.
V. Does the Company √ 1. The 2021 Sustainability Report of the Company adopts the frameworks No differ-
refer to internationally issued by GRI and is prepared according to SASB. In the report, we made ence
accepted reporting categorizations based on three major ESG aspects regarding the material
standards or aspects and made disclosures according to the specifications. Apart from
guidelines obtaining the certification from the third-party institutions, we also added
for compiling the CPA assurance operation for our report in 2021 according to the re-
sustainability non- quirements.
financial information, 2. For the preparation principles of the report and the information of the
reports, such as on third-party certifying institution, please refer to the 2021 Sustainability Re-
corporate social port.
responsibility? Does
the previous released
report obtain the
assurance of the third-
party verification unit?
VI. Has the Company established its Sustainable Development Best Practice Principles according to the Sustainable Development Best
Practice Principles for TWSE/TPEx-Listed Companies, describe the implementation status and the deviation from the Principles:
The Company has established its ESG strategies and management policies according to the “Sustainable Development Best Prac-
tice Principles for TWSE/TPEx-Listed Companies”and actual operating requirements, and makes execution accordingly. For the
operation of sustainable development, there is no deviation from the “Sustainable Development Best Practice Principles for TWSE/
TPEx-Listed Companies.”
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VII. Other important information that is helpful to understand the implementation status of promoting sustainable development:

In response to the increasing attention attached to the ESG performances of TSRC by the international capital market and stakeholders, and under the effect of global climate change, net zero emission has become the final goal of countries and enterprises. Meanwhile, in response to the implication of promoting the sustainable development of the listed companies and the amendments to the “Sustainable Development Best Practice Principles for TWSE/TPEx-Listed Companies” by the FSC, the Company established its ESG strategies to serve as the long-term promotional policies in terms of environment, social, and governance.
The Company’s ESG strategies primarily focus on three aspects of environment, social, and governance; the purpose of such strategies is to allow the stable and continual operation and development of the Company through the establishment of shortterm, mid-term, and long-term targets. Through the ESG strategies, we continued to implement governance for the governance aspect; in combination with the long-term strategies and operating plans, we reinforced our operating performances and built our operating resistance. For the environment aspect, we set active carbon dioxide reduction targets, increased the using ratio of renewable energy, wastewater recycling ratio, and using ratio of reuse water. For the social aspect, we continued cultivating sustainability talents, reinforced the health and safety environment for employees, increased employees’ happiness, and increased our social participation. By doing so, we allow stakeholders to understand the investments and efforts made by the Company in different ESG aspect, and in turn, secure their support and improve the competitive strength of the Company’s products in the market. Moreover, through our ESG performance achievements, we obtained favorable ratings from domestic and overseas rating institutions (i.e., MSCI, EcoVadis, CDP, and Corporate Governance Evaluation). Apart from improving our business growth, we also brought positive contributions to the environment and society.

<6> Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and Reasons

IV. Status of corporate governance implementation

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Status Any depar-
ture of such
implementa-
tion from the
Corporate
Assessment Items Governance
Yes No Abstract Description Best-Practice
Principles
for TWSE/
TPEx Listed
Companies
I. Define the program for operation in 1. The Company has established its “Ethical Corporate No differ-
good faith √ Management Best Practice Principles” and “Code of ence
(1) Does the Company clearly state the Ethical Conduct” that are approved by the Board to
policy and the practice of ethical state its philosophy and principles of ethical manage-
corporate management in the ment and establish specifications and structures for
regulations and external documents joint observation.
when formulating the ethical corporate 2. The Company has stipulated its “Risk Management
management approved by the Board Policy” and established the “Procedures for the Pre-
of Directors, and do the board of vention of Insider Trading,” “Procedures for Gift and
directors and senior management Entertainment for Official Affairs,” “Procedures for
level actively implement the ethical Conflict of Interests” (see details below), and other
corporate management policy? rules and regulations regarding acts with high unethi-
(3) Does the Company establish an √ cal risks based on the risk assessment; such provisions
evaluation mechanism for the risk specify the matter of notice and are disclosed on
of dishonesty behaviors, regularly the Company’s website and MOPS. In addition, the
analyzes and evaluates business Company has established the “Regulations for the
activities with a higher risk of Evaluation and Management Regulation” to ensure
dishonesty behaviors in the business our partners may implement the “Code of Conduct
scope. Based on the mechanism, does for Partners of TSRC Corporation.” The above men-
the Company formulate a plan for tioned rules and regulations fully cover the prevention
preventing dishonesty behaviors, at measures for acts stated in paragraph 2, Article 7 of
least covering the preventive measures the “Ethical Corporate Management Best Practice
in the second paragraph of Article 7 of Principles for TWSE/TPEx Listed Companies.”
“Ethical Corporate Management Best 3. The Company communicates with and requires man-
Practice Principles for TWSE/GTSM agerial officers and all employees to comply with the
listed companies?” above mentioned rules and regulations through our
√
(3) Does the Company clearly set up educational training programs, and the responsible
the operating procedures, behavior superiors as well as legal, finance, human resource,
guidelines, punishment and appeal and other departments shall monitor the execution;
system for violations in the plan of the Company also requires employees to regularly
preventing dishonesty, implement it, disclose and confirm their status of conflict of interest
and regularly review and revise the annually for the responsible superiors to make ar-
above-mentioned plan? rangements according to the requirements.
4. The Company also has the “Procedures for Whis-
tle-blowing”(see details below) and “Regulations
for Reward and Punishment” in place to ensure the
compliance of the above mentioned rules and regula-
tions by employees.
II. Fulfillment of operation in good faith
(1) Has the Company assessed the ethical √ 1. The Company has established the “Regulations for No differ-
record of its partners and stipulated the Evaluation and Management Regulation” to en- ence
the ethical behavior clause in the sure our partners may implement the “Code of Con-
contract? duct for Partners of TSRC Corporation.”
(2) Does the company have a dedicated √ 2. The Company has established its “Regulations for
unit to promote ethical corporate Conflict of Interests” that requires Directors manage-
management under the Board of rial officers, and employees to complete the question-
Directors, and regularly (at least naires for the disclosure of conflict of interests each
once a year) report to the Board of year; the Company also organizes promotional pro-
Directors about its policy on ethical gram of “Explanation Session for Conflict of Interests
corporate management, plans to and Disclosure.” For any conflict of interests, such
prevent dishonesty and monitor parties involved shall make declarations actively and
implementation? recuse themselves according to the requirements.
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IV. Status of corporate governance implementation

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Status Any depar-
ture of such
implementa-
tion from the
Corporate
Assessment Items Governance
Yes No Abstract Description Best-Practice
Principles
for TWSE/
TPEx Listed
Companies
(3) Has the Company stipulated policies √ 3. The accounting system and the internal control sys-
to prevent the conflict of interest, tem of the Company are established according to the
provided an adequate complaint requirements of the competent authority, and the
channel and ensured by its proper Company prepares its financial reports according to
implementation? the International Accounting Standards. The internal
(4) Does the Company establish an √ audit department regularly evaluates risks and pre-
effective accounting system and pares audit plans according to the “internal control
internal control system for the system,” regularly performs audits regarding the
implementation of ethical corporate compliance status of the system above, prepares audit
management, and the internal auditing reports and submits them to the Audit Committee
system. Based on the results of the and the Board.
assessment of the risk of dishonesty 4. To promote the ethical management policies of the
behaviors, the audit unit should draw Companies and improve the awareness of employees
up relevant audit plans, and based regarding laws related to ethical management, the
on it, check if the plan of preventing Company organized educational training courses of
dishonest behavior is followed, or “Understand Insider Trading,” “Business Secrets
commission an accountant to perform and Non-competition,” “Illegal Infringement at
the check? Workplace,” and “Disclosure of Conflict of Interests
(5) Has the Company regularly organized √ and Management System.”
internal and external education
and training concerning ethical
management?
III. Status of the Company's reporting The Company has established its “Procedures for Whis- No differ-
mechanism. √ tle-blowing,” set up a public whistle-blowing mailbox ence
(1) Has the Company stipulated a on its corporate website, appointed dedicated personnel
specific reporting and reward system, for handing the whistle-blowing cases, and carried out
established a convenient reporting investigations on the identity of whistle-blowers through
channel and assigned appropriate confidential manners; in addition, the Company explicitly
personnel to the accused? √ stated the prohibition on revenge against whistle-blow-
(2) Does the Company establish standard ers.
operating procedures of investigations For any illegal or inappropriate behaviors, the Compa-
to receive reports, follow-up ny adheres to objective, just, and stringent attitudes to
measures after the investigation is investigate and impose punishments according to the
completed, and related confidentiality requirements, and examines and improves relevant rules,
mechanisms? regulations, and procedures, accordingly, to prevent
(3) Has the Company taken measures √ similar events to reoccur; when necessary, the Company
to protect the reporter from being adopts appropriate legal acts to protect the Company’s
wrongfully treated? interests, credibility, and reputation.
4. Enhance the disclosure of information √ The Company discloses its “Ethical Corporate Manage- No differ-
Has the Company disclosed the ment Best Practice Principles,”“Code of Ethical Con- ence
performance of its ethical management duct,” and relevant specifications, as well as substantial
on the Company website and the operations and implementation status on the corporate
MOPS? website.
5. If the Company has defined its ethical corporate management practice in accordance with the Ethical Corporate Management 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.
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<7> Stipulations of Corporate Governance Best Practice Principles and related regulations

The Company has established it’s “Corporate Governance Best Practice Principles,”“Ethical Corporate Manage-
ment Best Practice Principles,”“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 Acquisition and Disposal of Assets,”“Procedures for Loan to Others,”“Procedures for Endorsement and Guarantee,”“Charter of Audit Committee,”“Charter of Remuneration Committee," “Risk Management Policy,”“Procedures for the Prevention of Insider Trading,” and “Procedures for Whistle-blowing Management.” For more information, please visit our website (http://www.tsrc.com.tw).

IV. Status of corporate governance implementation

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

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Date of
Job title Name Organizer Program(s) Hours
Training
Securities & Futures Becoming the Key to the Sustain- 3
Institute able Enterprise: ESG Practices
December 3,
Chairman Nita Ing 2021
Securities & Futures
Institute Board Cyber security training 3
13 [th] Taipei Corporate Governance
September 1, 2021 Financial Supervisory Commission Forum (morning and afternoon 6
session)
Jing-
Director Lung Securities & Futures Becoming the Key to the Sustain- 3
Huang Institute able Enterprise: ESG Practices
December 3,
2021
Securities & Futures
Institute Board Cyber security training 3
September 1, Financial Supervisory 13 [th] Taipei Corporate Governance 3
2021 Commission Forum (morning session)
Chin-
Director Shan Securities & Futures Becoming the Key to the Sustain- 3
Institute able Enterprise: ESG Practices
Chiang December 3,
2021
Securities & Futures
Institute Board Cyber security training 3
May 5, 2021 Taiwan Institute for Sustain- Training Program for Corporate 3
able Energy Sustainable Development
Director John T. July 29, 2021 Taiwan Institute for Sustain-able Energy Speech25 [th] CEO Lecture and Project 2
Yu
Fully Ignite the Digital Resistance
August 3, Taiwan Corporate Gover- of Enterprises –Emergency Man- 3
2021 nance Association agement and Response from the
Perspective of Blackmailing Viruses
September 1, Financial Supervisory Com- 13 [th] Taipei Corporate Governance 3
2021 mission Forum (morning session)
Inde-
pendent Director Robert Hung December 3, Securities & Futures Institute Becoming the Key to the Sustain-able Enterprise: ESG Practices 3
2021
Securities & Futures
Institute Board Cyber security training 3
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IV. Status of corporate governance implementation


Job title Name Date of Training Organizer	Program(s)	Hours
Inde- pendent Director Sean Chao August 24, 2021 Taiwan Corporate Gover- nance Association September 1, 2021 Accounting Research and Development Foundation	Aspects of Directors’ and Super- visors’ Responsibilities – Corpo- rate Governance from the Perspec- tive of the KY Case Trend and Corresponding Strate- gies for ESG Sustainable Finance	3 3
December 7, 2021 Taiwan Stock Exchange	2021 Cathay Sustainable Finance and Climate Change Summit	3
September 1, 2021 Financial Supervisory Com- mission	13thTaipei Corporate Governance Forum (morning session)	3
Inde- pendent Director Rex Yang December 3, Securities & Futures Institute	Becoming the Key to the Sustain- able Enterprise: ESG Practices	3
2021 Securities & Futures Institute	Board Cyber security training	3
March 19, 2021 Taiwan Corporate Gover- nance Association	Directors’ Right to Information from the Aspect of Information Provision	3
March 26, 2021 Securities & Futures Institute	Analysis on Non-Arm's Length Transaction of Director and Super- visors and Case Study	3
Corporate Gover- nance Officer Chao- Cheng Tsai April 8, 2021 Taiwan Corporate Gover- nance Association April 13, 2021 Taiwan Academy of Banking and Finance	Legal Risks for Directors and Su- pervisors and Countermeasures from the Perspective of Significant Corporate Fraud Analysis on Actual Cases of Direc- tors’and Supervisors’ Criminal Responsibilities	3 3
September 1, 2021 Financial Supervisory Com- mission	13thTaipei Corporate Governance Forum	3
December 3, Securities & Futures Institute	Becoming the Key to the Sustain- able Enterprise: ESG Practices	3
2021 Securities & Futures Institute	Board Cyber security training	3
2.The Company continues to reinforce its corporate governance operations; for the investor relations section on the
corporate website, the Company established relevant rules for corporate governance and provide material resolu-
tions made by the Board for investors’ reference.
3.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.
42

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

1. A statement of Internal Control

TSRC Corporation A statement of Internal Control

Date: March 10, 2022

In accordance with the result of self-evaluation of the internal control system in 2021, 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, 2021 (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 10, 2022 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 2021 and until the annual report being published.

IV. Status of corporate governance implementation

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1. The important resolutions made by shareholders'
The status of implementation
regular meetings in 2021
(1) To adopt the 2020 Business Report and Financial
Statements Resolutions adopted.
Resolved, by the Board of Directors, to set August 31, 2021
as the ex-dividend date for the distribution of cash dividends
(2) To adopt the 2020 earnings distribution
of NT$0.36 per share and the payment date is September 15,
2021.
(3) Election of the 17 [th] session of the Company’s Became effective after the resolution was made at the share-
Directors holders’ meeting
(4) Release the non-competition restriction on the Became effective after the resolution was made at the share-
17 [th] session of the Company’s Directors holders’ meeting
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2. Important resolutions made by board of directors' meetings
Date Important resolutions
May 6, 2021 Resolved to approve the financial report for the 1st quarter of FY2021.
August 3, 2021 Resolved to approve the financial report for the 2nd quarter of FY2021.
Elect Director Nita Ing as the Chairman
August 4, 2021
List of newly elected members of the Audit Committee and Remuneration Committee.
Resolved to approve the financial report for the 3rd quarter of FY2021.
November 4, 2021
Resolved to pass the change in the chief accountant of the Company.
Resolved to adopt the consolidated financial statements for FY2021.
March 10, 2022 Resolved to adopt the 2022 annual meeting of shareholders.
Resolved to adopt the earnings distribution for FY2021.
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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:

internal audit, chief of corporate governance and chief of research and development:	internal audit, chief of corporate governance and chief of research and development:	internal audit, chief of corporate governance and chief of research and development:	internal audit, chief of corporate governance and chief of research and development:	internal audit, chief of corporate governance and chief of research and development:
December 31, 2021
Job title	Name	Date of accede	Date of discharge	Reason of resignation or dismissal
Chief Accountant	Ming-Huang Chen	July 1, 2013	November 5, 2021	Retirement

V. Information regarding TSRC’s audit fees

<1> Information about audit fee and non-audit fee paid to CPA and the accounting firm, and its affiliates:

Unit: thousand NTD

V. Information regarding TSRC’s audit fees
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 or any of its affiliated companies
VIII. Information on directors, managers and shareholders holding more than 10% of outstanding shares transfer equity or equity pledge movements

Name of the ac- counting firm	Name of the CPA	CPA's audit period	Audit fee	Non-audit fee	Non-audit fee	Non-audit fee	Non-audit fee	Non-audit fee	Total	Remarks
				System design	Industrial & commercial registration	Human resource	Other	Subtotal
KPMG Taiwan	Ming Hung Huang	January 1, 2021 to De- cember 1, 2021	8,405	0	13	0	870	883	9,288	Others under the non-audit fees are primarily taxation certification fees and certification fees di- rectly deducted from the business tax.
	Lin Wu

<2> The audit fees paid for the fiscal year with accounting firm changed has decreased compared to the previous year : Not applicable
<3> 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 or any of its affiliated Company-None
VIII. Information on directors, managers and shareholders holding more than 10% of outstanding shares transfer equity or equity pledge movements

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2021 As of March 20, 2022
Job title Name Increase Increase Increase Increase
(decrease) in (decrease) in (decrease) in (decrease) in
shares held pledged shares shares held pledged shares
Chairman Nita Ing - - - -
Director Wei-Dar Development
directorCorporate representative of the Corporate representative of the Co., Ltd.Nita IngJing-Lung Huang -- -- -- --
director
Director Han-De Construction
- - - -
Corporate representative of the Co., Ltd.
director Chin-Shan Chiang - - - -
Corporate representative of the John T. Yu - - - -
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 - - - -
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Job title	Name	2021		As of March 20, 2022
		Increase (decrease) in shares held	Increase (decrease) in pledged shares	Increase (decrease) in shares held	Increase (decrease) in pledged shares
Vice President	Qiwei Lu	-	-	-	-
Vice President	Kevin Liu	-	-	-	-
Vice President	Chi-Wei Hsu	-	-	-	-
Vice President	De-Bei Wang	-	-	-	-
Corporate Governance Officer	Chao-Cheng Tsai (Note2)	-	-	-	-

Note 1: Holding shares in the name of others. Note 2: Newly elected of March12, 2021

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. Disclosure of Interrelationship among top 10 largest shareholders

IX. Disclosure of Interrelationship among top 10 largest shareholders

August 31, 2021

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Shares
currently Shares held Names and relationship of any of the top ten
Share(s) held held by their in another shareholders and their spouses or relatives of 2nd
personally spouses and person's degree of relationship who are related defined in the Re-
Name children of name Statement
marks
minor age
Share Share
Share (s) (%) (%) (%) Name/name Relationship
(s) (s)
Panama Banco
Han-De Construction Co., Ltd.
industrial Com-
pany 69,524,417 8.41 0 - 0 - Wei-Dar Development Co., Ltd.Tamerton Group Limited Related-party
Representative:
Miriton Investment Corporation
Tu De-Ping
Chairman
Wei-Dar Development Co., Ltd. of the same
Han-De Con-
person
struction Co.,
Ltd. 63,093,108 7.64 0 - 0 -
Panama Banco industrial Company
Jing-Lung
Wei-Dar Development Co., Ltd. Related-
Huang
Tamerton Group Limited party
Miriton Investment Corporation
Chairman
Han-De Construction Co., Ltd. of the same
Wei-Dar Devel-
person
opment Corpo-
ration 53,708,923 6.50 0 - 0 -
Panama Banco industrial Company
Chairman: Jing-
Han-De Construction Co., Ltd. Related-
Lung Huang
Tamerton Group Limited party
Miriton Investment Corporation
FORMOSA PET-
ROCHEMICAL
CORPORATION 41,201,000 4.99 0 - 0 - No No
Responsible
person: Po-Lang
Chen
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X. Equity investment and shareholding information held by the Company, its directors, managers and directly/indirectly owned subsidiaries

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Shares
currently Shares held Names and relationship of any of the top ten
Share(s) held held by their in another shareholders and their spouses or relatives of 2nd
personally spouses and person's degree of relationship who are related defined in the Re-
Name children of name Statement
marks
minor age
Share Share
Share (s) (%) (%) (%) Name/name Relationship
(s) (s)
Tamerton Group Panama Banco industrial Company
Limited 34,578,143 4.19 0 - 0 - Han-De Construction Co., Ltd. Related-
Representative: Wei-Dar Development Co., Ltd. party
Wang, Hui-Ling Miriton Investment Corporation
Fubon Life In-
surance Co., Ltd. 33,435,000 4.05 0 - 0 - No No
Chairman: Rich-
ard M. Tsai
Hao Ran Foun-
dation 28,171,319 3.41 0 - 0 - No No
Representative:
Nita Ing
Cathay Life In-
surance Co. Ltd.
Responsible 24,920,000 3.02 0 - 0 - No No
person: Tiao-
Huei Huang
Miriton
Investment Panama Banco industrial Company
Corporation 14,151,148 1.71 0 - 0 - Han-De Construction Co., Ltd. Related-
Wei-Dar Development Co., Ltd. party
Representative:
Tamerton Group Limited
Wang, Hui-Ling
CITI Bank Taiwan
branch in custo-
dy for Govern- 13,149,050 1.59 0 - 0 - No No
ment of Singa-
pore Investment
Fund
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X. Equity investment and shareholding information held by the Company, its directors, managers and directly/indirectly owned subsidiaries

Unit: shares; %

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Investment by directors,
managers and enterprises
Investment by the Company directly or indirectly Total investment
Investees (Note) controlled by the
Company
Share(s) (%) Share(s) (%) Share(s) (%)
Trimurti Holding Corporation 86,920,000 100.00 - - 86,920,000 100.00
Hardison International Corpora- 3,896,305 100.00 - - 3,896,305 100.00
tion
Dymas Corporation 1,161,004 19.48 4,798,566 80.52 5,959,570 100.00
TSRC (Vietnam) Co., Ltd. Not applica- 100.00 - - Not applica- 100.00
ble ble
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Note: Long-term investments accounted for using the equity method.

Information on capital raising activities

I. Capital and shares

<1> Source of capital stock

March 20, 2022

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

Authorized stock capital Paid-in capital Remarks
Issue
Year/
month price Shares(s) Amount Shares(s) Amount Property other
(NTD) (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 Compa-]
ny
Technical
cooperation
June 1974 10 20,000 200,000 13,200 132,000 [Increase of ] remuneration
NTD 51,000,000 transferred to
capital stock
NTD 30,000,000
Technical
cooperation
February 10 20,000 200,000 20,000 200,000 [Increase of ] remuneration
1975 NTD 61,928,000 transferred to
capital stock
NTD 6,072,000
November 10 40,000 400,000 30,000 300,000 [Increase of ]
1975 NTD 100,000,000
December 10 40,000 400,000 40,000 400,000 [Increase of ]
1975 NTD 100,000,000
July 1976 10 60,000 600,000 50,000 500,000 [Increase of ]
NTD 100,000,000
April 1977 10 60,000 600,000 54,000 540,000 [Increase of ]
NTD 40,000,000
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
Septem- 10 110,000 1,100,000 92,300 923,000 NTD 16,980,000 Issue date:
ber 1981 NTD 173,640,000 May 18,1981
transferred from earnings
Increase of
Listed date:
NTD 135,470,000
April 1982 10 120,000 1,200,000 116,000 1,160,000 September 25,
NTD 101,530,000 trans-
1982
ferred 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
Septem- 10 164,200 1,642,000 164,200 1,642,000 NTD 119,577,000
ber 1986 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
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I. Capital and shares


Year/ month	Issue price (NTD)	Authorized stock capital		Paid-in capital		Remarks
		Shares(s) (1,000 shares)	Amount (NTD1,000)	Shares(s) (1,000 shares)	Amount (NTD1,000)	Source of stock capital	Property other than cash offset against capital	Other
August 1989	10	274,068	2,740,679	274,068	2,740,679	NTD 357,480,000 transferred from earnings
October 1991	10	306,956	3,069,560	306,956	3,069,560	NTD 328,881,000 transferred from earnings
August 1995	10	550,000	5,500,000	369,700	3,697,000	NTD 627,440,000 transferred from earnings
July 1997	10	550,000	5,500,000	502,900	5,029,000	NTD 1,332,000,000 transferred from earnings
July 1998	10	750,000	7,500,000	580,487	5,804,870	NTD 775,870,000 transferred from earnings		Authorized stock capital in- cludes convert- ible corporate bonds totaling 100 million shares
July 1999	10	750,000	7,500,000	609,511	6,095,114	NTD 290,244,000 transferred from earnings		June 29, 1999 Approved by the official letter under (88) Tai- Tsai-Cheng (1) No. 59287
June 2006	10	750,000	7,500,000	649,909	6,499,095	NTD 403,981,000 transferred from earnings		Approval by let- ter under Chin- Kuan-Cheng- Yi-Tze No. 0950124967 dated June 20, 2006
June 2011	10	900,000	9,000,000	714,900	7,149,004	NTD 649,909,000 transferred from earnings		Approval by let- ter under Chin- Kuan-Cheng- Yi-Tze No. 1000028593 dated June 22, 2011
June 2012	10	900,000	9,000,000	786,390	7,863,904	NTD 714,900,000 transferred from earnings		Approval by let- ter under Chin- Kuan-Cheng- Yi-Tze No. 1010027239 dated June 19, 2012
June 2014	10	900,000	9,000,000	825,709	8,257,099	NTD 393,195,000 transferred from earnings		Approval by let- ter under Chin- Kuan-Cheng- Yi-Tze No. 1030023928 dated June 25, 2014
June 2019	10	1,200,000	12,000,000	825,709	8,257,099

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March 20, 2022
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 - - -
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Information related to general report system-Not applicable

I. Capital and shares

<2> Shareholders' structure

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August 31, 2021
Shareholder's Structure Government Financial Other juridical Individual Institutions & Foreign Total
Quantity Agencies Institutions persons Natural Persons
Number of persons 4 24 203 77,771 315 78,317
Share(s) 8,204,024 73,226,007 195,030,758 287,798,491 261,450,698 825,709,978
Stake(%) 0.99 8.87 23.63 34.85 31.66 100.00
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<3> Diffusion of ownership

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Par value NTD10/ August 31, 2021
Range of shares held Number of shareholders Shares held Stake (%)
1- 999 37,750 6,747,044 0.82
1,000- 5,000 29,330 63,488,587 7.69
5,001- 10,000 5,801 43,067,375 5.22
10,001- 15,000 1,962 24,406,422 2.96
15,001- 20,000 1,060 19,183,493 2.32
20,001- 30,000 963 24,103,463 2.92
30,001- 40,000 379 13,349,346 1.62
40,001- 50,000 262 12,020,299 1.46
50,001- 100,000 443 31,494,272 3.80
100,001- 200,000 195 26,606,117 3.22
200,001- 400,000 80 22,116,568 2.68
400,001- 600,000 27 12,777,748 1.55
600,001- 800,000 8 5,329,386 0.64
800,001- 1,000,000 9 7,978,524 0.97
1,000,001 above 48 513,041,334 62.13
Total 78,317 825,709,978 100.00
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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	8.41
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
Fubon Life Insurance Co., Ltd.	33,435,000	4.05
Hao Ran Foundation Statutory	28,171,319	3.41
Cathay Life Insurance Co. Ltd.	24,920,000	3.02
Miriton Investment Corporation	14,151,148	1.71
CITI bank Taiwan branch in custody for Government of Singapore Investment Fund	13,149,050	1.59

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

Unit: NTD

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Fiscal year 2021 2020 As of March
Item 20,2022
Maximum 43.90 24.30 41.10
Market price Minimum 19.50 12.90 32.80
per share
Average 30.67 18.94 36.78
Before distribution 21.83 17.12 -
Net worth per
share After distribution 19.43(Note 1) 16.76 -
Weighted average share(s) 825,709,978 825,709,978 825,709,978
Earnings per share Before adjustment 4.76 (0.03) -
EPS
-
After adjustment 4.76(Note 1) (0.03)
Cash dividend (Note 1) 2.40 0.36 -
Dividend distributed from 0 0 -
earnings
Dividends per Dividends
share (Note 1)
Dividend distributed from ad-ditional paid-in capital - - -
- - -
Cumulative outstanding dividends(Note 2)
Price-earnings (P/E) ratio (Note 3) 6.44 - -
Cash dividend Price-dividend (P/D) ratio(Note 4) 12.78 52.61 -
yield
Cash dividend yield(Note 5) 7.83 1.90 -
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Note 1: The amount decided by the board of directors on March 10, 2022.

