FCFC — Audit Report / Information 2022

Dec 14, 2022

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2022 AND 2021

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For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

FORMOSA CHEMICALS & FIBRE CORPORATION

AND SUBSIDIARIES

INDEX

INDEX
Items Index Independent Auditors’ Review Report Consolidated Balance Sheets Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements	Pages
	1-7 8-9 10-11 12 13-14 15-102

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR22000337 To the Board of Directors and Shareholders of Formosa Chemicals & Fibre Corporation

Introduction

We have audited the accompanying consolidated balance sheets of Formosa Chemicals & Fibre Corporation and subsidiaries (the “Group”) as at December 31, 2022 and 2021, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies

In our opinion, based on our audits and the reports of other auditors (refer to the Other matter section ), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

~1~

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group’s 2022 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Assessment of loss allowance for accounts receivable

Description

Refer to Note 4(11) for accounting policy on accounts receivable, Note 5(2) for uncertainty of accounting estimates and assumptions in relation to impairment of accounts receivable, and Note 6(5) for details of loss allowance for accounts receivable. As of December 31, 2022, the Group’s accounts receivable amounted to NT$23,501,265 thousand, net of loss allowance in the amount of NT$151,542 thousand.

The Group assesses expected credit impairment loss on accounts receivable based on historical experience, forward-looking information and known reason or existing objective evidences. For those accounts which are considered uncollectible, the Company recognises impairment with a credit to accounts receivable. Management evaluates the reasonableness of estimated provision periodically. As the estimation of loss allowance is subject to management’s judgement and business indicators, the amount of provision is based on the collectability of accounts receivable, and considering that accounts receivable and loss allowance are material to the financial statements, we considered the loss allowance for accounts receivable a key audit matter

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

1. Obtained the overdue aging report used when management assessed the expected credit impairment loss, assessed whether the logic of data source was consistently applied, and tested its accuracy with proper documents.

2. Assessed the reasonableness of estimates used by management in calculating expected credit impairment loss and obtained supporting documents, including forward-looking information, disputed accounts, overdue accounts, subsequent collection, and other indicators that would show that the customer would be unable to repay on schedule.

~2~

1. Performed subsequent collection test in order to verify the adequacy of loss allowance provided for accounts receivable.

Evaluation of inventories

Description

Refer to Note 4(13) for accounting policy on inventory valuation, Note 5(2) for accounting estimates and assumption uncertainty in relation to inventory valuation, and Note 6(6) for detailed information on allowance for inventory valuation losses. As of December 31, 2022, the inventory and allowance for inventory valuation losses were NT$50,817,281 thousand and NT$2,379,891 thousand, respectively.

The Group is primarily engaged in the manufacture and sales of petrochemical plastic products, fibers weaving and cords. As the price of petrochemical plastic products is subject to the fluctuations in international crude oil price, and the textile market is competitive, there is a higher risk for inventory valuation loss. The Group recognises inventories at the lower of cost and net realisable value, and the net realisable value is calculated based on average price less selling expenses. Since the net realisable value used in inventory valuation involves subjective judgement and high uncertainty in estimation, and the allowance for inventory valuation losses is material to the financial statements, we considered the allowance for inventory valuation losses as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

1. Assessed the reasonableness of policies and procedures on allowance for inventory valuation loss, including the reasonableness of classification of inventory in determining the net realisable value.

2. Obtained an understanding of the Group’s warehousing control procedures. Reviewed the annual physical inventory count plan and participated in the annual inventory count in order to assess the effectiveness of the classification of inventory and internal control over inventory.

3. Checked the method in calculating the net realisable value of inventory and assessed the reasonableness of allowance for valuation loss.

~3~

Other matter – Reference to the audits of other auditors

We did not audit the financial statements of certain subsidiaries and investments accounted for under the equity method which were audited by other auditors. Therefore, our opinion expressed herein, insofar as it relates to the amounts included in respect of these subsidiaries and associates, is based solely on the reports of the other auditors. Total assets of these subsidiaries and the balances of these investments accounted for under the equity method amounted to NT$147,331,920 thousand and NT$157,808,066 thousand, constituting 27% and 26% of the consolidated total assets as at December 31, 2022 and 2021, respectively, and operating revenue amounted to NT$29,764,732 thousand and NT$28,464,573 thousand, both constituting 8% of the consolidated total operating revenue for the years then ended, respectively. The comprehensive income (loss) recognised from these associates and joint ventures accounted for under the equity method amounted to (NT$3,973,017) thousand and NT$14,655,582 thousand, constituting 10% and 22% of the consolidated total comprehensive income for the years ended December 31, 2022 and 2021, respectively.

Other matter – Parent company only financial reports

We have audited the parent company only financial statements of Formosa Chemicals & Fibre Corporation as of and for the years ended December 31, 2022 and 2021, and have expressed an unqualified opinion on those financial statements.

Responsibilities of management and those charged with governance for the consolidated financial statements

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

~4~

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

Those charged with governance, including audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ responsibilities for the audit of the consolidated financial statements

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

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

~5~

1. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

2. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

3. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

~6~

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

Juanlu, Man-Yu

[Wu, Han-Chi ]

For and on behalf of PricewaterhouseCoopers, Taiwan March 3, 2023

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(5) 6(5) and 7 6(5) 6(5) and 7 7 7 6(6) and 8 6(3) 6(4) and 8 6(7) 6(8), 7 and 8 6(9) 6(26) 6(1)	December 31, 2022 AMOUNT % $ 33,002,871 6 1,797,262 - 92,125,314 17 4,565,618 1 6,550,164 1 8,147 - 16,355,474 3 7,145,791 1 4,483,253 1 2,429,252 - 48,437,390 9 7,813,014 1 224,713,550 40 51,954,437 9 2,250,169 1 117,661,397 21 142,848,941 26 1,650,577 - 5,585 - 2,139,083 1 12,314,889 2 330,825,078 60 $ 555,538,628 100	December 31, 2021	December 31, 2021
		AMOUNT $ 33,002,871 1,797,262 92,125,314 4,565,618 6,550,164 8,147 16,355,474 7,145,791 4,483,253 2,429,252 48,437,390 7,813,014 224,713,550 51,954,437 2,250,169 117,661,397 142,848,941 1,650,577 5,585 2,139,083 12,314,889 330,825,078 $ 555,538,628	AMOUNT $ 23,062,097 3,903,900 116,451,723 1,953,235 8,173,238 8,505 20,204,508 8,719,009 2,742,096 2,698,693 47,200,475 11,513,548 246,631,027 72,999,266 2,390,179 129,632,702 130,897,801 1,577,555 5,884 2,240,322 11,970,535 351,714,244 $ 598,345,271	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1120 Current financial assets at fair value through other comprehensive income 1136 Current financial assets at amortised cost 1150 Notes receivable, net 1160 Notes receivable - related parties 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventory 1470 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				4 1 20 - 1 - 3 2 - - 8 2
				41
				12 1 22 22 - - - 2
				59
				100

(Continued)

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2022 December 31, 2021 Notes AMOUNT % AMOUNT % 6(10) $ 35,117,887 6 $ 17,512,874 3 6(10) 32,892,666 6 17,796,625 3 6(11) 2,826 - - - 164,722 - 246,102 - 4,801,464 1 3,888,771 - 7 13,884,528 3 17,527,128 3 7 12,432,106 2 12,762,681 2 7 1,472,658 - 542,013 - 903,787 - 5,732,381 1 165,804 - 110,520 - 6(12)(13) 11,045,140 2 4,550,000 1 4,067,358 1 4,247,942 1 116,950,946 21 84,917,037 14 6(12) 40,650,000 7 45,500,000 8 6(13) 18,568,279 4 17,177,183 3 6(26) 383,054 - 382,012 - 804,249 - 793,472 - 6(14) 4,825,636 1 5,594,613 1 65,231,218 12 69,447,280 12 182,182,164 33 154,364,317 26 6(15) 58,611,863 11 58,611,863 10 6(16) 9,246,656 2 9,192,999 1 6(17) 70,224,189 13 66,313,982 11 76,461,277 14 70,032,921 12 41,405,257 7 72,145,718 12 6(18) 70,501,451 12 114,997,001 19 6(15) ( 323,952) - ( 323,952) - 326,126,741 59 390,970,532 65 47,229,723 8 53,010,422 9 373,356,464 67 443,980,954 74 9 11 $ 555,538,628 100 $ 598,345,271 100	December 31, 2021	December 31, 2021
			%
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2120 Financial liabilities at fair value through profit or loss - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2220 Other payables - related parties 2230 Current income tax liabilities 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2530 Corporate bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity			3 3 - - - 3 2 - 1 - 1 1
			14
			8 3 - - 1
			12
			26
			10 1 11 12 12 19 -
			65
			9
			74
			100

The accompanying notes are an integral part of these consolidated financial statements.

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

Items

Year ended December 31 2022 2021 Notes AMOUNT % AMOUNT % 6(19) and 7 $ 379,896,563 100 $ 365,812,098 100 6(6)(14)(24)(25) and 7 ( 367,154,202) ( 96 ) ( 312,373,726) ( 85 ) 12,742,361 4 53,438,372 15 6(14)(24)(25) and 7 ( 12,003,638) ( 3 ) ( 12,840,956) ( 3 ) ( 6,024,797) ( 2 ) ( 6,164,686) ( 2 ) ( 18,028,435) ( 5 ) ( 19,005,642) ( 5 ) ( 5,286,074) ( 1 ) 34,432,730 10 6(20) 662,259 - 350,874 - 6(21) and 7 11,769,663 3 4,446,994 1 6(22) 1,973,842 - ( 589,966) - 6(8)(23) and 7 ( 1,797,644) - ( 1,048,054) - 6(7) 2,267,537 1 12,567,317 3 14,875,657 4 15,727,165 4 9,589,583 3 50,159,895 14 6(26) ( 385,722) - ( 7,452,464) ( 2 ) $ 9,203,861 3 $ 42,707,431 12

4000 Operating revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6000 Total operating expenses 6900 Operating (loss) profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year

(Continued)

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

							Year ended December 31	Year ended December 31	Year ended December 31	Year ended December 31	Year ended December 31
					2022						2021
	Items	Notes			AMOUNT			%			AMOUNT		%
	Other comprehensive income (net)	6(18)(26)
	Components of other comprehensive
	income that will not be reclassified to
	profit or loss
8311	Actuarial gains (losses) on defined
	benefit plans		$		294,190				- (	$	349,586)		-
8316	Unrealised (loss) gain on financial assets
	measured at fair value through other
	comprehensive income	(			45,626,887) (			12 )			21,961,032		6
8320	Share of other comprehensive (loss)
	income of associates and joint ventures
	accounted for using equity method	(			7,746,313) (				2 )		2,693,570		1
8310	Other comprehensive (loss) income
	that will not be reclassified to profit or
	loss	(			53,079,010) (			14 )			24,305,016		7
	Components of other comprehensive
	income that will be reclassified to profit
	or loss
8361	Financial statements translation
	differences of foreign operations				2,835,651				1 (		939,757) (		1 )
8370	Share of other comprehensive income
	(loss) of associates and joint ventures
	accounted for under equity method				1,872,011				- (		539,943)		-
8399	Income tax relating to the components of	6(26)
	other comprehensive income	(			359,626)				-		111,624		-
8360	Other comprehensive income (loss)
	that will be reclassified to profit or loss				4,348,036				1 (		1,368,076) (		1 )
8300	Total other comprehensive (loss) income
	for the year	($			48,730,974) (			13 )		$	22,936,940		6
8500	Total comprehensive (loss) income for the
	year	($			39,527,113) (			10 )		$	65,644,371		18
	Net income attributable to:
8610	Owners of the parent		$		7,359,531				3	$	38,359,347		11
8620	Non-controlling interest				1,844,330				-		4,348,084		1
			$		9,203,861				3	$	42,707,431		12
	Total comprehensive income (loss)
	attributable to:
8710	Owners of the parent	($			36,763,754) (				9 )	$	61,244,278		17
8720	Non-controlling interest	(			2,763,359) (				1 )		4,400,093		1
		($			39,527,113) (			10 )		$	65,644,371		18
					Before Tax		After Tax				Before Tax	After	Tax
	Basic earnings per share	6(28)
9710	Profit for the year from continuing
	operations			$	1.64	$		1.57		$	8.58 $		7.30
	Non-controlling interest				0.41			0.31			1.46		0.74
9750	Profit attributable to common
	shareholders of the parent			$	1.23	$		1.26		$	7.12 $		6.56
	Assuming shares held by subsidiary are not deemed as treasury stock:
9710	Profit for the year from continuing
	operations			$	1.46	$		1.57		$	8.56 $		7.29
	Non-controlling interest				0.41			0.31			1.45		0.75
9750	Profit attributable to common
	shareholders of the parent			$	1.23	$		1.26		$	7.11 $		6.54

The accompanying notes are an integral part of these consolidated financial statements.

~11~

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

Notes Year ended December 31, 2021 Balance at January 1, 2021 Profit for the year Other comprehensive income (loss) for the year 6(18) Total comprehensive income (loss) Appropriations of 2021 earnings 6(17) Legal reserve Special reserve Cash dividends Dividends paid to subsidiaries to adjust capital surplus 6(16) Changes in the net interest of associates recognised under the equity method 6(16) Expired cash dividends reclassified to capital surplus 6(16) Expired dividends paid from capital surplus 6(16) Changes in ownership interests in subsidiaries 6(16) Disposal of equity instruments measured at fair value through other comprehensive income 6(18) Cash dividends paid by consolidated subsidiaries Decrease in non-controlling interest-disposal of ownership interests in subsidiaries Balance at December 31, 2021 Year ended December 31, 2022 Balance at January 1, 2022 Profit for the year Other comprehensive income (loss) for the year 6(18) Total comprehensive income (loss) Appropriations of 2022 earnings 6(17) Legal reserve Special reserve Cash dividends Dividends paid to subsidiaries to adjust capital surplus 6(16) Changes in the net interest of associates recognised under the equity method 6(16) Expired cash dividends reclassified to capital surplus 6(16) Expired dividends paid from capital surplus 6(16) Changes in ownership interests in subsidiaries 6(16) Disposal of equity instruments measured at fair value through other comprehensive income 6(18) Cash dividends paid by consolidated subsidiaries Increase in non-controlling interest-disposal of ownership interests in subsidiaries Balance at December 31, 2022							Equityattri	butable to owners of	theparent	theparent	theparent							Non-controlling interest $ 51,098,671 4,348,084 52,009 4,400,093 - - - - - - - 2,948 175,384 ( 2,550,389) ( 116,285) $ 53,010,422 $ 53,010,422 1,844,330 ( 4,607,689) ( 2,763,359) - - - - - - - 23,097 ( 5,321) ( 3,439,586) 404,470 $ 47,229,723	Total equity
	Common stock	Total capital surplus, additional paid-in capital			Retained Earnings		Unappropriated retained earnings		Other EquityInterest				Revaluation surplus $ - - - - - - - - - - - - - - - $ - $ - - 1,002,383 1,002,383 - - - - - - - - - - - $ 1,002,383	Treasurystocks		Total
				Legal reserve $ 64,335,076 - - - 1,978,906 - - - - - - - - - - $ 66,313,982 $ 66,313,982 - - - 3,910,207 - - - - - - - - - - $ 70,224,189	Special reserve			Financial statements translation differences of foreign operations ( $ 5,272,606) - ( 968,064) ( 968,064) - - - - - - - - - - - ( $ 6,240,670) ( $ 6,240,670) - 3,310,023 3,310,023 - - - - - - - - - - - ( $ 2,930,647)	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income		Gains (losses) on hedging instruments
	$ 58,611,863 - - - - - - - - - - - - - - $ 58,611,863 $ 58,611,863 - - - - - - - - - - - - - - $ 58,611,863		$ 9,167,637 - - - - - - 11,379 442 12,366 ( 682) 1,857 - - - $ 9,192,999 $ 9,192,999 - - - - - - 21,847 145 18,555 ( 715) 13,825 - - - $ 9,246,656		$ 66,328,339 - - - - 3,704,582 - - - - - - - - - $ 70,032,921 $ 70,032,921 - - - - 6,428,356 - - - - - - - - - $ 76,461,277		$ 53,380,101 38,359,347 ( 537,510) 37,821,837 ( 1,978,906) ( 3,704,582) ( 14,652,966) - 2,565 - - - 1,277,669 - - $ 72,145,718 $ 72,145,718 7,359,531 412,469 7,772,000 ( 3,910,207) ( 6,428,356) ( 28,133,694) - 2,428 - - - ( 42,632) - - $ 41,405,257		$ 98,095,277 - 24,413,358 24,413,358 - - - - ( 2,565) - - - ( 1,277,669) - - $ 121,228,401 $ 121,228,401 - ( 48,839,050) ( 48,839,050) - - - - ( 2,428) - - - 42,632 - - $ 72,429,555		$ 32,123 - ( 22,853) ( 22,853) - - - - - - - - - - - $ 9,270 $ 9,270 - ( 9,110) ( 9,110) - - - - - - - - - - - $ 160			($ 323,952) - - - - - - - - - - - - - - ($ 323,952) ($ 323,952) - - - - - - - - - - - - - - ($ 323,952)		$ 344,353,858 38,359,347 22,884,931 61,244,278 - - ( 14,652,966) 11,379 442 12,366 ( 682) 1,857 - - - $ 390,970,532 $ 390,970,532 7,359,531 ( 44,123,285) ( 36,763,754) - - ( 28,133,694) 21,847 145 18,555 ( 715) 13,825 - - - $ 326,126,741			$ 395,452,529 42,707,431 22,936,940 65,644,371 - - ( 14,652,966) 11,379 442 12,366 ( 682) 4,805 175,384 ( 2,550,389) ( 116,285) $ 443,980,954 $ 443,980,954 9,203,861 ( 48,730,974) ( 39,527,113) - - ( 28,133,694) 21,847 145 18,555 ( 715) 36,922 ( 5,321) ( 3,439,586) 404,470 $ 373,356,464

The accompanying notes are an integral part of these consolidated financial statements.

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortisation Net (gain) loss on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of profit or loss of associates accounted for under the equity method Loss (gain) on disposal and scrap of property, plant and equipment Gain on disposal of investments Impairment loss Changes in operating assets and liabilities Changes in operating assets Notes receivable Notes receivable-related parties Accounts receivable Accounts receivable-related parties Other receivables Inventories Other current assets Changes in operating liabilities Notes payable Accounts payable Accounts payable-related parties Other payables Other current liabilities Accrued pension liabilities Cash inflow generated from operations Interest received Dividends received Interest paid Income tax paid Net cash flows from operating activities

YearendedDecember 31 Notes 2022 2021 $ 9,589,583 $ 50,159,895 6(8)(9)(24) 13,865,040 13,806,835 6(24) 4,599,170 4,185,976 6(22) ( 312,866 ) 91,153 6(23) 1,797,644 1,048,054 6(20) ( 662,259 ) ( 350,874 ) 6(21) ( 10,448,254 ) ( 3,116,391 ) ( 2,267,537 ) ( 12,567,317 ) 6(22) 71,483 ( 4,770 ) 6(22) ( 6,267 ) - 6(22) 175,492 - 1,623,074 2,711,153 358 ( 4,245 ) 3,853,080 ( 3,543,472 ) 1,573,218 ( 2,764,315 ) ( 1,525,148 ) ( 149,674 ) ( 1,231,762 ) ( 14,152,668 ) 3,704,570 ( 577,192 ) ( 82,960 ) 20,178 912,693 ( 2,041,666 ) ( 3,642,600 ) 5,318,561 ( 988,064 ) 2,681,152 ( 206,562 ) ( 1,843,600 ) ( 770,690 ) ( 369,793 ) 19,620,436 38,536,980 557,087 317,257 19,808,214 5,223,948 ( 1,677,612 ) ( 1,018,388 ) ( 5,575,870 ) ( 4,330,589 ) 32,732,255 38,729,208

(Continued)

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Decrease in other receivables-related parties Acquisition of financial assets at fair value through profit or loss Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through profit or loss Shares returned from reduction in financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortised cost Acquisition of investments accounted for under the equity method Net cash flows provided by acquisition of ownership interests in subsidiaries Proceeds from disposal of subsidiaries Shares returned from liquidation of investment accounted for under equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in non-current assets Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term borrowings Increase in short-term notes and bills payable Increase in other payables-related parties Increase in corporate bonds payable Payment of corporate bonds payable Increase in long-term borrowings Payment of long-term borrowings Payment of lease liabilities Decrease in other non-current liabilities Payment of cash dividends Payment of expired cash dividends reclassified to capital surplus Payment of cash dividends - non-controlling interest Shares returned from liquidation-non-controlling interest Net cash flows from (used in) financing activities Effect of foreign exchange translations Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

YearendedDecember 31 Notes 2022 2021 $ 269,441 $ 1,496,905 - ( 106,598 ) - ( 247,511 ) 2,422,330 - 4,250 - 1,114 2,026,251 ( 2,472,373 ) ( 2,962,890 ) ( 1,311,331 ) ( 936,281 ) 6(28) 16,563 - 1,000 - 6(7) 27,857 - 6(29) ( 22,971,096 ) ( 16,152,196 ) 43,551 24,546 - ( 3,063 ) ( 4,896,574 ) ( 7,294,922 ) ( 28,865,268 ) ( 24,155,759 ) 17,605,013 ( 1,542,746 ) 15,096,041 1,699,892 930,645 10,205 - 10,000,000 ( 4,550,000 ) ( 2,050,000 ) 19,267,631 12,024,670 ( 11,152,000 ) ( 10,955,608 ) ( 189,171 ) ( 181,506 ) ( 7,867 ) ( 10,310 ) 6(29) ( 28,130,157 ) ( 14,657,452 ) ( 715 ) ( 682 ) ( 3,400,920 ) ( 2,551,250 ) - ( 116,285 ) 5,468,500 ( 8,331,072 ) 605,287 ( 307,407 ) 9,940,774 5,934,970 23,062,097 17,127,127 $ 33,002,871 $ 23,062,097

The accompanying notes are an integral part of these consolidated financial statements.

