FPC — Annual Report 2023

Jul 2, 2024

Stock Code: 1301

Formosa Plastics Corporation

2023 Annual Report

Notice to readers

This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

Taiwan Stock Exchange Market Observation Post System: http: //newmops.twse.com.tw Annual Report is available at: www.fpc.com.tw Printed on April 22, 2024

• I. Name, title, contact number and e-mail address of the Company’s Spokesperson

and deputy spokesperson:

	Spokesperson	DeputySpokesperson
Name	JerryLin	Chia-HungChien
Title	Senior Vice President	Assistant Vice President
Contact number	(02)2712-2211	(02)2712-2211
E-mail address	formosa@fpc.com.tw	formosa@fpc.com.tw

• II. Address and telephone of the headquarters, branches, and plants

Factory	Address	Telephone
Headquarter and Renwu Plant	No. 100, Shuiguan Rd., Renwu Dist., Kaohsiung City 814, Taiwan	(07)3711411
Linyuan Plant	No. 1, Shihua 1st Rd., Linyuan Dist., KaohsiungCity832,Taiwan	(07)6419911
Taipei Office	10F., No. 390, Sec. 6, Nanjing E. Rd., Neihu Dist.,Taipei City114,Taiwan	(02)27122211
Dongshan Plant	No. 201, Dongfu Rd., Dongshan Township, Yilan County269,Taiwan	(039)591134
Hsinkang Plant	No. 3, Zhongyang Industrial Park, Xingang Township,Chiayi County616,Taiwan	(05)3772111
Mailiao Plant	No. 1, Taisu Industrial Park, Mailiao Township,Yunlin County638,Taiwan	(05)6812345
Ningbo Plant	FPG Industrial Zone, Xiapu, Beilun, Ningbo,China	86-574-86902999
USA Plant	9 Peach Tree Hill Road Livingston, NJ 07039,USA	1-973-9922090

• III. The name, address, website, and telephone number of the agency handling shares transfer

Name: Stock Affairs Dept., Formosa Plastics Corp.

Address: 10F., No. 380, Sec. 6, Nanjing E. Rd., Neihu Dist., Taipei City 114,

Taiwan

Website: N/A

Tel: (02)2718-9898

• IV. Name of the certified public accountant (“CPA”): Hsin-Yi Kuo, Hui-Chih Kou

• V. Name of accounting firm: KPMG Certified Public Accountants

• Address: 68F., No. 7, Sec. 5, Xinyi Rd., Xinyi Dist., Taipei City 110, Taiwan Website: http: //www.kpmg.com.tw

• Tel: (02)8101-6666

• VI. Name of any exchanges where the Company’s securities are traded offshore, and the method by which to access information on said offshore securities: None.

• VII. Company website: www.fpc.com.tw

Contents

I. Letter to Shareholders

I. Letter to Shareholders
1.1 Business Performance for 2023………………………………………….	1
1.2 A Summary of the Business Plan for 2024, the Company’s Future
Development Strategy, and the Effect of External Competition, the Legal
Environment, and the Overall Business Environment……………	9
II. Company Profile
2.1 Date of Incorporation…………………………………………………….	13
2.2 Business Philosophy and Vision………………………………………….	13
2.3 Milestone……….………………………………………………………...	15
III. Corporate Governance Report
3.1 Organization……………………………………………………………...	32
3.2 Directors and Management Team………………………………………...	33
3.2.1 Directors……………………………………………………………...	33
3.2.2 Management Team…………………………………………………...	52
3.2.3 Succession Plan of Board of Directors and the Middle and High-
Level Management…………………………………………………..	54
3.3 Remuneration of Directors, President, and Vice Presidents……………...	56
3.3.1 Remuneration of Directors and Independent Directors ……………..	56
3.3.2 Remuneration of the President and Vice Presidents………..………..	59
3.3.3 Employee Compensation of Managers………………………………	61
3.3.4 Comparison of Remuneration for Directors, President and Vice
Presidents in the Two Most Recent Fiscal Years and Remuneration
Policy for Directors, President and Vice Presidents…………………	62
3.4 Implementation of Corporate Governance……………………………….	64
3.4.1 Board of Directors’ Meeting Status……………………………...…..	64
3.4.2 Audit Committee Meeting Status…………………………………….	68
3.4.3 Corporate Governance Implementation Status and Deviations from
the “Corporate Governance Best Practice Principles for TWSE/TPEx
Listed Companies”…………..............................................................	74
3.4.4 Composition, Responsibilities and Operations of Remuneration
Committee……………………………………………………………	96

3.4.5 Composition, Responsibilities and Operations of the Sustainable Development Committee…………………………………………… 100 3.4.6 Fulfillment of Sustainability and Deviations from the “Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies”…………………….......................................................... 102 3.4.7 Climate-related Information of TWSE/TPEx Listed Companies….… 122 3.4.8 Fulfillment of Ethical Corporate Management and Measures……….. 122 3.4.9 The Searching Way of Principles of Corporate Governance and Related Bylaws the Company Adopted……………………………... 140 3.4.10 Other Significant Information Provides a Better Understanding of the State of the Company’s Implementation of Corporate Governance….. 140 3.4.11 Implementation Status of the Internal Control System…………….. 145 3.4.12 If there Has Been Any Legal Penalty against the Company and its Internal Personnel, or any Disciplinary Penalty by the Company against its Internal Personnel for Violation of the Internal Control System, during the Most Recent Fiscal Year or during the Current Fiscal Year Up to the Publication Date of the Annual Report, Where the Result of such Penalty Could Have a Material Effect on Shareholder Interests or Securities Prices, the Annual Report Shall Disclose the Penalty, the Main Shortcomings, and Condition of Improvement………………….………............................................. 146 3.4.13 Material Resolutions of a Shareholders Meeting or Board of Directors Meeting during the Most Recent Fiscal Year or during the Current Fiscal Year Up to the Date of Publication of the Annual Report……………………………………………………………… 146 3.4.14 During the Most Recent Fiscal Year or during the Current Fiscal Year Up to the Date of Publication of the Annual Report, a Director Has Expressed a Dissenting Opinion with Respect to a Material Resolution Approved by the Board of Directors, and Said Dissenting Opinion Has Been Recorded or Prepared as a Written Declaration, Disclose the Principal Content Thereof……………………………. 159 3.4.15 A Summary of Resignations and Dismissals, during the Most Recent Fiscal Year or during the Current Fiscal Year Up to the Date of Publication of the Annual Report, of the Company’s Chairman, General Manager, Chief Accounting Officer, Chief Financial Officer, Chief Internal Auditor, Chief Corporate Governance

Officer, and Chief Research and Development Officer…………….	159
3.5 Information Regarding the Company’s Audit Fee…………………….....	160
3.5.1 Audit Range Table…………………………………………….……..	160
3.5.2 When the Company Changes its Accounting Firm and the Audit Fees
Paid for the Fiscal Year in Which Such Change Took Place Are Lower
Than Those for the Previous Fiscal Year, the Amounts of The Audit
Fees Before and After The Change and the Reasons Shall Be
Disclosed……………………………………………………………..	160
3.5.3 When the Audit Fees Paid for the Current Fiscal Year Are Lower Than
Those for the Previous Fiscal Year by 10 % or More, the Reduction
in the Amount of Audit Fees, Reduction Percentage, and Reasons
Therefor Shall Be Disclosed……………………………...................	160
3.6 Replacement of CPA……………………………………………………..	161
3.7 The Company’s Chairman, President, or Any Manager Involved in
Financial or Accounting Affairs Being Employed by the Auditor’s Firm
or Any of its Affiliated Company within the Last Year………………….	162
3.8 Changes in Shareholding Transfer or Shareholding Pledge by Directors,
or Managers, and Major Shareholders Who Holds 10% of the Company
Shares or More during the Most Recent Fiscal Year up to the Date of
Publication of the Annual Report….………………………......................	163
3.9 The Relationship of the 10 Largest Shareholders Any One Is a Related
Party or a Relative within the Second Degree of Kinship of
Another…………………………………………………………………..	166
3.10 The Total Number of Shares and Total Equity Stake Held in Any Single
Enterprise by the Company, its Directors, Managers, and Any
Companies Controlled Either Directly or Indirectly by the
Company...……………..……………………………..............................	169
IV. Capital Overview
4.1 Capital and Shares…………………………………………….................	171
4.1.1 Source of Capital…………………………………………..................	171
4.1.2 Structure of Shareholders…………………………………………….	172
4.1.3 Status of Shareholding Distribution………………………………….	172
4.1.4 List of Major Shareholders………………………………..................	173
4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share in the	173

Two Most Recent Years…………………….......................................
4.1.6 Dividend Policy and Implementation Status…………………………	174
4.1.7 Effect upon Business Performance and Earnings per Share of Any
Stock Dividend Distribution Proposed or Adopted at the Most Recent
Shareholders’ Meeting……………………………………………….	175
4.1.8 Compensation of Employees and Directors…………….……………	175
4.1.9 Share Repurchases by the Company…………………………………	176
4.2 Issuance of Corporate Bonds…………………………………………….	177
4.3 Issuance of Preferred Stock……………………………………………...	180
4.4 Issuance of Global Depositary Receipts…………………………………	180
4.5 Issuance of Employee Stock Options……………………………………	180
4.6 Issuance of New Shares in Connection with Mergers or Acquisitions or	180
with Acquisitions of Shares of Other Companies………………………..
4.7 The Implementation of the Company’s Capital Allocation Plans……….	180
4.7.1 Content of the Plan…………………………………………………...	180
4.7.2 The Status of Implementation……………………………..................	180
V. Operational Highlights
5.1 Business Activities……………………………………………………….	181
5.1.1 Scope of Business…………………………………………………....	181
5.1.2 Industry Overview………………………………………..................	183
5.1.3 Research and Development (R&D) ………………………………...	190
5.1.4 Long-term and Short-term Business Development Plans…………..	197
5.2 Market and Sales Overview……………………………………………...	200
5.2.1 Market Analysis……………………………………………………...	200
5.2.2 Main Applications and Production Process of Main Products……...	201
5.2.3 Supply Status of Main Materials………………………….................	204
5.2.4 The Name, Purchase (Sale) Amount, and Ratio of the Customers
Accounted for Over 10% of the Total Purchase (Sale) in One of the
Two Most Recent Fiscal Years, and the Reason for the Changes in
Purchase (Sales)..........……….............................................................	206
5.2.5 Production in the Two Most Recent Fiscal Years……………………	207
5.2.6 Sales in the Two Most Recent Fiscal Years………………………….	208
5.3 Employees……………………………………………………..................	209
5.4 Environmental Protection Expenditure………………………..................	210

5.5 Labor Relations………………………………………………..................	219
5.6 Information Security Management……………………………………….	225
5.7 Important Contracts……………………………………………………....	229
VI. Financial Information
6.1 Consolidated Balance Sheet and Income Statement for the Last Five
Fiscal Years………………………………………………………………	230
6.2 Financial Analysis for the Last Five Fiscal Years……………..................	235
6.3 Audit Committee’s Review Report for the Most Recent Year’s Financial
Statement………………………………………………………………...	240
6.4 Consolidated Financial Statements for the Years Ended December 31, 2021
and 2020, and Independent Auditors’ Report……………………………...	241
6.5 The Parent Company Only Financial Statements for the Years Ended
December 31, 2021 and 2020, and Independent Auditors’ Report………...	241
6.6 The Financial Difficulties of the Company and its Affiliated Companies	241
VII. Review of Financial Conditions, Financial Performance, and Risk
Management
7.1 Analysis of Financial Status……………………………………………..	242
7.2 Analysis of Financial Performance………………………………………	243
7.3 Analysis of Cash Flow…………………………………………………...	244
7.4 The Effect upon Financial Operations of Any Major Capital Expenditures
in the Most Recent Years….………………………………	246
7.5 Reinvestment Policy in the Most Recent Years…………….....................	247
7.6 Risks……………………………………………………………………..	250
7.7 Other Important Matters…………………………………………………	263
VIII. Other Special Notes
8.1 Summary of Affiliated Companies………………………………………	264
8.2 The Status of Private Placement of Securities…………..……………….	268
8.3 The Subsidiaries of the Company Acquired, Disposed of the Shares of
the Company………………………...…………………………………...	268
8.4 Other Necessary Supplement…………………………………………….	268
8.5 The Significant Impacts on Shareholders’ Right or Share Prices as Stated
in Item 3 Paragraph 2 of Article 36 of Securities and Exchange Law of
Taiwan in the Most Recent Year and as of the Date of Publication of the
Annual Report……………………………………………………………	268

I. Letter to Shareholders

1.1 Business Performance for 2023

The Company (Formosa Plastics Corporation) generated consolidated sales of NTD 199.14bn in 2023, reaching 73% of its target of NTD 271.27bn and was down by 21% from NTD 251.65bn generated in 2022. Consolidated pre-tax profit came in at NTD 6.99bn in 2023, reaching 12% of its target of NTD 58.03bn and declined by 84% from NTD 43.79bn generated in 2022.

In 2023, major central banks in the US and Europe implemented measures to curb high inflation, including continuous interest rate hikes and monetary tightening. Additionally, the ongoing technology and trade tensions between the US and China, coupled with the economic recovery in mainland China falling short of expectations post-reopening, led to a slowdown in global demand and a decline in economic growth momentum. Furthermore, factors such as geopolitical issues and supply chain rebalance contributed to a challenging market environment. The petrochemical industry faced oversupply issues as competitors expanded production capacity, resulting in intense price competition. Consequently, the global demand contraction, coupled with a decrease in product prices, led to a 21% decline in the Company's 2023 consolidated revenue. The consolidated operating loss was NTD 4.02bn, a decrease of NTD30.83bn, representing a decline of 115% from 2022.

Despite recognizing investments income of NTD 7.94bn in 2023 (+NTD 2.18bn vs. 2022) from companies like Formosa Petrochemical and Mai-Liao Power Corporation, a decrease in cash dividend income of NTD4.77bn resulted in a substantial decline of 84% in consolidated pre-tax profit in 2023 compared to 2022.

Facing uncertainties such as inflation, interest rate hikes, geopolitical risks, the rising ESG requirements, and the downturn in the petrochemical industry, the Company is strategically responding by aligning with the global supply chain shift. We are committed to diversifying our sales markets to regions such as India, Southeast Asia, Australia, New Zealand, Turkey, Africa, and South America, reducing reliance on a single market. Moreover, we are forming strategic alliances with both upstream and downstream partners, engaging in collaborative research and development of new products or expanding into new application areas. Our focus is on transitioning towards technology and

1

healthcare industries, enhancing the value of our products, applying for patents to ensure market exclusivity, and sharing future growth benefits.

Simultaneously, actively entering the innovative industry, the Company aims to increase product value and sales volume, while also achieving the goal of maintaining human health and enhancing the quality of life. The pioneering "Formosa New Functional PP Fiber" was introduced at the Taipei Textile Exhibition in October 2023, seizing opportunities in the high-performance functional wear market. Furthermore, "Formosa Antibacterial Shell Powder" was recognized by the Ministry of Environmental Protection in 2023 as an "Outstanding Resource Recycling Enterprise," indicating the company's efforts in upholding the founders' principles of "sustainable management and contribution to society" have been acknowledged.

Additionally, there is an increasing focus on the development and application of AI technology, establishing an integrated optimization module for the entire factory to move towards the goal of a "smart factory." The company is gradually integrating digital transformation achievements across departments, achieving integrated management of production, sales, and research to swiftly adapt to market challenges and enhance operational efficiency. As of the end of 2023, a total of 419 development projects have been proposed, with 223 completed, yielding an annual benefit of NTD 750mn. Furthermore, an AI research and development center was established in Jenwu, cultivating in-house AI talent. 98 individuals have completed training at institutions like the Taiwan AI School. Through systematic training, industry-academic collaboration, expert lectures, and other new initiatives, the Company is able to foster high-tech talent and accelerate future development, laying a solid foundation for digital transformation.

Moreover, the Company is fully committed to the development of circular economy, project improvements, water and energy conservation, and reducing the usage of public fluid units. In 2023, a total of 1,174 projects were completed, generating an annual benefit of NTD 990mn. Through the implementation of these business strategies and improvement measures, the Company continues to strengthen its resilience and reduce the impact of external challenges.

The company and its subsidiaries in Ningbo, China, and the US primarily manufacture plastics, chemicals, and fiber raw materials. The production of Polyvinyl Chloride (PVC) faced challenges in 2023 due to the ongoing RussiaUkraine conflict and geopolitical tensions, coupled with soft consumer demand

2

in Europe and the US due to high-interest rates. Additionally, the oversupply in the Chinese market, influenced by a sluggish real estate sector and significant capacity expansion in the industry, led the market to a state of oversupply. However, efforts to diversify into markets like Australia and the Middle East, coupled with increased infrastructure demand in India, contributed to a successful sales volume of 1.67 million tons, a growth of 3.4% compared to 2022. caustic soda benefitted from low coal prices in China, resulting in increased operating rates for caustic soda plants. However, the downstream market faced challenges due to US interest rate hikes and weakening demand in various countries, leading to an oversupply situation. Considering the unfavorable combined profits of EDC and caustic soda, a more flexible production strategy was adopted, resulting in a sales volume reduction to 1.25 million MT, a decrease of 14% compared to 2022.

HDPE faced challenges due to the slower-than-expected economic recovery in mainland China, weak market demand, and the impact of new capacity expansion, leading to a decline in PE prices. Additionally, the high cost of ethylene resulted in weaker sales in the Far East market. However, in view of the decline in ethylene prices in 3Q23, the Company seized the opportunity to actively promote sales, resulting in a sales volume of 370,000 tons, a 3% growth in 2023 from 2022. Linear Low-Density Polyethylene (LLDPE) experienced a similar situation, with increased competition in the Asian market due to higher exports from US peers. This led to a reduction in sales in Taiwan. However, the US subsidiary actively explored markets in Central and South America and Europe, contributing to a sales volume of 501,000 tons, a 4% growth from 2022. Ethylene Vinyl Acetate (EVA) saw an 18% growth in sales volume to 325,000 tons, driven by increased demand for shoe foam materials after the easing of the pandemic in China, lower silicon material costs, and increased demand for EVA encapsulation film from the solar module industry. Furthermore, the EVA plant in Ningbo completed a debottleneck project at the end of 2022, increasing its annual production capacity to 100,000 tons.

AE experienced a stable sales volume of 543,000 tons, despite reduced demand in Europe and Southeast Asia due to inflation and interest rate impacts. The rapid growth in India's real estate and infrastructure sector offset the decrease, leading to a steady sales volume. Carbon fiber faced challenges with an oversupply in the market for sports equipment like bicycles and intense competition in the wind power sector, resulting in a 32% decline in sales volume

3

to 4,000 tons. Butanol, mainly supplied for self-use by Taiwan and Ningbo AE plants, experienced a 12% growth in sales volume to 246,000 tons due to reduced market supply from peers in China and Southeast Asia during maintenance periods from August to October. SAP achieved a 6% growth in sales volume to 203,000 tons, driven by orders from major brands customers in the Americas and Africa and the expansion in the mainland China market.

Polypropylene (PP) faced a 4% decline in sales volume to 718,000 tons due to weakened end-consumer demand on high inflation in the US and Europe, and continuous capacity expansion in mainland China. Acrylonitrile (AN) and Methyl Methacrylate (MMA) saw increased sales volumes of 30% and 35%, respectively, despite intense competition from new supply from mainland China. However, Epoxy Chloropropane (ECH) experienced a 13% decline in sales volume to 75,000 tons due to soft demand in the electronics sector and lower demand for downstream Epoxy.

To enhance international competitiveness and enhance added value for products, the Company actively expanded production capacity and implemented debottleneck projects at various plants domestically and internationally. In Taiwan, three PVC plants in Jenwu, Linyuan, and Mailiao completed debottleneck projects with a total annual capacity of 100,000 tons at the end of 2023. Another debottleneck project with an annual capacity of 60,000 tons is expected to be completed in the second half of 2028. In Jenwu, a medical material center is being established to produce medical-grade compounds, including PVC, PE, and PP. The project is expected to be completed in the first half of 2024. Additionally, an expansion project for the A-column in the Jenwu carbon fiber plant, with an annual capacity of 1,600 tons, is expected to be completed in the first half of 2025.

In Ningbo, China, a PDH plant with an annual capacity of 600,000 tons was completed in December 2023. In the US, a new 1-hexene plant with an annual capacity of 100,000 tons is expected to be completed by the end of 2025.

Furthermore, in alignment with the urban development in Kaohsiung City, the Company relocated the Front Caisson area to the Intercontinental Phase II Petrochemical Zone, establishing 12 storage tanks and a salt warehouse. Apart from the ethylene storage tank expected to be completed in the first half of 2025, the rest were completed at the end of 2023. The completion of these new and expanded projects is expected to inject new growth momentum for the Company's future operations.

4

In terms of equity investments, FPC-USA’s (22.66% owned by the Company) pre-tax income amounted to USD 256mn, decline from 2022’s level. This decline can be attributed to several factors, including the high energy prices on prolonged Russia-Ukraine conflict, heightening interest rate in US, tightening monetary policies globally, weakness in China’s property sector and slowing demand for Chinese exports products. With muted global economic growth, the average selling price of petrochemical products declined from the levels seen in 2022, resulting in squeezed profit for the Company.

In 2023, the Company’s research and development expenses amounted to NTD 2.8bn, representing 1% of our total revenue. These funds were primarily allocated to various areas, including formula development, process improvement, quality enhancement, energy conservation, talent development, aiming to increase its product’s value and reduce costs. The Company successfully completed 58 research and development projects, generating an annual benefit of NTD 260mn. Some notable projects include the development of Special powder for the suspension method in CPVC production, high-efficiency flowblocking pipes for polymerization tanks, new processes to increase the production capacity of processing aids, composite emulsifiers for MBS, silicone tubing for peritoneal dialysis with anti-adhesive properties, new-type activated carbon recycling system, research on improving the quality of recycled wastewater from emulsion powder using specific algae and microorganisms, metal-coated HDPE pipe-grade material, high-flow HDPE fiber material, highpressure flame-retardant EVA cable material, dry spray and wet spinning for ultra-high-strength carbon fiber, next-generation SAP products from internationally renowned manufacturers and high-purity calcium carbonate. These proactive initiatives have yielded positive results in enhancing the added value of downstream products.

To enhance its competitiveness, the Company actively invest in critical technology research and development while applying for patents domestically and internationally. In 2023, the company obtained a total of 53 granted patents, bringing the cumulative number of valid patents to 319 by the end of 2023. In order to deepen our research and development foundation and strengthen R&D capabilities, the Company continually expand collaborations with academia and industry. The Company send talent in R&D team to universities domestically and internationally for further education, aiming to reinforce their expertise and broaden their perspectives. Additionally, the Company leverages the research

5

potential of top academic institutions and sufficient quantum high-speed computing resources to accelerate its pace and scope of R&D. This approach helps the Company effectively reduce the time required for product development.

In addition, by integrating resources from the valuable instrument center and virtual laboratory, the Company has been actively invested in the research and development in advanced composite materials. This initiative spans various sectors, including medical materials, energy, and green materials. In view of ESG and carbon neutrality policies, the Company is committed to development of carbon reduction technologies. Moreover, the Company is actively developing recyclable materials. These efforts include the development of new technologies, such as reusable systems for saltwater electrolysis and carbon dioxide, all-material PP cold-resistant clothing, new applications for recycled plastics (PCR), recyclable resin in carbon fiber composites, and antibacterial shell powder.

The Company always puts emphasis on industry development and environmental protection equally. As of 2023, the cumulative investment in improvements of occupational safety, environmental protection, and fire prevention has reached a substantial NTD 30bn. These improvements have resulted in the treatment and emission of various pollutants surpassing national regulatory standards. Several business units of the Company were praised by local government on the good performance in these efforts by 2023. Notable mentions include FPC’s Haifeng plant, Mailiao EVA and Carbon Four Plant (C4) for receiving the Yunlin County Occupational Health and Safety Excellence Unit award. The Mailiao Hainan Plant, in particular, received the Five-Star Award for three consecutive years. Additionally, the Company was honored with the Taipei City Government's Green Procurement Excellence Unit award.

In terms of greenhouse gas reduction, the Company sets short-term (20% reduction in 2025), medium-term (40% reduction in 2030) and long-term (carbon neutrality by 2050) reduction targets based on the benchmark of greenhouse gas (Scope 1 and 2) emissions in 2020 with 8.635 million tons. After a thorough test conducted by a third-party institution, the total greenhouse gas (Scope 1 and 2) emissions in 2022 was 7.943 million tons, a reduction of 69,200 tons compared with 2020, a decrease of 8%.

In terms of water and energy conservation and greenhouse emissions reduction, the Company accomplished 1,174 improvement projects in 2023. Total water saved amounted to 4,656 tons/day, while greenhouse gas emissions

6

reduction reached 112K tons/year. Other ongoing 1,167 improvement projects were expected to further conserve water by 4,360 tons/day and reduce greenhouse gas emissions by 278K tons/year. According to the results announced by Carbon Disclosure Project (CDP) in 2023, the Company was rated as “A” in climate change assessment and water resources assessment. Both achievements were among the top rankings within many well-known international chemical companies, which shows that the Company’s efforts in energy saving, emission reduction and circular economy in response to climate change have achieved considerable results.

Besides, in order to enhance operational safety, prevent occupational disasters, and ensure the safety and health of labors, the Company continued to conduct overall equipment inspection, implement Standard Operating Procedures (SOP), Management of Change (MOC) and Process Hazard Analysis (PHA) operations, and strengthen inspections of machinery and equipment for improvement. Measures such as personnel control, the use of safety helmets, the deployment of image recognition technology for monitoring elevated pipelines and high-risk areas, and the integration of abnormal incident reporting mechanisms are employed to enhance occupational safety management. For instance, the Company developed a "Personnel Positioning System" to monitor the real-time dynamics of personnel and construction activities. This system, combined with the existing "Image Recognition System for Construction Site Safety " that establishes electronic fences, has been implemented at the expansion construction site to facilitates effective occupational safety management, prevents occupational accidents, and contributes to the establishment of a safe and friendly work environment.

In response to increasingly stringent environmental regulations, all plants are required to implement measures such as reducing VOC sources, streamlining equipment components, and gradually eliminating low-leakage equipment components. The Company also strengthen autonomous inspections by the application of infrared detector (Gas Finder). Meanwhile, the Company enhance the management of various environmental indicators to continue promoting carbon neutrality and zero discharge of wasted water for a friendly environment.

The following is production and sales volume, and business performance in 2023:

7

1. Production and Sales volume in 2023 (including consolidated subsidiaries and inter-com an internal turnover p y )

Product	Unit	Production volume	Sales volume
Polyvinyl chloride(PVC)	ton	1,673,636	1,666,347
Caustic Soda	ton	1,467,507	1,247,315
High density polyethylene (HDPE)	ton	373,548	370,774
Ethylene vinyl acetate copolymer(EVA)	ton	320,858	324,780
Linear low density polyethylene(LLDPE)	ton	530,856	501,169
Acrylonitrile(AN)	ton	256,591	262,022
Epichlorohydrin(ECH)	ton	74,558	75,280
Methyl tert-butyl ether (MTBE)	ton	114,450	121,266
Methyl methacrylate(MMA)	ton	86,678	86,548
Acrylic esters(AE)	ton	560,993	542,919
N-butanol(NBA)	ton	235,342	245,811
Super absorbent polymer (SAP)	ton	200,711	202,558
Polypropylene(PP)	ton	724,548	718,428

In 2023, total sales value was NTD 199.13bn. The domestic sales (in Taiwan) were NTD 56.98bn, accounted for 29% of total sales, and export sales was NTD 142.15bn, accounted for 71% of total sales.

2. Business performance:

The consolidated operating sales of NTD 199.13bn in 2023 decreased NTD 52.5bn from NTD 251.64bn in 2022. After deducting operating costs of NTD 189.31bn and operating expenses of NTD 13.85bn, the operating loss was NTD 4.02bn, with an operating profit rate of -2%. Plus net non-operating revenues and expenses of NTD 11.02bn (including net gains and losses recognized by equity method for affiliated companies and joint ventures of NTD 7.94bn), the pre-tax net income of NTD 6.99bn in 2023 dropped by 84% from 2022.

8

• 1.2 A Summary of the Business Plan for 2024, the Company’s Future Development Strategy, and the Effect of External Competition, the Legal Environment, and the Overall Business Environment

Looking ahead to 2024, the effects of interest rate hikes and monetary tightening in the United States, Europe, and other countries are expected to have a spillover impact. On top of that, the prolonged downturn in the China real estate market and local debt may continue to dampen end demand. However, with inflation cooling down in the United States and Europe, market expectations for interest rate cuts in the second half of the year could lead to increased corporate investment and consumer spending. The fiscal stimulus policies in China also plays a role. According to the International Monetary Fund (IMF) predictions, global economic growth rates are anticipated to be similar to those in 2023, albeit still lower than the growth observed between 2000 and 2019. Moreover, the economic growth in Europe and other emerging markets is expected to offset the downturn in the United States and China. Countries such as India, Southeast Asia, and Mexico are anticipated to see increased corporate investment and accelerated infrastructure development, which will drive the demand for petrochemical products.

When will global economy recover and stable growth resume? Attention should be paid to the monetary policies and interest rate schedules in the United States and Europe, China's economic performance, the speed of global supply chain restructuring, the impact of extreme weather events and geopolitical risks on the trends of crude oil and other raw material prices.

In terms of the development of the global petrochemical market, according to the Chemical Market Analytics, the net increase in global ethylene production capacity in 2024 is projected to be 5.3 million MT, reaching a total capacity of 231 million MT; If demand is estimated based on a 0.9 times GDP growth, an increase of approximately 4.7 million MT is expected. Propylene production capacity is expected to increase by a net 9.3 million MT, reaching a total capacity of 175 million MT; If demand is estimated based on a 1.8 times GDP growth, an increase of approximately 6.2 million MT is expected, indicating an oversupply of petrochemical materials.

Among them, China is highlighted as the region with the most significant increase in ethylene and propylene production capacity in 2024. The production capacity will increase by 3 million MT (acc. 57% of global additions) and 7.8

9

million MT (acc. 84% of global additions). The total production capacity will reach 55 million MT and 70 million MT. As the per capita consumption of petrochemical products in China continues to increase with economic development, it is expected that ethylene and propylene will continue to experience capacity expansion in the coming years, with annual new capacity exceeding 3 million MT. This expansion will contribute to an increase in selfsufficiency rates of propylene and downstream derivatives and a gradually narrowed demand gap.

The petrochemical outlook for 2023 reflects the continuation of the trends observed in 2H22. High global inflation prompts significant interest rate hikes by the US Federal Reserve and the European Central Bank. The slower-thanexpected economic recovery in China severely impacts consumer purchasing power, leading to a contraction in end-demand, widespread price declines for petrochemical products, and an overall challenging economic environment for the industry. In 2024, as the ongoing Russia-Ukraine war and conflicts in the Middle East are expected to affect international crude oil supply and price trends, potentially causing a renewed increase in inflation. While the US and Europe still operating in a high-interest-rate environment, are expected to curb corporate investment and weaken consumer purchasing power, further affecting petrochemical product demand. China's significant increase in petrochemical production capacity leads to oversupply concerns, despite the introduction of economic stimulus policies. The effectiveness of these policies remains to be seen, making the outlook for the petrochemical industry in 2024 less optimistic.

China remains the largest market for global petrochemical materials. Although the economy recovery was not as strong as expected, the China government continued to introduce policies aimed at boosting economy and easing real estate regulations, along with the efforts to lower deposit interest rates. With the anticipation of inflation easing in the US and Europe, the market expects interest rate cuts to begin in 2024, which will help consumer confidence gradually recover and increase demand for petrochemical products, which could have a positive impact on the global economy and the petrochemical industry.

Looking ahead to the new year, in view of the lack momentum in global economic recovery, challenges arising from trade globalization, coupled with several unfavorable factors such escalating geopolitical tensions, substantial production capacity increases of China peers, and extreme climate risks, business will be severely tested.

10

In order to build a resilient business foundation and overcome economic downturns, the Company’s efforts will be focused on driving "transformation" as the most critical goal for future operations. This includes maintaining our core petrochemical business, expanding investments globally, actively developing high-value products, and exploring opportunities in technology and healthcare industries. By learning from the strategies and thinking of overseas petrochemical giants, the Company aims to analyze its future business direction and development opportunities, promote forward-looking technology and product research and development, strategically position new businesses and products, expecting these to become key drivers for the Company's sustained growth.

Simultaneously, through strategic alliances with the upstream and downstream companies, there will be a deeper commitment to innovation in “comfortable living”. This involves developing diverse applications to meet daily life needs, adding value to products, diversifying market presence based on regional market changes and supply-demand dynamics, and increasing the proportion of differentiated product sales. The objective is to seize opportunities amidst the global industrial supply chain reorganization.

In addition, strict control over capital expenditures, reduction of raw material and product inventories, continuous implementation of overall process safety measures and inspections at various plants and at construction sites will be maintained to eliminate safety hazards and ensure stable production with zero accidents. Furthermore, the company will deepen its development in AI and digital transformation, optimizing overall process and operational management digitally, moving towards the goal of intelligent factories. ChatGPT will also be applied to assist in business management to enhance operational efficiency.

In response to the global wave of low-carbon transformation, to achieve sustainable operations, the Company will integrate ESG principles into various business strategies. The Company is committed to promote energy transitions, circular economy practices, energy conservation and carbon reduction, strengthening our risk management for climate change. The Company’s dedicated efforts to the research and develop of environmentally friendly and medical-grade products, such as fully recyclable plastics, anti-adhesive composite granules, and green plastics, etc. are steps towards implementing a green transformation and the goal of carbon neutrality by 2050. Through these sustainable and innovative business strategies, the Company seeks to strengthen

11

its international competitiveness, especially during this downturn in petrochemical industry, finding key opportunities for a turnaround to break through various challenges to regain profitability.

The expected sales volume of major product in 2024 is following: (including consolidated subsidiaries and inter-company internal turnover)

Product	Unit	Sales volume
PVC	ton	1,737,187
Caustic Soda	ton	1,360,405
HDPE	ton	464,608
EVA	ton	326,708
LLDPE	ton	580,027
AN	ton	277,978
ECH	ton	80,560
MTBE	ton	87,600
MMA	ton	147,010
AE	ton	585,904
NBA	ton	255,561
SAP	ton	210,113
PP	ton	1,022,580

12

II. Company Profile

2.1 Date of Incorporation: November 5, 1954

2.2 Business Philosophy and Vision

The Company has undergone more than 70 years of development and has continuously expanded to maintain a global presence in Taiwan, China, the U.S., Vietnam and other regions. The Company’s business involvement consists of such industries as petrochemical, plastics, textile, fibers, electron, energy, transportation and steel. The driving force behind FPC’s constant expansion, growth and development is the founders, Mr. Wang Yung-Ching and Mr. Wang Yung-Tsai, who have always emphasized and demonstrated the spirit of “Diligence, Perseverance, Frugality and Trustworthiness; Aiming at the Sovereign Good; Perpetual Business Operation; Dedication to the Society”.

In terms of business operations, the Company deeply understands that a good management is the base of steady operations. Therefore, for a long time, in the aspects of production and sale, human resource allocation or resource utilization, the Company keeps the two founders’ spirit of tracking the root, seeking truth from fact and rationalization to reduce the cost and increase the benefits. This spirit has also been internalized as an important core of the company culture, but also the driving force for progress and sustainability. Moreover, the Company keeps the Company’s meaning based on reaching a reasonable profit and a good contribution to society at the same time. Therefore, in addition to its business operations, the Company and the affiliated companies have also established a number of non-profit public welfare institutions, such as schools, hospitals and foundations, to invest in medical care, education and various social welfare, and continuously expands its scale to enhance efficiency and quality to fulfill the corporate social responsibility.

Moreover, as the impact of global extreme climate intensifies, the Company has set the carbon and greenhouse gas reduction target in the short, middle and long term, and also actively promotes the energy transition by low carbon, energy saving, circular economy and increased use of renewable energy to speed up the carbon reduction. The Company is also committed to the research and development of environmentally friendly products such as plastic recycling, biodegradable and green plastics, creating diversified values, and moving towards the goal of “2050 carbon neutrality”, and hopes to create a zero-carbon environment in future with upstream and downstream supply chains producers.

13

The Company’s vision for future development is in the various industrial fields in which it is engaged, not only to achieve world-class production capacity, but also to focus on the artificial intelligence and innovative R&D. In addition to accelerating the promotion of AI and digital transformation technologies, building a digital ecosystem for operation management, optimizing manufacturing processes, improving output and quality, reducing raw material and energy consumption, and improving industrial safety and environmental protection, it also enhances the international competitiveness of its strong products to achieve its goal of sustainable development by staying in the global leadership position of the industry. With satisfying the customers’ needs and the creation of stockholders’ vale, the Company also keeps paying attention to ESG in order to fulfill corporate social responsibility, promote sustainable development with the environment, and reach the goal of sustainable operation.