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

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 2.4 per share.
VI. Restricted Stock Awards Status
VII. Status of issuance of new shares for mergers or acquisitions of other companies
VIII. Status of capital utilization
<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 28-1 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 2021 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 the resolution made at the 5[th] meeting of the 17[th] Board, the employees’ remuneration in cash for 2021 is NT$171,609 thousand; according to the resolution made at the 6[th] meeting of the 17[th] Board, the Directors’ remuneration for 2021 is NT$22,677 thousand; the amounts are in line with the estimated amounts during the year of recognition.
- (2) The Company does not distribute employees’ remuneration in stock before 2021.
The actual distribution of the remunerations of employees, Directors, and supervisors for the preceding year: In 2020, the Company distributed remunerations of employees in cash of NT$40,750 thousand and remunerations of Directors in cash of NT$616 thousand; the amounts are in line with the estimated amounts during the year of recognition.
<9> Share repurchases: None
II. Corporate bonds - None
III. Preferred shares - None
IV. Global depository receipts - None
V. Employee stock warrants - None
VI. Restricted Stock Awards Status - None

VII. Status of issuance of new shares for mergers or acquisitions of other companies - None VIII. Status of capital utilization - None

Overview of business operations

I. Business overview

<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

Product Portfolio
I. Business overview

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Unit: thousand NTD
Items Revenue in 2021 Total Turnover(%)
Synthetic rubber and elastomers 31,440,852 96.64
Applied materials 1,092,386 3.36
Total 32,533,238 100.00
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3. Planned Developments of New Products

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

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

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

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Develop differentiated HSBC products such as high-end medical grade materials,
3 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

According to the forecast made by the OECD and the IMF at the end of 2021, the economic growth rate in 2022 would be 4.5% and 4.9%, respectively. Due to the slowdown of the growth in market demand and the exiting of supportive financial and monetary policies worldwide, the global economic growth rate will record a downturn as compared with the preceding year, and inconsistent restoration of development occurred to different economies. With central banks of major economies making adjustments to their monetary policies, global supply chains encounter the bottleneck and inflation, intensified geopolitics, and the variation of COVID-19, such factors will determine the development in the global market.

Since the beginning of the pandemic, the U.S.A. has been adopting easy monetary policies to stabilize the economic impacts brought by the outbreak; however, the scale of the Fed’s balance sheet exceeded US$8.7 trillion at of the beginning of 2022. With the exit of the QE policy in the U.S.A., the market generally expects that the Fed will announce the increase in interest rates in 2022. BoE has become the first among the G7 central banks to increase the interest rate at the end of 2021 to cope with the inflation. However, ECB maintained its easy monetary policies, and the financial expenditures in the Euro region remained high to continue supporting its economic growth. Mainland China made a downward adjustment to the reserve requirement ratio of financial institutions at the end of 2021, which was deemed as a signal that the government will continue adopting the eased financial and monetary policies by the market; however, attentions shall be attached to the effects of the Chinese government adopting zero tolerance policy on the economy. Looking into 2022, the economy and overall development in Taiwan will continue thriving; however, as the base period for comparison is slightly higher, the expected economic growth slowed down. According to the latest forecast issued by the Taiwan Institute of Economic Research in November 2021, the GDP growth rate in 2022 will be 4.1%, lower than 6.1% in 2021.

In 2021, the global oil price increased over 50% from the end of 2020. OPEC estimated that the oil price will continue to rise in 2022; the shortage of energy supply, the increasingly explicit energy transition policies and measures related to carbon emissions payment rolled out by countries are expected to keep the energy price up in the short term,

intensifying the concerns for inflation in different regions. As the turbulent geopolitics affecting the regional energy prices and the stability of supply, other events, such as the RCEP became effective in 2022, the intensified military conflicts between NATO and Russia, and the continual US-China trade war, and changes in the international situation will potentially affect the development of the global economy.

On the COP26 at the end of 2021, there were over 40 countries executed the carbon dioxide reduction agreement. The low-carbon economy transition worldwide in response to the threat of climate change has become an irreversible trend. Meanwhile, due to the ESG investing the grew rapidly since 2020 and the improvement in consumers’ environmental protection awareness, enterprises commit to reducing the impacts of their operating activities on the environment and increasing the investments in products or service innovation related to the green economy and circular economy. In terms of mid-to-long-term development, national policies, market trends, and social participations will continue to promote the ESG development, which will also bring new opportunities and challenges to enterprises.

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

I. Business overview

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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 demand for the global automobile industry recovered rapidly in 2021, bringing about the strong market growth. Even though affected by the shortage of automotive chips in the second half of the year, LMC estimated that the global sales of automobile would be approximately 81.94 million vehicles, representing a growth rate of 5.4% as compared to 2020. The Chinese market recovered relatively earlier than other regions worldwide. According to the China Association of Automobile Manufacturers, it is estimated that the sales of automobiles in China in 2021 will be approximately 26.28 million vehicles, representing a growth rate of 3.8% as compared to the sales volume in 2020. Benefiting from the rapid recovery of demands, the demand for synthetic rubber grew by approximately 7% worldwide in 2021. The exit of partial suppliers and the congestion of the global transportation supply chain resulted in the short supply of synthetic rubber, giving rise to the requirements of customers in local supply. Through the pre-emptive preparedness through production scheduling and logistic plans, and adjustment of production line across regions, TSRC managed to stable supply under the strained supply chain, and worked closely with customers in terms of supply, technical services, transportation, and cost management, further reinforcing its competitive strength.

Looking into 2022, even though the economic recovery pace is slower than 2021, the markets generally maintain positive, and the strained supply chain would slightly be relieved. However, the freight is unlikely to return to the level before the epidemic. Inflation, increasingly stringent environmental safety and health regulations, and the increase in the carbon dioxide emission costs will intensify challenges faced by enterprises.

For the application of synthetic rubber, the demand for tires in 2022 will maintain its growth in accordance with the global car demand; it is expected that the market will continue to grow. For the synthetic rubber business, the Company will continue developing green energy-saving tire materials and expand non-tire applications to strengthen its core competitive strength. Sufficient new production capacities will continue to be released for the TPE industry; in particular, there will be more “refining-chemical integrated” petroleum businesses purchasing downstream auxiliary devices for commercial operations in the following three to five years in Mainland China; it is expected that the supply will increase significantly, and the space for profitability will shrink. Developing high-value products, improving market competitive strength, and grasping changes and new opportunities brought by ESG (environment, social, and governance) and the green economy will be the challenges to test companies’ decision-making, judgement, and operational execution capacities

<3> Overview of technology and R&D

1. R&D expenses

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Research and
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I. Business overview

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

Unit: thousand NTD
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2. Successfully developed technology or products

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Item Result
Patents ・ [There are 16 patents granted for this year.]
・ [The Global R&D Center is the second multi-functional R&D facility, the first ]
R&D center outside Taiwan of TSRC worldwide; it provides the strategic po-
sitioning of TSRC and strengthens our innovation ability and global layout to
effectively support our global customers located in the European and Ameri-
can market, facilitating the growth in the polymer’s performances.
Establishment of the Global R&D
・ [The Global R&D Center will focus on the product development of SBC, in-]
Center in Texas, the U.S.A.
cluding polymer structures, functionalized design, process technology devel-
opment, terminal utilization, and customer technical services. Combined with
the global technical capacity of TSRC, it will focus on application markets of
medical level materials, sanitary supplies, adhesives, thin film, asphalt modifi-
cation, and elastic non-woven fabric.
・ [We have successfully optimized the quality for the existing products, intro-]
duced modification technologies to successfully reduce costs, and acquired
more orders.
S-SBR Products ・ [Our customized products have been certified by the factories of major inter-]
national brands 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 ]
High value HSBC product devel- non-woven fabric, which are used in diapers, masks and hygiene care prod-
opment ucts; 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.
Foaming:
(1) We made use of SIFT to develop the 2nd generation insole, and the physical
New material for high perfor-
mance customized shoes property are recognized by international brands.
(2) We made use of the high bouncing foaming materials in middle sole, which
was recognized by international brands and commercialized
・ [We made use of the medical grade HSBC material and successfully developed ]
the compound formula of films, tubes, and rubber plugs used by transfusion
Blending materials for medical use
systems; partial new marks have gained the recognition from customers in
the Pan Asia region and put into trial mass production.
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I. Business overview

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Item Result
・ [We developed a series of formulas with features comparable with leading ]
companies; we commenced the commercial operations for partial formulas
Special film application
one after another, and such formulas are being certified by global leading
companies.
Blending materials for special ap- ・ [Developed generation 1 and generation 2 shoe materials, which were recog-]
plications nized by the international brands and commercialized.
・ [Completed the design of the new reactor and upgraded the technologies ]
comprehensively. Meanwhile, we achieved more favorable production and
Development of top-notch pro- energy-saving efficiency; in the future, such features will be introduced to the
cess technologies building design of new plants.
・ [Completed the reformation of small-scale commercialized plants and im-]
proved the product quality and stability.
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<4> Long-Term and Short-Term Business Development Plans

To realize High-Value transformation and in response to the increasing global awareness of ESG, the Company’s major R&D direction will focus on developing new products and new technologies with high added-values by using advanced environmental protection process, to allow products and services of the Company to gain customers’ satisfaction and solve all issues of customers arising from the use of rubber, creating the niche for mutual benefits. The substantial development plan includes:

Long-term plan:
(1) Continue reinforcing the technology platform and customer development and establish differentiated competitive strength; combine the development of downstream industries and customers’ requirements to develop application products with high added-values, including EV tire materials, high-end shoe materials, medical grade TPE, protection films, and elastic non-woven fabric, so as to improve the diversity of our product profile and enter the new segregation market for application.
(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.
(3) Upgrade manufacturing equipment and the utilization of raw materials to improve production efficiency and optimize production costs.
(4) Continue examining synthetic rubber market dynamics and customer needs while exploring opportunities in new products, market, and applications, and evaluate opportunities of upstream and downstream strategic alliances.
(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) Expand our global layout and accelerate the development and product commercialization of specialty chemical applications through the newly established Global R&D Center in Texas, the U.S.A.
(7) Evaluate the possibility of using bio-feeds, dissoluble packaging materials, and other environmental-friendly materials in product process and increase the use ratio of renewable energy and the recycle ratio of water.
(8) 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.
Short-Term Plan:
(1) As countries, including the EU, Japan, and China, have promoted the environmental tire label one after another, we formed the S-SBR project R&D team to continue focusing on developing and promoting the S-SBR market with low rolling resistance and wet grip feature; meanwhile, we will reinforce S-SBR and other special synthetic rubber product profiles to respond to the carbon dioxide reduction requirements of customers, securing the recognition from major tire customers and increasing our market share.
(2) Improve the non-tire applications (i.e., shoe industry) and HIPS sales proportion to diverse market risks and increase profits.
(3) Comply with the environmental regulations in China and continue to satisfy the requirements of local markets. The production base of Shen Hua will relocate and the expansion of production capacity will be performed; we will continue focusing on the Chinese market and improve our competitiveness.
(4) Strengthen the Company’s market positioning by utilizing the production capacity of the Vietnam Plant and its geographical advantages and enter new regions, including India and Southeast Asia for development; continue expanding our customer base to improve the supply chain benefits.
(5) Improve the level of production processing for customers and the product value chains through stable quality, close cooperation with customers, supply of High-Value products, and market segregation.

II. Market overview and production/sales analysis

arket overview and production/sales analysis	arket overview and production/sales analysis	arket overview and production/sales analysis
Market Analysis
1. Major sales destinations
			Unit: thousand NTD/Metric Ton
Name of product	2021 Sales volume Sales amount		Exported territories
Synthetic rubber and elasto- mers	535,238	31,440,852	China, U.S.A., Thailand, Viet- nam, Germany, Turkey, Japan,
Applied materials	9,887	1,092,386	China, Southeast Asia.

II. Market overview and production/sales analysis

<1> Market Analysis

2. Market share:

2. Market share:
Synthetic rubber and elastomers	Asia is the major market accounting for 72% of the total sales, while Americas and Eurozone ac- count for 15% and 11% of total sales respectively.
Applied materials	China is the main market accounting for 44% of total sales, followed by Vietnam and Hong Kong with 35% of the total sales.

3. Industry demand supply and market growth projection

As partial competitors’ production capacities were used for other products or suspended due to the constant supply over demand in the synthetic rubber industry during recent years, the current supply-demand in the market is reaching a balanced state. In the future, it is estimated that the investment of new production capacity will be minor; together with the fact that the Asia region remains as the region with higher growth regarding the demand for automobiles and tires worldwide, it is estimated that the demand for synthetic rubber will continue to grow. The Company will improve its profitability performances through the optimization of customer and product profiles, order allocations, and production line adjustment.

The economic recovery will promote the applications of footwears, automobiles, consumables, and adhesives, and further push forward the market demand for TPE. However, TPE is still within its peak phase for production expansion, which may lead to the imbalanced demand-supply resulting from the decreasing production capacity utilization rate in the following three years, affecting the space for profits of enterprises. In terms of the long-term trend, the rapid growth in production capacity triggered the commoditization trend and facilitated the products’ replacement cycle; the demand-supply relations within the market will face great challenges.

The demand for SBS will increase by 4.2% in 2022. For the supply, under the new production capacity invested by Gulei and Luhua in China and NKNK in Russia, the supply volume will increase by 125,000 MT. With the significant growth in the demand for e-commerce and water-proof applications, and the recovery of demands for adhesives, the global demand for SIS will increase by 4.1%. The supply of SIS has increased by 10,000 MT; within the newly expanded production capacity, Jinhai Chenguang and Luhua both possess the advantage of upstream and downstream integration, and it is estimated that the demand-supply competition will be further intensified. The demand for HSBC will increase by 5%; with Sinopec and Kuraray investing in new production capacity, the global supply will increase by 16,000 MT, making the competition among products with same levels more challenging. For international trade, with the intensified market competition and the technology improvement in China, the import volume of China will be reduced to a lower standard.

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. Market overview and production/sales analysis

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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.
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2.Outline of production process:

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E-SBR is produced in an emulsion polymerization system. Soap is used as the reaction medium and
E-SBR emulsifier for the polymerization of butadiene and styrene to produce high molecular latex. 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. Butadiene and styrene was polymerized to high
S-SBR molecule weight rubber solution via anionic initiator in organic solvent system. After the addition of an-
ti-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 styrene 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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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 SMCT, 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 was no supplier or customer accounted for 10% or more of the Company's total purchases or sales value in the most recent two years.

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

[Unit: thousand NTD/Metric Ton]

III. Employees information

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2021 2020
Product
Capacity Output Output value Capacity Output Output value
Synthetic rubber
586,600 548,218 24,725,605 565,767 506,462 17,666,204
and elastomers
Applied materi-
23,731 13,920 874,293 23,910 15,067 582,242
als
Total 610,331 562,138 25,599,898 589,677 521,529 18,248,446
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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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2021 2020
Product Domestic Export Domestic Export
Volume Value Volume Value Volume Value Volume Value
Synthetic
rubber and 357,932 21,016,189 177,306 10,424,663 379,987 17,024,568 140,679 6,149,323
elastomers
Applied mate-
5,780 480,995 4,107 611,391 4,319 371,885 3,311 478,667
rials
Total 363,712 21,497,184 181,413 11,036,054 384,306 17,396,453 143,990 6,627,990
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III. Employees information

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Year 2021 2020 March 20, 2022
Direct workers 846 861 853
Indirect workers 758 747 772
Total 1,604 1,608 1,625
Average age 41.2 (years old) 40.7 (years old) 41.2 (years old)
Average seniorities 11.4 (years) 10.6 (years) 11.3 (years)
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Year		2021	2020	March 20, 2022
	Ph.D.	1%	1％	1%
	Master	14%	13％	14%
Education level (%)	Bachelor	65%	66％	65%
	Senior high school	17%	17％	17%
	Below senior high school	3%	3％	3%

IV. Disbursements of environmental protections

IV. Disbursements of environmental protections Losses for environmental pollution

	2021	Till March 20, 2022
Pollution (Type and procedure)	Air pollution, waste	No
Counterpart, or authority imposing fines	Kaohsiung Environmental Protection Bureau	No
Compensation and fines	NT$710,000	No

For the most recent year and as of the date of the annual report, the descriptions of losses incurred due to environment pollution:

No.	No. of Fine Notification	Regulation or Provision Violated	Disposal	Amount of Fine	Countermeasure
1	Kao-Shi- Huan-Ju-Fei- Chu-Zi No.40- 110-030035	Paragraph 1, Article 53 of the Waste Disposal Act	In the triplicate form of consigned common processing, control, and delivery of business wastes, the weighing weight of the waste’s(inflammable waste liquid) weight declared by Kaohsiung Plant was inconsistent with the weight declared by the consigned company for processing.	NT$ 60,000	The actual weighing of waste for the clearing of wastes was executed according to the specifications in the waste contract.
2	Kao-Shi- Huan-Ju- Kong-Chu-Zi No.20-111- 030003	Paragraph 1, Article 20 of the Air Pollution Control Act	The testing value of an equipment component in the TPE process (M04) of Kaohsiung Plant exceeded the standards stated in the Standards for the Control and Emission of Volatile Organics in Equipment Component of Kaohsiung City as verified by the Environmental Protection Bureau Kaohsiung City Government.	NT$450,000	The butadiene system in the process easily leaks the COCK (one-piece threaded ball valve) of VOC; the Company purchased valves (three-piece threaded ball valve) that could pass the test for the VOC leakage volume of 100ppm for replacement.
3	Kao-Shi- Huan-Ju- Kong-Zi No.20-111- 030003.4	Paragraph3, Article 22 of the Air Pollution Control Act	The percentage of effective number of monitoring hours in Q3 and Q4 was lower than 85% as the test was not implemented once a week before the completion of the review on the monitoring equipment confirmation report according to the requirement after the replacement of monitoring equipment.	NT$200,000	From December 2021, the Company has arranged substituting testing schedule to implement the test once a week until the completion of the review on the monitoring equipment confirmation report.

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, self-selected group buying of daily supplies from employee welfare club, etc., to truly implement the actual concepts of employee welfare.

V. Labor relations

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, 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 2021 is NTD 6,593,000, in which the average training fee per person is NTD 4,000 and the training hour per person is 46 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 2021, 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 2021 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 incorporation of the labor union, the relationship between employees and the Company has remained fair through the good interaction and communication. 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. Cybersecurity Management

The Company has established a comprehensive cybersecurity risk management framework, set up corresponding information security risk management specification, information security risk execution regulations, and details. The scope of the flow includes: identifying the level of risk of the core system, regular inventory check on cybersecurity equipment, execution of annual information safety risk assessment.

Regarding the importance of cybersecurity, to defend ourselves from internal or external information security threats of intention or by accident and protect the safety of the Company’s material assets, the Company stated the internal cybersecurity policies. The specifications of the information security Scope of cybersecurity protection:

(1) Scope of cybersecurity protection: Information equipment and applications used on employees’ computers, telecommunication equipment, large-scale server, system software, and all corporate information.
(2) Regulations for Cybersecurity Execution: Regulations for Computer Resources, Regulations for Software/Hardware, Regulations for Employees’ Information, Regulations for Emergency Management Operations, and multiple information safety management regulations.
(3) Categories of cybersecurity threats and details on corresponding management: Requirements for employees’ accounts (default password, length of password, complexity of password, historical record of password, restrictions on the shortest and longest valid period of password).
VI. Cybersecurity Management
VII. Material contracts
(4) Cybersecurity protection measures: Resources substantially invested in information security equipment are as follows: Anti-virus firewall, mail filtration system, invasion detection and defense, advanced undisrupted threat protection system.
(5) The Company has established appropriate protection measures for the processing and storage of sensitive information, such as physical isolation, exclusive computer operating environments, access control, data encryption, transmission encryption, data masking, personnel management and handling specifications.
(6) The Company established its Procedures for Emergency Management and Report of Information Security Event, including effect judgment and loss evaluations, as well as internal and external report procedures.
In 2021 and as of the date of the annual report, no loss incurred to the Company due to cybersecurity events.

