FPC - Annual Report 2023 | FinancialReports.eu

Stock Code:1301

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2023 and 2022

Address: No.100, Shuiguan Rd., Renwu Dist., Kaohsiung City 814, Taiwan (R.O.C.) Telephone: (07)371-1411

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

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

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Contents 1. Cover Page 2. Table of Contents 3. Representation Letter 4. Independent Auditors’ Report 5. Consolidated Balance Sheets 6. Consolidated Statements of Comprehensive Income 7. Consolidated Statements of Changes in Equity 8. Consolidated Statements of Cash Flows 9. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of material accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Assets pledged as security (9) Significant commitments and contingencies (10) Losses due to major disasters (11) Subsequent events (12) Others (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in Mainland China (d) Major shareholders (14) Segment information	Page
	1 2 3 4 5 6 7 8 9 9 9`～`10 11`～`28 29 30`～`69 69`～`76 76 76`～`77 77 77 77 78`～`83 84 85 85 86`～`87

Representation Letter

The entities that are required to be included in the combined financial statements of Formosa Plastics Corporation as of and for the year ended December 31, 2023 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10, "Consolidated Financial Statements. " endorsed by the Financial Supervisory Commission of the Republic of China. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Formosa Plastics Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Formosa Plastics Corporation Chairman: Jaing-Nan Lin Date: March 6, 2024

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KPMG

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

Independent Auditors’ Report

To the Board of Directors of Formosa Plastics Corporation:

Opinion

We have audited the consolidated financial statements of Formosa Plastics Corporation and its subsidiaries (“ the Group” ), which comprise the consolidated balance sheet as of December 31, 2023 and 2022, the consolidated statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, based on our audits and the reports of other auditors, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“ IASs” ), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of 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. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

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

1. Revenue Recognition

As the control of products transfers at different points in time, it exposes the risk wherein revenue may not be recognized within the proper period. For this reason, revenue recognition is considered to be one of our key audit matters. The accounting policies and the related information for the revenue recognition were discussed in Notes 4(o) and 6(r) to the consolidated financial statements.

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

4-1

The principal audit procedures we have performed to address the aforementioned key audit matter included assessing the rationality of accounting treatment for revenue recognition; vouching the original sales documents according to the transactions with the customers during a selected period of time before and after the balance sheet date to evaluate whether the revenue is recorded appropriately.

2. Valuation of Inventories

The Group measured the cost and net realizable value of inventory and recognized the loss on the balance sheet date according to IAS 2 (including loss on obsolescence of inventories); However, to determine whether or not the loss of inventories should be recognized depends on the subjective judgment of the management. For this reason, the valuation of inventories is considered to be one of the key audit matters. The accounting policies and the related information for the valuation of inventories were discussed in Notes 4(h), 5 and 6(e) to the consolidated financial statements.

The principal audit procedures we have performed to address the aforementioned key audit matter included assessing the appropriateness of the policy on inventory valuation and slack loss recognition; ensuring whether the process of inventory valuation is in conformity with the accounting policies, confirming the sales price adopted by the management and the changes in the market price of inventory in the period after the balance sheet date; and sampling procedures to assess the reasonableness of the net realizable value of inventory.

Other Matter

We did not audit the financial statements of certain investee companies under the equity method and the relevant information on the reinvestment business in Note 13 of the consolidated financial report has not been checked by this accountant, but is checked by other accountants. The Group's investments in the aforementioned investee companies constituted 32.50% and 32.12% of the consolidated total assets as of December 31, 2023 and 2022, respectively; and the recognized shares of profit of associates accounted for using equity method of these investee companies constituted 106.33% and 18.76% of the consolidated income before tax for the years ended December 31, 2023 and 2022, respectively. The consolidated financial statements of the aforementioned investee companies were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for these investee companies, is based solely on the reports of other auditors.

We have also audited the parent company only financial statements of the Company as of and for the years ended December 31, 2023 and 2022, and have expressed an unmodified opinion with an emphasis of matter paragraph or other matter paragraph thereon.

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

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

4-2

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 auditor’s 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:

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

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

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

4-3

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

The engagement partners on the audit resulting in this independent auditors’ report are Kuo, Hsin-Yi and Ko, Hui-Chih.

KPMG

Taipei, Taiwan (Republic of China) March 6, 2024

Notes to Readers

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

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

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2023 Assets Amount % Current assets: 1100 Cash and cash equivalents(Note 6(a)) $ 6,147,041 1 1110 Current financial assets at fair value through profit or loss(Note 6(b)) 1,641,598 - 1120 Current financial assets at fair value through other comprehensive income(Note 6(b)) 90,739,431 17 1150 Notes receivable(Notes 6(c) and (r)) 1,721,802 - 1170 Accounts receivable, net(Notes 6(c) and (r)) 9,340,997 2 1180 Accounts receivable`－`related parties(Notes 6(c), (r) and 7) 3,186,784 1 1200 Other receivables(Note 6(d)) 1,905,005 - 1210 Other receivables`－`related parties(Notes 6(d) and 7) 18,954,547 4 130X Inventories(Note 6(e)) 21,439,773 4 1470 Other current assets 4,561,284 1 Total current assets 159,638,262 30 Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income(Note 6(b)) 18,408,990 4 1550 Investments accounted for using equity method(Note 6(f)) 222,537,086 42 1600 Property, plant and equipment(Notes 6(g), 7 and 8) 112,452,052 21 1755 Right-of-use assets(Note 6(h)) 2,307,666 - 1780 Intangible assets 563,243 - 1840 Deferred tax assets(Note 6(o)) 1,192,430 - 1900 Other non-current assets(Note 8) 13,638,627 3 Total non-current assets 371,100,094 70 Total assets $ 530,738,356 100	December 31, 2022 Amount % 17,110,163 3 1,562,720 1 86,948,159 17 1,996,187 1 9,659,490 2 4,197,388 1 1,480,775 - 10,492,259 2 22,411,798 4 4,961,321 1 160,820,260 32 16,564,214 3 212,475,605 42 107,315,483 21 1,624,919 - 607,382 - 1,251,835 - 10,594,709 2 350,434,147 68 511,254,407 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings(Note 6(i)) 2110 Short-term notes and bills payable(Note 6(j)) 2130 Current contract liabilities(Note 6(r)) 2170 Accounts payable 2180 Accounts payable`－`related parties(Note 7) 2200 Other payables 2220 Other payables`－`related parties(Note 7) 2280 Current lease liabilities(Note 6(m)) 2321 Current portion of bonds payable(Note 6(l)) 2322 Current portion of long-term borrowings(Notes 6(k) and 8) 2399 Other current liabilities (Include related parties)(Notes 6(f) and 7) Total current liabilities Non-Current liabilities: 2530 Bonds payable(Note 6(l)) 2540 Long-term debts(Notes 6(k) and 8) 2570 Deferred tax liabilities(Note 6(o)) 2580 Non-current lease liabilities(Note 6(m)) 2640 Net defined benefit liabilities-non-current(Note 6(n)) 2670 Other non-current liabilities Total non-current liabilities Total liabilities Equity(Note 6(p)): 3110 Ordinary shares 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Total retained earnings 3400 Other components of equity Total equity Total liabilities and equity	December 31, 2023	December 31, 2023		December 31, 2022
		Amount	%		Amount % 14,900,000 3 19,430,865 4 2,002,962 - 5,445,904 1 6,328,325 2 5,735,863 1 14,138,127 3 26,811 - 8,846,341 2 5,000,000 1 14,008,122 3 95,863,320 20 27,274,332 5 6,437,383 1 19,369,781 4 607,619 - 3,886,866 1 130,243 - 57,706,224 11 153,569,544 31 63,657,408 12 11,797,297 2 74,910,988 15 82,520,970 16 72,838,396 14 230,270,354 45 51,959,804 10 357,684,863 69 511,254,407 100
		$ 23,466,921 30,663,374 1,309,623 6,838,697 4,792,543 347,761 17,395,867 60,234 3,699,403 1,543,394 12,983,859 103,101,676 34,664,786 21,362,108 19,209,364 1,294,833 3,609,170 136,274 80,276,535 183,378,211 63,657,408 11,829,847 78,532,046 87,559,869 44,712,409 210,804,324 61,068,566 347,360,145 $ 530,738,356	4 6 - 1 1 - 3 - 1 - 3 19 7 4 4 - 1 - 16 35 12 2 15 16 8 39 12 65 100

See accompanying notes to consolidated financial statements.

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2023 and 2022

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

4000
Operating revenue (Notes 6(r) and 7)
5000
Operating costs (Notes 6(e), (g), (h), (n), (s) and 7)
Gross profit from operations
Operating expenses (Notes 6(c), (g), (h), (n), (s) and 7):
6100
Selling expenses
6200
Administrative expenses
6300
Research and development expenses
6450
Expected credit losses (gains)
Total operating expenses
Net Operating (losses) income
Non-operating income and expenses (Notes 6(f), (g), (m), (t) and 7):
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7060
Recognized share of profit of associates and joint ventures accounted for using equity method, net
Total non-operating income and expenses
Profit from continuing operations before tax
7950
Less: Income tax (benefits) expenses (Note 6(o))
Profit
8300
Other comprehensive income (loss) (Notes 6(n), (o) and (p)):
8310
Components of other comprehensive income (loss) that will not be reclassified to profit or loss:
8311
(Losses) gains on remeasurements of defined benefit plans
8316
Unrealized gains (losses) from investments in equity instruments measured at fair value through
other comprehensive income
8320
Share of other comprehensive income of associates and joint ventures accounted for using equity
method, components of other comprehensive income that will not be reclassified to profit or loss
8349
Income tax related to components of other comprehensive income that will not be reclassified to
profit or loss
8360
Components of other comprehensive (loss) income that will be reclassified to profit or loss:
8361
Exchange differences on translation
8370
Share of other comprehensive income of associates and joint ventures accounted for using equity
method, components of other comprehensive income that will be reclassified to profit or loss
8399
Income tax related to components of other comprehensive (loss) income that will be reclassified to
profit or loss
Total components of other comprehensive income that will be reclassified to profit or loss
8300
Other comprehensive income (loss)
8500
Total comprehensive income
Basic/Diluted earnings per share(NT dollars) (Note 6(q))

2023

Basic/Diluted earnings per share(NT dollars) (Note 6(q))

See accompanying notes to consolidated financial statements.

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the years ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

		Equity attributable to owners	Equity attributable to owners	Equity attributable to owners	of parent
Ordinary shares	Capital surplus	Retained earnings				Total other equity interest
		Legal reserve	Special reserve 71,352,267 - - - - 11,168,703 - - - - 82,520,970 - - - - 5,038,899 - - - - 87,559,869	Unappropriated retained earnings	Exchange differences on translation of foreign financial statements (12,738,403) - 12,135,050 12,135,050 - - - - - - (603,353) - (1,321,183) (1,321,183) - - - - - - (1,924,536)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 94,230,777 - (42,592,303) (42,592,303) - - - - - - 51,638,474 - 10,420,158 10,420,158 - - - - - - 62,058,632	Gains (losses) on hedging instruments
$ 63,657,408 - - - - - - - - - 63,657,408 - - - - - - - - - $ 63,657,408	11,770,685	67,780,313		107,126,265 36,142,868 86,584 36,229,452 (7,130,675) (11,168,703) (52,199,074) (18,869) - - 72,838,396 7,337,709 (13,363) 7,324,346 (3,621,058) (5,038,899) (26,736,112) (54,264) - - 44,712,409			10,962
	- -	- -
	-	-
	- - - - 171 26,441	7,130,675 - - - - -
	11,797,297 - -	74,910,988 - -
	-	-
	- - - - 230 32,320	3,621,058 - - - - -
	11,829,847	78,532,046

See accompanying notes to consolidated financial statements.

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile loss: Depreciation expenses Amortization expenses Expected credit losses (gains) Interest expenses Net gains on financial assets at fair value through profit Interest income Dividend income Shares of profit of associates and joint ventures accounted for using equity method Gains on disposal of property, plant and equipment Gain on early termination of contract Unrealized foreign exchange losses Total adjustments to reconcile loss Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Accounts receivable Accounts receivable - related parties Other receivables Other receivables - related parties Inventories Other current assets Total changes in operating assets Changes in operating liabilities: Accounts payable Accounts payable - related parties Other payables Other payables - related parties Other current liabilities (including contract liabilities) Net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from operating activities Cash flows from (used in) investing activities: Proceeds from capital reduction of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets designated at fair value through profit or loss Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in other receivables - related parties Increase in other non-current assets Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term notes and bills payable Proceeds from issuing bonds Repayments of bonds Proceeds from long-term debts Repayments of long-term debts Increase (Decrease) in other payables - related parties Payment of lease liabilities Decrease in other non-current liabilities Cash dividends paid Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period	2023 $ 6,996,631 7,530,238 537,775 178,031 2,113,967 (78,878) (594,143) (3,667,671) (7,944,764) (381,875) - 288,265 (2,019,055) 274,385 53,689 1,010,605 (609,190) 484,996 1,020,221 400,035 2,634,741 1,411,006 (1,535,783) 908,832 (918,027) (1,890,559) (434,752) (2,459,283) 175,458 (1,843,597) 5,153,034 517,219 7,925,321 (2,181,458) (5,256,805) 6,157,311 6,848 - (2,048,600) (13,609,178) 773,028 (27,417) (9,072,790) (3,510,574) (27,488,683) 158,969,929 (148,716,326) 11,300,000 11,100,000 (8,850,000) 17,012,448 (5,475,226) 4,364,948 (72,235) (356,740) (26,745,324) 12,531,474 (2,163,224) (10,963,122) 17,110,163 $ 6,147,041	2022 43,794,387 7,511,001 945,271 (1,033) 1,037,054 (192,016) (380,017) (8,441,831) (5,761,275) (31,512) (2,319) 123,984 (5,192,693) 3,809,974 5,450,086 491,316 (114,820) 174,828 2,113,774 (1,383,410) 10,541,748 (2,322,994) (1,873,422) 4,963,059 708,263 (1,025,697) (2,272,319) (1,823,110) 8,718,638 3,525,945 47,320,332 378,613 20,940,421 (716,799) (11,120,952) 56,801,615 4,250 2,422,695 (1,000,000) (14,775,464) 38,627 (11,181) (3,304,467) (1,695,154) (18,320,694) 129,692,300 (119,276,976) 17,350,000 - (9,400,000) 7,565,803 (316,012) (3,731,462) (47,076) (69,095) (52,172,634) (30,405,152) (4,681,060) 3,394,709 13,715,454 17,110,163

See accompanying notes to consolidated financial statements.

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023 and 2022

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

(1) Company history

Formosa Plastics Corporation (the “Company”) was incorporated on November 5, 1954, and established its factories in Kaohsiung City. The Company and its subsidiaries (the “ Group” ) engage in the manufacture and sale of plastic raw materials, chemical fibers, and petrochemical products. The Company has gone through several capital increases and established many divisions, and become a well-diversified enterprise.

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

These consolidated financial statements were authorized for issue by the Board of Directors on March 6, 2024.

(3) New standards, amendments and interpretations adopted:

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

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2023:

●Amendments to IAS 1 “Disclosure of Accounting Policies”
●Amendments to IAS 8 “Definition of Accounting Estimates”
●Amendments to IAS 12 “ Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

The Group has initially adopted the new amendment, which do not have a significant impact on its consolidated financial statements, from May 23, 2023:

●Amendments to IAS 12 “International Tax Reform—Pillar Two Model Rules”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its consolidated financial statements:

●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
●Amendments to IAS 1 “Non-current Liabilities with Covenants”
●Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
●Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Standards or Effective date per Interpretations Content of amendment IASB Amendments to IFRS 10 and The amendments address an acknowledged Effective date to be IAS 28 “Sale or Contribution inconsistency between the requirements in determined by IASB of Assets Between an Investor IFRS 10 and those in IAS 28 (2011) in and Its Associate or Joint dealing with the sale or contribution of Venture” assets between an investor and its associate or joint venture.

The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary. Amendments to IAS21“Lack The amendments set out: January 1, 2025 of Exchangeability” ●when a currency is exchangeable into another currency; and ●how a company determines an estimated spot rate when a currency lacks exchangeability.

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

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

●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information”

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of material accounting policies:

The material accounting policies presented in the consolidated financial statements are summarized below. The following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations” ) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C (hereinafter referred to IFRSs as endorsed by the FSC).

(b) Basis of preparation

Basis of measurement

Except for the following significant accounts,the consolidated financial statements have been prepared on historical cost basis:

(i) Financial assets at fair value through other comprehensive income are measured at fair value.
(ii) The net defined benefit liabilities (assets) are measured as the fair value of the plan assets, less the present value of the defined benefit obligation.