14

2.3 Milestone

• Formosa Plastics Corporation established in November 1954, with capitalization of NTD 5 million and constructed the first PVC plant in Kaohsiung City. The capital of the Company has built up to NTD 63.6 billion by the end of 2023. The primary businesses included the production and sale of plastics and fibers products, where the capacity of VCM is 1,644K tons and it will be up to 3,111K tons including the capacity of USA re-invested companies, which places the Company to the third rank VCM manufacturers in the world. In addition, the Company’s capacity of PVC is 1,338K tons, which is the largest PVC manufacturers in Twain, and it will be up to 3,132K tons including the capacity of USA and China re-invested companies, which places the Company to the third rank PVC manufacturers in the world. The capacity of others such as the caustic soda, Acrylic acid(AA), n-butanol(NBA), super absorbent polymer(SAP), acrylonitrile(AN), Methyl methacrylate (MMA) and epichlorohydrin(ECH) also ranks among the top in the world.

The Company’s business expansion roughly divided into the following stages:

• 1954  Establishment of Formosa Plastics Corporation with capitalization of NTD 5 million. Constructed the first PVC plant in Kaohsiung City.

• 1957  Started operations in April with a monthly PVC capacity of 120 metric tons.

• 1960  Invested in Tungshan Calcium Carbide Corporation with a monthly capacity of 2,000 metric tons.

• 1963  Expanded capacity of PVC plant in Kaohsiung to 2,100 MT/month.

• 1965  The Caustic Soda plant in Chienchen came on stream (70 MT/day).

• Merged Tung Shan Calcium Carbide Corporation and added an electric furnace to increase capacity to 4,000 MT/month.

• 1966  The Caustic Soda plant in Chienchen set up a department to produce DOP.

• 1967  The Tairylan plant was built in Chienchen to produce acrylic fiber, with a daily capacity of 4 metric tons.

• 1968  Set up Kuandu plant to produce acrylic yarn and carpet.

• Increased calcium carbide capacity to 8,500 MT/month.

• Improved production technology to increase acrylic fiber capacity to 20 MT/day.

• 20 tanks were added to Caustic Soda plant in Chienchen to raise capacity to 88 MT/day.

15

• 1969  Took over Chi Ho Fiber Co. and changed the name as Sanhsia plant.  Set up a Machinery plant.

• 1970  The Caustic Soda plant in Chienchen added a commutator to increase capacity to 100 MT/day.

• 1971  The Acrylic Fiber plant in Chienchen set two new units and raised capacity to 55 MT/day.

• 1972  The PVC plant in Renwu started operation with a monthly capacity of 2,400 MT.

• Dyeing and knitting equipment in Kuandu plant were moved to Sanhsia plant.

• Engineering Section was expanded and renamed as Engineering Division.

• 1973  Built a PVC plant in Puerto Rico with a monthly capacity of 6,000 MT.

• Began construction of Caustic Soda and VCM plant in Renwu, with a capacity of 525 MT/day and 240,000 MT/year respectively.

• Capacity of DOP plant was increased to 2,500 MT/month.

• Machinery plant was expanded and moved to Renwu complex.

• 1974  Expanded capacity of 50 MT/day of Acrylic Fiber plant (A and B series) in Renwu.

• 1975  The capacity of PVC plant in Renwu was increased to 9,000 MT/month.

• The Caustic Soda plant in Renwu completed construction and came on stream (525 MT/day).

• The VCM plant (phase I) in Renwu completed construction and came on stream with an annual capacity of 240,000 MT.

• The Utility plant with a 246 T/H boiler was added.

• Machinery plant was restructured into Machinery Division.

• Construction of Wharf#29 in Kaohsiung was completed.

• 1977  A 130M[3] reactor of PVC plant in Renwu was completed and increased capacity to 18,000 MT/month.

• The Plastics Division phased out the use of calcium carbide in its manufacture of VCM.

• Test production of E-process Compound fiber (C series) began in Acrylic Fiber plant in Renwu.

• 1978  Began the construction of VCM plant (phase II) in Renwu, with capacity of 240,000 MT/Y.

• The capacity of Caustic Soda plant in Chienchen was increased to 105 MT/day.

16

• Construction of the first phase PVC plant at Kaohsiung was completed, increasing production capacity of suspension PVC resin by 1,500 MT/month to a total of 9,000 MT/month.

• The Tairylan plant at Renwu successfully developed E-process Compound fiber (D series).

• Chienchen and Renwu plants totaled 165 MT/day.

• 1979  Started planning investments in the United States.

• An expansion was added to PVC plant in Renwu to produce 100,000 MT/Y of Mass PVC resin.

• The Tairylan plant in Chienchen was shut down, and some equipments were transferred to Tairylan plant in Renwu.

• The Tairylan plant in Renwu expanded capacity by 30 MT/day (F series).

• Two 8,000 KW oil-fired generators were added.

• 1980  The Puerto Rico plant was shut down.

• The VCM plant (phase II) in Renwu completed construction, increasing the total production capacity to 480,000 MT/Y.

• The Caustic Soda plant in Renwu added four tanks, increasing its capacity to 530 MT/month.

• The Tairylan plant in Renwu expanded its capacity by 30 MT/day.

• Installed a Benson boiler of 180 T/H, a steam generator of 23,500 KW, and an oxygen plant of 3,667 NM[3] /H.

• The Machinery Division entered into technical cooperation with Renk Corp in Germany.

• 1981  Expanded PE plant (120,000 MT/Y), Utility plant (boiler 120T/H, cogeneration 15,800 KW) and AE plant (28,500 MT/Y) in Linyuan.

• The DOP plant was shut down in November.

• Completed the expansion of phase II Dispersion PVC resin of PVC plant in Kaohsiung with a monthly capacity of 900 MT.

• Completed the 30 MT/day (G series) expansion of Tairylan plant in Renwu and increased capacity to 210 MT/day.

• Began the set-up calcium carbonate equipments with capacity of 10,800 MT/month in Calcium Carbide plant.

• 1982  The expansion of 100,000 MT/Y Mass PVC resin of PVC plant in Renwu was completed and came on stream.

• FPC USA started operations.

17

• The A and B series of Tairylan plant in Renwu were converted to E-Type, resulting in an increase of production capacity to 240 MT/day.

• The Caustic Soda plant in Renwu added an IEM-1 ion-exchange system with capacity of 116 MT/day.

• 1983  Set up the PE processing section.

• A Polyolefin Division was established.

• Planned to expand Phase III of VCM plant in Linyuan with capacity of 240,000 MT/Y.

• Succeeded in developing carbon fiber

• 1984  The AE plant in Linyuan came on stream with an annual capacity of 28,500 MT.

• The Machinery Division signed a cooperative agreement with Murata Corp. of Japan to manufacture automatic warehousing system.

• The 120,000 MT/Y HDPE plant in Linyuan came on stream.

• 1985  A carbon fiber plant with an annual capacity of 100 MT was constructed.

• Completed the expansion project of 2EHA (2 Ethyl Hexyl Acrylate) with capacity 60 MT/day.

• A chlorofluorocarbon plant with capacity of 23,040 MT/Y was constructed.

• The VCM plant (phase III) in Linyuan came on stream; as a result, the total capacity of VCM was increased to 720,000 MT/Y.

• The Caustic Soda plant using IEM-1 process in Renwu came on stream with capacity of 116 MT/day.

• The Caustic Soda plant in Chienchen was shut down.

• 1986  Planned to invest in No.6 Naphtha Cracking Project.

• Built the 300 MT/Y carbon precursor plant.

• Built the 330 T/H coal boiler.

• Set up Machinery plant in Lungteh.

• Built a wax plant with an annual capacity of 1,440 MT.

• The 100 MT/Y carbon fiber plant came on stream.

• Built a MBS plant in Linyuan with capacity of 12,000 MT/Y.

• Phase I of PVC plant in Linyuan with capacity of 140,000 MT/Y was completed.

• Expansion of Chemical Wharf#28 in Kaohsiung was completed.

• 1987  Phase II of PVC plant in Linyuan with capacity of 70,000 MT/Y was completed.

18

• Added equipments for carpet tile production with a monthly capacity of 16,500 M[2] .

• The Taical plant came on stream with capacity of 400 MT/month.

• The Carbon Precursor plant came on stream with capacity of 300 MT/Y.

• The Carbon Precursor plant came on stream with capacity of 300 MT/Y.

• Phase II of AE plant in Linyuan with capacity of 75,000 MT/Y was completed.

• 1988  Installed the BCF-PP and flat fiber production line in Sanhsia plant.

• Production of Caustic Soda plant in Renwu was shifted from mercury process to ion-exchange process, with capacity of 425 MT/day.

• Phase II of Carbon Fiber plant with capacity of 130 MT/Y was completed.

• Built the Plastic Precessing plant in Hsinkang, Chiayi to produce garbage bags (120 MT/month), shopping bags (140 MT/month) and deli bags (40 MT/month).

• Finished special fiber construction of Tairylan plant with capacity of 30 MT/day and came on stream, increasing total capacity to 300 MT/day.

• Utility plant in Linyuan added a 200 T/H boiler and 49,460 KW cogenerator.

• A 6,000 MT/month Maerz limestone kiln was installed.

• Utility plant in Renwu added two boilers (350 T/H).

• Expansion of second line of Taical production (600 MT/month).

• 1989  The mercury process was shut down and IEM-2 started operation with capacity of 425 MT/day.

• Phase I of PVC plant in Linyuan came on stream with capacity of 140,000 MT/Y.

• The MBS plant in Linyuan came on stream with capacity of 12,000 MT/Y.

• Invested US$100 million to establish Formosa Plastics Corporation, America (FPCA), building IEM plant (caustic soda 633,000 MT/Y, chlorine 571,000 MT/Y) and EDC plant (600,000 MT/Y).

• The second line of Taical production came on stream with capacity of 600 MT/month, having total capacity of 12,000 MT/Y.

• 1990  Phase II of AE plant in Linyuan was completed, increasing total capacity to 75,000 MT/Y.

• Phase II of Carbon Fiber plant was completed, increasing total capacity to 230 MT/Y.

19

• The Chlorofluorocarbon plant came on stream with capacity of 23,040 MT/Y.

• Phase II of PVC plant in Linyuan was completed, with capacity of 70,000 MT/Y.

• 1991  Constructed POM plant in Hsinkang, with an annual capacity of 20,000 MT.

• Constructed SAP (Super Absorbent Polymer) plant in Hsinkang, with an annual capacity of 6,000 MT.

• Completed PE Processing plant in Hsinkang.

• Two sets of 350 T/H boilers and co-generators with 201,400 KW capacity come on stream in Renwu.

• One 200 T/H boiler and co-generator with 49,460 KW capacity came on stream in Linyuan.

• Formosa Heavy Industries Corporation was established.

• Started production of distributed control system (DCS), with capacity of 18~24 sets per year.

• Constructed NS-2500 calcium carbonate process with an annual capacity of 6,000 MT.

• 1992  Transferred assets and personnel of Machinery Division to Formosa Heavy Industries Corporation.

• Formosa Petrochemical Corporation (FPCC) was established. The personnel of Olefin Team I were transferred to FPCC.

• Fiber Processing Division was closed.

• Added one set of co-generator with 125,900 KW capacity in Renwu.

• DCS installation and testing facilities went into operation.

• Started pilot production for CFC substitutes HCFC-141b and 142b.

• 1993  Commencement of work on No.6 Naphtha Cracking Project officially announced on July 5.

• Super Absorbent Polymer plant in Hsinkang with capacity of 6,000 MT/Y was completed and went into operation.

• POM Pilot plant in Hsinkang, with capacity of 1,000 MT/Y, went into operation.

• Six electrolytic cells were added in Caustic Soda plant in Renwu, increasing an annual capacity of 35,300 MT.

• Mailiao Harbor Administration Corporation was established.

20

• Constructed KS-50 calcium carbonate facilities with capacity of 7,500 MT/month.

• 1994  Invested in Asia Pacific Investment Corporation.

• Processed with the expansion of PVC plant in Linyuan, including Processing Aids and Acrylic Modifiers (5,760 MT/Y for PA, 1,440 MT/Y for AM and 3,600 MT/Y for MBS).

• Successful developed CFC substitutes HCFC-141b and 142b came on stream.

• Processed with the second phase expansion of Super Absorbent Polymer plant (6,000 MT/Y).

• Added a MAERZ limestone Kiln (9,000 MT/Y) in Calcium Carbide plant.

• 1995  Processed with the expansion of HDPE plant to raise annual capacity to 180,000 MT.

• Completed and started production of POM plant in Hsinkang (20,000 MT/Y).

• Completed the installation of one set co-generator with 500 T/H (125,900 KW) capacity in Renwu.

• Completed the second phase expansion of Super Absorbent Polymer plant (6,000 MT/Y).

• Invested NTD 432 million (24% shareholding) to establish Formosa Komatsu Silicon Corporation with Japan’s Komatsu Electronic Metals Co., Ltd. and Asia Pacific Investment Corporation.

• Processed with the phase three expansion for carbon fiber with annual capacity of 500 MT.

• Addition of one precipitated calcium carbonate plant (3,000 MT/month) and one set of U-Cal facility (1,200 MT/month) in Calcium Carbide plant.

1996

• Mailiao Power Corporation was established.

• Formosa Mailiao Maintenance Corporation was established.

• Completed the expansion for processing aids and acrylic modifiers of PVC plant in Linyuan.

• Completed the expansion of HDPE plant in Linyuan to raise annual capacity to 180,000 MT.

• Completed the phase three expansion for carbon fiber.

• 1997  Processed with the phase one expansion for Carbon Fiber plant in Mailiao with annual capacity of 2,000 MT.

• Chlorofluorocarbon plant renamed as Hydrochlorofluorocarbon plant.

21

• Precipitated calcium carbonate plant (3,000 MT/month) and U-Cal facility (1,200 MT/month) began production.

• 1998  Completed and started production of AE plant in Mailiao (100,000 MT/Y).

• Completed and started production of HDPE plant in Mailiao (240,000 MT/Y).

• Completed and started production of PVC plant in Mailiao (420,000 MT/Y).

• Olefin Team-Ⅱ renamed as Chemicals Division.

• Invested NTD 200 million (50% shareholding) to establish Formosa Asahi Spandex Co., Ltd. with Japan’s Asahi Chemical Industry Co., Ltd.

• 1999  Completed and started production of VCM plant in Mailiao (600,000 MT/Y).

• Completed and started production of Caustic Soda plant in Mailiao (phase I 1,000 MT/day).

• Processed with phase three expansion for Super Absorbent Polymer plant (12,000 MT/Y).

• Invested NTD 50 million (50% shareholding) to establish Formosa Daikin Advanced Chemicals Co., Ltd. with Japan’s Daikin Industries, Ltd.

• Processed with PDP plant in Sanhsia (phase I 7,200 SETS/Y).

• 2000  Completed and started production of Carbon Fiber plant in Mailiao (1,000 MT/Y).

• Completed and started production of EVA/LDPE plant in Mailiao (200,000 MT/Y).

• Completed and started production of AN plant in Mailiao (200,000 MT/Y).

• Completed and started production of C4 plant in Mailiao (MTBE 151,000 MT/Y and B-1 17,000 MT/Y).

• Completed and started production of Caustic Soda plant in Mailiao (phase II 500 MT/day).

• Completed and started production of phase three expansion for Super Absorbent Polymer plant (12,000 MT/Y).

• Formosa Plastics Marine Corporation was established.

• 2001  Completed and started production for paste PVC of PVC plant in Mailiao (36,000 MT/Y).

22

• Completed and started production of LLDPE plant in Mailiao (240,000 MT/Y).

• Completed and started production of MMA plant in Mailiao (70,000 MT/Y).

• Completed and started production of ECH plant in Mailiao (80,000 MT/Y).

• PDP plant (phase I 7,200 SETS/Y) in Sanhsia began production.

• Formosa Teletek. Corporation (100% shareholding) was established.

• Formosa Group Ocean Marine Investment Corporation (19% shareholding) was established.

• SU-HUA Transport Corporation (25% shareholding) was established.

• 2002  Completed the expansion project of AE plant in Mailiao (18,000 MT/Y).

• Invested Gala Television Corporation (6.25% shareholding).

• Signed the PDP MOU with Fujitsu Hitachi Plasma Display Corporation and AU Optronics Corporation.

• Formosa Plasma Display Corporation was established (77.5% shareholding).

• Acquired 49% and 0.46% share holdings of Yungchia Chemical Industries Corporation from Central Investment Corporation and China Petroleum Corporation respectively.

• 100% owned subsidiary Formosa Industries (Ningbo) Co., Ltd. was established.

• 2003  Completed and started production for phase three of HDPE plant in Mailiao (50,000 MT/Y).

• Completed and started production for MAA of MMA plant in Mailiao (20,000 MT/Y).

• Completed and started production for LiPF6 of Hydrochlorofluorocarbon plant in Renwu (200 MT/Y).

• Completed and started production for debottlenecking plan of Acrylic Fiber plant in Renwu (13,000 MT/Y). Completed and started production for debottlenecking plan of PP plant in Linyuan (50,000 MT/Y).

• Completed and started production for debottlenecking plan of POM plant in Hsinkang (5,000 MT/Y).

• Processed with phase one of NF3 plant in Renwu (100 MT/Y).

23

• Processed with the phase four expansion of No.6 Naphtha Cracking Project in Mailiao: 38,000 MT/Y for paste PVC phase two, 333,000 MT/Y for caustic soda phase four, 30,000 MT/Y for HDPE, 80,000 MT/Y for AN, 28,000 MT/Y for MMA, 20,000 MT/Y for ECH and 23,000 MT/Y for MTBE.

• The Board Meeting dated March 6th decided to merge Yungchia Chemicals Industries Corporation (1.96 shares of Yungchia stock for 1 share of FPC stock).

• Formosa Environmental Technology Corporation was established (24.34% shareholding).

• FPC supplied 63,734,000 FPCC shares for FPCC IPO (NTD 43 per share).

• 100% owned subsidiary Formosa Acrylic Esters (Ningbo) Co., Ltd. was established.

• 2004  Completed and started production for phase one NF3 in Renwu (100 MT/Y).

• Completed and started production for debottlenecking plan of PP plant in Linyuan (25,000 MT/Y).

• Completed and started production for debottlenecking plan of SAP plant in Hsinkang (6,500 MT/Y).

• Completed and started production for phase three of Caustic Soda plant in Mailiao (167,000 MT/Y).

• Completed and started production for phase three of VCM plant in Mailiao (80,000 MT/Y).

• Completed and started production for debottlenecking plan of AE plant in Mailiao (13,500 MT/Y).

• Completed and started production for debottlenecking plan of LLDPE plant in Mailiao (24,000 MT/Y).

• Completed and started production for debottlenecking plan of AN plant in Mailiao (40,000 MT/Y).

• Processed with phase two & three of NF3 plant in Renwu (100 % 200 MT/Y), renewal the first set of co-generation in Renwu, expansion for Caustic Soda plant in Renwu (133,000 MT/Y for caustic soda-liquid and 100,000 MT/Y for caustic soda-pearls), expansion for MBS (4,100 MT/Y) and AM (17,800 MT/Y) in Linyuan, debottlenecking plan for LDPE/EVA plant in Mailiao (40,000 MT/Y) and phase two of Carbon Fiber plant in Mailiao (1,100 MT/Y).

24

• 100% owned subsidiary Formosa Polypropylene (Ningbo) Co., Ltd. was established.

  • 100% owned subsidiary Formosa Electronics (Ningbo) Co., Ltd. was established.

• Issued foreign corporate bond of US$ 250 million, exchangeable for FPCC’s stock.

• Facilities of PE Processing plant in Chienchen were moved to Hsinkang complex, and the carbide production was shut down.

• 2005  Completed and started production of PVC plant in Ningbo, China.

• The Board Meeting of 100% owned subsidiary Formosa Teletek. Corporation decided to shut down its production of LTCC.

• The production of chlorofluorocarbon in Hydrochlorofluorocarbon plant was shut down.

• Completed and started production of 38,000 MT/Y for paste PVC phase two, 333,000 MT/Y for caustic soda phase four, 14,000 MT/Y for MMA, 23,000 MT/Y for MTBE and 40,000 MT/Y for LDPE/EVA in Mailiao.

• Completed and started production for the first set renewal of cogeneration, expansion of 100 MT/Y for NF3 phase two in Renwu.

• Processed with the debottlenecking plan of VCM plant in Mailiao (100,000 MT/Y) and SAP plant in Hsinkang (9,500 MT/Y).

• 100% owned subsidiary Formosa Super Absorbent Polymer (Ningbo) Co., Ltd. was established.

• The Board Meeting dated December 19th decided to exchange all FPCAmerica stocks for FPC-USA, and FPC holds 22.43% of FPC-USA from 6.04% after exchanging.

• 2006  The Shareholders’ Meeting of 93.37% owned subsidiary Formosa Plasma Display Corporation decided to dissolve.

• The Shareholders’ Meeting of 100% owned subsidiary Formosa Teletek. Corporation decided dissolve.

• FPC’s foreign corporate bonds, exchangeable for FPCC’s stock, were all exchanged.

• Completed and started production of AE plant in Ningbo, China.

• The Board members was reduced from 17 to 15, and Chairman Y.C. Wang & Executive Director Y.T. Wang retired.

• Completed and started production of following debottlenecking plan in Mailiao: 40,000 MT/Y for AN, 20,000 MT/Y for ECH, 14,000 MT/Y for MMA, 30,000 MT/Y for HDPE.

25

• Completed and started production of following expansion plan in Renwu: 200 MT/Y for NF3 phase three, 133,000 MT/Y for caustic soda-liquid and 100,000 MT/Y for caustic soda-pearls.

• Completed and started production of 9,500 MT/Y for SAP expansion plan in Hsinkang.

• Completed and started production of 4,100 MT/Y for MBS and 17,800 MT/Y for AM expansion plan in Linyuan.

• Completed and started production of 25,000 MT/Y for PP debottlenecking plan in Linyuan.

• Processed with the following expansion plan in Mailiao: 1,100 MT/Y for Carbon Fiber phase two, 2,200 MT/Y for Carbon Fiber phase three, 250,000 MT/Y for NBA and 30,000 MT/Y for SAP.

• Processed with 700 MT/Y for Carbon Fiber debottlenecking plan in Mailiao.

• Issued domestic unsecured corporate bond for NTD 10 billion.

• 2007  Completed and started production of 1,100 MT/Y expansion for Carbon Fiber phase two and 700 MT/Y debottlenecking for Carbon Fiber in Mailiao.

• The Board Meeting decided to invest Fujian FuXin Special Steel Corporation in China for 25% shareholding. Formosa Industries (Hong Kong) Limited was established and adjusted the structure for investment in China.

• Processed with 2,600 MT/Y expansion plan for Carbon Fiber phase four.

• 2008  Completed and started production of SAP and PP plant in Ningbo, China.

• Completed and started production of 2,200 MT/Y for Carbon Fiber phase three and 250,000 MT/Y for NBA.

• The Board Meeting decided to invest Formosa Ha Tinh Steel Corporation in Vietnam for 25% shareholding.

• Founder Mr. Y.C. Wang passed away.

• Issued domestic unsecured corporate bond twice for NTD 6 billion each.

• 2009  3 Independent Director were elected.

• Issued domestic unsecured corporate bond for NTD 6 billion.

• The Shareholders’ Meeting decided to increase capital of NTD 4,004,330,110 to set up a Silane plant in Mailiao.

26

• 2010  Issued domestic unsecured corporate bond for NTD 6 billion.

• Top Advisor Mr. C.S. Wang passed away.

• Board of Directors decided to lower the shareholding ratio of Formosa Ha Tinh Steel Corporation to 21.25%.

• Board of Directors approved the expansion of PVC of Formosa Industries (Ningbo) Co., Ltd. for 150,000 MT/Y, AA/AE of Formosa Acrylic Esters (Ningbo) Co., Ltd. for 160,000 /200,000 MT/Y, SAP of Formosa SAP (Ningbo) Co., Ltd. for 60,000 MT/Y, and also established Formosa Polyethylene (Ningbo) Co., Ltd. to produce EVA for 100,000 MT/Y for Phase I.

• Processed the expansion of SAP for 60,000 MY/Y in Mailiao Plant.

• Completed and started production of 1,300 MT/Y for Carbon Fiber Phase IV Line H expansion plan in Mailiao and of 20,000 MT/Y for POM debottlenecking plan in Hsinkang.

• 2011  Board of Directors approved Formosa Industries (Ningbo) Co., Ltd. to build a new plant producing paste PVC for capacity of 70,000 MT/Y.

• Issued domestic unsecured corporate bond twice for total NTD 10 billion.

• Completed and started production of Carbon Fiber Phase IV expansion for 1,300 MT/Y.

• Processed with debottlenecking plan for SAP of 10,000 MT/Y in Hsinkang plant.

• Established Remuneration Committee.

• 2012  Issued domestic unsecured bond three times for total NTD 21 billion.

• Completed and started production: SAP debottlenecking plan for 10,000 MT/Y in Hsinkang plant and SAP expansion plan for 60,000 MT/Y in Mailiao plant.

• Board of Directors agreed to have a joint venture, Formosa Mitsui Advanced Chemicals Co., Ltd., with Mitsui Chemicals Inc. for 50% shareholding each to produce electrolyte solution for lithium battery with capacity 5,000 MT/Y.

• Board of Directors agreed to consolidate Formosa Industries (Ningbo) Co., Ltd, Formosa Acrylic Esters (Ningbo) Co., Ltd, Formosa Polypropylene (Ningbo) Co., Ltd, Formosa Electronics (Ningbo) Co., Ltd, Formosa SAP (Ningbo) Co., Ltd and Formosa Polyethylene (Ningbo) Co., Ltd into one company as Formosa Industries (Ningbo) Co., Ltd.

27

• Board of Directors agreed to invest Formosa Ha Tinh Steel Corporation for USD$ 170 million.

• 2013  Board of Directors approved to issue domestic unsecured bond for NTD 2 million.

• Formosa Group (Cayman) Limited, located on British Cayman Islands, was established together by Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemicals & Fibre Corp. and Formosa Petrochemical Corp.

• Formosa Resources Corporation was established together by Formosa Plastics Corp., Nan Ya Plastics Corp., Formosa Chemicals & Fibre Corp. and Formosa Petrochemical Corp., with capital of NTD 1 million and for 25% shareholding each.

• Lowered shareholding ratio of Formosa Ha Tinh Steel Corporation from 21.25% to 14.75%.

• Increased to invest Formosa Resources Corporation for NTD 2.99975 billion.

• 2014  Disposed 49,348,000 shares of Formosa Petrochemical Corporation with lowering shareholding ratio from 29.31% to 28.79%.

• Increased to invest Formosa Resources Corporation for NTD 1.1625 billion.

• Kaohsiung plant was no longer operational, so our registration address was changed to No.100, Shuiguan Rd., Renwu Dist., Kaohsiung City 814, Taiwan (R.O.C.)

• Board of Directors agreed to issue domestic unsecured bond for NTD 6 billion.

• Established “Formosa Group Investment (Cayman) Limited” with Nanya Plastics Corp., Formosa Chemicals & Fibre Corp. and Formosa Petrochemical Corp. in the British Cayman Islands.

• Founder, Y. T. Wang, passed away.

• Board of Directors agreed to establish Formosa Industries Corporation in U.S. to invested in ethane cracker of 1.2 million MT/Y ethylene. and HDPE for capacity of 400,000 MT/Y.

• Formosa Industries (Ningbo) Co., Ltd. completed and started production of paste PVC expansion for 70,000 MT/Y.

• The machinery equipment and inventory of the plastic processing group were sold to Inteplast Taiwan Corp.

28

• 2015  Formosa Acrylic Esters (Ningbo) Co., Ltd has expanded AA/AE for capacity of 160,000/170,000 MT/Y. Formosa SAP (Ningbo) Co., Ltd has expanded SAP for capacity of 60,000 MT/Y into completion.

• Disposed 3,821,000 shares of Nanya Technology Corporation with lowering shareholding ratio from 15.48% to 15.32%.

• Disposed 22,000,000 shares of Formosa Petrochemical Corporation with lowering shareholding ratio from 28.79% to 28.56%.

• Board of Directors agreed to establish the Audit Committee instead of supervisors and Audit Committee’s term of service is from June 25, 2015 to June 24, 2018.

• The Chairman, C.T. Lee, changed to be as the top advisor of the Company.

• Formosa Industries Corporation was established in Texas, U.S. to produce HDPE for capacity of 400,000 MT/Y and also invested in ethane cracker of 1.2 million MT/Y ethylene.

• Lowered shareholding ratio of Formosa Ha Tinh Steel Corporation from 14.75% to 12.346%.

• A joint venture, Shang Wei (Jiangsu) carbon fiber composite material Co. Ltd., with Swancor IND Co. Ltd. for 18% shareholding.

• 2016  Formosa Polyethylene (Ningbo) Co., Ltd has expanded EVA for capacity of 72,000 MT/Y into completion.

• Lowered shareholding ratio of Formosa Ha Tinh Steel Corporation from 12.346% to 11.432%.

• Completed and started production of 34,000 MT/Y for PP debottlenecking plan in Linyuan Plant.

• Board of Directors agreed to cease producing acrylic fiber in Renwu Plant.

• Established “Lolita Packaging L.L.C” through a US subsidiary, “Formosa Industries Corporation”, with an investment of USD 9.88 million for 38% shareholding.

• Formosa Mitsui Advanced Chemicals Co., Ltd., the reinvested company, processed with phase two expansion for electrolyte solution for lithium battery with capacity 3,500 MT/Y.

• 2017  A merger involving several Ningbo subsidiaries, including Formosa Industries (Ningbo) Co., Ltd., Formosa Acrylic Esters (Ningbo) Co., Ltd., Formosa Polyethylene (Ningbo) Co., Ltd., Formosa Polypropylene (Ningbo) Co., Ltd. and Formosa Super Absorbent Polymer (Ningbo) Co.,

29

Ltd. was completed and Formosa Industries (Ningbo) Co., Ltd. is the surviving company.

• Board of Directors agreed to cease producing NF3 and NH3 in Renwu Plant.

• Donation of NTD 125 million to establish Foundation of Y. C. Wang and Y. T. Wang Brothers Park in Kaohsiung.

• Increased to invest Formosa Resources Corporation for USD 55 million.

• Issue domestic unsecured bond for NTD 7 billion.

• Increased to invest Formosa Ha Tinh (Cayman) Limited for USD 114,321,668.

• Increased to invest Fujian Fuxin Special Steel Co., Ltd. for USD 145.8 million.

• Increased to invest Formosa Industries (Ningbo) Co., Ltd. for USD 267 million.

• Disposed 32,722,000 shares of Nanya Technology Corporation with lowering shareholding ratio from 13.37% to 11.30%.

• 2018  Issue domestic unsecured bond for NTD 9.3 billion.

• Signed the Letter of Intent to establish Y. C. Wang and Y. T. Wang Brothers Park in Kaohsiung with Kaohsiung City Government.

• Board of Directors agreed to invest NTD 4.675 billion to purchase the “Taipei Industrial Park of Cooperation Headquarters “located at Sec. 6, Nanjing E. Rd., Neihu Dist., Taipei City with holding a quarter of buildings and land.

• Formosa Industries (Ningbo) Co., Ltd will construct a PDH plant for Propylene capacity of 600,000 MT/Y.

• Increased to invest Formosa Industries Corporation for USD 12,375 thousand to reinvest Formosa Olefins, L.L.C.

• 2019  To invest Minima Technology Co., Ltd. for NTD 229,555 thousand with 7,405,000 stocks, equivalent to shareholding ratio 19.15%.

• Increased to invest Formosa Resources Corporation for USD 81.25 million.

• Increased to invest Formosa Industries Corporation for USD 100 million.

• 2020  Issue domestic unsecured bond for NTD 8.35 billion.

• Adjust the investment structure of Formosa Ha Tinh Steel Corp.

• Increased to invest Formosa Industries Corporation for USD 185 million.

• Invest a joint venture, Formosa Tokuyama Advanced Chemicals Co., Ltd.

30

(50% shareholding), with Tokuyama Corp.

• Increased to invest Formosa Plastics Construction Corporation for NTD 500 million.

• Board of Directors agreed to increase investment for USD 4,600,000 to Formosa Mitsui Advanced Chemicals Co., Ltd.

• 2021  Formosa Industries (Ningbo) Co., Ltd completed and commenced production of 10,000 MT/Y for SAP debottlenecking plan.

• “Electronic Special Project Department” was renamed “Electronic Materials Division”.

• To invest Puriblood Medical Co., Ltd. for NTD 91,000 thousand with 1,300,000 stocks, equivalent to shareholding ratio 9.14%.

• Donation of NTD 250 million to Executive Yuan for the use of bailouts.

• Issue domestic unsecured bond for NTD 7.5 billion.

• 2022  Board of Directors agreed to invest for NTD 1.75bn (25% shareholding) to set up “Formosa Smart Energy Tech Corp.” with Formosa Chemicals and Fibre Corp., Nanya Plastics Corp. and Formosa Petrochemical Corp.

• Increased to invest Formosa Industries Corporation for USD 70million for setting up 1-hexne plant.

• Set up “Sustainable Development Committee” under the Board of Directors.

• 2023  Board of Directors approved to liquidate the investee, Formosa Mitsui Advanced Chemicals Co., Ltd.

• Increased to invest Formosa Resources Corporation for USD 25 million.

• Increased to invest Formosa Plastics Construction Corporation for NTD 500 million.

• Issue domestic unsecured bond for NTD 11.1 billion.

• 2024  Board of Directors approved to purchase a 50% stake in Taiwan Tokuyama Corp. from Tokuyama Corp., with a maximum limit of NTD 1.1 billion.

• Increased to invest Fujian Fuxin Special Steel Co., Ltd. for USD 530 million.