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. History and Organisation

Formosa Chemicals & Fibre Corporation (the ‘‘Company”) was founded on March 5, 1965. The Company and its subsidiaries (together referred herein as the “Group”) now has eight business divisions, namely First Chemical Division, Petrochemicals Division, Third Chemical Division, Plastics Division, Textile Division, First Fiber Division and its subsidiaries, Second Fiber Division, and Engineering & Construction Division. The Group’s major businesses are production and sales of petrochemical products, including PTA, PS, AN, Butadiene, SM polymer, SM, benzene, toluene, p-xylene (PX) and o-xylene (OX), as well as nylon fiber, and rayon staple fiber. The Group is also engaged in spinning, weaving, dyeing and finishing.

1. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These consolidated financial statements were authorised for issuance by the Board of Directors on March 3, 2023.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC and became effective from 2022 are as follows:

==> picture [488 x 149] intentionally omitted <==

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

Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’ January 1, 2022
Amendments to IAS 16, ‘Property, plant and equipment: January 1, 2022
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts— January 1, 2022
cost of fulfilling a contract’
Annual improvements to IFRS Standards 2018–2020 January 1, 2022
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The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

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(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by

the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2023 are as follows:

follows:
New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IAS 1,‘Disclosure of accounting policies’	January1,2023
Amendments to IAS 8,‘Definition of accountingestimates’	January1,2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arisingfrom a single transaction’	January 1, 2023

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. The quantitative impact will be disclosed when the assessment is complete.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’	To be determined by International Accounting Standards Board
Amendments to IFRS 16,‘Lease liabilityin a sale and leaseback’	January1,2024
IFRS 17,‘Insurance contracts’	January1,2023
Amendments to IFRS 17,‘Insurance contracts’	January1,2023
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 – comparative information’	January 1, 2023
Amendments to IAS 1, ‘Classification of liabilities as current or non- current’	January 1, 2024
Amendments to IAS 1,‘Non-current liabilities with covenants’	January 1, 2024

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. The quantitative impact will be disclosed when the assessment is complete.

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

• The consolidated financial statements of the Group have been prepared in accordance with the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

• (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

• (c) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

• (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

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• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

• B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiary	Main business activities Spinning, dyeing, printing, finishing and manufacturing synthetic fibre, rug and carpet Investing Renewable-energy- based electricity retailing corporation Manufacturing and sales of cleaner and cosmetics Spinning Wholesale and retail of petrochemical and plastic raw materials	December 31,2022 December 31,2021 100.00 100.00 100.00 100.00 100.00 - 88.59 88.59 - - 50.00 50.00 Ownership (%)	Description
			December 31,2022 100.00 100.00 100.00 88.59 - 50.00
The Company The Company The Company The Company The Company The Company	Formosa FCFC Carpet Corp. FCFC Investment Corp. (Cayman) Formosa Green Power Corp. Formosa Biomedical Technology Corp. Tah Shin Spinning Corp. Formosa Idemitsu Petrochemical Corp.			The Company holds more than 50% of voting rights. The Company holds more than 50% of voting rights. The Company holds more than 50% of voting rights. (Note 3) The Company holds more than 50% of voting rights. The Company holds more than 50% of voting rights. (Note 1) The Company has substantial control and thus regards Formosa Idemitsu Petrochemical Corp. as a subsidiary.

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Name of investor	Name of subsidiary	Main business activities Chemistry, international trade of petrochemistry Hydropower Production and marketing of textile, polyester staple fibre, cotton, hydropower Production and marketing of Polyamine fabric, Polyester fabric, cotton fabric, blended fabric and tire cord fabric Cogeneration power generation business Investing	December31,2022 December31,2021 50.00 50.00 51.00 51.00 42.50 42.50 37.40 37.40 100.00 100.00 100.00 100.00 Ownership (%)	Description
			December31,2022 50.00 51.00 42.50 37.40 100.00 100.00
The Company The Company The Company The Company FCFC Investment Corp. (Cayman) FCFC Investment Corp. (Cayman)	Formosa INEOS Chemicals Corp. Chia-Nan Enterprise Corp. Formosa Industries Corp. Formosa Taffeta Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Chemicals & Fibre (Hong Kong) Co., Ltd.			The Company has substantial control and thus regards Formosa INEOS Chemicals Corp. as a subsidiary. The Company holds more than 50% of voting rights. The Company has substantial control and thus regards Formosa Industries Corp. as a subsidiary. The Company has substantial control and thus regards Formosa Taffeta Corp. as a subsidiary. The company holds more than 50% of voting rights through wholly-owned company - FCFC Investment Corp. (Cayman). The company holds more than 50% of voting rights through wholly-owned company - FCFC Investment Corp. (Cayman).

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Name of investor	Name of subsidiary	Main business activities Producing and marketing of PTA、PS、ABS、 Phenol Removal and disposal of waste Investment Manufacturing industrial catalyst and wholesale of other chemical products Manufacturing and sale of battery energy storage systems and related products Research and development and clinical application of cell therapy technologies	December31,2022 December31,2021 100.00 100.00 71.00 71.00 100.00 100.00 57.00 57.00 51.00 51.00 51.00 - Ownership (%)	Description
			December31,2022 100.00 71.00 100.00 57.00 51.00 51.00
Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp.	Formosa Chemicals Industries (Ningbo) Co., Ltd. Hong Jing Resources Corp. Formosa Biomedical Technology (SAMOA) Co., Ltd Formosa Waters Technology Co., Ltd Formosa Bio & Energy Corp. (Japan) Ivy Life Sciences Co.,Ltd			The company holds more than 50% of voting rights through wholly-owned company - FCFC Investment Corp. (Hong Kong). The Company holds more than 50% of voting rights through an 88.59% voting rights owned company - Formosa Biochemical Technology Corp. Formosa Biochemical Technology holds more than 50% of voting rights. Formosa Biochemical Technology holds more than 50% of voting rights. Formosa Biochemical Technology holds more than 50% of voting rights. Formosa Biochemical Technology holds more than 50% of voting rights. (Note 2)

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Name of investor	Name of subsidiary	Main business activities Sales of cleaning supplies Importing, exporting and wholesale of heatlhy food Production of cotton, Terylene greige cloth, coloured cloth and textured processing yarn products Production and marketing of textile, polyester staple fibre, cotton, hydropower Assembly, testing, model processing and research and development of various integrated circuits Manufacturing of nylon and polyester filament products	December31,2022 December31,2021 100.00 - 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Ownership (%)	Description
			December31,2022 100.00 100.00 100.00 100.00 100.00 100.00
Formosa Biomedical Technology Corp. Formosa Biomedical Technology (SAMOA) Co., Ltd Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd.	Formosa Eco Life Technology Co., Ltd. Formosa Biomedical Trading (Shanghai) Co., Ltd. Formosa Taffeta (Zhong Shan) Co.,Ltd. Formosa Taffeta (Vietnam) Co., Ltd. Formosa Development Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd.			Formosa Biochemical Technology holds more than 50% of voting rights. (Note 3) Formosa Biochemical Technology holds more than 50% of voting rights through a 100% owned company- Formosa Biomedical Technology (SAMOA) Co., Ltd. Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. Formosa Taffeta Co., Ltd. holds more than 50% of voting rights.

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Name of investor	Name of subsidiary	Main business activities December31,2022 December31,2021 Sales of Nylon and Polyamine fabric 100.00 100.00 Manufacturing of processing fabric of nylon filament knitted cloth, weaving and dyeing as well as post processing of knitted fabric 100.00 100.00 Employment services and temporary worker services 100.00 100.00 Ownership (%)	Description
Formosa Taffeta Co., Ltd. Formosa Taffeta (Hong Kong) Co., Ltd. Formosa Development Co., Ltd.	Formosa Taffeta (Hong Kong) Co., Ltd. Formosa Taffeta (Changshu) Co., Ltd. Public More Internation Co., Ltd.		Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. Formosa Taffeta Co., Ltd. holds more than 50% of voting rights through a 100% owned company - Formosa Taffeta (Hong Kong) Co., Ltd. Formosa Taffeta Co., Ltd. holds more than 50% of voting rights through a 100% owned company - Formosa Development Co., Ltd.

• Note 1: On August 25, 2020, Tah Shin Spinning Corporation has implemented the liquidation procedure, and the dissolution and liquidation were completed on July 6, 2021.

• Note 2: On February 25, 2022, the Board of Directors of the Group’s subsidiary, Formosa Biomedical Technology Corp., resolved to acquire 51% equity interest in Ivy Life Sciences Co., Ltd. in several stages. The total amount of investments in March and May 2022 was $755,032 with a shareholding ratio of 51%.

• Note 3: On August 23, 2022 and May 17, 2022, the Company and the subsidiary, Formosa Biomedical Technology Corp., were approved by the authority to establish Formosa Green Power Corp. and Formosa Eco Life Technology Co., Ltd., respectively.

• C. Subsidiaries not included in the consolidated financial statements: None

• D. Adjustments for subsidiaries with different balance sheet dates: None

• E. Significant restrictions: None

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• F. Subsidiaries that have non-controlling interests that are material to the Group:

• As of December 31, 2022 and 2021, the non-controlling interest amounted to $47,229,723 and $53,010,422, respectively. The information on non-controlling interest and respective subsidiary is as follows:

s as follows:
Name of subsidiary Formosa Taffeta Co., Ltd.	Principal place Ownership Ownership of business Amount (%) Amount (%) Taiwan 34,810,054 $ 62.60 38,800,031 $ 62.60 Non-controllinginterest December31,2022 December31,2021
		62.60

Summarised financial information of the subsidiary:

Balance sheets

Balance sheets
			Formosa Taffeta Co.,Ltd.
			December 31,2022		December 31,2021
Current assets		$	19,948,346	$	17,693,888
Non-current assets			55,461,489		63,648,300
Current liabilities	(		8,633,765)	(	7,905,048)
Non-current liabilities	(		11,008,855)	(	11,193,281)
Total net assets		$	55,767,215	$	62,243,859

Statements of comprehensive income

Formosa Taffeta Co., Ltd.

		Year ended			Year ended
		December31,2022			December31,2021
Revenue		34,722,655 $		$	32,799,007
Profit before income tax		3,706,214			2,387,355
Income tax expense	(	301,233)	(		244,188)
Profit for the year		3,404,981			2,143,167
Other comprehensive (loss) income,
net of tax	(	8,233,849)			297,081
Total comprehensive (loss) income for
the year	4,828,868) ($			$	2,440,248
Comprehensive income attributable to
non-controlling interest		- $		$	-

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Statements of cash flows

Statements of cash flows
			FormosaTaffeta			Co.,Ltd.
			Year ended			Year ended
			December31,2022			December31,2021
Net cash provided by operating activities		$	3,624,078		$	2,433,092
Net cash used in investing activities	(		909,164)	(		689,510)
Net cash used in financing activities	(		1,035,608)	(		1,333,856)
Effect of exchange rates on cash and
cash equivalents			66,094	(		21,907)
Increase in cash and cash equivalents			1,745,400			387,819
Cash and cash equivalents, beginning of year			3,471,141			3,083,322
Cash and cash equivalents, end of year		$	5,216,541		$	3,471,141

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

• (a) The operating results and financial position of all the group entities, associates and jointly controlled entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

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• i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

• ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

• iii. All resulting exchange differences are recognised in other comprehensive income.

• (b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

(5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c)Assets that are expected to be realised within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

• Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(7) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

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• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

• D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (8) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income. Financial assets at amortised cost or fair value through other comprehensive income are designated as at fair value through profit or loss at initial recognition when they eliminate or significantly reduce a measurement or recognition inconsistency.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

• D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (9) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

  • (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

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• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

• (a) The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognised in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss.

• (10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (11) Impairment of financial assets

• For accounts receivable or contract assets that have a significant financing component, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

• (12) Derecognition of financial assets

The Group derecognises a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has not retained control of the financial asset.

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(13) Inventories

• Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in process comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

• (14) Investments accounted for using equity method /associates

• A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognises the Group’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

• D. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

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• F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.

• G. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• H. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

• (15) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.

• B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Land improvements 3 ~ 15 years Buildings 10 ~ 60 years Machinery and equipment 5 ~ 15 years Transportation equipment 3 ~ 15 years Other equipment 2 ~ 15 years

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(16) Leasing arrangements (lessee) － right-of-use assets / lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

• (a) Fixed payments, less any lease incentives receivable;

• (b) Variable lease payments that depend on an index or a rate;

• (c) Amounts expected to be payable by the lessee under residual value guarantees;

• (d) The exercise price of a purchase option, if the lessee is reasonably certain to exercise that option; and

• (e) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following:

• (a) The amount of the initial measurement of lease liability;

• (b) Any lease payments made at or before the commencement date;

• (c) Any initial direct costs incurred by the lessee; and

• (d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

• D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognise the difference between remeasured lease liability in profit or loss.

(17) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life.

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(18) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognised.

(19) Borrowings

Borrowings comprise long-term and short-term bank borrowings and other long-term and short-term loans. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(20) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges.

• B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

• (22) Bonds payable

• Ordinary corporate bonds issued by the Group are initially recognised at fair value less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is presented as an addition to or deduction from bonds payable, which is amortised to profit or loss over the period of bond circulation using the effective interest method as an adjustment to ‘finance costs’.

(23) Derecognition of financial liabilities

• A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or expires.

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(24) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(25) Non-hedging derivatives

Non-hedging derivatives are initially recognised at fair value on the date a derivative contract is entered into and recorded as financial assets or financial liabilities at fair value through profit or loss. They are subsequently remeasured at fair value and the gains or losses are recognised in profit or loss.

(26) Employee benefits

• A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.

• ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as other equity.

• iii. Past service costs are recognised immediately in profit or loss.

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• C. Employees’, directors’ and supervisors’ remuneration

  • Employees’ remuneration and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

• (27) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred income tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

• D. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred income tax assets are reassessed.

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• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

• F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

• (28) Treasury shares

• Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

• (29) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities.

• For the shareholders' dividends that should be distributed in cash, the Company’s Board of Directors would be adopted by a majority vote at a meeting of the Board of Directors attended by two-thirds of the total number of directors, and then reported to the shareholders. The provisions of the preceding paragraph that must be resolved by the shareholders' meeting shall not apply.

• (30) Revenue recognition

Sales of goods

• A. The Group manufactures and sells a variety of petrochemical products, including the spinning, weaving, dyeing and finishing of rayon and nylon fiber. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

• B. The amount of sales revenue recognised is equal to the contract price net of volume discounts and sales discounts and allowances. Volume discounts and sales discounts and allowances are estimated based on historical information, and a refund liability is recognised for expected volume discounts and sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period. The sales usually are made with a credit term of 30 to 120 days. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.

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• C. A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• (31) Business combinations

• A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

• B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognised and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognised directly in profit or loss on the acquisition date.

• (32) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments.

1. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

2. The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. The information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

None.

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(2) Critical accounting estimates and assumptions

• A. Impairment assessment of accounts receivable

  • In the process of assessing impairment of accounts receivable, the Group must use judgements and assumptions to determine the collectability of accounts receivable. The collectability is affected by various factors: customers’ financial conditions, the Group’s internal credit ratings, historical experience, etc. When sales are not expected to be collected, the Group recognises a specific allowance for doubtful receivables after the assessment. The assumptions and estimates of loss allowance provided for accounts receivable are based on concerning future events as that on the balance sheet date. Assumptions and estimates may differ from the actual results which may result in material adjustments.

• B. Evaluation of inventories

  • As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

  • As of December 31, 2022, the carrying amount of inventories was $48,437,390.

• Details of Significant Accounts

(1) Cash and cash equivalents

tails of Significant Accounts Cash and cash equivalents
Cash on hand and petty cash Checking accounts and demand deposits Cash equivalents Time deposits Bonds repurchased and commercial paper	December 31, 2022 101,106 $ 10,386,991 11,632,545 10,882,229 33,002,871 $	December31,2021
		94,367 $ 6,700,501 8,760,277 7,506,952
		23,062,097 $

• A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. Loss allowance is measured using 12-month expected credit losses. For the years ended December 31, 2022 and 2021, the Group did not recognise any loss allowance.

• B. As of December 31, 2022 and 2021, the capital repatriated by the Group amounting to USD 44,221 thousand and interest amounting to USD 361 thousand (equivalent to $1,369,152) and USD 44,221 thousand (equivalent to $1,224,487), respectively, that failed to meet the definition of cash and cash equivalents under IAS 7, ‘Statement of Cash Flows’ due to the restrictions under “The Management, Utilisation, and Taxation of Repatriated Offshore Funds Act” were classified as other financial assets, and listed under other non-current assets.

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• C. The Group has no cash and cash equivalents pledged to others.

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

Financial assets at fair value through profit or loss
Items Financial assets mandatorily measured at fair value through profit or loss Fund Valuation adjustments	December31,2022 December31,2021 1,597,661 $ 4,191,897 $ 199,601 287,997) ( 1,797,262 $ 3,903,900 $	December31,2021
		3,903,900 $

• A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

Financial assets mandatorily measured at fair value through profit or loss Fund Derivatives	For the year ended For the year ended December31,2022 December31,2021 315,692 $ 91,208) ($ - 82) ( 315,692 $ 91,290) ($

• B. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

(3) Financial assets at fair value through other comprehensive income

Current items: Equity instruments Listed stocks Unlisted stocks Valuation adjustment Non-current items: Equity instruments Listed stocks Unlisted stocks Valuation adjustment	December31,2022 24,450,527 $ 825,839 66,848,948 92,125,314 $ 8,410,475 $ 26,980,781 16,563,181 51,954,437 $	December 31,2021
		24,450,527 $ 825,839 91,175,357
		116,451,723 $
		8,410,475 $ 27,038,367 37,550,424
		72,999,266 $

• A. The Group has elected to classify equity securities investments that are considered to be steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $144,079,751 and $189,450,989 as at December 31, 2022 and 2021, respectively.

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• B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

For the year ended December31,2022	For the year ended December31,2021

Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive (loss) income ($ 45,626,887) $ 21,961,032 Cumulative gains (losses) reclassified to retained earnings due to derecognition (including gain (loss) included in noncontrolling interest) ($ 50,381) ($ 1,455,618)

• C. As of December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group were $144,079,751 and $189,450,989, respectively.

• D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

(4) Financial assets at amortised cost

income is provided in Note 12(2). Financial assets at amortised cost
Items Current items: Time deposits with original maturity date of more than three months Non-current items: Time deposits with original maturity date of more than one year	December31,2022 4,565,618 $ 2,250,169 $	December31,2021
		1,953,235 $
		2,390,179 $

• A. Amounts recognised in profit or loss in relation to financial assets at amortised cost are listed below:

below:
Interest income	For the year ended December31,2022 278,218 $	For the year ended December31,2021
		49,941 $

• B. As of December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Group were $6,815,787 and $4,343,414, respectively.

• C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

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• D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2). The counterparties of the Group’s investments in certificates of deposits are financial institutions with high credit quality, so the Group expects that the probability of counterparty default is remote.

• (5) Notes and accounts receivable

Notes and accounts receivable
		December31,2022			December31,2021
Notes receivable		$	6,550,164		$	8,173,238
Less: Allowance for uncollectible accounts			-			-
		$	6,550,164		$	8,173,238
Notes receivable - related parties		$	8,147		$	8,505
Accounts receivable		$	16,507,016		$	20,360,034
Less: Allowance for uncollectible accounts	(		151,542)	(		155,526)
		$	16,355,474		$	20,204,508
Accounts receivable - related parties		$	7,145,791		$	8,719,009

Accounts receivable - related parties

• A. As of December 31, 2022 and 2021, accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2021, the balance of receivables from contracts with customers amounted to $33,660,263.

• B. As of December 31, 2022 and 2021, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes and accounts receivable were $6,558,311 and $8,181,743, and accounts receivable were $23,501,265 and $28,923,517, respectively.

• C. Information relating to credit risk is provided in Note 12(2).

