TSRC - Interim / Quarterly Report 2022

Stock Code:2103

TSRC CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Three Months Ended March 31, 2022 and 2021

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

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

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in Mainland China (d) Major shareholders (14) Segment information	Page
	1 2 3 4 5 6 7 8 8 8～9 9～11 11 12～41 42～45 45 45 45 46 46 47～50 50 50～51 51 52

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

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KPMG

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

Independent Auditors’ Review Report

To the Board of Directors of TSRC Corporation:

Introduction

We have reviewed the accompanying consolidated balance sheets of TSRC Corporation (the "Company") and its subsidiaries (together referred to as the "Group") as of March 31, 2022 and 2021, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months then ended and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

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

Basis for Qualified Conclusion

As stated in Note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect the total assets amounting to $4,015,491 thousand and $3,444,667 thousand, constituting 12% and 11% of the consolidated total assets; and the total liabilities amounting to $826,323 thousand and $805,038 thousand, constituting 5% and 6% of the consolidated total liabilities as of March 31, 2022 and 2021, respectively; as well as the total comprehensive income amounting to $201,999 thousand and $115,356 thousand, constituting 14% and 10% of the consolidated total comprehensive income for the three months ended March 31, 2022 and 2021, respectively.

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

3-1

Furthermore, as stated in Note 6(h), the other equity accounted investments of the Group in its investee companies of $2,190,643 thousand and $1,527,641 thousand as of March 31, 2022 and 2021, respectively, and its equity in net earnings on these investee companies of $113,695 thousand and $215,608 thousand for the three months ended March 31, 2022 and 2021, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of TSRC Corporation and its subsidiaries as of March 31, 2022 and 2021, and of its consolidated financial performance and its consolidated cash flows for the three months then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

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

KPMG

Taipei, Taiwan (Republic of China) May 5, 2022

Notes to Readers

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

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 31, 2022 and 2021

TSRC CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2022, December 31 and March 31, 2021 (Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1150 Notes receivable, net (note 6(d)) 1170 Accounts receivable, net (note 6(d)) 1200 Other receivables (notes 6(e) and 7) 1220 Current income tax assets 130x Inventories (note 6(f)) 1460 Non-current assets held for sale (note 6(g)) 1479 Other current assets Total current assets Non-current assets: 1517 Financial assets at fair value through other comprehensive income－non-current (note 6(c)) 1550 Investments accounted for under equity method (notes 6(h) and 7) 1600 Property, plant and equipment (notes 6(g), 6(j), 8 and 9) 1755 Right-of-use assets (note 6(k)) 1760 Investment property (note 6(l)) 1780 Intangible assets (note 6(m)) 1840 Deferred income tax assets 1900 Other non-current assets (note 8) Total non-current assets Total assets	March 31, 2022 Amount % $ 4,949,695 14 6,821 - 1,180,983 3 3,679,310 11 138,896 - - - 6,486,478 19 - - 687,338 2 17,129,521 49 1,425,787 4 2,190,643 6 10,272,424 30 859,755 2 1,548,467 5 891,283 3 246,332 1 143,934 - 17,578,625 51 $ 34,708,146 100	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 15,463,097 47 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 - 17,366,666 53 32,829,763 100	March 31, 2021 Amount % 3,637,903 12 27,689 - 893,746 3 3,647,526 12 82,847 - 12,151 - 5,002,707 16 201,665 1 772,143 2 14,278,377 46 1,093,607 4 1,527,641 5 10,200,897 32 975,479 3 1,563,192 5 988,302 3 275,932 1 157,179 1 16,782,229 54 31,060,606 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(n)) 2322 Current portion of long-term borrowings (notes 6(n) and 8) 2323 Current portion of long-term payables (note 6(n)) 2120 Current financial liabilities at fair value through profit or loss (note 6(b)) 2170 Accounts payable 2180 Accounts payable－related parties (note 7) 2216 Dividend payable (note 6(s)) 2230 Current income tax liabilities 2219 Other payables (notes 6(u) and 7) 2280 Current lease liabilities (note 6(p)) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2541 Long-term bank borrowings (notes 6(n) and 8) 2542 Other long-term borrowings (note 6(n)) 2550 Non-current provision liabilities (notes 6(o), 7 and 12(c)) 2570 Deferred income tax liabilities 2580 Non-current lease liabilities (note 6(p)) 2600 Other non-current liabilities (note 12(c)) Total non-current liabilities Total liabilities Equity attributable to shareholders of the Company (note 6(s)) : 3100 Common stock 3200 Capital surplus Retained earnings: 3310 Legal reserve 3350 Unappropriated earnings Other equity: 3410 Financial statement translation differences for foreign operations 3420 Unrealized gains or losses on financial assets measured at fair value through other comprehensive income 3450 Gains or losses on hedging instrument Total equity attributable to shareholders of the Company 36xx Non-controlling interests (note 6(i)) Total equity Total liabilities and equity	March 31, 2022 Amount % $ 3,716,214 11 966,597 3 349,921 1 5,366 - 1,835,432 5 70,943 - 1,981,704 6 460,084 1 1,228,490 4 118,951 - 230,126 1 10,963,828 32 2,143,505 6 - - 277,883 1 1,082,876 3 348,338 1 355,230 1 4,207,832 12 15,171,660 44 8,257,099 23 50,725 - 4,073,680 12 3,751,398 11 7,825,078 23 93,069 - 1,018,178 3 (32,108) - 1,079,139 3 17,212,041 49 2,324,445 7 19,536,486 56 $ 34,708,146 100	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 8,548,784 27 1,936,219 6 349,922 1 269,536 1 1,089,204 3 357,355 1 154,925 - 4,157,161 12 12,705,945 39 8,257,099 25 50,725 - 4,073,680 12 5,080,942 16 9,154,622 28 (456,708) (1) 1,047,059 3 (26,847) - 563,504 2 18,025,950 55 2,097,868 6 20,123,818 61 32,829,763 100	March 31, 2021 Amount % 4,212,684 14 2,383,421 8 - - 932 - 1,601,743 5 46,758 - - - 357,360 1 1,175,449 4 123,892 - 173,658 1 10,075,897 33 2,073,559 7 349,744 1 32,279 - 932,505 3 461,246 1 131,612 - 3,980,945 12 14,056,842 45 8,257,099 27 49,531 - 4,068,862 13 2,380,940 8 6,449,802 21 (273,515) (1) 699,819 2 (71,165) - 355,139 1 15,111,571 49 1,892,193 6 17,003,764 55 31,060,606 100

See accompanying notes to consolidated financial statements.

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

TSRC CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2022 and 2021

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

4000 Revenue (note 6(v)) 5000 Operating costs (notes 6(f), 6(j), 6(k), 6(p), 6(q), 6(u) and 7) 5910 Gross profit 6000 Operating expenses (notes 6(d), 6(j), 6(k), 6(p), 6(q), 6(u) and 7): 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Impairment loss (reversal of impairment loss) determined in accordance with IFRS 9 Total operating expenses 6500 Other income and expenses, net (notes 6(w) and 7) 6900 Operating profit Non-operating income and expenses (notes 6(h), 6(p), 6(x) and 7): 7100 Interest income 7020 Other gains and losses 7050 Finance costs 7370 Share of gain of associates and joint ventures accounted for under equity method Total non-operating income and expenses 7900 Net income before tax 7950 Less: tax expenses (note 6(r)) Net income 8300 Other comprehensive income: 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method 8399 Less: Income tax related to components of other comprehensive income that will be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income Total comprehensive income Net income attributable to: 8610 Shareholders of parent 8620 Non-controlling interests Total comprehensive income attributable to: 8710 Shareholders of parent 8720 Non-controlling interests 9710 Basic earnings per share (in New Taiwan Dollars) (note 6(t)) 9810 Diluted earnings per share (in New Taiwan dollars) (note 6(t))	For the three month	s ended March 31 2021 Amount % 8,216,811 100 6,211,295 76 2,005,516 24 415,692 5 258,926 3 89,031 1 311 - 763,960 9 55,346 1 1,296,902 16 6,118 - (3,852) - (29,372) - 215,608 2 188,502 2 1,485,404 18 399,273 5 1,086,131 13 140,917 2 - - 140,917 2 (87,300) (1) 5,357 - - - (81,943) (1) 58,974 1 1,145,105 14 896,970 11 189,161 2 1,086,131 13 972,451 12 172,654 2 1,145,105 14 1.09
	2022 Amount % $ 8,642,027 100 6,782,664 78 1,859,363 22 569,005 7 265,183 3 85,357 1 (1,993) - 917,552 11 61,369 1 1,003,180 12 10,463 - 4,816 - (26,092) - 113,695 1 102,882 1 1,106,062 13 309,059 4 797,003 9 (36,578) - (7,697) - (28,881) - 654,610 8 (28,360) - - - 626,250 8 597,369 8 $ 1,394,372 17 $ 652,160 7 144,843 2 $ 797,003 9 $ 1,167,795 14 226,577 3 $ 1,394,372 17 $ 0.79 $ 0.79
		1.08

See accompanying notes to consolidated financial statements.

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

TSRC CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the three months ended March 31, 2022 and 2021 (Expressed in Thousands of New Taiwan Dollars)

			Equity attributable t	Equity attributable t	o owners of parent					Non-controlling interests	Total equity
Common stock	Capital surplus		Retained earnings			Total other equity interest			Total equity attributable to owners of parent
					Financial statements translation differences for foreign operations	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Gains (losses) on hedging instruments	Total
		Legal reserve	Unappropriated retained earnings	Total
$ 8,257,099 - -	49,531 - -	4,068,862 - -	1,483,970 896,970 -	5,552,832 896,970 -	(198,125) - (75,390)	558,902 - 140,917	(81,119) - 9,954	279,658 - 75,481	14,139,120 896,970 75,481	1,719,539 189,161 (16,507)	15,858,659 1,086,131 58,974
-	-	-	896,970	896,970	(75,390)	140,917	9,954	75,481	972,451	172,654	1,145,105
$ 8,257,099	49,531	4,068,862	2,380,940	6,449,802	(273,515)	699,819	(71,165)	355,139	15,111,571	1,892,193	17,003,764
$ 8,257,099 - - -	50,725 - - -	4,073,680 - - -	5,080,942 (1,981,704) 652,160 -	9,154,622 (1,981,704) 652,160 -	(456,708) - - 549,777	1,047,059 - - (28,881)	(26,847) - - (5,261)	563,504 - - 515,635	18,025,950 (1,981,704) 652,160 515,635	2,097,868 - 144,843 81,734	20,123,818 (1,981,704) 797,003 597,369
-	-	-	652,160	652,160	549,777	(28,881)	(5,261)	515,635	1,167,795	226,577	1,394,372
$ 8,257,099	50,725	4,073,680	3,751,398	7,825,078	93,069	1,018,178	(32,108)	1,079,139	17,212,041	2,324,445	19,536,486

See accompanying notes to consolidated financial statements.