31

==> picture [139 x 178] intentionally omitted <==

==> picture [5 x 58] intentionally omitted <==

==> picture [6 x 58] intentionally omitted <==

==> picture [5 x 58] intentionally omitted <==

==> picture [9 x 19] intentionally omitted <==

==> picture [5 x 110] intentionally omitted <==

==> picture [6 x 110] intentionally omitted <==

==> picture [5 x 110] intentionally omitted <==

==> picture [9 x 55] intentionally omitted <==

==> picture [11 x 15] intentionally omitted <==

==> picture [11 x 46] intentionally omitted <==

==> picture [5 x 65] intentionally omitted <==

==> picture [5 x 65] intentionally omitted <==

==> picture [5 x 65] intentionally omitted <==

==> picture [4 x 65] intentionally omitted <==

==> picture [5 x 120] intentionally omitted <==

==> picture [5 x 120] intentionally omitted <==

==> picture [5 x 120] intentionally omitted <==

==> picture [4 x 120] intentionally omitted <==

==> picture [10 x 19] intentionally omitted <==

==> picture [9 x 19] intentionally omitted <==

==> picture [10 x 55] intentionally omitted <==

==> picture [9 x 55] intentionally omitted <==

==> picture [57 x 5] intentionally omitted <==

==> picture [58 x 7] intentionally omitted <==

==> picture [29 x 17] intentionally omitted <==

==> picture [253 x 727] intentionally omitted <==

32

2024.4.22	Remark (Note 5)		Note 5
	Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Relation	None	Brother, Brothers in law
		Name	None	Wilfred Wang, K. H. Wu
		Title	None	Managing Director, Director
	Director’s Current Positions at FPC & Other	Companies	Chairman of Formosa Sumco Technology Corporation, Chairman of Formosa Plastics Corporation, U.S.A.	Chairman of Formosa Taffeta Co., Ltd., Managing Director of Formosa	Chemicals & Fibre Corp., Nanya Plastics Corp. and Formosa Petrochemical Corp.
	Experience (Education) (Note 4)		Master in Environmental Sciences, Wageningen Agricultural University	Master in Industrial Engineering and BS in	Chemical Engineering, University of Houston
	Shareholding by Nominee Arrangement	％	0.00	0.00	0.00
		Shares	0	0	0
	Spouse & Minor Shareholding	％	0.00	0.00	0.02
		Shares	0	0	1,168,100
	Current Shareholding	％	0.00	7.65	0.71
		Shares	0	486,978,694	45,151,509
	Shareholding when Elected	％	0.00	7.65	0.71
		Shares	0	486,978,693	45,151,509
	Date First Elected (Note3)		May 23 2003	Jun 5	2006
	Term (Years)		3		3
	Date Elected		Jul 29 2021	Jul 29	2021
	Gender and Age (Note 2)		Male Over 81	-	Male 71-80
	Name		Jason Lin	Formosa Chemicals & Fibre Corp.	William Wong
	Nationality/ Place of Registration		R.O.C	R.O.C	R.O.C
	Title (Note 1)		Chairman	Managing Director

33

Remark (Note 5)
Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Relation	Sister		Brother, Brothers in law		None	None	None	None
	Name	Cher Wang		William Wong, K. H. Wu		None	None	None	None
	Title	Director		Managing Director, Director		None	None	None	None
Director’s Current Positions at FPC & Other	Companies	Managing Director of Formosa Petrochemical Corporation		Managing Director of Formosa Petrochemical Corporation		Chairman of IBF Financial Holdings Corporation	None	Independent Director of CTCI Corporation	Independent Director of ASE Technology Holding Corporation
Experience (Education) (Note 4)		BBA in Economics, Barnard College, U.S.		BA in Mechanical Engineering, University of London		Ph.D. in Economic, Paris of University	Ph.D. in Education, National Taiwan Normal University	Ph.D. in Massachusetts Institute of Technology	Master in Investment and Financial Risk Management, City, University of London
Shareholding by Nominee Arrangement	％	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
	Shares	0	0	0	0	0	0	0	0
Spouse & Minor Shareholding	％	0.00	0.00	0.00	0.52	0.00	0.00	0.00	0.00
	Shares	0	0	0	32,800,000	0	0	166,403	166,403
Current Shareholding	％	4.63	0.14	2.07	0.19	0.00	0.00	0.00	0.00
	Shares	294,793,105	8,828,219	131,460,365	12,066,840	0	0	0	0
Shareholding when Elected	％	4.63	0.14	2.07	0.19	0.00	0.00	0.00	0.00
	Shares	294,793,105	8,828,219	131,460,365	12,066,840	0	0	0	0
Date First Elected (Note3)		Jun 5	2006	Jun 5	2006	Jun 5 2009	Jun 19 2012	Jun 20 2018	JUL 29 2021
Term (Years)			3		3	3	3	3	3
Date Elected		Jul 29	2021	Jul 29	2021	Jul 29 2021	Jul 29 2021	Jul 29 2021	Jul 29 2021
Gender and Age (Note 2)		-	Female 61-70	-	Male 71-80	Male 71-80	Male 71-80	Male 71-80	Male 61-70
Name		Nanya Plastics Corp.	Susan Wang	Formosa Petrochemical Corp.	Wilfred Wang	C. L. Wei	C. J. Wu	Yen-Shiang Shih	Wen-Chyi Ong
Nationality/ Place of Registration		R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C
Title (Note 1)		Managing Director		Managing Director		Managing Director (Independent Director)	Independent Director	Independent Director	Independent Director

34

Remark (Note 5)
Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Relation	None	Sister	Brothers in law, Brothers in law	None	None
	Name	None	Susan Wang	William Wong, Wilfred Wang	None	None
	Title	None	Managing Director	Managing Director, Managing Director	None	None
Director’s Current Positions at FPC & Other	Companies	None	Chairman of High Tech Computer Corporation	Consultant of Formosa Heavy Industries Corporation	Chairman of Y F Chemical Corporation	Chairman of Formosa Plastics Construction Corp.
Experience (Education) (Note 4)		BS in Chemical Engineering, National Cheng Kung University	BBA in Economics, University of California, Berkeley	BS in Mechanical Engineering, Chung Yuan Christian University	BS in Industrial Administration , University of San Francisco	BS in Electrical Engineering, Ming Chi Institute of Technology
Shareholding by Nominee Arrangement	％	0.00	0.00	0.00	0.00	0.00
	Shares	0	0	0	0	0
Spouse & Minor Shareholding	％	0.00	0.00	0.57	0.00	0.00
	Shares	0	0	36,204,112	0	0
Current Shareholding	％	0.00	0.12	0.00	0.44	0.00
	Shares	0	7,369,380	68,537	27,824,363	0
Shareholding when Elected	％	0.03	0.12	0.00	0.44	0.00
	Shares	1,846,541	7,369,380	134,537	27,824,363	0
Date First Elected (Note3)		Mar 20 1973	Jun 5 2009	Apr 26 1994	May 17 2000	JUL 29 2021
Term (Years)		3	3	3	3	3
Date Elected		Jul 29 2021	Jul 29 2021	Jul 29 2021	Jul 29 2021	Jul 29 2021
Gender and Age (Note 2)		Male Over 81	Female 61-70	Male 71-80	Male 71-80	Male 61-70
Name		C. T. Lee	Cher Wang	K. H. Wu	Ralph Ho	Sang-Chi Lin
Nationality/ Place of Registration		R.O.C	R.O.C	R.O.C	R.O.C	R.O.C
Title (Note 1)		Director (Note 6)	Director	Director	Director	Director

35

Remark (Note 5)				Note 1: In the case of institutional shareholders, the names and representatives should be indicated respectively (for representatives, the names of institutional shareholders they represent should be indicated) and filled in the table 1. Note 2: Please list the actual age or express it in intervals, such as 41-50 years old or 51-60 years old. Note 3: Any disruption in duty as a Director after the date of election should be included in a separate note. Note 4: The work experiences of anyone above relating to their current roles, e.g. previous employment in the auditing CPA firm or employment in an affiliated company, must be addressed with detailed job titles and responsibilities. Note 5: Where the Chairman of the Board of Directors and the President or person of an equivalent post (the highest level manager) of a company are the same person, spouses, or relatives within the first degree of kinship, the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto (such as increasing the number of independent director seats, and more than half of all directors must not concurrently serve as employees or managers) must be disclosed: Due to the need of operating management and realizing the principle of separation between supervision and implementation to follow the spirt of corporate governance, the Board of Directors of the Company approved to promote Wen-Bee Kuo as President from Senior Vice President, and discharge President, Jason Lin, on March 10, 2023, who was originally as Chairman and President at the same time, to enhance the independence of the Board of Directors. Note 6: Director Mr. C.T. Lee passed away on May 21, 2023.
Executives, Directors or Supervisors Who are Spouses or within Two Degrees of Kinship	Relation	None	None
	Name	None	None
	Title	None	None
Director’s Current Positions at FPC & Other	Companies	Senior Vice President of FPC	None
Experience (Education) (Note 4)		BBA in Business Administration , National Chengchi University	BS in Chemistry, National Chung Hsing University
Shareholding by Nominee Arrangement	％	0.00	0.00
	Shares	0	0
Spouse & Minor Shareholding	％	0.00	0.00
	Shares	0	0
Current Shareholding	％	0.00	0.00
	Shares	0	0
Shareholding when Elected	％	0.00	0.00
	Shares	0	0
Date First Elected (Note3)		Jun 20 2018	Jun 19 2012
Term (Years)		3	3
Date Elected		Jul 29 2021	Jul 29 2021
Gender and Age (Note 2)		Male 61-70	Male 71-80
Name		Jerry Lin	Cheng-Chung Cheng
Nationality/ Place of Registration		R.O.C	R.O.C
Title (Note 1)		Director	Director

36

Table 1: Major shareholders of the institutional shareholders

2024.4.22

		2024.4.22
Name of Institutional Shareholders(Note1)	Major Shareholders(Note 2)	Shareholding Ratio
Formosa Chemicals & Fibre Corp.	Chang Gung Medical Foundation Chindwell International Investment Corp. Vanson International Investment Co., Ltd. Formosa Plastics Corp. Nanya Plastics Corp. William Wong Consolidated Power Development Corp. Standard Chartered Bank (Taiwan) Ltd. in custody for Genesis Equity Group Inc. HSBC Bank (Taiwan) Limited in custody for Consolidated Power Development Corp. Bank of Taiwan Limited in custody for Wang Jhan Yang CharitableTrust Fund	18.58% 6.35% 3.80% 3.39% 2.40% 2.20% 1.63% 1.51% 1.45% 1.37%
Nanya Plastics Corp.	Chang Gung Medical Foundation Formosa Plastics Corp. Formosa Chemicals & Fibre Corp. Chang Gung University Vanson International Investment Co., Ltd. Formosa Petrochemical Corp. Chindwell International Investment Corp. LGT Bank (Singapore) Ltd. Taishin International Bank custody for Cathay MSCI Taiwan ESG Sustainability High Dividend Yield ETF Citibank Taiwan Limitedincustodyfor Macro SystemCorp.	11.05% 9.88% 5.21% 4.00% 2.39% 2.26% 1.86% 1.50% 1.46% 1.45%
Formosa Petrochemical Corp.	Formosa Plastics Corp. Formosa Chemicals & Fibre Corp. Nanya Plastics Corp. Chang Gung Medical Foundation Formosa Taffeta Co., Ltd. Standard Chartered Bank (Taiwan) Ltd. in custody for Genesis Equity Group Inc. Cathay Life Insurance Corp. HSBC Bank (Taiwan) Limited in custody for Power Unlimited Corporation Standard Chartered Bank (Taiwan) Ltd. in custody for Central Capital Management Inc. HSBC Bank (Taiwan) Limited in custody for Pacific Light andPowerCorporation	28.56% 24.15% 23.11% 5.79% 3.83% 0.60% 0.51% 0.51% 0.49% 0.48%

37

• Note 1: Directors acting as the representatives of institutional shareholders shall indicate the names of the institutional shareholders.

• Note 2: The name of major shareholders of the institutional shareholders (top-10 in terms of shareholding percentage) and the holding percentage of each shall be noted. If any of those shareholders is an institutional shareholder should fill out the following table 2.

• Note 3: If the institutional shareholder is not a company, the names and shareholding ratio of shareholders to be disclosed are the names of people (referred to the announcement on Judicial Yuan) who contributed or donated the capital and the ratio of their contribution or donation. If the people had passed away, it shall be noted.

Table 2: Major shareholders of the Company’s major institutional

shareholders in Table 1 2024.4.22

shareholders in Table	1	2024.4.22
Name of Institutional Shareholders (Note 1)	Major Shareholders (Note 2)	Shareholding (Donation) Ratio(Note 4)
Chang Gung Medical Foundation (Note 5)	Nanya Plastics Corp. Formosa Chemicals & Fibre Corp. Formosa Plastics Corp. Yung-Tsai Wang (passed away) Yung-ChingWang (passed away)	17.98% 13.84% 13.28% 11.24% 7.35%
Chindwell International Investment Corp.	Everred Corporate, Inc.	100.00%
Vanson International Investment Co.,Ltd.	Landmark Capital Holdings Inc.	100.00%
Consolidated Power Development Corp.	Cabo de Roca Corporation	100.00%
Standard Chartered Bank (Taiwan) Ltd. in custody for Genesis EquityGroupInc.	Investment account	-
HSBC Bank (Taiwan) Limited in custody for Consolidated Power Development Corp.	Investment account	-
Bank of Taiwan Limited in custody for Wang Jhan Yang Charitable Trust Fund	Investment account	-
Chang Gung University (Note 5)	Chang Gung Medical Foundation Yung-Ching Wang (passed away) Chindwell International Investment Corp. Nanya Plastics Corp. Formosa Plastics Corp.	56.83% 13.13% 3.88% 2.64% 2.34%

38

Name of Institutional Shareholders (Note 1)	Major Shareholders (Note 2)	Shareholding (Donation) Ratio(Note 4)
LGT Bank(Singapore)Ltd.	Investment account	-
Taishin International Bank custody for Cathay MSCI Taiwan ESG Sustainability High Dividend Yield ETF	Investment account	-
Citibank Taiwan Limited in custodyfor Macro SystemCorp.	Investment account	-
Formosa Taffeta Co., Ltd.	Formosa Chemicals & Fibre Corp. Chang Gung Medical Foundation Yu Yuang Textile Co., Ltd. Min- Xiong Lai Chang Gung University Chang Gung University of Science and Technology Ming Chi University of Technology Taiwan Life Insurance Co., Ltd. Asia- Pacific Investment Corporation Citibank Taiwan Limited in custody for Macro SystemCorp.	37.40% 5.79% 2.55% 2.2% 2.20% 2.13% 1.87% 1.59% 1.43% 0.93%
CathayLifeInsurance Corp.	CathayFinancial Holdings Co.,Ltd.	100%
HSBC Bank (Taiwan) Limited in custody for Power Unlimited Corporation	Investment account	-
Standard Chartered Bank (Taiwan) Ltd. in custody for CentralCapital Management Inc.	Investment account	-
HSBC Bank (Taiwan) Limited in custody for Pacific Light and PowerCorporation	Investment account	-

• Note 1: If any major shareholder listed in Table 1 is an institutional shareholder, it shall indicate the institutional shareholder’s name.

• Note 2: The major shareholders of the corporation (top-10 in terms of shareholding percentage) and the holding percentage of each shall be noted.

• Note 3: If the institutional shareholder is not a company, the names and shareholding ratio of shareholders to be disclosed are the names of people (referred to the announcement on Judicial Yuan) who contributed or donated the capital and the ratio of their contribution or donation. If the people had passed away, it shall be noted.

• Note 4: Ratio of the contribution or donation is calculated by the cumulative amount of donations over the years and the amount of donated stocks is calculated based on the par value.

39

• Note 5: Ratio of the donation of Chang Gung Medical Foundation is calculated by the cumulative amount of donation by December 31, 2023. Ratio of the donation of Chang Gung University is calculated by the cumulative amount of donation by the end of semester of 2022 (as July 31, 2023).

40

Number of other public companies in which the individual is concurrently serving as an independent director	0	0
Independence Status	His spousal or a familial relationship within the second degree of kinship is not as the Company’s director, which is in compliance with Article 26-3 of Securities and Exchange Act.	The among of 2 directors of the Company is his spousal or a familial relationship within the second degree of kinship, which is not over the half of the total directors of the Company and in
Professional Qualification and Work Experience	Jason Lin holds a Master of Science in Environmental Sciences from Wageningen Agricultural University. He is provided with an abundant industrial knowledge and managerial experiences including the industry of plastic, textile, chemistry, gas and electricity, semiconductor, iron and steel, and shipping and transportation, etc. He is not only as a chairman or a director of the companies in the above industries, but also as the chairman of Taiwan Synthetic Resins Manufactures Association, the managing director of Petrochemical Industry Association of Taiwan and the laureate of Industrial Technology Research Institute, also as the convener of sustainable development committee of the Company. With the profession in chemistry and environmental emerging, and the ability of leading, decision making, crisis and risk management, and international market perspective, he also manages the subsidiaries in China and the US, and invested companies. He actively promotes the Company’s development toward ESG, artificial intelligence (AI), technology digital transformation, and high value added, healthy and medical care products.	William Wong holds a Master of Industrial Engineering from University of Houston, U.S.A and a Bachelor of Chemical Engineering from the University of Houston, U.S.A. He is provided with an abundant industrial knowledge and nearly 50 years of managerial experiences including the industry of plastic, textile, chemistry, gas and electricity, semiconductor, iron and steel, and shipping and transportation, and biotechnology and
Criteria Name	Jason Lin	William Wong, Representative of Formosa Chemicals & Fibre Corp.

41

Number of other public companies in which the individual is concurrently serving as an independent director		0	0
Independence Status	compliance with Article 26-3 of Securities and Exchange Act.	The among of 1 director of the Company is her spousal or a familial relationship within the second degree of kinship, which is not over the half of the total directors of the Company and in compliance with Article 26-3 of Securities and Exchange Act.	The among of 2 directors of the Company is his spousal or a familial relationship within the second degree of kinship, which is
Professional Qualification and Work Experience	medical care, etc. He was ever as a high-level manager of the companies in the above industries, and now as a chairman or a director in the related companies. With the ability of leading, decision making, crisis management, risk management and international market perspective, he is not only a leader of multinational enterprise but also has experience as the chairman of the Chinese National Federation of Industries and the Taiwan Textile Federation. With the profession in engineering technology and fully understating of artificial intelligence (AI), he leads the Company to implement energy saving, emission reduction, circular economy, AI simulation, and digital transformation.	Susan Wang holds a Bachelor of Economics from Barnard College, Columbia University, U.S.A. She is provided with an abundant industrial knowledge and nearly 40 years of managerial experiences including the industry of plastic, gas and electricity, textile, chemistry, semiconductor, iron and steel, and shipping and transportation, and biotechnology and medical care, etc. She was ever as a high-level manager of the companies in the US, and now as a director in TWSE/TPEx listed or multinational companies in the above industries. With the ability of leading, decision making, strategical planning, crisis and risk management, international market perspective and insight, she focuses on and carries out Key Performance Indicators (KPI) management and supervises ESG implementation of the Company.	Wilfred Wang holds a Bachelor of Mechanical Engineering from University of London He is provided with an abundant industrial knowledge and nearly 45 years managerial experiences including the industry of gas and electricity, plastic, textile, chemistry, iron and steel, and shipping and transportation, optoelectronics, and biotechnology and medical
Criteria Name		Susan Wang, Representative of Nanya Plastics Corp.	Wilfred Wang, Representative of Formosa Petrochemical Corp.

42

Number of other public companies in which the individual is concurrently serving as an independent director		2
Independence Status	not over the half of the total directors of the Company and in compliance with Article 26-3 of Securities and Exchange Act.	All of independent directors, their spousal or a familial relationship within the second degree of kinship (or who is used by their names) do not hold any share of the Company’s stock. They also do not have any condition of Article 3, paragraph 1 of Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, and are eligible for an independent director qualification. The Company also obtains their
Professional Qualification and Work Experience	care, etc. He was ever as a high-level manager of the companies in the above industries, and now as a chairman in the company of shipping and transportation, optoelectronics, investment development, and as a director in the companies of the above industries. With the profession in mechanical engineering and the ability of leading, decision making, innovative strategy, crisis risk management, and international market perspective, he supervises the Company to expand and diversify the more business.	C. L. Wei holds a Ph.D. in Economics from University of Paris. He is provided with an abundant industrial, political and academic experiences and professional knowledge, and was ever as the secretary-general in Executive Yuan, the chairman in Land Bank of Taiwan, and a director of the companies in the industry of finance and insurance, plastic, cement, computer, electronic parts and components, optoelectronics, and building material and construction, etc. Nowadays, he not only serves as the chairman in IBF Financial Holdings Corporation, the adjunct professor in National Taiwan University, an independent director in Inventec Corporation and Taiwan Secom Corporation and the director in TWSE/TPEx listed companies, but also as the convener of audit, remuneration committee and the member of sustainable development committee of the Company. With the profession in banking, finance and accounting, and the ability of leading, decision making, operating and crisis management, and international economic perspective, he fulfills his duty to supervise the Company’s issues about internal control, financial information present fairly, manager remuneration, ESG, etc.
Criteria Name		C. L. Wei

43

Number of other public companies in which the individual is concurrently serving as an independent director	0	1
Independence Status	statement of independence announcement.
Professional Qualification and Work Experience	C. J. Wu holds a Ph.D. in Education from National Taiwan Normal University. He is provided with an abundant academic knowledge about organization management, leading, decision making, and the plastic industry experiences, and was ever as a commissioner and a deputy mayor of Taipei City Government and a deputy director, an undersecretary and a minister of Ministry of Education. Nowadays, he not only serves as the president in Taiwan University of Education, the director in Fooyin University and University of Kang Ning, the chair professor in National Taiwan Normal University, National Pingtung University of Science and Technology, and the convener of China youth Corp., but also as the member of audit, remuneration and sustainable development committee of the Company. With the profession in education personnel training and organization management, concentration in industry-academy cooperation and the ability of operating management and international economic perspective, he fulfills his duty to supervise the Company’s issues about internal control, financial information present fairly, manager remuneration, ESG, etc.	Yen-Shiang Shih holds a Ph.D. in Massachusetts Institute of Technology. He is provided with an abundant industrial, political academic experiences and professional knowledge, and was ever as the minister of Ministry Economic Affair, the commissioner of Industrial Development Bureau, the chairman of CPC corporation, and the director in the companies in the industry of plastic and optoelectronics, etc. Nowadays, he not only serves as the consultant in Taiwan Electrical and Electronic Manufactures’ Association, the Chairman of Textile Industry Sustainable Development Association of Taiwan Association., an adjunct chair professor in Chung Yuan Christian University, the independent director in
Criteria Name	C. J. Wu	Yen-Shiang Shih

44

Number of other public companies in which the individual is concurrently serving as an independent director		1	0
Independence Status			His spousal or a familial relationship within the second degree of kinship is not as the Company’s director, which is in compliance with Article 26-3 of Securities and Exchange Act.
Professional Qualification and Work Experience	CTCI Corporation, but also as the member of audit, remuneration and sustainable development committee of the Company. With the profession in chemistry and the ability of leading, operating management, and international economic perspective, he fulfills his duty to supervise the Company’s issues about internal control, financial information present fairly, manager remuneration, ESG, etc.	Wen-Chyi Ong holds a Master of Investment and Financial Risk Management from City, University of London. He is provided with an abundant industrial, political and academic experiences and professional knowledge, and was ever as the reprehensive in India of Ministry of Foreign Affairs, the chairman of Chunghwa Post Corporation and SinoPac Holdings. Nowadays, he not only serves as the part-time professor in National Chengchi University, and an independent director in ASE Technology Holding Co., Ltd., but also as the member of audit, remuneration and sustainable development committee of the Company. With the profession in banking, finance and accounting, and the ability of leading, decision making, operating and crisis management, and international economic perspective, he fulfills his duty to supervise the Company’s issues about internal control, financial information present fairly, manager remuneration, ESG, etc.	C. T. Lee holds a Bachelor of Chemical Engineering from National Cheng Kung University. He is provided with an abundant industrial knowledge and managerial experiences including the industry of plastic, semiconductor and chemistry, etc. He was ever not only as the director of the companies in the above industries, but also as a chairman and president of the Company. Nowadays, he serves as the top advisor of the Company.
Criteria Name		Wen-Chyi Ong	C. T. Lee (Notes 1)

45

Number of other public companies in which the individual is concurrently serving as an independent director		0	0	0
Independence Status		The among of 1 director of the Company is her spousal or a familial relationship within the second degree of kinship, which is not over the half of the total directors of the Company and in compliance with Article 26-3 of Securities and Exchange Act.	The among of 2 directors of the Company is his spousal or a familial relationship within the second degree of kinship, which is not over the half of the total directors of the Company and in compliance with Article 26-3 of Securities and Exchange Act.	His spousal or a familial relationship within the second degree of kinship is not as the
Professional Qualification and Work Experience	With the profession in chemistry and the ability of leading, decision making, crisis management, and international market perspective, he supervises the operation and investing decisions of the Company.	Cher Wang holds a Bachelor of Economics from University of California, Berkeley. She is provided with an abundant industrial knowledge and managerial experiences including the industry of plastic, communications and internet, and semiconductor, etc. She ever was the chairman of VIA Technologies, Inc., and LEO Systems, Inc. Nowadays, she serves as the chairman of HTC Corporation and a director of VIA Technologies, Inc. at the same time. With the profession in communications and internet, and economy, and the ability of leading, decision making, enterprise operating and international market perspective, she supervises the Company’s business performance, and provides the opinion about the digital transformation by her fully involved experience in augmented reality, virtual reality, artificial intelligence and Metaverse.	K. H. Wu holds a Bachelor of Mechanical Engineering from Chung Yuan Christian University. He is provided with an abundant industrial knowledge and managerial experiences including plastic, iron and steel, cogeneration and mechanical engineering. He ever severed as the supervisor of the Company and the director or high-level manager in the companies in the above industries. With the profession in mechanics and the ability of leading, decision making, crisis management and international market perspective, he supervises the Company’s operating performance.	Ralph Ho holds a Bachelor of Industrial Administration from University of San Francisco. He is provided with an abundant chemical industry knowledge and managerial experiences. He was as the director of Sepracor Inc. in the US, the chairman of SinoPac
Criteria Name		Cher Wang	K. H. Wu	Ralph Ho

46

Number of other public companies in which the individual is concurrently serving as an independent director		0	0
Independence Status	Company’s director, which is in compliance with Article 26-3 of Securities and Exchange Act.	His spousal or a familial relationship within the second degree of kinship is not as the Company’s director, which is in compliance with Article 26-3 of Securities and Exchange Act.	His spousal or a familial relationship within the second degree of kinship is not as the Company’s director, which is in compliance with Article 26-3 of Securities and Exchange Act.
Professional Qualification and Work Experience	Baxter Healthcare Corporation and the supervisor of the Company. Nowadays, he serves as the chairman and president of YF Chemical Corporation. With the profession in chemistry and the ability of leading, decision making, crisis management and international market perspective, he supervises the Company’s operating performance.	Sang-Chi Lin holds a Bachelor of Electrical Engineering from Ming Chi Institute of Technology. He is provided with an abundant chemical industry knowledge and nearly 45 years managerial experiences including the industry of plastic, chemistry, biotechnology and medical care, construction engineering, etc. He serves as the chairman of a construction development corporation, and the director or supervisor of the companies in the above industries. With the profession in industrial safety and environmental protection, he was ever as the top manager of the industrial safety and environmental center of FPC enterprise. He also has the ability of leading, decision making, commination and coordination, crisis and risk management, to supervise the Company’s industrial safety and environmental protection, procurement, information processing.	Jerry Lin holds a Bachelor of Business Administration from National Chengchi University. He is provided with an abundant chemical industry knowledge and managerial experiences including the industry of plastic, chemistry, iron and steel, cogeneration, mechanical engineering. He was ever as the special assistant, chief, and vice president in the president office. Nowadays, he serves as the spokesman, senior vice president and the member of sustainable development committee of the Company, and the director or supervisor of the companies in the above industries. With the profession in finance, accounting, and enterprise management, and the ability of
Criteria Name		Sang-Chi Lin	Jerry Lin

47

Number of other public companies in which the individual is concurrently serving as an independent director		0	Note1: Director Mr. C.T. Lee passed away on May 21, 2023. Note2: All directors are without any condition of Article 30 of Company Act.
Independence Status		His spousal or a familial relationship within the second degree of kinship is not as the Company’s director, which is in compliance with Article 26-3 of Securities and Exchange Act.
Professional Qualification and Work Experience	leading, decision making, crisis and risk management, and international market perspective, he supervises the business operation, corporate governance, promotes ESG matters and artificial intelligence on digital transformation, and maintains the relationship between the Company and shareholders.	Cheng-Chung Cheng holds a Bachelor of Chemistry from National Chung Hsing University. He is provides with an abundant chemical industry knowledge and managerial experiences including the industry of plastic, chemistry. He was as the vice president of plastic division, and senior vice president and consultant in the president office to manage the group of plastic business division, and as the director of the companies in the above industries. With the profession in chemistry and the ability of leading, decision making, crisis management and international market perspective, he supervises the operating business and the development of product of the Company.
Criteria Name		Cheng-Chung Cheng

48

(2) Diversity and independence of board of directors A.Diversity a. The Board of Directors of the Company includes 15 Directors and they are with diversified industry experience, business management background and, decision making ability. The related information of each Director is as follows:	Operation Management Background and Decision Management Ability	Financial and Accounting Analysis	Financial and Accounting Analysis					
		International Perspective						
		Industry Knowledge						
		Leadership Decision						
		Business Management						
	Industry Experience	Education						
		Technology						
		Finance						
		Petrochemical						
	Basic Information	Term of office of Independent Director	Over 9 years					
			3-9 years
			Less than 3 years
		Age	Over 71 years old					
			61-70 years old			
		Also serves as an employee of the Company
		Gender		Male	Male	Female	Male	Male
		Nationality		R.O.C	R.O.C	R.O.C	R.O.C	R.O.C
		Name		Jason Lin	William Wong, Representative of Formosa Chemicals & Fibre Corp.	Susan Wang, Representative of Nanya Plastics Corp.	Wilfred Wang, Representative of Formosa Petrochemical Corp.	C. L. Wei
		Title		Chairman	Managing Director	Managing Director	Managing Director	Managing Director (Independent Director)

49

Operation Management Background and Decision Management Ability	Financial and Accounting Analysis	Financial and Accounting Analysis											Notes: Director Mr. C.T Lee passed away on May 21, 2023. b. In order to reach gender equal in Board’s numbers, the Company sets the target that at least 10% of Directors should be female. The Company includes 2 female Directors, accounted for 13% of the Board’s numbers, which reached the goal we set. B.Independence a. The Board of Directors only has 5 members who are the familial relationship within the second degree of kinship, including William Wong, Susan Wang, Wilfred Wang, Cher Wang and K. H. Wu. The relationship of each other could be referred to “1. Directors (Ⅰ)”. It meets the Article 26-3 of Securities and Exchange Act which regulates
	International Perspective											
	Industry Knowledge											
	Leadership Decision											
	Business Management											
Industry Experience	Education			
	Technology										
	Finance				
	Petrochemical											
Basic Information	Term of office of Independent Director	Over 9 years	
		3-9 years		
		Less than 3 years			
	Age	Over 71 years old										
		61-70 years old									
	Also serves as an employee of the Company										
	Gender		Male	Male	Male	Male	Female	Male	Male	Male	Male	Male
	Nationality		R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	U.S.A.	R.O.C	R.O.C	R.O.C
	Name		C. J. Wu	Yen-Shiang Shih	Wen-Chyi Ong	C. T. Lee	Cher Wang	K. H. Wu	Ralph Ho	Sang-Chi Lin	Jerry Lin	Cheng-Chung Cheng
	Title		Independent Director	Independent Director	Independent Director	Director (Notes)	Director	Director	Director	Director	Director	Director

50

51

Remark (Note 3)
Managers who are Spouses or Within Two Degrees of Kinship	Relation	-	-	-	-	-	-	-	-	-
	Name	-	-	-	-	-	-	-	-	-
	Title	-	-	-	-	-	-	-	-	-
Current Position at Other Companies		None	None	None	None	None	None	None	None	None
Experience (Education) (Note 2)		BA of Chemical Engineering, Tsing Hua University	BA of Business Administration, National Chengchi University	BA of Mechanical Engineering, National Chiao Tung University	Master of Chemical Engineering, University of Pittsburgh	BA of Chemical Engineering, Tsing Hua University	BA of Chemical Engineering, National Central University	BA of Chemical Engineering, National Taiwan University of Science and Technology	BA of Chemical Engineering, National Central University	Taipei Institute of Technology
Shareholding by Nominee Arrangement	％	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
	Shares	0	0	0	0	0	0	0	0	0
Director’s Spouse & Minor Shareholding	％	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
	Shares	0	0	10,000	0	0	0	0	0	145
Shareholding	％	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
	Shares	0	0	0	0	15,800	16,000	0	3,000	0
Date Effective		Mar.10, 2023	Mar 23, 2017	Mar.17, 2021	Jan.22, 2024	Aug.10, 2023	May 8, 2016	Jan.22, 2024	Mar.17, 2021	Mar.17, 2021
Gender		Male	Male	Male	Male	Male	Male	Male	Male	Male
Name		Wen-Bee Kuo	Jerry Lin	Tony Liang	Yun-Tsing Ou	Jung-Hung Kao	Jen-Long Wu	Kuo-Ching Lien	Yeats Yeh	Chao-Jung Chen
Nationality		R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C	R.O.C
Title (Note 1)		President	Senior Vice President	Senior Vice President	Plastics Division Acting Vice President	Polypropylene Division Acting Vice President	Polyolefin Division Vice President	Tairylan Division Acting Vice President	Chemicals Division Vice President	Eng. & Const. Division Vice President

52

Remark (Note 3)						Note 1: Include background information of the President, Vice Presidents, Assistant Vice Presidents, heads of various departments and branches, and anyone of equivalent authority to the above, regardless of their job titles. Note 2: The work experiences of anyone above relating to their current roles, e.g. previous employment in the auditing CPA firm or employment in an affiliated company, must be addressed with detailed job titles and responsibilities. Note 3: Where the President or person of an equivalent post (the highest level manager) and Chairman of the Board of Directors are the same person, spouses, or relatives within the first degree of kinship, the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto (such as increasing the number of independent director seats, and more than half of all directors must not concurrently serve as employees or managers) must be disclosed: Please refer to “3.2.1 Directors, 1. Directors, Note 4”. Note 4: The above-mentioned disclosures are for those who manage affairs and have the right to sign on behalf of the Company.
Managers who are Spouses or Within Two Degrees of Kinship	Relation	-	-	-	-
	Name	-	-	-	-
	Title	-	-	-	-
Current Position at Other Companies		None	Financial Officer of Nanya Printed Circuit Board Corp.	None	None
Experience (Education) (Note 2)		Ming Chi Institute of Technology	Master of Business Administration, National Taiwan University	BA of Public Finance, National Chengchi University	BA of Industrial Management, National Cheng Kung University
Shareholding by Nominee Arrangement	％	0.00	0.00	0.00	0.00
	Shares	0	0	0	0
Director’s Spouse & Minor Shareholding	％	0.00	0.00	0.00	0.00
	Shares	0	0	0	0
Shareholding	％	0.00	0.00	0.00	0.00
	Shares	0	0	0	0
Date Effective		Mar.17, 2021	Dec 26, 2011	Jan 1, 2023	Jan 1, 2023
Gender		Male	Male	Male	Male
Name		Y.Y. Lee	Ray Lei	I-Yu Chiu	Chia-Hung Chien
Nationality		R.O.C	R.O.C	R.O.C	R.O.C
Title (Note 1)		Electronic Materials Division Vice President	Financial Officer	Accounting Officer	Corporate Governance Officer

53

3.2.3 Succession Plan of Board of Directors and the Middle and High-Level Management 1. The Company election of directors shall be conducted in accordance with the candidate nomination system and that shareholders shall elect directors from among those listed in the slate of director nominees. Now, the directors are nominated by major shareholders and elected by shareholders meeting. Each director has the professional ability such as operating management, industrial knowledge and international perspective, etc. The Company not only arranges 12 hours courses for newly directors, but also 6 hours courses per year for each director to assist them to equip various professional knowledge required to perform their duties. 2. In order to cultivate the persons who are managerial level to join into Board of Directors and make them familiar with the operation of Board of Directors, the President of the Enterprise Administration, Sang-Chi Lin, who was elected by shareholders on July 29, 2021, as Director, takes over the retired Director. 3. In needs of perpetual business operation and ensuring the development of major managing talents can successfully take over, the Company has set up Talent Development Rule. The rule specifies the criteria of development candidates, election principles, the way of development conduction and the review of promotion criteria. The amount of manager development candidates of each department shall at least by 2 for future optimum selection. To promote the excellent mangers, the Board of Directors of the Company approved to promote the following mangers by Board of Directors on March 10, August 10, 2023 and January 22, 2024. Original Manager New Manager Duty		Jason Lin President Wen-Bee Kuo President Manage all operating and management businesses Ming-Hung Cheng Vice President Yun-Tsing Ou Acting Vice President Manage Plastics Division Han-Sheung Wang Vice President Kuo-Ching Lien Acting Vice President Manage Tairylan Division Kwang-Ming Chen Vice President Jung-Hung Kao Acting Vice President Manage Polypropylene Division 4. If the development candidates are lack of experienced, the Company will increase his or her experiences by job rotation or increasing his or her responsible business scope. The annual working achievement of development candidates shall be included in periodic working assessment in accordance with “Assessment Rule” and the periodic working	Jason Lin President Wen-Bee Kuo President Manage all operating and management businesses Ming-Hung Cheng Vice President Yun-Tsing Ou Acting Vice President Manage Plastics Division Han-Sheung Wang Vice President Kuo-Ching Lien Acting Vice President Manage Tairylan Division Kwang-Ming Chen Vice President Jung-Hung Kao Acting Vice President Manage Polypropylene Division 4. If the development candidates are lack of experienced, the Company will increase his or her experiences by job rotation or increasing his or her responsible business scope. The annual working achievement of development candidates shall be included in periodic working assessment in accordance with “Assessment Rule” and the periodic working	Jason Lin President Wen-Bee Kuo President Manage all operating and management businesses Ming-Hung Cheng Vice President Yun-Tsing Ou Acting Vice President Manage Plastics Division Han-Sheung Wang Vice President Kuo-Ching Lien Acting Vice President Manage Tairylan Division Kwang-Ming Chen Vice President Jung-Hung Kao Acting Vice President Manage Polypropylene Division 4. If the development candidates are lack of experienced, the Company will increase his or her experiences by job rotation or increasing his or her responsible business scope. The annual working achievement of development candidates shall be included in periodic working assessment in accordance with “Assessment Rule” and the periodic working	Jason Lin President Wen-Bee Kuo President Manage all operating and management businesses Ming-Hung Cheng Vice President Yun-Tsing Ou Acting Vice President Manage Plastics Division Han-Sheung Wang Vice President Kuo-Ching Lien Acting Vice President Manage Tairylan Division Kwang-Ming Chen Vice President Jung-Hung Kao Acting Vice President Manage Polypropylene Division 4. If the development candidates are lack of experienced, the Company will increase his or her experiences by job rotation or increasing his or her responsible business scope. The annual working achievement of development candidates shall be included in periodic working assessment in accordance with “Assessment Rule” and the periodic working
	Duty	Manage all operating and management businesses	Manage Plastics Division	Manage Tairylan Division	Manage Polypropylene Division
	New Manager	President	Acting Vice President	Acting Vice President	Acting Vice President
		Wen-Bee Kuo	Yun-Tsing Ou	Kuo-Ching Lien	Jung-Hung Kao
	Original Manager	President	Vice President	Vice President	Vice President
		Jason Lin	Ming-Hung Cheng	Han-Sheung Wang	Kwang-Ming Chen