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(6) Inventories

Inventories
Raw materials Materials Work in progress Finished goods Inventory in transit Raw materials Materials Work in progress Finished goods Inventory in transit	Cost 17,155,365 $ 8,631,008 7,849,984 16,857,066 323,858 50,817,281 $	Allowance for valuation loss Bookvalue 362,170) ($ 16,793,195 $ 602,177) ( 8,028,831 149,410) ( 7,700,574 1,266,134) ( 15,590,932 - 323,858 2,379,891) ($ 48,437,390 $ December 31, 2021 December31,2022
	Cost 18,034,135 $ 7,659,515 6,385,669 16,596,245 279,633 48,955,197 $	Allowance for valuation loss Book value 172,360) ($ 17,861,775 $ 550,862) ( 7,108,653 182,162) ( 6,203,507 849,338) ( 15,746,907 - 279,633 1,754,722) ($ 47,200,475 $

• A. Expense and loss incurred on inventories for the years ended December 31, 2022 and 2021 were as follows:

as follows:
Cost of inventories sold Loss on inventory valuation Idle capacity (including annual survey and work stoppage) Others	For the year ended December31,2022 363,791,341 $ 621,259 2,515,184 226,418 367,154,202 $	For the year ended December31,2021
		310,560,643 $ 231,419 1,195,305 386,359
		312,373,726 $

B. As of December 31, 2022 and 2021, inventories pledged are described in Note 8.

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(7) Investments accounted for using equity method

Investments accounted for using equity method
. Formosa Heavy Industries Corp. Formosa Fairway Corp. Formosa Plastics Transport Corp. Formosa Petrochemical Corp. Mai Liao Power Corp. Hwa Ya Science Park Management Consulting Co., Ltd. Formosa Environmental Technology Corp. Formosa Synthetic Rubber Corp. (Hong Kong) Formosa Resources Corp. Formosa Group (Cayman) Corp. Formosa Construction Corp. Guo Su Plastic Industry Co., Ltd. FG INC. Formosa Smart Energy Tech Corp. Beyoung International Corp. Formosa Lithium Iron Oxide Corp. Formosa Advanced Technologies Co., Ltd. Nan Ya Optical Corp. Kuang Yueh Co., Ltd. Changshu Yu Yuan Co., Ltd. Schoeller Textil AG	December31,2022 7,262,143 $ 23,479 1,251,101 75,322,255 9,767,776 4,140 231,886 1,851,242 7,703,818 766,965 565,507 71,371 3,654,792 1,000,799 96,117 92,603 5,278,947 190,818 1,429,538 - 1,096,100 117,661,397 $	December31,2021
		7,694,115 $ 49,214 1,250,682 86,080,723 12,819,210 3,195 228,831 2,182,064 6,860,325 662,099 593,734 48,469 3,335,242 - 95,492 - 5,152,935 290,161 1,238,353 17,480 1,030,378
		129,632,702 $

A. Associates

(a) The basic information of the associate that is material to the Group is as follows:

Shareholding ratio

Companyname	Principal place of business	December 31, 2022	December 31, 2021	Nature of relationship	Method of measurement
Formosa Petrochemical Corp.	Taiwan	24.15%	24.15%	Investments accounted for using equity method	Equity method

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• (b) The summarised financial information of the associate that is material to the Group is shown below:

Balance sheets

==> picture [453 x 196] intentionally omitted <==

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

Formosa Petrochemical Corp.
. December 31, 2022 December 31, 2021
Current assets $ 262,757,723 $ 286,706,644
Non-current assets 148,710,566 162,099,170
Current liabilities ( 68,174,244) ( 56,639,797)
Non-current liabilities ( 30,805,611) ( 34,751,549)
Total net assets $ 312,488,434 $ 357,414,468
Share in associate’s net assets $ 75,465,957 $ 86,315,594
Unrealised loss (gain) from sale of upstream
transactions eliminations ( 32,982) ( 124,152)
Net differences in share capital ( 110,719) ( 110,719)
Carrying amount of the associate $ 75,322,256 $ 86,080,723
----- End of picture text -----

Statements of comprehensive income

Statements of comprehensive income
		Formosa Petrochemical Corp.
		For the year ended	For	the year ended
		December31,2022	December 31, 2021
Revenue		845,450,311 $	$	617,439,029
Profit for the period from continuing
operations		14,421,560 $	$	49,401,403
Other comprehensive (loss) income,
net of tax	(	23,143,116)		5,530,189
Total comprehensive income	8,721,556) ($		$	54,931,592
Dividends received from associates		8,743,039 $	$	1,357,472
The carrying amount of the Group’s interests in	all	individually immaterial associates and the
Group’s share of the operating results are summarised below:
As of December 31, 2022 and 2021, the carrying	amount of the Group’s individually immaterial
associates amounted to $42,339,142 and $43,551,979, respectively.
		For the year ended	For	the year ended
		December31,2022	December31,2021
(Loss) profit for the year from continuing
operations	4,302,174) ($		$	2,921,400
Other comprehensive (loss) income, net of tax	(	6,606,435)		3,782,065
Total comprehensive (loss) income	10,908,609) ($		$	6,703,465

(c) The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarised below:

As of December 31, 2022 and 2021, the carrying amount of the Group’s individually immaterial associates amounted to $42,339,142 and $43,551,979, respectively.

~42~

(d) The fair value of the Group’s associates which have quoted market price was as follows:

Formosa Petrochemical Corp. Kuang Yueh Co., Ltd. Formosa Advanced Technologies Co., Ltd.	December31,2022 184,754,224 $ 2,233,242 5,214,774 192,202,240 $	December31,2021 220,646,701 $ 2,427,998 5,323,699 228,398,398 $

• B. On June 8, 2022, the Group’s subsidiary, Formosa Biomedical Technology Corp., increased its investments in Formosa Lithium Iron Oxide Corp. in the amount of $3,797, and the shareholding ratio increased from 15.14% to 29.61%. Accordingly, financial assets at fair value through other comprehensive income were transferred to investments accounted for using equity method.

• C. On May 5, 2022, the Board of Directors of the Group approved to invest $1,000,000 in Formosa Smart Energy Tech Corp., and the shareholding ratio was 25%.

• D. On December 8, 2021, the competent authority of the Group resolved to invest in Guo Su Plastic Industry Co., Ltd. As of March 31, 2022, December 31, 2021 and December 27, 2021, the Group has invested $46,531, $27,788 and $20,680 in Guo Su Plastic Industry Co., Ltd., respectively, and the shareholding ratio was 49%. Accordingly, the Group is the single largest shareholder of Guo Su Plastic Industry Co., Ltd. Since the Group has no intention and no current ability to direct the relevant activities of Guo Su Plastic Industry Co., Ltd., the Group has no control, but only has significant influence, over the investee.

• E. On August 8, 2019, the Board of Directors of the Company resolved to increase its investment in the reinvested company, Formosa Resources Corp. The Company participated in the capital increase proportionately to its shareholding ratio, 25%, in the amount of USD 81,250 thousand. The actual investments were USD 31,250 thousand and USD 50,000 thousand on March 10, 2021 and August 19, 2019, respectively.

• F. Chang Shu Yu Yuan Development Co., Ltd. has implemented the liquidation procedure, and the dissolution and liquidation were completed on December 1, 2022. In addition, Chang Shu Yu Yuan Development Co., Ltd. returned the capital amounting to HKD 7,315 thousand, equivalent to $27,857 thousand, including the amount of HKD 4,153 thousand, which reduced the book value of the investment, and another part recognised gain on investment with balance of other equity interest.

• G. In accordance with IAS 36, ‘Impairment of Assets’, the Group recognised impairment loss of $175,492 in 2022.

• H. As of December 31, 2022 and 2021, no equity investments held by the Group were pledged to others.

~43~

(8) Property, plant and equipment

											Transportation	Transportation		Construction in	Construction in
												equipment			progress and
		Land and land							Machinery			and other			equipment to
.		improvements			Buildings			and equipment				equipment			be inspected		Total
At January 1, 2022
Cost	$		11,997,565	$		48,940,796	$		311,142,989	$		11,818,294	$		23,632,259	$	407,531,903
Accumulated
depreciation
and impairment	(		166,562)	(		28,992,646)	(		237,899,215)	(		9,575,679)			-	(	276,634,102)
	$		11,831,003	$		19,948,150	$		73,243,774	$		2,242,615	$		23,632,259	$	130,897,801
2022
Opening net
book amount	$		11,831,003	$		19,948,150	$		73,243,774	$		2,242,615	$		23,632,259	$	130,897,801
Additions			-			379,908			1,596,482			188,774			21,292,280		23,457,444
Effect of
consolidated
entity’s movement			84,180			6,020			11,365			27,490			-		129,055
Disposals			-	(		19,694)	(		92,837)	(		2,503)			-	(	115,034)
Reclassifications	(		7,432)			671,737			7,499,397			176,321	(		8,345,402)	(	5,379)
Depreciation
charge			-	(		1,618,583)	(		11,565,687)	(		474,659)			-	(	13,658,929)
Net exchange
differences			19			573,897			1,211,919			25,444			332,704		2,143,983
Closing net
book amount	$		11,907,770	$		19,941,435	$		71,904,413	$		2,183,482	$		36,911,841	$	142,848,941
At December 31, 2022
Cost	$		12,074,497	$		50,808,523	$		321,597,950	$		12,234,305	$		36,911,841	$	433,627,116
Accumulated
depreciation
and impairment	(		166,727)	(		30,867,088)	(		249,693,537)	(		10,050,823)			-	(	290,778,175)
	$		11,907,770	$		19,941,435	$		71,904,413	$		2,183,482	$		36,911,841	$	142,848,941

~44~

										Transportation	Transportation		Construction in	Construction in
											equipment			progress and
		Land and land						Machinery			and other			equipment to
.		improvements			Buildings		and equipment				equipment			be inspected		Total
At January 1, 2021
Cost	$		11,999,807	$		47,810,013	$	294,135,290	$		11,786,257	$		27,267,912	$	392,999,279
Accumulated
depreciation
and impairment	(		166,627)	(		27,634,688)	(	228,341,490)	(		9,587,514)			-	(	265,730,319)
	$		11,833,180	$		20,175,325	$	65,793,800	$		2,198,743	$		27,267,912	$	127,268,960
2021
Opening net
book amount	$		11,833,180	$		20,175,325	$	65,793,800	$		2,198,743	$		27,267,912	$	127,268,960
Additions			-			370,010		1,024,873			212,096			15,946,184		17,553,163
Disposals	(		2,170)	(		433)	(	10,795)	(		4,789)			-	(	18,187)
Reclassifications			-			1,062,527		18,401,573			296,028	(		19,510,520)		249,608
Depreciation
charge			-	(		1,520,557)	(	11,626,065)	(		450,776)			-	(	13,597,398)
Net exchange
differences	(		7)	(		138,722)	(	339,612)	(		8,687)	(		71,317)	(	558,345)
Closing net
book amount	$		11,831,003	$		19,948,150	$	73,243,774	$		2,242,615	$		23,632,259	$	130,897,801
At December 31, 2021
Cost	$		11,997,565	$		48,940,796	$	311,142,989	$		11,818,294	$		23,632,259	$	407,531,903
Accumulated
depreciation
and impairment	(		166,562)	(		28,992,646)	(	237,899,215)	(		9,575,679)			-	(	276,634,102)
	$		11,831,003	$		19,948,150	$	73,243,774	$		2,242,615	$		23,632,259	$	130,897,801

• A. Amount of borrowing costs capitalised as part of property, plant and equipment and the range of the interest rates for such capitalisation are as follows:

Amount capitalised Interest rate	Forthe years endedDecember31,	Forthe years endedDecember31,
	2022 211,589 $ 0.66%~3.84%	2021
		106,397 $
		0.61%~3.84%

• B. Under the regulations, land may only be owned by individuals. Thus, the Group has already obtained ownership of the agricultural land for future plant expansion which was acquired by the Group under the name of a third party, who has pledged the full amount to the Company. As of December 31, 2022 and 2021, the pledged amounts were $820,894 and $820,894, respectively.

• C. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

~45~

－ (9) Leasing arrangements lessee

• A. The Group leases various assets including land and buildings. Rental contracts are typically made for periods of 1 to 56 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings Transportation equipment Land Buildings Transportation equipment	December31,2022 Carrying amount 1,597,049 $ 52,906 622 1,650,577 $ For the year ended December31,2022 Depreciationcharge 174,614 $ 31,335 162 206,111 $	December31,2021
		Carrying amount
		1,509,752 $ 67,803 -
		1,577,555 $
		For the year ended December31,2021
		Depreciationcharge
		164,275 $ 45,162 -
		209,437 $

• C. For the years ended December 31, 2022 and 2021, the additions to right-of-use assets were $264,400 and $269,916, respectively.

• D. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on variable lease payments Gain on sublease of right-of-use assets	For the year ended December31,2022 12,341 $ 45,984 9,002 -	For the year ended December31,2021
		11,206 $ 30,986 4,421 5,749

• E. For the years ended December 31, 2022 and 2021, the Group’s total cash outflow for leases were $256,498 and $228,119, respectively.

~46~

(10) Short-term loans and short-term notes and bills payable

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Type of loans December 31, 2022 Interest rate range Collateral
OA loans $ 14,035 3.35% None
Secured loans 50,000 1.20%~1.83% Note 8
Unsecured loans 35,053,852 1.26%~5.75% None
Total short-term loans $ 35,117,887
Short-term notes and bills payable $ 32,950,000 0.28%~1.51% None
Short-term notes and bills payable discount ( 57,334)
Net short-term notes and bills payable $ 32,892,666
Type of loans December 31, 2021 Interest rate range Collateral
OA loans $ 31,236 0.75%~4.50% None
Secured loans 70,000 1.20% Note 8
Unsecured loans 17,411,638 0.42%~3.75% None
Total short-term loans $ 17,512,874
Short-term notes and bills payable $ 17,800,000 0.28%~0.45% None
Short-term notes and bills payable discount ( 3,375)
Net short-term notes and bills payable $ 17,796,625
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(11) Financial liabilities at fair value through profit or loss

Items Derivatives	December31,2022 2,826 $	December31,2021
		- $

A.Amounts recognised in profit or loss in relation to financial liabilities at fair value through profit or loss are listed below:

For the year ended For the year ended Items December 31, 2022 December 31, 2021 Derivatives ($ 2,826) $ 137

~47~

• B. The non-hedging derivative instruments transaction and contract information are as follows: December 31, 2021: None.

December 31, 2022

Contract Amount Derivative Instruments (Notional Principal) Liabilities (in thousands) Contract period Current items: Forward foreign exchange contracts: Taipei Fubon JPY 40,660 October 2022 - January 2023 Taipei Fubon JPY 40,000 October 2022 - January 2023 Taipei Fubon JPY 15,170 November 2022 - January 2023 Taipei Fubon JPY 69,830 November 2022 - February 2023

The forward exchange contracts are buy and sell JYP to hedge the change of exchange rate due to import and export transactions, but not adopting hedge accounting.

(12) Bonds payable

December 31, 2022 December 31, 2021 Bonds payable Domestic unsecured nonconvertible corporate bonds $ 45,500,000 $ 50,050,000 Less: Current portion ( 4,850,000) ( 4,550,000) $ 40,650,000 $ 45,500,000

~48~

The terms of nonconvertible corporate bonds were as follows:

Description	Issuance date	Maturity date	Yield rate(%)	Issued principal amount $ 4,100,000 2,200,000 2,800,000 10,000,000 1,400,000 4,600,000	December 31,2022 - $ 1,100,000 1,400,000 10,000,000 1,400,000 4,600,000	December 31,2021 2,050,000 $ 2,200,000 2,800,000 10,000,000 1,400,000 4,600,000	Note
Second issued domestic unsecured nonconvertible corporate bonds - C Third issued domestic unsecured nonconvertible corporate bonds - B First issued domestic unsecured nonconvertible corporate bonds - C Second issued domestic unsecured nonconvertible corporate bonds First issued domestic unsecured nonconvertible corporate bonds - A First issued domestic unsecured nonconvertible corporate bonds - B 2012 2013 2014	2012.12.7 2013.1.22 2013.7.8 2014.1.17 2014.7.4 2014.7.4	2021.12.7 ~ 2022.12.7 2022.1.22 ~ 2023.1.22 2022.7.8 ~ 2023.7.8 2025.1.17 ~ 2026.1.17 2023.7.4 ~ 2024.7.4 2028.7.4 ~ 2029.7.4	1.51 1.50 1.52 2.03 1.81 2.03				Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50%

~49~

Description	Issuance date	Maturity date	Yield rate(%)	Issued principal amount $ 3,300,000 3,000,000 700,000 2,900,000 5,200,000 1,900,000 6,000,000	December 31,2022 3,300,000 $ 3,000,000 700,000 2,900,000 5,200,000 1,900,000 6,000,000	December 31,2021 3,300,000 $ 3,000,000 700,000 2,900,000 5,200,000 1,900,000 6,000,000	Note
First issued domestic unsecured nonconvertible corporate bonds - A First issued domestic unsecured nonconvertible corporate bonds - B First issued domestic unsecured nonconvertible corporate bonds - C First issued domestic unsecured nonconvertible corporate bonds - A First issued domestic unsecured nonconvertible corporate bonds - B First issued domestic unsecured nonconvertible corporate bonds - C First issued domestic unsecured nonconvertible corporate bonds - A 2020 2021 2019	2019.5.13 2019.5.13 2019.5.13 2020.9.3 2020.9.3 2020.9.3 2021.5.10	2023.5.13 ~ 2024.5.13 2025.5.13 ~ 2026.5.13 2028.5.13 ~ 2029.5.13 2024.9.3 ~ 2025.9.3 2026.9.3 ~ 2027.9.3 2029.9.3 ~ 2030.9.3 2025.5.10 ~ 2026.5.10	0.75 0.83 0.93 0.52 0.60 0.67 0.48				Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50% Serial bonds, to be settled 50%, 50%

~50~

Description	Issuance date	Maturity date	Yield rate(%) Issued principal amount December31,2022 December31,2021 Note 0.56 $ 4,000,000 4,000,000 $ 4,000,000 $ Serial bonds, to be settled 50%, 50% 45,500,000 50,050,000 4,850,000) ( 4,550,000) ( 40,650,000 $ 45,500,000 $
First issued domestic unsecured nonconvertible corporate bonds - B 2021.5.10 2027.5.10 ~ 2028.5.10 Less: Current portion of bonds payable 2021

- (13) Long term bank loans and notes payable

Type of loans	Borrowing period/repayment term	Interest rate range	Collateral	December31,2022
Taipei Fubon Bank First Commercial Bank Mega International Commercial Bank Bank of Taiwan Mizuho Corporate Bank Long-term bank loans Unsecured loans	Jul. 17, 2019 ~ Jul. 17, 2024, each 50% of principal is payable starting from 4 years and 5 years after the first drawdown Jul. 15, 2020 ~ Jul. 15, 2025, principal payable semi-annually after 4 years Dec. 13, 2021 ~ Dec. 13, 2026, principal payable semi-annually after 4 years Jul. 28, 2022 ~ Aug. 10, 2023, principal payable at maturity date Jul. 28, 2022 ~ Dec. 15, 2024, principal payable at maturity date	LIBOR+0.78% (if TAIFX is higher than LIBOR+0.42%, the difference between TAIFX and LIBOR+0.42% is payable by the borrower) 1 to 5 years (including 5 years) rate of LPR- 0.8125% 1 to 5 years (including 5 years) rate of LPR- 1.35% 1.375%~1.5% 1.515%~1.672%	None " " " "	6,174,546 $ 1,680,241 2,808,632 2,000,000 2,500,000

~51~

Type of loans	Borrowing period/repayment term	Interest rate range	Collateral		December31,2022
		1.36% 1.73% 1.88% 1.55% 1.90% 1.45% 1.49% 1.72% 1.90% 1.75% 2.05% 2.10%	None " " " " " " " " " " "	300,000 $ 1,000,000 800,000 300,000 200,000 400,000 1,500,000 1,500,000 1,200,000 500,000 700,000 1,200,000 24,763,419 6,195,140) ( 18,568,279 $

~52~

Type of loans	Borrowing period/repayment term	Interest rate range	Collateral	December31,2021
Taipei Fubon Bank First Commercial Bank Mega International Commercial Bank Hua Nan Bank First Commercial Bank Mizuho Corporate Bank E. Sun Bank China Trust Bank Taipei Fubon Bank MUFG Bank Long-term bank loans Unsecured loans	Jul. 17, 2019 ~ Jul. 17, 2024, each 50% of principal is payable starting from 4 years and 5 years after the first drawdown Jul. 15, 2020 ~ Jul. 15, 2025, principal payable semi-annually after 4 years Dec. 13, 2021 ~ Dec. 13, 2026, principal payable semi-annually after 4 years Oct. 6, 2021 ~ Jan. 15, 2023, principal payable at maturity date Oct. 6, 2021 ~ Oct. 6, 2023, principal payable at maturity date Aug. 13, 2021 ~ Aug. 13, 2023, payable in full at maturity Dec. 15, 2020 ~ Dec. 14, 2023, payable in full at maturity Sep. 9, 2021 ~ Sep. 9, 2023, payable in full at maturity Mar. 12, 2021 ~ Mar. 12, 2023, payable in full at maturity Jul. 13, 2021 ~ Jul. 13, 2023, payable in full at maturity	LIBOR+0.78% (if TAIFX is higher than LIBOR+0.42%, the difference between TAIFX and LIBOR+0.42% is payable by the borrower) 1 to 5 years (including 5 years) rate of LPR- 0.8125% 1 to 5 years (including 5 years) rate of LPR- 1.35% 0.83% 0.79% 0.77% 0.85% 0.84% 0.73% 0.81%	None " " " " " " " " "	5,574,144 $ 1,212,494 690,545 1,000,000 1,000,000 1,600,000 200,000 500,000 1,500,000 800,000

~53~

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

Borrowing
period/repayment Interest
Type of loans term rate range Collateral December 31, 2021
----- End of picture text -----

HSBC Aug. 16, 2021 ~ Aug. 16, 2023, payable in full at maturity 0.78% None Bangkok Bank Dec. 3, 2021 ~ Dec. 1, 2023, payable in full at maturity 0.86% " Far Eastern International Bank Aug. 20, 2020 ~ Aug. 10, 2023, payable in full at maturity 0.83% " Mega International Commercial Bank Jul. 21, 2021 ~ Jul. 21, 2023, payable in full at maturity 0.83% " Less: Current portion of long-term loans	1,200,000 $ 200,000 700,000 1,000,000 17,177,183 - 17,177,183 $

(14) Pensions

• A. (a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March.