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

TSRC CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2022 and 2021

(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 Share of profit of associates and joint ventures accounted for under equity method Loss on disposal of property, plant and equipment Amortization to operating costs and inventories 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 Interest income received Interest paid Income taxes paid Net cash flow from operating activities Cash flows from (used in) investing activities: Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in other non-current assets Decrease in restricted assets Compensation for relocation Net cash flow 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 Net cash from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period		For the three months ended March 31 2022 2021 $ 1,106,062 1,485,404 286,218 281,361 31,206 30,401 (1,993) 311 26,092 29,372 (10,463) (6,118) (113,695) (215,608) 4,848 1,189 19,589 20,957 241,802 141,865 881 (24,229) (229,166) (322,526) 39,524 (845,486) (39,465) 86,260 (856,661) (230,243) (131,345) 18,944 (1,216,232) (1,317,280) 5,010 (31,696) 298,456 (41,521) 69,627 46,758 (318,264) (13,126) 22,115 45,373 (18,903) (17,413) 3,019 (5,509) 61,060 (17,134) (1,155,172) (1,334,414) (913,370) (1,192,549) 192,692 292,855 4,866 2,434 (25,236) (27,551) (128,690) (77,398) 43,632 190,340 (142,558) (205,428) 755 30 15,304 10,265 42,338 41,017 216,189 - 132,028 (154,116) 5,385,970 7,354,922 (5,778,845) (6,838,550) 516,269 510,040 (178,788) (513,938) (36,560) (40,301) (157) (65) (92,111) 472,108 401,391 (148,892) 484,940 359,440 4,464,755 3,278,463 $ 4,949,695 3,637,903	For the three months ended March 31 2022 2021 $ 1,106,062 1,485,404 286,218 281,361 31,206 30,401 (1,993) 311 26,092 29,372 (10,463) (6,118) (113,695) (215,608) 4,848 1,189 19,589 20,957 241,802 141,865 881 (24,229) (229,166) (322,526) 39,524 (845,486) (39,465) 86,260 (856,661) (230,243) (131,345) 18,944 (1,216,232) (1,317,280) 5,010 (31,696) 298,456 (41,521) 69,627 46,758 (318,264) (13,126) 22,115 45,373 (18,903) (17,413) 3,019 (5,509) 61,060 (17,134) (1,155,172) (1,334,414) (913,370) (1,192,549) 192,692 292,855 4,866 2,434 (25,236) (27,551) (128,690) (77,398) 43,632 190,340 (142,558) (205,428) 755 30 15,304 10,265 42,338 41,017 216,189 - 132,028 (154,116) 5,385,970 7,354,922 (5,778,845) (6,838,550) 516,269 510,040 (178,788) (513,938) (36,560) (40,301) (157) (65) (92,111) 472,108 401,391 (148,892) 484,940 359,440 4,464,755 3,278,463 $ 4,949,695 3,637,903
		2022 $ 1,106,062 286,218 31,206 (1,993) 26,092 (10,463) (113,695) 4,848 19,589 241,802 881 (229,166) 39,524 (39,465) (856,661) (131,345) (1,216,232) 5,010 298,456 69,627 (318,264) 22,115 (18,903) 3,019 61,060 (1,155,172) (913,370) 192,692 4,866 (25,236) (128,690) 43,632 (142,558) 755 15,304 42,338 216,189 132,028 5,385,970 (5,778,845) 516,269 (178,788) (36,560) (157) (92,111) 401,391 484,940 4,464,755 $ 4,949,695

			281,361 30,401 311 29,372 (6,118) (215,608) 1,189 20,957
			141,865
			(24,229) (322,526) (845,486) 86,260 (230,243) 18,944
			(1,317,280)
			(31,696) (41,521) 46,758 (13,126) 45,373 (17,413) (5,509)
			(17,134)
			(1,334,414)
			(1,192,549)
			292,855 2,434 (27,551) (77,398)
			190,340
			(205,428) 30 10,265 41,017 -
			(154,116)
			7,354,922 (6,838,550) 510,040 (513,938) (40,301) (65)
			472,108
			(148,892)
			359,440 3,278,463
			3,637,903

See accompanying notes to consolidated financial statements.

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

TSRC CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2022 and 2021

(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.

(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 May 5, 2022.

(3) New standards, amendments and interpretations adopted:

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

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

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

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) 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

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

Except for the following, the significant accounting policies applied in these consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended December 31, 2021. For the related information, please refer to note 4 to the consolidated financial statements for the year ended December 31, 2021.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" (Regulations) and IAS 34 "Interim Financial Reporting" which was endorsed and issued into effect by FSC. These consolidated financial statements do not include all of the information required by the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed by the FSC (hereinafter referred to as the IFRSs endorsed by the FSC) for the year-end consolidated financial statements.

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Basis of consolidation

The basis for consolidation applied in these consolidated financial statements is consistent with that applied in the consolidated financial statements for the year ended December 31, 2021. For the related information, please refer to note 4(c) to the consolidated financial statements for the year ended December 31, 2021.

List of the subsidiaries included in the consolidated financial statements:

Name of investor	Name of investee	Scope of business	Percentage of ownership March 31, 2022 December 31, 2021 March 31, 2021 Description % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 (note 2) % 100.00 % 100.00 % 100.00 (notes 1, 2) % 100.00 % 100.00 % 100.00 (note 2) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 (note 2) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 65.44 % 65.44 % 65.44 % 55.00 % 55.00 % 55.00 (note 2) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 (note 2)	Percentage of ownership March 31, 2022 December 31, 2021 March 31, 2021 Description % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 (note 2) % 100.00 % 100.00 % 100.00 (notes 1, 2) % 100.00 % 100.00 % 100.00 (note 2) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 (note 2) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 65.44 % 65.44 % 65.44 % 55.00 % 55.00 % 55.00 (note 2) % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 (note 2)
			March 31, 2022	December 31, 2021
TSRC TSRC TSRC & Hardison International Corporation TSRC Trimurti Holding Corporation Trimurti Holding Corporation TSRC (Hong Kong) Limited TSRC (Hong Kong) Limited TSRC (Lux.) Corporation S.A R.L TSRC (USA) Investment Corporation Polybus Corporation Pte Ltd Polybus Corporation Pte Ltd Polybus Corporation Pte Ltd Hardison International Corporation	Trimurti Holding Corporation Hardison International Corporation Dymas Corporation TSRC (Vietnam) Co., Ltd. Polybus Corporation Pte Ltd TSRC (Hong Kong) Limited TSRC (Shanghai) Industries Ltd. TSRC (Lux.) Corporation S.A R.L TSRC (USA) Investment Corporation TSRC Specialty Materials LLC Shen Hua Chemical Industrial Co,. Ltd. TSRC-UBE (Nantong) Chemical Industrial Co., Ltd. TSRC (Nantong) Industries Ltd. Triton International Holdings Corporation	Investment Investment Investment Production and processing of rubber color masterbatch, thermoplastic elastomer and plastic compound products International commerce and investment Investment Production and sale of reengineering plastic, plastic compound metal, and plastic elasticity engineering products International commerce and investment Investment Production and sale of TPE Production and sale of synthetic rubber products Production and sale of butadiene rubber Production and sale of TPE Investment	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 65.44 % 55.00 % 100.00 % 100.00	% 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 65.44 % 55.00 % 100.00 % 100.00

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Note 1: 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 2: It is an insignificant subsidiary, and its financial statement have not been reviewed.

(c) Non-current assets held for sale

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

(d) Employee benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other one-off events.

(e) Income tax

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

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the tax rates that have been enacted or substantively enacted at the time the asset or liability is recovered or settled, and be recognized directly in equity or other comprehensive income as tax expense.

(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 IAS 34 “Interim Financial Reporting” 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 preparation of the consolidated financial statements, estimates and underlying assumptions are consistent with the consolidated financial statements for the year ended December 31, 2021. For the related information, please refer to note 5 to the consolidated financial statements for the year ended December 31, 2021.

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts

Except as explained below, there are no significant differences in the description of significant accounts from the consolidated financial statements for the year ended December 31, 2021, and the related information is provided in note 6 to the consolidated financial statements for the year ended December 31, 2021.

(a) Cash 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 (b) Financial assets and liabilities at fair value 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	March 31, 2022 December 31, 2021 $ 408 390 924,179 1,110,545 4,025,108 3,323,820 - 30,000 $ 4,949,695 4,464,755 through profit or loss March 31, 2022 December 31, 2021 $ 6,821 7,702 March 31, 2022 December 31, 2021 $ 5,366 356	March 31, 2021
		402 1,281,809 2,355,692 -
		3,637,903
		March 31, 2021
		27,689
		March 31, 2021
	$	932

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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:

Forward contracts Forward contracts Swap contracts Swap contracts Swap contracts		March 31, 2022
	Contract amount (thousand dollars) EUR USD 2,110 / 2,363 USD JPY 218 / 25,000 EUR USD 16,030 / 17,925 USD CNH 4,020 / 25,610 NTD USD 100,000 / 3,497	Currency Maturity dates EUR/USD 2022.4.11~2022.6.13 USD/JPY 2022.4.11 EUR/USD 2022.4.11~2022.6.28 USD/CNH 2022.4.6~2022.6.14 NTD/USD 2022.4.18

Forward contracts Forward contracts Swap contracts Swap contracts Swap contracts Swap contracts Swap contracts Swap contracts Swap contracts	December 31, 2021	December 31, 2021
	Contract amount (thousand dollars) EUR USD 2,980 / 3,383 CNH USD 3,187 / 500 EUR USD 15,450 / 17,735 USD CNH 549 / 3,540 CNH USD 22,350 / 3,503 JPY USD 16,411 / 144	Currency Maturity dates EUR/USD 2022.1.12~2022.3.11 CNH/USD 2022.1.6 EUR/USD 2022.1.12~2022.3.30 USD/CNH 2022.2.15 CNH/USD 2022.1.6 JPY/USD 2022.1.12 March 31, 2021
	Contract amount (thousand dollars) EUR USD 27,850 / 33,668 USD CNH 3,134 / 20,394 JPY USD 10,000 / 92	Currency Maturity dates EUR/USD 2021.4.1~2021.7.1 USD/CNH 2021.4.7~2021.4.26 JPY/USD 2021.4.12

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Equity investments at fair value through other comprehensive income: Listed stocks (domestic) Unlisted stocks (domestic and overseas) Total	March 31, 2022 $ 749,532 676,255 $ 1,425,787	December 31, 2021 668,140 792,446 1,460,586	March 31, 2021
			- 1,093,607
			1,093,607

(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.