54

55

Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary or Parent Company (Note 11)	Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary or Parent Company (Note 11)	Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary or Parent Company (Note 11)	Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary or Parent Company (Note 11)	70	21,568	140	20,537	0	0	3,308	0	15,348	0	0
Total Remuneration and Ratio of Total Compensation (A+B+C+D+E+F+G ) to Net Income (%) (Note 10)		Companies in the consolidated financial statements		17,504 0.2385%	60 0.0008%	11,103 0.1513%	40 0.0005%	3,761 0.0513%	60 0.0008%	50 0.0007%	1,260 0.0172%	60 0.0008%	7,468 0.1018%	3,060 0.0417%
		The company		17,504 0.2385%	60 0.0008%	11,103 0.1513%	40 0.0005%	3,761 0.0513%	60 0.0008%	50 0.0007%	1,260 0.0172%	60 0.0008%	7,468 0.1018%	3,060 0.0417%
Relevant Remuneration Received by Directors Who are Also Employees	Employee Compensation (G) (Note 6)	Companies in the consolidated financial statements (Note 7)	Stock	0	0	0	0	0	0	0	0	0	0	0
			Cash	13	0	0	0	0	0	0	0	0	5	0
		The company	Stock	0	0	0	0	0	0	0	0	0	0	0
			Cash	13	0	0	0	0	0	0	0	0	5	0
	Severance Pay (F)	Companies in the consolidated financial statements (Note 7)		0	0	0	0	41	0	0	0	0	108	0
		The company		0	0	0	0	41	0	0	0	0	108	0
	Salary, Bonuses, and Allowances (E) (Note 5)	Companies in the consolidated financial statements (Note 7)		2,425	0	11,053	0	3,710	0	0	0	0	7,275	3,000
		The company		2,425	0	11,053	0	3,710	0	0	0	0	7,275	3,000
Total Remuneration and	Ratio of Total Remuneration (A+B+C+D) to Net Income (%) (Note 10)	Companies in the consolidated financial statements		0.2053%	0.0008%	0.0007%	0.0005%	0.0001%	0.0008%	0.0007%	0.0172%	0.0008%	0.0011%	0.0008%
		The company		0.2053%	0.0008%	0.0007%	0.0005%	0.0001%	0.0008%	0.0007%	0.0172%	0.0008%	0.0011%	0.0008%
Director’s Remuneration	Allowances (D)(Note 4)	Companies in the consolidated financial statements (Note 7)		80	60	50	40	10	60	50	60	60	80	60
		The company		80	60	50	40	10	60	50	60	60	80	60
	Directors Compensation (C) (Note 3)	Companies in the consolidated financial statements (Note 7)		0	0	0	0	0	0	0	0	0	0	0
		The company		0	0	0	0	0	0	0	0	0	0	0
	Severance Pay (B) (Note 2)	Companies in the consolidated financial statements (Note 7)		0	0	0	0	0	0	0	0	0	0	0
		The company		0	0	0	0	0	0	0	0	0	0	0
	Base Compensation (A)	Companies in the consolidated financial statements (Note 7)		14,986	0	0	0	0	0	0	1,200	0	0	0
		The company		14,986	0	0	0	0	0	0	1,200	0	0	0
	Name (Note 1)			Jason Lin	William Wong, Representative of Formosa Chemicals & Fibre Corp.	Susan Wang, Representative of Nanya Plastics Corp.	Wilfred Wang, Representative of Formosa Petrochemical Corp.	C. T. Lee (note 12)	Cher Wang	K. H. Wu	Ralph Ho	Sang-Chi Lin	Jerry Lin	Cheng-Chung Cheng
	Title			Chairman	Managing Director	Managing Director	Managing Director	Director	Director	Director	Director	Director	Director	Director

56

Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary or Parent Company (Note 11)				None				1. Please describe the policy, system, standard, and structure of remuneration to independent directors, and the correlation between duties, risk, and time input with the amount of remuneration: The Company does not provide directors’ compensation. The independent directors’ remuneration is based on a fixed payment. The main consideration is to maintain their independence and facilitate the supervision function. The Company paid the independent directors with NTD1.8 million remuneration and gave transportation allowance with NTD10,000 for each attendance of Board meeting. According to the Company’s “Rules Governing the Scope of Powers of Independent Directors”, the responsibilities and risks of independent directors include overseeing fair presentation of the financial reports, the hiring (and dismissal), independence, and performance of CPAs, the effective implementation of the internal control system, compliance with relevant laws and regulations, management of the existing or potential risks, etc. The Company has insured directors’ liability insurance for independent directors. The independent directors of the Company participate Board of Directors’ meeting at least 4 times, audit committees meeting at least 2 times, remuneration committees at least 2 times, and sustainable development committees at least 1time each year. To implement the integrity of the Company’s business operations, the independent directors review the internal audit report every month, and regularly communicate with internal audit officer and CPAs against internal control and financial statements issues. The communication situation is detailed in “3.4.2 Audit Committee Meeting Status”. 2. In addition to the above remuneration, director remuneration shall be disclosed about the directors’ compensation for their services in the most recent year, such as a consultant of the parent company, companies in the consolidated financial statement or invested company: None.
Total Remuneration and Ratio of Total Compensation (A+B+C+D+E+F+G ) to Net Income (%) (Note 10)		Companies in the consolidated financial statements		1,950 (0.0266)	1,950 (0.0266)	1,950 (0.0266)	1,950 (0.0266)
		The company		1,950 (0.0266)	1,950 (0.0266)	1,950 (0.0266)	1,950 (0.0266)
Relevant Remuneration Received by Directors Who are Also Employees	Employee Compensation (G) (Note 6)	Companies in the consolidated financial statements (Note 7)	Stock	0	0	0	0
			Cash	0	0	0	0
		The company	Stock	0	0	0	0
			Cash	0	0	0	0
	Severance Pay (F)	Companies in the consolidated financial statements (Note 7)		0	0	0	0
		The company		0	0	0	0
	Salary, Bonuses, and Allowances (E) (Note 5)	Companies in the consolidated financial statements (Note 7)		0	0	0	0
		The company		0	0	0	0
Total Remuneration and	Ratio of Total Remuneration (A+B+C+D) to Net Income (%) (Note 10)	Companies in the consolidated financial statements		1,950 (0.0266)	1,950 (0.0266)	1,950 (0.0266)	1,950 (0.0266)
		The company		1,950 (0.0266)	1,950 (0.0266)	1,950 (0.0266)	1,950 (0.0266)
Director’s Remuneration	Allowances (D)(Note 4)	Companies in the consolidated financial statements (Note 7)		150	150	150	150
		The company		150	150	150	150
	Directors Compensation (C) (Note 3)	Companies in the consolidated financial statements (Note 7)		0	0	0	0
		The company		0	0	0	0
	Severance Pay (B) (Note 2)	Companies in the consolidated financial statements (Note 7)		0	0	0	0
		The company		0	0	0	0
	Base Compensation (A)	Companies in the consolidated financial statements (Note 7)		1,800	1,800	1,800	1,800
		The company		1,800	1,800	1,800	1,800
	Name (Note 1)			C. L. Wei	C. J. Wu	Yen-Shiang Shih	Wen-Chyi Ong
	Title			Managing Director (Independent Director)	Independent Director	Independent Director	Independent Director

57

58

Compensation Paid to the President and Vice Presidents from an Invested Company Other than the Company’s Subsidiary or Parent Company (Note 9)	Compensation Paid to the President and Vice Presidents from an Invested Company Other than the Company’s Subsidiary or Parent Company (Note 9)	Compensation Paid to the President and Vice Presidents from an Invested Company Other than the Company’s Subsidiary or Parent Company (Note 9)					70	70	70	70	70	70	70	70
Total compensation and Ratio of total compensation (A+B+C+D) to net income (%) (Note 8)	Companies in the consolidated financial statements						59,117 (0.8057)
	The company						59,117 (0.8057)
Employee Compensation (D) (Note 4)	Companies in the consolidated financial statements (Note 5)	Stock					0
		Cash					38
	The company	Stock					0
		Cash					38
Bonuses and Allowances (C) (Note 3)	Companies in the	consolidated financial statements (Note 5)					43,133
		The company					43,133
Severance Pay (B)	Companies in the	consolidated financial statements (Note 5)					684
		The company					684
Salary (A) (Note 2)	Companies in the	consolidated financial statements (Note 5)					16,261
		The company					16,261
	Name (Note 1)		Jason Lin	Wen-Bee Kuo	Jerry Lin	Tony Liang	Ming-Hung Cheng	Kwang-Ming Chen	Jung-Hung Kao	Jen-Long Wu	Han-Sheung Wang	Yeats Yeh	Chao-Jung Chen	Y.Y. Lee
	Title		President (Note 10)	President (Note 10)	Senior Vice President	Senior Vice President	Vice President (Note 10)	Vice President (Note 10)	Acting Vice President (Note 10)	Vice President	Vice President (Note 10)	Vice President	Vice President	Vice President

59

	Name of President and Vice Presidents	Range of Remuneration The company (Note 6) Compensation Paid to Directors from Parent Company and Invested Companies (Note 7) E	Under NTD1,000,000 None None	NTD1,000,000 ~ NTD1,999,999 Jung-Hung Kao None	NTD2,000,000 ~ NTD3,499,999 Jason Lin Jason Lin	NTD3,500,000 ~ NTD4,999,999 Chao-Jung Chen,Kwang-Ming Chen Chao-Jung Chen,Kwang-Ming Chen	NTD5,000,000 ~ NTD9,999,999 Jerry Lin, Wen-Bee Kuo, Tony Liang, Ming-Hung Cheng, Jen-Long Wu, Han-Sheung Wang, Yeats Yeh, Y.Y. Lee Jerry Lin, Wen-Bee Kuo, Tony Liang, Ming-Hung Cheng, Jen-Long Wu, Han-Sheung Wang, Yeats Yeh, Y.Y. Lee	NTD10,000,000 ~ NTD14,999,999 None None	NTD15,000,000 ~ NTD29,999,999 None Jason Lin	NTD30,000,000 ~ NTD49,999,999 None None	NTD50,000,000 ~ NTD99,999,999 None None	Over NTD100,000,000 None None	Total 12 12	＊It should include the information disclosure of the position equivalent to president, or vice president.	Note 1: Names of President and Vice President should be separately disclosed. The amount of remunerations should be disclosed in summary. If a director concurrently serves as the President or Vice President, this table and the	above table must be filled out.	Note 2: It refers to the President’s and Vice President’s salary, special responsibility allowance, and severance pay.	Note 3: It refers to the bonuses, incentives, transportation allowance, special allowance, the provision of dormitory and vehicle, and other compensations received by the President and Vice President in the recent year. When a	house, car, and other transportation or personal expense are provided, the nature and cost of the assets provided, the actual or estimated rental expense based on a fair market price, gas expense, and other payments should	be disclosed. Further, if a chauffeur is assigned, please also describe the relevant compensation paid to such chauffeur in the Note. However, such amount shall not be included in the remuneration. In addition, the salary	expense recognized in accordance with IFRS 2 “Share-based payment” includes the acquisition of employee stock warrant, employee restricted stock, and subscription of new shares from cash capitalization	Note 4: It refers to the employee remuneration (including stock and cash) received by the President and Vice President that is distributed in accordance with the proposal for distributing the recent year’s earnings adopted at a	meeting of board of directors and such proposal has not been submitted to the Shareholders ‘Meeting for approval. If such amount is unable to be estimated, the amount can be determined in accordance with the actual	distribution ratio for last year. The following table shall be filled out as well.	Note 5: Disclose the total amount of remuneration paid to the President and Vice President by all the companies (including the Company) included in the consolidated financial statements.	Note 6: Disclose the name of the President and Vice President in the respective range of total remuneration received from all the Company.	Note 7: Disclose the total amount of remuneration paid to the President and Vice President by all the companies (including the Company) included in the consolidated financial statements. Disclose the name of the President and	Vice President in the respective range of total remuneration received.	Note 8: It refers to the net income in the parent company only financial reports or individual financial reports of the recent year.	Note 9: a. Specify the amount of remuneration received by the president and vice presidents from ventures other than subsidiaries or from the parent company in this field (Please fill in “None” if none).	b. Where the Company’s president and vice president received relevant remuneration from ventures other than subsidiaries or from the parent company, the remuneration received by the Company’s president and vice	president from ventures other than subsidiaries or from the parent company shall be included in the “E” column of the remuneration bracket table with the column name changed to “the parent company and all invested	companies.”.	c. The remuneration means pay, compensation (including compensation of employees, directors and supervisors) and business expense received by the president or vice president serving as a director, supervisor or manager	of ventures other than subsidiaries or of the parent company.	Note 10: The Board of Directors of the Company approved to promote Wen-Bee Kuo as Acting President from Senior Vice President, and discharge President, Jason Lin, on March 10, 2023, who was originally as Chairman and	President at the same time. Vice President Kwang-Ming Chen resigned effective July 1, 2023, and Assistant Vice President Jung-Hung Kao was promoted to Acting Vice President on August 10, 2023. Vice President	Ming-Hung Cheng and Han-Sheung Wang resigned effective January 1, 2024	＊Compensations in the table are different from incomes for income tax law. Therefore, figures in the table are mainly for information disclosure and cannot be used as the basis for taxation.

60

3.3.3 Employee Compensation of ManagersUnit: NTD thousands；2023.12.31	Ratio of Total Amount to Net Income (％)	0.0006	0.0006	0.0006	0.0006	0.0006	0.0006	0.0006	0.0006	0.0006	0.0006	0.0006	0.0006	0.0006	0.0006	0.0006
	Total	301
	Employee Compensation - in Cash	43
	Employee Compensation -in Stock	0
	Name (Note 1)	Jason Lin	Wen-Bee Kuo	Jerry Lin	Tony Liang	Ming-Hung Cheng	Kwang-Ming Chen	Jung-Hung Kao	Jen-Long Wu	Han-Sheung Wang	Yeats Yeh	Chao-Jung Chen	Y.Y. Lee	Ray Lei	I-Yu Chiu	Chia-Hung Chien
	Title (Note 1)	President (Note 5)	President (Note 5)	Senior Vice President	Senior Vice President	Vice President (Note 5)	Vice President (Note 5)	Acting Vice President (Note 5)	Vice President	Vice President (Note 5)	Vice President	Vice President	Vice President	Financial Officer	Accounting Officer	Corporate Governance Officer
	Managers

61

• 3.3.4 Comparison of Remuneration for Directors, President and Vice Presidents in the Two Most Recent Fiscal Years and Remuneration Policy for Directors, President and Vice Presidents

• The ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the two most recent fiscal years to directors, president and vice presidents of the

Company, to the net income. Unit: ％

ompany,to the net income.		Unit:％
Year Item	2023	2022
Directors	0.5611	0.1318
President and Vice Presidents	0.8057	0.1970

Explanation:

  - A. Remuneration of directors includes the Directors who are adjunct managers.

  - B. The ratios of total remuneration of Directors, President and Vice Presidents to the after-tax net income in 2023 are higher than which in 2022, because the after-tax net income was down by 79.7 ％ from 2022 to 2023.

1. The policies, standards, and portfolios for the payment of remuneration, the procedures for determining remuneration, and the correlation with risks and business performance.

2. A. Remuneration of the Company’s Directors and managers is submitted to Remuneration Committee and Board of Directors for approval.

3. B. Remuneration of Directors:

   • a. According to Article 28 of the Association of the Company, the Board of Directors are authorized to determine the remuneration amount based on a Director’s involvement in the Company’s operations and his/her contribution values and in comparison with payments in other business of the same industry. However, independent directors and director, Ralph Ho, receive a fixed monthly remuneration, as well as reimbursement for transportation expenses based on their actual attendance of the board meetings. Other directors only receive reimbursement for transportation expenses based on their actual attendance of the board meetings.

   • b. The Articles of Association of the Company do not regulate the compensation of directors.

62

• C. Remuneration of President, Vice Presidents and Managers:

• a. According to Article 28 of the Association of the Company, the compensation includes fixed monthly salary, diligence bonus, year-end bonus, manager bonus, severance pay and other welfare. The fixed monthly salary is adjusted based on the standard of all employees’ salary adjustment and the annually individual performance including the financial indicators and non-financial indicators assessed by Chairman and approved by Remuneration Committee.

ommittee.	ommittee.
Category		Item
Financial Indicators		Profit and loss, and EBITDA Operational target achievement rate Operational growth rate Profit contribution
Non-Financial Indicators	Environment Protection	Environmental sustainability engagement Energy and water saving performance Circular economic benefits Carbon reduction target achievement rate
	Social Responsibility	Work safety and occupational accidents Product R&D and innovation Friendship with neighbors and protest cases
	Corporate Governance	Operational management capability AI cases and benefits fraud cases

• b. According to Article 39 of the Association of the Company, if the Company gains any profits in any year, the Company shall retain 0.05% to 0.5% of the pre-tax profit as employee compensation before deducting the employee compensation of such year.

63

3.4 Implementation of Corporate Governance

3.4.1 Board of Directors’ Meeting Status

A total of 6 (A) meetings of the Board of Directors were held in 2023. The

attendance of director was as follows:

Title	Name (Note1)	Attendance in Person (Ｂ)	By Proxy	Attendance Rate (%) 【Ｂ/Ａ】 (Note2)	Remarks
Chairman	Jason Lin	6	1	100.00
Managing Director	William Wong, Representative of Formosa Chemicals & Fibre Corp.	6	0	100.00
Managing Director	Susan Wang, Representative of Nanya Plastics Corp.	5	0	83.33
Managing Director	Wilfred Wang, Representative of Formosa Petrochemical Corp.	4	2	66.67
Managing Director (Independent Director)	C. L. Wei	6	0	100.00
Independent Director	C. J. Wu	6	0	100.00
Independent Director	Yen-Shiang Shih	6	0	100.00
Independent Director	Wen-Chyi Ong	6	0	100.00
Director	C. T. Lee	1	1	50.00	Passed away on May 21, 2023.
Director	Cher Wang	6	0	100.00
Director	K. H. Wu	5	1	83.33
Director	Ralph Ho	6	0	100.00
Director	Sang-Chi Lin	6	0	100.00
Director	JerryLin	6	0	100.00

64

• Director Cheng-Chung Cheng 6 0 100.00 Other mentionable items: 1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the company’s response should be specified: (1) Matters referred to in Article 14-3 of the Securities and Exchange Act: The Company is not applied to Article 14-3 of the Securities and Exchange Act, because it had set up audit committee. The statements about Article 14-5 of the Securities and Exchange Act refer to “3.4.2 Audit Committee Meeting Status”.

• (2) Other matters involving objections or expressed reservations by independent directors that were recorded or stated in writing that require a resolution by the Board of Directors: None.

• 1. If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: Please refer to “3.4.13 Material resolutions of Shareholders Meeting or Board of Directors Meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report”.

• TWSE/TPEx Listed Companies shall disclose the evaluation cycles, evaluation periods, scope and method of evaluation, the evaluation content of self-evaluation or peer evaluation of the Board of Directors: In order to implement corporate governance and enhance the function of the Board of Directors, the Company conducts the implementation evaluation of the Board of Directors as a whole, individual board members, and each functional committee annually, according to the rules of “Self-Evaluation of the Board of Directors”. The results of evaluation of 2023 are good and were reported to the Board of Directors on December 14, 2023.

	Evaluation	Evaluation	Evaluation
				Evaluation method	Evaluation content
	cycle	period	scope
	Once annually	2022.10.01-	Board	Self-evaluation of	1. Participation level in the company’s
		2023.09.30	of Directors	Directors	operations (30％)
					2. Improvement of the quality of the
					board of directors’ decision making
					(30％)
					3.Composition and structure of the
					Board of Directors (18％)
					4. Election of the directors and their
					continuing professional education (10
					％)
					5. Internal control(12％)
	Once annually	2022.10.01-	Directors	Self-evaluation of	1.Control of the company’s goal and
		2023.09.30		Directors	mission (13％)
					2. Acknowledge the duty of Directors (13％)
					3. Participation level in the company’s

65

				operations (32％) 4. Communication and relationship maintenance within the Board of Directors (14％) 5. Director’s profession and continuing professional education (14％) 6. Internal control(14％)
Once annually	2022.10.01- 2023.09.30	Audit Committee	Self-evaluation of Directors	1. Participation level in the company’s operations (19％) 2. Acknowledge the duty of Audit Committee (19％) 3. Improvement of the quality of Audit Committee’s decision making (34％) 4.Composition and structure, and election of Audit Committee (14％) 5. Internal control(14％)
Once annually	2022.10.01- 2023.09.30	Remuneration Committee	Self-evaluation of Directors	1. Participation level in the company’s operations (21％) 2.Acknowledge the duty of Remuneration Committee (16％) 3. Improvement of the quality of Remuneration Committee’s decision making (37％) 4. Composition and structure, and election of Remuneration Committee (26％)
Once annually	2022.10.01- 2023.09.30	Sustainable Development Committee	Self-evaluation of Directors	1. Participation level in the company’s operations (20％) 2.Acknowledge the duty of Sustainable Development Committee (25％) 3. Improvement of the quality of Sustainable Development Committee’s decision making (35％) 4. Composition and structure, and election of Sustainable Development Committee(20％)

(1) The operations of the Board of Directors of the Company are exercised in accordance with the provisions of the laws and regulations, the Articles of Association, and the resolutions of the Shareholders’ Meetings. All Directors, in addition to the professional knowledge and skills

66

• necessary to perform their duties, should strive for the best shareholder interests based on the principles of loyalty and integrity.

• (2) The Company keeps strengthen the board diversified structure, and demand each director to participate the training each year to make the Board of Directors have the ability to adapt to the competitive environment and business risk.

• (3) In order to establish a sound board governance system, and strengthen supervisory functions and management mechanisms, the Company set up the functional committees as follow: A. The Board of Directors approved to set up Remuneration Committee on August 29, 2011, to review the remuneration policy and rules of directors and managers. The operating status of Remuneration Committee is referred to “3.4.4 Composition, Responsibilities and Operations of Remuneration Committee”.

• B. The Board of Directors approved to set up Audit Committee on June 25, 2015. In addition, the Shareholders’ meeting reelect the all directors and increase by 4 independent directors from 3 persons to strengthen external supervisory. The operating status of Audit Committee is referred to “3.4.2 Audit Committee Meeting Status”.

• C. The Board of Directors approved to set up Sustainable Development Committee on May 10, 2022 to realize the sustainable development goals of environment protection, social responsibility and corporate governance. The operating status of Sustainable Development Committee is referred to “3.4.5 Composition, Responsibilities and Operations of the Sustainable Development Committee”.

• (4) The Company reviews the operation of the Board of Directors annually, and the internal auditors make audit reports according to the review result. The monthly audit reports will be submitted to Independent Directors before the end of the next month.

• Note 1: Directors acting as the representatives of institutional shareholders shall indicate the names of the institutional shareholders.

• Note 2: (1) If there is a director leaving the company before the end of the year, the date of departure should be indicated in the remark’s column. The actual attendance rate (%) is calculated based on the number of meetings of the board of directors during the term of office and their actual attendance.

• (2) Before the end of the year, if there are reelected directors, the new and outgoing directors should be filled in, and the remarks should indicate that the directors are new or outgoing, and reelection date. The actual attendance rate (%) is calculated based on the number of meetings of the board of directors during the term of office and their actual attendance.

67

3.4.2 Audit Committee Meeting Status

1. Component of Audit Committee

The Audit Committee of the Company is constituted by four independent directors according to Article 14-4 of Securities and Exchange Act. Their term of office is from July 29, 2021 to July 28, 2024.

1. Duty and annual highlight of Audit Committee

2. (1) Adoption or amendment of an internal control system pursuant to Article 14-1.

3. (2) Assessment of the effectiveness of the internal control system.

4. (3) Adoption or amendment, pursuant to Article 36-1, of handling procedures for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, or endorsements or guarantees for others.

5. (4) A matter bearing on the personal interest of a director.

6. (5) A material asset or derivatives transaction.

7. (6) A material monetary loan, endorsement, or provision of guarantee.

8. (7) The offering, issuance, or private placement of any equity-type securities.

9. (8) The hiring or dismissal of an attesting CPA, or the compensation given thereto.

10. (9) The appointment or discharge of a financial, accounting, or internal auditing officer.

11. (10) Annual financial reports and second quarter financial reports that must be audited and attested by a CPA, which are signed or sealed by the chairperson, managerial officer, and accounting officer.

12. (11) Any other material matter so required by the company or the Competent Authority.

68

3. The attendance of Audit Committee

A total of 5 (A) meetings of Audit Committee were held in 2023. The attendance of Independent Directors was as follows:

Title	Name	Attendance in Person (Ｂ)	By Proxy	Attendance Rate (%)(Ｂ/Ａ) (Note1&2)	Remarks
Independent Director (Convener)	C. L. Wei	5	0	100.00
Independent Director	C. J. Wu	5	0	100.00
Independent Director	Yen-Shiang Shih	5	0	100.00
Independent Director	Wen-Chyi Ong	5	0	100.00
Other mentionable items: 1. If any of the following circumstances occur, the dates of meetings, sessions, contents of motion, resolutions of the Audit Committee and the Company’s response to the Audit Committee’s opinion should be specified: (1) Matters referred to in Article 14-5 of the Securities and Exchange Act. Date and Session of Meeting Contents and Handling of the Opinions 2023.03.6 (No.1 in 2023) 1.Proposal: (1) To create 2022 financial statements. (2) To change the certifying accountant for the company's financial reports. (3) To formulate the Company’s internal control system statement. (4) To compile plan of lending funds for 2023 Q2. (5) To transact with related parties. (6) To donate NTD 90,382,426 to Kaohsiung Cultural Foundation of Brothers Wang Yung-ching and Wang Yung-tsai Park. (7) Board of Directors approved to liquidate the investee, Formosa Mitsui Advanced Chemicals Co., Ltd. 2.Contents of dissenting opinions, qualified opinions, or recommendations of Independent Directors: None. 3.Audit Committee Resolution: The all above proposals were approved by all attendants and submitted to Board of Directors for approval. 4.The Company’s handling of the opinions of the Audit Committee: Board of Directors approved all aboveproposals.

69

	2023.05.11 (No.2 in 2023)	1.Proposal: (1)To compile plan of lending funds for 2023 Q3. (2) To transact with related parties. (3) To issue a letter of support for credit facilities of Formosa Ha Tinh (Cayman) Ltd. (4) To issue a letter of support for credit facilities of Formosa Steel IB Pty Ltd. (5) To amend “Internal Control Systems” and “Internal Audit Implementation Rules” of the Company. 2.Contents of dissenting opinions, qualified opinions, or recommendations of Independent Directors: None. 3.Audit Committee Resolution: The all above proposals were approved by all attendants and submitted to Board of Directors for approval. 4.The Company’s handling of the opinions of the Audit Committee: Board of Directors approved all aboveproposals.
	2023.08.10 (No.3 in 2023)	1.Proposal: (1) To compile plan of lending funds for 2023 Q4. (2) To transact with related parties. (3) To invest Formosa Resources Corporation for USD 25 million. 2.Contents of dissenting opinions, qualified opinions, or recommendations of Independent Directors: None. 3.Audit Committee Resolution: The all above proposals were approved by all attendants and submitted to Board of Directors for approval. 4.The Company’s handling of the opinions of the Audit Committee: Board of Directors approved all aboveproposals.
	2023.11.9 (No.4 in 2023)	1.Proposal: (1) To compile plan of lending funds for 2024 Q1. (2) To transact with related parties. (3) To invest Formosa Plastics Construction Corporation for NTD 500 million. 2.Contents of dissenting opinions, qualified opinions, or recommendations of Independent Directors: None. 3.Audit Committee Resolution: The all above proposals were approved by all attendants and submitted to Board of Directors for approval. 4.The Company’s handling of the opinions of the Audit Committee: Board of Directors approved all above proposals.

70

	2023.12.14	1.Proposal:
	(No.5 in 2023)	To issue a letter of support for credit facilities of Formosa Steel IB Pty Ltd.
		2.Contents of dissenting opinions, qualified	opinions,	or
		recommendations of Independent Directors: None.
		3.Audit Committee Resolution:
		The all above proposals were approved by all attendants and submitted
		to Board of Directors for approval.
		4.The Company’s handling of the opinions of the Audit Committee:
		Board of Directors approved all aboveproposals.

• (2) Other matters which were not approved by the Audit Committee but were approved by twothirds or more of all directors: None.

• If there are independent directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: None.

• Communications between the independent directors, the Company’s internal audit officer and CPAs (e.g. the material items, methods and results of audits of corporate finance or operations, etc.):

• (1) Communication between Independent Directors and CPAs:

  • I.Audit Committee appoints CPAs to audit various reports and financial statements, which are prepared by the Board of Directors and delivered to shareholders, and to submit a review report.

  • II.Independent Directors supervise the process of financial report with the audit agenda and the key audit matter item which were provided by CPAs before the annual auditing.

  • III.CPAs are arranged to attend at least once a year to report to Independent Directors about their independence, the financial report and internal control audit results of the Company and the subsidiaries. They also fully communicate any influence on accounting resulted from the changes in regulations.

• (2) Communication between Independent Directors and internal audit officer:

  • I.The internal auditing office of the Company submits the internal audit report issued by the Company to the Independent Director for review monthly.

  • II.Independent Directors and the internal audit officer communicate at least once quarterly on internal control operation status, the auditing results, the amendment of “Internal Control Systems” and “Internal Audit Implementation Rules”, the assessment of the effectiveness of internal control system, and the internal auditing plan. The Company will follow up the correction of defects and irregularities to make sure the related department to adopt the reliable improvement measures in time.

(3) Communication and status between Independent Directors, CAP and internal audit officer:

	Date	Communication Member	Content	Result
	2023.03.10	Independent Director C. L. Wei Independent Director C. J. Wu Independent Director Yen-Shiang Shih	To explain the auditing matters, results of 2022 financial report and results of AQI.	Well and approved by Audit

71

	Before Audit Committee Meeting	Independent Director Wen-Chyi Ong CPA Hui-Chih Kou		Committee and Board of Directors
	2023.03.10 Board of Directors	Independent Director C. L. Wei Independent Director C. J. Wu Independent Director Yen-Shiang Shih Independent Director Wen-Chyi Ong Other attended Directors Auditor Officer Chin-Chuan Chuang Other attended Managers	To report the execution status of the Company’s internal audit plan of the Nov. and Dec. of 2022.	Well and acknowledged
			To formulate “Internal Control System Statement” of the Company.	Well and approved by Board of Directors
	2023.05.11 Audit Committee	Independent Director C. L. Wei Independent Director C. J. Wu Independent Director Yen-Shiang Shih Independent Director Wen-Chyi Ong Auditor Officer Chin-Chuan Chuang Other attended Managers	To amend “Internal Control Systems” and “Internal Audit Implementation Rules” of the Company.	Well and approved by Audit Committee and Board of Directors
	2023.05.11 Board of Directors	Independent Director C. L. Wei Independent Director C. J. Wu Independent Director Yen-Shiang Shih Independent Director Wen-Chyi Ong Other attended Directors Auditor Officer Chin-Chuan Chuang Other attended Managers	To report the execution status of the Company’s internal audit plan of 2023 Q1.	Well and acknowledged
	2023.05.30 Board of Directors	Independent Director C. L. Wei Independent Director C. J. Wu Independent Director Yen-Shiang Shih Independent Director Wen-Chyi Ong Other attended Directors Acting Auditor Officer Chin-Chuan Chuang Other attended Managers	To report the status of correction of defects and irregularities of internal control systems for 2022.	Well and acknowledged
	2023.08.10 Board of Directors	Independent Director C. L. Wei Independent Director C. J. Wu Independent Director Yen-Shiang Shih Independent Director Wen-Chyi Ong Other attended Directors Auditor Officer Chin-Chuan Chuang Other attended Managers	To report the execution status of the Company’s internal audit plan of 2023 Q2.	Well and acknowledged
	2023.11.09 Board of Directors	Independent Director C. L. Wei Independent Director C. J. Wu Independent Director Yen-Shiang Shih	To report the execution status of the Company’s internal audit plan of 2023Q3.	Well and acknowledged

72

		Independent Director Wen-Chyi Ong Other attended Directors Auditor Officer Chin-Chuan Chuang Other attended Managers
	2023.12.14 Before Board of Directors Meeting	Independent Director C. L. Wei Independent Director C. J. Wu Independent Director Yen-Shiang Shih Independent Director Wen-Chyi Ong Auditor Officer Chin-Chuan Chuang	To formulate the Company’s internal audit plan in 2023.	Well and approved by Board of Directors
	2023.12.14 Board of Directors Meeting	Independent Director C. L. Wei Independent Director C. J. Wu Independent Director Yen-Shiang Shih Independent Director Wen-Chyi Ong Other attended Directors Auditor Officer Chin-Chuan Chuang Other attended Managers	To report the execution status of the Company’s internal audit plan in October, 2023.	Well and acknowledged

Note 1: If there is an independent director leaving the company before the end of the year, the date of departure should be indicated in the remarks column. The actual attendance rate (%) is calculated based on the number of meetings of the audit committee during the term of office and their actual attendance.

• Note 2: Before the end of the year, if there are reelected independent directors, the new and old directors should be filled in, and the remarks should indicate that the directors are new or outgoing, and reelection date. The actual attendance rate (%) is calculated based on the number of meetings of the audit committee during the term of office and their actual attendance.

73

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Consistent with Article 1 and Article 2 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. The “Principles of Corporate Governance” established by the Company adheres to the principles of the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” with minor amendments based on the Company’s actual practices.
Implementation Status (Note)	Summary	The Company passed the resolution of the Board of Directors on November 11, 2014 and set Principles of Corporate Governance, which was disclosed on the information reporting website designated by the securities authority and the Company’s website.
	No
	Yes	V
	Evaluation Item	1. Did the Company establish and disclose the Corporate Governance Best Practice Principles based on “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies”?

74

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	In compliance with Article 13 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. In compliance with Article 19 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. In compliance with Article 14 to Article 17 of the Corporate Governance Best Practice Principles for
Implementation Status (Note)	Summary	(1) The Company has an internal operating procedure for handling shareholder matters and has set up a spokesperson to address shareholder suggestions or concerns at any time. In addition, each functional team in the President Office fully supported the above matters and have an in-depth understanding and review of the shareholders’ suggestions or concerns. After that, an oral or written reply to the satisfaction of the shareholders is proposed. (2) The Company shall pay attention to the situation of any increase, decrease or use as collateral in the shares of shareholders holding more than 5% of shares and holding Director or manager positions, and has disclosed the information of shareholders holding more than 5% of shares in the quarterly financial report. The Directors, managers and shareholders holding more than 10% of the shares are disclosed monthly by the information reporting website designated by the securities authority. (3) a. Both the Company and its subsidiaries implement profit center management. Each company’s personnel, property management rights and responsibilities are clearly divided, and there are no irregular transactions.
	No
	Yes	V V V
	Evaluation Item	2. Shareholding structure and shareholders’ rights (1) Did the Company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? (2) Did the Company maintain a register of major shareholders with controlling power as well as a register of persons exercising ultimate control over those major shareholders? (3) Did the Company establish and execute the risk management and firewall systems with its affiliated businesses?

75

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	TWSE/TPEx Listed Companies. In compliance with Article 10-3 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies.
Implementation Status (Note)	Summary	b. The funds and loans of the Company and its related companies are calculated based on the accrued market interest rate. The amount of loan is reassessed every quarter based on business needs. Guaranteed coverage and limits have also been set for endorsement guarantees for other companies. c. To reduce losses, comprehensive risk assessment for banks, customers, and suppliers are performed. Each company credit authorization to the same customer and stop payment to the same supplier can be review through the computer system. d. The relationship between the Company and the related companies, such as transaction management, endorsement, loans, etc., are monitored. In accordance with the “Regulations Governing Establishment of Internal Control Systems by Public Companies”, outlined by the Financial supervisory Commission, the Company has set up supervision and management operations to implement the risk control mechanism for its subsidiaries. (4) a. The Company has established “Personnel Management Rules”, and “Guidelines for Prevention of Insider Trading” to forbid using undisclosed information to buy and sell securities for illegal profits. In addition, to enhance the corporate governance and prevent the insider trading previously, “Principles of Corporate Governance” of
	No
	Yes	V
	Evaluation Item	(4) Did the Company establish internal rules that prohibit Company insiders from trading securities using undisclosed information?