~54~

(b) The amounts recognised in the balance sheet are as follows:

			December31,2022			December31,2021
Present value of defined benefit obligations		$	9,046,037		$	9,750,242
Fair value of plan assets	(		4,500,627)	(		4,434,142)
Net defined benefit liability		$	4,545,410		$	5,316,100

(c) Movements in net defined benefit liabilities are as follows:

		Present value of	Present value of
		defined benefit			Fair value of			Net defined
			obligations		planassets		benefitliability
Year ended December 31, 2022
Balance at January 1		$	9,750,242	($	4,434,142)		$	5,316,100
Current service cost			68,186		-			68,186
Interest expense (income)			48,743	(	22,435)			26,308
			9,867,171	(	4,456,577)			5,410,594
Remeasurements:
Return on plan assets			-	(	357,121)	(		357,121)
Change in financial assumptions			241,205		-			241,205
Experience adjustments	(		234,832)		-	(		234,832)
			6,373	(	357,121)	(		350,748)
Pension fund contribution			-	(	98,089)	(		98,089)
Paid pension	(		827,507)		411,160	(		416,347)
Balance at December 31		$	9,046,037	($	4,500,627)		$	4,545,410
		Present value of
		defined benefit			Fair value of			Net defined
			obligations		planassets		benefitliability
Year ended December 31, 2021
Balance at January 1		$	9,713,595	($	4,530,754)		$	5,182,841
Current service cost			74,685		-			74,685
Interest expense (income)			97,136	(	45,884)			51,252
			9,885,416	(	4,576,638)			5,308,778
Remeasurements:
Return on plan assets			-	(	22,209)	(		22,209)
Change in financial assumptions			227,724		-			227,724
Experience adjustments			291,092		-			291,092
			518,816	(	22,209)			496,607
Pension fund contribution	(		2,596)	(	106,717)	(		109,313)
Paid pension	(		651,394)		271,422	(		379,972)
Balance at December 31		$	9,750,242	($	4,434,142)		$	5,316,100

~55~

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2022 and 2021 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

• (e) The principal actuarial assumptions used were as follows:

government. The principal actuarial assumptions used	were as follows:
Discount rate Future salary increases	Year ended December31,2022 1.25% 2.85%	Year ended December31,2021
		0.50%
		1.00%~2.85%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in each territory.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

Increase Decrease 0.25% 0.25% December 31, 2022 Effect on present value of defined benefit obligation 101,883) ($ 105,062 $ Increase Decrease 0.25% 0.25% December 31, 2021 Effect on present value of defined benefit obligation 132,269) ($ 136,797 $ Discountrate Discountrate	Increase Decrease 0.35% 0.35% 151,662 $ 144,952) ($ Increase Decrease 0.35% 0.35% 193,390 $ 183,703) ($ Future salaryincreases Future salaryincreases

~56~

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

  - (f) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2023 amount to $99,515.

• B. (a) From July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

  • (b) The Company’s mainland subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. The contribution percentage was 10~20% for the years ended December 31, 2022 and 2021. Other than the monthly contributions, the Group has no further obligations.

  • (c) The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2022 and 2021 were $469,987 and $378,914, respectively.

• (15) Capital stock

• A. As of December 31, 2022, the Company’s authorised and paid-in capital was $58,611,863, and total issued stocks was 5,861,186 thousand shares with a par value of $10 per share. All proceeds from shares issued have been collected.

~57~

• B. Changes in the treasury stocks for the years ended December 31, 2022 and 2021 are set forth below:

below:
Reason for reacquisition Parent company shares held by subsidiaries reclassified from long-term investment to treasury stock Reason for reacquisition Parent company shares held by subsidiaries reclassified from long-term investment to treasury stock	Subsidiary Formosa Taffeta Co. Subsidiary		Beginning Ending shares Additions Disposal shares 12,169,610 - - 12,169,610 Beginning Ending shares Additions Disposal shares 12,169,610 - - 12,169,610 For theyear ended December31,2022 For theyear ended December31,2021
	Formosa Taffeta Co.

• C. The market value of treasury stocks was $70.5 and $80.8 (in dollars) per share at December 31, 2022 and 2021, respectively.

• D. The above treasury stocks of the parent company were purchased by subsidiaries.

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(16) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Group has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

reserve is insufficient.
At January 1, 2022 Dividends allocated to subsidiaries Effect from net stockholding of associates recognised under the equity method Changes in ownership interests in subsidiaries Expired cash dividends reclassified to capital surplus Overdue dividends are transferred to capital surplus At December 31, 2022				For theyear ended December31,2022
		Share premium		Conversion premium of corporate bonds		Treasury share transactions		Effect from net stockholding of associates recognised using equitymethod
		2,710,554 $ - - - - - 2,710,554 $		5,514,032 $ - - - - - 5,514,032 $		348,233 $ 21,847 - 820 - - 370,900 $		379,632 $ - 145 13,005 - - 392,782 $

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For the year ended December 31, 2021

At January 1, 2021 Dividends allocated to subsidiaries Effect from net stockholding of associates recognised under the equity method Changes in ownership interests in subsidiaries Expired cash dividends reclassified to capital surplus Overdue dividends are transferred to capital surplus At December 31, 2021	Share premium 2,710,554 $ - - - - - 2,710,554 $		Conversion premium of corporate bonds		Treasury share transactions		Effect from net stockholding of associates recognised using equitymethod 378,153 $ - 442 1,037 - - 379,632 $	Difference between stock price and book value for disposal or acquisition of subsidiaries Others 163 $ 228,701 $ - - - - - - - 682) ( - 12,366 163 $ 240,385 $
			5,514,032 $ - - - - - 5,514,032 $		336,034 $ 11,379 - 820 - - 348,233 $

(17) Retained earnings

• A. Under the Company's Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years' operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The remaining balance is to be set aside as special reserve if necessary; and distributed to shareholders as interest on capital. The remaining balance for current year, after allocating for interest on capital, shall be accumulated with remaining balance of previous year and to be distributed as shareholders’ bonus proposed by the Board of Directors. For the distribution of cash dividends which was authorised to the Board of Directors would be adopted by a majority vote at a meeting of the Board of Directors attended by twothirds of the total number of directors, and then reported to the shareholders. The distribution of stock dividends should be reported to the shareholders for resolution.

• The special reserve includes:

• (a) Reserve for a special purpose;

• (b) Investment income recognised under equity method and deferred income tax assets arising from unused investment tax credits which are deemed unrealised and transferred to special reserve. Such investment income and deferred income tax assets are reclassified to unappropriated earnings only when they are realised;

• (c) Net unrealised gains from financial instruments transactions. The special reserve for unrealised gains from financial instruments is reduced when the accumulated value of the unrealised

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gains also decreases; and

• (d) Other special reserves as stipulated by other laws.

• B. The Group is in the mature stage and the profit is stable. The Board of Directors shall establish the cash dividend or stock dividend percentage. At least 50% of the distributable earnings after deducting the legal reserve, directors' and supervisors' remuneration, employee bonus and special reserves shall be distributed to stockholders. The Group would prefer cash dividend. If the Group requires funds for significant investments or needs to improve its financial structure, part of the dividend will be in the form of stocks which shall not exceed 50% of the total dividends.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Group’s paid-in capital.

• D. In accordance with the regulations, the Group shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

• E. The appropriations of 2021 earnings had been resolved at the stockholders’ meeting on June 8, 2022. The appropriations of 2020 earnings had been resolved after meeting the statutory voting threshold before June 30, 2021 via the electronic voting platform for the stockholders’ meeting and had been resolved at the stockholders’ meeting on July 23, 2021. Details are as follows:

For the years ended December 31,

Legal reserve Special reserve Cash dividends	2021	Dividends per share (indollars) 4.80 $	2020
	Amount 3,910,207 $ 6,428,356 28,133,694 38,472,257 $		Amount 1,978,906 $ 3,704,582 14,652,966 20,336,454 $	Dividends per share (indollars)
				2.50 $

Information about the appropriation of employees’ bonus and directors’ and supervisors’ remuneration by the Group as proposed by the Board of Directors and resolved by the stockholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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• F. The appropriations of the 2022 net income was approved by the Board of Directors during its meeting on March 3, 2023 as follows:

	F. The appropriations of the 2022 net income was approved by the Board of Directors during its meeting on March 3, 2023 as follows:	F. The appropriations of the 2022 net income was approved by the Board of Directors during its meeting on March 3, 2023 as follows:
(18)	Other equity items Dividends per share Amount (indollars) Legal reserve 773,180 $ Special reserve 141,215 Cash dividends 5,568,127 0.95 $ 6,482,522 $ December31,2022 For the year ended
		0.95 $

Hedging Unrealised gain Currency reserve (loss) translation At January 1, 2022 9,270 $ 121,228,401 $ 6,240,670) ($ Revaluation: –Group - 39,972,075) ( - –Associates - 8,866,975) ( - Revaluation transferred to retained earnings: –Group - 42,632 - –Associates - 2,428) ( - Cash flow hedges: –Associates 9,110) ( - - Currency translation differences: –Group - - 1,788,528 –Tax of Group - - 359,626) ( –Associates - - 1,881,121 At Decemberr 31, 2022 160 $ 72,429,555 $ 2,930,647) ($

Revaluation surplus Total - $ 114,997,001 $ - 39,972,075) ( - 8,866,975) ( - 42,632 - 2,428) ( - 9,110) ( - 1,788,528 - 359,626) ( 1,002,383 2,883,504 1,002,383 $ 70,501,451 $

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		Hedging		Unrealised gain	Unrealised gain		Currency
		reserve			(loss)		translation		Total
At January 1, 2021	$	32,123	$		98,095,277	($	5,272,606)	$	92,854,794
Revaluation:
–Group		-			21,531,864		-		21,531,864
–Associates		-			2,881,494		-		2,881,494
Revaluation transferred
to retained earnings:
–Group		-	(		1,277,669)		-	(	1,277,669)
–Associates		-	(		2,565)		-	(	2,565)
Cash flow hedges:
–Associates	(	22,853)			-		-	(	22,853)
Currency translation
differences:
–Group		-			-	(	562,598)	(	562,598)
–Tax of Group		-			-		111,624		111,624
–Associates		-			-	(	517,090)	(	517,090)
At December 31, 2021	$	9,270	$		121,228,401	($	6,240,670)	$	114,997,001

(19)	Operating revenue Sales revenue Service revenue Other operating revenue	2022 2021 379,010,979 $ 364,725,115 $ 534,344 559,829 351,240 527,154 379,896,563 $ 365,812,098 $ For theyears ended December31,	2022 2021 379,010,979 $ 364,725,115 $ 534,344 559,829 351,240 527,154 379,896,563 $ 365,812,098 $ For theyears ended December31,
			364,725,115 $ 559,829 527,154
			365,812,098 $

The Group derives revenue from the transfer of goods and services over time and at a point in time. (20) Interest income

Interest income
Interest income from bank deposits Interest from current account with others Other interest income	For the years ended December 31,
	2022 573,863 $ 40,380 48,016 662,259 $	2021 291,634 $ 43,478 15,762 350,874 $

(21) Other income

Other income
Rent income Dividend income Other income	For theyears ended December31,
	2022 135,627 $ 10,448,254 1,185,782 11,769,663 $	2021 136,415 $ 3,116,391 1,194,188 4,446,994 $

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(22) Other gains and losses

Other gains and losses
			Forthe years ended			December31,
			2022			2021
(Loss) Gain on disposal of property, plant
and equipment	($		71,483)		$	4,770
Net currency exchange gain (loss)			2,203,087	(		268,066)
Net gain (loss) on financial assets and
liabilities at fair value through profit or loss			312,866	(		91,153)
Gains on disposals of investments			6,267			-
Impairment loss	(		175,492)			-
Other losses	(		301,403)	(		235,517)
		$	1,973,842	($		589,966)

(23) Finance costs

			For the years ended	For the years ended	For the years ended	December 31,
			2022			2021
Interest expense:
Bank loans		$	1,204,872		$	431,810
Corporate bonds			566,257			605,260
Current account with others			31,867			26,463
Discount			177,189			63,169
Other interest expenses			29,048			27,749
			2,009,233			1,154,451
Less: Capitalisation of qualifying assets	(		211,589)	(		106,397)
		$	1,797,644		$	1,048,054

(24) Expenses by nature

Expenses by nature
Depreciation charges on property, plant and equipment and right-of-use assets Employee benefit expense Amortisation	Forthe years endedDecember31,
	2022 13,865,040 $ 14,679,885 4,599,170 33,144,095 $	2021
		13,806,835 $ 14,695,683 4,185,976
		32,688,494 $

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(25) Employee benefit expense

Employee benefit expense
		Forthe years ended		December31,
		2022		2021
Wages and salaries	$	12,469,085	$	12,560,038
Labor and health insurance fees		1,008,303		991,394
Pension costs		564,481		504,851
Other personnel expenses		638,016		639,400
	$	14,679,885	$	14,695,683

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit before income tax of the current year, after covering accumulated losses, shall be distributed as employees' compensation. The ratio shall not be lower than 0.05% and shall not be higher than 0.5% for employees’ compensation.

• B. For the years ended December 31, 2022 and 2021, employees’ remuneration (bonuses) was accrued at $7,210 and $41,705, respectively. The aforementioned amount was recognised in salary expenses.

• For the years ended December 31, 2022 and 2021, the employees’ compensation was estimated and accrued based on approximately 0.1% of the distributable profit.

Employees’ compensation for 2021 as resolved by the Board of Directors was in agreement with the amount of $41,705 recognised in profit or loss for 2021. Employees’ compensation for 2021 has been distributed.

• Information about the appropriations of employees’ bonus and directors’ and supervisors’ remuneration by the Company as proposed by the Board of Directors and resolved by the stockholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(26) Income tax

A. Income tax expense

(a) Components of income tax expense:

e tax ome tax expense Components of income tax expense:
			Forthe years endedDecember31,
			2022			2021
Current tax:
Current tax on profits for the year		$	1,086,180		$	7,461,782
Tax on undistributed surplus earnings			209,174			161,956
Adjustments in respect of prior years	(		658,745)	(		94,879)
Total current tax			636,609			7,528,859
Deferred tax:
Origination and reversal of temporary
differences	(		257,345)	(		75,761)
Effect of exchange rate			6,458	(		634)
Total deferred tax	(		250,887)	(		76,395)
Income tax expense		$	385,722		$	7,452,464
The income tax charge relating to components of other comprehensive income is as follows:
			For the years ended December 31,
			2022			2021
Currency translation differences	$		359,626	$		111,624

(b) The income tax charge relating to components of other comprehensive income is as follows:

B. Reconciliation between income tax expense and accounting profit

			Forthe years ended	Forthe years ended	December31,
			2022		2021
Tax calculated based on profit before tax and
statutory tax rate		$	1,936,180	$	12,895,686
Expenses disallowed by tax regulation	(		1,546,029)	(	5,366,454)
Effect from net operating loss carryforward			39,893	(	49,672)
Effect from investment tax credits	(		24,051)		-
Effect from changes in tax regulation of
overseas subsidiaries			194,333	(	94,173)
Additional tax on undistributed earnings			209,174		161,956
Non-deductible withholding income tax for
offshore income			234,967		-
Adjustments in respect of prior years	(		658,745)	(	94,879)
Income tax expense		$	385,722	$	7,452,464

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• C. Amounts of deferred tax assets or liabilities as a result of temporary differences and are as follows:

follows:
		For	theyear ended December31,				2022
					Recognised
			Recognised			in other
				in profit	comprehensive
		January1		or loss		income		December31
Deferred tax assets:
Temporary differences:
Currency translation differences	$	965,165	$	-	($	359,626)	$		605,539
Unrealised gain from downstream
transactions		65,009	(	65,009)		-			-
Loss on inventory		265,056		68,314		-			333,370
Accrued pension liabilities		629,497	(	73,823)		-			555,674
Impairment loss		140,863		12,246		-			153,109
Others		174,732		316,659		-			491,391
	$	2,240,322	$	258,387	($	359,626)	$		2,139,083
Deferred tax liabilities:
Temporary differences:
Investment income accounted for
using equity methed	($	349,420)	$	24,111	$	-	($		325,309)
Depreciation useful life difference	(	31,739)		8,295		-	(		23,444)
Unrealised gains on financial assets	(	853)	(	24,736)		-	(		25,589)
Unrealised exchange gain		-	(	123)		-	(		123)
Others		-	(	8,589)		-	(		8,589)
	($	382,012)	($	1,042)	$	-	($		383,054)
	$	1,858,310	$	257,345	($	359,626)	$		1,756,029

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For the year ended December 31, 2021

					Recognised	Recognised
			Recognised			in other
				in profit	comprehensive
		January1		or loss		income		December31
Deferred tax assets:
Temporary differences:
Currency translation differences	$	853,541	$	-	$	111,624	$		965,165
Unrealised gain from downstream
transactions		9,449		55,560		-			65,009
Loss on inventory		213,732		51,324		-			265,056
Accrued pension liabilities		690,374	(	60,877)		-			629,497
Impairment loss		167,792	(	26,929)		-			140,863
Others		176,274	(	1,542)		-			174,732
	$	2,111,162	$	17,536	$	111,624	$		2,240,322
Deferred tax liabilities:
Temporary differences:
Investment income accounted for
using equity methed	($	397,238)	$	47,818	$	-	($		349,420)
Depreciation useful life difference	(	40,276)		8,537		-	(		31,739)
Others	(	2,723)		1,870		-	(		853)
	($	440,237)	$	58,225	$	-	($		382,012)
	$	1,670,925	$	75,761	$	111,624	$		1,858,310

• D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

follows:
Year incurred 2014 2015 2017 2018 2019 2020 2021 2022	Amount filed/ assessed Assessed Assessed Assessed Assessed Assessed Assessed Amount filed Amount filed	December	Taxassets 3,876 $ 1,584 5,105 2,815 953 6,548 10,618 8,224 39,723 $ 31,2022	Expiry year
		Unused amount 3,876 $ 1,584 5,105 2,815 953 6,548 10,618 653,960 685,459 $
				2024 2025 2027 2028 2029 2030 2031 2027&2032

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December 31, 2021

Year incurred 2012 2014 2015 2017 2018 2019 2020 2021	Amount filed/ assessed Assessed Assessed Assessed Assessed Assessed Assessed Amount filed Amount filed	Unused amount Taxassets Expiry year 7,125 $ 7,125 $ 2022 3,876 3,876 2024 1,584 1,584 2025 5,105 5,105 2027 2,815 2,815 2028 953 953 2029 6,548 6,548 2030 11,642 10,618 2031 39,648 $ 38,624 $

• E. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

Deductible temporary differences	December31,2022 92,843 $	December31,2021 21,539 $

• F. The Company’s income tax returns through 2020 have been assessed and approved by the Tax Authority.

(27) Earnings per share

• A. Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders

of the parent by the weighted average number of ordinary shares in issue during the year.

Consolidated net income Net income of non- controlling interest Profit attributable to ordinary shareholders of the parent Basic earnings per share	Before tax After tax (shares in thousands) 9,589,583 $ 9,203,861 $ 2,386,958 1,844,330 7,202,625 $ 7,359,531 $ 5,849,017 For theyear ended December31, Amount Weighted average number of ordinary shares outstanding	2022 (in dollars) Earnings per share	2022 (in dollars) Earnings per share
	Before tax 9,589,583 $ 2,386,958 7,202,625 $	Before tax 1.64 $ 0.41 1.23 $	After tax
			1.57 $ 0.31
			1.26 $

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==> picture [484 x 177] intentionally omitted <==

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

For the year ended December 31, 2021
Weighted average
number of
ordinary shares Earnings per share
Amount outstanding (in dollars)
Before tax After tax (shares in thousands) Before tax After tax
Basic earnings per share
Consolidated net income $ 50,159,895 $ 42,707,431 $ 8.58 $ 7.30
Net income of non-
controlling interest 8,496,263 4,348,084 1.46 0.74
Profit attributable to
ordinary shareholders
of the parent $ 41,663,632 $ 38,359,347 5,849,017 $ 7.12 $ 6.56
----- End of picture text -----

• B. Employees’ bonus could be distributed in the form of stock. Since there is no significant impact when calculating diluted earnings per share, basic earnings per share equals diluted earnings per share.

• C. If stocks of the parent company held by subsidiaries are not treated as treasury stocks, the calculation of basic earnings per share is as follows:

Consolidated net income Net income of non- controlling interest Profit attributable to ordinary shareholders of the parent Consolidated net income Net income of non- controlling interest Profit attributable to ordinary shareholders of the parent Basic earnings per share Basic earnings per share	For theyear ended December31,2022	For theyear ended December31,2022	For theyear ended December31,2022	For theyear ended December31,2022
	Before tax After tax (shares in thousands) Before tax After tax 9,589,583 $ 9,203,861 $ 1.64 $ 1.57 $ 2,386,958 1,844,330 0.41 0.31 7,202,625 $ 7,359,531 $ 5,861,186 1.23 $ 1.26 $ Weighted average number of ordinary shares outstanding Earnings per share Amount (in dollars) For theyear ended December31,2021		Earnings per share (in dollars)
	Before tax 9,589,583 $ 2,386,958 7,202,625 $			After tax
				1.57 $ 0.31
				1.26 $
	Before tax After tax 50,159,895 $ 42,707,431 $ 8,496,263 4,348,084 41,663,632 $ 38,359,347 $ Amount	(shares in thousands) 5,861,186 Weighted average number of ordinary shares outstanding	Earnings per share (in dollars)
	Before tax 50,159,895 $ 8,496,263 41,663,632 $		Before tax 8.56 $ 1.45 7.11 $	After tax
				7.29 $ 0.74
				6.54 $

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(28) Business combinations

• A. The Group has acquired Ivy Life Sciences Co., Ltd. by cash amounting to $182,232 and $572,800 on March 9, 2022 and May 31, 2022, respectively, equivalent to 51% equity interest and has obtained control over it.

• B. The following table summarises the consideration paid for Ivy Life Sciences Co., Ltd. and the fair values of the temporary assets acquired and liabilities assumed at the acquisition date, as well as the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets at the acquisition date:

identifiable net assets at the acquisition date:
			May 31,2022
Purchase consideration
Cash paid		$	755,032
Non-controlling interest’s proportionate share of the recognised amounts
of acquiree’s identifiable net assets			395,447
			1,150,479
Fair value of the temporary identifiable assets acquired and
liabilities assumed
Cash			771,595
Accounts receivable			4,046
Other current assets			4,351
Inventories			5,153
Property, plant and equipment			129,055
Intangible assets			395
Other non-current assets			5,365
Notes payable	(		1,580)
Other payables	(		21,247)
Other current liabilities	(		29,125)
Long-term borrowings	(		48,853)
Other non-current liabilities	(		12,119)
Total identifiable net assets			807,036
Spread		$	343,443

C. As of December 31, 2022, the acquisition is still in the process of purchase price allocation, and the Group has commissioned experts to assess the fair value of the identifiable assets.