Functional and presentation currency

The functional currency of the Group is determined based on the primary economic environment in which the entities operate. The consolidated financial statements are presented in New Taiwan Dollar, which is the Company’ s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

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

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, 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.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances. Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

(ii) List of subsidiaries in the consolidated interim financial statements:

Name of Investor	Name of subsidiaries	Business activity	Percentage of Ownership (%) December 31, 2023 December 31, 2022 Note % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100	Percentage of Ownership (%) December 31, 2023 December 31, 2022 Note % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100
			December 31, 2023 % 100 % 100 % 100 % 100 % 100
The Company The Company Formosa Plastics Corporation (Cayman) Limited Formosa Industries (Hong Kong) Limited Formosa Industries (Hong Kong) Limited	Formosa Plastics Corporation (Cayman) Limited Formosa Industries Corporation U.S.A Formosa Industries (Hong Kong) Limited Formosa Industries (Ningbo) Co., Ltd. Formosa Electronic (Ningbo) Co., Ltd.	Investment High Density Polyethylene Investment Plastics Electronics		% 100 % 100 % 100 % 100 % 100

(iii) Subsidiary not included in the consolidated financial statements: None.

(d) Foreign currencies
(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Nonmonetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

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

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the Group’s functional currency at exchange rates at the reporting date. The income and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to the Group’s functional currency at average rate. Foreign currency differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes of only part of investment in an associate of joint venture that includes a foreign operation while retaining significant or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(e) Classification of current and non-current assets and liabilities

An asset is classified as current under any one of the following conditions. All other assets are classified as non-current.

(i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash and cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under any one of the following conditions. All other liabilities are classified as non-current.

(i) It is expected to be settled during the Group’s normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period date; or
(iv) The Group does not have any unconditional right to defer settlement of the liability for at least twelve months after the reporting period date. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Cash and cash equivalents

Cash comprises cash on hand and cash in bank. Cash equivalents are 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 which meet the above definition and are held for the purpose of meeting short?term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(g) Financial instruments

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

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

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

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

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Fair value through other comprehensive income (FVOCI )

Some trade receivables are held within a business model whose objective is achieved by both collecting contractual cash flows and selling by the Group, therefore, those receivables are measured at FVOCI. However, they are included in the ‘ trade receivables’ line item.

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

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

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

Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established.

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. Trade receivables that the Company intends to sell immediately or in the near term are measured at FVTPL; however, they are included in the ‘trade receivables’ line item. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

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

4) Business model assessment

The Group makes an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

‧ the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’ s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

‧ how the performance of the portfolio is evaluated and reported to the Group’ s management;
‧ the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
‧ how managers of the business are compensated ─ e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and
‧ the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Group’s continuing recognition of the assets.

5) Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘ principal’ is defined as the fair value of the financial assets on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:

‧ contingent events that would change the amount or timing of cash flows;
‧ terms that may adjust the contractual coupon rate, including variable rate features;
‧ prepayment and extension features; and
‧ terms that limit the Group’ s claim to cash flows from specified assets (e.g. nonrecourse features)
6) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, leases receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

The Group measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

‧ debt securities that are determined to have low credit risk at the reporting date; and

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

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

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

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

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

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

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

‧ significant financial difficulty of the borrower or issuer;
‧ a breach of contract such as a default or being more than 90 days past due;
‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧ it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧ the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charge to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

7) Derecognition of financial assets

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

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

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

Debt and equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Financial liabilities

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

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

3) Derecognition of financial liabilities

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

4) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(i) Investment in associates

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

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

The consolidated financial statements include the Consolidated Company’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align the accounting policies with those of the Consolidated Company, from the date on which significant influence commences until the date on which significant influence ceases. The Consolidated Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

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

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) Joint venture

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

When assessing the classification of a joint arrangement, the Group considers the structure and legal form of the arrangement, the terms in the contractual arrangement, and other facts and circumstances. When the facts and circumstances change, the Company reevaluates whether the classification of the joint arrangement has changed.

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

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

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

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

(ii) Subsequent expenditure

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

(iii) Depreciation

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

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

1) Buildings and constructions: 3 to 55 years.
2) Machinery and equipment: 2 to 35 years.
3) Other facilities: 3 to 15 years.

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Lease

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

(i) As a leasee

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

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

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

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

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

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

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

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

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

(ii) As a leasor

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

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

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

The lessor recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The lessor recognizes the interest income over the lease term based on a pattern reflecting a constant periodic rate of return on the lessor’ s net investment in the lease. The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Intangible assets
(i) Recognition and measurement

Goodwill arising on the acquisition of Yung Chia Chemical Industries Corp. in 2003, is measured at cost, less accumulated impairment losses.

Other intangible assets, including technical development expense, that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent measurement

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated.

(iii) Amortization

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

1) Technical development expense 10~45 years

2) Computer software 10years

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

(n) Impairment of non-financial assets

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

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

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

(o) Revenue recognition

(i) Revenue from contracts with customers

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

1) Sale of goods–plastic raw materials, chemical fibers, and petrochemical products.

The Group manufactures and sells plastic raw materials, chemical fibers, and petrochemical products to downstream manufacturers. The Group recognizes revenue 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. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

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

2) Construction contracts

Since the Group entered into separate agreements with different customers on the development of electronic components and software products, wherein the customers have control over the development process of the said items, the Group recognizes its revenue over time on the basis of the construction costs incurred to date as a proportion of the total estimated costs of the contract. The Group recognizes revenue only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If the Group has recognized a revenue without issuing any bill, then the entitlement to consideration is recognized as a contract asset. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

If the Group cannot reasonably measure its progress towards complete satisfaction of the performance obligation of a construction contract, the Group shall recognize revenue only to the extent of the costs expected to be recovered.

A provision for onerous contracts is recognized when the Group expects the unavoidable costs of performing the obligations under a construction contract exceed the economic benefits expected to be received under the contract.

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management.

3) Financing components

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

(p) Contract costs

(i) Incremental costs of obtaining a contract

The Group recognizes as an asset the incremental costs of obtaining a contract with a customer if the Group expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Group applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

(ii) Costs to fulfil a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Group recognizes an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:

‧ the costs relate directly to a contract or to an anticipated contract that the Group can specifically identify;
‧ the costs generate or enhance resources of the Group that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and
‧ the costs are expected to be recovered.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Group cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Group recognizes these costs as expenses when incurred.

(q) Employee benefits

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

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plans

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

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

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

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Short-term employee benefits

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

(r) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

The Group has determined that the global minimum top-up tax – which it is required to pay under Pillar Two legislation – is an income tax in the scope of IAS 12. The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.

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

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities at the reporting date and their respective tax bases. Deferred taxes are recognized except for the following:

(i) Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transaction affects neither accounting nor taxable profits (losses) and does not give rise to equal taxable and deductible temporary differences;
(ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Consolidated Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
(iii) Taxable temporary differences arising on the initial recognition of goodwill.

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Consolidated Company has a legally enforceable right to set off current tax assets against current tax liabilities ; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
(iii) Deferred tax asset are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

(s) Earnings per share

The Group discloses the Company’ s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as effect of employee share bonus.

(t) Operating segments

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the next period.

The accounting policies involved significant judgments and the information that have significant effect on the amounts recognized in the consolidated financial statements are as below:

(a) Judgment of whether the Group has substantive control over Formosa Petrochemical Corporation

The Group holds 28.56% outstanding ordinary shares of Formosa Petrochemical Corporation, who has a total number of 15 directors in its board, including 2 seats representing the Group. Although the Group is the biggest shareholder of Formosa Petrochemical Corporation, the Group does not have definite control on its overall operating related activities. Therefore, it is determined that the Group has no control over Formosa Petrochemical Corporation.

(b) Judgment of whether the Group has substantive control over Formosa Heavy Industries Corporation

The Group holds 32.92% outstanding ordinary shares of Formosa Heavy Industries Corporation, who has a total number of 7 directors in its board, with the Group obtaining none of the seats, but having only one supervisor serving as its representative. Although the Group is the biggest shareholder of Formosa Heavy Industries Corporation, the Group does not have definite control on its overall operating related activities. Therefore, it is determined that the Group has no control over Formosa Heavy Industries Corporation.

The Group holds 50.00% outstanding shares of Sky Dragon Investments Limited, which has only 1 director who is not connected with the Group. Although the Group is the biggest shareholder of Sky Dragon Investments Limited, the Group does not have definite control on its overall operating related activities. Therefore, it is determined that the Group has no control over Sky Dragon Investments Limited.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows.

As inventories are stated at the lower of cost or net realizable value, the Group estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of the reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Refer to note 6(e) for further description of the valuation of inventories.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Cash on hand Bank deposits Cash equivalents Cash equivalents`－`Time deposits Repurchase bonds	December 31, 2023 $ 362 3,325,160 2,821,519 - $ 6,147,041	December 31, 2022
		298 5,054,377 4,578,290 7,477,198
		17,110,163

Please refer to Note 6(u) for the fair value sensitivity analysis and interest rate risk of the financial assets and liabilities of the Group.

(b) Financial assets at fair value through profit or loss and other comprehensive income

December 31, 2023 (i) Mandatorily measured at FVTPL Private fund $ 1,641,598 Please refer to Notes 6(u) for amount of remeasurement at FVTPL. December 31, 2023 (ii) Equity investments at fair value through other comprehensive income Current: Domestic listed stocks (Exchange and Mainboard) $ 90,590,581 Domestic listed stocks (Emerging stock board) 148,850 Non-current: Non-listed stocks 5,127,160 Foreign non-listed stocks 13,281,830 Total $ 109,148,421	December 31, 2022
	1,562,720
	December 31, 2022
	86,772,334 175,825 5,232,499 11,331,715
	103,512,373

Equity investments at fair value through other comprehensive income.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group designated the investments shown above as equity instruments at fair value through other comprehensive income because these equity instruments represent those investments that the Group intends to hold for long-term for strategic purposes.

There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of December 31, 2023 and 2022.

Notes receivable from operating activities Accounts receivable (including related parties)`－`at amortized cost Account receivables -at fair value through other comprehensive income Less : allowance for doubtful receivables	December 31, 2023 $ 1,721,802 12,228,523 382,492 (83,234) $ 14,249,583	December 31, 2022 1,996,187 13,811,475 127,506 (82,103) 15,853,065

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables on December 31, 2023 and 2022. To measure the expected credit losses, accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information. The loss allowance were determined as follows:

December 31, 2023	December 31, 2023
Gross carrying amount Weighted- average loss rate $ 13,378,738 0.136% 858,046 3.222% 87,030 35.183% 9,003 76.867% $ 14,332,817 December 31, 2022		Loss allowance
		18,051 27,643 30,620 6,920
		83,234

	Weighted- average loss rate 0.193% 4.384% 34.373% 68.902%	Loss allowance
		29,979 15,397 12,604 24,123
		82,103

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The movement of the allowance for doubtful receivable was as follows:

Beginning balance Impairment losses (reversed) recognized Foreign exchange (gains) losses Ending balance	For the years ended December 31, 2023 2022 $ 82,103 82,222 1,050 (1,033) 81 914 $ 83,234 82,103
	2023 $ 82,103 1,050 81 $ 83,234

The Group entered into a factoring and financing agreement (without-recourse) with a financial institution. According to the contract, the net accounts receivable that have matured but are still uncollected will be paid by the financial institution, except for those affected by trade disputes. As of December 31, 2023, the outstanding accounts receivable factoring transaction between the Group and the financial institution was as follows:

		December 31, 2023
Purchaser	Factoring Balance Factoring Line Advanced Amount USD 12,907 $ 609,840 USD 462 $ 396,695 14,203 December 31, 2022		Range of Interest Rate Guarantee project 6.527%~6.573% None
CITIBANK
Purchaser	Factoring Balance Factoring Line USD 4,152 $ 288,000 $ 127,506	Advanced Amount -	Range of Interest Rate Guarantee project None
CITIBANK

(d) Other receivables

Other receivables—loans to related parties Other receivables—related parties Other receivables Less : Loss allowance	December 31, 2023 $ 17,689,244 1,438,881 1,905,005 173,578 $ 20,859,552	December 31, 2022
		8,790,032 1,702,227 1,480,775 -
		11,973,034

As of December 31, 2023, based on the management’s assessment of expected credit loss for other receivables, the Group anticipated credit impairment on other receivables from joint venture company "“Formosa Mitsui Advanced Chemical Co., Ltd.”, which was expected to be liquidated in 2024, and had recognized a provision for loss allowance of $173,578 thousand.

As of December 31, 2022, there are no expected credit loss required for other receivables after the management’s assessment.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Inventories

Finished goods Work in process Raw materials Supplies Machinery and accessories in process Others	December 31, 2023 $ 12,988,928 1,278,826 3,973,415 472,051 2,691,147 35,406 $ 21,439,773	December 31, 2022
		12,881,113 1,864,397 3,615,976 570,082 3,454,005 26,225
		22,411,798

Change of net realizable value of inventories ：

		For the years ended
		December 31,
		2023 2022
Loss from devaluation of inventories(Gain from recovery of
inventories)	$	(369,043) 587,535

The changes in net realizable value of the above inventories have been recognized as cost of goods sold.

(f) Investments accounted for using equity method

The components of the investments accounted for using equity method were as follows:

Associates
Formosa Petrochemical Corporation
Formosa Plastics Corp., U.S.A.
Formosa Heavy Industries Corp.
Sky Dragon Investments Limited
Mai Liao Power Corp.
Formosa Sumco Technology Corporation
Formosa Transportation Corp.
Formosa Fairway Corp.
Yi-Jih Development Corp.
Ya Tai Development Corp.
Formosa Automobile Corporation
Hwa Ya Technology Park Management Consulting Corporation
Formosa Environmental Technology Corporation

December 31,
2023
December 31,
2022
$ 95,893,554
89,018,096
76,598,468
75,212,016
6,664,662
7,161,374
631,603
3,122,370
13,805,045
9,768,599
7,395,360
7,216,118
1,237,189
1,210,265
5,572
22,825
19,651
19,667
19,646
19,662
390,857
508,991
4,299
4,140
234,962
231,815

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Formosa Resources Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Olefins, L.L.C. Lolita Packaging, L.L.C. Formosa Smart Energy Tech Corporation Joint ventures Formosa Asahi Spandex Co., Ltd. Formosa Daikin Advanced Chemical Co., Ltd. Formosa Mitsui Advanced Chemical Co., Ltd. Formosa Tokuyama Advanced Chemicals Co., Ltd.	December 31, 2023 $ 7,714,128 1,051,647 835,318 5,746,602 9,685 1,733,910 979,254 1,336,390 - 229,284 $ 222,537,086	December 31, 2022
		8,358,827 578,907 766,964 5,288,108 250 1,000,818 1,261,244 1,345,390 21,425 337,734
		212,475,605

The Group’s shares of net income (loss) of associates and joint ventures were as follows:

		For the years ended	For the years ended
		December 31,
		2023	2022
Associates
Formosa Petrochemical Corporation	$	6,234,378	4,218,733
Formosa Plastics Corp., U.S.A.		1,205,482	3,997,097
Formosa Heavy Industries Corp.		(617,732)	(590,385)
Sky Dragon Investment Limited		(2,489,269)	(1,487,779)
Mai Liao Power Corp.		3,104,370	(1,126,063)
Formosa Sumco Technology Corporation		1,005,129	1,401,186
Formosa Transportation Corp.		29,662	(15,579)
Formosa Fairway Corp.		(13,791)	(11,008)
Yi-Jih Development Corp.		(16)	(15)
Ya Tai Development Corp.		(16)	294
Formosa Automobile Corporation		76,565	216,682
Hwa Ya Technology Park Management Consulting
Corporation		128	419
Formosa Environmental Technology Corporation		3,126	2,586
Formosa Resources Corporation		(766,156)	(213,612)
Formosa Plastics Construction Corporation		(7,719)	(14,878)
Formosa Group (Cayman) Limited		68,656	31,789

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

		For the years ended	For the years ended
		December 31,
		2023	2022
Formosa Olefins, L.L.C.	$	460,389	(562,875)
Lolita Packaging, L.L.C.		9,570	76,206
Formosa Smart Energy Tech Corporation		(16,908)	818
Joint ventures
Formosa Asahi Spandex Co., Ltd.		(44,431)	3,551
Formosa Daikin Advanced Chemical Co., Ltd.		(8,842)	13,010
Formosa Mitsui Advanced Chemical Co., Ltd.		(179,361)	(59,537)
Formosa Tokuyama Advanced Chemicals Co., Ltd.		(108,450)	(119,365)
	$	7,944,764	5,761,275

(i) Associates

1) The information of the major associate of the investments accounted for using the equity method was as follows:

Associates Formosa Petrochemical Corporation Formosa Plastics Corp., U.S.A.	Relationship	Registration Country	Percentage of ownership
			December 31, 2023 December 31, 2022 % 28.56 % 28.56 % 22.66 % 22.66
	Formosa Petrochemical Corporation, the supplier of raw materials for the Group, engages in the manufacturing and sales of petroleum products and petrochemical raw materials. Formosa Plastics Corp., U.S.A, engages in the manufacturing and sales of oil, plastic raw materials, and petrochemical raw materials, and is also the sales target of the Group.	Taiwan U.S.A

The fair value of investments in publicly traded stocks of the major associate was as follows:

Formosa Petrochemical Corporation	December 31, 2023 $ 219,548,305	December 31, 2022
		218,460,086

The following is the aggregated financial information of the major associate, and necessary changes have already been made to the information therein concerning the associates' consolidated financial statements based on the IFRS as endorsed by FSC to reflect the fair value adjustments made at the time of acquisition and adjustment for accounting policy variations.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The financial information of Formosa Petrochemical Corporation was as follows:

		December 31,	December 31,
		2023	2022
Current assets	$	257,789,731	267,202,843
Non-current assets		158,371,896	154,578,625
Current liabilities		(44,489,619)	(69,784,532)
Non-current liabilities		(30,453,810)	(34,711,571)
Net asset	$	341,218,198	317,285,365
Net asset contributed to non-controlling interest of Formosa
Petrochemical Corporation	$	4,883,912	4,796,931
Net asset contributed to Formosa Petrochemical Corporation$		336,334,286	312,488,434
		For the years ended
		December 31,
		2023	2022
Revenue	$	712,576,194	848,048,496
Net income		21,875,854	14,399,662
Other comprehensive income (loss)		12,439,351	(22,673,007)
Total comprehensive income (loss)	$	34,315,205	(8,273,345)
Comprehensive (loss) income allocated to non-controlling
interest of Formosa Petrochemical Corporation	$	(8,458)	448,211
Comprehensive income (loss) allocated to Formosa
Petrochemical Corporation	$	34,323,663	(8,721,556)
	For the years ended December 31,
		2023	2022
Beginning balance of investments in major associate at	$	89,018,096	101,830,792
January 1
Total comprehensive income (loss) allocated to the
Company		9,838,584	(2,483,120)
Dividend Received		(2,992,604)	(10,338,086)
Share of net assets of affiliates as of December 31		95,864,076	89,009,586
Add: share premium acquired not according to
holding percentage		213	168
Add: Net adjustment		29,265	8,342
Total carrying amount of equity of the major associate as of
December 31	$	95,893,554	89,018,096

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The financial information of Formosa Plastics Corp., U.S.A. was as follows:

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net asset
Net asset contributed to non-controlling interest of Formosa
Plastics Corp., U.S.A.
Net asset contributed to Formosa Plastics Corp., U.S.A.
Revenue
Net income
Other comprehensive income (loss)
Total comprehensive income
Comprehensive income (loss) allocated to non-controlling
interest of Formosa Plastics Corp., U.S.A.
Comprehensive income allocated to Formosa Plastics
Corp., U.S.A.
Beginning balance of investments in major associate at
January 1
Total comprehensive income allocated to the Group
Dividend Received
Add: Net adjustment
Total carrying amount of equity of the major associate as of
December 31

December 31,
2023
December 31,
2022
$ 147,205,375
129,941,885
262,143,348
271,584,500
(19,393,491)
(18,827,535)
(39,884,496)
(40,225,300)
$
350,070,736
342,473,550
$
12,002,585
11,108,281
$
338,068,151
331,365,269
For the years ended December 31,
2023
2022
$
147,708,992
199,665,842
$ 6,217,686
16,829,791
2,132,493
(8,521,735)
$
8,350,179
8,308,056
$
897,277
(811,459)
$
7,452,902
9,119,515
For the years ended December 31
2023
2022
$ 75,212,016
67,037,893
1,478,637
9,523,955
-
(1,349,832)
(92,185)
-
$
76,598,468
75,212,016

2) The Group’s financial information for investments accounted for using the equity method that are individually insignificant was as follows:

that are individually insignificant was as follows:
Carrying amount of individually insignificant associates’ equity	December 31, 2023 $ 47,500,136	December 31, 2022
		45,279,700

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Attributable to the Group: Net income (loss) Other comprehensive income Total comprehensive income (loss)	For the years ended December 31, 2023 2022 $ 845,988 (2,292,214) 344,142 825,172 $ 1,190,130 (1,467,042)
	2023 $ 845,988 344,142 $ 1,190,130

3) On November 9, 2023, the Group participated in the capital increase by cash of Formosa Plastics Construction Corporation, an associate owned by the Group, with the total investment amounting to $500,000 thousand based on its original shareholding ratio of 25%.
4) On August 23, 2023, the Group participated in the capital increase by cash of Formosa Resources Corporation, an associate owned by the Group, with the total investment amounting to USD25,000 thousand (equivalent to $798,600 thousand) based on its original shareholding ratio of 25%.
5) On July 28, 2023, and May 31, 2022, the Group participated in the capital increase by cash of Formosa Smart Energy Tech Corporation, an associate owned by the Group, with the total investment amounting to USD750,000 thousand and $1,000,000 thousand based on its original shareholding ratio of 25%.

(ii) Joint ventures

The Group’s financial information for investments in individually insignificant joint venture accounted for using equity method at the reporting date was as follows. This financial information is included in the consolidated financial statements.

Individually insignificant joint venture Attributable to the Group: Net loss Other comprehensive income (loss) Total comprehensive loss	December 31, 2023 December 31, 2022 $ 2,544,928 2,965,793 For the years ended December 31, 2023 2022 $ (341,084) (162,341) 3,472 (448) $ (337,612) (162,789)

The Group invested in “Formosa Mitsui Advanced Chemical Co., Ltd.” (an investee accounted for using the equity method) and recognized the losses of $179,361 thousand for the year ended December 31, 2023. As of December 31, 2023, due to the agreement between the Group and the party to the joint venture to liquidate the investee company within one year, the Group’s cumulative losses from the above investment had already exceeded the book value of the long-term investment by $154,826 thousand, resulting in the Group reclassifying the investment to other current liabilities.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Collaterals

There are no investments accounted for using the equity method which were pledged to banks as collateral to secure the Group’s bank loans as of December 31, 2023 and 2022.

(g) Property, plant and equipment

The movements of cost and accumulated depreciation and impairments of property, plant and equipment of the the Group for the years ended 2023 were as follows:

Cost: Balance at January 1, 2023 Additions Disposals Reclassification Effect of exchange rate changes Balance at December 31, 2023 Balance at January 1, 2022 Additions Disposals Reclassification Effect of exchange rate changes Balance at December 31, 2022 Accumulated depreciation/ impairments: Balance at January 1, 2023 Depreciation for the period Disposals Reclassification Effect of exchange rate changes Balance at December 31, 2023 Balance at January 1, 2022 Depreciation for the period Disposals Reclassification Effect of exchange rate changes Balance at December 31, 2022 Carrying amounts: Balance at December 31, 2023 Balance at December 31, 2022	Land and land improvements $ 13,592,424 63,385 (380,870) 74,157 1,601 $ 13,350,697 $ 12,626,322 787,095 - - 179,007 $ 13,592,424 $ 407,863 129,291 - - (1,480) $ 535,674 $ 253,500 123,199 - - 31,164 $ 407,863 $ 12,815,023 $ 13,184,561	Buildings and constructions 29,715,939 54,699 (4,706) 22,974 (100,459) 29,688,447 29,443,105 170,529 (68,904) 22,125 149,084 29,715,939 19,825,915 861,967 (4,706) 611 (46,405) 20,637,382 18,981,780 872,438 (68,527) 670 39,554 19,825,915 9,051,065 9,890,024	Machinery and equipment 202,513,898 901,726 (1,388,977) 6,182,777 (684,285) 207,525,139 197,651,254 797,954 (969,762) 2,429,348 2,605,104 202,513,898 155,312,844 5,732,245 (1,308,014) (991) (485,541) 159,250,543 149,723,148 5,871,681 (965,571) (343) 683,929 155,312,844 48,274,596 47,201,054	Other facilities 8,831,877 645,348 (243,764) 218,417 (30,230) 9,421,648 8,142,779 584,139 (112,686) 181,366 36,279 8,831,877 6,049,487 708,642 (314,444) 991 (21,795) 6,422,881 5,555,347 583,276 (110,139) (281) 21,284 6,049,487 2,998,767 2,782,390	Construction in progress 34,257,454 11,944,020 - (6,644,275) (244,598) 39,312,601 23,993,354 12,435,747 - (2,280,731) 109,084 34,257,454 - - - - - - - - - - - - 39,312,601 34,257,454	Total 288,911,592 13,609,178 (2,018,317) (145,950) (1,057,971)
						299,298,532
						271,856,814 14,775,464 (1,151,352) 352,108 3,078,558
						288,911,592
						181,596,109 7,432,145 (1,627,164) 611 (555,221)
						186,846,480
						174,513,775 7,450,594 (1,144,237) 46 775,931
						181,596,109
						112,452,052
						107,315,483

(i) Collaterals

The property, plant and equipment pledged to secure bank loans as of December 31, 2023 and 2022, are described in Note 8.

(ii) As of December 31, 2023 and 2022, the Group’ s parcels of land with title temporarily registered under the names of third parties for trust purpose had carrying value as of $33,529 thousand which were recorded under property, plant and equipment. The Group has implemented a deed of trust with the authorities to secure the Group’s rights related to the abovementioned properties.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Please refer to Note 6(t) for further information about the capitalized interest on borrowings for the purchase of the property, plant and equipment and gain on disposal of property, plant and equipment.

(h) Right-of-use assets

The Group leases many assets including land and buildings, vehicle and machinery. Information about leases for which the Group is a leasee is presented below:

Cost: Balance at January 1, 2023 Additions Disposals Reclassifications Effect of exchange rate change Balance at December 31, 2023 Balance at January 1,2022 Additions Disposals Effect of exchange rate change Balance at December 31, 2022 Accumulated depreciation: Balance at January 1, 2023 Depreciation for the period Disposals Effect of exchange rate change Balance at December 31, 2023 Balance at January 1,2022 Depreciation for the period Disposals Effect of exchange rate change Balance at December 31, 2022 Carrying amount: Balance at December 31, 2023 Balance at December 31, 2022	Land $ 1,681,893 792,872 (15,877) 3,469 (16,348) $ 2,446,009 $ 1,186,465 627,248 (147,323) 15,503 $ 1,681,893 $ 56,974 98,093 (15,877) (847) $ 138,343 $ 52,479 60,407 (56,294) 382 $ 56,974 $ 2,307,666 $ 1,624,919	Buildings and constructions - - - - - - - - - - - - - - - - - - - - - - -	Total 1,681,893 792,872 (15,877) 3,469 (16,348) 2,446,009 1,186,465 627,248 (147,323) 15,503 1,681,893 56,974 98,093 (15,877) (847) 138,343 52,479 60,407 (56,294) 382 56,974 2,307,666 1,624,919

For the years ended December 31, 2023 and 2022, the Group increased the right-of-use assets, please refer to Notes 6(m). For the year ended December 31, 2022, the Group decreased the right-of-use assets, please refer to Notes 6(m).

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Short-term borrowings
(i) Short-term borrowings consisted of the following:

Short-term borrowings consisted of the following:
Unsecured short-term borrowings Interest rate	December 31, 2023 $ 23,466,921 1.650%~2.830%	December 31, 2022
		14,900,000
		0.776%~1.540%

(ii) Issuance and redemption of loans

Balance as of January 1, 2023 New issuance during the period Repayments during the period Effect of exchange rate change Balance as of December 31, 2023

Balance as of January 1, 2022 New issuance during the period Repayments during the period Balance as of December 31, 2022

For the years ended December 31, 2023 $ 14,900,000 158,969,929 (148,716,326) (1,686,682) $ 23,466,921 For the years ended December 31, 2022 $ 4,484,676 129,692,300 (119,276,976) $ 14,900,000

(j) Short-term notes and bills payable

December 31, 2023

Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Less: Discount on short-term notes and bills payable Total	Institutions	Interest rate Amount 1.400% $ 400,000 1.510%~1.545% 1,400,000 1.430%~1.545% 7,650,000 1.500%~1.545% 550,000 1.510% 1,000,000 1.405%~1.455% 2,700,000 1.430%~1.545% 3,550,000 1.430%~1.545% 8,200,000 1.554%~1.560% 3,800,000 1.500%~1.525% 1,500,000 30,750,000 (86,626) $ 30,663,374
	Union Bank of Taiwan Co., Ltd. International Bills Finance Corporation China Bills Finance Corporation Bank SinoPac Yuanta Commercial Bank Co., Ltd. Taishin International Bank Co., Ltd. Mega Bills Finance Co., Ltd. CTBC Bank Co., Ltd. E.SUN Commercial Bank, Ltd. Fubon Commercial Bank, Ltd.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Less: Discount on short-term notes and bills payable Total	December 31, 2022 Institutions Interest rate Amount Bank SinoPac 1.52% $ 950,000 Union Bank of Taiwan Co., Ltd. 1.50%~1.54% 600,000 International Bills Finance Corporation 1.52%~1.54% 7,500,000 China Bills Finance Corporation 1.52%~1.54% 2,850,000 Grand Bills Finance Corporation 1.52%~1.54% 1,950,000 CTBC Bank Co., Ltd. 1.52% 1,100,000 Yuanta Commercial Bank Co., Ltd. 1.54% 500,000 E.SUN Commercial Bank, Ltd. 1.55% 3,000,000 Taishin International Bank Co., Ltd. 1.36% 1,000,000 19,450,000 (19,135) $ 19,430,865
	Institutions
	Bank SinoPac Union Bank of Taiwan Co., Ltd. International Bills Finance Corporation China Bills Finance Corporation Grand Bills Finance Corporation CTBC Bank Co., Ltd. Yuanta Commercial Bank Co., Ltd. E.SUN Commercial Bank, Ltd. Taishin International Bank Co., Ltd.

Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Short-term notes and bills payable
Less: Discount on short-term notes and
bills payable
Total

December 31, 2022
Institutions
Interest rate
Amount
Bank SinoPac
1.52%
$ 950,000
Union Bank of Taiwan Co., Ltd.
1.50%~1.54%
600,000
International Bills Finance
Corporation
1.52%~1.54%
7,500,000
China Bills Finance Corporation
1.52%~1.54%
2,850,000
Grand Bills Finance Corporation
1.52%~1.54%
1,950,000
CTBC Bank Co., Ltd.
1.52%
1,100,000
Yuanta Commercial Bank Co., Ltd.
1.54%
500,000
E.SUN Commercial Bank, Ltd.
1.55%
3,000,000
Taishin International Bank Co., Ltd.
1.36%
1,000,000
19,450,000
(19,135)
$
19,430,865

Institutions

Bank SinoPac
Union Bank of Taiwan Co., Ltd.
International Bills Finance
Corporation
China Bills Finance Corporation
Grand Bills Finance Corporation
CTBC Bank Co., Ltd.
Yuanta Commercial Bank Co., Ltd.
E.SUN Commercial Bank, Ltd.
Taishin International Bank Co., Ltd.

(k) Long-term debts

(i) Long-term debts consisted of the following:

Unsecured long-term debts Less: Current portion Total Unsecured long-term debts Less: Current portion Total		December 31, 2023 Interest rate Expiration Amount 1.542%~1.746% 2024~2025 $ 22,905,502 (1,543,394) $ 21,362,108 December 31, 2022 Interest rate Expiration Amount 1.173%~1.52% 2023~2025 $ 11,437,383 (5,000,000) $ 6,437,383
	Currency	Interest rate
	NTD
	Currency	Interest rate
	NTD	1.173%~1.52%

(ii) Issuance and redemption of loan

Balance of January 1, 2023 New issuance during the period Repayments during the period Effect of exchange rate change Balance of December 31, 2023 Balance of January 1, 2022 New issuance during the period Repayments during the period Balance of December 31, 2022	Total $ 11,437,383 17,012,448 (5,475,226) (69,103) $ 22,905,502 Total $ 4,187,592 7,565,803 (316,012) $ 11,437,383

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Joint Credit Agreement

In order to secure working capital for its operational turnover, the Group has entered into a joint loan agreement with a consortium of seventeen financial institutions, with Hua Nan Commercial Bank as the lead bank, on April 14, 2023, as follows:

1) Credit line: $12,500,000 thousand.
2) Interest Rate: as settled with each participating bank.
3) Period: 3 years (including an 1-year extension).
4) The following financial ratios in the Company's annual audited and certified financial statements, included in the contractual restrictions, must comply with specified requirements. Failure to do so will result in the suspension of credit utilization or immediate repayment of outstanding loans:
- a) Current Ratio (Current Assets / Current Liabilities): Not less than one hundred percent.
- b) Debt Ratio (Total Liabilities / Net Worth): Not exceeding one hundred and fifty percent.
5) As of December 31, 2023, all financial ratios of the Group have complied with the provisions stated in the joint credit agreement.
(iv) Secured bank loans

The assets pledged to secure loans are described in Note 8.