76

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons		In compliance with Article 20 of the Corporate
Implementation Status (Note)	Summary	the Company regulates that it prohibits a director from trading its shares during the closed period of 30 days prior to the publication of the annual financial reports and 15 days prior to the publication of the quarterly financial reports. The Company noticed the directors about the banned trading stock period of this year financial report through email to avoid the inside trading suspicion on January 16, 2023. b. The Company conducts education and training on “Prevention of Insider Transactions”, “Internal Significant Information Handling Procedures” and related laws and regulations for directors, managers and employees to promote relevant information at least once yearly. c. The Company held online education and training for directors, managers and employees on September 11, 23 and 25, 2023 and November 30, 2023. The training courses include legislation basis, inside trading definition, standard object, material news category and penalty, with a total of 5,088 person involved in, and 5,207 training hours.	(1) a. Article 20 of Principles of Corporate Governance of the Company states that diversified backgrounds of the Company's Directors
	No
	Yes		V
	Evaluation Item		3. Composition and responsibilities of the Board of Directors: (1) Did the board of directors formulate and implement

77

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Governance Best Practice Principles for TWSE/TPEx Listed Companies. In compliance with Article 28 and Article 28-1 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. Article 28-2 has not been met, since the Company is able to
Implementation Status (Note)	Summary	should be considered when forming the Board of Directors. Gender, race and nationality of the Board members shall not be limited, and the overall Board shall possess the following abilities: to make operational judgments, to perform accounting and financial analysis, to conduct management administration, to conduct crisis management, to possess knowledge of the industry and an international market perspective, as well as to have abilities to lead and to make policy decisions. b. The Board of Directors of the Company include 14 Directors including 4 Independent Directors and 2 female Directors. Please refer to Page 49-51 of this annual report for the Board members' information and diversification policy, target and implementation status. (2) The Company’s Board of Directors approved to set up a remuneration committee and an audit committee on August 29, 2011, and June 25, 2015 respectively. To enhance the supervision of the Board of Directors and to promote the goal of sustainable development, the Company’s Board of Directors also approved to set up a sustainable development committee on May 10, 2022.
	No
	Yes	V
	Evaluation Item	diversified policies, specific management objectives? (2) In addition to establishing the Remuneration Committee and Audit Committee according to the regulations, has the Company voluntarily established other functional committees?

78

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	nominate suitable and appropriate Director candidates, and there is no operational need to set up a Nomination Committee. In compliance with Article 37 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. In compliance with Article 29 of the Corporate Governance Best Practice Principles
Implementation Status (Note)	Summary	(3) The Company has established the “Self-Evaluation Evaluation of the Board of Directors” approved by the Board of Directors on August 12, 2020. The performance evaluation results of 2023 have been submitted to the Board of Directors on December 14, 2023. The evaluation content and results could be referred to page 65-66 of this annual report. The preceding information could be as references in determining remunerations, nomination, and re-election of the Company Directors. (4) The Company evaluates the independence and competence of certifying accountants at least once a year by referencing audit quality indicators (AQIs). The evaluation covers five major dimensions: "professionalism," "audit quality control," "independence," "external
	No
	Yes	V V
	Evaluation Item	(3) Did the Company establish a standard to measure the performance of the Board of Directors and implement it annually? Did the Company submit the results of performance assessments to the board of directors and use them as reference in determining remuneration for individual directors, their nomination, and additional office term? (4) Did the Company regularly evaluate the independence of CPAs?

79

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	for TWSE/TPEx Listed Companies.	In compliance with Article 3-1 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed
Implementation Status (Note)	Summary	supervision," and "innovation capability," encompassing a total of 15 AQI indicators. The certifying accountant and their firm are required to complete a questionnaire and provide a "declaration" and other relevant materials for our company's assessment. It has been confirmed that the certifying accountant has no financial interests or business relationships with our company other than for certification and tax-related matters. Additionally, by referencing AQI indicator information, it is confirmed that the certifying accountant and their firm exceed the industry average in terms of audit experience and training hours. Over the past three years, they have implemented or planned initiatives or projects aimed at enhancing audit quality, including the adoption of a digital audit platform, the iRADAR financial product evaluation tool, digitalization of confirmations, and the FileEx file exchange platform, to improve audit quality. The most recent assessment of the certifying accountant's independence and competence was reported to the Audit Committee and Board of Directors on March 6, 2024.	(1) The Company has set up a Chief Governance Officer as the most senior manager in charge of corporate governance-related tasks on May 7, 2019. Appropriate personnel have also been designated to handle corporate governance tasks. (2) The officer supervises President Office, which is responsible for
	No
	Yes		V
	Evaluation Item		4. Did the TWSE/TPEx listed company have designated appropriate personnel to handle corporate governance tasks and set up a Chief Governance Officer as

80

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Companies.	In compliance with Article 51 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies.
Implementation Status (Note)	Summary	corporate governance-related matters and is assisted by the relevant departments such as the Legal Affairs Office of the General Administrative Office, which includes handling Board of Directors and shareholders meetings, taking minutes of such meetings, assisting Directors come to office and continue training, providing Directors relevant information for operations, assisting Directors compliance with law and regulations, report on the results of the review of the qualifications of independent directors to the Board of Directors, and so on. (3) The training records of Corporate Governance Officer refers to Page 143 of this annual report.	(1) The Company instructs the President Office to communicate with stakeholders depending on the situation. A spokesperson and a deputy spokesperson have been appointed as the external communication channel. (2) The Company set up the stakeholder area on the Company website to provide detailed contact information for the dedicated personnel, including phone number and e-mail, as the channels for the stakeholders to communicate with the Company. (3) The Company responds to stakeholders’ issues of concern at the appropriate time through the following channels:
	No
	Yes		V
	Evaluation Item	the most senior manager in charge of corporate governance-related tasks (including but not limited to providing information required for Director/Supervisor’s operations, convening board/shareholder meetings in compliance with the law, apply for/change Company registry and producing meeting minutes of board/shareholder meetings)?	5. Has the Company established a communication channel with stakeholders (including but not limited to shareholders, employees, customers and suppliers)? Has a stakeholders’ area been set up on the Company website? Are major Corporate Social Responsibility (CSR) topics that the stakeholders are concerned with addressed

81

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Implementation Status (Note)	Summary	a. Shareholders and investors: Shareholders’ meetings are held annually, and shareholders can fully exercise their voting rights through electronic means. In addition, the annual report of the shareholders’ meeting, the monthly revenue and the quarterly self- closing profit and loss are issued to facilitate shareholders’ understanding of the Company’s operating conditions. b. Employees: Employee collective bargaining rights are exercised, and communication with employees on workplace safety, employee welfare, human rights protection, labor and employment issues, etc. are conducted through regular trade unions, factory (office) meetings, etc. Suggestions are also addressed and reviewed on a regular basis. c. Suppliers and contractors: The Company adheres to the principle of sustainable management and fair trade and is committed to working with manufacturers that comply with environmental protection, safety, and human rights standards. Open tenders are held through the Formosa Plastics electronic trading platform, and regular briefings are held to strengthen two-way communication and advocacy. Also, suppliers can ask questions on the Formosa Plastics electronic trading platform, and the questions will be replied by personnel immediately, to achieve the goals with good
	No
	Yes
	Evaluation Item	appropriately by the Company?

82

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons		Although it does not meet the requirements of Article 7-1 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, it does not impair the operational efficiency of the shareholders’ meeting.	In compliance with Article 57 and Article 59 of the
Implementation Status (Note)	Summary	communications. d. Customer: Issues including product quality and after-sales service that customers care about can be addressed through customer visits, participating in exhibitions, product briefings, customer satisfaction surveys, etc. The website also lists the sales service line and e-mail address. Customer complaints are handled through the “Customer Response Form” and the “Customer Complaint Handling Form”. (The status of stakeholder communication refers to 1.3 Stakeholder Identification and Communication of 2023 ESG Report)	The Company's shareholders' meeting affairs are conducted on its own currently, but the relevant procedures are strictly planned and conducted in accordance with the relevant regulations by designated stock affairs unit, legal department and the President office, and have been evaluated by Taiwan Depository & Clearing Corporation, a designated institution by the FSC, since 2022. All of the Company's recent evaluation results comply with regulation and ensure the shareholders' meeting can be convened legally, validly and safely and therefore able to protect shareholders' right.	(1) The Company has set up a website in Chinese and English with disclosed relevant financial business and corporate governance
	No		V
	Yes			V
	Evaluation Item		6. Does the Company appoint a professional shareholder services agency to deal with shareholder affairs?	7. Information disclosure (1) Did the Company establish a website to disclose information

83

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. In compliance with Article 55 paragraph 3 and Article 56 and Article 58 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. Although it does not meet the requirements of Article 55 paragraph 2 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, the Company does announce our self-
Implementation Status (Note)	Summary	information under “Investor Relations Section”. The Company’s website is: www.fpc.com.tw. (2) The Company has a spokesperson and a deputy spokesperson. A dedicated person has been appointed in the President Office to collect and disclose Company information, as well as providing the spokespersons and relevant business departments with answers to stakeholders, investors, and authorities. (3) In principle, the Company submits and announces operating revenue data from the previous month on the 6thin every month and announces unaudited finance data from the previous quarter on the 10thday in each quarter. The Company also submits and announces financial reports before the deadline in accordance with laws and regulations. Though the Company does not announce annual financial statements within two months after the end of fiscal year due to CPA's auditing work, the Company does announce the unaudited annual financial information in
	No	V
	Yes	V
	Evaluation Item	on financial operations and corporate governance? (2) Did the Company have other information disclosure channels (such as establishing an English language website, delegating a professional to collect and disclose Company information, implementing a spokesperson system, and disclosing the process of investor conferences on the Company website)? (3) Does the Company publish and report its annual financial report within two months after the end of an accounting period, and publish and report its financial reports for the first, second, and third quarters as well as its operating status for each month

84

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	monitored financial information	In compliance with Articles 51 to Articles 54 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies.
Implementation Status (Note)	Summary	January to help investors to understand our operating status..	(1) Employees’ rights: The Company strives to pursue a harmonious labor-management relationship and attaches importance to the right of employees to express their opinions. We have set up physical suggestion boxes at the places where employees have easy access to, as well as an online suggestion box in the Company information system. Each suggestion box is appointed to dedicated personnel for replying, in order to facilitate communication. An “inspection method” that establishes the internal whistle-blower channel and protection system has also been set up. In the meantime, we attach importance to employee collective bargaining rights. Board of supervisors and labor-management meetings are held by the unions regularly. The heads of relevant departments attend the meetings to fully communicate with the labor representatives. If there are written demands and suggestions, they are also reviewed and explained on a regular basis. On major labor issues, the Company gives higher priority to the opinions of the unions, and the top leaders consult with the unions to reach a consensus and ensure the harmonious labor-management relationship as well as the sustainable development of the Company.
	No
	Yes		V
	Evaluation Item	before the specified deadline?	8. Has the Company disclosed other information to facilitate a better understanding of its corporate governance (including but not limited to employee’s rights, employee wellness, investor relations, supplier relations, stakeholders’ rights, Directors and Supervisors training records, implementation of risk management policies and measurement standards, implementation of customer policies and purchase of liability insurance for the Directors and Supervisors of the Company)?

85

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Implementation Status (Note)	Summary	(2) Employee wellness: In order to take care of employees’ physical and mental health, the Company has budgeted annual health checks at Chang Gung Memorial Hospital. In addition to the items required by the law, the Company has added cancer screening programs such as A-type fetal protein and cancer embryo antigen. The goal is to ensure the employees understand and improve their health status. In terms of the employees’ diet, the Company follows health regulations concerning food source, acceptance and storage, water safety and hygiene, food staff and kitchen cleaning operations, and food and tableware cleaning inspections to ensure the health and safety of employees’ diet. Besides, the Company has employed counseling personnel in charge of the interview with newcomers, helping them fit in the Company as soon as possible. The counseling personnel could also provide both advice and care when employees face difficulties with work or life. For the relevant welfare measures, please refer to page 219-224 of the annual report. (3) Investor relations: The Company uses the President Office and the shareholding department as a bridge between the Company and its shareholders. In terms of corporate information transparency, the Company’s website has an “Investor Relations Section” to provide investors with relevant information. In order to maintain a good relationship with investors, the
	No
	Yes
	Evaluation Item

86

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Implementation Status (Note)	Summary	Company has set up a spokesperson system to provide a means of contact with shareholders and corporate investment institutions. In addition to participating in investment forums held by domestic and foreign brokerage firms, the Company holds 48 times meetings with both domestic and international investors on irregular basis. (4) Supplier relations: The Company’s procurement and contracting operations are mainly aimed at creating a level playing field by looking for good manufacturers that can provide suitable and appropriate equipment, materials or projects at reasonable prices to meet the needs of expansion or operation of various departments in a timely manner. a. Open and fair procurement and delivery mechanism: The Company uses the “open tender” method to purchase and distribute the contracting system through the Formosa Plastics electronic trading platform. It provides functions such as inquiry, quotation, bargaining, order, delivery, payment progress inquiry, etc. All information is encrypted by electronic voucher and firewall control to ensure the security of all incoming and outgoing data. Vendors can access the inquiry case and make quotations anytime and anywhere through the Internet without time and space restrictions, which greatly improves the efficiency of operations, saves time and money, and reduces operating costs to increase
	No
	Yes
	Evaluation Item

87

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Implementation Status (Note)	Summary	profits. After all the inquiry cases have been launched electronically, the manufacturers with the lowest quotation, fastest delivery time, and best quality are chosen so that both the buyer and the seller can reasonably achieve the goals in a harmonious atmosphere. b. Sound vendor management: In order to stabilize the quality and delivery of materials and ensure the quality and progress of construction, the Company has conducted evaluation and ranking of all manufacturers through the sound management and evaluation of the manufacturers. In the case of overdue delivery of the products (engineering), poor quality, or violation of the safety regulations, the event will be automatically included in the assessment record in order to replace unqualified manufacturers, and cultivate excellent manufacturers to achieve good relations as well as long-term cooperation between the two sides. c. Electronic trading for a win-win situation: The Company combines the comprehensive ERP computer management system and the digital, open, and transparent online procurement and delivery mechanism to build a high-quality, safe, convenient and fast electronic trading environment. The Company has further extended the same system vertically and horizontally to the rest of the industry, sharing the e-generation “Formosa Plastic
	No
	Yes
	Evaluation Item

88

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	In compliance with Article 40 of the Corporate
Implementation Status (Note)	Summary	experience” with all enterprises. At present, combined with the Company’s upstream and downstream supply chain systems, with more than 20,000 suppliers and third-party suppliers, this electronic trading platform shares the business opportunities and economic benefits brought about by open trading. (5) Stakeholders’ rights: In addition to continuing to improve in the industry, the Company pursues good business performance and strives to achieve the mission of “caring for the employees, serving the customers, and rewarding the shareholders.” Therefore, it is committed to caring for the shareholders, customers, suppliers, employees, and society. In addition to complying with laws and business ethics, the Company is in line with international standards in enhancing competitiveness, create shareholders’ benefits, as well as providing supplies of stable, high-quality and low-cost products. With industrial and environmental protection as a priority, the Company will develop towards eco-industrial areas and promote green building and green energy conservation, raw materials procurement, actively planting forests, paying attention to various social issues, investing in community and social welfare undertakings suitable for enterprises to contribute to the society. (6) Director Training Records:
	No
	Yes
	Evaluation Item

89

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Governance Best Practice Principles for TWSE/TPEx Listed Companies.	Governance Best Practice Principles for TWSE/TPEx Listed Companies.	Governance Best Practice Principles for TWSE/TPEx Listed Companies.
Implementation Status (Note)	Summary						Managing Director (Independent Director) C. L. Wei 2023/3/14 2023/5/12 2023/8/11 1. Taiwan Corporate Governance Association 2. Taiwan Corporate Governance Association 3. Taiwan Corporate Governance 1. Investment Trends in Digital Biomedicine 2. Integrity Management and Prevention of Insider Trading 3. Risk Management Trends from an ESG Perspective 1.5 1.5 1.5
		Hours	3	3			1.5 1.5 1.5
		Course	1. Carbon Credit Trading	Mechanism and Application of Carbon Management 2. Global Economic Outlook	and Industrial Trends in 2024		1. Investment Trends in Digital Biomedicine 2. Integrity Management and Prevention of Insider Trading 3. Risk Management Trends from an ESG Perspective
		Organization	1.Securities	and Futures Institute 2.Securities	and Futures Institute		1. Taiwan Corporate Governance Association 2. Taiwan Corporate Governance Association 3. Taiwan Corporate Governance
		Date of Training	2023/9/23	2023/9/23			2023/3/14 2023/5/12 2023/8/11
		Name	Jason Lin	William Wong, Wilfred Wang	C. J. Wu	Sang-Chi Lin, Jerry Lin	C. L. Wei
		Title	Chairman	Managing Director	Independent Director	Director	Managing Director (Independent Director)
	No
	Yes
	Evaluation Item

90

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Implementation Status (Note)	Summary				Director Cher Wang, K. H. Wu, Ralph Ho Cheng- Chung 2023.10.3 2023.10.3 1.Securities and Futures Institute 2.Securities and Introduction to the Dispute over Corporate Management Rights and the Trial Procedure in Commercial Courts How Directors and Supervisors 3 3
		3	3 3	3 3	3 3
		4. Carbon Credit Trading Mechanism and Application of Carbon Management	1.Carbon Credit Trading Mechanism and Application of Carbon Management 2.How Directors and Supervisors Should Supervise Corporate Risks and Crises	1. An Overview of Corporate Governance and Public- Private Partnerships 2. How Directors and Supervisors Should Supervise Corporate Risks and Crises	Introduction to the Dispute over Corporate Management Rights and the Trial Procedure in Commercial Courts How Directors and Supervisors
		Association 4.Securities and Futures Institute	1.Securities and Futures Institute 2.Securities and Futures Institute	1. Taiwan Corporate Governance Association 2.Securities and Futures Institute	1.Securities and Futures Institute 2.Securities and
		2023/10/3	2023/4/13 2023/10/3	2023/4/13 2023/10/3	2023.10.3 2023.10.3
			Yen-Shiang Shih	Wen-Chyi Ong	Cher Wang, K. H. Wu, Ralph Ho Cheng- Chung
			Independent Director	Independent Director	Director
	No
	Yes
	Evaluation Item

91

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons	In compliance with Article 39 of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies.
Implementation Status (Note)	Summary	Cheng Futures Institute Should Supervise Corporate Risks and Crises (7) The situation in which the Company purchased liability insurance for the Directors: The Company has purchased liability insurance for all Directors, and the insured amount is US$30 million. The above insurance period is from August 1, 2013 to today. (8) Implementation and policies of risk management: The Company established risk management policies to identify, evaluate, supervise and control risk from every aspect, enhance the sense of awareness of employees and make sure all potential risks that might happen are endurable, thus, can the Company execute the optimal strategy to rationalize the balance between profits and risks, please refer to page 250~260 of the annual report for further disclosure of risk management policies of the Company. (9) Implementation of customer policy: Customers are the cornerstone of the Company’s existence. The goal is to quickly supply the requested products and achieve stable and adequate supply so that customers can continue operate. a. Creating a stable supply and demand The Company and its customers have an important relationship of interdependence, coexistence, and co-prosperity. Therefore, building
	No
	Yes
	Evaluation Item

92

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Implementation Status (Note)	Summary	a stable supply and demand relationship is an issue that every sustainable company must pay attention to. Focusing on the long- term development of the industries in Taiwan, the Company actively invests in the production of chemicals, plastic, and Fibre raw materials to provide customers with a stable source of materials and lay a solid foundation for related industries. The solid long-term cooperation has allowed the customers to show steady growth. b. Enhancing the competitiveness of midstream and downstream manufacturers In order to improve the management capabilities of the middle and lower suppliers of the plastic industry, the founders set up a series of management courses at the early stage, and actively shared the Company’s system and experience with the industry. The Company has received positive feedback while strengthening the competitiveness of customers. So far, if other companies come visit, we are willing to share. From a management point of view, the Company has always believed that by taking customer interests into account, the Company will also benefit from it. In addition, in order to cooperate with customers to expand the market, the Company also actively supports customers and provides after-sales service. c. E-commerce saves costs and improves efficiency In order to improve the efficiency of the transaction process with the
	No
	Yes
	Evaluation Item

93

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons		9. Please specify the Company’s measures to improve the items listed in the corporate governance review result by Taiwan Stock Exchange’s Corporate Governance Center and the improvement plans for items yet to be completed. The Company has ranked among the top 20 percentile of all listed companies that participated in the 10th Corporate Governance Evaluation in 2023.The following is a description on improvements the Company has undertaken based on governance evaluation indicators:
Implementation Status (Note)	Summary	customer, the customer can get instant information and respond quickly when placing orders, order progress inquiries, receipts and payments, the Company officially established the Formosa Plastics E-Commerce Center in January 2001. This B2B online trading portal imports the e-commerce trading system, coordinates the management of internal resources and strengths, and integrates upstream and downstream supply chain systems and customer business relationships. Due to the remote marketing demand, the Company established “FPC E-commerce Platform” which integrates automatic sales and production function, AI arranging production schedule technology and delivery information base on ERP system. The platform provides the customers to make orders from online system and inform the latest orders information to customers, which increases the shipment efficiency, and it started from September 2020.
	No
	Yes
	Evaluation Item

94

Deviations from the	“Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons							Note: Provide a brief description in the appropriate column regardless of whether “yes” or “no” is selected.
			Improvement Status	FPC has recorded the important contents of shareholders' questions and our responses in the minutes of the 2023 shareholders' meeting.	FPC has uploaded the changes in the shares held by insiders for the previous month to the MOPS before the 10th of each month in 2023.	FPC plans to hold the 2025 annual shareholders' meeting in May.	On March 6, 2024, the board of directors approved the re- election of all 12 directors (including 4 independent directors). After the shareholders' meeting on June 20th, the seats of independent directors will account for one-third of the board seats.
Implementation Status (Note)	Summary
			Evaluation Indicator	(1) Does the company record the important contents of shareholders' questions and the company's responses in the minutes of the shareholders' meeting?	(2) Does the company upload the changes in the shares held by insiders for the previous month to the Market Observation Post System (MOPS) before the 10th of each month?	(1) Does the Company convene the shareholders' meeting by the end of May?	(2) Do the seats of independent directors account for more than one-third of the board seats?
	No
	Yes
	Evaluation Item
			Category	Items	Improved		Improvement Set as a Priority

95

3.4.4 Composition, Responsibilities and Operations of Remuneration Committee

1. Professional qualifications and independence of Remuneration Committee members 2024.4.22

Criteria Title Name	Criteria Title Name	Professional Qualification and Work Experience	Independence Status	Number of other public companies in which the individual is concurrently serving as a remuneration committee member
Independent Director (Convener)	C. L. Wei	C. L. Wei serves as the member of remuneration committee of the Company, Sinbon Electronics Company Ltd., Chia Hsin Cement Corp. and Inventec Corp., from August, October, December 2011 and June 2021, respectively, to now. He also experienced as the member of remuneration committee of many TWSE/TPEx listed companies, such as Compal Electronics, Inc., Inventec Besta Co., Ltd. and Innolux Corp., etc. He is familiar with and experienced in the remuneration issues and operations. Please refer to chapter of 3.2.1 Directors-2. Directors (Ⅱ) about hisqualification.	Please refer to chapter of 3.2.1 Directors-2. Directors (Ⅱ) about their independence status.	3
Independent Director	C. J. Wu	C. J. Wu serves as the member of remuneration committee of the Company from June 2012 to now, and is familiar with the operations and his duty in the committee. Please refer to chapter of 3.2.1 Directors-2. Directors (Ⅱ) about his qualification.		0
Independent Director	Yen- Shiang Shih	Yen-Shiang Shih serves as the member of remuneration committee of CTCI Corp. and the Company from June 2017 and June 2018, respectively, to now. He has an abundant experience in the TWSE listed companies, such as AU Optronics Corp. He is familiar with the operations and the duty of the committee. Please refer to chapter of 3.2.1 Directors-2. Directors (Ⅱ)about hisqualification.		1

96

Criteria Title Name	Criteria Title Name	Professional Qualification and Work Experience	Independence Status	Number of other public companies in which the individual is concurrently serving as a remuneration committee member
Independent Director	Wen- Chyi Ong	Wen-Chyi Ong serves as the member of remuneration committee of ASE Technology Holding Co., Ltd. and the Company from July 2021 to now. He is familiar with the remuneration issues and has many experiences in the communication with independent directors during the time as the chairman of Sinopac Financial Holdings Company Limited. Please refer to chapter of 3.2.1 Directors-2. Directors (Ⅱ)about hisqualification.		1

97

1. Remuneration Committee Meeting Status

2. (1) Component of Remuneration Committee

   • The Remuneration Committee of the Company is constituted by four directors. Their term of office is from July 29, 2021 to July 28, 2024.

3. (2) Duty of Remuneration Committee

   • I. Periodically reviewing remuneration committee charter and making recommendations for amendments.

   • II. Establishing and periodically reviewing performance goals for the directors and managers of the Company and the policies, systems, standards, and structure for their compensation.

   • III. Periodically assessing and setting the types and amounts of the directors and managers compensation of the Company.

4. (3) The attendance of Remuneration Committee

A total of 2 (A) meetings of Remuneration Committee were held in 2023.

The attendance of Remuneration Committee members was as follows:

Title	Name	Attendance in Person (Ｂ)	By Proxy	Attendance Rate (%) (Ｂ/Ａ)(Note)	Remarks
Independent Director (Convener)	C. L. Wei	2	0	100.00
Independent Director	C. J. Wu	2	0	100.00
Independent Director	Yen-Shiang Shih	2	0	100.00
Independent Director	Wen-Chyi Ong	2	0	100.00
Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (e.g., the remuneration approved by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected to by members or expressed reservations and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: None.

98

he most recent opinion:	fiscal year and the Company’s response to the Remuneration Committee’s
Date and Session of Meeting	Contents and Handling of the Opinions
2023.01.12 (No.1 in 2023)	1.Proposal: To report the 2022 year-end bonus distribution standard of managers who are appointed by Board of Directors. 2. Remuneration Committee Resolution: acknowledged. 3.The Company’s handling of the opinions of the Remuneration Committee: The year-end bonus of the appointed managers had been calculated according to the “Principle of Year-End Bonus and Reward Distribution” and the Board of Directors approved to distribute accordingly.
2023.08.10 (No.2 in 2023)	1.Proposal: The 2023 annual salary of the managers adjusts in line with the all employees’ compensation. 2. Remuneration Committee Resolution: The all above proposals were approved by all attendants and submitted to Board of Directors for approval. 3.The Company’s handling of the opinions of the Remuneration Committee: Board of Directors approved all above proposals.

Note 1: If there is a remuneration committee member leaving the company before the end of the year,

the date of departure should be indicated in the remarks column. The actual attendance rate

• (%) is calculated based on the number of meetings of the remuneration committee during the term of office and their actual attendance.

Note 2: Before the end of the year, if there are reelected remuneration committee member, the new and outgoing members should be filled in, and the remarks should indicate that the members are new or outgoing, and reelection date. The actual attendance rate (%) is calculated based on the number of meetings of the remuneration committee during the term of office and their actual attendance.

99

3.4.5 Composition, Responsibilities and Operations of the Sustainable Development Committee

1. Component and professional ability of Sustainable Development Committee

The Sustainable Development Committee of the Company is constituted by six directors. Their term of office is from May 10, 2022 to July 28, 2024. The each member of this Committee with the related professional background and experience is as below table:

Title	Name			Professional Background and Experience	Professional Background and Experience	Professional Background and Experience	Professional Background and Experience	Professional Background and Experience	Professional Background and Experience
		Industrial Safety	Environment Protection	Circular Economy	Social Participation	Corporate Governance	Legal Compliance	Risk Management	Green finance	R&D and Innovations
Chairman (Convener)	Jason Lin	V	V	V	V	V	V	V	V	V
Director	JerryLin	V	V	V	V	V	V	V	V	V
Independent Director	C. L. Wei				V	V	V	V	V	V
Independent Director	C. J. Wu				V	V	V	V		V
Independent Director	Yen-Shiang Shih		V	V	V	V	V	V	V	V
Independent Director	Wen-Chyi Ong				V	V	V	V	V	V

1. Sustainable Development Committee Meeting Status

2. (1) Duty of Sustainable Development Committee

   • I. Reviewing the sustainable development policies, strategies, and managerial rules of the Company.

   • II. Supervising the matters of sustainable development promotion and implementation cases.

   • III. Reviewing the material sustainable development information including ESG report and reporting to the board of directors.

   • IV. Supervising the greenhouse gas inventory and verification plans.

   • V. Supervising the Company to care the material issues concerned by stockholders, employees, customers, community, and government.

   • VI. Other matters instructed by the resolution of the board of directors.

3. (2) The attendance of Sustainable Development Committee

   • A total of 2 (A) meetings of Sustainable Development Committee were held in 2023. The attendance of Sustainable Development Committee members was as follows:

100

Title	Name	Attendance in Person (Ｂ)	By Proxy	Attendance Rate (%) (Ｂ/Ａ)(Note)	Remarks
Chairman (Convener)	Jason Lin	2	0	100.00
Director	JerryLin	2	0	100.00
Independent Director	C. L. Wei	2	0	100.00
Independent Director	C. J. Wu	2	0	100.00
Independent Director	Yen-Shiang Shih	2	0	100.00
Independent Director	Wen-Chyi Ong	2	0	100.00
The dates of meetings, contents of motion, resolutions of the Sustainable Development Committee during the most recent fiscal year and the Company’s response to the Sustainable Development Committee’s opinion: Date and Session of Meeting Contents and Handling of the Opinions 2023.05.26 (No.1 in 2023) 1.Proposal: To formulate ESG report of the Company of 2022. 2. Sustainable Development Committee Resolution: The above proposal was approved by all attendants and submitted to the Board of Directors for report. 3.The Company’s handling of the opinions of the Sustainable Development Committee: Acknowledged. 2023.12.14 (No.2 in 2023) 1.Proposal: To report the result of greenhouse gas verification in 2022. 2. Sustainable Development Committee Resolution: Acknowledged and submitted to the Board of Directors for report. 3.The Company’s handling of the opinions of the Sustainable Development Committee: Acknowledged.

• Note 1: If there is a sustainable development committee member leaving the company before the end of the year, the date of departure should be indicated in the remarks column. The actual attendance rate (%) is calculated based on the number of meetings of the sustainable development committee during the term of office and their actual attendance.

• Note 2: Before the end of the year, if there are reelected sustainable development committee member, the new and outgoing members should be filled in, and the remarks should indicate that the members are new or outgoing, and reelection date. The actual attendance rate (%) is calculated based on the number of meetings of the sustainable development committee during the term of office and their actual attendance.

101

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	In compliance with the Article 9 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies.
Implementation Status(Note1)	Summary(Note2)	To promote Corporate Sustainability, the Chairman-Jason Lin has been appointed as the general convener and the President-Wen-Bee Kuo and the Senior Vice President-Jerry Lin as Vice convener. President Office, safety and health department, accounting department, Mailiao and Kaohsiung management department and other units form “The Sustainable Development Team” which is dedicated to the implementation of corporate sustainability. (For details of the structure of the sustainable development team, please refer to 2.2.2 Sustainable Development Promotion of 2023 ESG Report.) The sustainable development team holds regular meetings, as well as reviews and reports all work matters to the Company's directors through internal official documents. They report at least once a year to the Board of Directors regarding the Company's implementation status of sustainable developments, including sustainable development policies, goals and management policies, risk management, climate change risks and opportunities, and greenhouse gas and energy management, etc. In addition, the Company established the Sustainable Development Committee under the Board of Directors on May 10, 2022, to strengthen the Company's implementation of the supervision mechanism for promoting sustainable development.
	No
	Yes	V
	Evaluation Item	1. Does the Company establish a governance structure to promote sustainable development as well as an exclusively (or concurrently) dedicated unit to implement sustainable development and have management appointed by the Board of Directors to be in charge of sustainable development and to report the implementation status to the Board of Directors?

102

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	In compliance with the Article 3 paragraph 2 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies.	In compliance with Article 13 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies.
Implementation Status(Note1)	Summary(Note2)	The Company's President Office and each department asses the risks to the Company from environmental, social and governance issues based on the levels of influence to stakeholders, and establish risk policies that enable effective identification, measurement and evaluation, supervision, and control to lower influences from relevant risks. The related scope of risk management refers to FPC website. (http://csr.fpc.com.tw/FPC_CSR/coporate_governance/operation_risk.aspx) The Company will identify the main stakeholders with electronic questionnaire to care the issues who focus on. The Company will review the issue impact to our Company. (For details of the structure of the sustainable development team, please refer to 1.4 Identification of Material Topic of 2023 ESG Report.)	(1) The Company formulated the administrative standards for security and health management, management information systems, office automation systems in accordance with the environmental protection laws and regulations formulated by the Environmental Protection Administration (such as the Air Pollution Control Act, the Water Pollution Control Law, the Waste Disposal Act and the Toxic and Concerned Chemical Substances Control Act, etc.), and strengthened the management of the security zone in the plants area through the improvement of the system. In addition, the Company applies
	No
	Yes	V	V
	Evaluation Item	2. Does the Company conduct risk assessment in regards to environmental, social, and governance topics related to company operations in accordance with the materiality principle, and establish relevant risk management policy or strategy?(Note 2)	3. Environmental issues (1) Has the Company referred to the nature of its industry to establish a suitable environment management system (EMS)?

103

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	In compliance with Article 12 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies.
Implementation Status(Note1)	Summary(Note2)	environmental accounting systems by collecting environmental expenditure information, environmental expenditure benefits, and informing stakeholders of environmental protection measures. (For details of the environmental management system based on industrial characteristics, please refer to 3.1 Environmental Management Strategies of 2023 ESG Report) All complex of the Company have achieved the environmental management system (ISO-14001) certification. The Company also asks SGS Taiwan Limited to assess the system to maintain the effectiveness each time per 3years. The result of ISO certification of the Company refers to FPC website as follow. (https://fpcweb.fpcetg.com.tw/fpcw/index.php?op=res&id=10&c=8) (2) The Company continues to promote energy conservation, emission reduction and circular economy, and integrates energy and resources across factories to improve energy efficiency. In recent years, AI and simulation technologies have been used to carry out industrial safety management and process optimization to improve production efficiency and maximize energy utilization. The Company reviews the recycling method for industrial waste and exhaust, and continues to develop recycled products with industrial waste recycling PIR aimed at 100% recycling, such as anti-bacterial oyster shell powder plastic products, etc.
	No
	Yes	V
	Evaluation Item	(2) Is the Company committed to improving usage efficiency of various resources and utilizing renewable resources with reduced environmental impact?

104

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	In compliance with Article 17, paragraph 1 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies. In compliance with Article 17, paragraph 2~3 of the Sustainable Development Best
Implementation Status(Note1)	Summary(Note2)	From raw material procurement to product sales, the Company attaches great importance to the health and safety of its customers. Therefore, the production process is continuously improved upon. To follow market trends and meet customer’s needs, the Company has shifted its focus to producing non-toxic and environmentally friendly products with improved production processes as well as green energy products. (For details of the specific practices and products that are environmentally friendly, please refer to 2.3.2 Product Development Innovation of 2023 ESG Report) (3) The Company continued to assess potential risks and opportunities arising from climate change in aspects of finance, reputation, global economy, energy cost volatility, and environmental compliance costs, set energy conservation targets and measures, and develop eco-friendly products to keep the business operations stable and competitive. The Company signs up to support the Climate-related Financial Disclosures (TCFD) and disclose information on the Company's governance, strategy, risk management, indicator and targets for climate-related risks and opportunities in accordance to the TCFD. (Please refer to 2023 TCFD and 3.2 Climate Change Management of 2023 ESG Report.) (4) To meet our corporate social responsibility and future requirements for GHG reductions, the Company has set up and maintained a systematic inventory of GHG emissions since 2016 in accordance with ISO 14064-
	No
	Yes	V V
	Evaluation Item	(3)Does the Company assess potential risks and opportunities arising from climate change, and establish relevant risk management policy or state? (4) Does the company monitor its greenhouse gas (GHG) emissions, water

105

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Practice Principles for TWSE/GTSM Listed Companies.	In compliance with Article 18 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies.
Implementation Status(Note1)	Summary(Note2)	1. The Company also regularly commissions BSI (British Standards Association) and SGS (SGS Taiwan Limited) to conduct greenhouse gas inventory. For energy conservation and carbon reduction, the Company will set a specific reduction target each year. (For further details and statistic data, please refer to chapter 3.3~3.6 of 2023 ESG Report)	(1) a. In order to guarantee the human right of employees, customers and stakeholders of the Company, the Company complies with relevant employment relations acts such as the Labor Standard Act, UN Universal Declaration of human Rights, and UN Guiding Principles on Business & Human Rights, International Labor Office Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy, etc. The Company also complies relevant labor laws to formulate personnel rules and regulations to protect employees’ rights and interests. It also provides stable and excellent treatment, complete education and training, promotion and development system, and a safe and healthy working environment to enhance the professional
	No
	Yes		V
	Evaluation Item	consumption, and waste volume for the past two years, and establish policies for energy conservation, carbon and GHG reduction, water consumption reduction, waste volume reduction accordingly?	4. Social issues (1) Has the Company referred to relevant laws and international human rights instruments to establish relevant management policies and procedures?