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(29) Supplemental cash flow information

A. Investing activities with partial cash payments

			Forthe years endedDecember31,	Forthe years endedDecember31,	Forthe years endedDecember31,
			2022		2021
Purchase of fixed assets		$	23,457,444		17,553,163 $
Add: Opening balance of payable
on equipment			3,057,560		1,656,593
Less: Ending balance of payable
on equipment	(		3,543,908)	(	3,057,560)
Cash paid during the year		$	22,971,096		16,152,196 $

B. Financing activities with partial cash payments

			Forthe years ended	Forthe years ended	December31,
			2022		2021
Cash dividends distributed		$	28,133,694	$	14,652,966
Add: Opening balance of cash dividends
payable			72,427		76,913
Less: Ending balance of cash dividends
payable	(		75,964)	(	72,427)
Cash dividends paid		$	28,130,157	$	14,657,452

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(30) Changes in liabilities from financing activities

Short-term borrowings At January 1, 2022 17,512,874 $ Changes in cash flow from financing activities 17,605,013 Impact of changes in foreign exchange rate - Changes in acquisition of subsidiaries - At December 31, 2022 35,117,887 $ Short-term borrowings At January 1, 2021 19,055,620 $ Changes in cash flow from financing activities 1,542,746) ( Impact of changes in foreign exchange rate - At December 31, 2021 17,512,874 $

Short-term notes and Bonds payable (including current Long-term borrowing (including current Liabilities from financial bills payable portion) portion) activities-gross 17,796,625 $ 50,050,000 $ 17,177,183 $ 102,536,682 $ 15,096,041 4,550,000) ( 7,115,631 35,266,685 - - 418,605 418,605 - - 52,000 52,000 32,892,666 $ 45,500,000 $ 24,763,419 $ 138,273,972 $ Short-term notes and Bonds payable (including current Long-term borrowing (including current Liabilities from financial billspayable portion) portion) activities-gross 16,096,733 $ 42,100,000 $ 16,298,088 $ 93,550,441 $ 1,699,892 7,950,000 1,069,062 9,176,208 - - 189,967) ( 189,967) ( 17,796,625 $ 50,050,000 $ 17,177,183 $ 102,536,682 $

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7. Related Party Transactions

(1) Names of related parties and relationship

lated Party Transactions Names of related parties and relationship
Names of relatedparties	Relationship with theGroup
Formosa Petrochemical Corp. Formosa Heavy Industries Corp. Formosa Heavy Industries (Ningbo) Corp. Formosa Plastics Transport Corp. Formosa Synthetic Rubber (Ningbo) Corp. Mai Liao Power Corp. Formosa Environmental Technology Corp. Hwa Ya Science Park Management Consulting Corp. Formosa Resourses Corp. Formosa Construction Corp. Formosa Fairway Corporation Kuang Yueh Co., Ltd. Formosa Group (Cayman) Corp. Guo Su Plastic Industry Co., Ltd. FG Inc. Formosa Advanced Technologies Co., Ltd. Schoeller Textil AG Nan Ya Optical Corp. Formosa Smart Energy Tech Corp. Formosa AdvEnergy Technology Corp. Beyoung International Corp. Changshu Yu Yuan Co., Ltd. Formosa Lithium Iron Oxide Corp. Formosa Plastics Corp. Nan Ya Plastics Corp. Nan Ya Plastics (Hui Zhou) Corp. Nan Ya Plastics (Nan Tong) Corp. Nan Ya Plastics Corp., U.S.A. Nan Ya Plastics (Ningbo) Corp. Nan Ya Technology Corp. Nan Ya PCB Corp. Nan Ya Electronic Materials Co., Ltd. Formosa Automobile Sales Corporation Formosa Petrochemical Transportation Corporation Chang Gung University Chang Gung Memorial Hospital Chang Gung Biotechnology Co., Ltd.	Associate ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ Other related party ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵

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Names of relatedparties

Relationship with theGroup

Yue Chi Development Corp. PFG Fiber Glass Corp. Formosa Plastics Marine Corp. Formosa Plastics Marine Co., Ltd. Mai Liao Harbor Administration Corp. Formosa Network Technology Corp. Formosa Plastics Building Parking Lot FPG Travel Service Co., Ltd. Formosa Daikin Advanced Chemicals Co., Ltd. Formosa Sumco Technology Corporation Formosa Asahi Spandex Co., Ltd. Formosa Plastics Logistics Corp. Formosa Plastics Transport (Ningbo) Co., Ltd. Formosa Electronic (Ningbo) Co., Ltd. Inteplast Taiwan Corporation Formosa Oil (Asia Pacific) Corporation Asia Pacific Development Corp. Ya Tai Development Co., Ltd. Bio Trust International Corp. Formosa Ha Tinh (Cayman) Ltd. Formosa Ha Tinh Steel Corp. - TW Formosa Ha Tinh Steel Corp. BP Chemicals (Malaysia) SDN Corp. (Note) INEOS Acetyls (Malaysia) SDN Bhd Idemitsu Kosan Co., Ltd. Idemitsu Chemicals (Hong Kong) Co., Ltd. Idemitsu Chemicals U.S.A. Corp. Yugen Co., Ltd. Yumaowu Enterprise Co., Ltd. Yu Yuang Textile Co., Ltd. Yu Maowu Complex Co., Ltd. NKFG Corporation Kuang Yueh (Vietnam) Co., Ltd. Hua Ya Power Corp. Asia Pacific Technology Corp. Kong You Industrial Co., Ltd. Hong Jing Metal Corp. Formosa Industries (Ningbo) Co., Ltd. Nan Ya Plastics Industry (Anshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Plastics Film (Nantong) Co., Ltd. Nan Ya Plastics Film (Hui Zhou) Co., Ltd Nan Ya Chemical Fiber (Kunshan) Co., Ltd.

Other related party ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵ ˵

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Names of related parties Relationship with the Group
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Names of related parties	Relationship withthe Group
Nan Ya Draw-Textured Yarn (Kunshan) Co., Ltd.	Other related party
Nan Ya Plastics (Xiamen) Co., Ltd.	˵
Formosa Heavy Industries (Guangzhou) Co., Ltd.	˵
Asia Pactfic Investment Co.	˵
Nan Ya Printed Circuit Board Corp.	˵
Formosa Automobile Corp.	˵
Taisuwang Commerce and Trade Co., Ltd.	˵
Huaya Steel Co., Ltd.	˵
Fuxin Special Steel Co., Ltd.	˵

Note: On January 1, 2021, the original shareholder who held 50% of the shares of the subsidiary of the Group has disposed its holdings to INEOS Quattro Holding Ltd. Therefore, BP Chemicals (Malaysia) SDN Corp. is not a related party of the Group since January 1, 2021.

(2) Significant related party transactions

A. Sales of goods:

nificant related party transactions Sales of goods:
Sales of goods: － Associates － Other related parties	2022 2021 41,563,432 $ 33,690,289 $ 48,727,058 48,259,385 90,290,490 $ 81,949,674 $ For theyears ended December31,
		33,690,289 $ 48,259,385
		81,949,674 $

The Group sells goods to related parties. Except for terms to certain related parties which are longer, prices are the same with third parties.

B. Purchases of goods:

longer, prices are the same with third parties. Purchases of goods:
Purchases of goods: － Associates Formosa Petrochemical Corp. Others － Other related parties	Forthe years endedDecember31,
	2022 183,369,442 $ 10,359 19,560,134 202,939,935 $	2021
		156,498,774 $ 7,465 27,549,418
		184,055,657 $

The payment terms for related parties are within 30~60 days of purchase. The purchase prices and terms for related parties are the same with non-related parties.

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C. Receivables from related parties:

Receivables from related parties:
. Receivables from related parties: － Associates － Other related parties	December31,2022 3,313,185 $ 3,840,753 7,153,938 $	December31,2021
		3,264,658 $ 5,462,856
		8,727,514 $

Receivables from related parties are mainly from sales of goods and receivables for payments on behalf of others for construction design services. Receivables for sales are due 30~120 days from the date of sale; receivables for payments on behalf of others for construction design services are due 270 days from the services rendered. The receivables do not bear interest and no collaterals were pledged. No provision was accrued for receivables from related party.

D. Payables to related parties:

Payables to related parties:
. Payables to related parties: － Associates Formosa Petrochemical Corp. Others － Other related parties	December 31, 2022 12,574,263 $ 468 1,309,797 13,884,528 $	December31,2021
		14,838,406 $ - 2,688,722
		17,527,128 $

The payables to related parties arise mainly from purchase transactions and are due 30~60 days after the date of purchase. The payables bear no interest.

E. Expansion and repair project

• (a) Expansion and repair project:

ansion and repair project Expansion and repair project:
Ending balance of payables for expansion Expansion and repair works of factory sites － Associates －Other related parties . Payables to related parties: － Associates － Other related parties	Forthe years endedDecember31,
	and repair project: 2022 125,295 $ 260,796 386,091 $ December31,2022 7,818 $ 8,477 16,295 $	2021
		352,208 $ 130,496
		482,704 $
		December31,2021
		888 $ 68,532
		69,420 $

(b) Ending balance of payables for expansion and repair project:

The Group contracted the expansion and repair works of the factory sites to related parties. The

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payment terms are in accordance with the industry practice with payment due within a month after inspection.

F. Financing

• (a) Loans to related parties:

• i. Ending balance of accounts receivable - related parties

ii. Interest income . － Other related parties Formosa Plastics Marine Co., Ltd. － Associates Formosa Heavy Industries Corp. － Other related parties Formosa Plastics Marine Co., Ltd.	December 31, 2022 December 31, 2021 2,429,252 $ 2,698,693 $ Forthe years endedDecember31,	December 31, 2022 December 31, 2021 2,429,252 $ 2,698,693 $ Forthe years endedDecember31,
	2022 8,141 $ 32,201 40,342 $	2021
		1,917 $ 41,451
		43,368 $

The loan terms to related parties are in accordance with the contract’s repayment schedule after the loan is made; interest was collected at 0.98 % %~1.79% and 0.98%~1.23% per annum for the years ended December 31, 2022 and 2021, respectively.

• (b) Loans from related parties:

• i. Ending balance of accounts payable - related parties

ii. Interest expense － Associates － Other related parties	December 31, 2022 1,472,658 $ - 1,472,658 $	December31,2021
		515,520 $ 26,493
		542,013 $

Interest expense
－Associates － Other related parties	For theyears ended December31,
	2022 28,063 $ 416 28,479 $	2021
		15,492 $ 211
		15,703 $

The loan terms from associates are in accordance with the contract’s repayment schedule after the loan is made; interest is both paid at a rate of 3.08% per annum for the years ended December 31, 2022 and 2021.

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G. Operating expenses

Operating expenses
Rental revenue Transportation charges － Other related parties Formosa Plastics Marine Corp. Formosa Plastics Transport (Ningbo) Others － Associates Formosa Petrochemical Corp. Others － Other related parties Nan Ya Plastics Corp. Formosa Plastics Building Parking Lot Formosa Network Technology Corp. Others	2022 2021 1,123,689 $ 700,493 $ 1,262,620 1,053,817 160,075 383,934 2,546,384 $ 2,138,244 $ Forthe years endedDecember31, For the years ended December 31,
	2022 21,215 $ 11,798 33,013 28,461 15,116 15,400 24,923 83,900 116,913 $	2021
		21,215 $ 12,590
		33,805
		27,182 15,815 15,400 26,438
		84,835
		118,640 $

H. Rental revenue

The rental prices charged to related parties are determined considering the local rental prices and payments, and are collected monthly.

I. Property transactions:

• (a) Acquisition of property, plant and equipment

Purchase of property, plant and equipment － Associates － Other related parties	Forthe years endedDecember31,	Forthe years endedDecember31,
	2022 278,856 $ 725 279,581 $	2021
		291,614 $ 24,418
		316,032 $

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(b) Acquisition of financial assets

Guo Su Plastic Industry Co., Ltd. Formosa Smart Energy Tech Corp. Formosa Lithium Iron Oxide Corp.	Accounts	No. ofshares Objects 1,800,000 Guo Su Plastic Industry Co., Ltd. 100,000,000 Formosa Smart Energy Tech Corp. 5,063,128 Formosa Lithium Iron Oxide Corp.	For the year ended December31,2022
			Consideration
	Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method		46,531 $ 1,000,000 3,797 1,050,328 $

Formosa Lithium Iron Oxide Corp.	Investments accounted for using equity method	5,063,128	Formosa Lithium Iron Oxide Corp. 3,797 1,050,328 $
Formosa Resources Corp. Guo Su Plastic Industry Co., Ltd.	Accounts	No. ofshares	For the year ended December31,2021 Objects Consideration Formosa Resources Corp. 887,813 $ Guo Su Plastic Industry Co., Ltd. 48,469 936,282 $
	Investments accounted for using equity method Investments accounted for using equity method	88,453,125 1,875,000

(c) Disposal of financial assets:

For the year ended December 31, 2021: None.

For the year ended December 31, 2022 Accounts No. of shares Objects Proceeds Gain/(loss) Formosa Smart Long-term 100,000 Formosa Energy Tech equity AdvEnergy Corp. investment Technology accounted for Corporation using equity method $ 1,000 $ 71

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J. Donation:

Donation:
	Forthe years endedDecember31,
	2022	2021
Transportation charges
－ Other related parties	4,853 $	3,781 $

K. Details of affiliates endorsed/guaranteed and commitment letter for the Associate are provided in Notes 9(3) and (4).

(3) Key management compensation

Notes 9(3) and (4). Key management compensation
Salaries Post-employment benefits	2022 2021 116,212 $ 131,392 $ 1,644 1,480 117,856 $ 132,872 $ Forthe years endedDecember31,
		131,392 $ 1,480
		132,872 $

8. Pledged Assets

The Group’s assets pledged as collateral are as follows:

Pledged assets Property, plant and equipment Inventory Non-current financial assets at amortised cost - Time deposits	December31,2022 December31,2021 5,872,827 $ 5,873,527 $ 17,610 17,610 1,500 1,500 5,891,937 $ 5,892,637 $ Bookvalue	Purpose
	December31,2022 5,872,827 $ 17,610 1,500 5,891,937 $
		Collateral for bank loans Collateral for bank loans Guarantee deposits for natural gas

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9. Significant Contingent Liabilities and Unrecognised Contract Commitments

The details of commitments and contingencies as of December 31, 2022 were as follows:

• (1) Capital expenditures of property, plant and equipment that were contracted but not yet paid amounted to $7,137,894 thousand, RMB 1,057,993 thousand and VND 418,593,310 thousand.

• (2) The outstanding letters of credit for major raw materials and equipment purchases amounted to USD 7,456 thousand, JPY 472,556 thousand, EUR 4,882 thousand.

• (3) The provision of endorsements and guarantees to others are as follows:

		December 31, 2022		December 31, 2021
Formosa Group (Cayman) Corp.	$	7,677,000	$	6,922,500
Formosa Ha Tinh (Cayman) Corp.		-		8,778,019
Formosa Taffeta (Zhong Shan) Co., Ltd.		15,355		13,840
Formosa Taffeta (Vietnam) Co., Ltd.		358,557		484,408
Formosa Taffeta (Changshu) Co., Ltd.		160,731		189,498
Formosa Taffeta (Dong Nai) Co., Ltd.		2,418,137		2,358,647
	$	10,629,780	$	18,746,912

• (4) The promissory notes issued for others are as follows: As of December 31, 2022, the Group’s indirect investees, Formosa Ha Tinh (Cayman) Limited Co. and Formosa Ha Tinh Steel Corporation, were provided with a bank loan facility of USD 3,222,500 thousand and 2,602,500 thousand to meet the operation needs, respectively. To secure the rights of its shareholders, the Company is required to issue a promissory note to ensure the borrower has fulfilled its obligation for repayment.

• (5) Contingencies - litigation

• A. Taiwan Cooperative Bank Co., Ltd. (“TCB”) filed a civil lawsuit against the Group’s subsidiary, Formosa Taffeta Co., Ltd. (“Formosa Taffeta”) with the Taipei District Court in September 2019. TCB claimed that the former employees of Formosa Taffeta colluded with New Site Industries Inc. (“New Site”) and New Brite Industries Inc. (“New Brite”) to make false statements. TCB was misled with the fact that New Site and New Brite have accounts receivable due from Formosa Taffeta, causing damage to TCB. Therefore, TCB claimed that Formosa Taffeta should be liable with the obligation of indemnity. However, this case arose purely as a result of the personal behavior of the former employee. As the case is still under trial proceedings, the ultimate outcome and amount of the lawsuit cannot presently be determined. However, Formosa Taffeta has engaged a lawyer to submit a strong defense to protect its rights and interests.

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• B. DBS (Taiwan) Commercial Bank Co., Ltd. (“DBS”) filed a civil lawsuit against the Group’s subsidiaries, Formosa Taffeta Co., Ltd. (“Formosa Taffeta”) and Formosa Taffeta Dong Nai Co., Ltd. (“Formosa Taffeta Dong Nai”) with the Taipei District Court in September 2019. The former employees of Formosa Taffeta and Formosa Taffeta Dong Nai colluded with New Site Industries Inc. (“New Site”) to make false statements. DBS was misled with the fact that New Site has accounts receivable due from Formosa Taffeta and Formosa Taffeta Dong Nai, causing damage to DBS. Therefore, DBS claimed that Formosa Taffeta and Formosa Taffeta Dong Nai should be jointly and severally liable with the obligation of indemnity. However, this case arose purely as a result of the personal behavior of the former employee. In its adjudication dated December 31, 2022, the Taipei District Court has rejected the claims filed by DBS. Consequently, DBS filed an appeal in January 2023. The ultimate outcome of the appeal and amount of the lawsuit cannot presently be determined. However, Formosa Taffeta and Formosa Dong Nai have engaged lawyers to submit a strong defense to protect their rights and interests.

• C. O-Bank Co., Ltd. (“O-Bank”) filed a civil lawsuit against the Group’s subsidiaries, Formosa Taffeta Co., Ltd. (“Formosa Taffeta”) and Formosa Taffeta Dong Nai Co., Ltd. (“Formosa Taffeta Dong Nai”) with the Taipei District Court in February 2020. The former employees of Formosa Taffeta and Formosa Taffeta Dong Nai colluded with I Chin Young Inc. (“I Chin Young”) to make false statements. O-Bank was misled with the fact that I Chin Young has accounts receivable due from Formosa Taffeta and Formosa Taffeta Dong Nai, causing damage to O-Bank. Therefore, O-Bank claimed that Formosa Taffeta and Formosa Taffeta Dong Nai should be jointly and severally liable with the obligation of indemnity. However, this case arose purely as a result of the personal behavior of the former employee. In its adjudication dated February 10, 2023, the Taipei District Court has rejected the claims filed by O-Bank. O-bank is expected to file an appeal in accordance with related laws. The ultimate outcome of the appeal and amount of the lawsuit cannot presently be determined. However, Formosa Taffeta and Formosa Dong Nai have engaged lawyers to submit a strong defense to protect their rights and interests.

• D. Yuanta Commercial Bank Co., Ltd. (“YCB”) filed a criminal lawsuit with a supplementary civil action against the Group’s subsidiary, Formosa Taffeta Co., Ltd. (“Formosa Taffeta”) with the Taipei District Court in October 2020. The former employees of Formosa Taffeta colluded with Loomtech Industries Inc. (“Loomtech”) to make false statements. YCB was misled with the fact that Loomtech has accounts receivable due from Formosa Taffeta, causing damage to YCB. Therefore, YCB claimed that Formosa Taffeta should be liable with the obligation of indemnity. However, this case arose purely as a result of the personal behavior of the former employee. As the case is still under trial proceedings, the ultimate outcome and amount of the lawsuit cannot presently be determined. However, Formosa Taffeta and Formosa Taffeta Dong Nai have engaged lawyers to submit a strong defense to protect their rights and interests.

• E. Taiwan Business Bank, Ltd. (“TBB”) filed criminal lawsuit with a supplementary civil action against the Group’s subsidiaries, Formosa Taffeta Co., Ltd. (“Formosa Taffeta”) and Formosa

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Taffeta Dong Nai Co., Ltd. (“Formosa Taffeta Dong Nai”) in 2021. The former employees of Formosa Taffeta and Formosa Taffeta Dong Nai colluded with New Site Industries Inc. (“New Site”), New Brite Industries Inc. (“New Brite”) and I Chin Young Inc. (“I Chin Young”) to make false statements. TBB was misled with the fact that New Site, New Brite and I Chin Young has accounts receivable due from Formosa Taffeta and Formosa Taffeta Dong Nai, causing damage to TBB. Therefore, TBB claimed that Formosa Taffeta and Formosa Taffeta Dong Nai should be jointly and severally liable with the obligation of indemnity. However, this case arose purely as a result of the personal behavior of the former employee. As the case is still under trial proceedings, the ultimate outcome and amount of the lawsuit cannot presently be determined. However, Formosa Taffeta and Formosa Taffeta Dong Nai have engaged lawyers to submit a strong defense to protect their rights and interests.

• F. On June 24, 2022, the Taipei District Prosecutor's Office made a non-prosecution decision against the litigation filed by Taiwan Cooperative Bank and Taiwan Business Bank based on the Code of Criminal Procedure and other laws since there were no active evidence that Formosa Taffeta had any criminal actions.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

The Board of Directors has resolved the appropriations of 2022 earnings on March 3, 2023. Details are provided in Note 6(17)F.

12. Others

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt.

The Group’s management strategy of its debt-to-capital ratio for the year ended December 31, 2022 is the same as that for the year ended December 31, 2021. As of December 31, 2022 and 2021, the Group’s debt-to-capital ratio was 22% and 15%, respectively.