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

March 31, 2022 THB December 31, 2021 THB March 31, 2021 THB	Foreign currency amount (thousand dollars) $ 369,416 493,334 182,817	Exchange rate NTD 0.8651 319,581 0.8347 411,786 0.9149 167,259

(d) Notes and accounts receivable

Notes receivable Accounts receivable Less: allowance for impairment	March 31, 2022 $ 1,180,983 3,684,874 5,564 $ 4,860,293	December 31, 2021 951,817 3,724,240 7,399 4,668,658	March 31, 2021
			893,746 3,652,992 5,466
			4,541,272

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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:

	March 31, 2022
Gross carrying amount Weighted- average expected credit loss rate $ 4,792,901 0.05%~0.14% 62,446 2.35%~6.31% 10,503 8.38%~29.19% 7 100% $ 4,865,857 December 31, 2021		Loss allowance provision
		2,447 1,710 1,400 7
		5,564

	Weighted- average expected credit loss rate 0.05%~0.14% 2.35%~6.31% 8.07%~29.19% 100% March 31, 2021	Loss allowance provision
		2,559 1,173 1,480 2,187
		7,399

	Weighted- average expected credit loss rate 0.09%~0.17% 2.18%~4.58% 6.35%~6.59%	Loss allowance provision
		4,465 900 101
		5,466

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Balance at beginning of period Impairment losses (reversed) recognized Foreign exchange gain or loss Balance at end of period	For the three months ended March 31 2022 2021 $ 7,399 5,194 (1,993) 311 158 (39) $ 5,564 5,466
	2022 $ 7,399 (1,993) 158 $ 5,564

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

(e) Other receivables (including related parties)

Other receivables－related parties Other	March 31, 2022 $ 53,430 85,466 $ 138,896	December 31, 2021 47,938 45,896 93,834	March 31, 2021
			50,162 32,685
			82,847

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

(f) Inventories

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

Raw materials Supplies Work in progress Finished goods Merchandise Total	March 31, 2022 $ 1,962,226 11,857 323,282 3,392,700 796,413 $ 6,486,478	December 31, 2021 1,648,221 8,744 299,749 2,986,188 686,915 5,629,817	March 31, 2021
			1,501,349 11,245 296,813 2,717,484 475,816
			5,002,707

The aformentioned inventories were not pledged as collateral.

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 Unallocated production overhead Total	For the three months ended March 31	For the three months ended March 31
	2022 $ 5,972 (6,342) 99,221 $ 98,851	2021
		(28,755) (7,271) 79,105
		43,079

(g) Non-current assets held for sale

To optimize the Group’s asset value, the Group disposed its land and building located in Kaohsiung City, Renwu Dist. to a non-related party for $1,220,000 thousands, with a book value of $201,665 thousand, recognized as non-current assets-for-sale as of March 31, 2021. All relevant transactions amounting to $909,118 thousands, recognized as gain, had been completed in July 2021.

(h) Investments accounted for under equity method

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

Associates Joint ventures	March 31, 2022 $ 947,521 1,243,122 $ 2,190,643	December 31, 2021 844,557 1,186,016 2,030,573	March 31, 2021
			769,659 757,982
			1,527,641

(i) Associates

For the three months ended March 31, 2022 and 2021, the Group recognized its share of gain from the associates of $69,326 thousand and $34,874 thousand, respectively.

The details of the significant associates are as follows:

Name of associates	Existing relationship with the Group	The main operating place / register country	Proportion of equity and voting right	Proportion of equity and voting right
			March 31, 2022	December 31, 2021 March 31, 2021 % 50.00 % 50.00
ARLANXEO-TSRC (Nantong) Chemicals Industries Co., Ltd.	Strategic alliance of production and sales of NBR	China	% 50.00

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The comprehensive financial information of ARLANXEO-TSRC (Nantong) Chemicals Industries Co., Ltd., which is the significant associate to the Consolidated company, is as follows:

follows:
				December 31,
	March	31, 2022		2021	March 31, 2021
Current assets	$	1,000,043		735,166	678,036
Non-current assets		637,131		584,324	642,210
Current liabilities		(347,626)		(282,615)	(600,814)
Non-current liabilities		(89,492)		(29,454)	(30,579)
Equity	$	1,200,056		1,007,421	688,853
Equity attributable to the Group	$	600,028		503,711	344,427
				For the three months ended
				March 31
				2022	2021
Revenue			$	655,079	453,476
Net income of continued operations			$	151,498	49,752
Other comprehensive income (loss)				-	-
Total comprehensive income (loss)			$	151,498	49,752
Total comprehensive income attributable to the Group			$	75,749	24,876
				For the three months ended
				March 31
				2022	2021
Beginning balance of the equity of the associate
attributable to the Group			$	505,494	323,287
Current total comprehensive income	of the associate
attributable to the Group				75,749	24,876
Other				20,263	(1,490)
Ending balance of the equity of the associate
attributable to the Group			$	601,506	346,673

Summary of respectively not significant associates recognized under equity method were as follows. The financial information is included in the consolidated financial statement.

Balance of not significant associate’s equity	March 31, 2022 $ 346,015	December 31, 2021 339,063	March 31, 2021
			422,986

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Attributable to the Group: Net income (loss) of continued operations Other comprehensive income Total comprehensive income	For the three months ended March 31	For the three months ended March 31
	2022 $ (6,423) - $ (6,423)	2021
		26,463 -
		26,463

(ii) Joint ventures

The details of the significant joint ventures are as follows:

Name ofjoint ventures	Existing relationship with the Group	The main operating place / register country	Proportion of equity and voting right	Proportion of equity and voting right
			March 31, 2022	December 31, 2021 March 31, 2021 % 50.00 % 50.00
Indian Synthetic Rubber Private Limited	Strategic alliance of production and sales of synthetic rubber products	India	% 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	March 31, 2022		December 31, 2021 2,806,016 2,527,405 (1,720,350) (1,284,317) 2,328,754 1,164,377	March 31, 2021
				1,825,712 2,869,403 (1,396,016 (1,829,351
				1,469,748
				734,874

Revenue Net income of continued operations Other comprehensive income Total comprehensive income Total comprehensive income attributable to the Group	For the three months ended March 31	For the three months ended March 31
	2022 $ 1,450,598 $ 84,496 80,672 $ 165,168 $ 82,584	2021
		1,701,019
		367,067 6,246
		373,313
		186,657

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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	For the three months ended March 31	For the three months ended March 31
	2022 $ 1,130,197 82,584 (29,784) $ 1,182,997	2021
		512,624 186,657 3,350
		702,631

Summary of respectively not significant joint ventures recognized under the equity method was as follows. The financial information is included in the consolidated financial statement.

March 31, 2022 Balance of not significant joint venture's equity $ 60,125 Attributable to the Group: Net income (loss) of continued operations Other comprehensive income Total comprehensive income	March 31, 2022		December 31, 2021 March 31, 2021 55,819 55,351 For the three months ended March 31	March 31, 2021
				55,351
				2021
				(2,799) -
				(2,799)

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

Aforementioned other equity accounted investments of the Group in its investee companies, and its equity in net earnings (loss) on these investee companies were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

(i) Material non-controlling interests of subsidiaries

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

Name of joint ventures	The main operating place / register country	Proportion of Non-controlling interests	Proportion of Non-controlling interests
		March 31, 2022	December 31, 2021 March 31, 2021 % 34.56 % 34.56 % 45.00 % 45.00
Shen Hua Chemical Industries Co., Ltd. TSRC-UBE (Nantong) Industries Ltd.	China China	% 34.56 % 45.00

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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.

				December 31,
	March 31, 2022			2021	March 31, 2021
Current assets	$	3,873,115		3,236,185	3,055,610
Non-current assets		1,169,959		1,169,739	913,119
Current liabilities		(627,181)		(542,982)	(708,268)
Non-current liabilities		(489,914)		(263,395)	(17,766)
Net assets	$	3,925,979		3,599,547	3,242,695
Non-controlling interests	$	1,356,819		1,244,003	1,120,677
				For the three months ended
				March 31
				2022	2021
Revenue			$	2,138,640	2,164,385
Net income			$	187,598	397,605
Other comprehensive income				113,895	(28,298)
Total comprehensive income			$	301,493	369,307
Total net income attributable to non-controlling
interests			$	64,833	137,412
Total comprehensive income attributable to non-
controlling interests			$	104,196	127,633
				For the three months ended
				March 31
				2022	2021
Net cash flow from (used in) operating activities			$	25,862	(99,722)
Net cash flow from (used in) investing activities				203,427	(36,278)
Effect on exchange rate changes on cash and cash
equivalents				35,737	(3,441)
Increase (decrease) in cash and cash equivalents			$	265,026	(139,441)