106

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
Implementation Status(Note1)	Summary(Note2)	competence of employees. The Chairman of the Company, Jason Lin, officially signed the human rights policy of the new version in August, 2019, which aims at preventing child and forced labor, respecting employees’ privacy and freedom of association, respecting employee privacy, freedom of association, and collective bargaining rights, and providing employees with diverse communication channels. For details, please refer to the official website of the Company. (http://csr.fpc.com.tw/FPC_CSR/talent/policy.aspx) b. Principle of Diversity, Inclusion and Equal Employment: Comply with the Employment Service Act to provide open, fair and equitable employment opportunities, and establish the Diversity and Inclusion Policy. c. Gender friendliness: In addition to the formulation of the “Measures on Prevention, Complaint and Punishment of Sexual Harassment at Workplace” to ensure equal gender work rights, the Company also attaches great importance to gender equality in the workplace. Although due to the nature of the industry, the proportion of male employees is higher than female employees, promotion channels have been structured and the performance of female employees are highly valued. Therefore, the number and proportion of female supervisor above employees constantly increase year on year, which is a demonstration of the Company's effort in gender equality. Please refer
	No
	Yes
	Evaluation Item

107

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	In compliance with Article 21, paragraph 2 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies.
Implementation Status(Note1)	Summary(Note2)	to the Company's 2023 ESG Report 4.1.2 Talent Recruitment. d. Local recruitment: In recruiting new employees, priority is given to local residents. Local quality supervisors are cultivated. Over the years, a high proportion of local residents have been employed, as detailed in the Company’s 2023 ESG Report 4.1.2 Talent Recruitment (2) a.The Company has clear regulations on employee promotion, assessment, training, rewards, and punishments. The salary for new recruits is based on the qualifications required for the job. Female and male employees of the same position and rank receive equal pay for equal work. Employee performance is reviewed regularly in order for raise and promotion to be given accordingly. b. The Company’s fixed holidays are 2 days off, national holidays, and other holidays as stipulated by the central competent authority. Annual leaves are also given to employees pursuant to the Labor Standards Act. For more details on other employee benefits, please refers to page 219~224 of the annual report. c. Article 39 of the Articles of Incorporation of the Company states that when allocating the net profits for each fiscal year, the Company shall set aside 0.05% to 0.5% of the balance of pre-tax profit prior to deducting employee’s compensation as compensation of employees. In addition, the Company provide year-end bonus and formulate the degree of salary increase each year according to operation
	No
	Yes	V
	Evaluation Item	(2)Did the company establish and implement reasonable employee benefits (including compensations, holidays, and other benefits), and appropriately reflect its business performance and results on its employee compensations?

108

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	In compliance with Article 20 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies.
Implementation Status(Note1)	Summary(Note2)	performance of the Company. (3) a.The Company produces “i Medical Health Network” and “iHealth Podcast” in the form of video and audio streaming to provide employees with health education information. In order to enhance the employees' awareness of safety and hygiene, the “Work Hazard Reminder Card” and “Safety and Hygiene Handbook” are distributed, and employees are reminded of work safety through education and training and safety observation (for various practices related to improving employee and workplace safety, please refer to section 4.3 Workplace Safety Management of 2023 ESG Report) b.The ISO 45001 Occupational Safety and Health Management System and the Taiwan Occupational Safety and Health Management System (TOSHMS) certifications have been obtained by all plants of the Company. c.In 2023, 2 number of employee occupational accident cases (excluding traffic occupational accident) occurred in the Company, 2 people were injured and no people died, accountied for 0.03% of the total employees. The Company immediately formed an “incident investigation team” after the accident to collectively review and clarify the cause of the accident with relevant departments. Substantive improvement measure was proposed, and all departments are requested to inspect and review the adequacy of protective
	No
	Yes	V
	Evaluation Item	(3) Has the Company provided employees with safe and healthy work environments as well as regular classes on health and safety?

109

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	In compliance with Article 21, paragraph 1 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies. In compliance with Article 24 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies.
Implementation Status(Note1)	Summary(Note2)	measures in place. Those with inadequate protection are requested to make improvement, while education and training has also been reinforced across all departments. All employees are requested to comply with the Company’s rules to avoid any future recurrence. (4) The Company's entry-level personnel have successively received training courses such as pre-employment training, shift training, basic and professional training on the job, and CiNet after arriving on the job. Besides the basic and professional training, the Company also held the management training for the candidates of the first-level and second- level supervisor. In addition, in response to the rapid development of AI and big data application technology, the Company has dispatched employees to participate in the technical leadership training classes and executive programs at the Taiwan AI Academy every year since 2018. (For specific training practices, please refer to 4.2.2 Employee Training and Performance Management of 2023 ESG Report.) (5) a.Since most of the products produced by the Company are not directly sold to general consumers, there are fewer marketing activities such as media advertisements and campaigns. If there are promotion activities involving regulations, all units will first consult the legal office to avoid violation. To protect customer privacy, the Company has established the “Personal Data Management Procedures” to strictly limit the use and control on any queries into personal data.
	No
	Yes	V V
	Evaluation Item	(4) Has the Company established an effective competency development career training program for employees? (5) Does the company follow relevant laws, regulations and international guidelines in terms of customer health, safety, and privacy, as well as when marketing or labeling its products and

110

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	In compliance with Article 26 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies.
Implementation Status(Note1)	Summary(Note2)	b. Customer relationship management is an important part of the Company’s sustainable operation. In order to understand the valuable opinions of customers, the Company has clearly defined the customer complaints pipeline as well as return and compensation application procedures so that customers can express relevant appeals through the Response Form. Product complaints are handled by the salesperson filling out the Customer Complaint Handling Form for all returns and exchanges. The process is also monitored by the computer system. Another method for customers to make inquiries or comments is to contact the telephone number or e-mail address listed on the official website. Comments and suggestions are prioritized according to the level of importance and timeliness. They are then forwarded to the relevant departments to ensure that the Company meets all customers’ needs. (6) During procurement, the Company has always required upstream suppliers to meet RoHS, ISO, and related national industrial safety standards, where all goods must be suitably labeled according to the nature of the products, i.e. warning labels. Suppliers should also adopt appropriate recycling procedures for used containers or delivery vehicles. Products manufactured by the disadvantaged and products with non-radioactive labels are prioritized for procurement. The “Price Inquiries” and “Orders” include requirements for suppliers that they
	No
	Yes	V
	Evaluation Item	services and has the company established relevant consumer protection policies and grievance procedures? (6) Has the company established supplier management policy and require suppliers to comply with relevant standards on environmental protection, occupational safety and health, or labor and human

111

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons		In compliance with Article 29 of the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies.
Implementation Status(Note1)	Summary(Note2)	comply with the regulations and fair trade principles. The Company commits itself to ensuring that the partners meet environment protection, industrial safety, and human rights requirements. Non-compliant manufacturers will be rejected and placed under manufacturer evaluation. When purchasing materials, parts or products containing metal components, suppliers are required to investigate whether they meet the “conflict-free metal” to ensure that the purchased raw materials are obtained through legal channels. (For further details, please refer to 4.4 Supply Chain Management of 2023 ESG Report.)	The content structure of the Company’s 2023 ESG Report is based on the Global Resiliency Reporting Association’s GRI standards guidelines, written in accordance with the guidelines and framework, and exposes the Company’s main sustainability issues, strategies, goals and objectives, as well as measures. Verified by the British Standards Institution(BSI), an impartial third-party unit, and is presented in international common indicators.
	No
	Yes		V
	Evaluation Item	rights issues?	5. Does the company refer to guidelines for the preparation of internationally accepted reports and prepare ESG Reports and other reports that disclose the company’s non- financial information? Has the aforementioned statement received any validation or guarantee from third-party accreditation/attestation organization?

112

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	6. Where the Company has established its own Best Practices on sustainable development according to the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies, please describe any differences between the prescribed best practices and actual implementations taken by the Company: Note: The Board of Directors of the Company approved to set the “Principles of Corporate Social Responsibility Code” on August 11, 2015, and the Company reviews the principles annually. The latest version is on May 10, 2022, to revise “Principles of Corporate Social Responsibility Code” to “Principles of Sustainable Development” with the approval of the Board of Directors. Although the Company’s principles have been slightly revised according to the Company’s practice, it still complies with the spirit of “the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies”. For the operation of the Company’s sustainable development, please refer to the 2023 ESG Report and website.	7. Other important and helpful information in understanding sustainable development operation： (Explanation 1) Relevant systems and structures The Company established the “ESG Promotion Organization” in 2021. The business content includes three aspects: environmental protection (E), social responsibility (S), and corporate governance (G). Among them, the environmental protection (E) aspect is subdivided into 8 important topics: 1. Climate-related financial disclosure 2. Circular economy- energy (resource) efficiency improvement 3. Circular economy- plastic recycling 4. Integration of international carbon reduction initiatives 5. Safety and green procurement (including transportation and packaging) 6. Degradable plastic 7. Renewable energy and green energy 8. Green product research and development and promotion of the green industry. The Chairman-Jason Lin serves as the general convener and the President Wen-Bee Kuo andthe Senior Vice President-Jerry Lin serves as Vic convener to be responsible for strategy formulation, goal planning, performance monitoring and management policy about the Company’s ESG. President Office, safety and health department, accounting department, Mailiao and Kaohsiung management department and other units form “The ESG Unit to be responsible for corporate governance, work safety and environmental sustainability, water and energy saving, product and customer service, supplier and contractor management, happy workplace, good neighbors and other related work. The Company convenes each business unit to review the implementation of various ESG businesses every quarter to meet the goal of energy consuming reduction and the ecological balance, and realize the sustainable value of the Company of environment, sociality and corporate governance.
Implementation Status(Note1)	Summary(Note2)
	No
	Yes
	Evaluation Item

113

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	(Explanation 2)Social welfare engagement of the enterprise 1. The system, measures, and performance of environmental protection, safety, and health： Since its establishment, the Company has always adhered to the philosophy of “industrial development and environmental protection,” and pursues social responsibility and sustainable business. Therefore, it attaches great importance to the work of environmental protection. Following this concept, the Company adopts the latest international technology for production processes and environmental protection equipment. For example, when building a power plant more than a decade ago, the Company was the first in the country to insist on the use of closed coal bunkers. Coal dust no longer polluted the air, and BACT is used to make pollution emissions far below domestic and international standards. Although the construction cost increased, the intangible environmental improvement and the reduction of resource waste and cost reduction can be obtained. In addition to selecting the best production processes and environmental protection equipment at the beginning of the planning period, the Company also took into consideration of the integration of upstream, middle, and downstream processes, and recycles the by-products and wastes of the upstream process as raw materials and fuels for the middle and downstream processes by fully integrating and reusing waste gas, waste heat and low-level energy between the plants, make the best use of resources and energy, reduce energy and waste resources, we pursue the goal of achieving an eco-industrial park. For example, the power and steam consumption per unit of product in 2023 years has decreased by 18% and 19% respectively compared with the completion of the Phase 4 expansion in 2007. Future reduction targets will continue to be promoted. The spirit of the Company is to always find out the root cause of any problem, continue to improve,consists in stopping in perfect goodness. Through continuous improvement, the Company will continue to improve the efficiency of equipment operation to reduce energy and resource use, and strengthen the competitiveness of sustainable operation. Taking water conservation as an example, from 1999 years to 2023 the sixth naphtha cracker has invested 10.21 billion dollars to complete 2,875 improvement cases, saving 308,500 tons of water per day. The 231 ongoing cases will receive 1.67 billion dollars of investment to achieve the target of saving 13,900 tons of water per day. The total investment is 11.88 billion dollars. After the completion, the annual benefit will be approximately 1.44 billion dollars. In terms of energy conservation and carbon reduction, the sixth naphtha cracker has also invested 32.21 billion dollars 11,192 improvement cases have been completed, reducing about 13.72 million tons of CO2. 1,400ongoing cases will receive 16.34 billion
Implementation Status(Note1)	Summary(Note2)
	No
	Yes
	Evaluation Item

114

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	dollars. It is estimated that an additional 2.11 million tons of CO2will be reduced, with a total investment of 48.55 billion dollars. The end benefits will be about 44.17 billion dollars per year. The above-mentioned results can be affirmed by the Company awards from 97 business units and commendations from the competent authorities of the Ministry of Economic Affairs, the Water Resources Department, the Industrial Bureau, the Energy Bureau, and the Environmental Protection Agency during the 10 last years during 2014 to 2023. In addition to adopting the best international production process, doing environmental protection work such as pollution prevention, clean production, energy conservation, carbon reduction, and water conservation to reach the goal of becoming ecological industrial parks, the Company also follows the trend of the times and pays attention to global warming. In recent years, the Company has promoted tree planting in the factory area. The Company have actively promoted the greening of various factories. At present, the Company have planted nearly 2 million trees and 390,000 square meters of shrubs, which can absorb about 15,000 tons of CO2per year. Providing a green aerobic environment for employees and nearby residents, and taking into account the best of both industrial development and environmental protection. Traditional factories give the impression that there are few green spaces and trees, and even chimneys emit black smoke from time to time, causing air pollution. The direction of the Company's various factories is to change the minds of people to create a green landscape just like the park, and to turn air pollution into a natural landscape. At the same time, the Company also responded to the government's afforestation and carbon reduction plan and cooperated with the Yunlin County Government to promote flatland afforestation and carbon reduction activities. In 2011, the Company started to receive a 10-year afforestation and carbon reduction subsidy. The Company has received the flatland afforestation award in Yunlin County, with an application area of 1,094 hectares, and about 1.422 billion in subsidies have been provided to the afforestation applicants, contributing to the afforestation and carbon reduction. However, the Council of Agriculture considers that the conversion of fertile land into forest land may lead to food shortages, and it is easy to attract snakes, rats and birds, which will affect the harvest of adjacent farmlands. According to government policy, the Company will no longer provide reciprocal subsidies. The Company also fully cooperates with the Environmental Protection Agency to promote green procurement of private enterprises to
Implementation Status(Note1)	Summary(Note2)
	No
	Yes
	Evaluation Item

115

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	implement the energy-saving and carbon-reduction green consumption policy. The statistical green procurement amount of the Company in 2023 is 780 million dollars. In the future, the Company will continue to take into account the concept of environmental protection and economic development, and implement various measures such as water conservation, energy conservation and carbon reduction, sustainable use of resources and friendly environment in order to fulfill social responsibilities. In addition, providing a healthy and safe working environment is the responsibility of the Company to employees and their dependents. Therefore, “Safety First” is an important principle for us to cherish our employees. In addition to establishing a reward system, employees and contractors are encouraged to raise issues with unsatisfactory behaviors and false alarms. Departments with zero occupational disasters are also rewarded, encouraging all units to report potential hazards, and report abnormalities, and unsafe behaviors. Quarterly reviews are conducted to eliminate potential hazards, and an annual safety culture performance commendation conference is held to improve employees’ participation and sense of honor through cross-company competitions and performance appraisals across the enterprise. 2. Community participation： The Company is deeply rooted in Taiwan. Factories are distributed all over Taiwan. We strive to become a “good neighbor” with the surrounding residents by setting up a dedicated group in each factory to communicate with residents and provide all kinds of assistance. In addition, we continue to mobilize our staff to clean up neighborhood streets and beaches, continually invest in local public welfare activities, and assist in caring for families and disadvantaged groups, so that our employees and community residents can be integrated. Employees have also spontaneously formed a charity group, responding to the feedback to the neighborhood, and by long-term and continuous attention, gradually expand human care and love to every corner of the society to jointly establish a peaceful society. Please refer to 5.1 Local Community Development and Devotion of 2023 ESG Report. 3. Supporting domestic cultural development: Promoting the development of Taiwan’s unique culture: sponsoring the Ming Hwa Yuan Art & Cultural Group”, “I Wan Jan Puppet Theater “, “If kids Theatre”, “Apple Theatre” to go on tours in the countryside. (Performances were suspended in 2022 due to COVID pandemic).
Implementation Status(Note1)	Summary(Note2)
	No
	Yes
	Evaluation Item

116

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Due to the lack of library and room for the cultural exhibition, the Formosa Group donated NTD 480 million to Mailiao Township Office to build Mailiao Social Education Park which combined the area of library, social education and leisure aesthetics. The Kaohsiung Complex is the birthplace of Formosa Plastics Group and it has 13 memorial buildings including the office of two founders, Wang Yung-Ching and Wang Yung-Tsai. On December 5, 2018, it was officially registered as a cultural asset by the Kaohsiung City Government and “Formosa Wang Brothers Park” was established on its original site. The Company with Nanya Plastics Corp., Formosa Chemicals and Fibre Corp. and Formosa Petrochemical Corp. established “Kaohsiung Cultural Foundation of Brothers Wang Yung-Ching and Wang Yung-Tsai Park” which is responsible for the building restoration and the park planning and design, and also launches the related culture and art activities, and donated NTD 860 million together as of the end of 2023. The foundation held the cultural heritage party with Bureau of Cultural Affairs, Kaohsiung City Government in April 2023 to respond International Day For Monuments and Sites. 4. Social contribution, social services, social welfare, and other social responsibility activities： Based on the spirit of “Take from society, give back to society”, the Company is committed to the sustainable operation and continues to give back to the society and fulfill its social responsibilities with the management policy of “quality, reputation, service, and environmental protection.” Our results in social responsibility are also recorded in the “ESG Report”. In addition to dedicating to business operations, we also invest in medical care, education, and various social welfare undertakings to fulfill Corporate Social Responsibility: (1) Medical treatment: Chang Gung Memorial Hospital was established in 1976. It is committed to “improving medical standards and creating social well-being” and has the courage to challenge the status quo. It not only drives the reform and progress of the medical community but also won the trust of the general public. Now, in Taiwan, there are four major sectors, the North Sector (including Keelung, Lover Lake, Taipei, Linkou, Taoyuan, Tucheng, and other nursing homes), Chiayi Sector, Yunlin Sector, and Kaohsiung Sector (Kaohsiung and Fengshan Hospital). In services, it is also the largest and most complete medical institution in Asia, from emergency medical treatment to rehabilitation, health care, and senior care. Chang Gung Memorial Hospital also donated 1,186 sets of artificial electronic ears for the benefit of hearing-impaired children, and set up a social service fund to subsidize poor patients for long-term treatment. As of the end of 2023, it has spent 10.721 billion dollars and continues to provide the medical assistance needed in remote and undeveloped countries.
Implementation Status(Note1)	Summary(Note2)
	No
	Yes
	Evaluation Item

117

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	(2) Education: In the 1960s, various industries in Taiwan flourished. In view of the shortage of industrial talents, the Company founded Mingzhi Institute of Technology (now Mingzhi University of Science and Technology) to provide the students from poor families a chance to study and work at the same time. Later, Chang Gung Medical College (now Chang Gung University) and Chang Gung College (now Chang Gung University of Science and Technology) were established to cultivate students' diligence and simplicity by combining theory and practice, and to cultivate excellent industrial middle cadres and medical staff. Since the beginning of the 1995, the Company started funding for Aboriginal youth education and employment opportunities. The total donation amount is about 1.677 billion dollars, and the number of assisted people reached 5,500. (3) Disaster relief: assisting in the 921 earthquake (1999), Morakot wind disaster (2009), Kaohsiung gas explosion incident (2014), Tainan earthquake (2016), Nibble wind disaster (2016), Hualien earthquake (2018) and other disaster relief in reconstruction and the rehabilitation of schools in the disaster areas. So far, 76 primary and secondary schools have been fully sponsored by the Company. (4) Other social welfare: In addition to medical and education, the founders of Formosa Plastics have set up seven foundations and charitable social welfare funds. Through the operation of the foundations and the active participation of companies within the corporation, they continue to promote and donate to various social welfare undertakings, such as: A. Since 2007, the Company has cooperated with the government to promote the national free vaccination program for the elderly over 75 years old to improve their health and quality of life. Up until 2010 when the government budgeted and promoted on its own, a total of nearly 1.16 million doses of the Pneumococcal Conjugate Vaccines were donated. B. Continue to promote the “Professional Service of Early Treatment Effectiveness Improvement Program”. Assist developmentally retarded children to receive high-quality treatment as soon as possible in order form them to return to the general education system and integrate with society, thereby reducing the burden of family and social care. This project is based on empirical research and guided by the fusion of concepts, family-centered and community-based promotion principles, with the main focus to improve the quality of institutions, personnel capabilities, and parental awareness. From 2006 to 2023, NT$ 1,000 million were invested, 33 thousand people and 92 units were benefited. C. Support the inmates: donated to the Yunlin Second Prison, Kaohsiung Prison, and Taipei Prison to handle the Wang Jhan-Yang Foundation Rainbow
Implementation Status(Note1)	Summary(Note2)
	No
	Yes
	Evaluation Item

118

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Project (drug-addicted HIV inmates), with three courses of physiological education, psychological counseling, and vocational training the project assists drug-addicted prisoners with HIV to cultivate life skills, repair family relationships and reintegrate into society. Cooperation with Yunlin Second Prison and Kaohsiung Prison to handle the Wang Jhan-Yang charitable trust fund Xiangyang project (drug inmates) to assist inmates in returning to the society is also conducted. Collaboration with the Correctional Affairs Department of the Ministry of Justice in 2017 to expand the Xiangyang Project in three prisons including Hualien Prison, Tainan Prison, and Kaohsiung Women's Prison. In consideration of the widespread dental defects among AIDS prisoners that result in poor chewing functions and poor health, Wang Jhan-Yang charitable trust fund donated denture installation fund for the underprivileged AIDS prisoners in Yilan, Taipei, Tainan, Kaohsiung, and Kaohsiung Women’s Prison in the hope of assisting prisoners' nutrition digestion and health improvement. In 2023, donated to reformatory schools for the budget of purchasing vocational training equipment in order to enhance employment skills and foster a passion for learning. D. Promote various scholarships and work-study programs: such as the Children's Education Assistance Program, Assistance to Teenagers/Young Adults who Recently Graduated from Children's Homes, Disadvantaged Student Scholarship, and the Student Financial Aid Program in Remote Areas, to help the economically disadvantaged or disabled children and young students to be able to receive education unhindered. The Excellent Talents Development Program provides long-term scholarships for outstanding students from disadvantaged backgrounds to assist them in academic and moral development. In addition, we will promote semester and summer work-study programs, match students to work in social welfare institutions, cultivate the service spirit of students contributing to society, and reduce institutional operating costs and expenditures to serve more vulnerable people. E. Women and Children's Welfare: a. Promote the nutritional breakfast subsidy for the vulnerable children in the neighboring 7 Township for Mailiao Factory, b. Promote the economic assistance program for victims of domestic abuse, c. Promote the medical treatment and economic assistance of patients with rare diseases, d. Donation to Taitung and Hualien English Assistance Program, an introduction of outstanding American college students to primary schools in remote areas for English teaching, e. Promote the nutritional breakfast subsidy for the vulnerable Junior High School students of Pingtung County, f. Donation the nutritional lunch subsidy for all public elementary and junior high school students of Yunlin County, g. Donation Scholarship for Orphan, h. Donation living expenses for Preschool children from disadvantaged families. i. Donation the HPV 9-valent vaccine for the girls in the first year of junior high school of Yunlin County, j. Donation the ‘Childminder Management and Subsidy Programme’of Yunlin
Implementation Status(Note1)	Summary(Note2)
	No
	Yes
	Evaluation Item

119

Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons	County k. Set up a used toy recycling center, l. Promotion of the after-school care program at rural schools by providing after-school care subsidies for schoolchildren of elementary schools in rural areas, offering schoolwork tutoring, life and cultural education to improve schoolwork performance and bridge the gap between families and schools. F. Elderly welfare: a. promote the elderly housing improvement and appliance donation plan, b. Mailiao and Taixi Township meal delivery plan for elderly living alone, c. promote the ‘’Active Aging Center’’ corporately in Taiwan. Members in this center would participate in five major classes (of the elderly) through package-based individual planning courses, including health management, brain training, vitality, physical training and social participation, to maintain their health, preventing disability, and effectiveness of helping healthy elderly people improve, d. Donate to the elderly daycare center shuttle bus and dream plan, e. Elderly welfare institution lighting improvements plan, f. Donation daycare and health promotion for elder in Remote Areas. h. Donation the “Evergreen Canteen” of Yunlin County. h. Donation the “Evergreen Canteen” of Yunlin County, i. Donations were made to elderly people aged 65-69 in Yunlin County as Double Ninth Festival gift money. G. Vulnerable group support: a. Donation to social welfare institutions daily necessities and rice, b. The low-income households near Mailiao factory receive gifts and bonus for the three most important Chinese holidays c. Emergency Allowances plan, d. Donation of daily necessities to the Christian Relief Association food bank, e. Promoting Homeless Assistance Program, including the establishment of supportive housing and the subsidy of kitchen facilities, to support the homeless to live as independently as possible within their community., f. Promote “The design and implementation of intelligent support system in long term care” and “Love Health Volunteer Promotion Program”, g. Promote lighting improvement projects, donate lighting equipment to improve the lighting equipment in social welfare institutions in order to provide good care of the environment and save electricity bills, h. Promotion of food banks for the effective use of charitable resources to meet the basic living needs of vulnerable populations, i. donated to the Taichung School for the Visually Impaired for the budget of purchasing computer equipment to assist the visually impaired in their learning. H. Promote the Wang Jhan-Yang charitable trust fund “ Burning Star Project” to cultivate outstanding sports talents, “Future Star Project “ sports talents abroad training programs and sports player medical protection programs to help domestic sports talents improve their performance. Wang Chang Gung charitable trust has implemented the ”Caretaker for Athletes Program” since 2019, sponsoring the Chinese Taipei Paralympic Committee for
Implementation Status(Note1)	Summary(Note2)
	No
	Yes
	Evaluation Item

120

Evaluation Item Implementation Status(Note1) Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons Yes No Summary(Note2) the training of athletes with disabilities. I. Institutional support: a. Donation of social welfare institutions to purchase facilities and equipment and construction and repair (17 social welfare institutions), b. Donate funds for vulnerable groups to help plan(Kaohsiung City Government, Taoyuan City Government, Keelung City Government, ChiaYi County Government) ,c. donation of mooncakes to social welfare institutions. Note 1: If Implementation Status is specified “Yes”, please explain the key policies, strategies and measures taken and the current progress. If Implementation Status is specified “No”, please refer to “Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons” section to explain the situation and reasons for the discrepancies, as well as explain any policy, strategy and measure planned for the future. However, in relation to the implementation of Items 1 and 2, listed and OTC companies should specify the governance and supervision framework for sustainable development, including but not limited to management approach, strategy and goal setting, review measures, etc. It also describes the Company’s risk management policies or strategies on operational-related environmental, social and corporate governance issues and their assessment. Note 2: The materiality principle refers to environmental, social, or corporate governance issues that have a material impact on the investors or other stakeholders of the company. Note 3: For the disclosure method, please refer to the template on the Taiwan Stock Exchange Rules & Regulations Directory website.	Evaluation Item Implementation Status(Note1) Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons Yes No Summary(Note2) the training of athletes with disabilities. I. Institutional support: a. Donation of social welfare institutions to purchase facilities and equipment and construction and repair (17 social welfare institutions), b. Donate funds for vulnerable groups to help plan(Kaohsiung City Government, Taoyuan City Government, Keelung City Government, ChiaYi County Government) ,c. donation of mooncakes to social welfare institutions. Note 1: If Implementation Status is specified “Yes”, please explain the key policies, strategies and measures taken and the current progress. If Implementation Status is specified “No”, please refer to “Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons” section to explain the situation and reasons for the discrepancies, as well as explain any policy, strategy and measure planned for the future. However, in relation to the implementation of Items 1 and 2, listed and OTC companies should specify the governance and supervision framework for sustainable development, including but not limited to management approach, strategy and goal setting, review measures, etc. It also describes the Company’s risk management policies or strategies on operational-related environmental, social and corporate governance issues and their assessment. Note 2: The materiality principle refers to environmental, social, or corporate governance issues that have a material impact on the investors or other stakeholders of the company. Note 3: For the disclosure method, please refer to the template on the Taiwan Stock Exchange Rules & Regulations Directory website.	Evaluation Item Implementation Status(Note1) Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons Yes No Summary(Note2) the training of athletes with disabilities. I. Institutional support: a. Donation of social welfare institutions to purchase facilities and equipment and construction and repair (17 social welfare institutions), b. Donate funds for vulnerable groups to help plan(Kaohsiung City Government, Taoyuan City Government, Keelung City Government, ChiaYi County Government) ,c. donation of mooncakes to social welfare institutions. Note 1: If Implementation Status is specified “Yes”, please explain the key policies, strategies and measures taken and the current progress. If Implementation Status is specified “No”, please refer to “Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons” section to explain the situation and reasons for the discrepancies, as well as explain any policy, strategy and measure planned for the future. However, in relation to the implementation of Items 1 and 2, listed and OTC companies should specify the governance and supervision framework for sustainable development, including but not limited to management approach, strategy and goal setting, review measures, etc. It also describes the Company’s risk management policies or strategies on operational-related environmental, social and corporate governance issues and their assessment. Note 2: The materiality principle refers to environmental, social, or corporate governance issues that have a material impact on the investors or other stakeholders of the company. Note 3: For the disclosure method, please refer to the template on the Taiwan Stock Exchange Rules & Regulations Directory website.
Deviations from the Sustainable Development Best Practice Principles for TWSE/GTSM Listed Companies and Reasons		the training of athletes with disabilities. I. Institutional support: a. Donation of social welfare institutions to purchase facilities and equipment and construction and repair (17 social welfare institutions), b. Donate funds for vulnerable groups to help plan(Kaohsiung City Government, Taoyuan City Government, Keelung City Government, ChiaYi County Government) ,c. donation of mooncakes to social welfare institutions.
Implementation Status(Note1)	Summary(Note2)
	No
	Yes
	Evaluation Item

121

Implementation Status	FPC values Environment, Society and Corporate Governance (ESG)-related issues as the fundamental of corporate sustainable development. Accordingly, on May 10, 2022, the Board of Directors has approved the establishment of the Sustainable Development Committee, in order to enhance the review and supervision responsibility of the Board of Directors on sustainable matters in response to climate change. FPC has also established the Sustainable Development Promotion Team (as shown in the image below). The Chairman of the Board acts as the convener, President and Senior Vice President acts as the deputy conveners, in charge of the establishment of corporate sustainability strategy, execution of the program, and promotion of social responsibility and risk management. (Please refer to the Company's 2023 TCFD report)	The climate risks and opportunities identified by the Company and their effects: (Please refer to the Company's 2023 TCFD report)
			Description of Effects	The "Climate Change Response Act" will classify manufacturing industries with greenhouse gas emissions exceeding 25,000 tons of carbon dioxide equivalent (CO2e) as major carbon emitters subject to carbon fees, resulting in increased expenditures. If there is no carbon cost pass-through, product prices will be less competitive, leading to a material financial impact.	The electricity contract capacity of the Company's Linyuan Plant is 25,000 kW, which exceeds the required 5,000 kW stipulated by the Renewable Energy Development Act. We need to install renewable energy equipment or energy storage equipment with 10% of the
			Items of Climate Risks and Opportunities	Transition risk - imposition of carbon fees	Transition risk - Renewable Energy Development Act
Item	1. State the supervision and governance of climate-related risks and opportunities of the Board of Directors and the management.	2. State how identified climate risks and opportunities affect the business, strategies, and finance of the company in the short-term, medium-term and long- term.

122

	Implementation Status
		contract capacity within 5 years, or purchase renewable energy certificates. Failure to do so will result in paying monetary substitution.	In response to the global trend of carbon reduction, plastic goods customers have started to develop low-carbon green products and are requesting that upstream raw materials in the supply chain also reduce carbon emissions. This may result in a decrease in sales volume of the Company's non-low-carbon energy-saving products.	Impact of strong winds or typhoons due to climate anomalies leads to the necessary of safe shutdown of plants to prevent process hazards. Impact of heavy rainfall/floods may cause the plants to suspend due to flooding, which will affect operations and may result in financial losses.	If the lightweight PP materials produced by the Company are used in automotive components, they can reduce vehicle weight, improve fuel efficiency, and reduce carbon dioxide emissions. It is estimated that orders will increase in the future. In addition, products such as EVA, HDPE, and carbon fiber can be used in wind power generation and solar power generation, and it is estimated that future revenue will increase.	Considering that climate change will lead to an increase in the prices of raw materials, it is necessary to review alternative types of raw materials to strengthen supply chain resilience. It is estimated that product sales opportunities and revenue of biomass raw materials may increase in the future.
			Transition risk - customers' demands for carbon reduction	Physical risk - flood	Transition opportunity - carbon reduction products, renewable energy supply chain	Transition opportunity - biomass materials
	Item

123

Implementation Status	1. Extreme climate event: Considering the impact of strong winds or typhoons caused by abnormal climate events, it is necessary to provide safe parking at the plant site in order to prevent process hazard. Considering the impact of heavy rainfall/flood, operations at the plant site will be suspended due to floods, resulting in reduction of revenue. FPC periodically monitors and manages the energy consumption and water consumption of each plant site on a monthly basis and establishes climate change countermeasures to mitigate the risk arising from the climate change. For the Mailiao Plant, major desilting and dredging operation is performed annually and its annual cost is approximately NT$3,708.5 thousand, in order to reduce the probability of flooding in the plant site due to heavy rainfall/flood. (Please refer to the Company's 2023 TCFD report) 2. Transition action: In response to the global trend of carbon reduction, the light-weight PP material manufactured by FPC can be applied to auto parts, thereby reducing vehicle weight and improving fuel efficiency and reducing carbon emission. Accordingly, the sales order on such material is expected to increase in the future. The estimated light-weight PP material sales volume is 61,313 tons/year, and it is expected to increase the revenue by NT$2,262,449 thousand/year. (Please refer to the Company's 2023 TCFD report)	All functional teams (Sales Management Unit, Management Unit, Management Analysis Unit, and Research and Development Unit) of the President’s Office, Safety and Health Division and all business departments (Manager’s Office, Technology Division, Business Division and Production Plant) are responsible for the collection of information related to the risks and opportunities of climate change and a review is performed semiannually. After establishing the “Risk Management Procedure” in accordance with the ISO 22301 principles, framework and spirit and assessing the climate change related risks and opportunities,
Item	3. State the effects of extreme climate events and transition actions on finance.	4. State how the process for identifying, assessing, and managing climate risks is integrated into the overall risk management system.

124

Implementation Status	for potential events of major risks, response strategies (such as risk transfer or risk aversion) and handling solutions (such as reduction of the number of occurrence, reduction of financial impact in order to reduce possible loss caused by the risk) are planned in advance and reported to the Chairman of the Board. (Please refer to the Company's 2023 TCFD report)	According to the TCFD’s recommendations, FPC adopts the Worst-case Scenarios for the transition and the physical risks and includes the analysis results in the strategic resilience assessment. For the transition risk, FPC will take into account the “IEA WEO 450 Scenario, 2016” promulgated by the International Energy Agency and the Nationality Determined Contribution (NDC) goals set by the countries where FPC’s production bases are located. In the INDC (Intended Nationally Determined Contributions) of Taiwan, Taiwan sets the GHG emission reduction by 50% subject to the BAU (Business As Usual) in 2030. Under such scenario, the power generation structure in 2025 will be 20% for renewable energy, 30% for coals and 50% for gases. After the above scenarios are implemented, the impact on FPC is analyzed with respect to the aspects of market, technology, reputation, finance and operations in the future. As for the physical risk, we refer to the Taiwan Climate Change Projection Information and Adaptation Knowledge Platform (TCCIP) and the National Science and Technology Center for Disaster Reduction to estimate sea level rise of 2020~2040, flood levels below the 2050 level, temperature rise, rainfall variability, maximum continuous rainfall days and total rainfall for the scenarios of RCP2.6, RCP4.5 and RCP8.5. (Please refer to the Company's 2023 TCFD report)	To enable stakeholders to fully understand the efforts and achievements of the Company in promoting energy conservation, emission reduction, and circular economy, as well as our capacity for management of physical and transition risks and opportunities of climate change adaptation, the Company has prepared a report based on the TCFD framework. The report is updated annually and published on the company website. The 2023 edition will be published in June 2024. For indicators and goals related to the management of physical and transition risks, please refer to the Company's TCFD report.
Item		5. If using scenario analysis to assess resilience to climate change risks, it is necessary to explain the scenario, parameters, assumptions, analysis factors used, and major financial impacts.	6. If there is a transition plan to address and manage climate-related risks, please explain the plan's content, as well as the indicators and goals used to identify and manage physical risks and transition risks.