VII. Material Contracts

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March 20, 2022
Nature Concerned party Duration Contents Restrictive terms
The joint venture for production
UBE Industries Ltd., October 20, 1995 until
Joint ven- and sale of BR with the annual
ture Marubeni Corporation termination of the co- capacity of 50 thousand metric No
UBE (Thailand) Co.,Ltd operative relationship tons of BR in Thailand
The joint venture for production
UBE Industries Ltd., October 26, 2006 until
Joint ven- Marubeni Petrochemicals termination of the co- and sale of BR plant with the No
ture Investment B.V. operative relationship annual capacity of 72 thousand metric tons in China
Technical December 31, 2006 ~
support Trimurti Holding Corpora- until termination Authorize to use SEBS No
and tion of the cooperative technology
services relationship
Authorize for production of
Technology license JSC VORONEZHSYNTHEZ-KAUCHUK 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 production
Joint ven-ture Indian Oil Corporation April 3, 2010 until termination of the co- and sales of ESBR plant with the annual capacity of 120 thou- No
operative relationship sand metric tons in India
September 1, 2010
Technology Indian Synthetic Rubber Pri- until termination of A license for India Synthetic Rubber Private Limited. to use No
license vate Ltd. the cooperative rela-
ESBR technology
tionship
The joint venture for production
Joint ven-ture ARLANXEO Holding B.V May 7, 2010 until termination of the co- and sales of NBR plant with the annual capacity of 30 thousand No
operative relationship metric tons in China
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VI. Cybersecurity Management VII. Material contracts

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Nature Concerned party Duration Contents Restrictive terms
December 1, 2010 un-
A license for ARLANXEO-TSRC
Technology license ARLANXEO–TSRC (Nantong) Chemical Industrial Co., Ltd til termination of the cooperative relation- (Nantong) Chemical Industrial No
Co Ltd. to use NBR technology
ship
January 2, 2011 until
Technology TSRC (Nantong) termination of the Extend to a 35 thousand metric No
license Industrial Ltd. cooperative relation- tons-SEBS technology licensing
ship
Technology license TSRC (Nantong) Industrial Ltd. January 1, 2014 to December 31, 2023 Authorize to use SIS technology No
September 1, 2017 to
within ten years start- Adding the permission for SEBS
Technology TSRC (Nantong) ing from the issuance authorized products with the No
license Industrial Ltd. of the first invoice of annual production of 20 thou-
the new production sand metric tons
line
Chemical Industrial Park
Management Office of
Relocation Nantong Economic & December 4, 2021 Compensation agreement for
Compen-sation Technological Development Area, Nantong Nengda River Science Innovation Park until termination of the cooperative rela- Shen Hua Chemical Industrial Co., Ltd. to relocate in accor- No
Contract tionship dance with the policy
Development Co., Ltd. and
Shen Hua Chemical Industri-
al Co., Ltd.
The investment of relocating
Chemical Industrial Park Shen Hua’s plant that initially
Management Office of located in the North Devel-
Nantong Economic & opment Zone to the South
December 4, 2021
Investment Technological Development until termination of Development Zone In response
Area, Nantong Nengda River to the “Industrial Upgrade, No
agreement Science Innovation Park the cooperative rela- Reformation, and Relocation
tionship
Development Co., Ltd. and Project" of the Chemical Indus-
Shen Hua Chemical Industri- trial Park of Nantong Economic
al Co., Ltd. & Technological Development
Area
Medi-
um-and Mega Bank May 02, 2018 to Loaned NTD 500 million Loan amount cannot
long-term October 23, 2023 be drawn again.
loan
Medi-
um-and June 25, 2021 to Loan amount cannot
MUFG Bank Loaned NTD 600 million
long-term June 25, 2024 be drawn again.
loan
Repaid amount of
Medi- NTD 500,000,000
um-and March 23, 2018 to cannot be drawn
CTBC Bank Loaned NTD 850 million
long-term March 28, 2023 again. The amount
loan of NTD 50,000,000 is
calculable mobility.
Medi-
um-and E. Sun Bank February 20, 2020 to Loaned NTD 478 million Loan amount cannot
long-term August 15, 2027 be drawn again.
loan
Medi-
um-and March 23, 2021 to Loan amount cannot
Tai Shin Bank Loaned NTD 500 million
long-term March 23, 2024 be drawn again.
loan
Medi-
um-and Chang Hwa Bank January 14, 2022 to Loaned NTD 500 million Loan amount cannot
long-term January 14, 2027 be drawn again.
loan
----- End of picture text -----

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 2021 2020 2019 2018 2017
Current assets 3,810,009 3,129,891 4,024,296 4,200,063 3,709,562
Property, plant and equipment 2,866,238 2,978,757 2,727,714 2,789,755 2,760,238
Intangible assets 69,112 65,098 44,819 65,778 86,312
Other assets 18,700,221 16,201,577 17,494,817 17,248,237 16,104,401
Total assets 25,445,580 22,375,323 24,291,646 24,303,833 22,660,513
Before distribution 4,225,702 6,037,851 4,813,822 4,790,367 6,304,390
Current liabili-
ty
After distribution 6,207,406(Note) 6,335,107 5,226,677 5,599,562 7,097,072
Non-current liability 3,193,928 2,198,352 4,602,132 4,202,463 1,478,607
Before distribution 7,419,630 8,236,203 9,415,954 8,992,830 7,782,997
Total liability
After distribution 9,401,334(Note) 8,533,459 9,828,809 9,802,025 8,575,679
Equity attributable to shareholders
18,025,950 14,139,120 14,875,692 15,311,003 14,877,516
of the parent
Common stock 8,257,099 8,257,099 8,257,099 8,257,099 8,257,099
Capital surplus 50,725 49,531 47,140 45,158 41,043
Before distribution 9,154,622 5,552,832 5,917,502 5,809,486 5,431,836
Retained
earnings
After distribution 7,172,918(Note) 5,255,576 5,504,647 5,000,291 4,639,154
Other equity 563,504 279,658 653,951 1,199,260 1,147,538
Treasury stock 0 0 0 0 0
Non-controlling interest 0 0 0 0 0
Total share- Before distribution 18,025,950 14,139,120 14,875,692 15,311,003 14,877,516
holders'
equity After distribution 16,044,246(Note) 13,841,864 14,462,837 14,501,808 14,084,834
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Note: the amount decided by the board of directors on March 10, 2022.

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


Fiscal year Item		Financial information for the recent years
		Consolidated
		2021	2020	2019	2018	2017
Current assets		15,463,097	12,437,636	15,365,918	14,861,158	13,913,627
Property, plant and equip- ment		10,154,640	10,516,517	10,037,395	8,768,849	8,558,709
Intangible assets		892,679	1,012,405	1,669,885	1,851,601	1,942,350
Other assets		6,319,347	5,301,824	5,441,725	4,748,561	4,584,655
Total assets		32,829,763	29,268,382	32,514,923	30,230,169	28,999,341
Current	Before distribution	8,548,784	9,893,767	9,300,535	8,172,613	10,811,273
liability	After distribution	10,530,488(Note)	10,191,023	9,713,390	8,981,808	11,603,955
Non-current liability		4,157,161	3,515,956	6,761,665	5,175,715	1,744,622
Total liability	Before distribution	12,705,945	13,409,723	16,062,200	13,348,328	12,555,895
	After distribution	14,687,649(Note)	13,706,979	16,475,055	14,157,523	13,348,577
Equity attributable to share- holders of the parent		18,025,950	14,139,120	14,875,692	15,311,003	14,877,516
Common stock		8,257,099	8,257,099	8,257,099	8,257,099	8,257,099
Capital surplus		50,725	49,531	47,140	45,158	41,043
Re- tained earn- ings	Before distribution	9,154,622	5,552,832	5,917,502	5,809,486	5,431,836
	After distribution	7,172,918(Note)	5,255,576	5,504,647	5,000,291	4,639,154
Other equity		563,504	279,658	653,951	1,199,260	1,147,538
Treasury stock		0	0	0	0	0
Non-controlling interest		2,097,868	1,719,539	1,577,031	1,570,838	1,565,930
Total share-	Before distribution	20,123,818	15,858,659	16,452,723	16,881,841	16,443,446
hold- ers' equity	After distribution	18,142,114(Note)	15,561,403	16,039,868	16,072,646	15,650,764

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 2021 2020 2019 2018 2017
Operating revenue 11,150,474 8,344,155 10,856,945 10,834,520 11,254,655
Gross profit 2,199,544 489,887 1,072,357 1,107,890 896,998
Operating profit 1,094,181 (346,968) 129,881 250,966 106,207
Non-operating income and expenses 3,247,030 428,824 788,028 1,077,163 790,340
Net income before tax 4,341,211 81,856 917,909 1,328,129 896,547
Net income 3,930,939 (21,891) 740,316 1,192,186 874,107
Other comprehensive income (loss) 251,953 (304,217) (368,414) 29,868 (552,296)
Total comprehensive income 4,182,892 (326,108) 371,902 1,222,054 321,811
Net income attributable to shareholders
3,930,939 (21,891) 740,316 1,192,186 874,107
of the parent
Net income attributable to non-con-
0 0 0 0 0
trolling interests
Total comprehensive income attributable
4,182,892 (326,108) 371,902 1,222,054 321,811
to shareholders of the parent
Total comprehensive income attributable 0 0 0 0 0
to non-controlling interests
EPS (Note) 4.76 (0.03) 0.90 1.44 1.06
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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 2021 2020 2019 2018 2017
Operating revenue 32,533,238 24,024,443 28,910,723 29,751,218 31,766,237
Gross profit 6,800,464 2,937,269 3,377,284 3,488,714 3,328,879
Operating profit 3,928,099 822,315 1,084,861 1,301,814 1,202,526
Non-operating income and expenses 1,704,889 (301,644) 169,777 328,629 (65,391)
Net income before tax 5,632,988 520,671 1,254,638 1,630,443 1,137,135
Net income 4,464,305 215,261 817,120 1,233,670 849,717
Other comprehensive income (loss) 237,266 (282,003) (439,025) (6,708) (568,595)
Total comprehensive income 4,701,571 (66,742) 378,095 1,226,962 281,122
Net income attributable to sharehold-
3,930,939 (21,891) 740,316 1,192,186 874,107
ers of the parent
Net income attributable to non-con-
533,366 237,152 76,804 41,484 (24,390)
trolling interests
Total comprehensive income attribut-
4,182,892 (326,108) 371,902 1,222,054 321,811
able to shareholders of the parent
Total comprehensive income attribut-
518,679 259,366 6,193 4,908 (40,689)
able to non-controlling interests
EPS (Note) 4.76 (0.03) 0.90 1.44 1.06
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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
2021 Wu, Lin Unqualified 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
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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
2021 2020 2019 2018 2017
Debt-asset ratio(%) 29.16 36.81 38.76 37.00 34.35
Financial
structure Ratio of long-term capital to property, plant 740.34 548.47 714.07 699.47 592.56
and equipment(%)
Current ratio(%) 90.16 51.84 83.60 87.68 58.84
Solvency Quick ratio(%) 49.78 26.47 35.99 34.79 23.76
Interest coverage ratio(%) 74.24 2.04 10.03 17.39 13.53
Receivables turnover rate (times) 8.45 7.94 9.92 9.88 9.21
Average collection days for receivables 43.20 45.97 36.79 36.94 39.63
Inventory turnover rate (times) 5.68 4.25 4.17 4.19 4.94
Operating Payables turnover rate (times) 12.24 10.21 10.97 11.90 11.26
ability
Average days of sales 64.26 85.88 87.53 87.11 73.89
Property, plant and equipment turnover rate 3.82 2.92 3.94 3.90 4.12
(times)
Total assets turnover rate(times) 0.47 0.36 0.45 0.46 0.50
Return on assets(%) 16.89 0.18 3.38 5.36 4.11
Return on equity(%) 24.44 (0.15) 4.90 7.90 5.79
Profitability Ratio of income before tax to paid-in capital 52.58 0.99 11.12 16.08 10.86
(%)
Profit margin before tax (%) 35.25 (0.26) 6.82 11.00 7.77
EPS (NTD) 4.76 (0.03) 0.90 1.44 1.06
Cash flow ratio (%) 18.91 5.23 13.27 6.81 2.58
Cash flows Cash flow adequacy ratio(％） 39.62 24.82 32.18 28.13 41.77
Cash flow reinvestment ratio(%) 1.83 (0.43) (0.67) (1.85) (3.02)
Operating leverage 3.94 (10.74) 37.22 15.65 30.93
Leveraging
Financial leverage 1.06 0.81 4.59 1.48 3.07
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The reasons for financial ratio changes in 2021 as compared to 2020: Due to the increase in profits in 2021, the Company's financial structure became healthier, and its operating ability and profitability, and various indexes increased.

The debt-asset ratio decreased due to the increase in the assets of subsidiaries resulted from favorable profitability.
The ratio of long-term capital for property, plant and equipment was due to the increase in equity resulting from the increase in net profit after tax.
The increase in current ratio, quick ratio, and cash flow ratios was due to the decrease in long-term borrowings due within one year.

The increase in the interest coverage ratio was due to the increase in net profit before tax.
For the Inventory turnover rate, the average days of sales reduced due to the increase in cost of sales and turnover rate resulting from the strong recovery of demands.
The increase in property, plant and equipment turnover rate and total assets turnover rate was due to the increase in revenue.
The increase in various ratios under the operating ability was due to the increase in net profit after tax.
The increase in cash flow adequacy ratio and cash flow reinvestment ratio was due to the increase in the cash flow from operating activities.
The leverage fell at the lowest point for the past five years, which was due to the net operating loss incurred after reaching the highest point throughout the past nine years due to the effects of the outbreak in 2020.
II. Financial analysis for the recent five fiscal years

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Fiscal year Financial information for the recent years
Consolidated
Item
2021 2020 2019 2018 2017
Debt-asset ratio(%) 38.70 45.82 49.40 44.16 43.30
Financial
structure Ratio of long-term capital to property, plant 239.11 184.23 231.28 251.54 212.51
and equipment(%)
Current ratio(%) 180.88 125.71 165.22 181.84 128.70
Solvency Quick ratio(%) 110.62 67.35 92.98 102.14 72.44
Interest coverage ratio(%) 51.87 4.14 6.88 10.62 7.04
Receivables turnover rate (times) 8.09 6.86 8.19 8.21 8.19
Average collection days for receivables 45.11 53.20 44.56 44.45 44.56
Inventory turnover rate (times) 4.95 3.76 3.97 4.21 4.98
Operating Payables turnover rate (times) 16.18 10.30 12.88 15.71 15.75
ability
Average days of sales 73.73 97.07 91.93 86.69 73.29
Property, plant and equipment turnover rate 3.15 2.34 3.07 3.43 3.63
(times)
Total assets turnover rate(times) 1.05 0.78 0.92 1.00 1.08
Return on assets(%) 14.66 1.02 3.09 4.62 3.42
Return on equity(%) 24.81 1.33 4.90 7.40 5.07
Profitability Ratio of income before tax to paid-in capital 68.22 6.31 15.19 19.75 13.77
(%)
Profit margin before tax (%) 13.72 0.90 2.83 4.15 2.67
EPS (NTD) 4.76 (0.03) 0.90 1.44 1.06
Cash flow ratio (%) 31.61 23.89 27.93 22.92 14.72
Cash flows Cash flow adequacy ratio(％） 92.56 78.25 91.81 99.39 109.82
Cash flow reinvestment ratio(%) 5.88 5.54 5.05 3.11 2.41
Operating leverage 2.40 7.47 5.95 8.52 8.23
Leveraging
Financial leverage 1.03 1.18 1.21 1.15 1.19
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The reasons for financial ratio changes in 2021 as compared to 2020:

Benefiting from the rapid recovery of the customer demands in 2021, the exit of partial suppliers and the congestion of the

global transportation supply chain resulted in the short supply of synthetic rubber. The Company managed to make appropriate coordination and arrangements for supply and procurements and recorded a significant increase in net profit before tax and the healthy growth of its various financial ratios. The ratios are described as follows:

The increase in ratio of long-term capital to property, plant and equipment was due to the increase in equity resulting from the increase in net profit after tax.
The increase in current ratio and quick ratio was due to the increase in current assets.
The increase in interest coverage ratio was due to the increase in net profit before tax.
For the Inventory turnover rate, the average days of sales reduced due to the increase in cost of sales and turnover rate resulting from the strong recovery of demands.For the Inventory turnover rate, the average days of sales reduced due to the increase in cost of sales resulting from the strong recovery of demands.
The increase in property, plant and equipment turnover rate and total assets turnover rate was due to the increase in revenue.
The increase in various ratios under the operating ability was due to the increase in net profit after tax.
The increase in cash flow ratios was due to the decrease in the long-term borrowings due within one year.
The decrease in leverage was due to the increase in net operating profits.

1. Financial structure:

II. Financial analysis for the recent five fiscal years

(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
(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 2021 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 2022 Annual Shareholders' Meeting

III. Audit committee's report

TSRC Corporation

The convener of Audit Committee Sean Chao

Date: March 10, 2022

IV. Consolidated financial statements and independent auditors' report for the most recent fiscal year- Please refer to Page 92.
V. Individual financial statements and independent auditors' report for the most recent fiscal year-Please refer to Page 164.
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

I. Financial position:

Unit: thousand NTD

I. Financial position
II. Financial performance

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Fiscal year 2021 2020 Amount change Percentage change
Item (％)
Current assets 15,463,097 12,437,636 3,025,461 24.33
Property, plant and equip-
10,154,640 10,516,517 (361,877) (3.44)
ment
Intangible assets 892,679 1,012,405 (119,726) (11.83)
Other assets 6,319,347 5,301,824 1,017,523 19.19
Total assets 32,829,763 29,268,382 3,561,381 12.17
Current liabilities 8,548,784 9,893,767 (1,344,983) (13.59)
Non-current liabilities 4,157,161 3,515,956 641,205 18.24
Total liabilities 12,705,945 13,409,723 (703,778) (5.25)
Capital stock 8,257,099 8,257,099 0 0.00
Capital Surplus 50,725 49,531 1,194 2.41
Retained earnings 9,154,622 5,552,832 3,601,790 64.86
Total shareholders' equity 20,123,818 15,858,659 4,265,159 26.89
----- End of picture text -----

Major changes and impacts:

The increase in current assets and total shareholders’ equity during 2021 from 2020 was due to the increase in cash, receivables, and inventories resulting from the strong recovery of demands and favorable profitability.

II. Financial performance:

Analysis and comparison of financial performance

Unit: thousand NTD

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Fiscal year 2021 2020 Amount change Percentage change
Item (％)
Revenue 32,533,238 24,024,443 8,508,795 35.42
Operating cost 25,732,774 21,087,174 4,645,600 22.03
Gross profit 6,800,464 2,937,269 3,863,195 131.52
Operating expenses 3,143,910 2,297,813 846,097 36.82
Other income and expenses 271,545 182,859 88,686 48.50
Operating profit 3,928,099 822,315 3,105,784 377.69
Non-operating revenues and
1,704,889 (301,644) 2,006,533 (665.20)
gains
Net income before tax 5,632,988 520,671 5,112,317 981.87
Less: income tax expenses 1,168,683 305,410 863,273 282.66
Net income 4,464,305 215,261 4,249,044 1973.90
----- End of picture text -----

The changes in 2021 as compared to 2020 and the effects:

The increase in revenue, gross profit, and operating profits was due to the recovery of customer demands for synthetic rubber and the commercial operation of SEBS’s new line of TSRC (Nantong)Industries.
The increase in operating expenses was primarily due to the surge in carriage costs resulting from the congestion of the global transportation supply chain under the effect of the global outbreak.
The changes in non-operating income and expenses was due to the gains from the disposals of lands and the favorable profits recorded by overseas subsidiaries in 2021 and the provision of impairment losses for intangible assets in 2020.

Sales volume forecast and the basis there of

Unit: Metric Ton

III. Cash flow analysis

Name of product	2022	2022
	Sales volume fore cast	Basis
Synthetic rubber and elastomers	539,000	Subject to the requirement of the market and customers
Applied Materials	12,000	Subject to the requirement of the market and customers forecast growth
Total	551,000

III. Cash flow analysis:

Unit: Metric Ton

Ch bl	Net cash flow f i	Cash inflow	The impact of h	Rid	Remedy for insufficient cash	Remedy for insufficient cash
as aance at the beginning	rom operatng activities of the year	(outflow) of the year	excange rate fluctuation on cash	emaner (deficit) of cash	Investment plan	Financial plan
3,278,463	2,701,973	(1,291,565)	(224,116)	4,464,755	-	-

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

1.Operating activities: Primarily due to the cash inflows of NT$5,236,257 thousand from items of profit or loss, cash outflow of NT$1,702,536 thousand from net changes in operating assets and liabilities, net interest expense of NT$85,769 thousand, and the payment of income tax of NT$745,979 thousand.
2.Investing activities: The net cash inflow from investing activities of NT$674,418 thousand was primarily due to the new inflow of NT$356,707 thousand from the acquisition and disposal of property, plant and equipment, dividend received of NT$149,573 thousand, decrease in restricted assets of NT$129,299 thousand, and decrease in other non-current assets of NT$38,839 thousand.
3.Financing activities: The net cash outflow from financing activities of NT$1,965,983thousand was primarily due to the net inflow of short-term borrowings of NT$299,003 thousand, net outflow from long-term borrowings of NT$1,682,714 thousand, repayment for the principal of lease of NT$145,875 thousand, and the distribution of cash dividends of NT$436,397 thousand.

<2> Improvement plan for insufficient liquidity: There is no insufficient liquidity.

<3> Liquidity analysis for the coming year:

Unit: thousand NTD

	f	Estimated annual f		Remedy for insufficient cash	Remedy for insufficient cash
Cash balance at the beginning(1)	Projected cash low from operation of the year (2)	net cash low from investing and financing activities(3)	Projected remainder (deficit) of cash (1)+(2)-(3)	Investment plan	Financial plan
4,464,755	2,571,000	(2,655,000)	4,380,755	-	-

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

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Actual of Year
intended
Item Sources of funds Amount
completion
2021 2022
date
New plant of Self-owned capital and 2024 6,130,000 - 2,132,000
Shen Hua loads from banks
BD storage tank Self-owned capital 2022 420,000 137,000 122,000
----- End of picture text -----

<2> Benefits generated: Expected to increase profitability.

  - It is estimated that the new plant of Shen Hua may improve our market share and increase profits; the BD storage tank may give rise to the low-price inventories to improve our profit margin.

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
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

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 Accounting for the
2021 Amount percentage of net percentage of net profit
operating revenues (%) before taxation (%)
Net interest income
(80,665) (0.2) (1.4)
(expense)
Net exchange gain (loss) 10,047 0.0 0.2
----- 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 shorten the term for account receivables offered to customers or 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

Unit: thousand NTD

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Project name Expected R&D spending
New Generation and High Performance Tire Product Develop-
50,000
ment
New Differentiated Polybutadiene Products 37,000
High Value-Added Thermoplastic Elastomer (TPE) Products 178,000
High Performance Materials and Formulas for Footwear 106,000
Advanced Process Technology Development 86,000
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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
<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 (including cybersecurity risks) 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. Regarding the increasingly important cybersecurity, apart from reinforcing the information protection educational training, the Company also introduced the “zero trust network,”“multi-factor authentication,” and “instant information security monitoring” systems to effectively improve the information safety protection ability of the Company and minimize risks related to information security.
<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 reg-

ularly 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. Minimize potential risks arising from M&A.
<8> Expected benefits and risks associated with plant expansion and mitigation measures being or to be taken:

Regarding the initiative related to the environmental protection along the Yangtze River promoted by local governments and our optimistic view on the continual growth in the demand for synthetic rubber in the regional markets, the Company relocate Shen Hua Chemical to the South Area of the Chemical Industry Park of NETDA in Jiangsu Province and expanded its production capacity to 220,000 MT. The production capacity expansion is subject to limited risk as it is required by the operations and organized through detailed capital expenditure planning.

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

VII. Other important matters

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, which gave rise to the consolidation of purchases; however, none of the single supplier accounts for over 10% of the purchase ratio. In the event of force majeure experienced by the domestic suppliers, the Company can still purchase raw materials from foreign suppliers as such raw materials are international suppliers and materials. 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

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

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<1> Company's Affiliate Business Report
1.Organizational chart of affiliates

TSRC Corp.

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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
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December 31, 2021

2. Profiles of the Company's affiliates

I. Information related to the Company's affiliates

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Name of enterprise Date of Address Actual received Major business or
incorporation capitals production items
Trimurti Holding Cor- Palm Grove House, P.O. Box 438, Road Investment corpora-
March 10,1994 USD 86,920,000
poration Town, Tortola, B.V.I. tion
Hardison International Palm Grove House, P.O. Box 438, Road Investment corpora-
March 11,1994 USD3,896,000
Corporation Town, Tortola, B.V.I. tion
Palm Grove House, P.O. Box 438, Road Investment corpora-
Dymas Corporation March 19,1991 Town, Tortola, B.V.I. USD5,960,000 tion
Polybus Corporation February 25, 100 Peck Seah Street #09-16 Singapore Trading and invest-
SGD105,830,000
Pte Ltd. 1995 079333 ment corporation
TSRC (Hong Kong) March 19, 15/F BOC Group Life Assurance Tower Investment corpora-
USD103,850,000
Limited 2008 136 Des Voeux Road Central tion
Triton International Palm Grove House, P.O. Box 438, Road USD50,000 Investment corpora-
Holdings Corporation May 24, 1993 Town, Tortola, B.V.I. tion
TSRC (Lux.) Corpora- 39-43 avenue de la Liberté, L-1931 Lux- Trading and invest-
tion S.à r.l. July 26, 2011 embourg EUR74,870,000 ment corporation
2711 Centerville Road, Suite 400, Coun-
TSRC(USA) Investment January 27, Investment corpora-
Corporation 2011 try of New Castle, Wilmington, Dela- USD96,050,000 tion
ware, 19808
TSRC Specialty Mate- February 20, 12012 Wickchester Lane, Suite 280, Note Production and sale
rials LLC 2002 Houston, TX 77079 of TPE
TSRC (Shanghai) In- February 22, No. 1406, Yu Shu Road,Hi-tech Park USD5,500,000 Production and sale of
dustries Ltd 2001. Songjiang Zone, Shanghai,P.R.C compounding materi-als
Shen Hua Chemical March 29, NO.1 Shen Hua Road, Nantong Eco- Production and sale
Industrial Co., Ltd 1996. nomic & Technology Development USD41,220,000 of synthetic rubber
Area, Nantong Jiangsu, P.R.C. products
TSRC (Nantong) In- September 05, No. 22 Tong Wang Road, Nantong Eco- Production and sale
dustries Ltd 2006 nomic & Technological Development USD105,125,000 of TPE
Area, Nantong Jiangsu, P.R.C.
TSRC-UBE (Nantong) December 06, No. 22 Tong Wang Road, Nantong Eco- Production and sale
Chemical Industrial 2006 nomic & Technological Development USD40,000,000 of butadiene rubber
Company Limited Area, Nantong Jiangsu, P.R.C.
Production and
8 VSIP II-A Street 31, Vietnam Singa- processing of plastic
TSRC (Vietnam) Co., October 16,
Ltd. 2018 pore Industrial Park II-A, Tan Uyen USD 11,300,000 rubber granular, Ther-
Town, Binh Duong Province, Vietnam moplastic Elastomer
and plastic compound
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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.