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(2) Financial instruments

A. Financial instruments by category

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December 31, 2022 December 31, 2021
Financial assets
Financial assets at fair value through
profit or loss $ 1,797,262 $ 3,903,900
Financial assets at fair value through
other comprehensive income 144,079,751 189,450,989
Financial assets at amortised cost 78,369,917 71,368,663
$ 224,246,930 $ 264,723,552
December 31, 2022 December 31, 2021
Financial liabilities
Financial liabilities at fair value
-
through profit or loss $ 2,826 $
Financial liabilities at amortised cost 170,218,543 137,684,866
Lease liability 970,053 903,992
$ 171,191,422 $ 138,588,858
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• Note: Financial assets measured at amortised cost include cash and cash equivalents, financial assets measured at amortised cost, accounts and notes receivable, other receivables, other financial assets and refundable deposits. Financial liabilities measured at amortised cost include short-term borrowings, accounts and notes payable, other payables, long-term borrowings (including those maturing within one year or one business cycle), corporate bonds payable (including those maturing within one year or one business cycle), and guarantee deposits received.

• B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimize any adverse effects on the financial performance of the Group, derivative financial instruments, such as foreign exchange forward contracts and foreign currency option contracts are used to hedge certain exchange rate risk.

• (b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the board of directors. Company treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

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• (c) Information about derivative financial instruments that are used to hedge certain exchange rate risk are provided in Notes 6(2) and (11).

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group is exposed to foreign exchange risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities.

• ii. Management has set up a policy to manage its foreign exchange risk against its functional currency. Each entity hedges its entire foreign exchange risk exposure.

• iii.The Group hedges foreign exchange rate by using forward exchange contracts. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at fair value through profit or loss are provided in Notes 6(2) and (11).

• iv. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD, VND and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

fluctuations is as follows:
. Financial assets Monetary items USD：NTD JPY：NTD USD：RMB USD：VND EUR：NTD Non-monetary items RMB：NTD USD：NTD VND：NTD Financial liabilities Monetary items USD：NTD USD：RMB USD：VND	December31,2022
	Foreign Currency Amount (In Thousands) 542,462 $ 435,017 23,785 26,173 4,211 15,110,044 $ 168,160 6,199,281,723 31,784 $ 3,405 482,645	ExchangeRate 30.71 0.23 30.71 30.71 32.70 4.41 30.71 0.0013 30.71 30.71 30.71	BookValue (NTD)
			16,659,008 $ 100,054 730,437 803,773 137,700 66,635,294 $ 5,164,194 8,059,066 976,087 $ 104,568 14,822,028

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December 31, 2021

v.	Total exchange (loss) gain, including realised and unrealised arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2022 and 2021 amounted to $2,203,087 and ($268,066), respectively. Foreign Currency Amount . (In Thousands) Exchange Rate BookValue(NTD) Financial assets Monetary items USD：NTD 793,785 $ 27.69 21,979,907 $ JPY：NTD 440,596 0.24 105,743 USD：RMB 22,799 27.69 631,304 USD：VND 37,975 27.69 1,051,528 EUR：NTD 5,515 31.36 172,950 Non-monetary items RMB：NTD 15,685,198 $ 4.34 68,073,759 $ USD：NTD 180,246 27.69 4,991,012 VND：NTD 7,494,002,737 0.0012 8,992,803 Financial liabilities Monetary items USD：NTD 32,773 $ 27.69 907,484 $ USD：RMB 6,103 27.69 168,992 USD：VND 416,042 27.69 11,520,203	BookValue(NTD)

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vi. Analysis of foreign currency market risk arising from significant foreign exchange variation:

variation:
Financial assets Monetary items USD：NTD JPY：NTD USD：RMB USD：VND EUR：NTD Non-monetary items RMB：NTD USD：NTD VND：NTD Financial liabilities Monetary items USD：NTD USD：RMB USD：VND Financial assets Monetary items USD：NTD JPY：NTD USD：RMB USD：VND EUR：NTD Non-monetary items RMB：NTD USD：NTD VND：NTD Financial liabilities Monetary items USD：NTD USD：RMB USD：VND	Effect on Degree ofvariation profit or loss 1% 166,590 $ 1% 1,001 1% 7,304 1% 8,038 1% 1,377 1% - $ 1% - 1% - 1% 9,761 $ 1% 1,046 1% 148,220 For theyear ended December Sensitivity analysis Forthe yearendedDecember		Effect on other comprehensive - $ - - - - 666,353 $ 51,642 80,591 - $ - - 31,2022 31,2021
		Sensitivity analysis
	Degree ofvariation	Effect on profit or loss	Effect on other comprehensive
	1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	219,799 $ 1,057 6,313 10,515 1,730 - $ - - 9,075 $ 1,690 115,202	- $ - - - - 680,738 $ 49,910 89,928 - $ - -

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Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group’s investments in equity securities comprise domestic listed, beneficiary certificate and fund. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, components of equity for the years ended December 31, 2022 and 2021 would have increased/decreased by $14,378 and $31,231, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $1,440,798 and $1,894,510, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• i. The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During the years ended December 31, 2022 and 2021, the Group’s borrowings at variable rate were denominated in the NTD and USD.

• ii. The Group’s borrowings are measured at amortised cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

• iii. For the years ended December 31, 2022 and 2021, if interest rates on borrowings had been 1% higher/lower with all other variables held constant, post-tax profit for the periods then ended would have been $198,107 and $137,417 lower/higher, respectively, mainly as a result of higher/lower interest expense on floating rate borrowings.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, classified as the contract cash flows of instruments stated at amortised cost at fair value through other comprehensive income.

• ii. The Group manages its credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. According to the Group’s credit policy, each local entity in the Group

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is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii. The Group adopts the assumptions under IFRS 9, that is, to assess whether there has been a significant increase in credit risk on that instrument since initial recognition.

• iv. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights. On December 31, 2022 and 2021, the Group’s written-off financial assets that are still under recourse procedures amounted to $4,924 and $0, respectively.

• v. The Group used the forecastability of Directorate-General of Budget, Accounting and Statistics, Executive Yuan and Taiwan Institute of Economic Research boom observation report to adjust historical and timely information to assess the default possibility of accounts receivable, contract assets and lease payments receivable. As of December 31, 2022 and 2021, the provision matrix is as follows:

Not past due At December 31, 2022 Expected loss rate 0.14%~1.00% Total book value 29,695,671 $ Loss allowance 73,388 $ At December 31, 2021 Expected loss rate 0.07%~0.69% Total book value 36,526,066 $ Loss allowance 61,850 $	Up to 30 days past due	31~90 days past due	Over 91 days past due
	0.10%~13.00% 414,021 $ 8,807 $ 0.03%~5.77% 564,252 $ 4,803 $	0.09%~47.00% 43,932 $ 11,853 $ 0.04%~69.84% 93,208 $ 15,255 $	100% 57,494 $ 57,494 $ 93.81%~100.00% 77,260 $ 73,618 $

The ageing analysis of accounts receivable that were past due but not impaired is as follows:

Not past due Up to 30 days 31 to 90 days 91 to 180 days	December31,2022 29,695,671 $ 414,021 43,932 57,494 30,211,118 $	December31,2021
		36,526,066 $ 564,252 93,208 77,260
		37,260,786 $

The above ageing analysis was based on past due date.

~90~

vi. Movements in relation to the Group applying the simplified approach to provide loss allowance for notes and accounts receivable and contract assets are as follows:

			Forthe	yearendedDecember	yearendedDecember	31,	2022
		Accounts	receivable		Contract assets		Notesreceivable
At January 1		$	155,526	$	-	$	-
Write-offs	(		4,924)		-		-
Effect of exchange
rate changes			940		-		-
At December 31		$	152,482	$	-	$	-
			Forthe	yearendedDecember		31,	2021
		Accounts	receivable		Contract assets		Notes receivable
At January 1		$	155,882	$	-	$	-
Reversal of
impairment loss	(		94)		-		-
Effect of exchange
rate changes	(		262)		-		-
At December 31		$	155,526	$	-	$	-

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable, external regulatory or legal requirements, for example, currency restrictions.

• ii. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in interest bearing current accounts, loans to related parties, time deposits and cash equivalents, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts.

• iii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

~91~

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2022 Less than 1year Lease liability 183,105 $ Bonds payable 4,850,000 Long-term borrowings 6,195,140 December 31, 2021 Less than 1 year Lease liability 182,877 $ Bonds payable 4,500,000 Long-term borrowings - Non-derivative financial liabilities:	Between 1 Between 3 and2years and 5 years 158,662 $ 386,184 $ 3,800,000 27,650,000 15,649,277 1,795,549 Between 1 Between 3 and 2 years and 5 years 139,811 $ 310,305 $ 4,850,000 26,850,000 12,729,570 4,447,613	Over5 years 408,013 $ 9,200,000 1,123,453 Over5 years
		345,155 $ 13,800,000 -

Except for the aforementioned liabilities, the Group’s non-derivative financial liabilities will mature within one year.

Derivative financial liabilities:

==> picture [436 x 60] intentionally omitted <==

For the year ended December 31, 2021: None.

iv. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value estimation

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks is included in Level 1.

• Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in stock investment, private equity fund market, and most derivative instruments is included in Level 2.

• Level 3: Inputs for the asset or liability that are not based on observable market data.

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• B. Financial instruments not measured at fair value

The carrying amounts of cash and cash equivalents, notes receivable (including related parties), accounts receivable (including related parties), other receivables (including related parties), short-term borrowings, short-term notes and bills payable, notes payable (including related parties), accounts payable (including related parties) and other payables (including related parties) are approximate to their fair values. The carrying amounts of long-term borrowings (including current portion) and lease liabilities are reasonable basis for fair value estimate given that their interest rates are approximate to market rates.

	short-term borrowings, short-term notes and bills payable, notes payable (including related parties), accounts payable (including related parties) and other payables (including related parties) are approximate to their fair values. The carrying amounts of long-term borrowings (including current portion) and lease liabilities are reasonable basis for fair value estimate given that their interest rates are approximate to market rates.	short-term borrowings, short-term notes and bills payable, notes payable (including related parties), accounts payable (including related parties) and other payables (including related parties) are approximate to their fair values. The carrying amounts of long-term borrowings (including current portion) and lease liabilities are reasonable basis for fair value estimate given that their interest rates are approximate to market rates.
C.	The related information on financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows: December 31, 2022 Level 1 Level 2 Level3 Total Assets: Financial assets at fair value through profit or loss Derivative instruments Fund - $ 1,797,262 $ - $ 1,797,262 $ Financial assets at fair value through other comprehensive income Equity securities 119,848,002 2,451,596 21,780,153 144,079,751 119,848,002 $ 4,248,858 $ 21,780,153 $ 145,877,013 $ December 31, 2021 Level 1 Level 2 Level3 Total Assets: Financial assets at fair value through profit or loss Derivative instruments Fund - $ 3,903,900 $ - $ 3,903,900 $ Financial assets at fair value through other comprehensive income Equity securities 149,339,525 3,297,965 36,813,499 189,450,989 149,339,525 $ 7,201,865 $ 36,813,499 $ 193,354,889 $ Recurring fair value measurement Recurring fair value measurement
		1,797,262 $ 144,079,751
		145,877,013 $
		Total
		3,903,900 $ 189,450,989
	Financial assets at fair value through profit or loss Derivative instruments Fund Financial assets at fair value through other comprehensive income Equity securities
		193,354,889 $

~93~

• D. The methods and assumptions the Group used to measure fair value are as follows:

• (a) The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

  • Listed shares Open-end fund

  • Market quoted price Closing price Net asset value

• (b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• (c) When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• (d) The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate. Structured interest derivative instruments are measured by using appropriate option pricing models (i.e. Black-Scholes model) or other valuation methods, such as Monte Carlo simulation.

• (e) The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• (f) The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.

• E. For the years ended December 31, 2022 and 2021, there was no transfer between Level 1 and Level 2.

~94~

F. The following chart is the movement of Level 3 for the years ended December 31, 2022 and 2021:

			Forthe yearendedDecember31,2022
			Non-derivative equityinstrument
At January 1		$	36,813,499
Gains and losses recognised in other
comprehensive income
Recorded as unrealised gains (losses)
on valuation of investments in equity
instruments measured at fair value
through other comprehensive income	(		15,032,844)
Sold during the year	(		502)
At December 31		$	21,780,153
			For the year ended December 31, 2021
			Non-derivative equity instrument
At January 1		$	22,498,588
Gains and losses recognised in other
comprehensive income
Recorded as unrealised gains (losses)
on valuation of investments in equity
instruments measured at fair value
through other comprehensive income			14,456,713
Acquired during the year			550
Transfers out from level 3	(		142,352)
At December 31		$	36,813,499

• G. Because the investment target has been traded in active market from June 2021, and there is insufficient observable market information available, the Group has transferred the fair value from Level 3 into Level 1 at the end of the month when the event occurred

• H. The Group Treasury is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. The Treasury sets up valuation policies, valuation processes and rules for measuring fair value of financial instruments and ensure compliance with the related requirements in IFRS. The related valuation results are reported to Accounting Division monthly. Accounting Division is responsible for managing and reviewing valuation processes.

~95~

• I. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non- derivative equity instrument: Unlisted shares	Fair value at December 31, 2022	Fair value at December 31, 2021 Valuation technique 17,579,482 $ Market comparable companies 1,448,502 Discounted cash flow 17,785,515 Net asset value	Significant unobservable input	Relationship of inputs to fair value
	11,909,013 $ 1,712,563 8,158,577		Price to earnings ratio multiple, price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability Long-term revenue growth rate, weighted average cost of capital, long- term pre-tax operating margin, discount for lack of marketability, discount for lack of control Not applicable	The higher the multiple, the higher the fair value The higher the long-term revenue growth rate and long- term pre-tax operating margin, the higher the fair value Not applicable

• J. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect on profit or loss or on other comprehensive income from financial assets and liabilities categorised within Level 3 if the inputs used to valuation models have changed:

~96~

Input Financial assets Equity instruments Price to earnings ratio multiple, price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability Equity instruments Long-term revenue growth rate, weighted average cost of capital, long-term pre-tax operating margin, discount for lack of marketability, discount for lack of control Input Financial assets Equity instruments Price to earnings ratio multiple, price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability Equity instruments Long-term revenue growth rate, weighted average cost of capital, long-term pre-tax operating margin, discount for lack of marketability, discount for lack of control	Input	Change ± 1% ± 1% Change ± 1% ± 1%	December31,2022	December31,2022
			Recognised in other comprehensive income
			Favourable change Unfavourable change 119,090 $ 119,090 $ 17,126 $ 17,126 $ December31,2021	Unfavourable change
				119,090 $
				17,126 $
			Recognisedinothercomprehensiveincome
			Favourable change 175,795 $ 14,485 $	Unfavourable change
				175,795 $
				14,485 $

13. Supplementary Disclosures

(1) Significant transactions information

• A. Loans to others: Refer to table 1.

• B. Provision of endorsements and guarantees to others: Refer to table 2.

~97~

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Refer to table 4.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Refer to table 5.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Refer to table 6.

• I. Trading in derivative instruments undertaken during the reporting periods: Refer to Notes 6(2), and (11); 12(2) and (3).

• J. Significant intragroup transactions during the reporting periods: Refer to table 7.

• (2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Refer to table 8.

• (3) Information on investments in Mainland China

• A. Basic information: Refer to table 9.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Refer to table 10.

• (4) Major shareholders information

Major shareholders information: Refer to table 11.

14. Segment Information

• (1) General information

The Group’s reportable segments are strategic business units and provide different products and services. Strategic business units are separately managed because each unit needs different techniques and marketing strategies. The Group’s reportable segments are as follows:

• 1st Petrochemical Div: responsible for production of benzene, p-xylene and o-xylene.

• 2nd Petrochemical Div: responsible for production of styrene, synthetic phenolic and acetone.

• 3rd Petrochemical Div: responsible for production of purified terephthalic acid.

Plastics Division: responsible for production of ABS resin, polypropylene and PS.

Formosa Taffeta Co., Ltd.: responsible for production of blended fabric, spun fabric, cross-woven fabric, polyamine and polyester fabric, epidemic fabric, designer sportswear fabric, high-tech and function fabric, tire cord fabric, pure cotton yarn, blended yarn, various functional yarn, fireproof fabric, anti-static cloth and industrial fabric, and operation of petrol stations to sell petroleum, diesel fuel, kerosene and small package of petroleum products and provide car wash services. Formosa Advanced Technologies Co.: responsible for IC packaging, testing and production of memory module.

~98~

(2) Measurement of segment information

The Group has not yet amortised tax expenses or non-recurring gains and losses to reportable segments. Further, not all reportable segments’ profit or loss include significant non-cash items besides depreciation and amortisation. Reporting amount and reports for operating decision-maker are the same.

The Group’s operating segment profit or loss is measured based on operating income before tax for performance assessment basis. The Group considers the sale and transfer among segments as transactions with third parties and measured at market price.

~99~

(3) Information about segment profit or loss, assets and liabilities

For the year ended December 31, 2022

1st Petrochemical 2nd Petrochemical 3rd Petrochemical Div Div Div Plastics Division External revenue 63,770,358 $ 61,024,864 $ 73,410,749 $ 101,312,630 $ Internal revenue 95,434,785 27,163,750 3,581,984 18,222,673 Total revenue 159,205,143 $ 88,188,614 $ 76,992,733 $ 119,535,303 $ Segment profit (loss) 417,199 $ 2,187,215) ($ 286,032 $ 661,373) ($ Segment income (loss): Total depreciation and amortisation 4,284,436 $ 3,315,171 $ 3,268,576 $ 2,489,879 $ Interest expense 226,944 $ 165,829 $ 107,959 $ 248,733 $ Investment income accounted for using equity method Not included in segments’ income measurement, but regularly provided to operating decision-maker: Income tax expense Total assets of segments 36,804,840 $ 31,598,482 $ 47,374,534 $ 49,841,854 $	Formosa Taffeta Co.,Ltd. 25,977,787 $ 204,781 26,182,568 $ 3,643,302 $ 787,276 $ 123,143 $ 76,699,997 $	Reconciliation Other divisions and offset 54,400,175 $ - $ 18,344,531 162,952,504) ( 72,744,706 $ 162,952,504) ($ 8,582,536 $ 490,898) ($ 4,112,761 $ - $ 925,036 $ - $ 424,189,973 $ 110,971,052) ($	Total
			379,896,563 $ -
			379,896,563 $
			9,589,583 $
			18,258,099 $
			1,797,644 $
			2,267,537 $
			385,722 $
			555,538,628 $

~100~

For the year ended December 31, 2021

==> picture [745 x 242] intentionally omitted <==

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

1st 2nd 3rd Formosa
Petrochemical Petrochemical Petrochemical Taffeta Reconciliation
Div Div Div Plastics Division Co., Ltd. Other divisions and offset Total
External revenue $ 46,293,632 $ 58,073,703 $ 58,093,973 $ 127,995,260 $ 24,182,088 $ 51,173,442 $ - $ 365,812,098
Internal revenue 78,194,293 28,598,595 4,242,153 24,009,881 307,993 14,478,571 ( 149,831,486) -
Total revenue $ 124,487,925 $ 86,672,298 $ 62,336,126 $ 152,005,141 $ 24,490,081 $ 65,652,013 ($ 149,831,486) $ 365,812,098
Segment profit (loss) $ 2,618,121 $ 6,665,517 $ 3,438,122 $ 19,739,516 $ 2,266,193 $ 27,128,406 ($ 11,695,980) $ 50,159,895
Segment income (loss):
Total depreciation and
amortisation $ 3,913,531 $ 3,126,173 $ 3,247,614 $ 2,355,764 $ 786,341 $ 4,353,951 $ - $ 17,783,374
Interest expense $ 186,272 $ 128,552 $ 104,799 $ 186,824 $ 80,142 $ 361,465 $ - $ 1,048,054
Investment income
accounted for using
equity method $ 12,567,317
Not included in segments’ income measurement, but regularly provided to operating decision-maker:
Income tax expense $ 7,452,464
Total assets of segments $ 42,172,797 $ 32,578,280 $ 43,666,667 $ 56,564,919 $ 76,699,997 $ 473,339,643 ($ 126,677,032) $ 598,345,271
----- End of picture text -----

~101~

(4) Reconciliation for segment income (loss)

Sales between segments are carried out at arm’s length. The revenue from external parties reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income.

(5) Information on products and services

of comprehensive income. nformation on products and services
Sales revenue Service revenue Other operating income	For theyears ended December31,
	2022 379,010,979 $ 534,344 351,240 379,896,563 $	2021
		364,725,115 $ 559,829 527,154
		365,812,098 $

(6) Geographical information

Geographical information for the years ended December 31, 2022 and 2021 is as follows:

Taiwan China Others	Non-current Revenue assets 133,152,762 $ 84,191,678 $ 179,427,122 54,357,655 67,316,679 18,270,659 379,896,563 $ 156,819,992 $ YearendedDecember31,2022	YearendedDecember31,2021	YearendedDecember31,2021
	Revenue 133,152,762 $ 179,427,122 67,316,679 379,896,563 $	Revenue 135,047,857 $ 153,203,013 77,561,228 365,812,098 $	Non-current assets
			81,764,710 $ 45,620,211 17,066,854
			144,451,775 $

(7) Major customer information

The information on customers with over 10% of sales revenue in the statement of comprehensive income for the years ended December 31, 2022 and 2021: None.