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

					December 31,
	March 31, 2022				2021	March 31, 2021
Current assets	$	1,713,598			1,447,115	1,143,768
Non-current assets		837,477			833,123	889,541
Current liabilities		(394,624)			(377,385)	(313,825)
Non-current liabilities			(6,170)		(5,373)	(5,002)
Net assets	$	2,150,281			1,897,480	1,714,482
Non-controlling interests	$	967,626			853,865	771,516
					For the three months ended
					March 31
					2022	2021
Revenue				$	915,771	788,618
Net income				$	177,799	114,997
Other comprehensive income					61,064	(14,951)
Total comprehensive income				$	238,863	100,046
Total net income attributable to non-controlling
interests				$	80,010	51,749
Total comprehensive income attributable to non-
controlling interests				$	107,488	45,021
					For the three months ended
					March 31
					2022	2021
Net cash flow from (used in) operating activities				$	51,518	(73,442)
Net cash used in investing activities					(7,456)	(6,895)
Net cash flow from financing activities					29,641	38,815
Effect on exchange rate changes on cash and cash
equivalents					21,125	1,192
Increase (decrease) in cash and cash	equivalents			$	94,828	(40,330)

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) 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, 2022 Additions Disposals Reclassification Effect on changes in exchange rates Balance at March 31, 2022 Balance at January 1, 2021 Additions Reclassification to assets held for sale Disposals Reclassification Effect on changes in exchange rates Balance at March 31, 2021 Depreciation and impairment loss: Balance at January 1, 2022 Depreciation Disposals Effect on changes in exchange rates Balance at March 31, 2022 Balance at January 1, 2021 Depreciation Disposals Effect on changes in exchange rates Balance at March 31, 2021 Carrying value: January 1, 2022 March 31, 2022 January 1, 2021 March 31, 2021	Land $ 639,920 - - - 677 $ 640,597 $ 841,829 - (201,665) - - 17 $ 640,181 $ - - - - $ - $ - - - - $ - $ 639,920 $ 640,597 $ 841,829 $ 640,181	Land improvements 150,505 - - - 2,237 152,742 142,168 - - - - 46 142,214 99,240 2,122 - 926 102,288 94,229 1,361 - 23 95,613 51,265 50,454 47,939 46,601	Buildings 4,931,763 - (5,471) 5,553 137,354 5,069,199 4,672,369 - - - 115,431 (27,172) 4,760,628 2,607,460 45,097 (1,242) 62,317 2,713,632 2,464,473 39,632 - (12,869) 2,491,236 2,324,303 2,355,567 2,207,896 2,269,392	Machinery 22,755,392 1,688 (4,745) 122,353 485,691 23,360,379 21,983,009 624 - (37,086) 139,352 (72,642) 22,013,257 16,343,116 212,265 (4,043) 305,245 16,856,583 15,857,095 210,500 (35,931) (38,701) 15,992,963 6,412,276 6,503,796 6,125,914 6,020,294	Furniture and fixtures and other equipment 255,962 63 - 3,104 5,292 264,421 247,058 - - (634) - (679) 245,745 190,954 4,665 - 3,644 199,263 182,165 4,211 (570) (477) 185,329 65,008 65,158 64,893 60,416	Construction in progress 661,868 126,541 (672) (137,107) 6,222 656,852 1,228,046 188,689 - - (248,905) (3,817) 1,164,013 - - - - - - - - - - 661,868 656,852 1,228,046 1,164,013	Total 29,395,410 128,292 (10,888) (6,097) 637,473 30,144,190 29,114,479 189,313 (201,665) (37,720) 5,878 (104,247) 28,966,038 19,240,770 264,149 (5,285) 372,132 19,871,766 18,597,962 255,704 (36,501) (52,024) 18,765,141 10,154,640 10,272,424 10,516,517 10,200,897

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

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) 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, 2022 Additions Write-off Lease modification Amortization to operating costs and inventories Effect on changes in foreign exchange rates Balance at March 31, 2022 Balance at January 1, 2021 Additions Lease modification Amortization to operating costs and inventories Effect on changes in foreign exchange rates Balance at March 31, 2021 Accumulated depreciation and impairment losses: Balance at January 1, 2022 Depreciation Write-off Effect on changes in exchange rates Balance at March 31, 2022 Balance at January 1, 2021 Depreciation Lease modification Effect on changes in exchange rates Balance at March 31, 2021 Carrying value: January 1, 2022 March 31, 2022 January 1, 2021 March 31, 2021	Land $ 564,225 - - (124) - 20,650 $ 584,751 $ 569,782 - - - (3,974) $ 565,808 $ 157,671 3,457 - 5,896 $ 167,024 $ 145,489 3,456 - (1,189) $ 147,756 $ 406,554 $ 417,727 $ 424,293 $ 418,052	Building 202,597 - (2,098) 314 (956) 4,630 204,487 255,467 - (865) (1,603) (1,352) 251,647 132,851 12,513 (2,098) 3,205 146,471 111,766 15,747 321 (621) 127,213 69,746 58,016 143,701 124,434	Machinery 374,699 - - - (18,633) 12,969 369,035 457,714 - - (19,354) (3,584) 434,776 - - - - - 17,224 - - 14 17,238 374,699 369,035 440,490 417,538	Transportation equipment 32,988 430 (161) - - 1,017 34,274 32,827 3,749 - - (4) 36,572 16,502 2,418 (161) 538 19,297 18,339 2,773 - 5 21,117 16,486 14,977 14,488 15,455	Total 1,174,509 430 (2,259) 190 (19,589) 39,266 1,192,547 1,315,790 3,749 (865) (20,957) (8,914) 1,288,803 307,024 18,388 (2,259) 9,639 332,792 292,818 21,976 321 (1,791) 313,324 867,485 859,755 1,022,972 975,479

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

(l) Investment property

Carrying value: January 1, 2022 March 31, 2022 January 1, 2021 March 31, 2021	Owned property
	Buildings
	$ 1,552,148 $ 1,548,467 $ 1,566,873 $ 1,563,192

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

There were no significant additions to, disposals of, or provision (reversal) of impairment of, the Group's investment properties for the three months ended March 31, 2022 and 2021. The amortization of investment properties of the Group is provided in note 12(a), and the related information is provided in note 6(k) to the consolidated financial statements for the year ended December 31, 2021.

The fair value of the Group's investment properties does not significantly differ from the information disclosed in note 6(k) to the consolidated financial statements for the year ended December 31, 2021.

(m) Intangible assets

Intangible assets
Carrying value: January 1, 2022 March 31, 2022 January 1, 2021 March 31, 2021	Industrial technology and know-how $ 328,474 $ 321,718 $ 392,856 $ 382,312	Computer software 24,594 24,109 14,913 18,252	Patent and trademark 190,903 193,268 212,729 207,400	Customer relationship 348,708 352,188 391,907 380,338	Total 892,679
					891,283
					1,012,405
					988,302

There were no significant additions to, disposals of, or provision (reversal) of impairment of, the Group's intangible assets for the three months ended March 31, 2022 and 2021. The amortization of intangible assets of the Group is provided in note 12(a), and the related information is provided in note 6(l) to the consolidated financial statements for the year ended December 31, 2021.

(n) 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

	March 31, 2022	March 31, 2022
Range of interest rates (%)	Year of maturity		The unused credit facilities
0.35~3.60			16,166,127

Range of interest rates (%)	Year of maturity		The unused credit facilities
0.40~3.85			15,543,553

Range of interest rates (%)	Year of maturity	Amount $ 4,212,684	The unused credit facilities
0.38~3.70	2021		14,945,395

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Long-term borrowings

1) Long-term bank borrowings

Secured loans Unsecured loans Unsecured loans Total Current Non-current Total		March 31, 2022	March 31, 2022
	Currency	Range of interest rates (%)	Year of maturity Amount 2022~2023 $ 107,359 2022~2027 2,561,964 2022~2024 440,779 $ 3,110,102 $ 966,597 2,143,505 $ 3,110,102
	USD NTD USD	4.38 0.95~1.25 1.73~1.98

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

Total		$ 2,753,932	$ 2,753,932
Secured loans Unsecured loans Total Current Non-current Total		March 31, 2021
	Currency	Range of interest rates (%)	Year of maturity Amount 2021~2023 $ 164,597 2021~2025 4,292,383 $ 4,456,980 $ 2,383,421 2,073,559 $ 4,456,980
	USD NTD	4.38 1.04~5.08

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the three months ended March 31, 2022 and 2021, the Group repaid the amounts of $178,788 thousand and $513,938 thousand, respectively, for its long-term borrowings, wherein the proceeds amounting to $516,269 thousand and $510,040 thousand bore the interest rates of 1.15%~1.50% and 1.04%~1.20%, as well as maturities ranging from November 2025 to January 2027 and March 2024 to November 2025, respectively, and the related information is provided in note 6(m) to the consolidated financial statements for the year ended December 31, 2021.

2) Long-term commercial paper payable (recorded as current portion of long-term payables and other long-term borrowings)

Long-term commercial paper payable Less: discount on long-term commercial paper payable Less: current portion Total Interest rate	March 31, 2022 $ 350,000 79 349,921 $ - 1.1737%	December 31, 2021 350,000 78 - 349,922 1.1640%	March 31, 2021
			350,000 256 -
			349,744
			1.1600%

(o) Non-current provision liabilities

Balance at January 1, 2022 Reverse in provisions Effect on changes in exchange rates Balance at March 31, 2022 Balance at January 1, 2021 Increase in provisions Balance at March 31, 2021	Guarantees $ 27,757 (691) - $ 27,066 $ 31,819 460 $ 32,279	Demolition and relocation costs 241,779 - 9,038 250,817 - - -	Total 269,536 (691) 9,038 277,883 31,819 460 32,279

Please refer to note 12(c) for further description of guarantees, demolition and relocation costs.

(p) Lease liabilities

The Group's lease liabilities were as follow:

Current Non-current	March 31, 2022 $ 118,951 $ 348,338	December 31, 2021 128,928 357,355	March 31, 2021
			123,892
			461,246

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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	For the three months ended March 31	For the three months ended March 31
	2022 $ 613 $ 3,834 $ 4,665	2021
		798
		4,031
		3,743

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

The amounts recognized in the statement of cash flows for the	Group were as follows:	Group were as follows:
Total cash outflow for leases	For the three months ended March 31
	2022 $ 45,672	2021
		48,873

(q) Employee benefits

(i) Defined benefit plans

The Group allocated the pension fund in accordance with the "Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund", and contributed $18,773 thousand and $17,323 thousand to the Bank of Taiwan labor pension reserve account in March 2022 and March 2021, respectively. Since there were no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2021 and 2020.