(l) Bonds payable
(i) Bonds payable consisted of the following:

Domestic unsecured nonconvertible corporate bonds Less: current portion Total Expiry	December 31, 2023 $ 38,364,189 (3,699,403) $ 34,664,786 2023~2031	December 31, 2022 36,120,673 (8,846,341) 27,274,332 2022~2030

(ii) Issuance and redemption of Domestic unsecured nonconvertible corporate bonds
1) Issuance

Amount Interest rate Expiry	For the years ended December 31,	For the years ended December 31,
	2023 $ 11,100,000 1.55%~1.62% 2029`、`2031	2022
		-
		-
		-

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Repayment

Amount

For the years ended December 31,	For the years ended December 31,
2023 $ 8,850,000	2022
	9,400,000

(iii) The terms of domestic corporate bonds as of December 31, 2023 and 2022 were as follows:

Issue amount 2023.12.31Ending balance 2023.12.31Current portion 2022.12.31Ending balance 2022.12.31Current portion Issuance date Coupon rate Interest payment date Repayment method Issue amount 2023.12.31Ending balance 2023.12.31Current portion 2022.12.31Ending balance 2022.12.31Current portion Issuance date Coupon rate Interest payment date Repayment method	The first domestic unsecured nonconvertible corporate bond in 2013	The second domestic unsecured nonconvertible corporate bond in 2013	The first domestic unsecured nonconvertible corporate bond in 2014	The first domestic unsecured nonconvertible corporate bond in 2017
	$ 11,500,000 - - 749,243 749,243 June 10, 2013 1.23%`、`1.52% June 10 Payable in 2 equal installments for each different coupon rate in 2016~2017 and 2022~2023, respectively. The first domestic unsecured nonconvertible corporate bond in 2018	8,500,000 - - 3,148,922 3,148,922 November 8, 2013 1.42%`、`1.94% November 8 Payable in 2 equal installments for each different coupon rate in 2017~2018 and 2022~2023, respectively. The first domestic unsecured nonconvertible corporate bond in 2020	6,000,000 5,498,450 499,772 5,997,355 499,453 May 21, 2014 1.83%`、`1.92% May 21 Payable in 2 equal installments for each different coupon rate in 2023~2024 and 2025~2026, respectively. The first domestic unsecured nonconvertible corporate bond in 2021	7,000,000 1,849,631 1,849,631 3,698,683 1,849,052 May 19, 2017 1.09%`、`1.32% May 19 Payable in 2 equal installments for each different coupon rate in 2021~2022 and 2023~2024, respectively. The first domestic unsecured nonconvertible corporate bond in 2023
	$ 9,300,000 4,096,047 1,350,000 6,694,400 2,599,671 June 26, 2018 0.82%`、`0.93%`、`1.09% June 26 Payable in 2 equal installments for each different coupon rate in 2022~2023, 2024~2025 and 2027~2028, respectively.	8,350,000 8,343,176 - 8,341,396 - June 22, 2020 0.58%`、`0.63%`、`0.67% June 22 Payable in 2 equal installments for each different coupon rate in 2024~2025, 2026~2027 and 2029~2030, respectively.	7,500,000 7,492,637 - 7,490,674 - September 15, 2021 0.46%`、`0.52% September 15 Payable in 2 equal installments for each different coupon rate in 2025~2026, 2026~2027, and 2030~2031, respectively.	11,100,000 11,084,248 - - - June 27, 2023 1.55%`、`1.62% June 27 Payable in 2 equal installments for each different coupon rate in 2027~2028, and 2029~2030, respectively.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Lease liabilities

The carrying values of lease liabilities were as follows:

The carrying values of lease liabilities were as follows:
Current Non-current financial assets Please refer to Note 6 (u) the maturity analysis.	December 31, 2023 $ 60,234 $ 1,294,833	December 31, 2022
		26,811
		607,619

On December 31, 2023, the amounts of lease liabilities incurred from the rentals of land increased by $792,872 thousand, with the interest rates of 2.05%, maturing in October 2042. On December 31, 2022, the amounts of lease liabilities incurred from the rentals of land increased by $627,248 thousand, with the interest rates of 1.80% ~ 2.05%, maturing in October 2042. The amount of lease liabilities decreased due to early termination is $93,349 thousand.

The amounts recognized in profit or loss were as follows:

		For the years	ended
		December	31,
		2023	2022
Interest on lease liabilities	$	26,999	6,431
Expenses relating to short-term leases	$	144,196	126,894

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

Total cash outflow for leases	For the years ended December 31,	For the years ended December 31,
	2023 $ 243,430	2022
		180,401

(i) Real estate leases

As of December 31, 2023, the Group leases land and buildings for Ship berthing, loading, unloading, storage and transfer operations. The leases typically run for a period of 1 to 20 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Some leases provide for additional rent payments that are based on changes in the local price indices, or sales that the Group incurred at the leased store in the period. Some also require the Group to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined annually.

(ii) Other leases

The Group leases buildings with contract terms of one year or less. These leases are shortterm. The Group has elected not to recognize its right-of-use assets and lease liabilities for these leases.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Employee benefits

(i) Defined benefit plan

The movements in the present value of the defined benefit obligations and fair value of plan assets were as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2023 $ 8,451,672 (4,842,502) $ 3,609,170	December 31, 2022 8,805,303 (4,918,437) 3,886,866

The Group makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of the plan asset

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Group’ s Bank of Taiwan labor pension reserve account balance amounted to $4,776,892 as of December 31, 2023. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

Defined benefit obligations on January 1 Benefits paid Current service and interest costs Remeasurement of net defined benefit liabilities `－`actuarial losses arising from change in financial assumptions Decrease due to transfer of related party employees Defined benefit obligations on December 31	For the years ended December 31, 2023 2022 $ 8,805,303 9,286,451 (608,965) (596,555) 181,654 129,313 215,002 114,990 (141,322) (128,896) $ 8,451,672 8,805,303
	2023 $ 8,805,303 (608,965) 181,654 215,002 (141,322) $ 8,451,672

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Movements in fair value of defined benefit plan assets

Fair value of plan assets on January 1 Interest income Remeasurement of net defined obligation assets `－`return on plan assets (excluding interest income) Benefits already paid by the plan Contributions from employer Fair value of plan assets on December 31	For the years ended December 31, 2023 2022 $ 4,918,437 3,127,266 61,139 15,500 57,947 258,375 (305,252) (283,754) 110,231 1,801,050 $ 4,842,502 4,918,437
	2023 $ 4,918,437 61,139 57,947 (305,252) 110,231 $ 4,842,502

4) Expense recognized in profit or loss

The pension costs recognized in profit or loss for the years ended 2023 were as follows:

Current service costs Interest costs Operating costs Selling expenses Administrative expenses	For the years ended December 31,	For the years ended December 31,
	2023 $ 72,619 47,896 $ 120,515 $ 86,103 3,591 30,821 $ 120,515	2022
		83,293 30,520
		113,813
		80,907 3,251 29,655
		113,813

5) Remeasurement of net defined benefit assets recognized in other comprehensive income

Balance of January 1, Recognized in current period Balance of December 31,	For the years ended December 31, 2023 2022 $ 2,522,465 2,665,850 157,055 (143,385) $ 2,679,520 2,522,465
	2023 $ 2,522,465 157,055 $ 2,679,520

6) Actuarial assumptions

The following are the principal actuarial assumptions as of 2023:

Discount rate Rate of future salary increases	For the years ended December 31,
	2023 2022 % 1.25 % 1.25 % 2.85 % 2.85

Based on the actuarial report, the Group is expected to make contributions of $116,817 to the defined benefit plans for the one year period after the reporting date.

The weighted average duration of the defined benefit plan is 6.8 years.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

7) Sensitivity analysis

When calculating the present value of the defined benefit obligation, the Group should use judgments and estimates in determining the related actuarial assumptions at balance sheet date, including discount rate, expected return on plan assets and future salary increases. Any changes in actuarial assumptions may significantly impact the present value of the defined benefit obligation.

As of December 31, 2023 and 2022, the effects of the present value of the defined benefit obligation arising from changes in principal actuarial assumptions were as follows:

December 31, 2023 Discount rate (change 0.25%) Future salary increases (change 1.00%) December 31, 2022 Discount rate (change 0.25`％`) Future salary increases (change 1.00`％`)	Effect of defined benefit obligations Increase Amount Decrease Amount $ (106,393) 109,695 464,985 (421,270) (124,662) 128,681 539,611 (486,133)

The sensitivity analysis presented above may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. The sensitivity analysis adopts the same methods for determining the defined benefit assets at balance sheet date.

The same methods and assumptions are adopted in the two-year sensitivity analysis.

(ii) Defined contribution plan

The Group contributes an amount equal to 6% of the employee’s monthly wages to the Labor Pension personal account with the Bureau of the Labor Insurance in accordance with the provisions of the Labor Pension Act, under which, the Group is not required to bear the regulated or putative obligation subsequent to the payment of fixed-rate contribution.

The Group’s pension costs under the defined contribution pension plan amounted to $406,165 and $398,856 for the years ended 2023 and 2022, respectively.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Income tax

(i) The components of income tax for the years ended December 31, 2023 and 2022 were as follows:

Current income tax (benefits) expenses Deferred tax expenses The origination of temporary differences Income tax (benefits) expenses	For the years ended December 31,	For the years ended December 31,
	2023 $ (444,538) 103,460 $ (341,078)	2022 6,917,788 733,731 7,651,519

(ii) The amounts of income tax benefits (expenses) recognized in other comprehensive income were as follows:

		For the years ended	For the years ended
		December 31,
		2023	2022
Items that could not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit plan	$	31,411	(28,677)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign financial
statements	$	173,061	(154,405)

The income tax calculated at a statutory income tax rate on accounting income before income tax was reconciled with income tax expense recognized in profit or loss as follows:

Income tax using the Company’s domestic tax rate Effect of tax rates in foreign jurisdiction Tax- exempt income Tax effect on domestic investment income recognized under equity method and Non-deductible expenses Change in provision in prior periods Income tax expense	For the years ended December 31,	For the years ended December 31,
	2023 $ 1,399,326 12,279 (819,271) (408,405) (525,007) $ (341,078)	2022
		8,758,869 854,142 (1,688,366) (273,108) (18) 7,651,519

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Recognized deferred tax assets and liabilities

Movements in deferred tax assets and liabilities were as follows:

For the year ended December 31, 2023 Deferred tax assets Unrealized gross loss Unamortized fixed manufacturing expense Accrued pension liability Unamortized impairment loss on non-financial assets Unrealized foreign currency exchange loss Others Total Deferred tax liabilities Foreign investment income under equity method Accumulated translation adjustment Depreciation Others Total For the year ended December 31, 2022 Deferred tax assets Unrealized gross loss Unamortized fixed manufacturing expense Accrued pension liability Unrealized impairment loss on non-financial assets Unrealized foreign currency exchange loss Others Total Deferred tax liabilities Foreign investment income under equity method Unrealized foreign currency exchange gain Accumulated translation adjustment Depreciation Others Total	Beginning balance	Beginning balance	Recognized in income or loss
	$ - 32,346 855,873 185,895 24,797 152,924 $ 1,251,835 $ 19,010,020 285,445 69,812 4,504 $ 19,369,781 Beginning balance
		Beginning balance
	$ 7,826 11,773 1,310,337 220,420 9,699 402,832 $ 1,962,887 $ 18,945,319 7,996 131,040 79,436 229 $ 19,164,020

(iv) The Company’s income tax return for the year 2021 had been examined and approved by the R.O.C tax authorities.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Global minimum top-up tax

As of December 31, 2023, there have been no legislative or substantive legislative enactments on supplementary taxes in any country where the operations of the are located; hence, no related deferred income taxes have been recognized. Although the retrospective application of － Amendments to IAS 12 "International Tax Reform Pillar Two Model Rules" has no impact on its consolidated financial statements, the Group is closely monitoring the legislative developments related to the introduction of the Global minimum top-up tax in the jurisdictions where it operates.

The Group has applied the deferred tax accounting based on the temporary mandatory relief policy. Due to the impacts of the top-up tax, the income tax incurred by the Group during the year will be recognized as current tax. (see Note 4 (r)).

(p) Capital and other equity

As the year ended 2023 and 2022, the Company’s government registered total authorized capital and issued capital stock both amounted to $63,657,408, divided into $6,365,741 thousand shares of stock with $10 par value per share. All issued shares were paid up upon issuance.

(i) Capital surplus

The components of capital surplus were as follows:

Paid-in capital in excess of par value Treasury stock transactions Equity in capital surplus of investee companies Overdue unpaid directors’ remuneration and dividends Paid-in capital in excess of the par value derived from overseas corporate bond conversion	December 31, 2023 $ 8,130,081 16,263 203,039 482,961 2,997,503 $ 11,829,847	December 31, 2022
		8,130,081 16,263 202,809 450,641 2,997,503
		11,797,297

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Retained earnings

According to the Company’s Articles of Association, the Company’s annual net earnings, after providing for income tax and covering the losses of previous years, are first set aside for legal reserve at the rate of 10% thereof. However, this is not the case when the statutory surplus reserve has reached the amount of paid-in capital of the Company. In addition, a special reserve shall also be set aside as necessary. The remainder plus the undistributed earnings at the beginning of the same period, if any, should be distributed as part of the appropriation of earnings by the Board of Directors for resolution by the shareholders at the Annual Shareholders’ Meeting.

According to the Company’s Articles of Association, the Board of Directors is authorized to distribute cash dividends by the attendance of at least two-thirds of the directors and the resolution of a majority of the directors attended, and to report the distribution to the Shareholders’ Meeting; the distribution of stock dividends is proposed to the Shareholders’ Meeting for resolution.

The Company's business is a mature industry with table profits each year. The Company also adopts a dividend policy that combines cash dividends, capitalization from earnings, and capitalization from capital surplus. At least 50% of the Company's distributable earnings, after deducting legal reserve and special reserve, should be distributed as cash dividends, with cash dividends as the first priority, and the combined ratio of capitalization from earnings to capital surplus and from capitalization to capital surplus should not exceed 50% of the total dividends.The Company also adopts a dividend distribution policy, under which, net earnings after deducting the legal reserve and special reserve may first be distributed by way of cash dividends which shall be equal to at least fifty percent (50%) of the Company’s total dividend distribution every year. The capitalization of earnings and capital surplus shall not exceed fifty percent of the total dividends.

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a Shareholders’ Meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2) Special reserve

As the Company opted to avail of the exemptions allowed under IFRS 1 “ First-time Adoption of International Financial Reporting Standards” during the Company’s firsttime adoption of the IFRS endorsed by the FSC, unrealized revaluation increments and cumulative translation adjustments (gains) of $2,790,507 thousand under shareholders’ equity were reclassified to retained earnings.When the related assets are used, disposed of, or reclassified, the Company may reverse the appropriation of the special reserve in proportion to the original appropriation. The carrying amount of the special reserve amounted to $2,790,507 thousand as of December 31, 2023 and 2022, respectively.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

According to the regulations of the FSC, the Company is also required to set aside an additional special reserve, as part of the distribution of its annual earnings, equal to the difference between the amount of above-mentioned special reserve and net debit balance of the other components of stockholders’ equity, from the current period's profit or loss and the undistributed earnings of the previous period. The amount of debit balance of other stockholders' equity accumulated in prior periods should not be distributed as a special reserve from prior periods' undistributed earnings. If the amount of debit balance of other stockholders' equity is reversed, the reversed amount may be distributed as earnings.