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.
I. Information related to the Company's affiliates

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5. Profiles of Directors, Supervisors and Presidents of the Company's affiliates: December 31, 2021
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.A 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 - -
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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
Chairman Wing-Keung Hendrick Lam - -
Director Huang-Cheng Kuo - -
Director Chin-Bao Lu - -
TSRC (Shanghai) Industries Ltd
Director Cheng-Nan Lin - -
Supervisor Edward Wang - -
President Peter Lee - -
Chairman Chao Yang Jiang - -
Director Edward Wang - -
Director Chi-Wei Hsu - -
Director Cheng-Nan Lin - -
Shen Hua Chemical Industrial Co., Ltd
Director Kevin Liu - -
Director Li Shen - -
Director Peijun Gu - -
President Shian-Chung Kuo - -
Chairman Wing-Keung Hendrick Lam - -
Director Chao Yang Jiang - -
TSRC (Nantong) Industries Ltd Director Chin-Bao Lu - -
Supervisor Edward Wang - -
President Chao Yang Jiang - -
Chairman Kevin Liu - -
Director Cheng-Nan Lin - -
Director Chi-Wei Hsu - -
TSRC-UBE (Nantong) Chemical Industrial Director Tokoro Yasunobu - -
Company Limited
Director Peijun Gu - -
Supervisor Yokoo Hisaaki - -
President Jian Hui Lu - -
Chairman Wing-Keung Hendrick Lam - -
Director Huang-Cheng Kuo - -
TSRC (Vietnam) Co., Ltd. Director Cheng-Nan Lin - -
Supervisor Edward Wang - -
President Huang-Cheng Kuo - -
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December 31, 2021 Unit: thousand NTD

6. Overview of operation of affiliates

I. Information related to the Company's affiliates

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Gain/loss
Total Operating Operating current EPS after
Name of enterprise Capital Total assets Net worth
liabilities revenue income (loss) period (after tax (NTD)
tax)
Trimutri Holding Corpo- 2,403,450 14,810,865 453 14,810,412 - (14,702) 2,249,887 25.88
ration
Hardison International 107,889 666,055 - 666,055 - (68) 16,980 4.36
Corporation
Dymas Corporation 165,020 749,963 - 749,963 - (105) 24,112 4.05
Polybus Corporation 1,993,680 9,364,460 222,739 9,141,721 691,027 7,070 1,297,441 12.26
Pte Ltd
TSRC (Hong Kong) Lim- 2,875,607 3,680,381 8,045 3,672,336 - (428) 364,704 3.51
ited
TSRC (Lux.) Corporation 2,343,693 3,999,366 1,087,630 2,911,736 2,604,983 159,379 285,684 3.82
S.A R.L.
TSRC (USA) Investment 2,659,625 3,256,940 494,145 2,762,795 - (108,832) 163,233 1.70
Corporation
TSRC Specialty Materi- - 3,018,066 655,031 2,363,035 4,273,329 399,754 321,142 NA
als LLC
Triton International - -
1,385 56,136 56,136 (47) (2,368) (47.36)
Holdings Corporation
TSRC (Shanghai) 152,295 464,962 112,664 352,298 577,311 82,015 89,300 NA
Industries Ltd
Shen Hua Chemical
1,141,382 4,405,924 806,377 3,599,547 8,018,930 1,326,272 1,002,175 NA
Industrial Co., Ltd
TSRC (Nantong) 2,910,911 6,352,445 2,049,956 4,302,489 5,678,443 439,893 276,512 NA
Industries Ltd
TSRC-UBE (Nantong)
Chemical Industrial 1,107,600 2,280,238 382,758 1,897,480 3,280,916 573,192 415,589 NA
Company Limited
TSRC (Vietnam) Co., Ltd. 312,897 613,973 398,518 215,455 75,618 (34,287) (40,674) NA
----- End of picture text -----

Note: Spot exchange rate on the balance sheet date under the title of assets=USD1:NTD 27.69. Spot exchange rate on the balance sheet date under the title of income=USD1:NTD 28.0294.

<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, 2021 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 10, 2022

<3> Relation Statement

Statement

The 2021 Relation Statement of the Company (from Jan. 1, 2021 to Dec. 31, 2021) 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 10, 2022

Letter

To TSRC Corporation:

The 2021 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 2021 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 10, 2022

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

Other disclosures

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

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

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

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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
----- End of picture text -----

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, 2021 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 10, 2022

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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, 2021 and 2020, 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, 2021 and 2020, 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 audits in accordance with the “Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants” and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the 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, 2021. 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.

1. Revenue recognition

Please refer to note 4(q) and note 6(v) 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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2. 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 it is reasonable and is being implemented. The procedures include reviewing the inventory aging documents and analyzing its changes; obtaining the documents of inventory measurement and evaluating whether if the bases used for net realizable value is reasonable; selecting samples and verifying them with the vouchers to test the accuracy of the amount; and reviewing whether the disclosure of inventory measurement made by the management is appropriate.

Other Matter

TSRC Corporation has additionally prepared its parent company only financial statements as of and for the years ended December 31, 2021 and 2020, 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, IFRIC, 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.

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.

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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 10, 2022

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TSRC CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2021 Amount % $ 4,464,755 14 7,702 - 951,817 3 3,716,841 11 93,834 - - - 5,629,817 17 598,331 2	December 31,	2020
	Amount	%
	3,278,463 3,460 571,220 2,802,351 146,171 12,151 4,772,464 851,356	12 - 2 10 - - 16 3
15,463,097 47	12,437,636	43
1,460,586 4 2,030,573 6 10,154,640 31 867,485 3 1,552,148 5 892,679 3 253,434 1 155,121 -	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
17,366,666 53	16,830,746	57

$ 32,829,763 100 29,268,382 100

Total assets

See accompanying notes to consolidated financial statements.

Chief Accountant: Hsing-Jung Lin

Chairman:Nita Ing

Manager:Joseph Chai

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December 31, 2021 Amount % $ 4,006,365 12 817,713 3 356 - 1,536,976 5 1,316 - 288,186 1 1,560,933 5 128,928 - 208,011 1	December 31, 2021 Amount % $ 4,006,365 12 817,713 3 356 - 1,536,976 5 1,316 - 288,186 1 1,560,933 5 128,928 - 208,011 1	December 31, 2021 Amount % $ 4,006,365 12 817,713 3 356 - 1,536,976 5 1,316 - 288,186 1 1,560,933 5 128,928 - 208,011 1
	%	Amount
	12 3 - 5 - 1 5 - 1	3,789,276 2,784,129 32,628 1,643,264 - 172,787 1,204,135 139,263 128,285
8,548,784	27	9,893,767
1,936,219 349,922 269,536 1,089,204 357,355 154,925	6 1 1 3 1 -	1,679,735 349,341 31,819 807,700 492,827 154,534
4,157,161	12	3,515,956
12,705,945	39	13,409,723
	25	8,257,099
50,725	-	49,531
4,073,680 5,080,942	12 16	4,068,862 1,483,970
9,154,622	28	5,552,832
(456,708) 1,047,059 (26,847)	(1) 3 -	(198,125) 558,902 (81,119)
563,504	2	279,658
18,025,950	55	14,139,120
2,097,868	6	1,719,539
20,123,818	61	15,858,659
$ 32,829,763	100	29,268,382

See accompanying notes to consolidated financial statements.

Chief Accountant: Hsing-Jung Lin

Chairman:Nita Ing

Manager:Joseph Chai

TSRC CORPORATION AND SUBSIDIARIES

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Consolidated Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Share)

2021 Amount $ 32,533,238 25,732,774		2020
	%	Amount	%
	100 79	24,024,443 21,087,174	100 88
6,800,464	21	2,937,269	12
1,755,251 1,014,618 371,679 2,362	6 3 1 -	949,953 1,000,809 350,678 (3,627)	4 4 2 -
3,143,910	10	2,297,813	10
271,545	1	182,859	1
3,928,099	12	822,315	3
30,076 66,256 917,257 (110,741) 802,041	- - 3 - 2	46,923 62,290 (588,796) (123,569) 301,508	- - (2) - 1
1,704,889	5	(301,644)	(1)
5,632,988 1,168,683	17 3	520,671 305,410	2 1
4,464,305	14	215,261	1
(31,893) 509,502 21,345	- 1 -	(14,247) (67,869) -	- - -
456,264	1	(82,116)	-
(282,962) 63,964 -	(1) - -	(247,989) 48,102 -	(1) - -
(218,998)	(1)	(199,887)	(1)
237,266	-	(282,003)	(1)
$ 4,701,571	14	(66,742)	-
$ 3,930,939 $ 533,366	12 2	(21,891) 237,152	1
4,464,305	14	215,261	1
$ 4,182,892 $ 518,679	13 1	(326,108) 259,366	(1) 1
4,701,571	14	(66,742)	-
$	4.76	(0.03)
$	4.73	(0.03)

See accompanying notes to consolidated financial statements. Chief Accountant: Hsing-Jung Lin

Chairman:Nita Ing Manager:Joseph Chai

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TSRC CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

Equity attributable to owners of parent

Common stock $ 8,257,099 - - - - -	Capital surplus	Retained earnings
		Legal reserve Unappropri- ated retained earnings Total
	47,140 - - 2,391 - -	3,977,141 1,940,361 5,917,502 91,721 (91,721) - - (412,855) (412,855) - - - - (21,891) (21,891) - (14,247) (14,247)
-	-	- (36,138) (36,138)
-	-	- 84,323 84,323
8,257,099 - - - - -	49,531 4,068,862 1,483,970 5,552,832 - 4,818 (4,818) - - - (297,256) (297,256) 1,194 - - - - - 3,930,939 3,930,939 - - (31,893) (31,893)
-	- - 3,899,046 3,899,046
$ 8,257,099	50,725 4,073,680 5,080,942 9,154,622

100

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(Expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of parent

Total other equity interest

Financial state- ments transla- tion differences for foreign operations Unrealized gains (losses) on financial assets measured at fair value through other compre- hensive income Gains (losses) on hedging instru- ments Total Total equity attributable to owners of parent Non-controlling interests Total equity 23,383 711,094 (80,526) 653,951 14,875,692 1,577,031 16,452,723 - - - - - - - - - - - (412,855) (116,858) (529,713) - - - - 2,391 - 2,391 - - - - (21,891) 237,152 215,261 (221,508) (67,869) (593) (289,970) (304,217) 22,214 (282,003)	Unrealized gains (losses) on financial assets measured at fair value through other compre- hensive income	Gains (losses) on hedging instru- ments	Total	Total equity attributable to owners of parent	Non-controlling interests	Total equity
(221,508) (67,869) (593) (289,970) (326,108) 259,366 (66,742)
- (84,323) - (84,323) - - -
(198,125) 558,902 (81,119) 279,658 14,139,120 1,719,539 15,858,659 - - - - - - - - - - - (297,256) (140,350) (437,606) - - - - 1,194 - 1,194 - - - - 3,930,939 533,366 4,464,305 (258,583) 488,157 54,272 283,846 251,953 (14,687) 237,266
(258,583) 488,157 54,272 283,846 4,182,892 518,679 4,701,571
(456,708) 1,047,059 (26,847) 563,504 18,025,950 2,097,868 20,123,818

See accompanying notes to consolidated financial statements. Chief Accountant: Hsing-Jung Lin

Chairman:Nita Ing

Manager:Joseph Chai

101

2021

2020

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TSRC CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2021 and 2020 (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 Impairment loss (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 (gain) 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	$ 5,632,988	520,671
	1,087,768 122,572 2,362 110,741 (30,076) (66,256) (802,041) (900,164) - 78,363 -	1,018,861 137,553 (3,627) 123,569 (46,923) (62,290) (301,508) 127,553 495,745 82,962 (8,780)
	(396,731)	1,563,115
	(4,242) (380,597) (916,852) 59,195 (857,353) 123,726	(3,446) 295,127 (39,107) (26,710) 1,642,215 (122,707)
	(1,976,123)	1,745,372
	(32,272) (106,288) 1,316 362,607 79,726 (16,086) (15,416)	26,956 (749,082) (59,418) (90,728) (90,953) (54,978) 15,989
	273,587	(1,002,214)
	(1,702,536)	743,158
	(2,099,267)	2,306,273
	3,533,721	2,826,944

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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 Decrease (increase) in restricted assets Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Proceeds from long-term borrowings Repayments of 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	2021 23,218 (108,987) (745,979)
	2,701,973
	- (860,808) 1,217,515 - 38,839 149,573 129,299
	674,418
	24,560,598 (24,261,595) 1,709,548 (3,392,262) (145,875) (437,591) 1,194
	(1,965,983)
	(224,116)
	1,186,292 3,278,463
	$ 4,464,755

See accompanying notes to consolidated financial statements.

Chief Accountant: Hsing-Jung Lin

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, 2021 and 2020

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

<1> Company history

TSRC Corporation (the original name was Taiwan Synthetic Rubber Corporation, hereinafter referred to as "the Company") was incorporated in the Republic of China (ROC) on November 22, 1973, as a corporation limited by shares in accordance with the ROC Company Act. In May 1999, Taiwan Synthetic Rubber Corporation was renamed TSRC Corporation as approved by the stockholders' meeting. In June 2016, the Company changed its registered address to be No.2, Singgong Rd., Dashe Dist., Kaohsiung City. The 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 10, 2022.

<3> New standards, amendments and interpretations adopted:

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

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

[Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”]
[Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform －Phase 2”]
The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from April 1, 2021:
[Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”]
(b) The impact of IFRS issued by the FSC but not yet effective

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

[Amendments to IAS 16 “Property, Plant and Equipment －Proceeds before Intended Use”]
[Amendments to IAS 37 “Onerous Contracts －Cost of Fulfilling a Contract”]
[Annual Improvements to IFRS Standards 2018-2020]
[Amendments to IFRS 3 “Reference to the Conceptual Framework”]
(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:

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

Content of amendment

Effective date per IASB

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

January 1, 2023

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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.

<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

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, 2021 31, 2020
----- 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, 2021	December 31, 2020

TSRC	Trimurti Holding Corpo- ration	Investment	100.00%	100.00%
TSRC	Hardison International Corporation	Investment	100.00%	100.00%
TSRC&Hardison International Corpo- ration	Dymas Corporation	Investment	100.00%	100.00%	(note 1)
TSRC	TSRC (Vietnam) Co., Ltd.	Production and pro- cessing of rubber color masterbatch, thermoplas- tic elastomer and plastic compoundproducts	100.00%	100.00%
Trimurti Holding Corporation	Polybus Corporation Pte Ltd	International commerce and investment	100.00%	100.00%
Trimurti Holding Corporation	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, plastic compound metal, and plastic elasticity engi- neering products	100.00%	100.00%
TSRC (Hong Kong) Limited	TSRC (Lux.) Corporation S.A R.L.	International commerce and investment	100.00%	100.00%
TSRC (Lux.) Corpora- tion S.A R.L.	TSRC (USA) Investment Corporation	Investment	100.00%	100.00%
TSRC (USA) Invest- ment Corporation	TSRC Specialty Materials 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 synthetic 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 Interna- tional 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 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.
(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.

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(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.

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.

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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.

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.

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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.

(iii) Financial assets

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) Financial instruments

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.

(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.

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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) Investment in associates

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.

(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 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	7~30 years
2)	Buildings	3~60 years
3)	Machinery	3~50 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.

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(m) Leases

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.

(i) 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.

(ii) As a leasee

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.

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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) Leases
(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 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:

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.

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 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.

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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.

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.

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 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.

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(u) Earnings per share

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

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

(v) Operating segments

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.

(w) Changes in accounting policies

Shen Hua Chemical Industries Co., Ltd. (Shen Hua) signed a relocation compensation contract with Nantong Economic and Technological Development Zone Chemical Park Management Office (Nantong Management Office) and Nantong Nengda Yanjiang Science and Technology Park Development Co., Ltd. (Nantong Nengda) on December 4, 2021. Based on the contract, Shen Hua will have to close its factories before December 31, 2024. It also signed an investment agreement for its new factories with Nantong Management Office, wherein the immovable buildings and facilities (defined as “immovable assets” herein) will be compensated at book value when they are written off. Therefore, the remaining useful life of the immovable assets is extended to December 31, 2024, resulting in the residual value to increase to CNY 75,974 thousand. The change in accounting estimate will not have a significant impact on the depreciation expenses for the years between 2021 and 2024.

<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(l) for further description of the impairment of intangible assets.

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lanation of significant accounts ash and cash equivalents Cash on hand Checking and savings deposits Time deposits Commercial paper with reverse repurchase agreements Cash and cash equivalents per statements of cash flow	December 31, 2021 $ 390 1,110,545 3,323,820 30,000 $ 4,464,755

<6> Explanation of significant accounts

(a) Cash and cash equivalents

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

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

Mandatorily measured at fair value through profit or loss: Derivative instruments not used for hedging Forward contracts/Swap contracts Financial liabilities held for trading: Derivative instruments not used for hedging Forward contracts/Swap contracts	December 31, 2021 $ 7,702	December 31, 2020
		3,460
	December 31, 2021 $ 356	December 31, 2020
		32,628

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, 2021	December 31, 2021
Contract amount (thou- sand dollars) Currency EUR USD 2,980/ 3,383 EUR/USD CNH USD 3,187/ 500 CNH/USD EUR USD 15,450/ 17,735 EUR/USD USD CNH 549/ 3,540 USD/CNH CNH USD 22,350/ 3,503 CNH/USD JPY USD 16,411/ 144 JPY/USD December 31, 2020		Maturity dates
		2022.1.12~2022.3.11 2022.1.6 2022.1.12~2022.3.30 2022.2.15 2022.1.6 2022.1.12
Contract amount (thou- sand dollars) EUR USD 450/ 551 TWD USD 238,846/ 8,500 EUR USD 21,050/ 24,753	Currency EUR/USD TWD/USD EUR/USD	Maturity dates
		2021.2.19~2021.2.26 2021.1.15~2021.1.22 2021.1.6~2021.2.3

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

Equity investments at fair value through other comprehensive income: Listed stocks (domestic) Unlisted stocks (domestic and overseas) Total	December 31, 2021 $ 668,140 792,446 $ 1,460,586	December 31, 2020
		- 952,645
		952,645

(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 year ended December 31, 2020, the fair value at that time of disposal was $114,323 thousand and accumulated gain on disposal was $84,323 thousand, which has been transferred from other equity to retained earnings.

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

December 31, 2021 THB December 31, 2020 THB Notes and accounts receivable Notes receivable Accounts receivable Less: allowance for impairment	Foreign currency amount (thousand dollars) Exchange rate $ 493,334 0.8347 205,493 0.9556 December 31, 2021 $ 951,817 3,724,240 7,399 $ 4,668,658	Foreign currency amount (thousand dollars) Exchange rate $ 493,334 0.8347 205,493 0.9556 December 31, 2021 $ 951,817 3,724,240 7,399 $ 4,668,658	Foreign currency amount (thousand dollars) Exchange rate $ 493,334 0.8347 205,493 0.9556 December 31, 2021 $ 951,817 3,724,240 7,399 $ 4,668,658	NTD
				411,786 196,370 December 31, 2020
		$ 951,817 3,724,240 7,399		571,220 2,807,545 5,194
		$ 4,668,658		3,373,571

(d) Notes and accounts receivable

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, 2021
	Gross carrying amount 4,611,091 46,559 16,220 2,187 4,676,057	Weighted-average expected credit loss rate 0.05%~0.14% 2.35%~6.31% 8.07%~29.19% 100%	Loss allowance provi- sion
$			2,559 1,173 1,480 2,187
$			7,399

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

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

Balance at beginning of period Impairment losses recognized Impairment loss reversed Foreign exchange gain or loss Balance at end of period	For theyears ended December 31 2021 2020 $ 5,194 8,935 2,362 - - (3,627) (157) (114) $ 7,399 5,194	For theyears ended December 31 2021 2020 $ 5,194 8,935 2,362 - - (3,627) (157) (114) $ 7,399 5,194
		2020
		8,935 - (3,627) (114)
		5,194

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

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, 2021 $ 47,938 45,896 $ 93,834	December 31, 2020
		39,572 106,599
		146,171

The aformentioned financial assets were not past due or impaired. For other credit risk information, please refers to note 6(z).

(f) Inventories

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

Raw materials Supplies Work in progress Finished goods Merchandise Total	December 31, 2021 $ 1,648,221 8,744 299,749 2,986,188 686,915 $ 5,629,817	December 31, 2020
		1,719,583 9,476 297,435 2,258,866 487,104
		4,772,464

As of December 31, 2021 and 2020, 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:

Loss on (reversal of) decline in market value of inventory Income from sale of scrap Loss on physical count Unallocated production overhead Total	2021 $ (84,544) (28,244) 1,010 394,301 $ 282,523	2020 63,242 (21,162) 6,165 433,063 481,308

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(g) Investments accounted for under equity method

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

Associates Joint ventures	December 31, 2021 $ 844,557 1,186,016	December 31, 2020
		732,531 571,256
	$ 2,030,573	1,303,787

(i) Associates

For the years ended December 31, 2021 and 2020, the Group recognized its share of gain from the associates of $200,793 thousand and $169,357 thousand, respectively.

The details of the significant associates are as follows:

Name of associates ARLANXEO-TSRC (Nantong) Chemicals Industries Co., Ltd. Asia Pacific Energy Develop- ment Co., Ltd.	Existing relationship with the Group Strategic alliance of produc- tion and sales of NBR Strategic alliance of invest- ment	The main op- erating place / register country China Cayman Isiands	Proportion of equity and	Proportion of equity and
			voting right December 31, 2021 December 31, 2020 50.00% 50.00% 37.78% 37.78%
				50.00% 37.78%

Summaries of the financial information of the significant associate were 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 of continued operations Other comprehensive income (loss) Total comprehensive income (loss) Total comprehensive income attributable to the Group	December 31, 2021 $ 735,166 584,324 (282,615) (29,454) $ 1,007,421 $ 503,711 2021 $ 2,273,143 $ 367,700 - $ 367,700 $ 183,850	December 31, 2020
		478,937 668,836 (471,579) (31,085)
		645,109
		322,554
		2020 1,519,119 180,927 - 180,927 90,464

Beginning balance of the equity of the associate attributable to the Group Current total comprehensive income of the associate attribut- able to the Group Other Ending balance of the equity of the associate attributable to the Group	2021 $ 323,287 183,850 (1,643) $ 505,494	2020
		231,111 90,464 1,712
		323,287

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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	December 31, 2021 $ 485,380 922,300 (488,265) (8,301) $ 911,114 $ 344,218 2021 $ 1,411,811 $ 44,847 - $ 44,847 $ 16,943	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

Beginning balance of the equity of the associate attributable to the Group Current total comprehensive income of the associate attribut- able to the Group Other Ending balance of the equity of the associate attributable to the Group	2021 $ 409,244 16,943 (87,124) $ 339,063	2020
		404,508 78,893 (74,157)
		409,244

(ii) Joint ventures

The details of the significant joint ventures are as follows:

Name of joint ventures Indian Synthetic Rubber Private Limited	Existing relationship with the Group Strategic alliance of production and sales of synthetic rubber products	The main op- erating place / register country India	Proportion of equity and voting right	Proportion of equity and voting right
			December 31, 2021 50.00%	December 31, 2020
				50.00%

The comprehensive financial information of Indian Synthetic Rubber Private Limited,which is the joint venture material to the Consolidated company, is as follows:

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	December 31, 2021 $ 2,806,016 2,527,405 (1,720,350) (1,284,317) $ 2,328,754 $ 1,164,377 2021 $ 6,608,019 $ 1,207,138 88,966 $ 1,296,104 $ 648,052	December 31, 2020 1,119,957 3,089,725 (1,252,076) (1,869,712)
		1,087,894
		543,947
		2020 3,728,248
		280,563 (13,179)
		267,384
		133,692

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Beginning balance of the equity of the joint venture attributable to the Group Current total comprehensive income of the joint venture attributable to the Group Other Ending balance of the equity of the joint venture attributable to the Group	2021 $ 512,624 648,052 (30,479)
	$ 1,130,197

Summary of respectively not significant joint ventures recognized under the equity method was as follows:

Balance of not significant joint venture's equity Attributable to the Group: Income (loss) from continued operations Other comprehensive income (loss) Total comprehensive income (loss)	December 31, 2021 $ 55,819	December 31, 2020 58,632
	2021 $ (2,321) -	2020 (8,130) -
	$ (2,321)	(8,130)

(iii) Collateral

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

(h) Material non-controlling interests of subsidiaries

The material non-controlling interests of subsidiaries were as follows:

Name of joint ventures Shen Hua Chemical Industries Co., Ltd. TSRC-UBE (Nantong) Industries Ltd.	The main operating place / register country	Proportion of Non-controlling interests December 31, 2021 December 31, 2020 34.56% 34.56% 45.00% 45.00%	Proportion of Non-controlling interests December 31, 2021 December 31, 2020 34.56% 34.56% 45.00% 45.00%
			December 31, 2020
	China China		34.56% 45.00%

The following information of the aforementioned subsidiaries have been prepared in accordance with the IFRSs endorsed by the FSC. Included in this information are the fair value adjustment made during the acquisition and the relevant difference in accounting principles between the Group and its subsidiaries as at the acquisition date. Intra-group transactions were not eliminated in this information.

(i) Summary of financial information of Shen Hua Chemical Industries Co., Ltd.

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Non-controlling interests	December 31, 2021 $ 3,236,185 1,169,739 (542,982) (263,395) $ 3,599,547 $ 1,244,003	December 31, 2020
		2,569,212 904,877 (582,827) (17,878)
		2,873,384
		993,042

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		2021	2020
Revenue	$	8,018,930	5,695,244
Net income	$	1,002,175	497,954
Other comprehensive income (loss)		(24,572)	34,727
Total comprehensive income (loss)	$	977,603	532,681
Total net income attributable to non-controlling interests	$	346,351	172,093
Total comprehensive income attributable to non-controlling interests	$	337,858	184,094
		2021	2020
Net Cash flow from operating activities	$	455,922	720,022
Net Cash used in investing activities		(130,480)	(97,685)
Net Cash used in financing activities		(251,975)	(342,922)
Effect on exchange rate changes on cash and cash equivalents		(2,746)	16,872
Increase in cash and cash equivalents	$	70,721	296,287
Summary of financial information of TSRC-UBE (Nantong) Industries Ltd.
	December 31, 2021		December 31, 2020
Current assets	$	1,447,115	1,051,480
Non-current assets		833,123	922,652
Current liabilities		(377,385)	(355,169)
Non-current liabilities		(5,373)	(4,524)
Net assets	$	1,897,480	1,614,439
Non-controlling interests	$	853,865	726,497
		2021	2020
Revenue	$	3,280,916	2,319,775
Net income	$	415,589	144,576
Other comprehensive income (loss)		(13,764)	22,694
Total comprehensive income (loss)	$	401,825	167,270
Total net income attributable to non-controlling interests	$	187,015	65,059
Total comprehensive income attributable to non-controlling interests	$	180,821	75,272
		2021	2020
Net Cash flow from operating activities	$	509,736	284,721
Net Cash used in investing activities		(56,162)	(30,505)
Net Cash used in financing activities		(111,404)	(268,638)
Effect on exchange rate changes on cash and cash equivalents		4,196	3,878
Increase (decrease) in cash and cash equivalents	$	346,366	(10,544)

(ii) Summary of financial information of TSRC-UBE (Nantong) Industries Ltd.