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

Operating costs Operating expenses	For the three months ended March 31	For the three months ended March 31
	2022 $ 821 514 $ 1,335	2021
		846 567
		1,413

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

According to the defined contribution plans, the Group made contributions to the Bureau of Labor Insurance and the local authorities of the consolidated overseas subsidiaries. The Group recognized pension costs of the defined contribution plans in profit or loss as follows:

Operating costs Operating expenses	For the three months ended March 31	For the three months ended March 31
	2022 $ 19,570 8,413 $ 27,983	2021
		15,161 6,762
		21,923

(r) Income tax

The components of income tax expense were as follows:

Current income tax expense (benefit) Current period Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Income tax expenses of continued operations	For the three months ended March 31	For the three months ended March 31
	2022 $ 300,591 (3) 300,588 8,471 $ 309,059	2021
		261,971 -
		261,971
		137,302
		399,273

The amounts of the Group's income tax benefit recognized under other comprehensive income were as follows:

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	For the three months ended March 31
	2022 $ (7,697)	2021
		-

The tax returns of the Company have been assessed by the tax authorities for all years through 2020.

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(s) Capital and other equity

Except as explained in the following paragraphs, there were no significant changes in the capital and other equity during the three months ended March 31, 2022 and 2021. Please refer to note 6(s) to the consolidated financial statements for the year ended December 31, 2021 for the related information.

－ (i) Retained earnings earnings distribution

In accordance with the Company's articles of incorporation, 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.

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.

On March 10, 2022, the Company's Board of Directors resolved to appropriate the 2021 earnings. On August 4, 2021, the shareholders' meeting resolved to distribute the 2020 earnings. These earnings were appropriated as follows:

Dividends distributed to common shareholders: Cash (ii) Other equities (net for tax) Foreign exchange differences arising from foreign operations Balance as of January 1, 2022 $ (456,708) Foreign exchange differences arising from foreign operations 572,876 Exchange differences on translation financial statements from investments accounted for using equity method (23,099) Unrealized gains or losses from financial assets measured at fair value through other comprehensive income - Share of cash flow hedges of associates and joint ventures accounted for under equity method - Balance as of March 31, 2022 $ 93,069	2021 $ 1,981,704 Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Gains (losses) on hedging instruments 1,047,059 (26,847) - - - - (28,881) - - (5,261) 1,018,178 (32,108)		2020 297,256 Total 563,504 572,876 (23,099) (28,881) (5,261) 1,079,139

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance as of January 1, 2021 Foreign exchange differences arising from foreign operations Exchange differences on translation financial statements from investments accounted for using equity method Unrealized gains or losses from financial assets measured at fair value through other comprehensive income Share of cash flow hedges of associates and joint ventures accounted for under equity method Balance as of March 31, 2021	Foreign exchange differences arising from foreign operations $ (198,125) (70,793) (4,597) - - $ (273,515)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 558,902 - - 140,917 - 699,819	Gains (losses) on hedging instruments (81,119) - - - 9,954 (71,165)	Total 279,658 (70,793) (4,597) 140,917 9,954 355,139

(t) Earnings per share

The calculations of the Company's basic earnings per share and diluted earnings per share was as follows:

(i) Basic earnings per share

Net income attributable to common shareholders of the Company Weighted-average number of common shares (in thousands) Basic earnings per share (NTD)	For the three months ended March 31	For the three months ended March 31
	2022 $ 652,160 825,710 $ 0.79	2021
		896,970
		825,710
		1.09

(ii) Diluted earnings per share

Net income attributable to common shareholders of the Company (diluted) Weighted-average number of common shares (basic) (in thousands) Impact on potential common shares Effect on employees' compensation (in thousands) Weighted-average number of shares outstanding (diluted) (in thousands) Diluted earnings per share (NTD)	For the three months ended March 31	For the three months ended March 31
	2022 $ 652,160 825,710 4,949 830,659 $ 0.79	2021
		896,970
		825,710 1,876
		827,586
		1.08

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 three months ended March 31, 2022 and 2021, the Company recognized the employees' compensation of $39,063 thousand and $22,378 thousand, respectively, and the directors' remuneration of $3,661 thousand and $4,716 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. If the distribution in the following year is different from the estimate, the difference is treated as a change in accounting estimate and will be recognized as profit or loss for the following year.

For the years ended December 31, 2021 and 2020, the Company recognized its employees' compensation of $171,609 thousand and $40,750 thousand, respectively, and its directors' remuneration of $22,677 thousand and $616 thousand, respectively. There was no difference between the distribution and the recognized amounts. For relevant information, please refer to Market Observation Post System.

(v) Revenue from contracts with customers

For the three months ended March 31, 2022	For the three months ended March 31, 2022	For the three months ended March 31, 2022
Synthetic rubber $ 6,032,101 1,259,076 953,750 198,344 $ 8,443,271 8,399,244 - 44,027 $ 8,443,271	Non-synthetic rubber 193,124 5,583 49 - 198,756 - 196,821 1,935 198,756	Total
		6,225,225 1,264,659 953,799 198,344
		8,642,027
		8,399,244 196,821 45,962
		8,642,027

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Primary geographical markets: Asia Americas Europe Others Major product lines: Synthetic rubber / elastomers Applied materials Others (w) Other income and expenses Rental income Royalty income Net service income Depreciation of investment properties Net other income Other income and expenses (x) Non-operating income and expenses (i) Interest income Interest income from bank deposits	For the three months ended March 31, 2021 Synthetic rubber Non-synthetic rubber Total $ 5,874,866 287,990 6,162,856 1,002,892 4,535 1,007,427 828,487 - 828,487 218,041 - 218,041 $ 7,924,286 292,525 8,216,811 $ 7,866,141 - 7,866,141 - 292,320 292,320 58,145 205 58,350 $ 7,924,286 292,525 8,216,811 For the three months ended March 31 2022 2021 $ 18,208 19,107 36,395 27,305 1,307 3,651 (3,681) (3,681) 9,140 8,964 $ 61,369 55,346 For the three months ended March 31 2022 2021 $ 10,463 6,118	For the three months ended March 31, 2021 Synthetic rubber Non-synthetic rubber Total $ 5,874,866 287,990 6,162,856 1,002,892 4,535 1,007,427 828,487 - 828,487 218,041 - 218,041 $ 7,924,286 292,525 8,216,811 $ 7,866,141 - 7,866,141 - 292,320 292,320 58,145 205 58,350 $ 7,924,286 292,525 8,216,811 For the three months ended March 31 2022 2021 $ 18,208 19,107 36,395 27,305 1,307 3,651 (3,681) (3,681) 9,140 8,964 $ 61,369 55,346 For the three months ended March 31 2022 2021 $ 10,463 6,118	For the three months ended March 31, 2021 Synthetic rubber Non-synthetic rubber Total $ 5,874,866 287,990 6,162,856 1,002,892 4,535 1,007,427 828,487 - 828,487 218,041 - 218,041 $ 7,924,286 292,525 8,216,811 $ 7,866,141 - 7,866,141 - 292,320 292,320 58,145 205 58,350 $ 7,924,286 292,525 8,216,811 For the three months ended March 31 2022 2021 $ 18,208 19,107 36,395 27,305 1,307 3,651 (3,681) (3,681) 9,140 8,964 $ 61,369 55,346 For the three months ended March 31 2022 2021 $ 10,463 6,118
	Synthetic rubber
	$ 5,874,866 1,002,892 828,487 218,041 $ 7,924,286 $ 7,866,141 - 58,145 $ 7,924,286

Interest income from bank deposits

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other gains and losses

Gains or losses on disposal of property, plant and equipment Foreign exchange gain or loss, net Gains or losses on financial assets (liabilities) at fair value through profit or loss Other gains and losses Other gains and losses, net	For the three months ended March 31	For the three months ended March 31
	2022 $ (4,848) (884) 9,486 1,062 $ 4,816	2021
		(1,189) (42,999) 34,035 6,301
		(3,852)

(iii) Finance costs

Interest expense	For the three months ended March 31	For the three months ended March 31
	2022 $ 26,092	2021
		29,372

(y) Financial instruments

Except as noted below, there were no significant changes in the Group's exposure to credit risk, liquidity risk, and market risk due to financial instruments. Please refer to note 6(z) to the consolidated financial statements for the year ended December 31, 2021.

(i) Liquidity risk

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

March 31, 2022 Non-derivative financial liabilities Short-term borrowings Accounts payable (including related parties) Dividend payable Other payables Long-term borrowings (including other long-term borrowings,current portion and current portion of long-term payables) Lease liabilities Deposits received Derivative financial liabilities Other swap contracts: Outflow	Contractual cash flows $ 3,727,787 1,906,375 1,981,704 1,228,490 3,530,138 470,587 50,926 5,366 $ 12,901,373	1 year 3,727,787 1,906,375 1,981,704 1,228,490 1,351,366 119,995 - 5,366 10,321,083	1-2 years - - - - 906,190 70,301 36,559 - 1,013,050	2-5 years - - - - 1,272,582 157,626 11,247 - 1,441,455	Over 5 years
					- - - - - 122,665 3,120 -
					125,785

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2021 Non-derivative financial liabilities Short-term borrowings Accounts payable (including related parties) Other payables Long-term borrowings (including other long-term borrowings and current portion) Lease liabilities Deposits received Derivative financial liabilities Other swap contracts: Outflow March 31, 2021 Non-derivative financial liabilities Short-term borrowings Accounts payable (including related parties) Other payables Long-term borrowings (including other long-term borrowings and current portion) Lease liabilities Deposits received Derivative financial liabilities Other swap contracts/other forward contracts: Outflow	Contractual cash flows $ 4,029,764 1,538,292 1,560,933 3,169,756 491,077 48,177 356 $ 10,838,355 $ 4,232,042 1,648,501 1,175,449 4,903,695 621,345 57,028 932 $ 12,638,992	1 year 4,029,764 1,538,292 1,560,933 851,952 130,861 - 356 8,112,158 4,232,042 1,648,501 1,175,449 2,426,999 138,904 - 932 9,622,827	1-2 years - - - 1,046,502 73,131 33,810 - 1,153,443 - - - 1,637,614 111,781 41,371 - 1,790,766	2-5 years - - - 1,271,302 154,206 11,247 - 1,436,755 - - - 839,082 185,445 12,536 - 1,037,063	Over 5 years
					- - - - 132,879 3,120 -
					135,999
					- - - - 185,215 3,121 -
					188,336