3) Earnings distribution

The amounts of cash dividends for the 2022 earnings distribution had been approved at the board meeting held on March 10, 2023; while the 2021 earnings distribution had been approved during the shareholders’ meeting on June 9, 2022 as follows:

Dividends attributable to ordinary shareholders: Cash dividends	2022	2022	2022	2021 Dividends per share Amount 8.20 52,199,074	2021 Dividends per share Amount 8.20 52,199,074
	Dividends per share		Amount		Amount
	$ 4.20		26,736,112		52,199,074

(iii) Other equity

Balance at January 1, 2023 Exchange differences on foreign operations Exchange differences on associates and joint ventures accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates and joint ventures accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Share of cash flow hedge of associates and joint ventures Balance at December 31, 2023	Exchange differences on translation of foreign financial statements $ (603,353) (633,499) (687,684) - - - $ (1,924,536)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 51,638,474 - - 4,777,345 5,642,813 - 62,058,632	Gains (losses) on hedging instruments (77,910) - - - - 9,787 (68,123)	Revaluation surplus 1,002,593 - - - - - 1,002,593	Total 51,959,804 (633,499) (687,684) 4,777,345 5,642,813 9,787 61,068,566

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance at January 1, 2022 Exchange differences on foreign operations Exchange differences on associates and joint ventures accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates and joint ventures accounted for using equity method Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Revaluation surplus accounted for using equity method Share of cash flow hedge of associates and joint ventures Balance at December 31, 2022	Exchange differences on translation of foreign financial statements $ (12,738,403) 9,750,931 2,384,119 - - - - $ (603,353)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 94,230,777 - - (11,872,202) (30,720,101) - - 51,638,474	Gains (losses) on hedging instruments 10,962 - - - - - (88,872) (77,910)	Revaluation surplus - - - - - 1,002,593 -	Total 81,503,336 9,750,931 2,384,119 (11,872,202) (30,720,101) 1,002,593 (88,872) 51,959,804
				1,002,593

(q) Earnings per share

The basic earnings per share and diluted earnings per share were calculated as follows:

		For the years	ended
		December	31,
Basic earnings per share
Profit attributable to ordinary shareholders	$	7,337,709	36,142,868
Weighted-average number of ordinary shares (in thousands)		6,365,741	6,365,741
	$	1.15		5.68
Diluted earnings per share
Profit attributable to ordinary shareholders (diluted)	$	7,337,709	36,142,868
Weighted-average number of ordinary shares (basic) (in
thousands)		6,365,741	6,365,741
Effect of dilutive potential ordinary shares
Effect of employee share bonus		229		921
Weighted-average number of ordinary shares (diluted) (in
thousands)		6,365,970	6,366,662
	$	1.15		5.68

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Revenue from contracts with customers

(i) Disaggregation of revenue

		For the year	s ended Decembe	r 31, 2023
Plastic division $ 20,019,244 14,964,370 32,948,259 $ 67,931,873 $ 43,542,554 17,101,481 - - - - - - - - - - - - 7,287,838 $ 67,931,873	Polyolefin division 9,477,264 16,533,118 19,424,914 45,435,296 - - 13,006,148 14,865,175 17,312,267 - - - - - - - - - 251,706 45,435,296	Polypropylene division 5,150,678 18,039,399 3,777,112 26,967,189 - - - - - 24,615,423 2,351,766 - - - - - - - - 26,967,189 For the year	Tairylan division 5,516,264 16,265,286 10,580,444 32,361,994 - - - - - - - 15,453,199 8,099,772 2,934,163 3,532,123 - - - 2,342,737 32,361,994 s ended Decembe	Chemistry division 13,016,281 2,219,211 6,188,968 21,424,460 - - - - - - - - - - - 9,057,917 3,497,136 2,781,004 6,088,403 21,424,460 r 31, 2022	Others divisions 3,807,122 584,524 626,319 5,017,965 - - - - - - - - - - - - - - 5,017,965 5,017,965	Total 56,986,853 68,605,908 73,546,016
						199,138,777
						43,542,554 17,101,481 13,006,148 14,865,175 17,312,267 24,615,423 2,351,766 15,453,199 8,099,772 2,934,163 3,532,123 9,057,917 3,497,136 2,781,004 20,988,649
						199,138,777

	Polyolefin division 11,967,519 19,065,379 23,563,056 54,595,954 - - 13,738,016 18,307,564 22,388,140 - - - - - - - - - 162,234 54,595,954	Polypropylene division 6,304,047 21,688,909 3,643,742 31,636,698 - - - - - 28,487,174 3,149,524 - - - - - - - - 31,636,698	Tairylan division 7,772,232 20,793,031 13,430,248 41,995,511 - - - - - - - 20,628,874 10,617,443 4,364,813 3,383,921 - - - 3,000,460 41,995,511	Chemistry division 17,658,688 1,063,497 5,917,272 24,639,457 - - - - - - - - - - - 8,854,696 2,913,254 5,697,276 7,174,231 24,639,457	Others divisions 3,176,048 697,223 481,230 4,354,501 - - - - - - - - - - - - - - 4,354,501 4,354,501	Total 73,857,489 83,962,658 93,827,207
						251,647,354
						54,505,730 25,557,163 13,738,016 18,307,564 22,388,140 28,487,174 3,149,524 20,628,874 10,617,443 4,364,813 3,383,921 8,854,696 2,913,254 5,697,276 29,053,766
						251,647,354

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Contract balances

Notes receivable Accounts receivable (including related parties) Less: allowance for impairment Total Contract liabilities - unearned sales	December 31, 2023 $ 1,721,802 12,611,015 (83,234) $ 14,249,583 December 31, 2023 $ 1,309,623	December 31, 2022 1,996,187 13,938,981 (82,103) 15,853,065 December 31, 2022 2,002,962	January 1, 2022 5,806,161 19,880,501 (82,222) 25,604,440 January 1, 2022 2,038,073

For details on accounts receivable and allowance for impairment, please refer to Note 6(c).

The major change in the balance of the contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

The amounts of revenue recognized for the years ended December 31, 2023 and 2022 that were included in the contract liabilities balance at the beginning of the periods were $1,583,891 thousand and $1,090,741 thousand, respectively.

(s) Remunerations to employees

According to the Company’s Articles of Association, once the Company has annual profit, it should appropriate 0.05%~0.5% of the pre-tax net profit before deducting remunerations to employees. However, if the Company has accumulated deficits, an amount should be reserved to offset the deficits.

The remunerations to employees amounted to $8,989 thousand and $55,483 thousand for the years ended December 31, 2023 and 2022, respectively. These amounts were calculated using the Company’ s pre-tax income for each period before deducting the remunerations of employees multiplied by the proposed percentages of remunerations of employees as stated in the Company’s Articles of Association. These remunerations were expensed under operating costs or expenses for each period. If there are any subsequent adjustments to the actual remuneration amounts after the annual shareholders’ meeting, the adjustments will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year.

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

Interest income from bank deposits Other interest income	2023 $ 325,903 268,240 $ 594,143	2022
		189,372 190,645
		380,017

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other income

Rent income Dividend income	2023 $ 204,726 3,667,671 $ 3,872,397	2022
		198,841 8,441,831
		8,640,672

(iii) Other gains and losses

Gains on disposals of property, plant and equipment Foreign exchange gains Gains on financial assets at fair value through profit or loss Expected credit losses Other gains Other losses Finance costs Interest expense Less: capitalized interest Interest expense from bank loans Capitalized interest rate	2023 $ 391,153 (18,046) 78,878 (176,981) 767,722 (314,913) $ 727,813 2023 $ 2,485,255 (371,288) $ 2,113,967 1.060%~6.591%	2022 31,512 2,436,555 192,016 - 942,628 (352,451) 3,250,260 2022 1,389,856 (352,802) 1,037,054 1.33%~1.394%

(iv) Finance costs

(u) Financial Instruments

(i) Credit risk

1) Credit risk exposure

The Group is exposed to credit risk primarily from financial assets and contract assets.

2) Concentration of credit risk

The Group's revenue was not attributable to sales transactions with a single customer or to sales in a specific region. Therefore, accounts receivable have no obvious concentrated credit risk. To reduce credit risk, the Group regularly monitors and reviews the recoverable amount of the trade receivables to its clients, but the Group usually doesn’t ask its clients to provide collateral.

3) Receivables and debt securities

For credit risk exposure of notes and trade receivables, please refer to note 6(c).

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

Contractual cash flows	Within 6 months	6~12months	1~2years	Over 5 years
23,700,380 40,140,283 30,750,000 23,913,946 11,631,240 2,357,855 15,579,111 8,869,214 193,969 1,630,389	23,700,380 2,366,785 30,750,000 - 11,631,240 2,357,855 15,579,111 8,869,214 193,969 43,618	- 1,362,555 - 1,579,930 - - - - - 43,618	- 7,961,770 - 18,527,171 - - - - - 87,236	- 13,194,320 - - - - - - - 1,107,735
158,766,387	95,492,172	2,986,103	26,576,177	14,302,055
15,014,752 37,189,448 19,450,000 11,650,904 11,774,229 8,665,570 12,060,932 9,386,661 154,139 770,073	15,014,752 2,610,660 19,450,000 - 11,774,229 8,665,570 - 9,386,661 154,139 19,730	- 6,356,080 - 5,062,500 - - 12,060,932 - - 19,730	- 5,613,130 - 6,588,404 - - - - - 39,460	- 3,449,300 - - - - - - - 533,694
126,116,708	67,075,741	23,499,242	12,240,994	3,982,994

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Currency risk

1) Exposure to currency risk

The Group’s exposure to significant foreign currency risk was as follows:

Financial assets: Monetary items USD EUR JPY CNY Financial liabilities Monetary items USD EUR JPY	December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2022 Foreign currency (in thousand) Exchange Rate New Taiwan Dollars 51,414 30.7080 1,578,821 137 32.7026 4,480 54,235 0.2306 12,507 38 4.4091 168 72,899 30.7080 2,238,582 199 32.7026 6,508 23,333 0.2306 5,381	December 31, 2022 Foreign currency (in thousand) Exchange Rate New Taiwan Dollars 51,414 30.7080 1,578,821 137 32.7026 4,480 54,235 0.2306 12,507 38 4.4091 168 72,899 30.7080 2,238,582 199 32.7026 6,508 23,333 0.2306 5,381
	Foreign currency (in thousand)	Exchange Rate	New Taiwan Dollars		Exchange Rate New Taiwan Dollars 30.7080 1,578,821 32.7026 4,480 0.2306 12,507 4.4091 168 30.7080 2,238,582 32.7026 6,508 0.2306 5,381
	$ 268,567 1,603 55,243 636 41,034 1,246 176,488	30.7350 33.9755 0.2172 4.3394 30.7350 33.9755 0.2172	8,254,407 54,463 11,999 2,760 1,261,180 42,333 38,333	51,414 137 54,235 38 72,899 199 23,333

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the foreign currency exchange fluctuations on cash and cash equivalents, accounts receivable, other receivables, loans and borrowings, accounts payable and other payables which are denominated in different foreign currencies. A 1% depreciation of the NTD against the USD, EUR, JPY and CNY as the year ended of 2023 and 2022 would have decreased and increased the net income after tax by $69,818 and $6,545 for the years ended 2023 and 2022 respectively. This analysis is performed on the same basis assuming that all other variables remain constant and ignoring any impact of forecasted sales and purchases.

3) Foreign exchange gains and losses on monetary items

Since the Group has many kinds of functional currency, the information on foreign exchange gains (losses) on monetary items is disclosed by total amount. For the years 2023 and 2022, foreign exchange losses and gains (including realized and unrealized portions) amounted to $18,046 and $2,436,555, respectively.

(iv) Interest rate analysis

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

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to management internally, which also represents the Group management's assessment of the reasonably possible interest rate change.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

An increase 1% in interest rates mainly from loans with floating interest rates at the reporting date would have decreased net income by $463,724 thousand and $224,000 thousand for the years ended December 31, 2023 and 2022 with all other variable factors remaining constant. This is mainly due to the Group’s borrowing at variable rates.

(v) Other market price risk

For the years ended December 31, 2023 and 2022, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for comprehensive income as illustrated below:

comprehensive income as illustrated	below:	below:	below:	below:
Prices of securities at the reporting date	For the years ended December 31,
	2023		2022 Other comprehensive income after tax Net income 869,482 - (869,482) -
	Other comprehensive income after tax	Net income		Net income
Increasing 1% Decreasing 1%	$ 907,394 $ (907,394)	-		-
		-		-

(vi) Fair value of financial instruments
1) Fair value hierarchy

The fair value of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income (available for sale financial assets ) is measured on a recurring basis.

The carrying amounts and fair values of the Group's financial assets and liabilities, including the information on fair value hierarchy, were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and those equity investments in which the fair value cannot be reliably measured and without any quoted price in the open market, disclosure of fair value information is not required:

		December 31, 2023	December 31, 2023	December 31, 2023
Carrying value			Fair value
		Level 1	Level 2	Level 3 - -	Total
$ 1,641,598 1,641,598		-	1,641,598		1,641,598
	1,641,598	-	1,641,598		1,641,598

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2023	December 31, 2023	December 31, 2023
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - 18,408,990 382,492 18,791,482 - - - - 18,791,482 - - - - - - - - - - -	Total
	90,590,581 - - -	- 148,850 - -		90,590,581 148,850 18,408,990 382,492
	90,590,581	148,850		109,530,913
	- - -	- - -		- - -
	-	-		-
	90,590,581	1,790,448		111,172,511
	- - - - - - - - - -	- - - - - - - - - -		- - - - - - - - - -
	-	-		-

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2022	December 31, 2022	December 31, 2022
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - - 16,564,214 127,506 16,691,720 - - - - 16,691,720 - - - - - - - - - - -	Total
$ 1,562,720 1,562,720 86,772,334 175,825 16,564,214 127,506 103,639,879 17,110,163 15,725,559 11,973,034 44,808,756 $ 150,011,355 $ 36,120,673 19,430,865 14,900,000 11,437,383 11,208,420 11,774,229 8,665,570 9,386,661 153,533 634,430 $ 123,711,764	-	1,562,720		1,562,720
	-	1,562,720		1,562,720
	86,772,334 - - -	- 175,825 - -		86,772,334 175,825 16,564,214 127,506
	86,772,334	175,825		103,639,879
	- - -	- - -		- - -
	-	-		-
	86,772,334	1,738,545		105,202,599
	- - - - - - - - - -	- - - - - - - - - -		- - - - - - - - - -
	-	-		-

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Valuation techniques for financial instruments not measured at fair value

The Group’ s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

Financial liabilities measured at amortized cost

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

3) Valuation techniques for financial instruments measured at fair value

The fair value of the financial instruments traded in active markets is based on quoted market prices. The fair value of listed equity instruments is based on the market prices that were published at main stock exchanges.

If the financial instruments possessed by the Group have quoted market prices in active markets, the fair value was as follows:

The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined by reference to quoted market prices.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor.

4) Transfers between Level 1 and Level 2

Since the quoted prices in the emerging market were no longer active, the equity securities at fair value through other comprehensive income amounting to $196,300 thousand was transferred from Level 1 to Level 2 for the year ended December 31, 2022. There was no transfer between the fair value hierarchy levels for the year ended December 31, 2023.

5) Reconciliation of Level 3 fair values

Opening balance, January 1, 2023 Total gains and losses recognized: In other comprehensive income Proceeds from capital reduction Effect of exchange rate changes Ending balance, December 31, 2023	Fair value through other comprehensive income Unquoted equity instruments $ 16,564,214 1,846,850 (6,848) 4,774 $ 18,408,990

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Opening balance, January 1, 2022 Total gains and losses recognized: In other comprehensive income Proceeds from capital reduction Effect of exchange rate changes Ending balance, December 31, 2022	Fair value through other comprehensive income Unquoted equity instruments $ 24,910,619 (8,321,048) (4,250) (21,107) $ 16,564,214

6) The valuation procedures for fair value measurements being categorized within Level 3 are 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. According to the Group’s accounting policy, at the reporting date, the analysis of value changes of remeasured or reevaluated assets and liabilities is performed to ensure the reasonability of the evaluation results.
7) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

Most of the Group’ s financial instruments that use Level 3 inputs involve only one significant unobservable input. Only equity investment with no-active markets have multiple significant unobservable inputs.

Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income – unquoted equity instruments	Valuation technique Comparable Listed Companies Approach Net Asset Value Method	Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement Price to earnings ratio multiple, price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITDA multiple, discount for lack of marketability The estimated fair value would increase if the multiplier were higher Not applicable Not applicable

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

8) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The Group’ s measurement on the fair value of financial instruments is deemed reasonable despite different valuation models or assumptions may lead to different results. For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on profit or loss and other comprehensive income:

December 31, 2023 Financial assets at fair value through other comprehensive income – unquoted equity instruments December 31, 2022 Financial assets at fair value through other comprehensive income – unquoted equity instruments	Inputs Price to earnings ratio multiple price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITDA multiple, discount for lack of marketability Price to earnings ratio multiple price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITDA multiple, discount for lack of marketability	Recognized in other comprehensive income Change Favorable change Unfavorable change ± 1% $ 134,263 (134,263) ± 1% $ 122,719 (122,719)	Recognized in other comprehensive income	Recognized in other comprehensive income
				Unfavorable change
				(134,263)
				(122,719)

(v) Financial risk management

The Group seeks to ensure sufficient cost-efficient funding readily available when needed. The Group manages its exposure to credit risk, liquidity risk and market risk with the objective to reduce the potentially adverse effects the market uncertainties may have on its financial performance.