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(i) 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, 2021 Additions Disposals Reclassification Effect on changes in exchange rates Balance at December 31, 2021 Balance at January 1, 2020 Additions Disposals Reclassification Effect on changes in exchange rates Balance at December 31, 2020 Depreciation and impairment loss: Balance at January 1, 2021 Depreciation Disposals Reclassification Effect on changes in exchange rates Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Disposals Reclassification Effect on changes in exchange rates Balance at December 31, 2020 Carrying value: December 31, 2021 December 31, 2020 January 1, 2020	$	Land 841,829 - (201,665) 344 (588) 639,920 614,101 140,061 - 88,441 (774) 841,829 - - - - - - - - - - - - 639,920 841,829 614,101	Land improvements 142,168 9,037 - 951 (1,651) 150,505 143,699 - - 1,644 (3,175) 142,168 94,229 5,735 - - (724) 99,240 90,293 5,232 - - (1,296) 94,229 51,265 47,939 53,406	Buildings
				4,672,369 56,644 (4,864) 242,404 (34,790)
	$			4,931,763
	$			4,051,022 - (6,734) 591,761 36,320
	$			4,672,369
	$ $			2,464,473 160,753 (3,317) - (14,449)
				2,607,460
	$			2,314,620 137,546 (3,490) (654) 16,451
	$			2,464,473
	$			2,324,303
	$			2,207,896
	$			1,736,402

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

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

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Machinery 21,983,009 185,687 (238,677) 1,016,360 (190,987) 22,755,392 20,332,811 29,676 (503,925) 2,215,069 (90,622) 21,983,009 15,857,095 815,165 (191,547) (19) (137,578) 16,343,116 15,614,341 745,908 (378,626) (38) (124,490) 15,857,095 6,412,276 6,125,914 4,718,470	Furniture and fixtures and other equipment 247,058 245 (6,984) 18,169 (2,526) 255,962 244,989 92 (9,135) 13,376 (2,264) 247,058 182,165 17,455 (6,715) - (1,951) 190,954 174,944 17,414 (8,221) (21) (1,951) 182,165 65,008 64,893 70,045	Construction in progress 1,228,046 847,440 (66,740) (1,334,117) (12,761) 661,868 2,844,971 1,256,316 - (2,835,265) (37,976) 1,228,046 - - - - - - - - - - - - 661,868 1,228,046 2,844,971

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(j) 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, 2021 Additions Write-off Lease modification Amortization to operating costs and inventories Effect on changes in foreign ex- change rates Balance at December 31, 2021 Balance at January 1, 2020 Additions Write-off Lease modification Reclassification to construction in progress Amortization to operating costs and inventories Effect on changes in foreign ex- change rates Balance at December 31, 2020 Accumulated depreciation and im- pairment losses: Balance at January 1, 2021 Depreciation Write-off Lease modification Effect on changes in exchange rates Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Write-off Lease modification Effect on changes in exchange rates Balance at December 31, 2020 Carrying value: December 31, 2021 December 31, 2020 January 1, 2020	Land $ 569,782 1,222 - - - (6,779) $ 564,225 $ 663,708 - - - (94,596) - 670 $ 569,782 $ 145,489 13,616 - - (1,434) $ 157,671 $ 130,190 13,798 - - 1,501 $ 145,489 $ 406,554 $ 424,293 $ 533,518	Building 255,467 14,561 (5,191) (52,107) (4,487) (5,646) 202,597 383,925 32,150 (3,695) (143,496) - (6,850) (6,567) 255,467 111,766 49,763 (5,191) (20,463) (3,024) 132,851 68,316 70,243 (3,695) (21,425) (1,673) 111,766 69,746 143,701 315,609	Machinery 457,714 11,683 (16,935) - (73,876) (3,887) 374,699 471,843 57,174 - - - (76,112) 4,809 457,714 17,224 - (16,935) - (289) - 14,551 3,576 - - (903) 17,224 374,699 440,490 457,292	Transporta- tion equip- ment 32,827 12,926 (11,993) - - (772) 32,988 34,216 2,501 - (2,561) - - (1,329) 32,827 18,339 10,556 (11,993) - (400) 16,502 9,064 10,418 - (512) (631) 18,339 16,486 14,488 25,152	Total
					1,315,790 40,392 (34,119) (52,107) (78,363) (17,084)
					1,174,509
					1,553,692 91,825 (3,695) (146,057) (94,596) (82,962) (2,417)
					1,315,790
					292,818 73,935 (34,119) (20,463) (5,147)
					307,024
					222,121 98,035 (3,695) (21,937) (1,706)
					292,818
					867,485
					1,022,972
					1,331,571

The Group did not pledge any collateral on right-of-use assets.

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$ $	Land	Buildings 741,889 -
	1,073,579 -
	1,073,579	741,889
$ $	1,073,579 -	741,889 -
	1,073,579	741,889
$	- -	248,595 14,725
$	-	263,320
$	- -	233,869 14,726
$	-	248,595
$	1,073,579	478,569
$	1,073,579	493,294
$	1,073,579	508,020

(k) 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(w) 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 Da'an Dist., Taipei City	2021 2.10%	2020
		2.10%

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

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(l) Intangible assets

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

Costs: Balance at January 1, 2021 Reclassification Effect of changes in exchange rates Balance at December 31, 2021 Balance at January 1, 2020 Additions Reclassification Effect of changes in exchange rates Balance at December 31, 2020 Amortization and impairment losses: Balance at January 1, 2021 Amortization Reclassification Effect of changes in exchange rates Balance at December 31, 2021 Balance at January 1, 2020 Amortization Impairment loss Effect of changes in exchange rates Balance at December 31, 2020 Carrying value: December 31, 2021 January 1, 2020 December 31, 2020	Industrial technology and know-how $ 980,299 8,000 (24,430) $ 963,869 $ 995,035 25,300 - (40,036) $ 980,299 $ 587,443 62,976 - (15,024) $ 635,395 $ 491,771 48,157 66,582 (19,067) $ 587,443 $ 328,474 $ 392,856 $ 503,264	Computer software 261,995 21,047 (622) 282,420 246,832 146 14,069 948 261,995 247,082 11,337 19 (612) 257,826 234,745 11,363 - 974 247,082 24,594 14,913 12,087	Goodwill
			195,817 - (5,619)
			190,198
			206,793 - - (10,976)
			195,817
			195,817 - - (5,619)
			190,198
			- - 203,263 (7,446)
			195,817
			-
			-
			206,793

(i) Amortization of intangible assets

For the years ended December 31, 2021 and 2020, the amortization of intangible assets are included in the statement of comprehensive income:

Operating costs Operating expenses	2021 $ 7,096 115,476 $ 122,572	2020
		5,256 132,297
		137,553

(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 2011. 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 not 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.

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Patent and trademark 561,090 - (16,101) 544,989 592,543 - - (31,453) 561,090 348,361 15,913 - (10,188) 354,086 200,235 23,059 141,733 (16,666) 348,361 190,903 212,729 392,308	Customer relationship 1,023,437 - (29,366) 994,071 1,080,805 - - (57,368) 1,023,437 631,530 32,346 - (18,513) 645,363 525,372 54,974 84,167 (32,983) 631,530 348,708 391,907 555,433	Non-compete agreement 8,553 - (245) 8,308 9,032 - - (479) 8,553 8,553 - - (245) 8,308 9,032 - - (479) 8,553 - - -

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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 rela- tionship	Total 495,745
				84,167

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.

sumptions represent the management's assessment of the future trends of related industries ation of historical information from internal and external sources.	and the consider
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 for the year ended December 31, 2021.

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

(m) 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, 2021	December 31, 2021
Range of interest rates (%) 0.40~3.85	Year of maturity Amount 2022 $ 4,006,365 December 31, 2020		The unused credit facilities
			15,543,553

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

(ii) Long-term borrowings

1) Long-term bank borrowings

	December 31, 2021	December 31, 2021
Currency USD NTD USD	Range of interest rates (%) 4.38 0.95~1.25 1.48~1.72	Year of maturity		Amount
		2022~2023 2022~2025 2022~2024	$	118,063 2,145,756 490,113
			$	2,753,932
			$	817,713 1,936,219
			$	2,753,932

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Secured loans Unsecured loans Unsecured loans Unsecured loans Total Current Non-current Total		December 31, 2020	December 31, 2020
	Currency USD NTD USD CNY	Range of interest rates (%) 4.38 1.09~1.25 1.53~3.82 5.08	Year of maturity
			2021~2023 2021~2025 2021~2023 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 December 31, 2020, the relevant forgiveness amount has been applied to the bank for review. In addition, the Company applied the “Welcoming the Return of Taiwanese Investment Initiative Act” loan of $478,000 thousand from the bank in 2020. As of December 31, 2021 and 2020, the Company had used the amounts of $148,837 thousand and $75,727 thousand which were measured and recognized based on the market interest rate of 1.2%; and the difference between the actually interest rate of 0.45% and the market interest rate of 1.2% had been recorded as government subsidy under deferred income.

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

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

	December 31, 2021	Amount $ 350,000 78
Guarantee or accep- tance institution CTBC Bank	Range of interest rates (%) 1.164 December 31, 2020
		$ 349,922
		Amount $ 350,000 659
Guarantee or accep- tance institution	Range of interest rates (%)
CTBC Bank	1.206
		$ 349,341

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

The Group pledged certain assets for the loans. Please refer to note 8 for additional information.

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Non current provision liabilities Balance at January 1, 2021 Increase in provisions Reverse in provisions Balance at December 31, 2021 Balance at January 1, 2020 Increase in provisions Balance at December 31, 2020	Guarantees	Demolition and relo- cation costs - 241,779 -
	$ 31,819 - (4,062)
	$ 27,757	241,779
	$ 19,227 12,592	- -
	$ 31,819	-

(n) Non current provision liabilities

Please refer to note 7(c) and note 12(b) for further description of guarantees, demolition and relocation costs.
(o) Lease liabilities

The Group's lease liabilities were as follow:

Current Non-current For the maturity analysis, please refer to note 6(z). The amounts recognized in profit or loss were as follows: Interest on lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets The amounts recognized in the statement of cash flows for the Total cash outflow for leases	December 31, 2021 $ 128,928 $ 357,355 2021 $ 3,463	December 31, 2020
		139,263
		492,827
		2020 6,775 17,264 18,499 2020
	$ 15,819
	$ 22,836
	Group were as follows: 2021 $ 187,993
		216,145

(p) 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(k).

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

Less than one year One to two years Two to three years Three to four years Four to five years More than five years Total undiscounted lease payments	December 31, 2021 $ 68,755 61,118 49,356 12,138 13,241 42,990 $ 247,598	December 31, 2020
		68,159 67,739 60,905 48,363 13,710 63,568
		322,444

In 2021 and 2020, the rental income from investment property amounted to $73,422 thousand and $64,663 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, 2021 $ 605,909 (519,935)	December 31, 2020 606,090 (535,923) 70,167
	$ 85,974

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.

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 $519,935 thousand at the end of the current reporting period. For information on the utilization of the labor pension fund assets including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of 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, 2021 and 2020 were as follows:

Defined benefit obligation as of 1 January Current service costs and interest Remeasurements of net defined benefit liability (asset) －Return on plan assets (excluding current interest expense) －Due to changes in financial assumption of actuarial gains or losses Benefits paid by the plan Defined benefit obligation as of 31 December Movements in fair value of defined benefit plan assets he movements in the fair value of the defined benefit plan nd 2020, were as follows: Fair value of plan assets as of January 1 Expected return Remeasurements of net defined benefit liability (asset) －Return on plan assets (excluding current interest expense) Contributions made Benefits paid by the plan Fair value of plan assets as of December 31	2021 2020 $ 606,090 615,154 8,891 11,598 6,392 15,816 31,893 14,247 (47,357) (50,725) $ 605,909 606,090 assets for the years ended December 31, 2021 2021 2020 $ 535,923 504,256 3,241 4,867 6,392 15,816 21,736 61,709 (47,357) (50,725) $ 519,935 535,923	2020
		615,154 11,598 15,816 14,247 (50,725)
		606,090
		504,256 4,867 15,816 61,709 (50,725)
		535,923

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, 2021 and 2020, were as follows:

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4) Expenses recognized in profit or loss

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

2021 2020 Current service cost $ 5,226 5,645 Net interest on the defined benefit liability (asset) 424 1,086 $ 5,650 6,731 The Group recognized pension costs of the defined benefit plans in profit or loss as follows: 2021 2020 Operating costs $ 3,402 4,008 Operating expenses 1,972 2,328 Other income and expenses 276 290 Other receivables - 105 $ 5,650 6,731	2021 $ 5,226 424	2020 5,645 1,086
	$ 5,650	6,731
	$ 5,650	6,731

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

5) Actuarial assumptions

The following are the Group's principal actuarial assumptions:

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

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

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

6) Sensitivity analysis

When calculating the present value of the defined benefit obligation, the 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, 2021 and 2020, the effects on the present value of the defined benefit obligation arising from changes in principal actuarial assumptions were as follows:

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

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

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

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(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 $97,612 thousand and $47,436 thousand for the years 2021 and 2020, 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, 2021 Compensated absence liabilities $ 50,242 me tax ncome tax expenses The amounts of the Group's income tax for the years ended December 31, 2021 and 2020 2021 Current income tax expense Current period $ 873,721 Adjustment for prior periods (192) 873,529 Deferred tax expense (benefit) Origination and reversal of temporary differences 295,154 Income tax expenses of continued operations ~~$~~ 1,168,683	December 31, 2021 $ 50,242	December 31, 2020 48,138 were as follows: 2020 412,974 8,207
	873,529	421,181
	295,154	(115,771)
	~~$~~ 1,168,683	305,410

(r) Income tax
(i) Income tax expenses

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

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

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

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

Income before tax Income tax calculated on pretax accounting income at statuto- ry rate Effect of tax rates in foreign jurisdiction Tax exempt income Adjustment for prior periods Foreign investment income R&D tax credits utilized Withholding tax of revenue from overseas Land value increment tax Change in unrecognized temporary differences Regulations Governing the Utilization and Taxation of Repatri- ated offshore Funds Others Total	2021 $ 5,632,988	2020 520,671
	$ 1,126,597 130,283 (213,172) (192) 61,746 (21,529) 67,668 103,118 (83,695) - (2,141)	104,134 50,257 (10,516) 8,207 75,088 (17,824) 41,840 - 14,419 34,589 5,216
	$ 1,168,683	305,410

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(ii) Recognized deferred tax assets and liabilities

1) Unrecognized deferred tax liabilities

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

				December 31, 2021
Aggregate amount of temporary differences related to investments in subsidiaries			$	1,227,164
Unrecognized deferred tax liabilities			$	245,433
Unrecognized deferred tax assets
he Group's deferred tax assets have not been recognized in respect of the following items:
		December 31, 2021		December 31, 2020
The carryforward of unused tax losses	$	-		83,695

2) Unrecognized deferred tax assets

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

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

3) As of December 31, 2021, the Group didn't have any unrecognized deferred tax assets for taxable losses. Recognized deferred income tax assets and liabilities

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

Deferred tax assets:
			Allowance
	Defined benefit		for invento-	Loss carry-
		plans	ry valuation	forward	Others	Total
Balance at January 1, 2021	$	2,718	63,332	90,382	131,997	288,429
Recognized in profit or loss		(2,718)	(17,586)	16,517	(31,208)	(34,995)
Balance at December 31, 2021	$	-	45,746	106,899	100,789	253,434
Balance at January 1, 2020	$	13,731	50,752	53,522	102,434	220,439
Recognized in profit or loss		(11,013)	12,580	36,860	29,563	67,990
Balance at December 31, 2020	$	2,718	63,332	90,382	131,997	288,429
Deferred tax liabilities:

Deferred tax liabilities:
	Foreign invest-		Depreciation
		ment income	difference
		accounted for	between	Land value
		under equity	financial and	increment
		method	tax reporting	tax	Others	Total
Balance at January 1, 2021	$	642,096	53,416	56,683	55,505	807,700
Recognized in profit or loss		201,284	46,080	-	12,795	260,159
Recognized in other compre- hensive income		-	-	-	21,345	21,345
Balance at December 31, 2021	$	843,380	99,496	56,683	89,645	1,089,204
Balance at January 1, 2020	$	586,688	69,408	56,683	142,702	855,481
Recognized in profit or loss		55,408	(15,992)	-	(87,197)	(47,781)
Balance at December 31, 2020	$	642,096	53,416	56,683	55,505	807,700

(iii) Assessment of tax

The tax returns of the Company have been assessed by the tax authorities for all years through 2019. (s) Capital and other equity

(i) Capital

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

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

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(ii) Additional paid-in capital

The components of additional paid-in capital as of December 31, 2021 and 2020, were as follows:

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

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

(iii) Retained earnings
1) Legal reserve
- The ROC Company Act stipulates that companies must retain 10% of their annual net earnings, as defined in the Act, until such retention equals the amount of issued share capital. When a company incurs no loss, it may, pursuant to a resolution to be adopted by the shareholders' meeting as required, distribute its legal reserve by issuing new shares or cash. Only the portion of legal reserve which exceeds 25% of the issued share capital may be distributed. In accordance with Rule No. 10802432410 issued by Ministry of Economic Affairs, R.O.C on January 9, 2020, the Company has to apply the profit distribution based on its financial 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. 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 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 two-thirds of the directors’ attendance, and be resolved by more than half of the directors, then be reported to the shareholders' general meeting.

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

Dividends distributed to ordinary stockholders: Cash (earnings)	2020 Amount per share (NTD) Total Amount $ 0.36 297,256	2019 Amount per share (NTD) Total Amount 0.50 412,855
	Amount per share (NTD)	Amount per share (NTD) 0.50
	$ 0.36

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

Foreign ex- change differ- ences arising from foreign operations		2021	2021	2021
	Amount per (NTD)	share Total Amount 2.40 1,981,704 Gains (losses) on hedging instruments Total	Total Amount
	$ Unreal- ized gains (losses) from finan- cial assets measured at fair value through other com- prehensive income			1,981,704
				Total
	558,902 - - 488,157 - 1,047,059 711,094 - - (67,869) (84,323) - 558,902	(81,119) - - - 54,272 (26,847) (80,526) - - - - (593) (81,119)		279,658 (268,275) 9,692 488,157 54,272
				563,504
				653,951 (270,203) 48,695 (67,869) (84,323) (593)
$ (198,125)				279,658

(iv) Other equities (net for tax)

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(t) Earnings per share

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

(ii) Diluted earnings (losses) per share

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

(v) Revenue from contracts with customers

Primary geographical markets: Asia Americas Europe Others Major product lines: Synthetic rubber / elastomers Applied materials Others	Synthetic rubber $ 22,784,625 4,661,513 3,181,003 813,711 $ 31,440,852 $ 31,152,950 - 287,902 $ 31,440,852	2021
		Non-synthetic rub- ber 1,078,285 14,036 65 - 1,092,386 - 1,088,446 3,940 1,092,386	Total
			23,862,910 4,675,549 3,181,068 813,711
			32,533,238
			31,152,950 1,088,446 291,842
			32,533,238

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Synthetic rubber $ 16,586,438 3,475,775 2,515,967 595,711		2020
		Non-synthetic rub- ber 843,653 6,870 29 - 850,552 - 837,387 13,165 850,552 2021

$ 23,173,891
$ 22,355,033 - 818,858
$ 23,173,891

	$	75,865 167,241 10,150 (14,725) 33,014
	$	271,545
		2021
	$	30,076
		2021 $ 66,256

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(iv) Finance costs

2021 $ 110,741 llows: 2021 $ 29,376 (24,896) $ 54,272		2020 123,569 2020

		(29,380) (28,787)
		(593)

Interest expense (y) Reclassification of components of other comprehensive income The changes in components of other comprehensive income were as follows: Effective portion of cash flow hedges: Net gains (losses) for current year Less: Adjustment of reclassification included in profit or loss Net gains (losses) recognized in other comprehensive income

(y) Reclassification of components of other comprehensive income

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

(z) Financial 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, 2021 and 2020, the maximum credit risk exposure amounted to $10,780,140 thousand, and $7,837,492 thousand, respectively.

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, 2021 Non-derivative financial liabilities Short-term borrowings Accounts payable (including related parties) Other payables Long-term borrowings (including other long-term bor- rowings and current portion) Lease liabilities Deposits received Derivative financial liabilities Other swap contracts: Outflow December 31, 2020 Non-derivative financial liabilities Short-term borrowings Accounts payable (including related parties) Other payables Long-term borrowings (including other long-term bor- rowings and current portion) Lease liabilities Deposits received Derivative financial liabilities Other swap contracts/other forward contracts: Outflow	Contractual cash flows $ 4,029,764 1,538,292 1,560,933 3,169,756 491,077 48,177 356 $ 10,838,355 $ 3,795,442 1,643,264 1,204,135 4,910,796 653,406 62,118 32,628 $ 12,301,789	Within 6 months
		3,721,255 1,538,292 1,560,933 607,584 84,389 - 356
		7,512,809
		3,675,788 1,643,264 1,204,135 1,239,315 71,505 - 32,628
		7,866,635

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 308,509 - - 244,368 46,472 - - 599,349 119,654 - - 1,593,226 71,505 - - 1,784,385	1-2years - - - 1,046,502 73,131 33,810 - 1,153,443 - - - 1,084,767 120,293 46,461 - 1,251,521	2-5years - - - 1,271,302 154,206 11,247 - 1,436,755 - - - 993,488 191,367 12,536 - 1,197,391

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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, 2021 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR JPY December 31, 2020 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR JPY	(thousand dollars) $ 95,757 $ 19,073 $ 262,873 $ 84,779 $ 92,364 $ 15,702 $ 235,269 $ 76,191 $ 8,197 $ 36,134 $ 22,490 $ 84,000 $ 6,212 $ 27,409	Exchange rate 27.6900 31.3035 0.2404 4.3446 27.6900 31.3035 0.2404 28.5080 35.0563 0.2765 4.3813 28.5080 35.0563 0.2765	NTD
			2,651,511 597,052 63,195 368,331 2,557,559 491,528 56,559 2,172,053 287,356 9,991 98,535 2,394,672 217,770 7,579

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 increased / decreased by $5,744 thousand for the year ended December 31, 2021, the Group's net income before tax would have decreased / increased by $521 thousand for the year ended December 31, 2020, respectively, with all other variable factors remaining constant. The analysis was performed on the same basis for both periods.

3) Foreign exchange gain and loss on monetary item

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, 2021 and 2020, foreign exchange gain (including Derivative financial instruments for non-hedging profit and loss) amounting to $10,047 thousand and $22,075 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 $71,102 thousand and $86,025 thousand for the years ended December 31, 2021 and 2020, respectively, with all other variable factors remaining constant. This is mainly due to the Group's borrowing at floating rates.

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(v) Fair value

1) Hierarchy and fair value of financial instruments

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

December 31, 2021

	Fair value	Fair value
Level 1 Level 2 Level 3 - 7,702 - 668,140 - - - - 792,446 668,140 - 792,446 668,140 7,702 792,446 - 356 - ~~December 31, 2020~~			Total
			7,702
			668,140 792,446
			1,460,586
			1,468,288
-			356

	Fair value
Level 1 - - - -	Level 2 3,460 - 3,460 32,628	Level 3 - 952,645 952,645 -	Total
			3,460
			952,645
			956,105
			32,628

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, 2021 Total gains: Recognized in other comprehensive income Transfer into level 1 Balance at December 31, 2021 Balance at January 1, 2020 Total gains: Recognized in other comprehensive income Balance at December 31, 2020	Unquoted equity instruments $ 952,645 423,391 (583,590)
	$ 792,446
	$ 1,022,688 (70,043)
	$ 952,645

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

4) Quantifies 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-equity investments without an active market	Valuation tech- nique Comparative listed company	Significant unobservable inputs ・Multipliers of price-to-earn- ings ratios as of December 31, 2021 and December 31, 2020 was all 9.45~20.31 and 15.62~17.80, respec- tively ・Multipliers of price-book ratios as of December 31, 2020 were 1.38 ・Market liquidity discount rate as of 20%	Inter-relationship between significant unobservable in- puts and fair value measure- ment
			・the estimated fair value would have been higher if the price-to-earnings and price-book ratios would be higher. ・the estimated fair value would have been higher if the market liquidity dis- count 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, 2021 Financial assets fair value through other comprehensive income Equity investments without an active market December 31, 2020 Financial assets fair value through other comprehensive income Equity investments without an active market	Input Liquidity discount at 20% Liquidity discount at 20%	Move up or down 1% 1%	Other comprehensive in- come	Other comprehensive in- come
			Favorable $ 9,904 $ 11,912	Unfavorable
				(9,904) (11,912)

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.

(aa) 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.

(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 un-

146

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dertakes 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, each constituting 26% of the total amount of the receivables as of December 31, 2021, and 2020.

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, 2021 and 2020, 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.

(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, USD, EUR, JPY and CNY.

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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, USD, EUR, 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.

(ab) 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, 2021 $ 12,705,945 20,123,818 $ 32,829,763 39%	December 31, 2020
		13,409,723 15,858,659
		29,268,382
		46%

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

(ac) 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, 2021 and 2020.