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

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Currency risk

1) Risk exposure

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

March 31, 2022 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR JPY December 31, 2021 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR JPY	Foreign currency (thousand dollars) $ 90,075 $ 23,347 $ 215,164 $ 40,540 $ 88,602 $ 20,190 $ 206,654 $ 95,757 $ 19,073 $ 262,873 $ 84,779 $ 92,364 $ 15,702 $ 235,269	Exchange rate NTD 28.6220 2,578,127 31.9164 745,152 0.2353 50,628 4.5070 182,714 28.6220 2,535,966 31.9164 644,392 0.2353 48,626 27.6900 2,651,511 31.3035 597,052 0.2404 63,195 4.3446 368,331 27.6900 2,557,559 31.3035 491,528 0.2404 56,559

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

March 31, 2021 Financial assets: Monetary assets: USD EUR JPY CNY Financial liabilities: Monetary liabilities: USD EUR JPY	Foreign currency (thousand dollars) $ 106,684 $ 10,575 $ 138,883 $ 26,612 $ 104,993 $ 7,246 $ 115,151	Exchange rate NTD 28.5310 3,043,801 33.4726 353,973 0.2576 35,776 4.3435 115,589 28.5310 2,995,555 33.4726 242,542 0.2576 29,663

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 $3,276 thousand and $2,814 thousand for the three months ended March 31, 2022 and 2021, respectively, with all other variable factors remaining constant. The analysis was performed on the same basis for both periods.

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 three months ended March 31, 2022 and 2021, foreign exchange gain (loss) (including Derivative financial instruments for non-hedging profit and loss) amounting to $8,602 thousand and $(8,964) thousand, respectively.

2) 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 $17,941 thousand and $22,549 thousand for the three months ended March 31, 2022 and 2021, respectively, with all other variable factors remaining constant. This is mainly due to the Group's borrowing at floating rates.

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) 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.

	March 31, 2022	March 31, 2022	March 31, 2022
Carrying amount $ 6,821 749,532 676,255 1,425,787 $ 1,432,608 $ 5,366		Fair value
	Level 1 Level 2 Level 3 - 6,821 - 749,532 - - - - 676,255 749,532 - 676,255 749,532 6,821 676,255 - 5,366 - December 31, 2021			Total
				6,821
				749,532 676,255
				1,425,787
				1,432,608
				5,366

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

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	March 31, 2021	March 31, 2021	March 31, 2021
Carrying amount $ 27,689 1,093,607 $ 1,121,296 $ 932		Fair value
	Level 1 - - - -	Level 2 27,689 - 27,689 932	Level 3 - 1,093,607 1,093,607 -	Total
				27,689
				1,093,607
				1,121,296
				932

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, 2022 Total gains: Recognized in other comprehensive income Balance at March 31, 2022 Balance at January 1, 2021 Total gains: Recognized in other comprehensive income Balance at March 31, 2021	Unquoted equity instruments $ 792,446 (116,191) $ 676,255 $ 952,645 140,962 $ 1,093,607

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 comprehensive income-equity investments without an active market	Valuation technique Comparative listed company	Significant unobservable inputs
		‧ Multipliers of price- to-earnings ratios as of March 31, 2022, December 31, 2021 and March 31, 2021 was all 7.24~19.03, 9.45~20.31 and 13.87~17.80, respectively ‧ Multipliers of price- book ratios as of March 31, 2021 were 1.69 ‧ Market liquidity discount rate as of 20%

Inter-relationship between significant unobservable inputs and fair value measurement

‧ 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 discount would be lower.
－
5) Fair value measurements in Level 3 sensitivity analysis of reasonably possible alternative assumptions

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

March 31, 2022 Financial assets fair value through other comprehensive income Equity investments without an active market December 31, 2021 Financial assets fair value through other comprehensive income Equity investments without an active market March 31, 2021 Financial assets fair value through other comprehensive income Equity investments without an active market	Input Liquidity discount at 20% Liquidity discount at 20% Liquidity discount at 20%	Move up or Other comprehensive income down Favorable Unfavorable 1% $ 8,452 (8,452) 1% $ 9,904 (9,904) 1% $ 13,676 (13,676)

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

(z) Financial risk management

The objectives and policies of the Group's financial risk management are the same as those in note 6(aa) to the consolidated financial statements for the year ended December 31, 2021.

(aa) Capital management

The objectives, policies, and procedures of the Group's capital management are the same as those in the consolidated financial statements for the year ended December 31, 2021. There were no significant changes in the Group's quantitative information from that disclosed in the consolidated financial statements for the year ended December 31, 2021. For further information, please refer to note 6(ab) to the consolidated financial statements for the year ended December 31, 2021.

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

The Group did not have non-cash flow transactions on investing and financing activities for the three months ended March 31, 2022 and 2021.

(ac) Reconciliation of liabilities arising from financing activities

Reconciliations of liabilities arising from financing activities for the three months ended March 31, 2022 and 2021 was as follows:

Long-term borrowings (including current portion) Other long-term borrowings (including current portion) Short-term borrowings Lease liabilities Total liabilities from financing activities Long-term borrowings (including current portion) Other long-term borrowings Short-term borrowings Lease liabilities Total liabilities from financing activities	January 1, 2022 $ 2,753,932 349,922 4,006,365 486,283 $ 7,596,502 January 1, 2021 $ 4,463,864 349,341 3,789,276 632,090 $ 9,234,571	Cash flows 337,481 - (392,875) (36,560) (91,954) Cash flows (3,898) - 516,372 (40,301) 472,173	N Foreign exchange movement 18,689 - 102,724 16,333 137,746 N Foreign exchange movement (2,986) - (92,964) (10,011) (105,961)	on-cash changes	Others - - - 620 620 Others - - - 2,562 2,562	March 31, 2022 3,110,102 349,921 3,716,214 467,289
				Amortization of commercial paper discount - (1) - 613 612 on-cash changes
						7,643,526
						March 31, 2021 4,456,980 349,744 4,212,684 585,138
				Amortization of commercial paper discount - 403 - 798 1,201
						9,604,546

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(7) Related-party transactions

(a) Names and relationship with related parties

In this consolidated financial report, the related parties having transactions with the Group are listed as below:

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	The Group recognized associates under equity
Industries Co., Ltd.	method
Asia Pacific Energy Development Co., Ltd.	〃
Nantong Qix Storage Co., Ltd.	The Group recognized joint venture under equity
	method
Marubeni Corporation	Corporate director of one consolidated entity
UBE Industrial Ltd.	〃
Metropolis Property Management	Other related parties of the Group
Corporation
Continental Engineering Corporation	〃
WFV Corporation	〃
UBE (Shanghai) Ltd.	Subsidiary of corporate director of one consolidated
	entity

(b) Significant transactions with related parties
(i) Purchases

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

Other related parties	For the three months ended March 31	For the three months ended March 31
	2022 $ 104,318	2021
		42,585

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

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Service income and expenses

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

Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. Joint ventures Indian Synthetic Rubber Private Limited Others joint ventures Other related parties Others related parties (iii) Lease－Rent income Other related parties	For the three months ended March 31 2022 2021 $ 47,289 36,849 15,843 17,591 1,801 982 (4,074) (3,869) $ 60,859 51,553 For the three months ended March 31 2022 2021 $ 1,119 1,119

The amount of rent is based on neighboring rent, and the rental is collected monthly from other related parties.

(iv) Receivables from related parties

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

Account Other receivables Other receivables	Type of related parties Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. Joint ventures Indian Synthetic Rubber Private Limited Others	March 31, 2022 $ 19,600 33,154 676 $ 53,430	December 31, 2021 29,013 18,192 733 47,938	March 31, 2021
				26,820 22,829 513
				50,162

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Payables to related parties

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

Account Accounts payable Other payables	Type of related parties Other related parties Other related parties	March 31, 2022 $ 70,943 1,917 $ 72,860	December 31, 2021 1,316 1,817 3,133	March 31, 2021
				46,758 1,188
				47,946

(vi) Guarantees

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

Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. Joint ventures Indian Synthetic Rubber Private Limited	March 31, 2022 $ 472,267 953,113 $ 1,425,380	December 31, 2021 500,576 922,077 1,422,653	March 31, 2021
			765,887 950,082
			1,715,969

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

Associates ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd. Joint ventures Indian Synthetic Rubber Private Limited	March 31, 2022 $ 1,478 25,588 $ 27,066	December 31, 2021 1,782 25,975 27,757	March 31, 2021
			2,247 30,032
			32,279

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Key management personnel transactions

The compensation of the key management personnel comprised the following:

Short-term employee benefits Post-employment benefits	For the three months ended March 31	For the three months ended March 31
	2022 $ 34,001 362 $ 34,363	2021
		29,630 341
		29,971

(8) Pledged assets

The carrying values of pledged assets were as follows:

(9)

Pledged assets
Object
March 31, 2022
December 31,
2021
March 31, 2021
Restricted savings
deposits (recorded as
other non-current
assets)
Bank guarantee for
electricity usage
$ 1,191
1,153
1,175
Machinery etc.
(recorded as
property, plant and
equipment)
Guarantee for long-
term borrowings
144,694
148,688
260,485
$
145,885
149,841
261,660
Commitments and contingencies
(a)
The unused letters of credit outstanding
March 31, 2022
December 31,
2021
March 31, 2021
The Group's unused letters of credit
outstanding
$
730,254
842,971
1,247,663
(b)
Total amounts and the cumulative payments of group's signed construction and design contracts with
several vendors as follows:
March 31, 2022
December 31,
2021
March 31, 2021
Total amounts of construction in
progress contracts
$
348,000
377,273
478,004
Cumulative payments
$
313,548
305,883
283,298

(10) Losses Due to Major Disasters: None.

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(11) Subsequent Events: None.