~102~

Formosa Chemicals and Fibre Corporation and subsidiaries

Loans to others

For the year ended December 31, 2022

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

Balance at December 31, 2022 （Note 8） Allowance for doubtful accounts Actual amount drawn down Interest rate Nature of loan （Note 4） Amount of transactions with the borrower （Note 5） Reason for short-term financing （Note 6） Is a related party No. （Note 1） Creditor Borrower General ledger account （Note 2） Maximum outstanding balance during the year ended December 31, 2022 （Note 3）	Collateral	Limit on loans granted to a single party （Note 7）	Ceiling on total loans granted （Note 7）	Footnote
	Item Value
0 The Company Formosa Plastics Corp. Other receivables- related parties Yes 7,500,000 $ 4,500,000 $ - $ 0.98~1.79 1 2 Additional operating capital - $ 0 The Company Nan Ya Plastics Corp. Other receivables- related parties Yes 7,500,000 4,500,000 - 0.98~1.79 1 2 Additional operating capital - 0 The Company Formosa Biomedical Technology Corp. Other receivables- related parties Yes 500,000 500,000 329,000 0.98~1.79 2 1 Additional operating capital - 0 The Company Formosa Heavy Industries Corp. Other receivables- related parties Yes 10,600,000 5,700,000 - 0.98~1.79 2 1 Additional operating capital - 0 The Company Formosa Plastics Marine Corp. Other receivables- related parties Yes 7,272,683 2,869,252 2,429,252 0.98~1.79 2 1 Additional operating capital - 0 The Company Formosa Carpet Corp. Other receivables- related parties Yes 100,000 100,000 - 0.98~1.79 2 1 Additional operating capital - 0 The Company Hong Jing Resources Corp. Other receivables- related parties Yes 500,000 500,000 - 0.98~1.79 2 1 Additional operating capital - 0 The Company Formosa Petrochemical Corp. Other receivables- related parties Yes 12,000,000 4,500,000 - 0.98~1.79 1 2 Additional operating capital -	- - $ - - - - - - - - - - - - - -	81,531,686 $ 81,531,686 65,225,349 65,225,349 65,225,349 65,225,349 65,225,349 81,531,686	163,063,371 $ 163,063,371 130,450,697 130,450,697 130,450,697 130,450,697 130,450,697 163,063,371	- - - - - - - -

Table 1, Page 1

Balance at December 31, 2022 （Note 8） Allowance for doubtful accounts Actual amount drawn down Interest rate Nature of loan （Note 4） Amount of transactions with the borrower （Note 5） Reason for short-term financing （Note 6） Is a related party No. （Note 1） Creditor Borrower General ledger account （Note 2） Maximum outstanding balance during the year ended December 31, 2022 （Note 3）	Collateral	Limit on loans granted to a single party （Note 7）	Ceiling on total loans granted （Note 7）	Footnote
	Item Value
2 Formosa Power (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Receivables from related party Yes $3,232,666 - $ - $ 3.32~3.08 1 2 Additional operating capital - $	- - $	8,292,804 $	16,585,608 $	-

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

• (1)The Company is ‘0’.

• (2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Name of account in which the loans are recognised including but not limited to accounts receivables-related parties, other receivables-related parties and, current account with stockholders, prepayments, and temporary

payments, etc.

Note 3 : Maximum outstanding balance of loans to others during the year period ended December 31, 2022

Note 4 : The nature of loans:

• (1) Related to business transactions is "1".

• (2) Short-term financing is "2".

Note 5 : Amount of business transactions with the borrower :

• (1) No business transactions is "1".

• (2) Business transactions amount is provided in Note 13 (1) G.

Note 6 : Provided that loans to others are for necessary short-term financing by nature, shall specifically note necessary reasons for the loans and purposes of the borrowers, for example, repayment of loans, acquisition of equipment, and financing for operation, etc.

Note 7 : The calculation of line of credit:

The limit on loans granted by the Company to a single party, related party and party with business transactions shall not be more than 25% of the Company's net assets, and limit to others is 20% of the Company's net assets.

The ceiling on loans granted by the Company to others shall not be more than 50% of the Company's net assets, and ceiling on loans granted a short-term financing borrower with no business transactions shall not be more than 40% of the Company's net assets.

The ceiling on loans granted by a subsidiary to others shall not be more than 100% of the Company's net assets, and ceiling on loans granted a short-term financing borrower with no business transactions shall not be more than 40% of the Company's net assets.

Note 8 : The amount was resolved by the Board of Directors.

Table 1, Page 2

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Formosa Chemicals and Fibre Corporation and subsidiaries Provision of endorsements and guarantees to others

For the year ended December 31, 2022

Number （Note 1） Endorser/ guarantor	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party （Note 3）	Maximum outstanding endorsement/ guarantee amount as of December 31, 2022 （Note 4）	Outstanding endorsement/ guarantee amount at December 31, 2022(Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided （Note 3）	Provision of endorsements/ guarantees by parent company to subsidiary （Note 7）	Provision of endorsements/ guarantees by subsidiary to parent company （Note 7）	Provision of endorsements/ guarantees to the party in Mainland China （Note 7）	Footnote
	Companyname Relationship with the endorser/ guarantor （Note 2）
0 The Company 0 The Company 1 Formosa Taffeta Co., Ltd. 1 Formosa Taffeta Co., Ltd. 1 Formosa Taffeta Co., Ltd. 1 Formosa Taffeta Co., Ltd. 1 Formosa Taffeta Co., Ltd.	Formosa Group (Cayman) Limited 6 Formosa Ha Tinh (Cayman) Limited 6 Formosa Taffeta (Zhongshan) Co., Ltd. 2 Formosa Taffeta (Vietnam) Co., Ltd. 2 Formosa Taffeta (Changshu) Co., Ltd. 2 Formosa Taffeta (Dong Nai) Co., Ltd. 2 Formosa Ha Tinh (Cayman) Co., Ltd. 6	211,982,383 $ 211,982,383 36,248,689 36,248,689 36,248,689 36,248,689 36,248,689	7,935,750 $ 6,601,191 1,063,095 1,707,395 1,771,825 4,042,983 1,953,531	7,677,000 $ - 1,013,430 1,627,630 1,689,050 3,854,105 -	7,677,000 $ - 15,355 358,557 160,731 2,418,137 -	- $ - - - - - -	2.35 - 1.82 2.92 3.03 6.91 -	423,964,766 $ 423,964,766 72,497,379 72,497,379 72,497,379 72,497,379 72,497,379	N N Y Y Y Y N	N N N N N N N	N N Y N Y N N	- - - - - - -

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1) The Company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories:

(1) Having business relationship.

(2) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.

(3) The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.

(4) The endorsed/guaranteed parent company directly or indirectly owns more than 90% voting shares of the endorser/guarantor subsidiary.

• (5) Mutual guarantee of the trade as required by the construction contract.

(6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

• (7) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

Note 3: In accordance with Company's procedures of endorsements and guarantees, limit on the Company's total guarantee amount is 130% of the Company's net assets, the limit on endorsement/guarantee to a single party is 50% of the aforementioned total amount. For companies having business relationship with the Company and thus being provided endorsements/guarantees, the limit on endorsements to a single party is the higher value of purchasing or selling.

Note 4: Year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.

Note 5: Fill in the amount approved by the Board of Directors or the chairman if the chairman has been authorised by the Board of Directors based on subparagraph 8, Article 12 of the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.

Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.

Note 7: 'Y' represents cases of provision of endorsements/guarantees by listed parent company to subsidiary, provision by subsidiary to listed parent company, or provision to the party in Mainland China.

Table 2, Page 1

Formosa Chemicals and Fibre Corporation and subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

For the year ended December 31, 2022

Table 3

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by	Marketable securities （Note 1）	Relationship with the securities issuer（Note 2）	General ledger account		As of December 31,2022	As of December 31,2022	Fair value Footnote
				Number of shares	Bookvalue	Ownership (%)
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Stocks_Formosa Plastics Corp. Stocks_Asia Pacific Investment Corp. Stocks_Nan Ya Plastics Corp. Stocks_Nan Ya Technology Corp. Stocks_Formosa Union Chemical Corp. Mega Private US Dollar Money Market Funds Stocks_Mai-Liao Harbor Administration Corp. Stocks_Formosa Plastic Corp. U.S.A Stocks_Taiwan Stock Exchange Corp. Stocks_Taiwan Aerospace Corp. Stocks_Yi-Jih Development Corp. Stocks_Chinese Television System Corp. Stocks_Formosa Plastics Maritime Corp. Stocks_Formosa Development Corp.	Other related parties Other related parties Other related parties Other related parties - - Other related parties Other related parties - - Other related parties - Other related parties Other related parties	Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through profit or loss - 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 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 Financial assets at fair value through other comprehensive income - non-current	486,978,694 63,621,500 413,327,750 334,815,409 14,723,422 4,554,251 39,562,740 8,999 20,499,841 1,070,151 63,174 2,376,202 355,880 19,769,234	42,269,751 $ 2,118,596 29,346,270 17,142,549 327,596 1,562,719 1,341,572 4,585,055 2,635,870 13,570 16,997 88,038 370,991 262,326	7.65 14.97 5.21 10.81 3.09 - 17.98 2.92 2.00 0.79 1.51 1.41 18.22 18.00	42,269,751 $ - 2,118,596 - 29,346,270 - 17,142,549 - 327,596 - 1,562,719 - 1,341,572 - 4,585,055 - 2,635,870 - 13,570 - 16,997 - 88,038 - 370,991 - 262,326 -

Table 3, Page 1

Securities held by	Marketable securities （Note 1）	Relationship with the securities issuer（Note 2）	General ledger account		As of December 31,2022	As of December 31,2022	Fair value Footnote
				Number of shares	Bookvalue	Ownership (%)
The Company The Company The Company The Company The Company The Company Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Taffeta Co., Ltd.	Stocks_Formosa Network Technology Corp. Stocks_Formosa Plastics Marine Corp. Stocks_Formosa Ocean Group Marine Investment Corp. Stocks_Guangyuan Investment Corp. Stocks_Mega Growth Venture Capital Co., Ltd. Stocks_Formosa Ha Tinh(Cayman) Limited Stocks_Formosa Union Chemical Corp. Asteran Milestone Private Equity Fund Stocks_Formosa Network Technology Corp. Stocks_Taiwan Leader Biotech Corp. Stocks_United Performance Materials Corp. Stocks_United Biopharma (Cayman), Inc. Stocks_UBI Pharma Inc. Stock_Maxigen Biotech Inc. Stock_Formosa Smart Energy Tech Corp. Stocks_Formosa Chemicals & Fibre Corp.	Other related parties Other related parties Other related parties - - Other related parties - - Other related parties - Other related parties - - - Other related parties Ultimate parent company	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 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 - current Financial assets at fair value through profit or loss - 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 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 Financial assets at fair value through other comprehensive income - current	2,925,000 2,428,500 2,622 3,750,000 2,075,000 621,178,219 865,373 - 169,120 2,100,000 423,720 23,559,814 3,289,600 7,534,235 20,000,000 12,169,610	180,794 $ 403,447 3,789,422 20,250 16,040 6,104,045 19,255 234,543 10,453 14,700 5,411 85,051 164,480 359,006 200,000 857,957	12.50 15.00 19.00 3.91 1.97 11.43 0.18 10.12 0.72 4.24 0.46 12.36 3.12 8.90 5.00 0.21	180,794 $ - 403,447 - 3,789,422 - 20,250 - 16,040 - 6,104,045 - 19,255 - 234,543 - 10,453 - 14,700 - 5,411 - 85,051 - 164,480 - 359,006 - 200,000 - 857,957 3

Table 3, Page 2

Securities held by	Marketable securities （Note 1）	Relationship with the securities issuer（Note 2）	General ledger account		As of December 31,2022	As of December 31,2022	Fair value Footnote
				Number of shares	Bookvalue	Ownership (%)
Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Development Co., Ltd.	Stocks_Pacific Electric Wire & Cable Corp., Ltd. Stocks_Formosa Plastics Corp. Stocks_Nan Ya Plastics Corp. Stocks_Asia Pacific Investment Corp. Stocks_Nan Ya Technology Corp. Stocks_Formosa Petrochemical Corp. Stocks_Syntronix Corporation Stocks_Toa Resin Corp., Ltd. Stocks_Shin Yun Natural Gas Corp. FG INC NKFG Co Stocks_Formosa Ha Tinh (Cayman) Limited Stocks_Formosa Taffeta Co., Ltd.	- Other related parties Other related parties Other related parties Other related parties Other related parties - Other related parties - Other related parties Other related parties Other related parties Parent company	Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - current Financial assets at fair value through other comprehensive income - 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 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 Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current	35 640 482,194 10,000,000 7,711,010 365,267,576 234,166 14,400 903,247 600 5,540,000 209,010,676 2,193,228	- $ 56 34,236 333,000 394,805 29,330,986 5,532 38,335 31,918 265,147 14,736 2,503,300 58,669	- - 0.01 2.35 0.25 3.83 0.54 10.00 1.20 3.00 2.50 3.85 0.13	- $ - 56 - 34,236 - 333,000 - 394,805 - 29,330,986 - 5,532 - 38,335 - 31,918 - 265,147 - 14,736 - 2,503,300 - 58,669 -

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities, as defined in IAS 39 "Financial instruments: Recognition and Measurement". Note 2: The column is left blank if the issuer of marketable securities is non-related party.

Note 3: The Company's stocks held by the subsidiaries—Formosa Taffeta Co., Ltd. is deemed as treasury stocks. Details are provided in Note 6 (15).

Table 3, Page 3

Formosa Chemicals and Fibre Corporation and subsidiaries

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

For the year ended December 31, 2022

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Marketable securities （Note1）	General ledgeraccount	Counterparty （Note2）	Relationship with the investor （Note2）	Balance as at January1,2022	Balance as at January1,2022	Addition （Note 3）	Addition （Note 3）		Disposal （Note 3）	Disposal （Note 3）		Balance as atDecember31,2022	Balance as atDecember31,2022
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Bookvalue	Gain (loss) on disposal	Number of shares	Amount
The Company The Company Formosa Biomedical Technology Corp.	Mage International Private Money Market funds Formosa Smart Energy Tech Corp. Ivy Life Sciences Corp.	Financial assets at fair value through profit or loss- current Investments measured by equity method Investments measured by equity method	- Formosa Smart Energy Tech Corp. Ivy Life Sciences Corp.	- Associates Subsidiary	12,477,992 - -	$ 3,793,036 - -	- 80,000,000 62,342,000	- $ 800,000 755,032	7,923,741 - -	$ 2,422,330 - -	$ 2,594,236 - -	$ 13,686 - -	4,554,251 80,000,000 62,342,000	$ 1,562,719 800,799 756,384

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.

Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach $300 million or 20% of paid-in capital or more. Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In case that shares were issued with no par value or a par value other than NT$10 per share, the 20% of paid-in capital level shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Table 4, Page 1

Formosa Chemicals and Fibre Corporation and subsidiaries

Table 5

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more

For the year ended December 31, 2022

Expressed in thousands of NTD

(Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationshipwith the counterparty		Transaction	Transaction		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote （Note 1）
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Formosa Plastics Corp. Nan Ya Plastics Corp. Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Petrochemical Corp. Formosa Chemicals Industries (Ningbo) Co., Ltd Formosa Chemicals Industries Co.,Ltd PFG Fiber Glass Corp. Nan Ya Plastics Corp., U.S.A. Formosa Idemitsu Petrochemical Corp. Formosa Plastics Corp., U.S.A. Formosa Taffeta Co., Ltd.	Other related parties Other related parties Subsidiary Associates Subsidiary Subsidiary Other related parties Other related parties Subsidiary Other related parties Subsidiary	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	2,332,017) ($ 29,403,614) ( 477,734) ( 36,723,899) ( 33,296,983) ( 3,509,188) ( 584,723) ( 167,616) ( 14,491,258) ( 1,101,848) ( 1,411,121) (	1) ( 12) ( - 15) ( 13) ( 1) ( - - 6) ( - 1) (	30 days 30 days 60 days 30 days 90 days 30 days 30 days 30 days 30 days 30 days 60 days	$ - - - - - - - - - - -	- - - - - - - - - - -	219,217 $ 1,990,843 Notes receivable 186,163 Accounts receivable 296,975 106,889 2,902,296 4,262,356 221,698 39,909 22,663 722,511 59,484	1 10 48 2 1 14 20 1 - - 3 -	- - - - - - - - - - -

Table 5, Page 1

Purchaser/seller	Counterparty	Relationshipwith the counterparty		Transaction	Transaction		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote （Note 1）
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company Formosa Biomedical Technology Corp. Formosa INEOS Chemicals Corp. Formosa INEOS Chemicals Corp. Formosa INEOS Chemicals Corp. Formosa INEOS Chemicals Corp. Formosa INEOS Chemicals Corp. Formosa INEOS Chemicals Corp. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd.	Formosa Plastics Corp. Nan Ya Plastics Corp. Formosa Petrochemical Corp. Nan Ya Technology Corp. The Company INEOS ACETYLS (MALAYSIA) SDN BHD Formosa Plastics Corp. Nan Ya Plastics Corp. Formosa Petrochemical Corp. Formosa Petrochemical Corp. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Plastics (Ningbo) Co., Ltd. Nan Ya Plastics (Ningbo) Corp. The Company Nan Ya Plastics (Ningbo) Corp.	Other related parties Other related parties Associates Other related parties Parent company Associates Other related parties Other related parties Associates Associates Associates Other related parties Other related parties Parent company Other related parties	Purchases Purchases Purchases Sales Sales Sales Sales Sales Sales Purchases Sales Sales Sales Sales Sales	5,704,632 $ 9,390,427 167,506,909 165,020) ( 1,249,036) ( 2,207,404) ( 131,993) ( 204,673) ( 834,301) ( 2,904,498 4,134,194) ( 2,488,612) ( 522,332) ( 222,154) ( 7,569,560) (	3 4 76 8) ( 20) ( 35) ( 2) ( 3) ( 13) ( 59 76) ( 46) ( 10) ( - 10) (	30 days 30 days 30 days 30 days 30 days 90 days after shipped 15 days 30 days 30 days 45 days 30 days 30 days 30 days 30 days 90 days	$ - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - -	404,641) ($ 452,152) ( 11,811,508) ( 477 66,193 440,556 16,291 6,577 44,384 214,188) ( 479,824 247,075 51,128 - 480,563	2) ( 3) ( 68) ( - 5 34 1 1 3 70) ( 68 35 7 - 5	- - - - - - - - - - - - - - -

Table 5, Page 2

Purchaser/seller	Counterparty	Relationshipwith the counterparty		Transaction	Transaction		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote （Note 1）
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Industries Corp. Formosa Industries Corp. Formosa Industries Corp. Formosa Industries Corp. Formosa Industries Corp. Formosa Industries Corp. Formosa Industries Corp. Formosa Industries Corp. Formosa Idemitsu Petrochemical Corp. Formosa Idemitsu Petrochemical Corp.	Formosa Plastics Corp. Formosa Petrochemical Corp. The Company Nan Ya Plastics Corp. Formosa Taffeta (Dong Nai) Corp. Formosa Taffeta (Zhongshan) Corp. Formosa Taffeta (Long An) Corp. Formosa Plastics Corp. Nan Ya Plastics Corp. Nan Ya Draw-Textured Yarn (Kunshan) Co.,Ltd. The Company Idemitsu Chemicals Japan Co., Ltd.	Other related parties Associates Parent company Other related parties Associates Associates Associates Other related parties Other related parties Other related parties Parent company Associates	Purchases Purchases Sales Sales Sales Sales Sales Purchases Purchases Purchases Sales Sales	$ 823,443 2,455,157 1,576,260) ( 253,305) ( 591,534) ( 111,983) ( 269,589) ( 364,633 1,721,485 240,240 1,963,309) ( 345,100) (	1 2 7) ( 1) ( 3) ( 1) ( 1) ( 1 7 1 17) ( 3) (	90 days 90 days 60 days 30 days 60 days 60 days 60 days 30 days 30 days 60 days 30 days 30 days after closing date	$ - - - - - - - - - - - -	- - - - - - - - - - - -	($ 248,233) - 132,671 10,958 53,641 19,352 44,574 26,175) ( 106,754) ( - 62,775 53,083	2) ( - 4 - 2 1 1 1) ( 5) ( - 6 5	- - - - - - - - - - - -

Table 5, Page 3

Purchaser/seller	Counterparty	Relationshipwith the counterparty		Transaction	Transaction		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote （Note 1）
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Formosa Idemitsu Petrochemical Corp. Formosa Idemitsu Petrochemical Corp. Formosa Idemitsu Petrochemical Corp. Formosa Idemitsu Petrochemical Corp. Formosa Idemitsu Petrochemical Corp. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd.	Idemitsu Chemicals Taiwan Corp. Idemitsu Kosan Co., Ltd. Idemitsu Chemicals (Hong Kong) Co., Ltd. Idemitsu Chemicals (U.S.A) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd Kuang Yueh Enterprise Co., Ltd. Yugen Co., Ltd. Formosa Taffeta (Dong Nai) Corp. Schoeller Asia CO. Limited Formosa Petrochemical Corp.	Associates Associates Associates Associates Associates Associates Other related parties Associates Other related parties Other related parties	Sales Sales Sales Sales Sales Sales Sales Sales Sales Purchases	($ 955,659) 1,251,171) ( 897,482) ( 178,053) ( 147,434) ( 281,476) ( 226,250) ( 179,428) ( 115,639 10,484,941	8) ( 11) ( 8) ( 2) ( 1) ( 1) ( 1) ( 1) ( - 46	30 days after closing date 30 days after closing date 30 days after closing date 30 days after closing date 90 days Pay by mail transfer 60 days after delivery Pay 120 days after delivery 60 days after monthly billings Pay by wire transfer 14 days after shipment Pay every 15 days by mail transfer	$ - - - - - - - - - -	- - - - - - - - - -	$ 83,242 58,352 104,513 40,289 23,713 65,727 41,795 43,013 5,856 546,996) (	8 5 9 4 5 4 2 2 - 51) (	- - - - - - - - - -

Table 5, Page 4

Purchaser/seller	Counterparty	Relationshipwith the counterparty		Transaction	Transaction		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote （Note 1）
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta (Zhong Shan) Co., Ltd. Formosa Taffeta (Zhong Shan) Co., Ltd. Formosa Taffeta (Zhong Shan) Co., Ltd. Formosa Taffeta (Vietnam) Co., Ltd. Formosa Taffeta (Vietnam) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Taffeta Co., Ltd.	Nan Ya Plastics Corp. Formosa Plastics Corp. Formosa Taffeta (Changshu) Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Industries Corp. Kuang Yueh (Vietnam) Co., Ltd. Formosa Industries Corp. Formosa Taffeta (Vietnam) Co., Ltd. Kuang Yueh (Vietnam) Co., Ltd. The Company	Other related parties Other related parties Associates Parent company Associates Other related parties Associates Associates Other related parties Ultimate parent company	Purchases Purchases Sales Sales Purchases Sales Purchases Sales Sales Purchases	$ 1,411,121 651,634 227,086 227,575) ($ 214,005) ( 134,914 127,134) ( 294,219 262,857) ( 288,738) (	3 1 11) ( 11) ( 13 5) ( 15 6) ( 7) ( 6	Pay by mail transfer on the 15th of the following month Pay by mail transfer on the 15th of the following month 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings Draw promissory notes due in 2 months after inspection	- - - - - - - - - $ -	- - - - - - - - - -	Notes payable $ (186,163) Accounts payable (296,079) 37,197) ( 11,195) ( 56,644 22,256 15,872) ( 20,032 25,352) ( 24,225 32,226	59) ( 28) ( 3) ( 1) ( 34 13 59) ( 6 29) ( 4 5	- - - - - - - - - - -

Table 5, Page 5

Purchaser/seller	Counterparty	Relationshipwith the counterparty		Transaction	Transaction		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote （Note 1）
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd.	Formosa Taffeta Co., Ltd. Formosa Industries Corp. The Company Nan Ya Plastics Corp.	Parent company Associates Ultimate parent company Associates	Sales Purchases Purchases Purchases	387,346) ( $ 648,679 482,940 130,485	9) ( 17 13 3	60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings	- $ - - -	- - - -	95,307 ($ 47,882) ( 76,824) 8,363) (	88 23 ( 36) 4) (	- - - -

Note 1: The disclosed transaction is the revenue side and related transactions are no longer disclosed.