(ad) Reconciliation of liabilities arising from financing activities

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

follows:
Long-term borrowings (includ- ing current portion) Other long-term borrowings Short-term borrowings Lease liabilities Total liabilities from financing activities	January 1, 2021 $ 4,463,864 349,341 3,789,276 632,090 $ 9,234,571	Cash flows (1,682,714) - 299,003 (145,875) (1,529,586)	Non-cash changes Foreign exchange movement Amortization of commer- cial paper discount Others (27,218) - - - 581 - (81,914) - - (12,142) 3,463 8,747 (121,274) 4,044 8,747		December 31, 2021
			Foreign exchange movement (27,218) - (81,914) (12,142) (121,274)	Amortization of commer- cial paper discount - 581 - 3,463 4,044
					2,753,932 349,922 4,006,365 486,283
					7,596,502

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Long-term borrowings (includ- ing current portion) Other long-term borrowings Short-term borrowings Lease liabilities Total liabilities from financing activities	January 1, 2020 $ 4,959,940 349,287 4,729,148 861,631 $ 10,900,006	Cash flows (446,716) - (867,094) (173,607) (1,487,417)	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 (49,360) - - - 54 - (72,778) - - (2,479) 6,775 (60,230) (124,617) 6,829 (60,230)
			Foreign exchange movement	Amortization of commer- cial paper discount - 54 - 6,775 6,829
			(49,360) - (72,778) (2,479)
			(124,617)

<7> Related-party transactions

(a) Parent company and ultimate controlling party

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

(b) Names and relationship with related parties

In this 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 ARLANXEO-TSRC (Nantong) Chemical Industries Co., The Group recognized associates under equity method

ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.

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:

2021 6,837	2020
	5,805

Associates

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

(ii) Purchases

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

Other related parties	2021 $ 304,804	2020
		102,188

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:

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Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. Joint ventures Indian Synthetic Rubber Private Limited Others joint ventures Other related parties Others related parties Lease －Rent income Other related parties	2021 $ 155,442 71,256 7,263 (15,357) $ 218,604 2021 $ 4,472

(iv) Lease －Rent income
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 Other receivables Other receivables	Type of relatedparties	December 31, 2021 $ 29,013 18,192 733 $ 47,938	December 31, 2020
	Associates ARLANXEO-TSRC (Nantong) Chemical In- dustries Co., Ltd. Joint ventures Indian Synthetic Rubber Private Limited Others		22,154 17,183 235
			39,572

(vi) Payables to related parties

The details of the Group's payables to related parties were as follows:

Account Type of relatedparties December 31, 2021 Accounts payable Other related parties $ 1,316 Other payables Other related parties 1,817 $ 3,133 Guarantees The credit limits of the guarantees the Group had provided to the bank for related parties December 31, 2021 Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. $ 500,576 Joint ventures Indian Synthetic Rubber Private Limited 922,077 $ 1,422,653	Account Type of relatedparties December 31, 2021 Accounts payable Other related parties $ 1,316 Other payables Other related parties 1,817 $ 3,133 Guarantees The credit limits of the guarantees the Group had provided to the bank for related parties December 31, 2021 Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. $ 500,576 Joint ventures Indian Synthetic Rubber Private Limited 922,077 $ 1,422,653	December 31, 2020
		- 1,226
		1,226
		were as follows: December 31, 2020 1,577,416 949,316 2,526,732
	$ 1,422,653

(vii) Guarantees

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

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

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

(d) Key management personnel transactions

The compensation of the key management personnel comprised the following:

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

2021 $ 140,150 1,225	2020 117,037 1,186 118,223
$ 141,375

Short-term employee benefits Post-employment benefits

<8> Pledged assets

The carrying values of pledged assets were as follows:

Pledged assets Object December 31, 2021 Restricted savings deposits (recorded as other non-current assets) Bank guarantee for elec- tricity usage $ 1,153 Machinery etc. (recorded as property, plant and equipment) Guarantee for long-term borrowings 148,688 $ 149,841 Commitments and contingencies (a) The unused letters of credit outstanding December 31, 2021 The Group's unused letters of credit outstanding $ 842,971 (b) Total amounts and the cumulative payments of group’s signed construction and design vendors as follows: December 31, 2021 Total amounts of construction in progress contracts $ 377,273 Cumulative payments $ 305,883	Pledged assets Object December 31, 2021 Restricted savings deposits (recorded as other non-current assets) Bank guarantee for elec- tricity usage $ 1,153 Machinery etc. (recorded as property, plant and equipment) Guarantee for long-term borrowings 148,688 $ 149,841 Commitments and contingencies (a) The unused letters of credit outstanding December 31, 2021 The Group's unused letters of credit outstanding $ 842,971 (b) Total amounts and the cumulative payments of group’s signed construction and design vendors as follows: December 31, 2021 Total amounts of construction in progress contracts $ 377,273 Cumulative payments $ 305,883	December 31, 2020
		1,173 269,284
		270,457
		December 31, 2020
		1,284,162
		contracts with several December 31, 2020
		2,851,593
	$ 305,883	2,342,971

<9> Commitments and contingencies

(a) The unused letters of credit outstanding
(b) Total amounts and the cumulative payments of group’s signed construction and design contracts with several vendors as follows:

<10> Losses Due to Major Disasters: None.

<11> Subsequent Events: None.

<12> Other

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

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

By function Year ended December 31, 2021 Year ended December 31, 2020
Operating Operating Total Operating Operating Total
By nature costs expenses costs expenses
Employee benefits
Salary 904,453 683,656 1,588,109 777,728 625,709 1,403,437
Labor and health insurance 91,960 59,449 151,409 83,687 56,970 140,657
Pension 71,396 31,866 103,262 29,323 24,844 54,167
Others (note 1) 226,863 160,722 387,585 152,379 78,107 230,486
Depreciation (note 2) 929,625 143,418 1,073,043 814,422 189,713 1,004,135
Amortization 7,096 115,476 122,572 5,256 132,297 137,553
----- End of picture text -----

Note1： Other personnel expenses included meals, employee welfare, training expenses and employees' bonus. Note2： Depreciation expenses excluded expenses for investment property recognized under other income and expenses, amounting to $14,725 thousand and $14,726 thousand for the years ended December 31, 2021 and 2020 respectively.

(b) To comply with the policy, Shen Hua signed a relocation compensation contract with Nantong Management Office and Nantong Nengda on December 4, 2021. It also signed an investment agreement for its new factories with Nantong Management Office at the compensated amount of CNY 479,677 thousand. Following the agreement schedule, Shen Hua will return the right to use the land after moving and demolishing its immovable assets in 2024. As for the movable assets, they will be transported to the new factories for further operation. For the year ended December 31, 2021, the Group recognized provision for demolition and relocation amounting to NTD 241,779 thousand.

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<13> Other disclosures

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(a) Information on significant transactions:

The following is the information on significant transactions required by the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" for the Group for the years ended December 31, 2021:

(i) Loans to other parties:

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

Highest
balance of
No Name of Name of Financial statement Related financing to Ending bal-
lender borrower account party other parties ance
during the
year
1 TSRC (Shanghai) Indus- TSRC (Nantong) Loan Yes 231,631 230,264
tries Ltd. Industries Ltd.
2 Polybus Corporation Pte TSRC Account receiv- Yes 684,744 664,560
Ltd able-related parties
3 TSRC (Hong Kong) Lim- TSRC Account receiv- Yes 171,186 166,140
ited able-related parties
4 TSRC (Hong Kong) Lim- TSRC (Vietnam) Co., Account receiv- Yes 110,760 110,760
ited Ltd. able-related parties
5 TSRC Specialty Materials TSRC (USA) Invest- Account receiv- Yes 427,965 415,350
LLC ment Corporation able-related parties
----- End of picture text -----

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

Note 2: The maximum loan extended to all parties should not be over 40% of total equity. However, if the counterparty is a subsidiary 100.00% 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 .

Note 3:The fund of loan and the loan to the other party are 100.00% owned by TSRC.

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

Note 5: 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".

Note 6: The transactions within the Group were eliminated in the consolidated financial statements.

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

Counter-party of guarantee and endorsement
Limitation on Highest balance
Name amount of for guarantees Ending balance of
No. of com-pany Name Relationship with the endorsements for guarantees and and endorse-ments during guarantees and endorsements
company one party the year
TSRC (USA) Investment Cor- 830,700
0 TSRC 4 (Note2) 835,980
poration (Note4)
0 TSRC ARLANXEO-TSRC (Nantong) 6 (Note2) 1,561,828 500,576
Chemical Industries Co., Ltd. (Note4)
0 TSRC Indian Synthetic Rubber 6 (Note2) 950,082 922,077
Private Limited
0 TSRC TSRC (Vietnam) Co., Ltd. 4 (Note2) 631,287 628,563
0 TSRC TSRC Specialty Materials LLC 4 (Note2) 285,310 276,900
----- 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.

152

Unit: thousand NTD

==> picture [484 x 230] intentionally omitted <==

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

Collateral
Purposes of Transaction amount for Reasons for Allowance limit for each Financing Maximum
tually drawnAmount ac- Range of in-terest rates fund financ-ing for the borrowers between business short-term financing for bad debt Item Value company (Note borrowing financing limit for the lender (Note 2)
two parties 1)
- 3.698% 2 - Operating - - 176,149 352,298
capital
- 0.288% 2 - Operating - - 4,570,861 9,141,721
capital
- 0.284% 2 - Operating - - 1,836,168 3,672,336
capital
- 0 2 - Operating - - 1,836,168 3,672,336
capital
235,365 0.12%~ 2 - Operating - - 1,181,518 2,363,035
0.33% capital
----- End of picture text -----

Unit: thousand NTD

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

actually drawnAmount guarantees and pledged on Property amounts of guarantees and endorsements to Ratio of accumulated Maximum allow-able amount for Parent company endorsement / guarantees to endorsement / guarantees to Subsidiary third parties on Endorsements/ guarantees to
endorsements net worth of the latest guarantees and third parties on be- third parties on behalf of compa-
(Amount) financial statements endorsements half of subsidiary behalf of parent ny in Mainland
company China
107,991 - 4.61% (Note3) Y
13,103 - 2.78% (Note3) Y
491,498 - 5.12% (Note3)
382,122 - 3.49% (Note3) Y
118,064 - 1.54% (Note3) Y
----- End of picture text -----

153

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(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 $10,815,570 thousand. Note 3: The aggregate amount of guarantee by the Company is limited to 1.5 times its stockholders' equity, amounting to $27,038,925 thousand.

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

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

Nature and name Relationship
Name of holder with the securi- Account name
of security
ty issuer
TSRC Evergreen Steel Corporation - Financial assets at fair value through other
comprehensive income －non-current
TSRC Thai Synthetic Rubbers Co., - Financial assets at fair value through other
Ltd. comprehensive income －non-current
TSRC Hsin-Yung Enterprise Corpora- - Financial assets at fair value through other
tion comprehensive income －non-current
Dymas Corpo-ration Thai Synthetic Rubbers Co., Ltd. - Financial assets at fair value through other comprehensive income －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.

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

Name of Transaction Acquisition Book Transaction
company Type of property date date value amount
TSRC Kaohsiung City, Renwu district's land and 2021.03.11 1999.07.29 201,665 1,220,000
property
----- End of picture text -----

(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.A R.L. TSRC Parent and subsidiary companies
TSRC TSRC (Lux.) Corporation S.A R.L. Parent and subsidiary companies
TSRC Specialty Materials LLC TSRC Parent and subsidiary companies
TSRC TSRC Specialty Materials LLC Parent and subsidiary companies
A director of TSRC-UBE (Nantong)
TSRC-UBE (Nantong) Industries Ltd. Marubeni Corporation Industries Ltd.
Shen Hua Chemical Industries Co., A director of Shen Hua Chemical
Ltd. Marubeni Corporation Industries Co., Ltd.
----- End of picture text -----

154

Unit: thousand NTD

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

Ending balance Maximum
Number of shares Book value Holding percent-age Market value investment in 2021 Remarks
12,148,000 668,140 2.89% 668,140 209,878
599,999 171,869 5.42% 171,869 65,143
5,657,000 380,660 3.90% 380,660 64,296
837,552 239,917 7.57% 239,917 52,865
1,460,586 1,460,586 392,182
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Unit: thousand NTD

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

Amount actually receivable Gain from disposal Counter-party relationshipNature of Purpose of disposal Price reference Other terms
According to the signing contract of the sale and 909,118 CHEN TA HSIUNG DEVELOPMENT Non-relat- activates its Appraisal of real None
ed parties assets estate report
purchase of real estate CO., LTD.
----- End of picture text -----

Unit: thousand NTD

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

Status and reason for
Transaction details deviation from arm's- Account / note receivable (payable)
length transaction Re-
Purchase / Sale Amount of total pur-Percentage Credit period Unit price [Credit peri-] od Balance accounts / notes receiv-Percentage of total marks
chases / sales able (payable)
Purchase 282,161 11.35% 70 days - (71,287) (13.41)%
Sale (282,161) (2.53)% 70 days - 71,287 4.44%
Purchase 298,138 10.78% 70 days - (94,756) (28.12)%
Sale (298,138) (2.67)% 70 days - 94,756 5.90%
Purchase 127,037 6.28% 14days - 1,315 1.08%
Purchase 177,767 3.11% 14days - - -
----- End of picture text -----

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Name of company	Counter-party	Relationship
Polybus Corporation Pte Ltd	TSRC (Nantong) Industries Ltd.	Related parties
TSRC (Nantong) Industries Ltd.	Polybus Corporation Pte Ltd	Related parties
Polybus Corporation Pte Ltd	Shen Hua Chemical Industries Co., Ltd.	Related parties
Shen Hua Chemical Industries Co., Ltd.	Polybus Corporation Pte Ltd	Related parties
TSRC (Lux.) Corporation S.A R.L.	TSRC Specialty Materials LLC	Related parties
TSRC Specialty Materials LLC	TSRC (Lux.) Corporation S.A R.L.	Related parties
TSRC (Lux.) Corporation S.A R.L.	TSRC (Nantong) Industries Ltd.	Related parties
TSRC (Nantong) Industries Ltd.	TSRC (Lux.) Corporation S.A R.L.	Related parties

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

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

Name of related party Counter-party Relationship
TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.A R.L. Related parties
TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.A R.L. Related parties
TSRC Specialty Materials LLC TSRC (USA) Investment Corporation Related parties
----- End of picture text -----

Note 1: Transactions within the Group were eliminated in the consolidated financial statements. Note 2: Until March 10, 2022.

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

(x) Business relationships and significant intercompany transactions:

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

Name of counter Existing
No. Name of Company relationship with
party
the counter-party
0 TSRC TSRC (Nantong) Industries Ltd. 1
0 TSRC TSRC (Nantong) Industries Ltd. 1
0 TSRC TSRC (Lux.) Corporation S.A R.L. 1
0 TSRC TSRC (Lux.) Corporation S.A R.L. 1
0 TSRC Polybus Corporation Pte Ltd 1
0 TSRC TSRC Specialty Materials LLC 1
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156

Transaction details	Transaction details	Transaction details	Transaction details	Status and reason for deviation from arm's- length transaction	Status and reason for deviation from arm's- length transaction	Account / note receivable (payable)	Account / note receivable (payable)
Purchase / Sale	Amount	Percentage of total pur- chases / sales	Credit period	Unit price	Credit peri- od	Balance	Percentage of total accounts / notes receiv- able (payable)
Purchase	254,450	38.20%	40days	-		(53,175)	(38.32)%
Sale	(254,450)	(4.48)%	40days	-		53,175	6.97%
Purchase	367,934	55.24%	40days	-		(72,975)	(52.10)%
Sale	(367,934)	(4.59)%	40days	-		72,975	4.86%
Purchase	655,296	26.36%	90 days	-		(165,389)	(31.12)%
Sale	(655,296)	(15.33)%	90 days	-		165,389	28.82%
Purchase	1,545,396	62.15%	70 days	-		(303,804)	(57.16)%
Sale	(1,545,396)	(27.22)%	70 days	-		303,804	39.83%

Unit: thousand NTD

holders' equity or the price of the Company's securities

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Overdue amount
Amounts received in Allowances
Balance of receivables Turnover
from related party rate Amount Action taken subsequent period(Note 2) for bad debts
303,804 7.78 - 214,637 -
165,389 6.13 - 119,595 -
235,365 - - 235,365 -
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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 99,611 The transaction is not significantly different from normal trans- 0.31%
actions, and the collection terms were about two months
Other income and 71,580 〃 0.22%
expenses
Sales revenue 282,161 〃 0.87%
Accounts receivable 71,287 〃 0.22%
Sales revenue 43,319 〃 0.13%
Sales revenue 298,138 〃 0.92%
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157

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Name of counter Existing
No. Name of Company relationship with
party
the counter-party
0 TSRC TSRC Specialty Materials LLC 1
0 TSRC TSRC (Nantong) Industries Ltd. 1
1 TSRC (Nantong) Industries Ltd. TSRC 2
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. Polybus Corporation Pte Ltd 3
1 TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.A R.L. 3
1 TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.A R.L. 3
1 TSRC (Nantong) Industries Ltd. TSRC-UBE (Nantong) Industries Ltd. 3
1 TSRC (Nantong) Industries Ltd. TSRC Specialty Materials LLC 3
2 TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.A R.L. 3
2 TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.A R.L. 3
3 Shen Hua Chemical Industries Co., Ltd. Polybus Corporation Pte Ltd 3
3 Shen Hua Chemical Industries Co., Ltd. Polybus Corporation Pte Ltd 3
4 TSRC (Lux.) Corporation S.A R.L. TSRC 2
2 TSRC Specialty Materials LLC TSRC (USA) Investment Corporation 3
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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： The transactions within the Group were eliminated in the consolidated financial statements.

(b) Information on investees:

The following is the information on investees for the year ended December 31, 2021 (excluding information on investees in Mainland China):

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Name of inves-
tor 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
TSRC Dymas Corpora-tion Palm Grove House, P.O.BOX 438, Road Town, Tortola B.V.I Investment corporation
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158

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Transaction details
Percentage of the total
Account name Amount Trading terms consolidated revenue
or total assets
Accounts receivable 94,756 〃 0.29%
Other income and 59,317 The transaction is not significantly different from normal trans- 0.18%
expenses actions, and the collection terms were about six months
Sales revenue 33,710 The transaction is not significantly different from normal trans- 0.10%
actions, and the collection terms were about two months
Sales revenue 53,730 〃 0.17%
Sales revenue 254,450 〃 0.78%
Accounts receivable 53,175 〃 0.16%
Sales revenue 1,545,396 〃 4.75%
Accounts receivable 303,804 〃 0.93%
Other income and 251,620 〃 0.77%
expenses
Sales revenue 36,101 〃 0.11%
Sales revenue 655,296 The transaction is not significantly different from normal transac- 2.01%
tions, and the collection terms were about three months
Accounts receivable 165,389 〃 0.50%
Sales revenue 367,934 The transaction is not significantly different from normal trans- 1.13%
actions, and the collection terms were about two months
Accounts receivable 72,295 〃 0.22%
Other income and 47,403 The transaction is not significantly different from normal trans- 0.15%
expenses actions, and the collection terms were about six months
Entrusted loans 235,365 The transaction is not significantly different from normal trans- 0.72%
actions, and the collection terms were about three months
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Unit: thousand NTD/thousand USD/thousand EUR

Original cost	Original cost	Ending balance	Ending balance	Ending balance	Maximum investment amount in 2021	Net income (loss) of investee	Invest- ment income (loss)	Remarks
December 31, 2021	December 31, 2020	Shares	Percentage of ownership	Book value
1,005,495	1,005,495	86,920,000	100.00%	14,810,412	1,005,495	2,249,887	2,249,887	Subsidiary
109,442	109,442	3,896,305	100.00%	666,055	109,442	16,980	16,980	Subsidiary
38,376	38,376	1,161,004	19.48%	141,941	38,376	24,112	4,697	Subsidiary (note 2)

159

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Name of inves-
tor Name of investee Address Scope of business
Production and processing of
8 VSIP II A Street 31, Vietnam Singapore In-
TSRC (Vietnam) rubber color masterbatch, ther-
TSRC dustrial Park II A, Tan Uyen Town, Binh Duong
Co., Ltd. moplastic elastomer and plastic
Province, Vietnam
compound products
Trimurti Holding Polybus Corpora- International commerce and
Corporation tion Pte Ltd 100 Peck Seah Street #09 16 Singapore 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
Trimurti Holding Rubber Private Room No.702, Indian Oil Bhawan, 1 Sri Aurob- Production and sale of synthetic
Corporation Limited indo Marg, Yusuf Sarai, New Delhi 110016, India rubber products
TSRC (Hong TSRC (Lux.) Corpo- International commerce and
Kong) Limited ration S.A R.L. 39-43 avenue de la Liberte L 1931 Luxembourg investment corporation
TSRC (Lux.) Cor- TSRC (USA) Invest- 2711 Centerville Road, Suite 400, Country of
Investment corporation
poration S.A R.L. ment Corporation New Castle, Wilmington, Delaware. ,19808.
TSRC (USA)
Investment Cor- TSRC Specialty 12012 Wickchester Lane, Suite 280, Houston, Production and sale of TPE
Materials LLC TX77079
poration
Hardison Inter- Triton Internation-
Palm Grove House, P.O.BOX 438, Road Town,
national Corpo- al Holdings Cor- Tortola B.V.I Investment corporation
ration poration
Hardison Inter-
Dymas Corpora- Palm Grove House, P.O.BOX 438, Road Town,
national Corpo- tion Tortola B.V.I Investment corporation
ration
Asia Pacific Energy Consulting for electric power
Dymas Corpora-
tion Development Co., Cayman Islands facilities management and elec-
Ltd. trical 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 NTD27.690; EUR1 to NTD31.3035).

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

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

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Method of in- Cumulative investment
Name of investee
in Mainland China Scope of business Issued capital vestment (Note (amount) from Taiwan
1) as of January 1, 2021
Shen Hua Chemical In- Production and sale of synthetic 1,141,832 -
(2)a.
dustries Co., Ltd. rubber products (USD41,220)
Changzhou Asia Pacific Power generation and sale of 639,639 106,108
(2)c.
Co-generation Co., Ltd. electricity and steam (USD23,100) (USD3,832)
TSRC (Shanghai) Indus- Production and sale of com- 152,295 108,545
(2)b.
tries Ltd. pounding materials (USD5,500) (USD3,920)
Nantong Qix Storage Storehouse for chemicals 83,070 (2)d. 41,535
Co., Ltd. (USD3,000) (USD1,500)
TSRC-UBE (Nantong) Production and sale of synthetic 1,107,600 27,690
Chemical Industrial Co., (2)a.
Ltd. rubber products (USD40,000) (USD1,000)
TSRC (Nantong) Indus- Production and sale of TPE 2,910,911 (2)a. 184,083
tries Ltd. (USD105,125) (USD6,648)
ARLANXEO-TSRC (Nan-
tong) Chemical Indus- Production and sale of NBR 1,240,512 (2)a. -
(USD44,800)
tries Co., Ltd.
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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.

160

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Original cost Ending balance Maximum Net income Invest-
investment ment
December 31, 2021 December 31, 2020 Shares of ownershipPercentage Book value amount in 2021 investee(loss) of income(loss) Remarks
342,742 278,280 - 100.00% 215,455 342,742 (40,674) (40,674) Subsidiary
Indirectly
1,802,647 1,802,647
105,830,000 100.00% 9,141,721 1,802,647 1,297,441 1,297,441 owned
(USD65,101) (USD65,101)
subsidiary
Indirectly
2,875,607 2,875,607
103,850,000 100.00% 3,672,336 2,875,607 364,704 364,704 owned
(USD103,850) (USD103,850)
subsidiary
816,107 816,107
222,861,375 50.00% 1,130,197 816,107 1,207,138 603,569 -
(USD29,473) (USD29,473)
Indirectly
2,343,681 2,343,681
74,869,617 100.00% 2,911,736 2,343,681 285,684 285,684 owned
(EUR74,870) (EUR74,870)
subsidiary
Indirectly
2,659,625 2,659,625
130 100.00% 2,762,795 2,659,625 163,233 163,233 owned
(USD96,050) (USD96,050)
subsidiary
Indirectly
6,053,505 6,053,505 - 100.00% 2,363,035 6,053,505 321,142 321,142 owned
(USD218,617) (USD218,617)
subsidiary
Indirectly
1,385 1,385
50,000 100.00% 56,136 1,385 (2,368) (2,368) owned
(USD50) (USD50)
subsidiary
Indirectly
132,884 132,884
4,798,566 80.52% 608,022 132,884 24,112 19,415 owned
(USD4,799) (USD4,799)
subsidiary
312,482 312,482
7,522,337 37.78% 339,063 312,482 44,847 16,943 -
(USD11,285) (USD11,285)
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Unit: thousand NTD/thousand USD

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Investment flow during Cumulative Direct /
current period investment Net income indirect Maximum Investment Accumulated
remittance of
Remit-tance triation Repa- Taiwan as of De-(amount) from investee(loss) of investment holding investment in 2021 income (loss) Book value current periodearnings in
amount amount cember 31, 2021 percentage
- - - 1,002,175 65.44% 747,215 655,824 2,371,007 4,786,340
(Note2)
- - 106,108 135,274 28.34% 181,274 38,337 338,468 358,308
(USD3,832) (Note3)
- - 108,545 89,300 100.00% 152,295 89,300 352,298 -
(USD3,920) (Note2)
- - 41,535 (4,642) 50.00% 41,535 (2,321) 55,819 74,060
(USD1,500) (Note2)
- - 27,690 415,589 55.00% 609,180 228,574 1,043,614 -
(USD1,000) (Note2)
- - 184,083 276,512 100.00% 2,910,911 276,512 4,302,489 440,864
(USD6,648) (Note2)
- - - 367,700 50.00% 620,256 183,850 505,494 -
(Note3)
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161

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(4) Other methods: EX: delegated investments.