(12) Other

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

By function By nature	Three months ended March 31, 2022	Three months ended March 31, 2022	Three months ended March 31, 2022	Three months ended March 31, 2021	Three months ended March 31, 2021	Three months ended March 31, 2021
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits
Salary	245,321	189,018	434,339	247,143	183,449	430,592
Labor and health insurance	27,420	19,133	46,553	23,702	15,354	39,056
Pension	20,391	8,927	29,318	16,007	7,329	23,336
Others (note 1)	57,825	37,400	95,225	46,623	25,999	72,622
Depreciation (note 2)	248,735	33,802	282,537	231,150	46,530	277,680
Amortization	2,339	28,867	31,206	1,415	28,986	30,401

Note 1: Other personnel expenses included meals, employee welfare, training expenses and employees' bonus.
Note 2: Depreciation expenses excluded expenses for investment property recognized under other income and expenses, amounting to $3,681 thousand for the three months ended March 31, 2022 and 2021.
(b) Seasonality or cyclicality of interim operations

The Group's operations were not affected by seasonality or cyclicality factors.

(c) 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 March 31, 2022, the Group collected installment compensation amounting to NTD 216,189 thousand based on the agreement and recognized provision for demolition and relocation amounting to NTD 250,817 thousand.

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(13) Other disclosures

(a) Information on significant transactions:

The following is the information on significant transactions required by the "Regulations Governing the Preparation of Financial Reports by Securities Issuers" for the Group for the three months ended March 31, 2022:

(i) Loans to other parties:

Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:	Loans to other parties:
													Unit: thousand NTD
No.	Name of lender	Name of borrower	Financial statement account	Related party	Highest balance of financing to other parties during the year	Ending balance	Amount actually drawn	Range of interest rates	Purposes of fund financing for the borrowers	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral		Financing limit for each borrowing company (Note 1)	Maximum financing limit for the lender (Note 2)
													Item	Value
1	TSRC (Shanghai) Industries Ltd.	TSRC (Nantong) Industries Ltd.	Loan	Yes	148,731	148,731	-	3.698%	2	-	Operating capital	-		-	176,149	352,298
2	Polybus Corporation Pte Ltd	TSRC	Account receivable- related parties	Yes	686,928	686,928	-	0.288%	2	-	Operating capital	-		-	4,949,858	9,899,716
3	TSRC (Hong Kong) Limited	TSRC	Account receivable- related parties	Yes	171,732	171,732	-	0.284%	2	-	Operating capital	-		-	1,932,267	3,864,533
4	TSRC (Hong Kong) Limited	TSRC (Vietnam) Co., Ltd.	Account receivable- related parties	Yes	114,488	114,488	-	0	2	-	Operating capital	-		-	1,932,267	3,864,533
5	TSRC Specialty Materials LLC	TSRC (USA) Investment Corporation	Account receivable- related parties	Yes	429,330	429,330	-	0.12%~0.44%	2	-	Operating capital	-		-	1,107,959	2,215,917

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.

(ii) Guarantees and endorsements for other parties:

		Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD	Unit: thousand NTD
No.	Name of company	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for one party	Highest balance for guarantees and endorsements during the year	Ending balance of guarantees and endorsements	Amount actually drawn	Property pledged on guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum allowable amount for guarantees and endorsements	Parent company endorsement / guarantees to third parties on behalf of subsidiary	Subsidiary endorsement / guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of company in Mainland China
		Name	Relationship with the company
0	TSRC	TSRC (USA) Investment Corporation	4	(Note 2)	840,630	429,330	45,795	-	% 2.49	(Note 3)	Y
0	TSRC	ARLANXEO- TSRC (Nantong) Chemical Industries Co., Ltd.	6	(Note 2)	509,245	472,267	3,741	-	% 2.74	(Note 3)			Y
0	TSRC	Indian Synthetic Rubber Private Limited	6	(Note 2)	953,113	953,113	508,041	-	% 5.54	(Note 3)
0	TSRC	TSRC (Vietnam) Co., Ltd.	4	(Note 2)	649,719	649,719	394,983	-	% 3.77	(Note 3)	Y
0	TSRC	TSRC Specialty Materials LLC	4	(Note 2)	286,220	286,220	107,359	-	% 1.66	(Note 3)	Y

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

(1) A company with which it does business.

(2) A company in which the public company directly and indirectly holds more than 50 percent of the voting shares.

(3) A company that directly and indirectly holds more than 50 percent of the voting shares in the public company.

(4) A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.

(5) A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.

(6) A company that all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages.

(7) Companies in the same industry provide among themselves joint and several 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 $10,327,225 thousand.

Note 3: The aggregate amount of guarantee by the Company is limited to 1.5 times its stockholders' equity, amounting to $25,818,062 thousand.

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Securities held as of March 31, 2022 (excluding investment in subsidiaries, associates and joint ventures):

Unit: thousand NTD

Name of holder	Nature and name of security	Relationship with the security issuer	Account name		Ending balance	Ending balance		Remarks
				Number of shares	Book value	Holding percentage	Market value
TSRC TSRC TSRC Dymas Corporation	Evergreen Steel Corporation Thai Synthetic Rubbers Co., Ltd. Hsin-Yung Enterprise Corporation Thai Synthetic Rubbers Co., Ltd.	- - - -	Financial assets at fair value through other comprehensive income－non- current Financial assets at fair value through other comprehensive income－non- current Financial assets at fair value through other comprehensive income－non- current Financial assets at fair value through other comprehensive income－non- current	12,148,000 599,999 5,657,000 837,552	749,532 133,385 356,674 186,196 1,425,787	2.89 % 5.42 % 3.90 % 7.57 %	749,532 133,385 356,674 186,196 1,425,787

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$300 million or 20% of the capital stock:

capital stock:	capital stock:
								Unit: thousand NTD
Name of company	Counter-party	Relationship	Transaction details				Status and deviation f length tr	reason for rom arm's- ansaction	Account / note receivable (payable)		Remarks
			Purchase / Sale	Amount	Percentage of total purchases / sales	Credit period	Unit price	Credit period	Balance	Percentage of total accounts / notes receivable (payable)
TSRC Specialty Materials LLC TSRC TSRC (Lux.) Corporation S.A R.L TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.A R.L TSRC (Nantong) Industries Ltd.	TSRC TSRC Specialty Materials LLC TSRC Specialty Materials LLC TSRC (Lux.) Corporation S.A R.L TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.A R.L	Parent and subsidiary companies Parent and subsidiary companies Related parties Related parties Related parties Related parties	Purchase Sale Purchase Sale Purchase Sale	109,408 (109,408) 142,175 (142,175) 603,753 (603,753)	11.17 % (3.98) % 17.21 % (12.94) % 72.93 % (34.68) %	70 days 70 days 90 days 90 days 70 days 70 days	- - - - - -		(140,319) 140,319 (144,118) 144,118 (455,593) 455,593	% (23.97) % 10.28 % (25.48) % 21.56 % (80.54) % 46.52

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

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

Unit: thousand NTD

Name of related party	Counter-party	Relationship	Balance of receivables from related party	Turnover rate	Overdue amount	Overdue amount	Amounts received in subsequent period (Note 2)	Allowances for bad debts
					Amount	Action taken
TSRC (Nantong) Industries Ltd.	TSRC (Lux.) Corporation S.A R.L	Related parties	455,593	6.36	-		99,019	-
TSRC Specialty Materials LLC	TSRC (Lux.) Corporation S.A R.L	Related parties	144,118	3.68	-		51,102	-
TSRC	TSRC Specialty Materials LLC	Parent and subsidiary companies	140,319	3.72	-		-	-

Note 1: Transactions within the Group were eliminated in the consolidated financial statements. Note 2: Until May 5, 2022.

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ix) Trading in derivative instruments: Please refer to note 6(b).
(x) Business relationships and significant intercompany transactions:

Unit: thousand NTD

No.	Name of company	Name of counter- party	Existing relationship with the counter- party	Transaction details	Transaction details	Transaction details	Transaction details
				Account name	Amount	Trading terms	Percentage of the total consolidated revenue or total assets
0 0 0 0 0 0 0 0 1 1 1 1 1 1 2 2 3 3 4	TSRC TSRC TSRC TSRC TSRC TSRC TSRC TSRC TSRC (Nantong) Industries Ltd. TSRC (Nantong) Industries Ltd. TSRC (Nantong) Industries Ltd. TSRC (Nantong) Industries Ltd. TSRC (Nantong) Industries Ltd. TSRC (Nantong) Industries Ltd. TSRC Specialty Materials LLC TSRC Specialty Materials LLC Shen Hua Chemical Industries Co., Ltd. Shen Hua Chemical Industries Co., Ltd. TSRC (Lux.) Corporation S.A R.L	TSRC (Nantong) Industries Ltd. TSRC (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.A R.L TSRC (Lux.) Corporation S.A R.L Polybus Corporation Pte Ltd TSRC Specialty Materials LLC TSRC Specialty Materials LLC TSRC (Nantong) Industries Ltd. TSRC (Shanghai) Industries Ltd. Polybus Corporation Pte Ltd Polybus Corporation Pte Ltd TSRC (Lux.) Corporation S.A R.L TSRC (Lux.) Corporation S.A R.L TSRC-UBE (Nantong) Industries Ltd. TSRC (Lux.) Corporation S.A R.L TSRC (Lux.) Corporation S.A R.L Polybus Corporation Pte Ltd Polybus Corporation Pte Ltd TSRC	1 1 1 1 1 1 1 1 3 3 3 3 3 3 3 3 3 3 2	Sales revenue Other income and expenses Sales revenue Accounts receivable Sales revenue Sales revenue Accounts receivable Other income and expenses Sales revenue Sales revenue Accounts receivable Sales revenue Accounts receivable Other income and expenses Sales revenue Accounts receivable Sales revenue Accounts receivable Other income and expenses	15,262 20,587 79,648 80,017 9,342 109,408 140,319 16,756 8,785 60,344 44,846 603,753 455,593 84,184 142,175 144,118 88,026 69,194 12,170	The transaction is not significantly different from normal transactions, and the collection terms were about two months 〃〃〃〃〃〃 The transaction is not significantly different from normal transactions, and the collection terms were about six months The transaction is not significantly different from normal transactions, and the collection terms were about two months 〃〃〃〃〃 The transaction is not significantly different from normal transactions, and the collection terms were about three months 〃 The transaction is not significantly different from normal transactions, and the collection terms were about two months 〃 The transaction is not significantly different from normal transactions, and the collection terms were about six months	0.18 % 0.24 % 0.92 % 0.23 % 0.11 % 1.27 % 0.40 % 0.19 % 0.10 % 0.70 % 0.13 % 6.99 % 1.31 % 0.97 % 1.65 % 0.42 % 1.02 % 0.20 % 0.14 %

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Note 1: Company numbering is as follows:

(1) Parent company - 0.