(i) Framework of risk management

Items	Risk Management Department	Risk Detection Computer audit & regular self audit; monthly budget meeting; finance supervisors meeting; internal audit department; and board meeting Computer audit & regular self audit; monthly budget meeting; finance supervisors meeting; internal audit department; and board meeting Purchase & sales meeting; operation performance meeting; R&D meeting; board meeting; and internal audit department
1. Interest rate, exchange rate, and inflation 2.Investments of high risk and leverage, loans to others, guarantees and endorsements, and trade of derivatives 3.R&D plans	General manager department; accounting department; finance department; and general management department General manager department; finance department; and general management department General manager department; technology department of each business division; and general management department

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Items	Risk Management Department	Risk Detection
4.Changes on significant domestic and international policies and regulations 5.Changes on technologies 6.Changes on corporate images 7.Merge and reinvestments 8.Expansion of factories 9.Centralization of purchases and sales 10.Changes of directors, controllers and major shareholders 11.Changes of management rights 12.Litigation and other affairs 13.Information Security	General manager department; manager department and technology department of each business division; legal department; and general management department Purchases & sales meeting; operation performance meeting; board meeting; and internal audit department General manager department; manager department of each business division; R&D center; and general management department Purchase & sales meeting; operation performance meeting; internal audit department; and board meeting General manager department; manager department of each business division; and general management department Purchase & sales meeting; operation performance meeting; and board meeting General manager department; manager department of each business division; and general management department Purchase & sales meeting; operation performance meeting; internal audit department; and board meeting General manager department; factory affair department of each business division; manager department; and general management department Purchase & sales meeting; operation performance meeting; internal audit department; and board meeting General manager department; manager department of each business division; purchase department; and general management department Weekiny marker price meeting; purchase & sales meeting; operation performance meeting; internal audit department; and board meeting General manager department; and shares management division of finance department Operation management meeting and board meeting General manager department; and general management department Operation management meeting and board meeting General manager department; general management department; and legal department Purchase & sales meeting; operation performance meeting; internal audit department; and board meeting General manager department; general management department; and general management department Operation management meeting; internal audit department; and board meeting

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group is exposed to credit risk from operating activities, primarily trade receivables, and from financing activities, primarily deposits, fixedincome investments and other financial instruments with banks.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

1) Accounts receivable and other receivables

To maintain the credit quality of receivables, a credit risk management policy has been established. Under this policy, each customer is analyzed individually regarding customer’ s financial situation, external and internal credit rating, historical trading record, and current economic condition which may affect customer’s payment ability. In addition, some methods are adopted to reduce the credit risk for specific customers, such as prepayment and insurance of accounts receivable.

2) Investments

The Group mainly invests in Petrochemical Industry, which belongs to mature industry with lower risk. In addition, the Group’s prudent management creates financial health without high-leveraged investment.

3) Guarantee

The Group’s endorsement policy is limited to endorsement of subsidiaries or associates with business relationship. The endorsed items are usually related to financing and import duty guarantee. Due to associates’ financial health created by prudent management, management of the Group believes that they are expecting no significant losses from endorsement.

(ii) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as much as possible, that it will always have sufficient current funds, such as cash and cash equivalent, securities with high liquidity and sufficient credit line from banks, to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Group’s reputation.

(iii) Market risk

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

1) Foreign currency risk

To protect against reductions in value and the volatility of future cash flows caused by changes in foreign exchange rates, the Group utilizes derivative financial instruments, including currency forward contracts and cross currency swaps, to hedge its currency exposure. These instruments help to reduce, but do not eliminate, the impact of foreign currency exchange rate movements.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Interest rate risk

The Group is exposed to interest rate risk arising from long-term borrowings at floating interest rates. To reduce the risk caused by floating interest rates, the Group utilized interest rate swap contracts to partially hedge its exposure.

(w) Capital management

Although business operated by the Group has reached the stage of maturity, a sufficient amount of capital is still required to support the operation of investee companies, construction and expand its production facilities and equipment.

The Group’s policy is to maintain adequate financial resources and operating plan to meet future operating capital, capital expenditure, research and development expenditure, loans reimbursement, and dividend distribution.

The Group uses debt to capital ratio to manage its capital. The debt to capital ratio is calculated by dividing the net liabilities by the total capital. Net liabilities derived from deducting cash and cash equivalents from total liabilities. Total capital includes common shares of stocks, capital surplus, retained earnings and net liabilities. The Group’s debt to capital ratio at the end of the reporting period was as follows:

Total liabilities Less: cash and cash equivalents Net liabilities Total equity Debt to capital ratio	December 31, 2023 $ 183,378,211 (6,147,041) 177,231,170 347,360,145 % 51.02	December 31, 2022 153,569,544 (17,110,163) 136,459,381 357,684,863 % 38.15

(x) Changes in liabilities arising from financing activities

Reconciliation of liabilities arising from financing activities was as follows:

Short-term borrowings Short-term notes and bills payable Long term debts (including current portion) Bonds payable (including current portion) Lease liabilities Loans from related parties Total liabilities from financing activities	January 1, 2023 $ 14,900,000 19,430,865 11,437,383 36,120,673 634,430 11,208,420 $ 93,731,771	Change in cash flows 10,253,603 11,300,000 11,537,222 2,250,000 (72,235) 4,364,948 39,633,538	Changes in non-cash - (67,491) - (6,484) 792,872 - 718,897	Effect of exchange rate changes (1,686,682) - (69,103) - - (187,595) (1,943,380)	December 31, 2023
					23,466,921 30,663,374 22,905,502 38,364,189 1,355,067 15,385,773
					132,140,826

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Short-term borrowings Short-term notes and bills payable Long term debts (including current portion) Bonds payable (including current portion) Lease liabilities Loans from related parties Total liabilities from financing activities	January 1, 2022 $ 4,484,676 2,099,824 4,187,592 45,509,254 147,607 13,568,100 $ 69,997,053	Change in cash flows 10,415,324 17,350,000 7,249,791 (9,400,000) (47,076) (3,731,462) 21,836,577	Changes in non-cash - (18,959) - 11,419 533,899 - 526,359	Effect of exchange rate changes - - - - - 1,371,782 1,371,782	December 31, 2022
					14,900,000 19,430,865 11,437,383 36,120,673 634,430 11,208,420
					93,731,771

(7) Related-party transactions:

(a) Name of related parties

Name of related party Relationship with the Group Formosa Petrochemical Corporation Associates Formosa Plastics Corp., U.S.A. Associates Formosa Heavy Industries Corp. Associates Mai Liao Power Corp. Associates Formosa Sumco Technology Corporation Associates Formosa Transportation Corp. Associates Formosa Plastics Corp., Texas Associates Formosa Smart Energy Tech Corporation Associates Formosa Resources Corporation Associates Formosa Group (Cayman) Limited Associates Hua Ya Power Corp. Associates Formosa Heavy Industries (Ningbo) Corp. Associates Formosa Resources Australia Associates Formosa Steel IB Associates Japan Formosa Sumco Technology Corp. Associates Fujian Fuxin Special Steel Co., Ltd. Associates Formosa Transportation (Ningbo) Corp. Associates Formosa Automobile Corporation Associates Formosa Plastics Construction Corporation Associates Formosa Asahi Spandex Co., Ltd. Joint venture Formosa Daikin Advanced Chemical Co., Ltd. Joint venture Formosa Mitsui Advanced Chemical Co., Ltd. Joint venture Formosa Tokuyama Advanced Chemicals Co., Ltd. Joint venture Nan Ya Plastics Corporation Other related parties Formosa Chemicals and Fiber Corporation Other related parties Chang Gung Medical Foundation Other related parties

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of related party

Nan Ya PCB Corporation Nan Chung Petrochemical Corporation Nan Ya Plastics (Guangzhou) Co,. Ltd. Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics (Huizhou) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. Nan Ya Plastics (Indonesia) Co., Ltd. Nan Ya Plastics Corporation America Formosa Industries Corp., Vietnam Formosa Taffeta Co., Ltd. Formosa INEOS Chemicals Corporation Formosa Biomedical Technology Corp. Formosa Carpet Co., Ltd. Formosa Idemitsu Petrochemical Corp. Hong Jing Resources Corp. Formosa Power (Ningbo) Co., Ltd. Formosa Waters Technology Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Plastics Marine Corp. Formosa Group Ocean Marine Corp. Formosa Ha Tinh Steel Corporation Nan Ya Technology Corporation Nan Ya Plastics Corporation USA Inteplast Taiwan Corporation Formosa Ha Tinh (Cayman) Ltd. Xiamen Chang Gung hospital Formosa Port (Ningbo) Co., Ltd. Chang Gung Biotechnology Corporation Formosa Technologies Corporation Inteplast Group Chang Gung University Kaohsiung Cultural Foundation of Brothers Wang Yung-ching and Wang Yung-tsal Park

Relationship with the Group

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 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 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 Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Significant transactions with related-parties

(i) Sales to related parties

The amounts of significant sales by the Group to related parties were as follows:

Associates Joint ventures Other related parties	For the years ended December 31,	For the years ended December 31,
	2023 $ 11,182,510 388,280 18,998,795 $ 30,569,585	2022
		14,931,649 295,979 26,573,001
		41,800,629

The receivables from related parties were as follows:

Associates Joint ventures Other related parties	December 31, 2023 $ 1,447,810 26,641 1,712,333 $ 3,186,784	December 31, 2022
		2,039,652 39,250 2,118,486
		4,197,388

The selling prices and collection terms of sales to related parties are not significantly different from those with the third-party customers, and receivables are collected on the 27th of the month following the month of sales. The terms of receivables from other foreign related parties are O/A 60 days, O/A 90 days or L/C at sight.

(ii) Purchase from related parties

The amounts of significant purchases by the Group from related parties were as follows:

Associates Formosa Petrochemical Corporation Other Other related parties	For the years ended December 31,	For the years ended December 31,
	2023 $ 66,063,456 9,599,400 4,307,112 $ 79,969,968	2022
		78,588,953 9,646,525 4,281,821
		92,517,299

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The payables from related parties were as follows:

Associates Formosa Petrochemical Corporation Other Other related parties	December 31, 2023 $ 4,038,790 527,668 226,085 $ 4,792,543	December 31, 2022
		5,562,011 428,704 337,610
		6,328,325

The purchase prices and payment terms of purchase with related parties are not significantly different from those with third-party vendors, and payables are paid on the 27th of the month following the month of purchase.

(iii) Property transactions
1) Sales of equipment (recognized as property, plant and equipment) to related parties were as follows ：

Associates	For the years ended December 31, 2023	For the years ended December 31, 2023		For the years ended December 31, 2022	For the years ended December 31, 2022
	Disposal price $ 791,571	Gain from disposal		Disposal price -	Gain from disposal
		410,701			-

The group has no outstanding balance from related transactions at the end of the period.

2) Purchase of equipment (recognized as property, plant and equipment) from related parties were as follows ：

Associates Joint ventures Other related parties	For the years ended December 31,	For the years ended December 31,
	2023 $ 2,101 8,589 420,566 $ 431,256	2022
		- - 1,300,192
		1,300,192

The outstanding balance of the Group at the end of the period is as follows (recognized as other payable-related parties):

Other related parties	December 31, 2023 $ 53,788	December 31, 2022
		411

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Acquisition of financial assets

The group has no related transactions for the year ended December 31, 2022.

Associates- Formosa Resources Corporation Formosa Smart Energy Tech Corporation Formosa Plastics Construction Corporation	Financial Statement Account Number of Shares (in thousands) Investments accounted for using equity method 79,860 Investments accounted for using equity method 75,000 Investments accounted for using equity method 50,000	Transaction Shares For the years ended December 31, 2023 Shares of stock of Formosa Resources Corporation $ 798,600 Shares of stock of Formosa Smart Energy Tech Corporation 750,000 Shares of stock of Formosa Plastics Construction Corporation 500,000 $ 2,048,600

(iv) Loans to related parties

The Group’s loans to related parties were as follows:

Associates Formosa Heavy Industries Corp. Formosa Heavy Industries (Ningbo) Corp. Other Joint ventures Other related parties Formosa Group Ocean Marine Corp. Less : Impairment	Due from related parties (recognized as other receivables-related parties)	Due from related parties (recognized as other receivables-related parties)
	December 31, 2023 $ 300,000 14,765,617 1,622,500 433,900 567,227 (173,578) $ 17,515,666	December 31, 2022
		2,900,000 2,746,904 - 690,474 2,452,654 -
		8,790,032

As of December 31, 2023 and 2022, the interest income receivables from the abovementioned transactions amounted to $118,721 thousand and $68,230 thousand, respectively, which were recognized as other receivables-related parties.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2)

Associates Formosa Plastics Corp., U.S.A. Other related parties Formosa Power (Ningbo) Co., Ltd.	Due to related parties (recognized as other payables– related parties) December 31, 2023 December 31, 2022 $ 13,216,050 11,208,420 2,169,723 - $ 15,385,773 11,208,420	Due to related parties (recognized as other payables– related parties) December 31, 2023 December 31, 2022 $ 13,216,050 11,208,420 2,169,723 - $ 15,385,773 11,208,420
	December 31, 2023 $ 13,216,050 2,169,723 $ 15,385,773
		11,208,420 -
		11,208,420

As of December 31, 2023 and 2022, the accrued interest expenses from the abovementioned transactions amounted to $83,659 thousand and $52,769 thousand, respectively, which were recognized as other current liabilities.

(v) Endorsements and guarantees

The Group’ s endorsements and guarantees to secure related parties’ loans were as follows:

Associates Formosa Group (Cayman) Limited	December 31, 2023 $ 7,683,750	December 31, 2022
		7,677,000

(vi) Other transactions

1) The Group’ s income received from related parties, such as sewage treatment income, wharf usage income and ocean outfall pipe usage income was as follows:

Associates Joint ventures Other related parties	Other receivables–related parties	Other receivables–related parties
	December 31, 2023 $ - - 3,426 $ 3,426	December 31, 2022
		12 4 43,372
		43,388

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) The Group’s expenses paid to related parties, such as usage of water, power and steam, were as follows:

were as follows:
Associates Other related parties	Other payables–related parties
	December 31, 2023 $ 1,690,576 265,730 $ 1,956,306	December 31, 2022 2,659,669 269,627 2,929,296

(vii) Advances to related parties
1) The Group paid for service fees on behalf of related parties as follows:

Associates Fujian Fuxin Special steel Co., Ltd.	Other receivables–related parties	Other receivables–related parties
	December 31, 2023 $ 1,316,734	December 31, 2022 1,590,609

(viii) Leases (recognized as other income)

The rental income of the Group from leasing its office and buildings to related parties, were as follows:

		For the years ended	For the years ended
		December 31,
		2023	2022
Associates
Formosa Heavy Industries Corp.	$	57,801	58,221
Other		25,893	18,893
Joint ventures
Formosa Daikin Advanced Chemical Co., Ltd.		21,490	17,397
Other		13,097	8,625
Other related parties
Nan Ya Plastics Corporation		21,974	25,839
Formosa Chemicals Industries (Ningbo) Co., Ltd.		17,415	39,009
Other		19,901	14,371
	$	177,571	182,355

The rentals charged to related parties are determined based on the local market prices, and rents are collected depending on the contract periods (e.g. monthly, semi-annually or annually).

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Key management personnel compensation

Key management personnel compensation comprised:

		For the years	ended
		December	31,
		2023	2022
Short-term employee benefits	$	55,568	69,758

(8) Assets pledged as security:

The carrying amounts of assets pledged as security were as follows:

Assets pledged as security Liabilities secured by pledge Property, plant and equipment Land and building Refundable deposits (classified under other non- current assets) Certificate of deposit	December 31, 2023 $ 2,151,901 111,986 $ 2,263,887	December 31, 2022
		2,153,375 108,699
		2,262,074

(9) Significant commitments and contingencies:

(a) The amounts of endorsements and guarantees for related parties were as follows:

Endorsements and guarantees	December 31, 2023 $ 7,683,750	December 31, 2022 7,677,000

(b) The amounts of unused outstanding letters of credit for the importation of raw materials for related parties were as follows:

Unused standby letters of credit	December 31, 2023 $ 283,422	December 31, 2022 342,113

(c)(i) As of December 31, 2023, the Company’s investee, Formosa Ha Tinh (Cayman) Ltd. and Formosa Ha Tinh Steel Corporation, signed several contracts of syndicated credit lines with different banks amounting to USD 4,848,500 thousand and USD 2,453,500 thousand for their operational needs, respectively. According to the requirement of the bank consortium, the Company, together with the other related parties, have to issue a letter of undertaking and to manage the necessary funds to fulfill the repayment of obligations when needed.