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

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

Note 4: Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD27.690). 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, 2021	Investment (amount) approved by Investment Commission, Ministry of Economic Affairs	Maximum investment amount set by Investment Commission, Ministry of Economic Affairs
TSRC	467,961 (USD16,900)	5,187,306 (USD187,335) (Note2)	- (Note1)

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 18, 2021. As it has an operational headquarters status, the Company is not subject to the limitation as to the amount of investment in Mainland China during the period from August 12, 2021 to August 11, 2024.

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 NTD27.690).

(iii) Significant transactions:

Related information is provided in note 13(a)x.

(d) Major shareholders:

Shareholding Shareholder’s Name	Shares	Percentage
Panama Banco industrial company	69,524,417	8.41%
Han-De Construction Co.,Ltd.	63,093,108	7.64%
Wei Dah Development Co., Ltd.	53,708,923	6.50%

<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. 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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Synthetic rubber $ 31,440,852 24,125	2021	2021
	Non-syn- thetic rubber
	1,092,386 5,546
$ 31,464,977	1,097,932
$ 101,319	9,422
$ 1,083,837	111,778
$ 787,419	-
$ 4,638,104	7,821
$ -	-
Synthetic rubber $ 23,173,891 40,734 $ 23,214,625 $ 117,527 $ 1,074,551 $ 230,745 $ 354,059 $ -
	Non-syn- thetic rubber 850,552 2,273 852,825 12,522 67,137 - 31,928 -	Others - 3,916 3,916 (6,480) 14,726 70,763 134,684 -

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	2021 $ 13,941,357 3,924,935 2,785,420 1,978,784 1,686,829 1,403,295 684,196 6,128,422 $ 32,533,238 December 31, 2021 $ 6,836,200 4,576,866 1,605,206 603,801 $ 13,622,073	2020
Revenue from external customers: China United States Taiwan Vietnam Thailand Germany Japan Other countries Total Geographical information		10,641,719 3,077,921 3,027,958 892,179 1,040,894 1,138,521 454,114 3,751,137
		24,024,443
		December 31, 2020
Non-current assets: China Taiwan United States Other countries Total		6,973,873 4,734,394 1,881,946 695,672
		14,285,885

Non-current assets include 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 2021 and 2020, the Group had no major customer who constituted 10% or more of net sales.

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

Opinion

We have audited the parent company only financial statements of TSRC Corporation, which comprise the balance sheets as of December 31, 2021 and 2020, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies. In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the TSRC Corporation as of December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

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

1. Revenue recognition

Please refer to note 4(q) and 6(t) 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.

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:

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and analyzing its changes; obtaining the documents of inventory measurement and evaluating whether if the bases used for net realizable value is reasonable; selecting samples and verifying them with the vouchers to test the accuracy of the amount; and reviewing whether the disclosure of inventory measurement made by the management is appropriate.

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

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

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

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

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

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

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.

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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 parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partners on the audit resulting in this independent auditors’ report are Ming-Hung Huang and Lin Wu.

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

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TSRC CORPORATION

Balance Sheets

December 31, 2021 and 2020December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2021	December 31, 2021	December 31,	2020
Amount	%	Amount	%
$ 140,115 713 1,857 1,398,583 203,040 202,063 - 1,670,515 193,123	1 - - 5 1 1 - 7 1	134,602 3,460 2,342 945,414 87,273 117,821 12,151 1,483,926 342,902	1 - - 4 - 1 - 7 2
3,810,009	16	3,129,891	15
1,220,669 15,833,863 2,866,238 43,833 1,552,148 69,112 28,187 21,521	5 62 11 - 6 - - -	838,235 13,644,962 2,978,757 43,131 1,566,873 65,098 67,126 41,250	4 61 13 - 7 - - -
21,635,571	84	19,245,432	85

$ 25,445,580 100 22,375,323 100

Total assets

See accompanying notes to parent company only financial statements.

Chief Accountant: Hsing-Jung Lin

Chairman:Nita Ing

Manager:Joseph Chai

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December 31, 2021 Amount % $ 2,205,053 9 400,000 2 93 - 789,029 3 33,039 - 726,615 3 38,323 - 33,550 -	December 31, 2021 Amount % $ 2,205,053 9 400,000 2 93 - 789,029 3 33,039 - 726,615 3 38,323 - 33,550 -	December 31,
	%	Amount
	9 2 - 3 - 3 - -	2,697,482 2,100,000 81 674,118 12,201 509,913 29,417 14,639
4,225,702	17	6,037,851
1,745,756 349,922 27,757 959,693 6,124 104,676	7 1 - 4 - -	973,718 349,341 31,819 739,404 15,034 89,036
3,193,928	12	2,198,352
7,419,630	29	8,236,203
8,257,099	32	8,257,099
50,725	-	49,531
4,073,680 5,080,942	16 20	4,068,862 1,483,970
9,154,622	36	5,552,832
(456,708) 1,047,059 (26,847)	(2) 5 -	(198,125) 558,902 (81,119)
563,504	3	279,658
18,025,950	71	14,139,120
$ 25,445,580	100	22,375,323

See accompanying notes to parent company only financial statements.

Chief Accountant: Hsing-Jung Lin

Chairman:Nita Ing

Manager:Joseph Chai

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TSRC CORPORATION

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Share)

2021 Amount $ 11,150,474 8,950,930		2020
	%	Amount	%
	100 80	8,344,155 7,865,980	100 94
2,199,544 27,755	20 -	478,175 (11,712)	6 -
2,171,789	20	489,887	6
609,388 526,203 263,947 (455)	5 5 2 -	342,250 441,427 264,001 (138)	4 5 3 -
1,399,083	12	1,047,540	12
321,475	3	210,685	2
1,094,181	11	(346,968)	(4)
5,107 59,252 1,011,054 (59,273) 2,230,890	- 1 9 (1) 20	6,503 56,878 5,956 (78,788) 438,275	- 1 - (1) 5
3,247,030	29	428,824	5
4,341,211 410,272	40 4	81,856 103,747	1 1
3,930,939	36	(21,891)	-
(31,893) 382,434 127,068 21,345	- 3 1 -	(14,247) 20,122 (87,991) -	- - (1) -
456,264	4	(82,116)	(1)
(258,583) 54,272 -	(2) - -	(221,508) (593) -	(3) - -
(204,311)	(2)	(222,101)	(3)
251,953	2	(304,217)	(4)
$ 4,182,892	38	(326,108)	(4)
$	4.76		(0.03)
$	4.73		(0.03)

See accompanying notes to parent company only financial statements.

Chief Accountant: Hsing-Jung Lin

Chairman:Nita Ing

Manager:Joseph Chai

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Common stock $ 8,257,099 - - - - -	Capital surplus	Capital surplus	Capital surplus
		Legal reserve
	47,140 - - 2,391 - -	3,977,141 91,721 - - - -	1,940,361 (91,721) (412,855) - (21,891) (14,247)
-	-	-	(36,138)
-	-	-	84,323
8,257,099 - - - - -	49,531 - - 1,194 - -	4,068,862 4,818 - - - -	1,483,970 (4,818) (297,256) - 3,930,939 (31,893)
-	-	-	3,899,046
$ 8,257,099	50,725	4,073,680	5,080,942

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(Expressed in Thousands of New Taiwan Dollars)

Total other equity interest

Financial statements translation differences for foreign operations	Unrealized gains (loss- es) on financial assets measured at fair value through other compre- hensive incom	Gains (losses) on effec- tive portion of cash flow hedges	Total	Total equity
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) - - - - (258,583)	558,902 - - - - 488,157	(81,119) - - - - 54,272	279,658 - - - - 283,846	14,139,120 - (297,256) 1,194 3,930,939 251,953
(258,583)	488,157	54,272	283,846	4,182,892
(456,708)	1,047,059	(26,847)	563,504	18,025,950

See accompanying notes to parent company only financial statements.

Chief Accountant: Hsing-Jung Lin

Chairman:Nita Ing

Manager:Joseph Chai

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TSRC CORPORATION

Statements of Cash Flows

For the years ended December 31, 2021 and 2020 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Net income before tax Adjustments: Adjustments to reconcile profit and loss: Depreciation Amortization Impairment loss (reversal of impairment loss) determined in accordance with IFRS 9 Interest expense Interest income Dividend income Share of profit of subsidiaries accounted for under equity method Gain on disposal of property, plant and equipment Unrealized gain (loss) on affiliated transactions Amortization to operating costs and inventories Unearned revenue from technology provided to investee Total adjustments to reconcile profit and loss Changes in operating assets and liabilities: Net changes in operating assets: Financial assets at fair value through profit or loss Notes receivable Accounts receivable Accounts receivable －related parties Other receivables Inventories Other current assets Total changes in operating assets, net Net changes in operating liabilities: Financial liabilities at fair value through profit or loss Accounts payable Other payables Other current liabilities Net defined benefit liability Other non-current liabilities Total changes in operating liabilities, net Total changes in operating assets and liabilities, net	2021 $ 4,341,211	2020
		81,856
	300,450 20,108 (455) 59,273 (5,107) (59,252) (2,230,890) (1,011,238) 27,755 31,639 (2,608)	321,969 20,418 (138) 78,788 (6,503) (56,878) (438,275) - (11,712) 34,096 (53,496)
	(2,870,325)	(111,731)
	2,747 485 (452,714) (115,767) (84,469) (186,589) 20,480	(3,446) 320 4,192 27,198 50,868 730,153 28,727
	(815,827)	838,012
	12 114,911 219,729 18,911 (16,086) (167)	(147) (192,245) (104,719) (15,699) (54,978) 5,135
	337,310	(362,653)
	(478,517)	475,359

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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 comprehen- sive income Acquisition of investments accounted for under equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in other non-current assets Dividends received Decrease (increase) in restricted assets Net cash flows from investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Payment of lease liabilities Cash dividends paid Over-aging unclaimed dividends Net cash used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2021 (3,348,842)
	992,369 5,334 (59,246) (139,401)
	799,056
	- (64,462) (385,596) 1,213,830 19,729 59,252 129,299
	972,052
	18,098,954 (18,591,383) 1,673,109 (2,601,071) (49,157) (297,241) 1,194
	(1,765,595)
	5,513 134,602
	$ 140,115

See accompanying notes to parent company only financial statements.

Chief Accountant: Hsing-Jung Lin

Chairman:Nita Ing

Manager:Joseph Chai

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TSRC CORPORATION

Notes to the Financial Statements

For the years ended December 31, 2021 and 2020(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

<1> Company history

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

<2> Approval date and procedures of the financial statements

The parent company only financial statements were approved by the Board of Directors and published on March 10, 2022.

<3> New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.
The Company has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:
[Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”]
[Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform －Phase 2”]
The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from April 1, 2021:
[Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”]
(b) The impact of IFRS issued by the FSC but not yet effective
The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its financial statements:
[Amendments to IAS 16 “Property, Plant and Equipment －Proceeds before Intended Use”]
[Amendments to IAS 37 “Onerous Contracts －Cost of Fulfilling a Contract”]
[Annual Improvements to IFRS Standards 2018–2020]
[Amendments to IFRS 3 “Reference to the Conceptual Framework”]
(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:

Effective date per IASB

Standards or Interpre-

Content of amendment

tations

Amendments to IAS

January 1, 2023

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

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

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

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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.

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

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

(i) an investment in equity securities designated as at fair value through other comprehensive income;
(ii) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
(iii) qualifying cash flow hedges to the extent that the hedges are effective.
- When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign currency gains and losses arising from such items are considered to form part of a net investment in the foreign operation and are recognized in other comprehensive income, and presented in the translation reserve in equity.
(d) Classification of current and non-current assets and liabilities
(i) An asset is classified as current under one of the following criteria, and all other assets are classified as 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.

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(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.

(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.

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.

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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.

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

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.

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5) Offsetting of financial assets and liabilities

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

6) Financial guarantee contract
- A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder of a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument.
- A financial guarantee contract not designated as at fair value through profit or loss issued by the Company is recognized initially at fair value plus any directly attributable transaction cost. After initial recognition, it is measured at the higher of: (a) the amount of the loss allowance determined in accordance with IFRS 9; and (b) the amount recognized initially less, where appropriate, cumulative amortization recognized in accordance with the IFRS 15.
(iii) Derivative financial instruments

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

(g) Inventories

(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.

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(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.

(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.

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

The estimated useful lives, for the equipment are as follows:	current and
Land improvements	8~30 years
Buildings	3~60 years
Machinery	3~50 years
Furniture and fixtures equipment	3~8 years

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

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(l) Investment property

Investment property is property held either to earn rental income or for capital appreciation, or for both, but not for sale in the ordinary course of business used in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

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

(m) Leases

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

(i) As a leasee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The 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

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payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a lessor

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

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

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

(n) Intangible assets

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

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

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

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 thennet 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 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

(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

(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(k) for further description of the Impairment of intangible assets.

<6> Explanation of significant accounts

(a) Cash and cash equivalents

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

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

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

o note 6(x). inancial assets and liabilities at fair value through profit or loss
Mandatorily measured at fair value through profit or loss: Derivative instruments not used for hedging Forward contracts / Swap contracts Financial liabilities held for trading: Derivative instruments not used for hedging Forward contracts / Swap contracts	December 31, 2021	December 31, 2020 3,460
	$ 713
	December 31, 2021	December 31, 2020 81
	$ 93

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

Forward contracts Swap contracts Swap contracts		December 31, 2021
	Contract amount (thousand dollars) EUR 1,830/ USD 2,081 EUR 1,100/ USD 1,255 JPY 16,411/ USD 144	Currency EUR/USD EUR/USD JPY/USD	Maturity dates
			2022.01.12~2022.03.11 2022.01.12~2022.03.11 2022.01.12

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December 31, 2020	December 31, 2020
Currency Maturity dates EUR/USD 2021.02.19~2021.02.26 NTD/USD 2021.01.15~2021.01.22 －non-current December 31, 2021 December 31, 2020 $ 668,140 - 552,529 838,235 $ 1,220,669 838,235		Maturity dates
	$ 668,140 552,529
	$ 1,220,669		838,235

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

The Company held equity instrument investment for long-term strategic purposes, not held for trading purposes, which have been designated as measured at fair value through other comprehensive income. Due to the financial asset activation, the Company sold the share of Taiwan High-speed Railway Co., Ltd. at the fair value in the 2020, the fair value at that time of disposition was $114,323 thousand and accumulated disposition benefit was $84,323 thousand, the cumulative disposition benefits have been transferred from other equity to retained earnings.

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

Foreign currency amount (thousand dollars) Exchange rate December 31, 2021 THB $ 205,905 0.8347 December 31, 2020 THB 85,768 0.9556 Notes and accounts receivable (including related parties) December 31, 2021 Notes receivable $ 1,857 Accounts receivable 1,399,816 Accounts receivable －related parties 203,040 Less: allowance for impairment 1,233 $ 1,603,480	Foreign currency amount (thousand dollars) Exchange rate December 31, 2021 THB $ 205,905 0.8347 December 31, 2020 THB 85,768 0.9556 Notes and accounts receivable (including related parties) December 31, 2021 Notes receivable $ 1,857 Accounts receivable 1,399,816 Accounts receivable －related parties 203,040 Less: allowance for impairment 1,233 $ 1,603,480	Exchange rate	NTD 171,869 81,960 December 31, 2020 2,342 947,102 87,273 1,688
	$ 1,857 1,399,816 203,040 1,233
	$ 1,603,480		1,035,029

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

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:

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Current 1 to 30 days past due Current		December 31, 2021
	Gross carrying amount	Weighted-average expected credit loss rate
	$ 1,591,657 13,056	0.05%~0.14% 2.44% December 31, 2020
	$ 1,604,713
	Gross carrying amount $ 1,036,717
		Weighted-average expected credit loss rate 0.09%~0.17%

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

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

The Company did not hold any collateral for the collectible amounts. For other credit risk please refers to note 6(x). The carrying amounts of notes and accounts receivable with short maturity are not discounted under the assumption that the carrying amount approximates the fair value.

(e) Other receivables (including related parties)

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

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

(f) Inventories

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

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

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

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

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2021 Loss on (reversal of) decline in market value of inventory $ (69,924) Income from sale of scrap (21,880) Unallocated production overhead 87,509 Total $ (4,295) nvestments accounted for under the equity method The details of the investments accounted for under the equity method were as follows: December 31, 2021 Subsidiaries $ 15,833,863	2021	2020 1,111 (12,063) 166,390
	$ (69,924) (21,880) 87,509
	$ (4,295)	155,438
		December 31, 2020 13,644,962
	$ 15,833,863

(g) Investments accounted for under the equity method

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

As of December 31, 2021 and 2020, 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, 2021 Additions Disposals Reclassification Balance at December 31, 2021 Balance at January 1, 2020 Additions Disposals Reclassification Balance at December 31, 2020 Depreciation and impairment loss: Balance at January 1, 2021 Depreciation Disposal Balance at December 31, 2021 Balance at January 1, 2020 Depreciation Disposal Balance at December 31, 2020 Carrying value: December 31, 2021 December 31, 2020 January 1, 2020	Land $ 821,469 - (201,665) - $ 619,804 $ 614,101 140,061 - 67,307 $ 821,469 $ - - - $ - $ - - - $ - $ 619,804 $ 821,469 $ 614,101	Land improvements 85,030 - - - 85,030 85,030 - - - 85,030 70,264 2,485 - 72,749 67,778 2,486 - 70,264 12,281 14,766 17,252	Buildings
			1,215,684 - - 14,093
			1,229,777
			1,207,726 - - 7,958
			1,215,684
			928,910 29,276 -
			958,186
			898,493 30,417 -
			928,910
			271,591
			286,774
			309,233

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

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

(i) Right-of-use assets

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

Cost: Balance at January 1, 2021 Additions Write-off Amortization to operating cost and inventories Balance at December 31, 2021 Balance at January 1, 2020 Additions Write-off Reclassify to construction in prog ress Amortization to operating cost and inventories Balance at December 31, 2020	$ s $ $ - s $	Land 1,402 641 - - 2,043 95,998 - - (94,596) - 1,402	Building 56,219 10,547 - (4,486) 62,280 56,506 10,258 (3,695) - (6,850) 56,219	Machinery 11,443 36,075 - (27,153) 20,365 38,689 - - - (27,246) 11,443	Transporta- tion equip- ment 3,309 985 (1,070) - 3,224 3,309 - - - - 3,309	Total
						72,373 48,248 (1,070) (31,639)
						87,912
						194,502 10,258 (3,695) (94,596) (34,096)
						72,373

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Machinery 9,367,035 - (64,349) 183,741 9,486,427 9,049,463 - (52,138) 369,710 9,367,035 7,842,890 228,578 (63,422) 8,008,046 7,646,885 248,143 (52,138) 7,842,890 1,478,381 1,524,145 1,402,578	Furniture and fixtures 109,970 - (336) 140 109,774 101,582 - - 8,388 109,970 80,601 9,479 (336) 89,744 70,680 9,921 - 80,601 20,030 29,369 30,902	Leased assets - - - - - - - - - - - - - - - - - - - - -	Prepayments for equip- ment and construction in progress 302,234 384,013 - (222,096) 464,151 353,648 350,038 - (401,452) 302,234 - - - - - - - - 464,151 302,234 353,648

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							Transporta-
							tion equip-
				Land	Building	Machinery	ment	Total
	Accumulated depreciation and
	impairment losses:
	Balance at January 1, 2021	$		561	26,443	-	2,238	29,242
	Depreciation			203	14,636	-	1,068	15,907
	Write-off			-	-	-	(1,070)	(1,070)
	Balance at December 31, 2021	$		764	41,079	-	2,236	44,079
	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
	Carrying value:
	December 31, 2021	$		1,279	21,201	20,365	988	43,833
	December 31, 2020	$		841	29,776	11,443	1,071	43,131
	January 1, 2020	$		95,718	41,244	38,689	2,190	177,841
(j)	Investment property
				Land		Buildings		Total
	Cost:
	Balance as at January 1, 2021		$		1,073,579	741,889		1,815,468
	Additions			-		-		-
	Balance as at December 31, 2021		$		1,073,579	741,889		1,815,468
	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
	Depreciation:
	Balance as at January 1, 2021		$	-		248,595		248,595
	Depreciation			-		14,725		14,725
	Balance as at December 31, 2021		$	-		263,320		263,320
	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
	Carrying value:
	Balance as at December 31, 2021		$		1,073,579	478,569		1,552,148
	Balance as at December 31, 2020		$		1,073,579	493,294		1,566,873
	Balance as at January 1, 2020		$		1,073,579	508,020		1,581,599
	Fair value:
	Balance as at December 31, 2021						$	3,336,956
	Balance as at December 31, 2020						$	3,336,956
	Balance as at January 1, 2020						$	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	2021	2020
Da'an Dist., Taipei City	2.10%	2.10%
As of December 31, 2021 and 2020, the Company did not pledge any collateral on investment properties.
ntangible assets
The cost and amortization of the intangible assets of the Company were as follows:
	Industrial technology		Computer software	Total
Costs:
Balance at January 1, 2021	$	99,213	188,103	287,316
Reclassification		8,000	16,122	24,122
Balance at December 31, 2021	$	107,213	204,225	311,438
Balance at January 1, 2020	$	73,913	172,706	246,619
Reclassification		25,300	15,397	40,697
Balance at December 31, 2020	$	99,213	188,103	287,316
Amortization:
Balance at January 1, 2021	$	47,965	174,253	222,218
Amortization		10,388	9,720	20,108
Balance at December 31, 2021	$	58,353	183,973	242,326
Balance at January 1, 2020	$	38,044	163,756	201,800
Amortization		9,921	10,497	20,418
Balance at December 31, 2020	$	47,965	174,253	222,218
Carrying value:
December 31, 2021	$	48,860	20,252	69,112
December 31, 2020	$	51,248	13,850	65,098
January 1, 2020	$	35,869	8,950	44,819

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

(k) Intangible assets

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

(i) In 2021 and 2020, the amortization of intangible assets were as follows:

Operating costs Operating expenses	2021 $ 5,493 14,615 $ 20,108	2020
		4,403 16,015
		20,418

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

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

(i) Short-term borrowings

	December 31, 2021	December 31, 2021
Range of interest rates (%) 0.73~0.88	Year of maturity Amount 2022 $ 2,205,053 December 31, 2020		The unused credit facilities
			6,924,557

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

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ong-term borrowings Unsecured loans Current Non-current Total Unsecured loans Current Non-current Total		December 31, 2021	December 31, 2021
	Currency NTD	Range of interest rates (%) Year of maturity 0.95~1.25 2022~2025 December 31, 2020
	Currency NTD	Range of interest rates (%) 1.09~1.25	Year of maturity 2021~2025

(ii) Long-term borrowings

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

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

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

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

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

(iv) Collateral of loans

The Company did not provide assets as pledge assets for the loans and long-term commercial paper payable. (m) Lease liabilities

The Company's lease liabilities were as follow:

Current Non-current For the maturity analysis, please refer to note 6(x). The amounts recognized in profit or loss were as follows: Interest on lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value assets, excluding short- term leases of low-value assets	December 31, 2021 $ 38,323	December 31, 2020 29,417
	$ 6,124	15,034
	2021 $ 905	2020
		1,166
	$ 686	748
	$ 638	834

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

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

(n) Operating leases

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

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

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

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

(o) Employee benefits
(i) Defined benefit plans

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

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

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

1) Composition of plan assets

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

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

2) Movements in present value of defined benefit obligation

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

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

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3) Movements in fair value of plan assets

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

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

4) Expenses recognized in profit or loss

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

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

5) Actuarial assumptions

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

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

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

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

6) Sensitivity analysis

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

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

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

The method and assumptions used on current sensitivity analysis are the same as those of the prior year. (ii) Defined contribution plans

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

The Company's pension costs under the defined contribution plan were $27,619 thousand and $26,818 thousand

for the years 2021 and 2020, respectively. Payments were made to the Bureau of Labor Insurance.