125

Implementation Status	To increase the sense of involvement in greenhouse gas emissions and strengthen the implementation of carbon reduction across all sites and departments, the Company has been implementing Internal Carbon Pricing (ICP) since 2022. In 2023, the internal carbon price is set at NTD 100 per ton. Through the Company's self-developed greenhouse gas calculation system, the cost of greenhouse gas carbon emissions (including cost of excess carbon emissions) will be included in the monthly operational performance calculation, aiming to deepen the greenhouse gas reduction efforts in all sites and departments. At the same time, to promote carbon reduction in the supply chain, an "Equipment Selection Analysis Form" for high-carbon emission equipment procurement cases has been developed. The purchase requisitioning department estimates the carbon emissions of the equipment to be purchased and incorporates the carbon emission cost into the procurement evaluation.	1. FPC has set absolute greenhouse gas emission reduction targets for the short, medium, and long term, using the 2020 emissions for Scope 1 and Scope 2 (8.635 million tons) as the baseline year. This covers all plant locations in Taiwan, excluding the Taipei office. The targets include a 20% reduction in greenhouse gas emissions by 2025 (to 6.908 million tons) for the short term, a 40% reduction by 2030 for the medium term, and achieving carbon neutrality by 2050 for the long term. 2. In 2022, FPC's total greenhouse gas emissions for Scope 1 and Scope 2 amounted to 7.943 million tons, a reduction of 692,000 tons or 8.0% compared to the 2020 baseline year. This overall performance indicates that the company is on track to achieve its short-term goal of a 20% reduction by 2025. 3. To achieve the short-term target, FPC will transition from coal to low (or zero) carbon energy, continue to promote energy conservation and carbon reduction through a circular economy, establish renewable energy sources, and implement other feasible carbon reduction measures.	1. Since 2005, FPC has conducted greenhouse gas inventories and commissioned external organizations (such as SGS and BSI) for verification, reporting the emissions to the competent authorities as required by law. The scope of verified data covers all plant locations in Taiwan, excluding the Taipei
Item	7. If using internal carbon pricing as a planning tool, the basis of price determination shall be explained.	8. If climate-related goals are set, the activities covered, scope of GHG emissions, planning schedule, and annual progress should be explained. If carbon offset or Renewable Energy Certificates (RECs) are used to achieve the related goals, the source and quantity of carbon reduction credit offset or the quantity of Renewable Energy Certificates (RECs) should be specified.	9. Greenhouse gas inventory and assurance, as well as reduction goals,

126

Implementation Status	office. The verification, based on the ISO 14064-3 standard, provides reasonable assurance. 2. In 2022, FPC's total greenhouse gas emissions for Scope 1 and Scope 2 amounted to 7.943 million tons, a reduction of 692,000 tons or 8% compared to the 2020 baseline year. This overall performance indicates that the company is on track to achieve its short-term goal of a 20% reduction by 2025. To meet the long-term goal of carbon neutrality by 2050, the company’s carbon reduction strategies and specific action plans are as follows (please refer to the company’s 2023 TCFD report):
		Explanation	• Promote the change of high carbon emission energy source of coal to the use of energy of relatively low carbon emission. • Promote low-energy consumption hydrogen power generation technology, develop low power consumption electrolyzer.	• Implement artificial intelligence (AI) • Adopt recycling and reuse of the CO2 produced by a part of the process as raw materials of chemicals instead of direct emission	• Continue to evaluate the construction of solar power generation equipment at the main plat sites of Mailiao, Renwu and Linyuan plants. • Formosa Heavy Industries Corporation (FHI) invested by FPC with shareholdings of 32.92% plans to develop
		Estimated Carbon Reduction (in ten thousand tons)	67.4	56.9	70.8
		Carbon Reduction Plan	1. Actively seeking low (zero) carbon energy transition	2. Continuously promoting energy conservation, carbon reduction, and circular economy	3. Establishing renewable energy equipment
Item	strategies, and specific action plans (also filled in 1-1 and 1-2).

127

Implementation Status				1.1 The Company's greenhouse gas inventory and assurance in the recent two years Year 2022	assurance opinions	,	,
	wind power generation at the ailiao plant and will whole-sell the electricity and green power certificate to FPC, in order to ensure the use of green power without any difficulties.	• Assess the use of biomass ethylene for the manufacturing of polyethylene (PE), recycle materials for renewable products.				FPC disclosed that its total greenhouse gas emissions amounted to 3,338,612 metric tons of CO2e (accounting for 17.4% of total emissions). These emissions have been verified by an assurance organization in accordance with ISO 14064-3 standards and the assurance opinion provided was one of reasonable assurance.	FPC disclosed that its total greenhouse gas emissions amounted to 4,605,137 metric tons of CO2e (accounting for 23.9% of total emissions). These emissions have been verified by an assurance organization in accordance with ISO 14064-3 standards and the assurance opinion provided was one of reasonable assurance.
					assurance agencies	SGS & BSI	SGS & BSI
		-	195.1
					Emission intensity (tCO2e/million)	17.113	23.605
		4. Researching and implementing other feasible carbon reduction measures	Total
					emissions (ton of CO2e)	3,338,612	4,605,137
Item
					Parent Company	Scope 1	Scope 2

128

	assurance opinions			1. The scope covers all complexes in Taiwan, except for the Taipei Office. 2. In 2022, the parent company's individual operating revenue was NTD 195,086.831 million. 3. The consolidated financial statements include subsidiaries such as Formosa Industries (Ningbo) Corp, Formosa Electronic (Ningbo) Corp, and Formosa Industries Corporation. Among these, only Formosa Electronic (Ningbo) provided inventory data, while the others have been verified by an independent third-party and have been issued certificates of reasonable assurance.
FPC disclosed that its total greenhouse gas emissions amounted to 11,298,608 metric tons of CO2e (accounting for 58.7% of total emissions). These emissions have been verified by an assurance organization in accordance with ISO 14064-3 standards, and the assurance opinion provided was one of reasonable assurance.		FPC disclosed that its total greenhouse gas emissions amounted to 220,893 metric tons of CO2e (accounting for 100% of total emissions). These emissions have been verified by an assurance organization in accordance with ISO 14064-3 standards, and the assurance opinion provided was one of reasonable assurance.	FPC disclosed that its total greenhouse gas emissions amounted to 599,644 metric tons of CO2e (accounting for 99.9% of total emissions). These emissions have been verified by an assurance organization in accordance with ISO 14064-3 standards, and the assurance opinion provided was one of reasonable assurance.
SGS	assurance agencies	SGS & China Classification Society Quality Assurance Ltd.	SGS & China Classification Society Quality Assurance Ltd.
57.915		3.149	8.554
	Emission intensity (tCO2e/million)
11,298,608	emissions (ton of CO2e)	220,893	599,965
Scope 3 (According to Note 2, each company should determine whether to disclose Scope 3)	Subsidiaries	Scope 1	Scope 2

129

assurance opinions	The complete verified data will be disclosed in the 2023 ESG Report.	The complete verified data will be disclosed in the 2023 ESG Report.	The complete verified data will be disclosed in the 2023 ESG Report.	assurance opinions	Being verified by an independent third-party.	Being verified by an independent third-party.	1. The scope covers all complexes in Taiwan, except for the Taipei Office. 2. In 2023, the parent company's individual operating revenue was NTD 150,361.071 million. 3. The consolidated financial statements include subsidiaries such as Formosa Industries (Ningbo) Corp, Formosa Electronic (Ningbo) Corp, and Formosa Industries Corporation. Among these, only the data of Formosa Industries (Ningbo) Corp is currently being verified by a third-party impartial organization; the rest are inventory data. Note 1: Direct emissions (Scope 1, i.e., emissions directly from sources owned or controlled by the Company), energy indirect emissions (Scope 2, i.e., greenhouse gas emissions indirectly caused by the input of electricity, heat, or steam), and other indirect emissions (Scope 3, i.e., emissions generated from the Company's activities that are not energy indirect emissions but come from other sources owned or controlled by the Company). Note 2: The scope of data coverage of direct emissions and energy indirect emissions shall be handled in accordance with the schedule specified in the provision of Article 10, Paragraph 2 of the Guideline. Information on other indirect emissions may be voluntarily disclosed.
assurance agencies			SGS		Zhejiang Renxin Huankeyuan Co., Ltd.
	SGS & BSI	SGS & BSI		assurance agencies
Emission intensity (tCO2e/million)			107.951		3.830	10.958
	23.557	29.685		Emission intensity (tCO2e/million)
emissions (ton of CO2e)			16,231,607		220,032	629,540
	3,542,116	4,463,433		emissions (ton of CO2e)
Parent Company				Subsidiaries	Scope 1	Scope 2
	Scope 1	Scope 2	Scope 3 (According to Note 2, each company should determine whether to disclose Scope 3)

130

131

Deviations from the	Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and Reasons	In compliance with Article 4 and Article 5 of the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.” Complying with the regulations specified in
Implementation Status (Note)	Summary	(1) In addition to following Company Act, Securities and Exchange Act, and other related regulations, the Company keeps the “Diligence, Perseverance, Frugality and Trustworthiness” enterprise spirit to comply with the law and ethical standards. With the business philosophy of honesty, integrity, fairness, and transparency, self-discipline, and responsibility, the Company has established Principles of Ethical Corporation Management approved by the Board of Directors. With the Company’s President Office as the driving unit to formulate and implement various ethical policies, and establish a good corporate governance and risk control mechanism, the Company is to pursue sustainable development. The Board of Directors and management also promise to carry out and supervise the implementation of the integrity management policy actively. (2) a. The Company has established strict rules of conduct and ethics such as the “Personnel Management Rules” and “Working Rules”, and has
	No
	Yes	V V
	Evaluation Item	1. Stipulating policies and plans for ethical corporate management (1) Has the Company established the Code of Ethics and Business Conduct, which have been approved by the Board of Directors, and clearly stipulated regulations and policies for ethical business conduct and relevant guidelines in company articles and external documents? Does the Company’s Directors and management team actively fulfill their commitment to corporate policies? (2) Has the company established a risk assessment mechanism

132

Deviations from the	Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and Reasons	Article 7 of “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies,” the Company has specified and enacted regulations designed to prevent unethical conduct in multiple rules and systems. Nevertheless, specific “Procedures for Ethical Management and Guidelines for Conduct” has yet to be formulated.
Implementation Status (Note)	Summary	specified the relevant reward and punishment regulations. Directors, managers, servants of the Company, or those who have substantial control capabilities are prohibited from providing, pledge, requesting or accepting any illegitimate interests directly or indirectly, or making other violations of good faith, illegality, or breach of fiduciary duty to prevent malpractice, misappropriation of public funds, acceptance of bribes, disclosure or lies, and other acts of dishonesty. b. The Company analyzes and assesses periodically business activities within their business scope which are at a higher risk of being involved in unethical conduct. For those who engage in business activities with a high risk of dishonest behavior, the Company has clearly established “Personnel Management Rules” and “Working Rules” which state that positions of interest for business, procurement, contracting, supervision, and budgeting, as well as contact with other manufacturers shall not accept business dinners or other entertainment activities invited by the manufacturer, nor accept the property or other interests of gifts. The offenders shall be excused from office and their Supervisors shall be jointly and severally punished. Besides, related duties have comprehensively promoted regular rotation operations to prevent the occurrence of any corruption.
	No
	Yes
	Evaluation Item	against unethical conduct, regularly analyzed business activities within their business scope which are at a higher risk of being involved in unethical conduct? Does the company establish prevention programs accordingly including measures prescribed in Article 7 Paragraph 2 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies?

133

Deviations from the	Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and Reasons	In compliance with Article 6, paragraph 1 of the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.”	In compliance with Article 9 of the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.”
Implementation Status (Note)	Summary	(3)The Company has clearly stipulated regulations and policies for ethical business conduct and relevant guidelines, code of conduct, whistleblowing, punitive measures for violations, and grievances in company articles and systems, including the “Personnel Management Rules”, “Principles of Ethical Corporation Management “, “Guidelines for Prevention of Insider Trading”, “Whistleblowing Procedures” and “Guidelines to Employee Grievances”. The Company has established “Code of Ethical Conduct” for the Directors and Managers of the Company to adhere to (please refer to page 140 of the annual report.). The adequacy and effectiveness of regulations and policies for ethical business conduct were reviewed on a regular basis.	(1) The contract signed by the Company for commercial activities is subject to the terms of good faith. In addition, the Company conduct inquiries such as honesty investigations for customers, suppliers, and other stakeholders to avoid the occurrence of dishonest behavior and damage of the Company’s rights and interests.
	No
	Yes	V	V
	Evaluation Item	(3) Has the Company established action plans to prevent unethical conduct? Has the Company clearly prescribed procedures, code of conduct, punitive measures for violations and appeal systems within the said plan? Did the action plans be implemented accordingly?	2. Implementing ethical corporate management (1) Has the Company evaluated ethical records of its counterparty? Does the contract signed by the Company and its trading counterparty clearly provide terms on ethical conduct?

134

Deviations from the	Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and Reasons	In compliance with Article 17 of the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.” In compliance with Article 19 of the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.”
Implementation Status (Note)	Summary	(2) The President Office of the Company and the general management office of the whole enterprise are in charge of promoting ethical business. They promote regulations and policies for ethical business conduct .In addition, they handles and verifies whistleblowing cases based on the Company’s Whistleblowing Procedure. The department in charge of promoting ethical business reports its ethical business management policy, and action plans to prevent unethical conduct to the Board of Directors at least once per year. The most recent report dated is on December 14, 2023. They mainly report the ethical corporate management policies, measures, implementation status of supervisory measures and commitments of the board of directors and management to implement business policies actively. Additionally, the internal audit report is submitted to the Independent Director monthly and the internal audit result is reported to the board of directors regularly. (3) a. The Company’s standards for the Board of Directors meetings has clearly states that if Directors or the juridical persons they represented have a personal interest, they shall state the key aspects of the interest in the meeting. If their interest may prejudice the interests of the Company, the persons concerned shall not participate in the discussion and voting of those items and shall recuse themselves from those sessions. Also, they shall not stand proxy for other Directors to exercise the voting right on those items.
	No
	Yes	V V
	Evaluation Item	(2) Has the Company designated an exclusively (or concurrently) dedicated unit reports its ethical business management policy, action plans to prevent unethical conduct, and implementation status of supervisory measures to the Board of Directors? (3) Has the Company established policies preventing conflict of interests, provided proper channels of appeal, and enforced these policies and channels accordingly?

135

Deviations from the	Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and Reasons	In compliance with Article 20 of the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.”
Implementation Status (Note)	Summary	b. The Company has stated in its “Personnel Management Rules” that employees should strictly abide by the code of conduct for avoidance of interests and proactively report ethical concerns such as conflicts of interest, and have provisions prohibiting competition to prevent conflicts of interest. c. The Company has provisions for “Guidelines to Employee Grievances” and “Whistleblowing Procedures”, etc., and provides specific reporting channels for reporting any illegal or improper behavior. (4) The Company has established an effective and improved accounting system and internal control mechanism, and fully implemented computerization of operations. The six management functions of personnel, finance, business, production, materials, and engineering are connected by computers, layer by layer, and executed for management of any abnormalities. In addition, the Company also established a professional and independent internal audit structure. The structure is divided into three levels. The first level is carried out by the Auditing Office attached to the Company's Board of Directors. The internal auditors will establish annual audit plan to verify the level of compliance with established regulations to lower the risk from unethical conduct. The second level is routine and project-based independent auditing carried out by the general administration office. Moreover, since internal
	No
	Yes	V
	Evaluation Item	(4) Has the Company established effective accounting systems and internal control systems for enforcing ethical corporate management? Did internal auditors establish relevant audit plan to verify the status of compliance with unethical conduct prevention action plans based on the result of risk assessment on unethical conduct? Did the Company entrust audits to a CPA ?

136

Deviations from the	Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and Reasons	In compliance with Article 22, paragraph 2 of the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.”
Implementation Status (Note)	Summary	auditing is the duty of all employees, the third level of auditing is to require all departments to conduct voluntary operation inspections (on a monthly, quarterly, semi-annual, or annual basis) to extend the concept internal control to all levels of the Company. (5) Through regular corporate publications as well as various occasions, the Company promotes the corporate culture of “Diligence, Perseverance, Frugality and Trustworthiness,” as well as cultivating work ethics based on integrity, fairness and transparency, self-discipline, and a sense of responsibility. All new recruits receive corporate culture training. In addition, training courses about regulations, anti-fraud, and anti- corruption are held every year to strengthen the employees’ commitment to complying with management rules based on good faith. In 2023, the Company held internal and external education training related to the issue of integrity management (including legal compliance, corporate ethics, risk management, enterprise sustainable development, stakeholder’s right maintenance and corporate governance) strengthening, with a total of 30,162 person involved in, and the 248,668 training hours.
	No
	Yes	V
	Evaluation Item	(5) Does the Company regularly organize internal and external training for ethical corporate management?

137

Deviations from the	Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and Reasons	In compliance with Article 23 of the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.”
Implementation Status (Note)	Summary	The Company has a “Guidelines to Employee Grievances” and “Whistleblowing Procedures” to provide a specific reporting and reward system: (1) Providing multiple reporting channels such as actual mailboxes, e-mail boxes, and fax lines. Visible notices are placed around the main entrances to be used by informants. (2) After a case is filed, the relevant team members of President Office shall be responsible for the procedures of case review, filing, and follow-up investigation. (3) The principle of confidentiality: During and after an investigation, it is strictly forbidden to disclose any information to unrelated parties. Supervisors at all levels must also keep information confidential. All relevant information must be processed and archived according to the confidential document procedures to ensure the informant does not experience any unjust setback. (4) Where the occurrence of illegal or improper act has been found to be true, punitive actions will be taken based on the “Personnel Management Rules”. Judicial or prosecuting institutions will be alerted when necessary.
	No
	Yes	V V V
	Evaluation Item	3. Status for enforcing whistle-blowing systems in the Company (1) Has the Company established concrete whistle-blowing and reward systems as well as accessible whistle-blowing channels? Does the Company assign a suitable and dedicated individual for the case being exposed by the whistle-blower? (2) Has the Company established standard operating procedures (SOP) for whistleblowing cases, follow-up measures and relevant systems of confidentiality after the investigation? (3) Has the Company adopted protection measures against inappropriate disciplinary actions for the whistle-blower?

138

Deviations from the	Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, and Reasons	In compliance with Article 25 of the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies.”	5. If the Company has established the Code of Ethics and Business Conduct based on the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”, please describe any deviations between the Code of Ethics and Business Conduct and their implementations: The Board of Directors of the Company approved to set the “Principles of Ethical Corporation Management” on November 11, 2014 which was amended by the Board of Directors on June 25, 2015, and the Company reviews the principles annually. Although the Company’s principles have been slightly revised according to the Company’s practice, it still complies with the spirit of “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”.	6. Other information helpful for understanding the principle of integrity of the Company's operations (e.g., the Company's amendment of its principles of integrity) The Company schedules corporate governance courses for Directors and managers regularly to emphasize the importance of governance, which is to strengthen the effectiveness of governance and put ethical management into practice.	Note: Provide a brief description in the appropriate column, regardless of whether “yes” or “no” is selected.
Implementation Status (Note)	Summary	Information on integrity management and ethical behavior has been disclosed on both Chinese and English website of the Company.
	No
	Yes	V
	Evaluation Item	4. Improvement of information disclosure Does the Company disclose its ethical corporate management policies and the results of its implementation on the Company’s website and MOPS?

139

• 3.4.9 The Searching Way of Principles of Corporate Governance and Related Bylaws the Company Adopted:

  • The Principles of Corporate Governance and related bylaws the Company adopted are available on the Company’s website.

• 3.4.10 Other Significant Information Provides a Better Understanding of the State of the Company’s Implementation of Corporate Governance:

• In line with Letter No. 0930005101 issued by the provisions of the Securities and Futures Bureau of the Executive Yuan Financial Supervisory Commission on October 28, 2004, and Letter No. 0930028186 issued by Taiwan Stock Exchange Cooperation on November 11, 2004, Principles of Ethical Corporate Management established by the Company is as follows:

Formosa Plastics Corporation

Code of Ethical Conduct for Directors and Managers

Chapter 1 General Principles

Article 1: The Code of Ethical Conduct (the “Code”) of Formosa Plastics Corporation (the “Company”) is established to stipulate rules for Directors and managers (including President, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Chief Financial Officer, Chief Accounting Officer, and other persons authorized to manage affairs and sign documents on behalf of the Company) to abide by in terms of ethical conduct when engaging in business activities within the scope of their authority, to prevent unethical conduct or any conduct that may damage the interest of the Company and its shareholders.

Chapter 2 Content of the Code

• Article 2: Directors and managers shall conduct corporate affairs on the basis of integrity, faithfulness, compliance with laws, fairness and righteousness and with an ethical, self-disciplined attitude.

• Article 3: Directors and managers shall avoid any conflicts of interest arising when their personal interest intervenes, or is likely to intervene in the overall interest of the Company, including but not limited to unable to perform their duties in an objective and efficient manner, or taking advantage of their position in the Company to obtain improper benefits for either themselves or their spouse, parents, children, or relatives within the second degree of kinship. To prevent conflicts of interest, any matters pertaining to lending funds, providing guarantees, and major asset transactions between the Company and the above-mentioned persons or their affiliated enterprise thereof shall be submitted to the Board of Directors for its approval in advance. The corresponding purchase (or sale) of goods shall be dealt with the best interest of the Company.

• Article 4: When the Company has an opportunity for profit, the Directors and managers have the

140

responsibility to conserve the reasonable and lawful benefits that can be obtained by the Company.

The Directors and managers shall not obtain personal gain by using the Company property or information or taking advantage of their positions. Unless otherwise stipulated in the Company Act or Articles of Association, they shall not engage in activities that compete with the business of the Company. Article 5: The Directors and managers shall be bound by the obligation to maintain the confidentiality of any information regarding the Company itself or its suppliers and customers, except when authorized or required by law to disclose such information. Confidential information includes any undisclosed information that, if exploited by a competitor or disclosed, could result in damage to the Company or the suppliers and customers. Article 6: The Directors and managers shall treat all suppliers and customers, competitors, and employees fairly, and may not obtain improper benefits through manipulation, nondisclosure, or misuse of the information learned by virtue of their positions, or through misrepresentation of important matters, or through other unfair trading practices. Article 7: The Directors and managers shall have the responsibility to safeguard the Company’s assets, to use the assets for official business purpose properly, and to avoid any impact on the Company’s profitability resulting from theft, negligence in care or waste of the assets. Article 8: The Directors and managers shall comply with applicable laws and the Company’s regulations. Article 9: When a director or manager is found by employee to have committed a violation of a law, regulation or the Code, the employee shall report to the Audit Committee, their direct managers, president office personnel, internal audit officer, or other appropriate personnel with sufficient evidence. Once the misconduct is confirmed, the Company will reward the above-mentioned employee in accordance with the Company’s rules for employment management. The Company shall handle the above-mentioned report properly and confidentially. The Company also shall use its best efforts to ensure the safety of the conscientious reporter and protect him/her from all kinds of reprisals.

Article 10: Where a director or manager is verified to have violated the Code, in addition to being subject to punishment under the Company’s rules for employment management, the Company shall report the violation to the Board of Directors. The person involved in the violation shall be liable for civil, criminal or administrative responsibilities required by law and the Company shall disclose the violation on the Market Observation Post System (“MOPS”) immediately, including: the date of the violation, description of the violation, the provisions of the Code violated, and the disciplinary actions taken.

Chapter 3 Procedures for Exemption

Article 11: Where a Director or manager is to be exempted from the Code due to special circumstances, such exemption shall be approved by an majority vote at a meeting of the Board of Directors attended by over two-third of the Directors in person or through representation. The Company shall immediately disclose on the MOPS, including: date of exemption granted by the Board of

141

Directors, any opposing or qualified opinion expressed by the independent directors, and the period of, reasons for, and the provisions of the Code behind the application of the exemption for shareholders to evaluate the appropriateness and to safeguard the interests of the Company.

Chapter 4 Method of Information Disclosure

Article 12: The Company shall disclose the Code on the Company’s website, annual reports, prospectuses, and the MOPS. Any amendment is subject to the same procedure.

Chapter 5 Additional Provision

Article 13: The Code shall be implemented after approval by the Board of Directors and shall be reported to a shareholders meeting. Any amendment is subject to the same procedure.

142

1. The Company’s managers attend continuing education and training relevant to corporate governance each year, and all equip professional knowledge. Their training status is as follows:

Title	Name	Date of Training	Organization	Course	Hours
President	Wen-Bee, Kuo	2023.9.23 2023.9.23	Securities and Futures Institute Securities and Futures Institute	Carbon Credit Trading Mechanism and Application of Carbon Management Global Economic Outlook and Industrial Trends in 2024	3 3
Senior Vice President	Jerry Lin
Senior Vice President	Tony Liang
Financial Officer	Ray Lei	2023.10.3 2023.10.3	Securities and Futures Institute Securities and Futures Institute	Introduction to the Dispute over Corporate Management Rights and the Trial Procedure in Commercial Courts How Directors and Supervisors Should Supervise Corporate Risks and Crises	3 3
Accounting Officer	I-Yu Chiu
Corporate Governance Officer	Chia- Hung Chien	2023.9.23	Securities and Futures Institute	Global Economic Outlook and Industrial Trends in 2024	3

1. Certification of employees whose jobs are related to the release of the Company’s financial information:

2. (1) Accounting department: 7 employees with Certified Public Accountant of Republic of China (Taiwan) Certification.

3. (2) Finance department: None.

4. (3) Audit department: 4 employees with Certified Internal Auditor (CIA) Certification, 6 employees with Certified Public Accountant of Republic of China (Taiwan) Certification and 1 US Certified Public Accountant (CPA) certification..

5. Company Procedures for Handling Material Inside Information:

6. (1) “Diligence, Perseverance, Frugality and Trustworthiness” is the core

143

enterprise spirit. The Company therefore set up a strict ethical policy hoping employees to obey every behavioral standard and principle of moral, and take full responsibility either for working or daily routine. Thus, employees disclose confidential information, tell a lie, indulge in malpractices, or spread rumors is strictly prohibited.

• (2) The Company has established the “Operating Procedures for Handling Material Inside Information” to specify the scope of material inside information, to require the Directors, managers and employees to keep the inside material information confidential, and to establish the confidentiality mechanism for material inside information and the provision of penalties for non-compliance. Internal evaluation and approval shall be obtained before public disclosure of material information and the Company's spokesperson or acting spokesperson shall speak on behalf of the Company in principle. In addition, the internal material information processing procedures are incorporated into the internal control and internal audit system, and training is provided on a timely basis.

• (3) The Company has set up and clearly stated the “Personnel Management Rules”. Without written permission issued by the Company, employees should not release any inside information or information has not been announced. Besides, the use of inside information for personal or business unrelated purposes are also strictly forbidden.

• (4) The Company has set up “Spokesperson Procedure” for information announcement and the procedures for critical factory events. Besides the Company’s spokesperson, none of the staff can reveal corporate policies or business related information in order to prevent insider trading.

144

3.4.11 Implementation Status of the Internal Control System

1. Internal control system statement

Formosa Plastics Corporation

Internal Control System Statement

Date: 2024.3.6

The Company states the following with regard to its internal control system in 2023, based on the findings of a self-assessment:

1. The Company is fully aware that establishing, operating, and maintaining an internal control system are the responsibility of its Board of Directors and management. The Company has established such a system aimed at providing reasonable assurance of the achievement of objectives in the effectiveness and efficiency of operations (including profits, performance, and safeguard of asset security), reliability, timeliness, transparency, and regulatory compliance of reporting, and compliance with applicable laws, regulations, and bylaws.

2. An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing the three goals mentioned above. Furthermore, the effectiveness of an internal control system may change along with changes in environment or circumstances. The internal control system of the Company contains self-monitoring mechanisms, however, and the Company takes corrective actions as soon as a deficiency is identified.

3. The Company judges the design and operating effectiveness of its internal control system based on the criteria provided in the Regulations Governing the Establishment of Internal Control Systems by Public Companies (herein below, the “Regulations”). The internal control system judgment criteria adopted by the Regulations divide internal control into five elements based on the process of management control: 1. Control environment 2. Risk assessment 3. Control activities 4. Information and communications 5. Monitoring activities. Each element further contains several items. Please refer to the Regulations for details.

4. The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid criteria.

5. Based on the findings of the assessment mentioned in the preceding paragraph, the Company believes that on 2023.12.31 its internal control system (including its supervision and management of subsidiaries), encompassing internal controls for understanding of the degree of achievement of operational effectiveness and efficiency objectives, reliability, timeliness, transparency, and regulatory compliance of reporting, and compliance of reporting, and compliance with applicable laws, regulations, and bylaws, was effectively designed and operating, and reasonably assured the achievement of the above-stated objectives.

6. This Statement will become a major part of the content of the Company’s Annual Report and Prospectus, and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Law.

7. This statement has been passed by the Board of Directors Meeting of the Company held on 2024.3.6, where all of 14 attending directors affirmed the content of this Statement.

Formosa Plastics Corporation

• Chairman: Jason Lin

President: Wen-Bee Kuo

145

1. Where a CPA is commissioned to conduct a review on the internal control system, disclose the CPA’s audit report: None

2. 3.4.12 If there has been any legal penalty against the company and its internal personnel, or any disciplinary penalty by the company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, where the result of such penalty could have a material effect on shareholder interests or securities prices, the annual report shall disclose the penalty, the main shortcomings, and condition of improvement: None.

3. 3.4.13 Material resolutions of Shareholders Meeting or Board of Directors Meeting during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report:

1. Shareholders’ Meeting on May 20, 2023

• Directors attending the Shareholders’ Meeting: 8 people including Jason Lin, Ralph Ho, Jerry Lin, Cheng-Chung Cheng(above as Directors), C. L. Wei, C. J. Wu, YenShiang Shih, Wen-Chyi Ong(above as Independent Directors), which is over the half of the number of the Board of Directors.

• (1) Ratification items

• Proposal 1

• Proposal: For approval of the 2022 Business Report and Financial Statements as required by the Company Act. (Proposed by the Board of Directors)

• Resolution: Total voting rights represented by the attending shareholders are 4,825,778,390 votes for this proposal. Voting results show adoption of 4,488,283,862 votes (of which votes through electronic means account for 3,749,029,587), representing 93 ％ of the total voting rights. Dissent voting rights are 18,955,846 votes (of which votes through electronic means account for 18,955,846 votes), and invalid voting rights are 0 votes. Forfeit and rights not exercised are 318,538,682 votes (of which votes through electronic means account for 317,645,939 votes). The rights of adoption have exceeded the required number. The proposal has been adopted.

Implementation: Recognized by the resolution of the shareholders meeting.

146

Proposal 2

• Proposal: For approval of the proposal for distribution of 2022 Profits as required by the Company Act. (Proposed by the Board of Directors)

• Resolution: Total voting rights represented by the attending shareholders are 4,825,778,390 votes for this proposal. Voting results show adoption of 4,508,778,335 votes (of which votes through electronic means account for 3,769,524,060), representing 93.4 ％ of the total voting rights. Dissent voting rights are 607,471 votes (of which votes through electronic means account for 607,471 votes), and invalid voting rights are 0 votes. Forfeit and rights not exercised are 316,392,584 votes (of which votes through electronic means account for 315,499,841 votes). The rights of adoption have exceeded the required number. The proposal has been adopted.

• Implementation: The Board of Directors set the date of March 10, 2023 resolved cash dividends of NTD4.2 per share and reported to the shareholders' meeting. The earnings distribution table was approved by the shareholders' meeting. On May 30, 2023, the Board of Directors set the date of July 3, 2023 as the base for the distribution of cash dividends. The actual distribution date was on July 26, 2023.

(2) Extraordinary Motions

• (Shareholder No. 0592925, Lin Yen-Ting, authorized Sun Hsing-Hsuan to attend and urged the Chairman and senior executives to implement corporate social responsibility by stopping pollution and violations in Vietnam. They also called for Formosa Ha Tinh Steel Corporation to conduct environmental pollution and human rights assessments and to publicly disclose the related assessment reports.)

• (Shareholder No. 0953460, Tseng Hung-Wen, authorized Nancy Nguyen Bui to attend and stated that in 2016, Formosa Ha Tinh Steel Corporation reached a compensation agreement with the Vietnamese government for the pollution case in Vietnam, but many victims have not received adequate compensation.)

• (Shareholder No. 0931292, Huang Ching-Ting, authorized Sylria Diane Wilson to attend and stated that they will continue to protest against FPG's pollution incident in Point Comfort, USA.)

• (Shareholder No. 0930243, Teng Yu-Yu, authorized Sharon Lavigne to attend and stated that residents in Louisiana and Texas do not want FPG to set up factories there. Additionally, they supported the victims of the Vietnam pollution case

147

involving Formosa Ha Tinh Steel Corporation and demanded compensation for them.)

(Shareholder No. 0489589, Shih Yueh-Ying, authorized Hsu Po-Jen to attend and stated that the litigation case involving the company and Formosa Ha Tinh Steel Corporation in Vietnam should be recorded in the annual report. They also hope that the company will strengthen governance related to human rights, the environment, and stakeholders in its overseas investments.)

(Shareholder No. 0764910, Pan Han-Sheng, inquired about the disclosure requirements for listed companies by the Financial Supervisory Commission regarding subsidiaries' carbon emission plans and the progress of the company's preparation of "Task Force on Climate-related Financial Disclosures" (TCFD) and "Task Force on Nature-related Financial Disclosures" (TNFD).)

(Shareholder No. 0173722, Chen Yun-Kung, inquired about the employee compensation for the year 2022, noting that only 0.13% of pre-tax profit before employee compensation was allocated to employees, while the compensation for directors and senior executives above the vice president level accounted for 0.32% of individual pre-tax profit. They asked if this information is correct.)

The Chairman designated company director Jerry Lin to provide a unified response to the above shareholder questions.

2. Board of Directors Meeting on March 10, 2023

Proposal 1

Proposal: Employee compensation of 2022.

Resolution: All attendants approved the proposal, and it was submitted to report on the 2023 Shareholders’ Meeting.

Proposal 2

Proposal: Creation of the 2022 business report and financial statements and the 2023 operating plans.

(The secretariat reported that the appendix of this proposal has been submitted to the Audit Committee for approval, and the manager reported the 2022 operating status and the 2023 annual operating plans.)

Resolution: All attendants approved the proposal.

Proposal 3

Proposal: Distribution of 2022 profits.

148

Resolution: All attendants approved the proposal.

Proposal 4

Proposal: Calling of the 2023 Shareholders’ Meeting to take place on May 30, 2023.

Resolution: All attendants approved the proposal.

Proposal 5

Proposal: To formulate the Company’s internal control system statement.

(Proposed by the Audit Committee) Resolution: All attendants approved the proposal.

Proposal 6

Proposal: To compile plan of lending funds for 2023 Q2.

(Proposed by the Audit Committee) (The attending Managing Directors, William Wong, Susan Wang, Wilfred Wang, and Director, Cher Wang, serve as Chairman, Managing Director, Director or representative of the institutional shareholders of the borrowing company, or as a relative party within the second degree of kinship of a managing director were recused from the discussion and voting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 7

Proposal: Transaction with related parties. (Proposed by the Audit Committee) (The attending Managing Directors, William Wong, Susan Wang, Wilfred Wang, and Director, Cher Wang, serve as Chairman, Managing Director, Director or representative of the institutional shareholders of the company of equipment transaction, or as a relative party within the second degree of kinship of a managing director were recused from the discussion and voting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves

from voting due to conflict of interest, the rest approved the proposal.

Proposal 8

Proposal: To donate NTD 90,382,426 to Kaohsiung Cultural Foundation of Brothers Wang Yung-ching and Wang Yung-tsai Park.

149

(Proposed by the Audit Committee) (The Chairman and attending Directors, Sang-Chi Lin, serve as Chairman or Director of Kaohsiung Cultural Foundation of Brothers Wang Yung-ching and Wang Yung-tsai Park, were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 9

Proposal: To liquate the investee, Formosa Mitsui Advanced Chemicals Co., Ltd.

(Proposed by the Audit Committee)

(The Chairman, serve as Chairman of Formosa Mitsui Advanced Chemicals Co., Ltd., was recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for Chairman who had to recuse himself from voting due to conflict of interest, the rest approved the proposal.

Proposal 10

Proposal: To formulate the policy of non-assurance services provided by audit CPA. (Proposed by the Audit Committee) Resolution: All attendants approved the proposal.

Proposal 11

Proposal: To exchange the finance report audit CPAs.

(Proposed by the Audit Committee) Resolution: All attendants approved the proposal.

Proposal 12

Proposal: To promote the manager of the Company.

(The attending manager, Wen-Bee Kuo, who the person will be promote was recused from the discussion.)

Resolution: All attendants approved the proposal.

3. Board of Directors Meeting on May 11, 2023

Proposal 1

Proposal: Creation of the 2023 Q1 financial statements.

150

(Proposed by the Audit Committee) (The manager of the president office reported the 2023 Q1 operating status.) Resolution: All attendants approved the proposal.

Proposal 2

Proposal: To compile plan of lending funds for 2023 Q3.