Table 5, Page 6

Formosa Chemicals and Fibre Corporation and subsidiaries

Receivables from related parties reaching $100 million or 20% of paid-in capital or more

For the year ended December 31, 2022

			For the year ended December 31, 2022
Table 6 Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2022 （Note 1）	Turnover rate	Overdue receivables		Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Actiontaken
The Company The Company The Company The Company The Company The Company Formosa INEOS Chemicals Corp. Formosa Idemitsu Petrochemical Corp. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Industries Corp. The Company The Company	Formosa Plastics Corp. Nan Ya Plastics Corp. Formosa Taffeta (Dong Nai) Co., Formosa Industries Corp. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Idemitsu Petrochemical Corp. INEOS ACETYLS (MALAYSIA) SDN BHD Idemitsu Chemicals (Hong Kong) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Plastics (Ningbo) Co., Ltd. Nan Ya Plastics (Ningbo) Corp. The company Formosa Taffeta Co., Ltd. Formosa Petrochemical Corp.	Other related parties Other related parties Subsidiary Subsidiary Subsidiary Subsidiary Associates Associates Associates Other related parties Other related parties Associates Subsidiary Associates	219,217 $ 1,990,843 Notes receivable 186,163 Accounts receivable 296,975 106,889 Accounts receivable 2,902,296 Other receivables 299,203 221,698 4,262,356 Accounts receivable 722,511 440,556 104,513 479,824 247,075 480,563 132,671	10.80 12.40 2.92 4.60 8.21 4.97 13.13 3.54 7.36 10.73 10.71 12.48 9.40 13.10	- $ - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - -	219,217 $ 1,990,843 186,163 103,580 32,543 2,880,662 - 108,904 1,180,382 722,511 276,076 68,577 479,824 247,075 480,563 58,436	- $ - - - - - - - - - - - - - - -

Note 1: Fill in separately the balances of accounts receivable–related parties, notes receivable–related parties, other receivables–related parties etc.

Table 6, Page 1

Formosa Chemicals and Fibre Corporation and subsidiaries

Table 7

Significant inter-company transactions during the reporting period

For the year ended December 31, 2022

Expressed in thousands of NTD

(Except as otherwise indicated)

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)			Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0 0	The Company The Company	Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Idemitsu Petrochemical Corp.	1 1	Sales revenue Sales revenue	33,296,983) ($ 14,491,258) (	In regular terms In regular terms	(9) (4)

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

• (1) Parent company is ‘0’.

(2) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 4: If the transaction amount in this sheet reaches 3% of consolidated operating income or total assets, it is considered material.

Table 7, Page 1

Formosa Chemicals and Fibre Corporation and subsidiaries

Information on investees (Excluding those in Mainland China)

For the year ended December 31, 2022

Table 8

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor	Investee （Note1, 2）	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2022	Shares held as at December 31,2022	Shares held as at December 31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31,2022	Footnote
				Balance as at December 31,2022	Balance as at December 31,2021	Number of shares	Ownership (%)	Book value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Formosa Taffeta Co., Ltd. Formosa Heavy Industries Corp. Formosa Fairway Corporation Formosa Plastics Transport Corp. Formosa Petrochemical Corp. Mai-Liao Power Corp. FCFC Investment Corp. (Cayman) Hwa Ya Science Park Management Consulting Co, Ltd. Chia-Nan Enterprise Corporation Formosa Idemitsu Petrochemical Corp.	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Cayman Islands Taiwan Taiwan Taiwan	Spinning Machinery Transportation Transportation Chemistry Electricity generation Investments Management Electricity generation Wholesale and retail of petrochemical and plastic raw materials	719,003 $ 2,497,721 33,320 299,272 25,842,468 5,985,531 34,012,602 340 370,561 299,999	719,003 $ 2,497,721 33,320 299,272 25,842,468 5,985,531 34,012,602 340 370,561 299,999	630,022,431 $ 661,334,402 4,697,951 6,566,384 2,300,799,801 764,201,100 56,000 33,000 21,163,000 60,000,000	37.40 32.91 33.33 33.33 24.15 24.94 100.00 33.00 51.00 50.00	20,429,118 $ 7,262,143 23,479 1,251,101 75,322,255 9,767,776 66,631,431 4,140 352,189 1,147,046	3,404,981 $ 1,762,047) ( 33,027) ( 46,742) ( 14,421,560 4,514,707) ( 555,456) ( 1,267 49,601 186,401) (	1,251,574 $ 579,757) ( 11,008) ( 15,579) ( 3,575,042 1,125,953) ( 555,456) ( 418 25,296 87,505) (	- - - - - - - - - -

Table 8, Page 1

Investor	Investee （Note1, 2）	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2022	Shares held as at December 31,2022	Shares held as at December 31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31,2022	Footnote
				Balance as at December 31,2022	Balance as at December 31,2021	Number of shares	Ownership (%)	Book value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Formosa Industries Corp. Formosa INEOS Chemicals Corp. Formosa Environmental Technology Co. Formosa Biomedical Technology Corp. Formosa Carpet Corp. Guo Su Plastic Industry Co., Ltd. Formosa Synthetic Rubber (Hong Kong) Co., Ltd. Formosa Resources Corporation Formosa Group Corp. (Cayman) Formosa Construction Corp. FG INC.	Vietnam Taiwan Taiwan Taiwan Taiwan Taiwan Hong Kong Taiwan Cayman Islands Taiwan United States	Textile, polyester staple fibre, cotton Chemistry, international of petrochemistry Disposals of wastes and sewage Manufacturing and sale of cosmetics Yarn spinning mills, finishing of textiles and carpet manufacturing Manufacture of synthetic resin and plastic products Manufacturing of synthetic rubber Mining industry and its trading, wholesale of chemical material and international trading Investments Development and sale of rebuilt housing, buildings and plants under urban redevelopment Investments	8,435,801 $ 1,201,500 417,145 1,566,879 300,000 95,000 4,214,914 8,303,053 377 600,000 3,413,031	8,435,801 $ 1,201,500 417,145 1,566,879 300,000 48,469 4,214,914 8,303,053 377 600,000 3,413,031	- $ 120,150,000 41,714,475 147,556,136 22,037,185 3,675,000 138,333,334 830,047,125 12,500 60,000,000 6,000	42.50 50.00 24.34 88.59 100.00 49.00 33.34 25.00 25.00 33.33 30.00	6,495,225 $ 2,645,680 231,886 2,903,755 180,575 71,371 1,851,242 7,703,818 766,965 565,507 3,313,454	1,941,578) ($ 1,178,077 10,626 225,163 8,305) ( 48,697) ( 499,324) ( 854,448) ( 127,156 44,634) ( 64,352) (	825,170) ($ 617,868 2,586 199,479 8,305) ( 23,629) ( 166,473) ( 213,612) ( 31,789 14,876) ( 20,028) (	- - - - - - - - - - -

Table 8, Page 2

Investor	Investee （Note1, 2）	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2022	Shares held as at December 31,2022	Shares held as at December 31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31,2022	Footnote
				Balance as at December 31,2022	Balance as at December 31,2021	Number of shares	Ownership (%)	Book value
The Company The Company FCFC Investment Corp. (Cayman) Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp.	Formosa Smart Energy Tech Corp. Formosa Green Power Corp. Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. Beyoung International Corp. Hong Jing Resources Corp. Formosa Biomedical Technology (Samoa) Co., Ltd. Formosa Waters Technology Co., Ltd. Formosa Bio& Energy Crop. (Japan)	Taiwan Taiwan Hong Kong Taiwan Taiwan Samoa Taiwan Japan	Renewable energy - investment, research and development of energy storage equipment Renewable-energy- based electricity retailing corporation Investments International trading Recycle of spent catalyst Investments Industrial Catalyst Manufacturing and Wholesale of Other Chemical Products Manufacturing and sale of battery energy storage systems and related products	800,000 $ 5,000 29,959,815 90,000 476,196 29,610 7,650 5,018	- $ - 29,959,815 90,000 476,196 29,610 7,650 5,018	80,000,000 $ 500,000 - 467,400 27,336,218 - 765,001 18,105	20.00 100.00 100.00 30.00 71.00 100.00 57.00 51.00	800,799 $ 4,911 50,486,788 96,117 616,136 8,487 31,608 12,628	3,271 $ 89) ( 635,426) ( 5,416 130,162 5,921 32,457 5,526) (	799 $ 89) ( 635,426) ( 1,625 92,411 5,921 18,500 3,074) (	- - - - - - - -

Table 8, Page 3

Investor	Investee （Note1, 2）	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2022	Shares held as at December 31,2022	Shares held as at December 31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31,2022	Footnote
				Balance as at December 31,2022	Balance as at December 31,2021	Number of shares	Ownership (%)	Book value
Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd.	Formosa AdvEnergy Technology Corp. Ivy Life Sciences Co., Ltd. Formosa Eco Life Technology Co., Ltd Formosa Lithium Iron Oxide Corp. Formosa Development Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Taffeta (Hong Kong) Co., Ltd.	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Hong Kong	Sales of battery cores and specific types of battery modules Research and development and clinical application of cell therapy technologies Sales of cleaning supplies Production and sales of Basic Chemical Industrial, Powder Metallurgy, cathode materials for lithium iron phosphate batteries and Wholesale of Batteries 1.Handling urban land consolidation 2.Development, rent and sale of industrial plants, residences and building IC assembly, testing and modules Sale of spun fabrics and filament textile	- $ 755,032 12,926 3,737 114,912 1,762,711 1,356,862	- $ - - - 114,912 1,762,711 1,356,862	- $ 62,342,000 1,292,597 10,363,128 16,100,000 135,686,472 -	- 51.00 100.00 29.61 100.00 30.68 100.00	- $ 756,384 12,644 92,603 188,540 5,260,936 1,213,683	1,386) ($ 6,527 309) ( 35,909 8,177 2,055,289 22,211) (	74) ($ 1,352 282) ( 157) ( 5,983 630,622 22,211) (	- - - - - - -

Table 8, Page 4

Investor	Investee （Note1, 2）	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2022	Shares held as at December 31,2022	Shares held as at December 31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31,2022	Footnote
				Balance as at December 31,2022	Balance as at December 31,2021	Number of shares	Ownership (%)	Book value
Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd.	Formosa Taffeta (Vietnam) Co., Ltd. Kuang Yueh Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Industries Corp. Schoeller Textil AG Nan Ya Optical Corp.	Vietnam Taiwan Vietnam Vietnam Switzerland Taiwan	Production, processing, further processing various yam and cotton cloth, dyeing and finishing clothes, curtains, towels, bed covers and carpets Processing and production of ready-to-wear, processing and trading of cotton cloth, and import and export of the aforementioned products Production, processing and sale of various dyeing and finishing textiles and yarn Synthetic fiber, spinning, weaving, dyeing and finishing and electricity generation Textile R&D, production and sales LED lighting system, lighting piping engineering design planning, manufacturing and installation	1,709,221 $ 213,771 2,806,938 1,987,122 1,285,507 263,327	1,709,221 $ 213,771 2,590,434 1,987,122 1,285,507 263,327	- 18,595,352 - - 21,874 7,013,871	100.00 17.99 100.00 10.00 50.00 15.22	2,332,278 $ 1,427,806 2,908,996 1,626,376 1,096,100 190,818	87,853 $ 1,172,400 11,187) ( 1,941,578) ( 79,380) ( 144,992	87,853 $ 211,005 11,187) ( 194,158) ( 39,690) ( 22,064	- - - - - -

Table 8, Page 5

Investor	Investee （Note1, 2）	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2022	Shares held as at December 31,2022	Shares held as at December 31,2022	Net profit (loss) of the investee for the year ended December 31,2022	Investment income (loss) recognised by the Company for the year ended December 31,2022	Footnote
				Balance as at December 31,2022	Balance as at December 31,2021	Number of shares	Ownership (%)	Book value
Formosa Development Co., Ltd. Formosa Development Co., Ltd. Public More Internation Co., Ltd.	Formosa Advanced Technologies Co., Ltd. Public More Internation Co., Ltd. Kuang Yueh Co., Ltd.	Taiwan Taiwan Taiwan	IC assembly, testing and modules Employment service, manpower allocation and agency service Processing and production of ready-towear, processing and trading of cotton cloth, and import and export of the aforementioned products	21,119 5,000 1,591 $	21,119 5,000 1,069 $	469,500 - 15,000	0.11 100.00 0.01	18,011 15,115 1,732 $	2,055,289 5,716 1,172,400 $	2,182 5,716 160 $	- - -

Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.

Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:

• (1)The columns of 'Investee', 'Location', 'Main business activities', Initial investment amount' and 'Shares held as at December 31, 2022 should fill orderly in the Company's (public company's) information on investees and every directly or indirectly controlled investee's investment information, and note the relationship between the Company (public company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the 'footnote' column.

• (2)The 'Net profit (loss) of the investee for the year ended December 31, 2022 column should fill in amount of net profit (loss) of the investee for this period.

• (3)The 'Investment income (loss) recognised by the Company for the year ended December 31, 2022 column should fill in the Company (public company) recognised investment income (loss) of its direct subsidiary and

• recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary's net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

Table 8, Page 6

Formosa Chemicals and Fibre Corporation and subsidiaries

Information on investments in Mainland China

For the year ended December 31, 2022

Table 9

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2022	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31,2022	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022	Net income of investee for the year ended December 31, 2022	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2022	Book value of investments in Mainland China as of December 31,2022	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2022	Footnote
					Remitted to MainlandChina	Remitted back to Taiwan
Formosa Power (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Synthetic Rubber (Ningbo) Co., Ltd. Formosa Biomedical Trading (Shanghai) Co., Ltd. Formosa Taffeta (Zhong Shan) Co., Ltd. Formosa Taffeta (Changshu) Co., Ltd.	Cogeneration power generation business Production and market of PTA Production and sale of synthetic rubber Investments Production and sale of polyester and polyamide fabrics Weaving and dyeing as well as post dressing of high-grade loomage face fabric	4,834,511 $ 35,575,404 12,777,478 29,610 1,402,085 1,302,019	1 1 4 1 1 2	4,051,414 $ 29,959,815 4,163,050 29,610 1,402,085 1,334,739	- $ - - - - -	- $ - - - - -	4,051,414 $ 29,959,815 4,163,050 29,610 1,402,085 1,334,739	79,971 $ 635,426) ( 499,324) ( 5,921 234,151 30,588) (	100.00 100.00 33.33 100.00 100.00 100.00	79,971 $ 635,426) ( 166,474) ( 5,921 234,151 30,589) (	16,135,740 $ 50,486,788 1,851,242 8,487 2,185,356 1,077,542	- $ 2,003,898 - - 43,914 -	- - - - 3 4

Table 9, Page 1

5

Changshu Yu Yuan Building and selling 70,788 2 Development Co., real estate Ltd.

18

40.78

7

Note 1: Investment methods are classified into the following three categories.

• (1) Directly invest in a company in Mainland China..

• (2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.

• (3) Others

• (4) Formosa Power (Ningbo) Co., Ltd. is an investee company in Mainland China through the Company's investee - FCFC Investment Corp. (Cayman).

• Formosa Chemicals Industries (Ningbo) Co., Ltd., Formosa PS (Ningbo) Co., Ltd., Formosa ABS Plastics (Ningbo) Co., Ltd. and Formosa Phenol (Ningbo) Limited Co. were investee companies in Mainland China through the Company's investee - FCFC Investment Corp. (Cayman). After share structure adjustment in 2008 and 2014, the parent company of the 4 investees became Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. is a wholly-owned subsidiary through reinvestment of FCFC Investment Corp. (Cayman).

• The Company reorganised its investment structure through a merger of 4 investees in Mainland China, namely, Formosa Chemicals Industries (Ningbo) Co., Ltd., Formosa ABS Plastics (Ningbo) Co., Ltd., Formosa PS (Ningbo) Co., Ltd. and Formosa Phenol (Ningbo) Limited Co. After the effective date of January 2, 2018, Formosa Chemicals Industries (Ningbo) Co., Ltd. was the surviving entity. The proposal had been resolved by Board of Directors on November 4, 2016. (Samoa) Co., Ltd..

Formosa Synthetic Rubber (Ningbo) Co., Ltd. is an investee company in Mainland China through the investee - Formosa Synthetic Rubber (Hong Kong) Co., Ltd..

• Formosa Biomedical Trading (Shanghai) Co., Ltd. is an investee company in Mainland China through the investee - Formosa Biomedical (Samoa) Co., Ltd..

• Formosa Taffeta (Changshu) Co., Ltd. is an investee company in Mainland China through the subsidiary - Formosa Taffeta (Hong Kong) Co., Ltd..

• The Company is the surviving company after the consolidation of Changshu Yu Yuan Development.Co.,Ltd. and Changshu Fushun Enterprise Management Co.,Ltd. It’s paid-in capital is RMB$13,592,920.

• Note 2: Investment income recognized in current period is based on the financial reports audited by CPAs of the Taiwan parent company .

• Note 3: The Company's paid-in capital, accumulative remittance from Taiwan as of January 1, 2022 and December 31, 2022 all amount to US$46,400,000.

• (The remittance of US$46,388,800 and the capitalised value of machinery and equipment of US$11,200)

• Note 4: The Company's paid-in capital, accumulative remittance from Taiwan as of January 1, 2022 and December 31, 2022 all amount to US$42,000,000. In order to effectively utilise the residential land of the Company, Formosa Chemicals & Fibre Co. split the residential land and established Changshu Fushun Enterprise Management Co., Ltd. by capitalizing the residential land in the first quarter, 2015.

• Formosa Chemicals & Fibre Co. reduced the capital of Formosa Taffeta (Changshu) Co., Ltd. by US$900,000, so the Company's paid-in capital amounts to $41,100,000.

• Note 5: The Company is the surviving company after the merger with Changshu Yu Yuan Development.Co., Ltd. in the third quarter, 2015. The paid-in capital of the Company is RMB$13,592,920.

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2022	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
The Company	$ 38,174,279	$ 43,716,830	Note

Note: Corporations that are qualified with operations headquarters certification issued by the Industrial Development Bureau, Ministry of Economic Affairs, R.O.C.

Table 9, Page 2

Formosa Chemicals and Fibre Corporation and subsidiaries

Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas

For the year ended December 31, 2022

Table 10 Investee in Mainland China	Sale(purchase)	Sale(purchase)	Propertytransaction	Propertytransaction	Accounts receivable (payable)	Accounts receivable (payable)	Provision of endorsements/guarantees or collaterals	Provision of endorsements/guarantees or collaterals		Financing	Financing	Interest during the year ended December 31, 2022 Others Expressed in thousands of NTD (Except as otherwise indicated)	Interest during the year ended December 31, 2022 Others Expressed in thousands of NTD (Except as otherwise indicated)
	Amount	%	Amount	%	Balance at December 31, 2022	%	Balance at December 31, 2022	Purpose	Maximum balance during the year ended December 31,2022	Balance at December 31,2022	Interest rate	Interest during the year ended December 31, 2022
Formosa Taffeta (Zhongshan) Co., Ltd. Formosa Taffeta (Changshu) Co., Ltd.	$ 13,933 4,836	0.05 0.02	$ - -	- -	$ 1,469 404	0.08 0.02	$ 1,013,430 1,689,050	For short-term loans from financial institutions For short-term loans from financial institutions	$ - -	- $ -	- -	- $ -	- -

Table 10, Page 1

Formosa Chemicals and Fibre Corporation and subsidiaries Information on Major Shareholders For the year ended December 31, 2022

Table 11

Name of Major Shareholder Chang Gung Medical Foundation Qin's International Investment Holdings Ltd.

Shares	Shares
Number of Shares	Ownership (%)
1,089,142,009 371,938,814	18.58% 6.35%

Table 11, Page 1