(iii) Short-term employee benefit liabilities

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

(p) Income tax

(i) Income tax expenses

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

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	2021 $ 256,034 50	2020 50,470 7,106
	256,084	57,576
	237,883 (83,695	31,752 ) 14,419
	154,188	46,171
	$ 410,272	103,747

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

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

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

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

(ii) Recognized deferred tax assets and liabilities

1) Unrecognized deferred tax liabilities

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

Aggregate amount of temporary differences related to investments in subsidiaries Unrecognized deferred tax liabilities 2) Unrecognized deferred tax assets The Company's deferred tax assets have not been recognized The carryforward of unused tax losses	December 31, 2021 $ 1,227,164 $ 245,433 in respect of the following items: December 31, 2021 December 31, 2020 $ - 83,695	December 31, 2021 $ 1,227,164 $ 245,433 in respect of the following items: December 31, 2021 December 31, 2020 $ - 83,695
		83,695

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

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

3) Recognized deferred income tax assets and liabilities

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

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

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Deferred tax liabilities: Balance at January 1, 2021 Recognized in profit or loss Recognized in other compre- hensive income Balance at December 31, 2021 Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020	Foreign investment income ac- counted for under equity method $ 642,096 201,284 - $ 843,380 $ 586,688 55,408 $ 642,096	Capitaliza- tion of inter- est expense 35,433 (1,033) - 34,400 36,246 (813) 35,433	Land value increment tax 56,683 - - 56,683 56,683 - 56,683	Others 5,192 (1,307) 21,345 25,230 18,120 (12,928) 5,192

Deferred tax liabilities:

(iii) Assessed of tax

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

(q) Capital and other equity

(i) Capital

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

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

(ii) Additional paid-in capital

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

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

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

(iii) Retained earnings

1) Legal reserve

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

2) Special earnings reserve

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

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3) Distribution of retained earnings

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

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

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

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

2019	2019	2019
	Total amount
	412,855
Total amount
		1,981,704
		Total
		279,658 (258,583)

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Unrealized gains or losses from financial assets measured at fair value through other comprehen- sive 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, 2021 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	Foreign ex- change differ- ences arising from foreign - - $ (456,708) $ 23,383 (221,508) - - - $ (198,125)	Unrealized gains (losses) from finan- cial assets measured at fair val- ue through other com- prehensive income 488,157 - 1,047,059 711,094 - (67,869) (84,323) - 558,902	Gains (loss- es) on hedg- ing instru- ments - 54,272 (26,847) (80,526) - - - (593) (81,119)

(r) Earnings (losses) per share

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

(i) Basic earnings (losses) per share

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

(s) Remuneration to employees and directors

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

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(t) Revenue from contracts with customers

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

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

(u) Other income and expenses

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

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

(v) Non-operating income and expenses
(i) Interest income

2021 $ 5,107	2020
	6,503

Interest income from bank deposits

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(ii) Other gains

Dividend income	2021 $ 59,252	2020 56,878

(iii) Other gains and losses

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

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

(iv) Finance costs

2021 Interest expense $ 59,273 Reclassification of components of other comprehensive income he changes in components of other comprehensive income were as follows: 2021 Effective portion of cash flow hedges: Net gains (losses) for current year $ 29,376 Less: Adjustment of reclassification included in profit or loss (24,896) Net gains (losses) recognized in other comprehensive income $ 54,272		2020 78,788 2020

		(29,380) (28,787)
		(593)

(w) Reclassification of components of other comprehensive income

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

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

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

2) Concentration of credit risk

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

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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, 2021 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, 2020 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 $ 2,207,590 789,029 726,615 2,549,024 44,841 16,854 93 $ 6,334,046 $ 2,699,986 674,118 509,913 3,471,621 44,800 16,855 81 $ 7,417,374	Within 6 months
		2,207,590 789,029 726,615 212,871 24,760 - 93
		3,960,958
		2,699,986 674,118 509,913 1,065,410 15,062 - 81
		4,964,570

The Company 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 - - - 212,385 13,864 - - 226,249 - - - 1,063,431 15,062 - - 1,078,493	1-2 years - - - 888,769 4,491 2,487 - 895,747 - - - 412,877 14,385 1,198 - 428,460	2-5 years - - - 1,234,999 1,322 11,247 - 1,247,568 - - - 929,903 291 12,536 - 942,730

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

2) Sensitivity analysis

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

3) Foreign exchange gain and loss on monetary item

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

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

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

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

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

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

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

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.

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econciliation of Level 3 fair values
		Unquoted equity instruments
Balance at January 1, 2021	$	838,235
Total gains recognized:
In other comprehensive income (loss)		297,884
Transfer into level 1		(583,590)
Balance at December 31, 2021	$	552,529
Balance at January 1, 2020	$	817,237
Total gains recognized:
In other comprehensive income (loss)		20,998
Balance at December 31, 2020	$	838,235

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 com- prehensive income －eq- uity investments without an active market	Valuation technique Comparative listed com- pany	Significant unobservable inputs ・Multipliers of price- to-earnings ratios as of December 31, 2021 and 2020 were 9.45~20.31 and 15.62~17.8, respec- tively ・Multipliers of equity ratios as of December 31, 2020 were 1.38 ・Market liquidity discount rate as of December 31, 2021 and 2020 was both 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.

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

5) Fair value measurements in Level 3 －sensitivity analysis of reasonably possible alternative assumptions For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on profit or loss and other comprehensive income:

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

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(y) Financial risk management
(i) Overview

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

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

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

(ii) Risk management framework

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

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

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

(iii) Credit risk

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

1) Trade and other receivables

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

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

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

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

2) Investments

The credit risk exposure in the bank deposits and other financial instruments is measured and monitored by the Company's finance department. Since those who transact with the Company are banks and other external parties with good credit standing, financial institutions with a credit rating above investment grade, and government agencies, there are no non-compliance issues. With regard to investment in a financial institution with a credit rating above investment grade, an investment limit is set according to the 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, 2021 and 2020, are disclosed in note 7 "Related-party Transactions."

(iv) Liquidity risk

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

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

(v) Market risk

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

1) Currency risk

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

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

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

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

The Company does not hedge against investments in subsidiaries.

2) Interest rate risk

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

3) Other market price risk

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

(z) Capital management

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

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

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

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

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

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

(ab) Reconciliation of liabilities arising from financing activities

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

	Cash flows	Non-cash changes Foreign exchange movement Amorti- zation of commer- cial paper discount Others - - - - 581 - (32,458) - - - 905 48,248 (32,458) 1,486 48,248 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 - - - - 581 - (32,458) - - - 905 48,248 (32,458) 1,486 48,248 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)	December 31, 2021 2,145,756 349,922 2,205,053 44,447 4,745,178 December 31, 2020
$ $	(927,962) - (459,971) (49,157)
	(1,437,090)
	Cash flows (376,282) - (379,814) (51,357) (807,453)
		Foreign exchange movement - - (58,267) - (58,267)	Amorti- zation of commer- cial paper discount - 54 - 1,166 1,220
$				3,073,718 349,341 2,697,482 44,451
$				6,164,992

<7> Related-party transactions

(a) Parent company and ultimate controlling party

(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.) Polybus Corporation Pte Ltd	Relationship with the Company
	The subsidiary of the Company 〃〃〃〃〃〃〃〃

209

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Name of relatedparty	Relationship with 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 un-
	der equity method
Nantong Qix Storage Co., Ltd.	〃

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

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

Subsidiaries	2021	2020
	$ 731,671	553,313

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

(ii) Purchases

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

Subsidiaries	2021 $ 33,624	2020
		16,452

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

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

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

210

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(iv) Leases －Rent income

2021 $ 4,472	2020
	4,472

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 receiv- able －related parties Accounts receiv- able －related parties Accounts receiv- able －related parties Accounts receiv- able －related parties Other receivables Other receivables Other receivables Other receivables	Type of relatedparties	December 31, 2021 $ 20,791 71,287 94,756 16,206 203,040 146,230 16,572 14,036 17,797 194,635 $ 397,675	December 31, 2020 21,909 32,789 28,862 3,713 87,273 63,830 13,996 9,479 17,184 104,489 191,762
	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

(vi) Payables to related parties

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

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

211

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(vii) Guarantees

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

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

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

der the equity method were as follows:
	December 31, 2021		December 31, 2020
Associates
ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.	$	1,782	733
Joint ventures
Indian Synthetic Rubber Private Limited		25,975	31,086
	$	27,757	31,819
Key management personnel transactions
The compensation of the key management personnel comprised the following:
		2021	2020
Short-term employee benefits	$	106,415	86,175
Post-employment benefits		604	565
	$	107,019	86,740
dged assets: None.
mmitments and contingencies
The unused letters of credit outstanding
	December 31, 2021		December 31, 2020
The Company's unused letters of credit outstanding	$	555,290	893,828
Total amounts and the cumulative payments of Company's signed construction and design			contracts with severa
endors as follows:
	December 31, 2021		December 31, 2020
The total amounts of construction in progress contracts	$	365,300	408,750
Cumulative payments	$	299,896	179,653

(d) Key management personnel transactions

The compensation of the key management personnel comprised the following:

<8> Pledged assets: None.
<9> Commitments and contingencies

(a) The unused letters of credit outstanding

(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: None.

212

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<12> Other

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

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

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

Note1： Salary includes base salary, overtime pay, performance bonus, year-end bonus and pay in lieu of untaken annual leave, etc. Note2： Pension expenses excluded expenses for employees on international assignments amounting to $1,553 thousand and $1,649 thousand for the years ended December 31, 2021 and 2020, respectively.

Note3： Other employee benefit includes meal expenses, employee welfare, training fees and employee compensation.

Note4： Depreciation expenses excluded expenses for investment property recognized under other income and expenses, amounting to $14,725 thousand and $14,726 thousand for the years ended December 31, 2021 and 2020, respectively.

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

employee benefits are as follows :
Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages The average of employee salary cost adjustment as follows Supervisor remuneration	2021 678 6 $ 1,583 $ 1,057 6.12% $ -	2020
		690
		6
		1,253
		996
		-

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

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

213

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<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:

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

Highest bal-
ance of financ-
No. Name of lender Name of borrower Financial statement ac-count Related party ing to other balanceEnding
parties during
the year
1 TSRC (Shanghai) TSRC (Nantong) Loan Yes 231,631 230,264
Industries Ltd. Industries Ltd.
2 Polybus Corporation Pte Ltd TSRC Account receivablerelated parties － Yes 684,744 664,560
3 TSRC(Hong Kong) Limited TSRC Account receivablerelated parties － Yes 171,186 166,140
4 TSRC (Hong Kong) Limited TSRC (VIETNAM) CO., LTD. Account receivablerelated parties － Yes 110,760 110,760
5 TSRC Specialty Ma-terials LLC TSRC (USA) Invest-ment Corporation Account receivablerelated parties － Yes 427,965 415,350
----- End of picture text -----

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

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

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

Note 5: Nature of financing activities is as follows:

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

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

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

Counter-party of guarantee and endorsement
Limitation on Highest balance Ending
Name amount of for guarantees balance of
No. of Com- Relationship guarantees and and endorse- guarantees
pany Name with the Com- endorsements ments during and endorse-
pany for one party the year ments
830,700
0 TSRC TSRC (USA) Investment Corporation 4 (Note 2) 835,980
(Note 4)
ARLANXEO-TSRC (Nantong) Chemi- 500,576
0 TSRC 6 (Note 2) 1,561,828
cal Industries Co., Ltd. (Note 4)
Indian Synthetic Rubber Private Lim-
0 TSRC 6 (Note 2) 950,082 922,077
ited
0 TSRC TSRC (Vietnam) Co., Ltd. 4 (Note 2) 631,287 628,563
0 TSRC TSRC Specialty Materials LLC 4 (Note 2) 285,310 276,900
----- 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.

214

Unit: thousand NTD

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==> picture [492 x 224] intentionally omitted <==

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

Collateral
fund financ-Purposes of Transaction amount for Reasons for Allowance Financing limit Maximum
tually drawnAmount ac- Range of in-terest rates ing for the borrowers betweenbusiness short-term financing for bad debt Item Value for each borrow-ing Company financing limit for the lender
(Note1) (Note2)
(Note 5) two parties
- 3.698% 2 - Operating - - 176,149 352,298
capital
- 0.288% 2 - Operating - - 4,570,861 9,141,721
capital
- 0.284% 2 - Operating - - 1,836,168 3,672,336
capital
- 2 - Operating - - 1,836,168 3,672,336
capital
235,365 0.12%~ 2 - Operating - - 1,181,518 2,363,035
0.33% capital
----- End of picture text -----

Unit: thousand NTD

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

Ratio of accumulated
actually Amountdrawn Property pledged ments (Amount)on guarantees and endorse- net worth of the latest amounts of guaran-tees and endorse-ments to Maximum allow-able amount for guarantees and endorsements third parties on be-Parent company endorsement / guarantees to dorsement /guar-parties on behalf antees to third Subsidiary en- parties on behalf of guarantees to third Company in Main-Endorsements/
financial statements half of subsidiary of parent company land China
107,991 - 4.61% (Note 3) Y
13,103 - 2.78% (Note 3) Y
491,498 - 5.12% (Note 3)
382,122 - 3.49% (Note 3) Y
118,064 - 1.54% (Note 3) Y
----- End of picture text -----

215

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

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

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

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

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

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

companName of y Type of property Transaction date Acquisition date Book value Transaction amount
TSRC Kaohsiung City, Renwu district's land and 2021.03.11 1999.07.29 201,665 1,220,000
property
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(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.A R.L. TSRC Parent and subsidary companies
TSRC TSRC (Lux.) Corporation S.A R.L. Parent and subsidary companies
TSRC Specialty Materials LLC TSRC Parent and subsidary companies
TSRC TSRC Specialty Materials LLC Parent and subsidary companies
TSRC-UBE (Nantong) Industries Co., A director of TSRC-UBE (Nantong)
Ltd. Marubeni Corporation Industries Co., Ltd.
Shen Hua Chemical Industries Co., A director of Shen Hua Chemical In-
Ltd. Marubeni Corporation dustries Co., Ltd.
Polybus Corporation Pte Ltd TSRC (Nantong) Industries Ltd. Related parties
----- End of picture text -----

216

Corporate governance report

Unit: thousand NTD

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

Ending balance
Remarks
Number of shares Book value Holding percentage Market value
12,148,000 668,140 2.89% 668,140
599,999 171,869 5.42% 171,869
5,657,000 380,660 3.90% 380,660
837,552 239,917 7.57% 239,917
1,460,586 1,460,586
----- End of picture text -----

Unit: thousand NTD

holders' equity or the price of the Company's securities

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

Amount actually receivable Gain from disposal Counter-party relationshiNature of p Purpose of disposal Price reference Other terms
According to the signing contract of the sale and 909,118 CHEN TA HSIUNG DEVELOPMENT Non-relat- Activates its Appraisal of real None
ed parties assets estate report
purchase of real estate CO., LTD.
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Unit: thousand NTD

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

Status and reason for
Transaction details deviation from arm's Account / note receivable (payable)
-length transaction Re-
Purchase / Percentage of Credit Percentage of total marks
Sale Amount total purchas-es / sales Credit period Unit price period Balance accounts / notes receiv-able (payable)
Purchase 282,161 11.35% 70days - (71,287) (13.41)%
Sale (282,161) (2.53)% 70days - 71,287 4.44%
Purchase 298,138 10.78% 70days - (94,756) (28.12)%
Sale (298,138) (2.67)% 70days - 94,756 5.90%
Purchase 127,037 6.28% 14days - 1,315 1.08%
Purchase 177,767 3.11% 14days - - - %
Purchase 254,450 38.20% 40days - (53,175) (38.32)%
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217

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

Name of Company Counter-party Relationship
TSRC (Nantong) Industries Ltd Polybus Corporation Pte Ltd Related parties
Polybus Corporation Pte Ltd Shen Hua Chemical Industries Co., Ltd. Related parties
Shen Hua Chemical Industries Co.,
Ltd. Polybus Corporation Pte Ltd Related parties
TSRC (Lux.) Corporation S.A R.L. TSRC Specialty Materials LLC Related parties
TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.A R.L. Related parties
TSRC (Lux.) Corporation S.A R.L. TSRC (Nantong) Industries Ltd. Related parties
TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.A R.L. Related parties
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:
Name of related party Counter-party Relationship
TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.A R.L. Related parties
TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.A R.L. Related parties
TSRC Specialty Materials LLC TSRC (USA) Investment Corporation Related parties
Note 1: Until March 10, 2022.
(ix) Trading in derivative instruments: Please refer to note 6(b).
(b) Information on investees:
The following is the information on investees for the year 2021 (excluding information on investees in Mainland China):
Name of investor Name of investee Address Scope of business
TSRC Trimurti Holding Cor-poration 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 Town,
TSRC 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 of
8 VSIP II A Street 31, Vietnam Singapore In-
TSRC (Vietnam) Co., rubber color masterbatch, ther-
TSRC Ltd. dustrial Park II A, Tan Uyen Town, Binh Duong moplastic elastomer and plastic
Province, Vietnam
compound products.
Trimurti Holding Polybus Corporation International commerce and
Corporation Pte Ltd 100 Peck Seah Street #09 16 Singapore 079333 investment corporation
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218

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Transaction details	Transaction details	Transaction details	Transaction details	Status and reason for deviation from arm's -length transaction	Status and reason for deviation from arm's -length transaction	Account / note receivable (payable)	Account / note receivable (payable)
Purchase / Sale	Amount	Percentage of total purchas- es / sales	Credit period	Unit price	Credit period	Balance	Percentage of total accounts / notes receiv- able (payable)
Sale	(254,450)	(4.48)%	40days	-		53,175	6.97%
Purchase	367,934	55.24%	40days	-		(72,975)	(52.10)%
Sale	(367,934)	(4.59)%	40days	-		72,975	4.86%
Purchase	655,296	26.36%	90days	-		(165,389)	(31.12)%
Sale	(655,296)	(15.33)%	90days	-		165,389	28.82%
Purchase	1,545,396	62.15%	70days	-		(303,804)	(57.16)%
Sale	(1,545,396)	(27.22)%	70days	-		303,804	39.83%

Unit: thousand NTD

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

Overdue amount
Amounts received in Allowanc-
Balance of receivables
Turnover rate subsequent period es for bad
from related party Amount Action taken (Note 1) debts
303,804 7.78 - 214,637 -
165,389 6.13 - 119,595 -
235,365 - - 235,365 -
----- End of picture text -----

Unit: thousand NTD/thousand USD/thousand EUR

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

Original cost Ending balance Net income
Investment
December 31, 2021 December 31, 2020 Shares Percentage of ownership Book value (loss) of invest-ee income (loss) Remarks
1,005,495 1,005,495 86,920,000 100.00% 14,810,412 2,249,887 2,249,887 Subsidiary
109,442 109,442 3,896,305 100.00% 666,055 16,980 16,980 Subsidiary
Subsidi-
38,376 38,376 1,161,004 19.48% 141,941 24,112 4,697
ary(Note2)
342,742 278,280 - 100.00% 215,455 (40,674) (40,674) Subsidiary
Indirectly
1,802,647 1,802,647
105,830,000 100.00% 9,141,721 1,297,441 1,297,441 owned subsid-
(USD65,101) (USD65,101)
iary
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219

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Name of investor	Name of investee	Address	Scope of business
Trimurti Holding Corporation	TSRC (Hong Kong) Limited	15/F BOC Group Life Assurance Tower 136 Des Voeux Road Central	Investment corporation
Trimurti Holding Corporation	Indian Synthetic Rub- ber Private Limited	Room No.702, Indian Oil Bhawan, 1 Sri Aurob- indo Marg, Yusuf Sarai, New Delhi 110016, India	Produchion and sale of ESBR
TSRC (Hong Kong) Limited	TSRC (Lux.) Corpora- tion S.A R.L.	39-43 avenue de la Liberte L 1931 Luxembourg	International commerce and investment corporation
TSRC (Lux.) Corpo- ration S.A R.L.	TSRC (USA) Investment Corporation	2711 Centerville Road, Suite 400, Country of New Castle, Wilmington, Delaware. ,19808.	Investment corporation
TSRC (USA) Invest- ment Corporation	TSRC Specialty Materi- als LLC	12012 Wickchester Lane, Suite 280, Houston, TX77079	Produchion and sale of TPE
Hardison Interna- tional Corporation	Triton International Holdings Corporation	Palm Grove House, P.O.BOX 438, Road Town, Tortola B.V.I	Investment corporation
Hardison Interna- tional Corporation	Dymas Corporation	Palm Grove House, P.O.BOX 438, Road Town, Tortola B.V.I	Investment corporation
Dymas Corpora- tion	Asia Pacific Energy Development Co., Ltd.	Cayman Islands	Consulting for electric power facilities management and elec- trical system design

Note 1: Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD27.690; EUR1 to NTD31.3035). Note 2: TSRC directly owns 19.48% of Dymas's equity and indirectly owns 80.52% via Hardison International Corporation, total directly and indirectly owns of equity are 100%.

(c) Information on investment in Mainland China:

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Method of in- Cumulative investment
Name of investee
in Mainland China Scope of business Issued capital vestment (amount) from Taiwan as of
(Note 1) January 1, 2021
Shen Hua Chemical Production and sale of synthetic rub- 1,141,832 -
(2)a.
Industries Co., Ltd. ber products (USD41,220)
Changzhou Asia Power generation and sale of electric- 639,639 106,108
Pacific Co-generation (2)c.
Co., Ltd. ity and steam (USD23,100) (USD3,832)
TSRC (Shanghai) Production and sale of compounding 152,295 108,545
(2)b.
Industries Ltd. materials (USD5,500) (USD3,920)
Nantong Qix Storage Storehouse for chemicals 83,070 (2)d. 41,535
Co., Ltd. (USD3,000) (USD1,500)
TSRC-UBE (Nantong) Production and sale of synthetic rub- 1,107,600 27,690
(2)a.
Industries Ltd. ber products (USD40,000) (USD1,000)
TSRC (Nantong) Production and sale of TPE 2,910,911 (2)a. 184,083
Industries Ltd. (USD105,125) (USD6,648)
ARLANXEO-TSRC
(Nantong) Chemical Production and sale of NBR 1,240,512 (2)a. -
(USD44,800)
Industries Co., Ltd.
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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 NTD27.690).

220

Original cost	Original cost	Ending balance	Ending balance	Ending balance	Net income (loss) of invest- ee	Investment income (loss)	Remarks
December 31, 2021	December 31, 2020	Shares	Percentage of ownership	Book value
2,875,607 (USD103,850)	2,875,607 (USD103,850)	103,850,000	100.00%	3,672,336	364,704	364,704	Indirectly owned subsid- iary
816,107 (USD29,473)	816,107 (USD29,473)	222,861,375	50.00%	1,130,197	1,207,138	603,569	-
2,343,681 (EUR74,870)	2,343,681 (EUR74,870)	74,869,617	100.00%	2,911,736	285,684	285,684	Indirectly owned subsid- iary
2,659,625 (USD96,050)	2,659,625 (USD96,050)	130	100.00%	2,762,795	163,233	163,233	Indirectly owned subsid- iary
6,053,505 (USD218,617)	6,053,505 (USD218,617)	-	100.00%	2,363,035	321,142	321,142	Indirectly owned subsid- iary
1,385 (USD50)	1,385 (USD50)	50,000	100.00%	56,136	(2,368)	(2,368)	Indirectly owned subsid- iary
132,884 (USD4,799)	132,884 (USD4,799)	4,798,566	80.52%	608,022	24,112	19,415	Indirectly owned subsid- iary
312,482 (USD11,285)	312,482 (USD11,285)	7,522,337	37.78%	339,063	44,847	16,943	-

Unit: thousand NTD

holders' equity or the price of the Company's securities

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Investment flow during current Cumulative Direct /
period investment Net income indirect Investment Accumulated
(amount) from remittance
(losses) of investment income Book value
Remittance Repatriation Taiwan as of investee holding (losses) of earnings in
amount amount December 31, 2021 percentage current period
- - - 1,002,175 65.44% 655,824 2,371,007 4,786,340
(Note2)
- - 106,108 135,274 28.34% 38,337 338,468 358,308
(USD3,832) (Note3)
- - 108,545 89,300 100.00% 89,300 352,298 -
(USD3,920) (Note2)
- - 41,535 (4,642) 50.00% (2,321) 55,819 74,060
(USD1,500) (Note2)
- - 27,690 415,589 55.00% 228,574 1,043,614 -
(USD1,000) (Note2)
- - 184,083 276,512 100.00% 276,512 4,302,489 440,864
(USD6,648) (Note2)
- - - 367,700 50.00% 183,850 505,494 -
(Note3)
----- End of picture text -----

221

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(ii) Limitation on investment in Mainland China:

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

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

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

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

1) Sales and accounts receivable

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

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

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

TSRC (Shanghai) Industries Ltd. TSRC (Nantong) Industries Ltd.	December 31, 2021
	$ 2,846 20,791
	$ 23,637

2) Purchases and accounts payable

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

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

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

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

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

3) Service income

222

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Nature Management and technology ser- vices Management and technology ser- vices & technology licensing Management and technology ser- vices Management and technology ser- vices Technology licensing	Name Shen Hua Chemical Industries Co., Ltd. TSRC (Nantong) Industries Ltd. TSRC-UBE (Nantong) Industries Ltd. TSRC (Shanghai) Industries Ltd. ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.	Service income in 2021 $ 5,298 84,344 803 11,669 16,538 $ 118,652

4) Guarantees

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

December 31, 2021

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

<14> Segment information

Please refer to the year 2021 consolidated financial statements.

223

AI assistant

TSRC — Annual Report 2021

51969_rns_2022-08-12_70a0f5e7-63a0-4dc0-8325-4e0716a0b36a.pdf

Home page

Home page

Table of Contents

Table of Contents

Letter to the Shareholders

Letter to the Shareholders

Letter to the Shareholders

I. Date of incorporation

2020's High-Value Transformation and Sustainable Operation

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

I. Company's organization

Board Diversity

Independence of the Board

<2> Presidents' and vice presidents' remuneration

IV. Status of corporate governance implementation

<1> Operation of the board of directors

<2> Implementation status of the Board of Directors' Self Evaluation:

<3> Operation of the Audit Committee

<4> Information on Compensation Committee:

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

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

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

1. A statement of Internal Control

TSRC Corporation A statement of Internal Control

V. Information regarding TSRC’s audit fees

VI. Information on replacement of CPA-None

Information on the transfer or pledge of equity interests:

IX. Disclosure of Interrelationship among top 10 largest shareholders

Information on capital raising activities

I. Capital and shares

<1> Source of capital stock

<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

I. Business overview

<1> Business Scope

1. Major business and product lines:

(2) Applied Materials

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

II. Market overview and production/sales analysis

<1> Market Analysis

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

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

<6> Volume of units sold for the most recent two fiscal years

III. Employees information

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:

<2> In 2021 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

VI. Cybersecurity Management

VII. Material Contracts

Overview of financial status

Overview of financial status

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

TSRC Annual Report 2021