(ii) As of December 31, 2023, Formosa Steel IB Pty Ltd., a subsidiary of the Company’ s investee, Formosa Resources Corporation, signed several contracts of syndicated credit lines with different banks amounting to USD 695,000 thousand for its operational needs. According to the requirement of the bank consortium, the Company, together with the other related parties, have to issue a letter of undertaking based on its ownership of 25% and commit to monitor the operations of Formosa Steel IB Pty Ltd. to ensure that it completes its financial obligation.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii)As of December 31, 2023, the Company' s investee, Formosa Resources Corporation, signed several contracts of syndicated credit lines with different bank amounting of USD 430,000 thousand for its operational needs, respectively. According to the requirement of the bank consortium, the Company, together with the other related parties, have to issue a letter of undertaking based on its ownership of 25% and commit to monitor the operations of Formosa Resources Corporation to ensure that it completes its financial obligation.
(iv) As of December 31, 2023, Formosa Resources Australia Pty Ltd., the subsidiaries of the Company' s investee Formosa Resources Corporation' s , signed several contracts of syndicated credit lines with different bank amounting to USD 550,000 thousand for its operational needs, respectively. According to the requirement of the bank consortium, the Company, together with the other related parties, have to issue a letter of undertaking based on its ownership of 25% and commit to monitor the operations of Formosa Resources Australia Pty Ltd. to ensure that it completes its financial obligation.

(10) Losses due to major disasters: None

(11) Subsequent events:

(a) The Company resolved in its board meeting held on January 22, 2024 to purchase 50% equity interest of Taiwan Tokuyama Corporation, a wholly-owned subsidiary of Japan Tokuyama Corporation, with the initial purchase price of $574,081 thousand, wherein the total consideration (capped at $1,100,000 thousand) will be subject to reevaluation following the auditor's report of Taiwan Tokuyama Corporation for the year ended December 31, 2025.
(b) Fujian Fuxin Special Steel Co., Ltd, an investee of the Company in mainland China, conducted a cash capital increase, at the amount of USD 1,450,000 thousand, in order to repay its loans and improve its financial structure, in which the Company participated by investing the amount of USD 530,000 thousand through a third-party entity, Sky Dragon Investment Limited(Samoa), based on a resolution decided during its board meeting held on March 6, 2024, resulting in the Company's cumulative investment to increase to USD 955,800, thousand, representing 32.84% of its subsidiary’s capital of USD 2,910,000 thousand.

(12) Others:

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

	For the years ended December 31, 2023	For the years ended December 31, 2023	For the years ended December 31, 2023	For the years ended December 31, 2023	For the years ended December 31, 2022	For the years ended December 31, 2022	For the years ended December 31, 2022	For the years ended December 31, 2022
	Operating costs	Operating expenses	Non- operating expenses	Total	Operating costs	Operating expenses	Non- operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	5,848,405 529,417 353,651 - 264,560 5,624,235 369,374	4,502,612 300,878 173,029 9,610 81,699 1,905,891 140,518	- - - - - 112 27,883	10,351,017 830,295 526,680 9,610 346,259 7,530,238 537,775	6,049,906 504,415 348,665 - 321,691 5,725,032 835,507	4,781,756 297,846 164,004 9,720 99,559 1,783,203 98,346	- - - - - 2,766 11,418	10,831,662 802,261 512,669 9,720 421,250 7,511,001 945,271

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The followings were the information on significant transactions required by the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the years ended December 31, 2023:

(i) Fund financing to other parties (the amounts expressed in CNY are in thousands):

(In Thousands of New Taiwan Dollars)

No.	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Colla	teral	Individual funding loan limits	Maximum limit of fund financing	Note
													Item	Value
0 0 0 0 0 0 0 0 1 1 2 2	The Company The Company The Company The Company The Company The Company The Company The Company Formosa Industries(Ning bo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Electronics (Ningbo) Co., Ltd. Formosa Electronic (Ningbo) Co., Ltd.	Formosa Petrochemical Corp. Formosa Chemicals & Fiber Corp. Nan Ya Plastic Corp. Formosa Heavy Industries Corp. Formosa Sumco Technology Corporation Formosa Steel IB Formosa Group Ocean Marine Corp. Japan Formosa Sumco Technology Corp. Formosa Mitsui Advanced Chemical Co., Ltd. Formosa Heavy Industries (Ningbo) Corp. Formosa Heavy Industries (Ningbo) Corp. Formosa Industries (Ningbo) Co., Ltd.	Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	8,500,000 8,500,000 8,500,000 8,400,000 6,000,000 1,700,000 3,754,862 540,000 1,061,319 (CNY244,600) 17,577,289 (CNY4,051,000) 251,662 (CNY58,000) 303,730 (CNY 70,000)	4,500,000 4,500,000 4,500,000 6,000,000 - 1,622,500 657,227 - 433,900 (CNY100,000) 14,513,955 (CNY3,345,000) 251,662 (CNY58,000) 303,730 (CNY 70,000)	- - - 300,000 - 1,622,500 567,227 - 433,900 (CNY100,000) 14,513,955 (CNY3,345,000) 251,662 (CNY58,000) 303,730 (CNY 70,000)	1.994% 1.994% 1.994% 1.864% ~ 1.994% 1.994% 1.994% 1.864% ~ 1.994% 1% 2.760% ~ 2.960% 2.760% ~ 2.960% 2.760%~ 2.920% 2.760%	2 2 2 2 2 2 2 2 2 2 2 2	- - - - - - - - - - - -	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - - - - - 173,578 - - -	- - - - - - - - - - - -	- - - - - - - - - - - -	69,472,029 69,472,029 69,472,029 69,472,029 69,472,029 69,472,029 69,472,029 69,472,029 21,329,179 21,329,179 267,087 333,859	138,944,058 138,944,058 138,944,058 138,944,058 138,944,058 138,944,058 138,944,058 138,944,058 53,322,946 53,322,946 667,718 667,718	Note 4 Note 4 Note 4 Note 4

Note 1: (1) Those with business contact please fill in 1

(2) Those necessary for short-term financing please fill in 2.

Note 2: (1) Capital loaned to other parties should not exceed 50% of the lender’s net worth, of which the sum loaned to non-interested parties for capital requirements should not exceed 40% of the net worth of borrower.

(2) The cap amount of loans to associates and interested parties should not exceed 25% of the equity of the lenders. Other parties should not exceed 20% of the lender’s net worth.

(3) Subsidiaries’ capital loaned to associates and interested parties should not exceed 50% of the equity of the lenders. Other parties should not exceed 40% of the lender’s net worth. However, subsidiaries' capital loaned to the parties located in non-Taiwan and directly or indirectly held by the company 100% of the shares should not exceed 50% of the lender' s net worth. However, subsidiaries' capital loaned to the parties located in nonTaiwan and directly or indirectly held by the company 100% of the shares should not exceed 50% of the lender' s net worth.

(4) The subsidiaries’ cap amount of loans to other parties should not exceed 100% of its equity. Non-intereseted parties should not exceed 40% of its net worth. However, subsidiaries’ capital loaned to the parties located in non-Taiwan and directly or indirectly held by the company 100% of the shares are not limited.

Note 3: The ending balance was approved by the Board of Directors.

Note 4: The exchange rate of New Taiwan dollars to CNY dollars was 4.339 to 1.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company (Note 2)
0	The Company	Formosa Group (Cayman) Limited	6	225,784,095	8,104,750	7,683,750	7,683,750	-	% 2.21	451,568,189	N	N	N

Note 1: The guarantees and endorsements of the Company and its subsidiaries were listed in the form of numbers with the rules below:

(1) The Company is represented by 0.

(2) The subsidiaries are represented numerically starting from 1.

Note 2: There are seven conditions in which the Company may have guarantees or endorsements for other parties as follows:

(1) The Company has business relationship.

(2) The Company holds directly and indirectly more than 50% of the voting shares of the subsidiaries.

(3) In aggregate, the Company holds directly or its subsidiaries hold indirectly more than 50% of the investee.

(4) Subsidiaries in which the Company holds directly or indirectly more than 90% of the voting shares make endorsement and guarantees for each other.

(5) The Company is required to provide guarantees or endorsements for the construction project based on the construction contract.

(6) The stockholders of the Company provide guarantees or endorsements for the investee in proportion to their stockholding percentage.

(7) According to Consumer Protection Act, companies are required to provide guarantees and endorsements for joint and several liability if take part in business of preconstruction real estate.

Note 3: The total amount of guarantees and endorsements by the Company shall not exceed 1.3 times of the Company’s net asset, and the amount of guarantees and endorsements for a specific enterprise shall not exceed 50% of the aforementioned total amount

(iii) Information regarding securities held at the reporting date (subsidiaries, associates and joint ventures not included):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance	Ending balance	Highest	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value	Percentage of ownership (%)
The Company The Company The Company The Company The Company The Company The Company	Asian Pacific Investment Corp. Mai-Liao Harbor Administration Corp. Taiwan Aerospace Corp. Chinese Television System Inc. China Investment & Development Co., Ltd. Formosa Plastics Development Corp. Xiangho Aircraft Leasing Corp.	Other related parties - - - - - -	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	68,743 39,574 1,103 1,769 1,287 20,471 2,071	2,335,200 1,147,440 29,505 67,336 11,628 257,935 -	% 16.17 % 17.99 % 0.81 % 1.05 % 0.80 % 18.00 % 9.55	2,335,200 1,147,440 29,505 67,336 11,628 257,935 -	% 16.17 % 17.99 % 0.81 % 1.05 % 0.80 % 18.00 % 9.55

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance		Highest	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value	Percentage of 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 The Company The Company Formosa Plastics Corp. (Cayman Ltd)	Formosa Petrochemical Transportation Corporation, Ltd. Formosa Technologies Corporation Formosa Plastics Marine Corp. Formosa Group Ocean Investment Corp. Formosa Plastics Maritime Corp. Guangyuan Investment Corp. Central Leasing International Corp. Inteplast Taiwan Corporation Mega Growth Venture Capital Co., Ltd. Minima Technology Co., Ltd. Formosa Ha Tinh (Cayman) Limited Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Nan Ya Technology Corp. Puriblood medical Co,.Ltd Mega Prosperity Private Placement Fund Swancor (Jiangsu) Carbon Fiber Composite Co., Ltd.	- 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- 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 Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current 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 Financial assets at fair value through other comprehensive income- non-current	2,642 2,925 11,657 3 354 3,750 2,373 2,160 1,390 7,405 621,178 783,357 198,744 334,815 1,300 4,554 -	96,758 265,371 501,865 6,307,880 190,447 31,275 - 54,810 11,039 126,551 6,873,089 18,308,129 52,093,232 12,381,747 26,115,602 148,850 90,739,431 1,641,598 100,861	% 12.00 % 12.50 % 15.00 % 19.00 % 18.11 % 3.91 % 1.43 % 18.00 % 1.97 % 18.81 % 11.43 % 9.88 % 3.39 % 10.81 % 9.14 - % 16.11	96,758 265,371 501,865 6,307,880 190,447 31,275 - 54,810 11,039 126,551 6,873,089 18,308,129 52,093,232 12,381,747 26,115,602 148,850 90,739,431 1,641,598 100,861	% 12.00 % 12.50 % 15.00 % 19.00 % 18.11 % 3.91 % 1.43 % 18.00 % 1.97 % 19.07 % 11.43 % 9.88 % 3.39 % 10.81 % 9.14 % 25.00 % 16.11

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of $300 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Category and name of security	Account name	Name of counter-party	Relationship with the company	Beginning Balance	Beginning Balance	Purchases	Purchases	Sales	Sales	Sales	Sales	Ending Balance	Ending Balance
					Shares (thousands)	Amount	Shares (thousands)	Amount	Shares (thousands)	Price	Cost	Gain (loss) on disposal	Shares (thousands)	Amount
The Company The Company The Company	Securities - Formosa Smart Energy Tech Corporation Securities - Formosa Plastics Construction Corporation Securities- Formosa Resources Corporation	Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method	Formosa Smart Energy Tech Corporation Formosa Plastics Construction Corporation Formosa Resources Corporation	Associates Associates Associates	100,000 60,000 830,047	1,000,818 578,907 8,358,827	75,000 50,000 79,860	750,000 500,000 798,600	- - -	- - -	- - -	- - -	175,000 110,000 909,907	1,733,910 (Note 1) 1,051,647 (Note 2) 7,714,128 (Note 3)

Note 1 : The ending balance includes the share of profit of associates and joint ventures accounted for using equity method of $(16,908) thousand.

Note 2: The ending balance includes the share of profit of associates and joint ventures accounted for using equity method of $(7,719) thousand and other of $(19,541) thousand.

Note 3: The ending balance includes the share of profit of associates and joint ventures accounted for using equity method of $(766,156) thousand and accumulated translation adjustment of $(677,143) thousand.

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

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

Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:	Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:
(In Thousands of New Taiwan Dollars)
Name of company	Type of property	Transaction date	Acquisition date	Book value	Transaction amount	Collection status	Gain from disposal	Counter-party	Nature of relationship	Purpose of disposal	Price reference	Other terms
The Company	Land and Building	2023.03.10	2007.01.30	380,870	791,571	Collected in full	410,701	Formosa Sumco Technology Corporation	Associates	Disposal of idle land	Valuation Report

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

(In Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship		Transaction details	Transaction details	Transaction details	Transactions wit from	h terms different others	Notes/Accounts	receivable (payable)	Note
			Purchases/Sales	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The Company The Company The Company The Company	Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Formosa Petrochemical Corporation Formosa Heavy Industries Corp. Formosa Tokuyama Advanced Chemicals Co., Ltd. Formosa Taffeta Co. Ltd. Inteplast Taiwan Corporation	Other related parties `〃` Associates Associates Joint venture Other related parties Other related parties	(Sales) `〃` `〃` `〃` `〃` `〃` `〃`	(9,612,342) (3,959,026) (7,004,036) (110,891) (259,856) (179,834) (199,518)	% 6.39 % 2.63 % 4.66 % 0.07 % 0.17 % 0.12 % 0.13	Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month	- - - - - - -		779,662 286,587 387,859 3,524 15,688 8,332 17,636	7.16% 2.63% 3.56% 0.03% 0.14% 0.08% 0.16%

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchases/Sales	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries U.S.A Co. Ltd The Company The Company The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd. Formosa Industries U.S.A Co. Ltd.	Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Industries Corp., Vietnam Formosa Industries (Ningbo) Co., Ltd. Formosa Sumco Technology Corporation Formosa Plastics Corp., U.S.A. The Company Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Inteplast Group Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Formosa Petrochemical Corporation Formosa Heavy Industries Corp. Formosa INEOS Chemicals Corporation Formosa Industries (Ningbo) Co., Ltd. The Company Formosa Plastics U.S.A Co. Ltd.	Other related parties Other related parties Parent- subsidiary Associates Associates Parent- subsidiary Other related parties `〃` Other related parties Other related parties Other related parties `〃` Associates `〃` Other related parties Parent- subsidiary `〃` Associates	(Sales) `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Purchases `〃` `〃` `〃` `〃` `〃` `〃` Purchases	(1,420,194) (220,050) (7,133,843) (125,548) (3,530,312) (966,553) (795,817) (159,216) (405,905) (1,373,065) 1,239,682 2,658,645 66,063,456 1,429,796 144,267 966,553 14,906,312 8,040,094	% 0.94 % 0.15 % 4.74 % 0.08 % 2.35 % 2.11 % 1.74 % 0.35 % 0.89 % 12.54 % 1.07 % 2.30 % 57.15 % 1.24 % 0.12 % 0.84 % 37.17 % 91.69	O/A 60 days O/A 60 days O/A 90 days O/A 90 days O/A 90 days Before the 30th of the following month Before the 30th of the following month Before the 30th of the following month Before the 30th of the following month Before the 10th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month Before the 90th of the following month Before the 30th of the following month O/A 90 days Before the 10th of the following month	- - - - - - - - - - - - - - - - - -		318,384 28,625 1,051,441 8,837 1,041,843 20,022 76,125 15,579 37,845 94,302 (72,623) (129,235) (4,038,790) - (12,406) 20,022 1,108,858 517,512	2.93% 0.26% 9.66% 0.08% 9.57% 0.56% 2.13% 0.44% 1.06% 10.71% 0.86% 1.54% 47.98% -% 0.15% 0.24% 34.98% 78.09%	Note1 Note1 Note1 Note, Note1

Note ： Including the purchases of raw materials on behalf of related parties.