(2) Subsidiary starts from 1.

Note 2: 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.

Note 3: 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.

Note 4: 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 three months ended March 31, 2022 (excluding information on investees in Mainland China):

Mainland China):	Mainland China):	Mainland China):	Mainland China):
				Unit: thousand NTD/thousand USD/thousand EUR
Name of investor	Name of investee	Address	Scope of business	Original cost		Ending balance			Net income (losses) of investee	Investment income (losses)	Remarks
				March 31, 2022	December 31, 2021	Shares	Percentage of ownership	Book value
TSRC TSRC TSRC TSRC Trimurti Holding Corporation Trimurti Holding Corporation Trimurti Holding Corporation TSRC (Hong Kong) Limited TSRC (Lux.) Corporation S.A R.L TSRC (USA) Investment Corporation Hardison International Corporation Hardison International Corporation Dymas Corporation	Trimurti Holding Corporation Hardison International Corporation Dymas Corporation TSRC (Vietnam) Co., Ltd. Polybus Corporation Pte Ltd TSRC (Hong Kong) Limited Indian Synthetic Rubber Private Limited TSRC (Lux.) Corporation S.A R.L TSRC (USA) Investment Corporation TSRC Specialty Materials LLC Triton International Holdings Corporation Dymas Corporation Asia Pacific Energy Development Co., Ltd.	Palm Grove House, P.O. BOX 438, Road Town, Tortola, B.V.I. Palm Grove House, P.O. BOX 438, Road Town, Tortola, B.V.I. Palm Grove House, P.O. BOX 438, Road Town, Tortola, B.V.I. 8 VSIP II-A Street 31, Vietnam Singapore Industrial Park II-A, Tan Uyen Town, Binh Duong Province, Vietnam 100 Peck Seah Strect #09-16 Singapore 079333 15/F Boc Group Life Assurance Tower 136 Dses Voeus Road Central Room No.702, Indian Oil Bhawan, 1 Sri Aurobindo Marg, Yusuf Sarai, New Delhi 110016, India 39-43 avenue de la Liberte L-1931 Luxembourg 2711 Centerville Road, Suite 400, County of New Castle, Wilmington, Delaware, USA 12012 Wickchester Lane, Suite 280, Houston, TX, USA Palm Grove House, P.O. BOX 438, Road Town, Tortola, B.V.I. Palm Grove House, P.O. BOX 438, Road Town, Tortola, B.V.I. Cayman Islands	Investment corporation Investment corporation Investment corporation Production and processing of rubber color masterbatch, thermoplastic elastomer and plastic compound products International commerce and investment corporation Investment corporation Production and sale of synthetic rubber products International commerce and investment corporation Investment corporation Production and sale of TPE Investment corporation Investment corporation Consulting for electric power facilities management and electrical system design	1,005,495 109,442 38,376 387,585 1,863,321 (USD65,101) 2,972,395 (USD103,850) 843,576 (USD29,473) 2,389,569 (EUR74,870) 2,749,143 (USD96,050) 6,257,256 (USD218,617) 1,431 (USD50) 137,357 (USD4,799) 322,999 (USD11,285)	1,005,495 109,442 38,376 342,742 1,863,321 (USD65,101) 2,972,395 (USD103,850) 843,576 (USD29,473) 2,389,569 (EUR74,870) 2,749,143 (USD96,050) 6,257,256 (USD218,617) 1,431 (USD50) 137,357 (USD4,799) 322,999 (USD11,285)	86,920,000 3,896,305 1,161,004 - 105,830,000 103,850,000 222,861,375 74,869,617 130 - 50,000 4,798,566 7,522,337	% 100.00 % 100.00 % 19.48 % 100.00 % 100.00 % 100.00 % 50.00 % 100.00 % 100.00 % 100.00 % 100.00 % 80.52 % 37.78	15,828,967 637,327 133,957 243,750 9,899,716 3,864,533 1,182,997 3,060,880 2,911,067 2,215,917 60,413 575,022 346,015	520,083 (3,133) (6,394) (24,205) 410,747 70,531 84,496 57,081 56,740 100,119 2,083 (6,394) (17,000)	520,083 (3,133) (1,246) (24,205) 410,747 70,531 42,248 57,081 56,740 100,119 2,083 (5,149) (6,423)	Subsidiary Subsidiary Subsidiary (note 2) Subsidiary Indirectly owned subsidiary Indirectly owned subsidiary - Indirectly owned subsidiary Indirectly owned subsidiary Indirectly owned subsidiary Indirectly owned subsidiary Indirectly owned subsidiary -

Note 1: Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD28.622; EUR1 to NTD31.9164). Note 2: TSRC directly owns 19.48% of Dymas's equity and indirectly owns 80.52% via Hardison International Corporation, total directly and indirectly owns of equity are 100%. Note 3: Transactions within the Group were eliminated in the consolidated financial statements.

(c) Information on investment in Mainland China:

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

					Unit: thousand NTD/thousand USD	Unit: thousand NTD/thousand USD	Unit: thousand NTD/thousand USD	Unit: thousand NTD/thousand USD	Unit: thousand NTD/thousand USD	Unit: thousand NTD/thousand USD	Unit: thousand NTD/thousand USD	Unit: thousand NTD/thousand USD
Name of investee in Mainland China	Scope of business	Issued capital	Method of investment (Note 1)	Cumulative investment (amount) from Taiwan as of January 1, 2022	Investment flow during current period		Cumulative investment (amount) from Taiwan as of March 31, 2022	Net income (losses) of investee	Direct / indirect investment holding percentage	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Remittance amount	Repatriation amount
Shen Hua Chemical Industries Co., Ltd.	Production and sale of synthetic rubber products	1,179,799 (USD41,220)	(2)a.	-	-	-	-	187,598	65.44 %	122,765 (Note 2)	2,585,144	4,786,340
Changzhou Asia Pacific Co-generation Co., Ltd.	Power generation and sale of electricity and steam	661,168 (USD23,100)	(2)c.	109,680 (USD3,832)	-	-	109,680 (USD3,832)	(17,642)	28.34 %	(5,000) (Note 3)	340,030	358,308
TSRC (Shanghai) Industries Ltd.	Production and sale of compounding materials	157,421 (USD5,500)	(2)b.	112,198 (USD3,920)	-	-	112,198 (USD3,920)	13,493	100.00 %	13,493 (Note 2)	379,267	-
Nantong Qix Storage Co., Ltd.	Storehouse for chemicals	85,866 (USD3,000)	(2)d.	42,933 (USD1,500)	-	-	42,933 (USD1,500	4,242	50.00 %	2,121 (Note 2)	60,125	74,060
TSRC-UBE (Nantong) Chemical Industrial Co., Ltd.	Production and sale of synthetic rubber products	1,144,880 (USD40,000)	(2)a.	28,622 (USD1,000)	-	-	28,622 (USD1,000)	177,799	55.00 %	97,789 (Note 2)	1,182,655	-
TSRC (Nantong) Industries Ltd.	Production and sale of TPE	3,008,888 (USD105,125)	(2)a.	190,279 (USD6,648)	-	-	190,279 (USD6,648)	131,815	100.00 %	131,815 (Note 2)	4,598,122	440,864
ARLANXEO-TSRC (Nantong) Chemical Industries Co., Ltd.	Production and sale of NBR	1,282,266 (USD44,800)	(2)a.	-	-	-	-	151,498	50.00 %	75,749 (Note 3)	601,506	-

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 4: Amounts in foreign currencies were translated based on the exchange rate at the reporting date (USD1 to NTD28.622). Note 5: The transactions within the Group were eliminated in the consolidated financial statements.

(ii) Limitation on investment in Mainland China:

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Unit: thousand NTD/thousand USD
Investment (amount) Maximum investment
Accumulated
approved by amount set by
investment amount in
Company Investment Investment
Mainland China as of
name Commission, Ministry Commission, Ministry
March 31, 2022
of Economic Affairs of Economic Affairs
TSRC 483,712 5,361,902 -
(USD16,900) (USD187,335) (Note 1)
(Note 2)
----- End of picture text -----

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 NTD28.622).

(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

(Continued)

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Segment information

The Group's operating segment information and reconciliation were as follows:

Three months ended March 31, 2022 Revenue: Revenue from external customers Income from operations Three months ended March 31, 2021 Revenue: Revenue from external customers Income from operations	Synthetic rubber $ 8,443,271 $ 1,155,861 $ 7,924,286 $ 1,439,377	Non-synthetic rubber 198,756 (36,934) 292,525 33,245	Others - (12,865) - 12,782	Total 8,642,027
				1,106,062
				8,216,811
				1,485,404

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.

AI assistant

TSRC — Interim / Quarterly Report 2022

51969_rns_2022-11-29_fbf16bfc-3f69-4da9-ba74-1a95cd566b20.pdf

TSRC CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 31, 2022 and 2021

TSRC CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

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

TSRC CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2022 and 2021

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

TSRC CORPORATION AND SUBSIDIARIES

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

TSRC CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2022 and 2021

TSRC CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the three months ended March 31, 2022 and 2021

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies

(a) Statement of compliance

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Basis of consolidation

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Non-current assets held for sale

(d) Employee benefits

(e) Income tax

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

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts

(a) Cash and cash equivalents

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Other receivables (including related parties)

(f) Inventories

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Non-current assets held for sale

(h) Investments accounted for under equity method

(i) Associates

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Joint ventures

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Material non-controlling interests of subsidiaries

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) Property, plant and equipment

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Right-of-use assets

(l) Investment property

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Intangible assets

(n) Short-term and long-term borrowings

(i) Short-term bank borrowings

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Long-term borrowings

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Defined benefit plans

TSRC CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

(r) Income tax

TSRC Interim / Quarterly Report 2022