Note1 ： The amounts of the transactions and the ending balances have been offset in the consolidated financial statements.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

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

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	Ove	rdue	Amounts received in subsequent period	Allowance for bad debts	Note
					Amount	Action taken
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Electronics (Ningbo) Co., Ltd. Formosa Electronics (Ningbo) Co., Ltd.	Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Formosa Petrochemical Corporation Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Plastics Corp., U.S.A. Formosa Heavy Industries Corp. Formosa Group Ocean Marine Corp. Fujian Fuxin Special Steel Co., Ltd Formosa Steel IB Formosa Mitsui Advanced Chemical (Ningbo) Co., Ltd. Formosa Heavy Industries(Ningbo) Corp. Formosa Heavy Industries(Ningbo) Corp. Formosa Industries (Ningbo) Co., Ltd.	Other related parties `〃` Associates Other related parties Parent-subsidiary Associates `〃` Other related parties Associates `〃` Joint ventures Associates `〃` `〃`	779,662 286,587 387,859 318,384 1,051,441 1,041,843 300,000 567,227 1,316,734 1,622,500 433,900 14,513,955 251,662 303,730	10.87 11.46 14.57 5.01 7.64 2.84 - - - - - - - -	- - - - - - - - - - - - - -	- - - - - - - - - - - - - -	779,662 286,587 387,859 318,384 1,051,441 1,041,843 - - - - - - - -	- - - - - - - - - - - - - -	Note Note

Note ： The amounts of the transactions and the ending balances have been offset in the consolidated financial statements.

(ix) Trading in derivative instruments: None.
(x) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

					(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No.	Name of company	Name of counter-party	Nature of relationship		Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0 0 0 0 1 1	The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd Formosa Industries (Ningbo) Co., Ltd	Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. The Company The Company	1 1 1 1 2 2	Sales Accounts receivable Other income (Note 3) Other receivables`－` related parties Sales Accounts receivable	7,133,843 1,051,441 7,772,469 57,417 966,553 20,022	O/A 90 days `〃` O/A 60 days `〃` Before the 30th of the following month `〃`	3.58% 0.20% 3.90% 0.11% 0.49% -%

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

Note 1: Companies are numbered as follows:
1. Parent company － 0
2. Subsidiary － starting from 1
----- End of picture text -----

Note 2: The relationships between transaction parties are numbered as follows:

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

1. Parent company and subsidiary － 1
----- End of picture text -----

Subsidiary and parent company － 2
Subsidiary and subsidiary － 3

Note 3: Other income is the payment for the purchase of raw materials on behalf of Formosa Industries (Ningbo) Co., Ltd.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(b) Information on investees:

The followings are the information on investees for the years ended December 31, 2023 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance	as of Decembe	r 31, 2023	Highest	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2023	December 31, 2022	Shares (thousands)	Ownership	Carrying value	Percentage of 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 The Company The Company The Company The Company The Company The Company The Company The Company Formosa Plastics Corp. (Cayman Ltd.) Formosa Industries Corporation Formosa Industries Corporation	Formosa Petrochemical Corporation Formosa Plastics Corp., U.S.A. Formosa Heavy Industries Corp. Sky Dragon Investment Limited Formosa Plastics Corp. (Cayman Ltd.) Mai Liao Power Corp. Formosa Sumco Technology Corp. Formosa Transportation Corp. Formosa Fairway Corp. Yi-Jih Development Corp. Ya Tai Development Corp. Formosa Asahi Spandex Co., Ltd. Formosa Automobile Corporation Hwa Ya Technology Park Management Consulting Corporation Formosa Daikin Advanced Chemical Co., Ltd. Formosa Resources Corporation Formosa Environmental Technology Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Industries Corporation Formosa Tokuyama Advanced Chemicals Co., Ltd. Formosa Smart Energy Tech Corporation Formosa Industries (Hong Kong) Limited Formosa Olefins, L.L.C. Lolita Packaging, L.L.C.	Taiwan U.S.A Taiwan Samoa Cayman Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Cayman U.S.A Taiwan Taiwan Hong Kong U.S.A U.S.A	Petrochemicals Chemicals Mechanical equipment Investment Investment Electricity Electronics manufacture Transportation Transportation Construction Development of land Artificial fiber Automobile Service business Chemical industry Mining industry Environmental industry Construction Investment Chemicals Semiconductor Battery green energy Reinvestment Olefins Transportation	30,144,951 5,614,024 2,498,463 13,221,416 27,347,136 5,985,531 1,709,987 110,664 33,330 12,003 54,034 501,752 270,442 341 100,000 9,099,071 417,145 1,100,000 377 17,736,955 500,000 1,750,000 15,801,889 (USD501,902) 3,527,939 (USD108,075) 306,478 (USD9,880)	30,144,951 5,614,024 2,498,463 13,221,416 27,347,136 5,985,531 1,709,987 110,664 33,330 12,003 54,034 501,752 270,442 341 100,000 8,300,471 417,145 600,000 377 17,736,955 500,000 1,000,000 15,801,889 (USD501,902) 3,527,939 (USD108,075) 306,478 (USD9,880)	2,720,549 70 661,458 425,800 78 764,201 112,708 6,566 4,698 1,200 1,306 50 27,044 33 24 909,907 41,714 110,000 13 6 50,000 175,000 - - -	% 28.56 % 22.66 % 32.92 % 50.00 % 100.00 % 24.94 % 29.06 % 33.33 % 33.33 % 28.72 % 45.04 % 50.00 % 45.00 % 33.00 % 50.00 % 25.00 % 24.34 % 33.33 % 25.00 % 100.00 % 50.00 % 25.00 % 100.00 % 33.00 % 38.00	95,893,554 76,598,468 6,664,662 631,603 53,929,869 13,805,045 7,395,360 1,237,189 5,572 19,651 19,646 979,254 390,857 4,299 1,336,390 7,714,128 234,962 1,051,647 835,318 11,536,884 229,284 1,733,910 53,996,224 (USD1,756,832) 5,746,602 (USD186,973) 9,685 (USD315)	% 28.56 % 22.66 % 32.92 % 50.00 % 100.00 % 24.94 % 29.06 % 33.33 % 33.33 % 28.72 % 45.04 % 50.00 % 45.00 % 33.00 % 50.00 % 25.00 % 24.34 % 33.33 % 25.00 % 100.00 % 50.00 % 25.00 % 100.00 % 33.00 % 38.00	21,888,842 6,217,686 (1,846,402) (4,978,537) 142,111 12,446,276 3,458,841 88,989 (41,380) (55) (35) (88,863) 170,150 388 (17,684) (3,064,624) 12,839 (23,157) 274,623 (2,418,167) (216,902) (67,630) 321,649 (USD10,316) 1,395,121 (USD44,747) 25,185 (USD808)	6,234,378 1,205,482 (617,732) (2,489,269) 142,111 3,104,370 1,005,129 29,662 (13,791) (16) (16) (44,431) 76,565 128 (8,842) (766,156) 3,126 (7,719) 68,656 (2,418,167) (108,450) (16,908) 321,649 (USD10,316) 460,389 (USD14,767) 9,570 (USD307)	Note, Note 2 Note, Note 2 Note, Note 2 Note, Note 2 Note, Note 1 Note, Note 2 Note, Note 2 Note, Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note, Note 2 Note, Note 2 Note 2 Note, Note 2 Note, Note 1 Note 2 Note 2 Note, Note 1, Note 3 Note, Note 2, Note 3 Note, Note 2, Note 3

Note ： Including cumulative translation adjustments.

Note 1 ： The amount had been offset in the consolidated financial statements.

Note 2 ： Long-term equity investments under equity method.

Note 3 ： The exchange rate of New Taiwan dollars to US dollars on December 31, 2023 is 30.7350 to 1. The average exchange rate of New Taiwan dollars to US dollars for the years ended December 31, 2023, is 31.1782 to 1.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(c) Information on investment in Mainland China:

(i) Names of investees in Mainland China, major operations, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Major operations	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January1, 2023	Invest flo	ment ws	Accumulated outflow of investment from Taiwan as of December 31, 2023	Net income (losses) of the investee	Percentage of ownership	Highest Percentage of ownership	Investment income (loss) recognized	Carrying value as of December 31, 2023	Accumulated inward remittance of earnings as of December 31, 2023
					Outflow	Inflow
Formosa Industries (Ningbo) Co., Ltd.(Note 2) Formosa Electronic (Ningbo) Co., Ltd.(Note 2) Formosa Mitsui Advanced Chemical Co., Ltd. Fujian Fuxin Special Steel Co., Ltd Swancor (Jiangsu) Carbon Fiber Composite Co., Ltd.	Plastics Electronics Electrolyte Steel Carbon fiber	31,188,509 (USD989,023) 74,648 (USD2,260) 501,096 (USD17,400) 34,347,344 (USD1,460,000) 616,986 (USD19,000)	(2) (2) (2) (2) (2)	26,928,755 (USD845,270) 66,137 (USD2,000) 250,548 (USD8,700) 13,221,416 (USD425,800) 99,993 (USD3,060)	- - - - -	- - - - -	26,928,755 (USD845,270) 66,137 (USD2,000) 250,548 (USD8,700) 13,221,416 (USD425,800) 99,993 (USD3,060)	228,116 (USD7,317) 93,533 (USD3,000) (358,721) (USD-11,506) (8,535,302) (USD-273,759) (82,357) (USD-2,642)	100.00% 100.00% 50.00% 29.16% 16.11%	% 100.00 % 100.00 % 50.00 % 29.16 % 16.11	228,116 (USD7,317) 93,533 (USD3,000) (179,361) (USD-5,753) (2,489,268) (USD-79,840) -	53,328,437 (USD1,735,105) 667,787 (USD21,727) - (USD-) 631,147 (USD20,535) 100,861 (USD3,282)	- - - - -

Note1 ： Investment methods are classified into the following three categories.

(1) Direct investment in Mainland China.

(2) Indirect investment in Mainland China through a third-region company.

(3) Others.

Note 2 ： The amounts of the transactions and the ending balances have been offset in the consolidated financial statements.

(ii) Limitation on investment in Mainland China:

	Accumulated investment in Mainland China as of December 31, 2023	Investment amounts authorized by Investment Commission, MOEA (Note1)	Upper limit on investment (Note 2)
	40,566,849 (USD1,284,830)	43,915,490 (USD1,428,843)	-

Note: The exchange rate of New Taiwan dollars to US dollars on December 31, 2023 is 30.735 to 1.

Note 1: Includes USD 144,013 thousand approved capital increase out of retained earnings.

Note 2: The Industrial Development Bureau of the MOEA issued a letter to the Company stating that it qualifies under Section 12 of the Statute for Upgrading Industries.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information on significant transactions”.

(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Chang Gung Medical Foundation	601,011,035	% 9.44
Formosa Chemicals and Fiber Corporation	486,978,694	% 7.64
The business department of Standard Chartered International Commercial Bank entrusted with the custody of Credit Suisse AG-Credit Suisse Singapore Branch investment account	398,731,554	% 6.26

(i) The information of major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, is calculated based on the shareholders holding more than 5% of the Company’s common shares that have been issued without physical registration. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration due to different bases of preparation and calculation.
(ii) Where the stocks are entrusted by shareholders, information is disclosed by the individual account of settlor who has segregated trust accounts opened by trustees. As for shareholders filing shareholdings of insiders with 10% or more of the Corporation’s stocks pursuant to the securities and exchange laws and regulations, the number of stocks owned shall be ones owned by the persons plus ones entrusted where the shareholders have the power to decide how to utilize the trust property. Please access the Market Observation Post System website for information on insiders’ shareholding filings.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Segment information:

(a) General information:

The Group’ s five reportable segments are: plastic division, polyolefin division, polypropylene division, tairylan division and chemical division. Plastic division is mainly engaged in the manufacture and sale of PVC; polyolefin division is mainly engaged in the manufacture and sale of polyethylene; polypropylene division is mainly engaged in the manufacture and sale of polypropylene; tairylan division is mainly engaged in the manufacture and sale of acrylic esters; chemical division is mainly engaged in the manufacture and sale of acrylonitrile.

The Group’ s reportable segments are responsible for the Company's strategic business units, including the manufacturing and supplying of different products. Since each strategic business unit requires different technology and marketing strategies, it must be administered separately.

No tax expenses are allocated to the reporting segment. In addition, the reporting segment does not include depreciation and amortization of significant non-cash items. The reportable amount is similar to that of the report used by the chief operating decision maker.

The accounting policies of the operating segments are the same as those described in Note 4. The operating segment’s profit of the Group uses the operating income before tax as the measurement and basis of performance evaluation. The Group treats intersegment sales and transfers as third-party transactions. They are measured at market price.

The Group’s operating segment information and reconciliation are as follows:

		For t	he years ended	December 31, 20	23		Total 199,138,777 -
Plastic division	Polyolefin division 45,435,296 23,654 45,458,950 39,878 776,001 (252,930) 1,903,440 14,420,028 1,655,842	Polypropylene division 26,967,189 51,069 27,018,258 54,592 631,517 (1,396,507) 4,452,834 35,995,351 1,999,354 For t	Tairylan division 32,361,994 80,294 32,442,288 140,977 1,432,909 (1,862,485) 696,877 22,737,733 1,762,727 he years ended	Chemistry division 21,424,460 1,388,876 22,813,336 103,578 341,840 (1,668,852) 90,703 5,360,116 489,931 December 31, 2	Others divisions	Adjustments and eliminated 1,035 (13,190,967) (13,189,932) - - 10,784,897 - (65,788,626) (1,047,590)
$ 67,931,873 2,246,153					5,016,930 9,400,921
$ 70,178,026					14,417,851		199,138,777
$ 273,778 2,191,649 $ 757,551					1,501,164 2,694,097 634,958		2,113,967 8,068,013 6,996,632
$ 652,085 $ 31,868,722					5,840,656 486,145,032		13,636,595 530,738,356
$ 5,136,617					173,381,330		183,378,211
					022
Plastic division	Polyolefin division 54,595,954 19,537 54,615,491 616 650,937 5,412,819 1,316,457 14,304,251 1,751,558	Polypropylene division 31,636,698 50,313 31,687,011 23,918 863,238 (713,729) 4,383,836 32,076,306 1,990,148	Tairylan division 41,995,511 78,619 42,074,130 47,442 1,339,296 4,807,124 299,489 23,323,015 1,924,637	Chemistry division 24,639,457 1,302,589 25,942,046 15,704 354,092 1,720,206 123,298 5,920,254 381,174	Others divisions	Adjustments and eliminated 1,685 (10,476,443) (10,474,758) - - 15,301,779 - (69,733,895) (460,858)	Total 251,647,354 -
$ 94,425,233 1,459,294 $ 95,884,527 $ 155 2,022,991 $ 18,813,922 $ 878,373 $ 31,938,806 $ 5,609,538					4,352,816 7,566,091
					11,918,907		251,647,354
							1,037,054 8,456,272 43,794,387
							14,786,645 511,254,407
							153,569,544

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Geographic area information

The Group’s revenue from continuing operations from external customers by location of operations and information about its non-current assets by location of assets are as follows:

Geographic Revenue from external customers: Taiwan Mainland China Others Non-current assets: Taiwan United States of America Mainland China Total	For the years ended December 31,	For the years ended December 31,
	2023 $ 56,986,853 68,605,908 73,546,016 $ 199,138,777 $ 45,212,132 17,992,214 65,757,242 $ 128,961,588	2022
		73,857,489 83,962,658 93,827,207
		251,647,354
		59,096,566 18,831,318 42,214,609
		120,142,493

Non-current assets include property, plant and equipment, right-of-use assets, intangible assets and other assets, but do not include financial instruments and deferred tax assets.

There is no single customer’s sale which exceeds 10% of the Group’s revenue.

AI assistant

FPC — Annual Report 2023

51762_rns_2023-12-29_33dc9176-c4bc-48fd-9726-fbf8edf302f0.pdf

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

Representation Letter

KPMG

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

1. Revenue Recognition

2. Valuation of Inventories

Other Matter

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

KPMG

Notes to Readers

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2023 and 2022

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

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2023 and 2022

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of material accounting policies:

(a) Statement of compliance

Basis of measurement

Functional and presentation currency

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Foreign operations

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Cash and cash equivalents

(g) Financial instruments

(i) Financial assets

1) Financial assets measured at amortized cost

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

7) Derecognition of financial assets

2) Financial liabilities

3) Derecognition of financial liabilities

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Inventories

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) Joint venture

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Lease

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) As a leasor

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Impairment of non-financial assets

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Revenue recognition

(i) Revenue from contracts with customers

2) Construction contracts

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Financing components

(p) Contract costs

FPC Annual Report 2023