(Proposed by the Audit Committee) (The Chairman and attending Managing Directors, William Wong, Susan Wang, and Director, Cher Wang, serve as Chairman, Managing Director, Director or representative of the institutional shareholders of the borrowing company, or as a relative party within the second degree of kinship of a managing director were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 3

Proposal: Transaction with related parties. (Proposed by the Audit Committee) (The Chairman and attending Managing Directors, William Wong, Susan Wang, and Director, Cher Wang, serve as Chairman, Managing Director, Director or representative of the institutional shareholders of the company of equipment transaction, or as a relative party within the second degree of kinship of a managing director were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 4

Proposal: To issue a letter of support for credit facilities of Formosa Ha Tinh (Cayman) Ltd. (Proposed by the Audit Committee) (The attending Managing Directors, William Wong, Susan Wang, Wilfred Wang, and Director, Cher Wang, serve as Chairman or Director of Formosa Ha Tinh (Cayman) Ltd., or as a relative party within the second degree of kinship of a managing director were recused from the discussion and voting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves

from voting due to conflict of interest, the rest approved the proposal.

151

Proposal 5

Proposal: To issue a letter of support for credit facilities of Formosa Steel IB Pty Ltd.

(Proposed by the Audit Committee) (The Chairman and attending Managing Directors, William Wong and Wilfred Wang, serve as Director or Chairman of Formosa Resources Corp. or FSIB, were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 6

Proposal: To amend “Internal Control Systems” and “Internal Audit Implementation

Rules” of the Company. (Proposed by the Audit Committee) Resolution: All attendants approved the proposal.

4. Board of Directors Meeting on May 30, 2023

Proposal 1

Proposal: To set the base date and distribution date of the Company’s 2022 allocation of cash dividend.

Resolution: All attendants approved the proposal.

Proposal 2

Proposal: The Company plans to negotiate credit facilities with financial institutions. Resolution: All attendants approved the proposal.

Proposal 3

Proposal: In order to meet operational needs, the Company plans to update the credit facilities negotiated with financial institutions.

Resolution: All attendants approved the proposal.

5. Board of Directors Meeting on August 10, 2023

Proposal 1

Proposal: Creation of the 2023 Q2 financial statements.

(Proposed by the Audit Committee)

(The manager of the president office reported the 2023 Q2 operating status.) Resolution: All attendants approved the proposal.

152

Proposal 2

Proposal: To compile plan of lending funds for 2023 Q4.

(Proposed by the Audit Committee)

(The Chairman and attending Managing Directors, William Wong, Susan Wang, Wilfred Wang, and Director, Cher Wang, serve as Chairman, Managing Director, Director or representative of the institutional shareholders of the borrowing company, or as a relative party within the second degree of kinship of a managing director were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 3

Proposal: Transaction with related parties.

(Proposed by the Audit Committee)

(The Chairman and attending Managing Directors, William Wong, Susan Wang, Wilfred Wang, and Director, Cher Wang, serve as Chairman, Managing Director, Director or representative of the institutional shareholders of the company of equipment transaction, or as a relative party within the second degree of kinship of a managing director were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 4

Proposal: To invest Formosa Resources Corporation for USD 25 million.

(Proposed by the Audit Committee)

(The Chairman and attending Managing Directors, William Wong and Wilfred Wang, serve as Chairman or Director of Formosa Resources Corp., were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves

from voting due to conflict of interest, the rest approved the proposal.

Proposal 5

Proposal: The salary raise of managers of 2023 was the same as the all employees.

153

(Proposed by the Remuneration Committee) (Attending Director Jerry Lin, along with managers Wen-Bee Kuo and Chia-Hung Chien, as involved parties in this case, recused themselves from the discussion and voting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 6

Proposal: To Promote the Company's Managers. Resolution: All attendants approved the proposal.

6. Board of Directors Meeting on November 9, 2023

Proposal 1

Proposal: Creation of the 2023 Q3 financial statements.

(Proposed by the Audit Committee) (The manager of the president office reported the 2023 Q3 operating status.) Resolution: All attendants approved the proposal.

Proposal 2

Proposal: To compile plan of lending funds for 2024 Q1.

(Proposed by the Audit Committee)

(The Chairman and attending Managing Directors, William Wong, Susan Wang, and Director, Cher Wang, serve as Chairman, Managing Director, Director or representative of the institutional shareholders of the borrowing company, or as a relative party within the second degree of kinship of a managing director were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 3

Proposal: Transaction with related parties.

(Proposed by the Audit Committee) (The Chairman and attending Managing Directors, William Wong, Susan Wang, and Director, Cher Wang, serve as Chairman, Managing Director, Director or representative of the institutional shareholders of the company of equipment

154

transaction, or as a relative party within the second degree of kinship of a managing director were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 3

Proposal: To invest Formosa Plastics Construction Corporation for NTD 500 million. (Proposed by the Audit Committee) (The Chairman and attending Director Sang-Chi Lin, serve as Chairman or Director of Formosa Plastics Construction Corp., were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

7. Board of Directors Meeting on December 14, 2023

Proposal 1 Proposal: Preparation of 2024 internal audit plan.

Resolution: All attendants approved the proposal.

Proposal 2

Proposal: To issue a letter of support for credit facilities of Formosa Steel IB Pty Ltd. (Proposed by the Audit Committee)

(The Chairman and attending Managing Directors, William Wong and Wilfred Wang, serve as Director or Chairman of Formosa Resources Corp. or FSIB, were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves

from voting due to conflict of interest, the rest approved the proposal.

Proposal 3

Proposal: Issuance of domestic unsecured ordinary corporate bonds within NTD 15 billion to raise long-term funds to invest in domestic or overseas business, to build and expand current plant, to replace current plant and equipment, to pay off loans, and to fund the working capital in 2024.

155

Resolution: All attendants approved the proposal.

Proposal 4

Proposal: In order to meet operational needs, the Company plans to get the credit line negotiated with financial institutions.

Resolution: All attendants approved the proposal.

8. Board of Directors Meeting on January 22, 2024

Proposal 1

Proposal: To Promote the Company's Managers.

Resolution: All attendants approved the proposal.

Proposal 2

Proposal: To purchase a 50% stake in Taiwan Tokuyama Corp. from Tokuyama Corp., with a maximum limit of NTD 1.1 billion.

(Proposed by the Audit Committee) (The Chairman provided additional explanation on the reasons for purchasing shares in Taiwan Tokuyama Corp.)

Resolution: All attendants approved the proposal.

9. Board of Directors Meeting on March 6, 2024

Proposal 1

Proposal: Employee compensation of 2023.

Resolution: All attendants approved, and it will be submitted to report on the 2024 Shareholders’ Meeting.

Proposal 2

Proposal: Creation of the 2023 business report and financial statements and the 2024 operating plans.

(The Secretariat reported that the appendix of this proposal has been submitted to the Audit Committee for approval, and the manager reported the 2023 operating status and the 2024 annual operating target.)

Resolution: All attendants approved the proposal.

Proposal 3

Proposal: Distribution of 2023 profits.

Resolution: All attendants approved the proposal.

156

Proposal 4

Proposal: Calling of the 2024 Shareholders’ Meeting to take place on June 20, 2024. Resolution: All attendants approved the proposal.

Proposal 5

Proposal: To reelect Directors in the 2024 Shareholders’ Meeting. Resolution: All attendants voted in favor of the resolution.

Proposal 6

Proposal: To amend the Articles of Incorporation of the Company.

Resolution: All attendants approved the proposal, and it was submitted to 2024 Shareholders’ Meeting for approval.

Proposal 7

Proposal: To formulate Internal Control System Statement of the Company.

(Proposed by the Audit Committee)

Resolution: All attendants approved the proposal.

Proposal 8

Proposal: To donate NTD 4,420,500 to Kaohsiung Cultural Foundation of Brothers Wang Yung-ching and Wang Yung-tsai Park.

(Proposed by the Audit Committee)

(The Chairman and attending Directors, Sang-Chi Lin, serve as Chairman or Director of Kaohsiung Cultural Foundation of Brothers Wang Yung-ching and Wang Yung-tsai Park, were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 9

Proposal: To compile plan of lending funds for 2024 Q2.

(Proposed by the Audit Committee) (The Chairman and attending Managing Directors, William Wong, Susan Wang, Wilfred Wang, and Director, Cher Wang, serve as Chairman, Managing Director, Director or representative of the institutional shareholders of the borrowing company, or as a relative party within the second degree of kinship of a managing

157

director were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 10

Proposal: Transaction with related parties.

(Proposed by the Audit Committee)

(The Chairman and attending Managing Directors, William Wong, Susan Wang, Wilfred Wang, and Director, Cher Wang, serve as Chairman, Managing Director, Director or representative of the institutional shareholders of the company of equipment transaction, or as a relative party within the second degree of kinship of a managing director were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

Proposal 11

Proposal: To invest Fujian Fuxin Special Steel Co., Ltd. for USD 530 million.

(Proposed by the Audit Committee) (The Chairman and attending Directors, Jerry Lin, serve as Chairman or Director of Fujian Fuxin Special Steel Co., Ltd., were recused from the discussion and voting. The Managing Director, C. L. Wei, was designated as temporary chairperson of the meeting.)

Resolution: Except for the above-mentioned Directors who had to recuse themselves from voting due to conflict of interest, the rest approved the proposal.

158

• 3.4.14 During the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a director has expressed a dissenting opinion with respect to a material resolution approved by the Board of Directors, and said dissenting opinion has been recorded or prepared as a written declaration, disclose the principal content thereof: None.

• 3.4.15 A summary of resignations and dismissals, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, of the company’s chairman, general manager, chief accounting officer, chief financial officer, chief internal auditor, chief corporate governance officer, and chief research and development officer: None.

159

3.5 Information Regarding the Company’s Audit Fee

• 3.5.1Audit fee Ran e Table Unite: NTD thousand g

Name of accounting firm	Name of CPA	Audit period	Audit Fee	Non- audit Fee	Total Fee	Remarks
KPMG Certified Public Accountants Firm	Hsin-Yi Kuo	2023.01.01~ 2023.12.31	6,125	2,022	8,147	Note 2
	Hui-Chih Kou	2023.01.01~ 2023.12.31

Note:

1. If the Company has changed CPA or accounting firm during the current fiscal year, the company shall report the information regarding the audit period covered by each CPA and the replacement reason. Non-audit service content shall be disclosed at the column of remarks.

2. Non-audit fee includes the profit-seeking enterprise income tax auditing with NTD 1,200 thousand, the transfer pricing documentation with NTD 440 thousand, master file of NTD 157 thousand, country- by-country report of NTD 105 thousand and sales tax direct deduction method of NTD 120 thousand.

3. 3.5.2 When the company changes its accounting firm and the audit fees paid for the fiscal year in which such change took place are lower than those for the previous fiscal year, the amounts of the audit fees before and after the change and the reasons shall be disclosed: Not applicable.

4. 3.5.3 When the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by 10 % or more, the reduction in the amount of audit fees, reduction percentage, and reasons therefor shall be disclosed: Not applicable.

160

• 3.6 Replacement of CPA ： If the company has replaced its CPA within the last two fiscal years or any subsequent interim period, it shall disclose the following information.

3.6.1 Re ardin the former CPA g g

Replacement Date	Approved the appointment by the Board of Directors on March 10,2023	Approved the appointment by the Board of Directors on March 10,2023	Approved the appointment by the Board of Directors on March 10,2023	Approved the appointment by the Board of Directors on March 10,2023	Approved the appointment by the Board of Directors on March 10,2023
Replacement reasons and explanations	The CPAs, Hui-Chih Kou, and Chi-Lung Yu, audited the financial report of the Company originally. According accounting firm internal job adjustment, the CPAs, Hsin- Yi Kuo, and Hui-Chih Kou will responsible to audit the financial report of the Companyfrom 2023Q1.
Describe whether the Company terminated or the CPA did not accept the appointment	Parties Status			CPA	Appointer
	Take the initiative to terminate the appointment			Not applicable	Not applicable
	No longer accepted (continued) appointment			Not applicable	Not applicable
Other issues (except for unqualified issues) in the audit reports within the last twoyears	None
The disagreement opinion with the issuer or not	Yes		Accounting principles orpractices
			Disclosure of financial reports
			Check the scope or step
			Other
	None	ˇ
	Description

161

• Other disclosed items 1. The former CPA had informed the Company that there (Items which should be was a lack of sound internal control system lending to disclosed according its financial report not be trusted: None. to item 6-1-4~6-1-7 , 2. The former CPA has informed the Company that he/she article 10 of the criteria is unable to rely on the Company's statement or is unwilling to have any connection with the Company's financial report: None.

• The former CPA has informed the Company that it is necessary to expand the scope of the audit, or the information indicates that if the scope of the audit is expanded, the credibility of the previously issued or about to be issued financial report may be impaired. However, due to the replacement of CPA or other reasons, the former CPA did not expanded the scope: None.

• The former CAP has informed the Company that the credibility of the financial report that has been issued or is about to be issued may be impaired based on the information collected. However, due to replacement of CPA or other reasons, the former CPA did not deal with this matter: None.

3.6.2 Re ardin the successor CPA g g

Regardingthe successor	CPA
Name of accountingfirm	KPMG Certified Public Accountants Firm
Name of CPA	Hsin-Yi Kuo,Hui-Chih Kou
Date of appointment	Approved the appointment by the Board of Directors on March 10,2023
Consultation results and opinions on accounting treatments or principles with respect to specified transactions and the company's financial reports that the CPA might issueprior to the engagement	None
Succeeding CPA’s written opinion of disagreement toward the former CPA	None

• 3.6.3 Reply of former CPA to item 6-1 and item 6-2-3, article 10 of the criteria ： None.

• 3.7 The Company’s Chairman, President, or Any Manager Involved in Financial or Accounting Affairs Being Employed by the Auditor’s Firm or Any of its Affiliated Company within the Last Year: None.

162

• 3.8 Changes in Shareholding Transfer or Shareholding Pledge by Directors, or Managers, and Major Shareholders Who Holds 10% of the Company Shares or More during the Most Recent Fiscal Year Up to the Date of Publication of the Annual Report.

• 3.8.1 Changes in Shareholding of Directors, Managers and Major Shareholders

Title (Note 1)	Name	2023	2023	As of April 22,2024	As of April 22,2024
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Chairman	Jason Lin	0	0	0	0
Managing Director	Formosa Chemicals & Fibre Corp.	0	0	0	0
	William Wong	0	0	0	0
Managing Director	Nanya Plastics Corp.	0	0	0	0
	Susan Wang	0	0	0	0
Managing Director	Formosa Petrochemical Corp.	0	0	0	0
	Wilfred Wang	0	0	0	0
Managing Director (Independent Director)	C. L. Wei	0	0	0	0
Independent Director	C. J. Wu	0	0	0	0
Independent Director	Yen-Shiang Shih	0	0	0	0
Independent Director	Wen-Chyi Ong	0	0	0	0
Director(Note 5)	C. T. Lee	-1,906,541	0	-	-
Director	Cher Wang	0	0	0	0
Director	K. H. Wu	600,000	0	-666,000	0
Director	Ralph Ho	0	0	0	0
Director	Sang-Chi Lin	0	0	0	0
Director (Senior Vice President)	Jerry Lin	0	0	0	0
Director	Cheng-Chung Cheng	0	0	0	0
President(Note 3)	Wen-Bee Kuo	0	0	0	0

163

Title (Note 1)	Name	2023	2023	As of April 22,2024	As of April 22,2024
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Senior Vice President	Tony Liang	0	0	0	0
Vice President	Ming-HungCheng	0	0	-	-
Acting Vice President(Note 4)	Yun-Tsing Ou	-	-	0	0
Vice President	Kwang-MingChen	0	0	-	-
Acting Vice President(Note 4)	Jung-Hung Kao	-	-	0	0
Vice President	Jen-LongWu	0	0	0	0
Vice President	Han-SheungWang	0	0	-	-
Acting Vice President(Note 4)	Kuo-Ching Lien	-	-	0	0
Vice President	Yeats Yeh	0	0	0	0
Vice President	Chao-JungChen	0	0	0	0
Vice President	Y.Y. Lee	0	0	0	0
Financial Officer	RayLei	0	0	0	0
Accounting and Corporate Governance Officer (Note 4)	Chia-Tse Chang	0	0	-	-
Accounting Officer (Note 4)	I-Yu Chiu	-	-	0	0
Corporate Governance Officer (Note 4)	Chia-Hung Chien	-	-	0	0

• Note 1: Shareholders holding greater than a 10 percent stake in the Company should be remark as major shareholders.

• Note 2: If the transferees of shareholding transfer or shareholding pledge are related party, it should fill in the following table.

• Note 3: The Board of Directors of the Company approved to promote Wen-Bee Kuo as President from Senior Vice President, and discharge President, Jason Lin, on March 10, 2023, who was originally as Chairman and President at the same time. Vice President Kwang-Ming Chen resigned effective July 1, 2023, and Assistant Vice President Jung-Hung Kao was promoted to Acting Vice President on August 10, 2023. Vice President Ming-Hung Cheng and Han-Sheung Wang resigned effective January 1, 2024, and Assistant Vice President Yun-Tsing Ou and KuoChing Lien were promoted to Acting Vice President on January 22, 2024.

164

Note 4: Chia-Tse Chang retired on December 31, 2022. The new accounting officer is I-Yu Chiu and the new corporate governance officer is Chia-Hung Chien from January 1, 2023.

• Note 5: Director Mr. C.T. Lee passed away on May 21, 2023.

3.8.2 Information of Shareholding Transfer: None.

3.8.3 Information of Shareholding Pledge: None.

165

2023.4.1
	Remarks
	The relationship of the 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another (Note 3)	Relationship	The representative of Ming Chi University of Technology is Chang Gung Medical Foundation’s Director.	- Nanya Plastics Corp. is the director of Formosa Chemicals & Fibre Corp.	1.Formosa Chemicals & Fibre Corp. invests in Formosa Petrochemical Corp. under equity method 2.Formosa Petrochemical Corp. is director of Formosa Chemicals & Fibre Corp.	Those two have the same key management personnel.	Those two have the same key management personnel.
		Name	Ming Chi University of Technology	- Nanya Plastics Corp.	Formosa Petrochemical Corp.	Chindwell International Investment Corp.	Vanson International Investment Co., Ltd.
	Shareholding by nominee arrangement	%	-	-			-
		Shares	-	-			-
	Spouse’s/minor’s Shareholding	%	-	-			-
		Shares	-	-			-
	Own shareholding	%	9.44%	7.65%		6.26%
		Shares	601,011,035	486,978,694		398,731,554
	Name (Note1)		Chang Gung Medical Foundation Representative: Ruey-Huei Wang	Formosa Chemicals & Fibre Corp. Representative: Fu-Yuan Hong		Credit Suisse AG- Credit Suisse Singapore Branch

166

Remarks	Remarks
The relationship of the 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another (Note 3)	Relationship	Formosa Chemicals & Fibre Corp. is the one of Nanya Plastics Corp.’s Directors.	1.Nanya Plastics Corp. invests in Formosa Petrochemical Corp. under equity method. 2.Formosa Petrochemical Corp. is the director of Nanya Plastics Corp.	Those two have the same key management personnel.	Those two have the same key management personnel.	Those two have the same key management personnel.	Those two have the same key management personnel.
	Name	Formosa Chemicals & Fibre Corp.	Formosa Petrochemical Corp.	Credit Suisse AG- Credit Suisse Singapore Branch	Vanson International Investment Co., Ltd.	Credit Suisse AG- Credit Suisse Singapore Branch	Chindwell International Investment Corp.
Shareholding by nominee arrangement	%		-	-		-
	Shares		-	-		-
Spouse’s/minor’s Shareholding	%		-	-		-
	Shares		-	-		-
Own shareholding	%		4.63%	4.16%		3.05%
	Shares		294,793,105	264,692,768		194,241,528
Name (Note1)		Nanya Plastics Corp. Representative: Chia-Chau Wu		Chindwell International Investment Corp. Representative: Everred Corporate, Inc.		Vanson International Investment Co., Ltd. Representative: Landmark Capital Holdings Inc.

167

						Old Labor Pension Fund 74,572,583 1.17% - - - - - - Note 1: Name of the top-10 shareholders must be listed respectively. For institutional shareholders, the title of such institutional shareholder and the name of the representative(s) shall be listed respectively. Note 2: The shareholding ratio shall be calculated by taking into account the shares held by the shareholder, his/her spouse, children of minor age, and other persons holding shares in his/her name. Note 3: For the shareholders referred to above including legal person and natural person, shall have the relationship disclosed.
Remarks
The relationship of the 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another (Note 3)	Relationship	1.Formosa Chemicals & Fibre Corp. invests in Formosa Petrochemical Corp. under equity method. 2.Formosa Chemicals & Fibre Corp.is the director of Formosa Petrochemical Corp.	1.Nanya Plastics Corp. invests in Formosa Petrochemical Corp. under equity method. 2.Nanya Plastics Corp. is the director of Formosa Petrochemical Corp.	The representative of Ming Chi University of Technology is Chang Gung Medical Foundation’s Director.	-	-
	Name	Formosa Chemicals & Fibre Corp.	Nanya Plastics Corp.	Chang Gung Medical Foundation	-	-
Shareholding by nominee arrangement	%	-		-	-	-
	Shares	-		-	-	-
Spouse’s/minor’s Shareholding	%	-		-	-	-
	Shares	-		-	-	-
Own shareholding	%	2.07%		1.43%	1.37%	1.17%
	Shares	131,460,365		90,902,297	87,260,948	74,572,583
Name (Note1)		Formosa Petrochemical Corp. Representative: Bao-Lang Chen		Ming Chi University of Technology Representative: William Wong	Government of Singapore	Old Labor Pension Fund

168

3.10 The Total Number of Shares and Total Equity Stake Held in Any Single Enterprise by the Company, its Directors and Managers, and Any Companies Controlled Either Directly or Indirectly by the Company Unit: share；％；2022.12.31
	Total Ownership	%	75.86	26.09	100.00	50.00	100.00	99.77	29.07	100.00	100.00	100.00	90.00
		Shares	7,226,113,167	80,212	2,009,477,174	425,800,000	78,000	3,056,852,514	112,736,734	19,699,242	14,095,269	4,180,000	2,610,000
	Direct or Indirect Ownership by Directors/ Managers	%	47.30	3.43	67.08	0.00	0.00	74.83	0.01	66.67	66.67	71.28	44.96
		Shares	4,505,564,157	10,558	1,348,019,259	0	0	2,292,651,414	29,018	13,132,871	9,397,318	2,979,698	1,303,870
	Ownership by the Company	%	28.56	22.66	32.92	50.00	100.00	24.94	29.06	33.33	33.33	28.72	45.04
		Shares	2,720,549,010	69,654	661,457,915	425,800,000	78,000	764,201,100	112,707,716	6,566,371	4,697,951	1,200,302	1,306,130
	Affiliated Enterprises (Note)		Formosa Petrochemical Corp.	Formosa Plastics Corp. U.S.A.	Formosa Heavy Industries Corp.	Sky Dragon Investments Limited	Formosa Plastics Corporation (Cayman) Limited	Mai Liao Power Corp.	Formosa Sumco Technology Corp.	Formosa Transportation Corp.	Formosa Fairway Corp.	Yi-Jih Development Corp.	Ya Tai Development Corp.

169

Total Ownership	%	50.00	90.00	100.00	50.00	50.00	95.00	100.00	75.67	100.00	100.00	100.00	Note: Above investees are under equity method of the Company.
	Shares	50,125	54,090,000	100,000	24,459	50,000,000	665,000,000	3,639,628,500	129,685,525	330,000,000	50,000	5,772.55
Direct or Indirect Ownership by Directors/ Managers	%	0.00	45.00	67.00	0.00	0.00	70.00	75.00	51.33	66.67	75.00	0.00
	Shares	0	27,045,801	67,000	0	0	490,000,000	2,729,721,375	87,971,050	220,000,000	37,500	0
Ownership by the Company	%	50.00	45.00	33.00	50.00	50.00	25.00	25.00	24.34	33.33	25.00	100.00
	Shares	50,125	27,044,199	33,000	24,459	50,000,000	175,000,000	909,907,125	41,714,475	110,000,000	12,500	5,773
Affiliated Enterprises (Note)		Formosa Asahi Spandex Co., Ltd.	Formosa Automobile Corp.	Wha Ya Park Management Consulting Co,.Ltd.	Formosa Daikin Advanced Chemicals Co., Ltd.	Formosa Tokuyama Advanced Chemicals Co., Ltd.	Formosa Smart Energy Tech Corp.	Formosa Resources Corp.	Formosa Environmental Technology Corp.	Formosa Plastics Construction Corp.	Formosa Group (Cayman) Limited	Formosa Industries Corporation

170

Remarks	Others	None	Note 1: Fill up to the current fiscal year up to the date of publication of the annual report. Note 2: Note the validity (approval) date and literature for fund increase. Note 3: Shares issued in value lower than the par value shall be labelled through visible marks Note 4: Monetary liabilities and technology offsetting shares shall be described with the type and amount of offset indicated. Note 5: Private fundraising shall be labelled through visible marks.	Remarks	Remarks	None	Note: Listed on TWSE.
	Capital Increased by Assets Other than Cash	None
	Sources of Capital	Earnings capitalization NTD 2,448,361,840 (Approval sought from Letter No. Jin- Guan-Zheng-Fa- 1020025067 dated 2013.6.28)
				Authorized Capital	Total Shares	6,365,740,781
Paid-in Capital	Amount	63,657,407,810
					Un-issued Shares	0
	Shares	6,365,740,781
Authorized Capital	Amount	63,657,407,810
					Issued Shares (Note)	6,365,740,781
	Shares	6,365,740,781
	Par Value	10
				Share Type		Common Stock
	Year / Month	2013.7

171

4.1.2 Structure of Shareholders 2024.4.22	Structure of Shareholders Quantity (Qty) Governmental Institution Financial Institution Other legal persons Natural Person Foreign Institutions and Foreign Individuals Total Number of persons 7 60 1,080 303,889 956 305,992 Shareholding 79,041,937 511,824,275 2,131,147,693 1,688,307,551 1,955,419,325 6,365,740,781 Shareholding ratio 1.24% 8.04% 33.48% 26.52% 30.72% 100.00% Note: A primary exchange-listed (or OTC-listed) company and emerging company should disclose the shareholding ratio of Chinese investors. Chinese investors meant for the citizens, legal persons, groups, institutions of Mainland China or the companies invested in third countries that have invested in Taiwan in accordance with Article 3 of the “the Measures Governing Investment Permit to the People of the Mainland Area.” 4.1.3 Status of Shareholding Distribution (The Company does not issue preferred stock.) 2024.4.22	Structure of Shareholders Quantity (Qty) Governmental Institution Financial Institution Other legal persons Natural Person Foreign Institutions and Foreign Individuals Total Number of persons 7 60 1,080 303,889 956 305,992 Shareholding 79,041,937 511,824,275 2,131,147,693 1,688,307,551 1,955,419,325 6,365,740,781 Shareholding ratio 1.24% 8.04% 33.48% 26.52% 30.72% 100.00% Note: A primary exchange-listed (or OTC-listed) company and emerging company should disclose the shareholding ratio of Chinese investors. Chinese investors meant for the citizens, legal persons, groups, institutions of Mainland China or the companies invested in third countries that have invested in Taiwan in accordance with Article 3 of the “the Measures Governing Investment Permit to the People of the Mainland Area.” 4.1.3 Status of Shareholding Distribution (The Company does not issue preferred stock.) 2024.4.22	Structure of Shareholders Quantity (Qty) Governmental Institution Financial Institution Other legal persons Natural Person Foreign Institutions and Foreign Individuals Total Number of persons 7 60 1,080 303,889 956 305,992 Shareholding 79,041,937 511,824,275 2,131,147,693 1,688,307,551 1,955,419,325 6,365,740,781 Shareholding ratio 1.24% 8.04% 33.48% 26.52% 30.72% 100.00% Note: A primary exchange-listed (or OTC-listed) company and emerging company should disclose the shareholding ratio of Chinese investors. Chinese investors meant for the citizens, legal persons, groups, institutions of Mainland China or the companies invested in third countries that have invested in Taiwan in accordance with Article 3 of the “the Measures Governing Investment Permit to the People of the Mainland Area.” 4.1.3 Status of Shareholding Distribution (The Company does not issue preferred stock.) 2024.4.22	Structure of Shareholders Quantity (Qty) Governmental Institution Financial Institution Other legal persons Natural Person Foreign Institutions and Foreign Individuals Total Number of persons 7 60 1,080 303,889 956 305,992 Shareholding 79,041,937 511,824,275 2,131,147,693 1,688,307,551 1,955,419,325 6,365,740,781 Shareholding ratio 1.24% 8.04% 33.48% 26.52% 30.72% 100.00% Note: A primary exchange-listed (or OTC-listed) company and emerging company should disclose the shareholding ratio of Chinese investors. Chinese investors meant for the citizens, legal persons, groups, institutions of Mainland China or the companies invested in third countries that have invested in Taiwan in accordance with Article 3 of the “the Measures Governing Investment Permit to the People of the Mainland Area.” 4.1.3 Status of Shareholding Distribution (The Company does not issue preferred stock.) 2024.4.22
	Total	305,992	6,365,740,781	100.00%	Shareholding ratio(％)	0.398	5.012	3.169	1.815	1.404	1.797	1.049	0.909	2.349	1.864	1.806	0.974	0.856	0.697	75.901	100.000
	Foreign Institutions and Foreign Individuals	956	1,955,419,325	30.72%
					Shareholding (Shares)	25,313,993	319,072,916	201,720,610	115,556,110	89,351,208	114,395,179	66,775,538	57,879,903	149,515,232	118,684,102	114,940,428	61,989,786	54,483,309	44,390,766	4,831,671,701	6,365,740,781
	Natural Person	303,889	1,688,307,551	26.52%
	Other legal persons	1,080	2,131,147,693	33.48%
					Number of Shareholders	104,153	149,044	26,811	9,308	4,946	4,603	1,904	1,269	2,145	854	403	126	79	50	297	305,992
	Financial Institution	60	511,824,275	8.04%
	Governmental Institution	7	79,041,937	1.24%
					Shareholding class	1~ 999	1,000~ 5,000	5,001~ 10,000	10,001~ 15,000	15,001~ 20,000	20,001~ 30,000	30,001~ 40,000	40,001~ 50,000	50,001~ 100,000	100,001~ 200,000	200,001~ 400,000	400,001~ 600,000	600,001~ 800,000	800,001~1,000,000	Over 1,000,001	Total
	Structure of Shareholders Quantity (Qty)	Number of persons	Shareholding	Shareholding ratio

172

4.1.4 List of Major Shareholders 2024.4.22

4.1.4 List of Major Shareholders		2024.4.22
Shares Name of Major Shareholders	Shareholding	Shareholding ratio(％)
ChangGungMedical Foundation	601,011,035	9.44
Formosa Chemicals & Fibre Corp.	486,978,694	7.65
Credit Suisse AG- Credit Suisse Singapore Branch	398,731,554	6.26
Nanya Plastics Corp.	294,793,105	4.63
Chindwell International Investment Corp.	264,692,768	4.16
Vanson International Investment Co.,Ltd.	194,241,528	3.05
Formosa Petrochemical Corp.	131,460,365	2.07
Government of Singapore	90,902,297	1.43
MingChi Universityof Technology	87,260,948	1.37
Old Labor Pension Fund	74,572,583	1.17

4.1.5 Market Price, Net Worth, Earnings, and Dividends per Share in

the Two Most Recent Years Unit: NTD ； er share p

Item	Year	Year	2022	2023	2024/1/1~ 2024/3/31 (Note 8)
Market Value per share (Note 1)	Highest		110.50	94.80	79.30
	Lowest		78.10	76.70	66.40
	Average		95.74	86.01	71.41
Net Worth per Share (Note 2)	Before Distribution		56.19	54.57	-
	After Distribution		51.99	53.57	-
Earnings per Share	Weighted Average Outstanding Shares		6,365,740,781	6,365,740,781	-
	EPS(Note 3 & 10)		5.68	1.15	-
Dividends per Share	Dividendsper Share(Note 9)		4.20	1.00	-
	Stock Dividends	Stock Dividends from Retained earnings	0	0	-
		Stock Dividends from Capital Surplus	0	0	-
	Accumulated Undistributed Dividends(Note 4)		0	0	-
Investment Return Analysis	Price / Earnings Ratio(Note 5)		16.86	74.79	-
	Price / Dividend Ratio(Note 6)		22.80	86.01	-
	Cash Dividend Yield Rate(Note7)		4.39	1.16	-

173

• ＊ In case of profits or capital reserve reinvested to allotment of shares, the number of shares to be distrusted should be disclosed with traced adjustment of market value and cash dividend information.

• Note 1: Denotes the common shares with highest and lowest market value for each year, calculated for the average annual market value for the trading value of each year and the trading volume.

• Note 2: Please use the number of share outstanding by the end of the year and filled out by the distribution of the resolutions made by the Shareholders’ Meeting of the second year.

• Note 3: In the event of free allotment and requires tracing for adjustment, each EPS shall be listed before and after adjustment.

• Note 4: In case the condition of outstanding equity security is distributed according to the undistributed dividends of that year accumulated to the year with earnings, the accumulated undistributed dividends of that year shall be disclosed respectively.

• Note 5: Price / Earnings Ratio = Average Market Price / Earnings per Share Note 6: Price / Dividend Ratio = Average Market Price / Cash Dividends per Share

• Note 7: Cash Dividend Yield Rate = Cash Dividends per Share / Average Market Price

• Note 8: Net worth per share and EPS shall be filled to the date of publication of the annual report with the data attested (reviewed) by the CPA in last quarter. The other columns should also be filled up data during the current fiscal year up to the date of publication of the annual.

• Note 9: Cash dividend in profits distribution of 2023 was approved by the Board of Directors.

• Note 10: The financial data of 2024 Q1 does not reviewed by CPAs yet during the current fiscal year up to the date of publication of the annual.

4.1.6 Dividend Policy and Implementation Status

1. Dividend policy:

The Company adheres to the principle of stability and balance considering shareholders’ profits. The dividend policy set out in the Articles of Association of the Company is as follows:

The Company is in a business of a mature industry and earns its annual profits on a stable basis. The Company adopts a dividend policy that allows the distribution to be made in either way of or a combination of cash dividends, earnings capitalization and capitalization of capital reserve. At least fifty percent (50%) of the annual distributable earning remained after deducting the legal reserve and special reserve will be distributed, preferably in cash. The total percentage of the capitalization of retained earnings and capital reserve shall not be more than fifty percent (50%) of the total dividends distributed of such year.

174

2. Dividend distribution:

  - The Board of Directors approved to distribute cash dividend with NTD 1 per share.

1. Expected significant change in dividend policy: None.

2. 4.1.7 Effect upon business performance and earnings per share of any stock dividend distribution proposed or adopted at the most recent Shareholders’ Meeting: There are no proposed stock dividends at this Shareholders’ Meeting and the Company does not need to prepare financial forecasts, so it is not applicable.

4.1.8 Compensation of Employees and Directors

1. The compensation of employees and directors set out in the Articles of Association of the Company is as follows:

2. (1) The compensation of employees: According of Article 39 of Association, if the Company gains any profits in any year, the Company shall retain 0.05% to 0.5% of the pre-tax profit as employee compensation before deducting the employee compensation of such year; provided, however, that the Company shall reserve the amount for compensating the deficit, if any. The determination of employee compensation shall be made in accordance with Article 235-1 of the Company Act.

3. (2) The compensation of directors: The Articles of Association of the Company do not regulate the compensation of directors.

4. (3) The Company’s employee compensation is distributed in cash, which adheres to the spirit of corporate governance, and is based on the dual principle of motivating employee performance and not diluting equity to protect shareholders’ equity.

5. The accounting treatment of the discrepancy between accrual and actual payment for the employee compensation for directors: Based on the Articles of Association of the Company, it retains 0.13 ％ of the pre-tax profit of 2023 as employee compensation before deducting the employee compensation of such year and employee compensation is paid in cash. If the actual amounts are different from the accrual amounts approved by Board of Directors, the difference will be treated as changes in accounting estimates for next year.

175

1. Distribution of 2023 compensation approved by the Board of Directors: The Board of Directors meeting on March 6, 2024 approved the amounts of employees’ cash compensation with NTD 8,989 thousand.

2. The actual distribution of employee and director compensation for the previous fiscal year (with an indication of the number of shares, monetary amount, and stock price, of the shares distributed), and, if there is any discrepancy between the actual distribution and the recognized employee or director compensation, additionally the discrepancy, cause, and how it is treated.

3. The Board of Directors meeting on March 10, 2023 approved the amounts of employees’ cash compensation with NTD 55,483 thousand, which are consistent with the actual amounts.

4.1.9 Share Repurchases by the Company: None.

176

4.2 Issuance of Cor orate Bonds p

Corporate Bond Type (Note 1)	Corporate Bond Type (Note 1)	The 1stTranche of Unsecured Corporate Bonds, 2014	The 1st Tranche of Unsecured Corporate Bonds, 2017
Issue date		2014.5.21	2017.5.19
Denomination		NTD 1,000,000	NTD 1,000,000
Issuing and transaction location (Note 2)		Taiwan	Taiwan
Issue price		Issue by denomination	Issue by denomination
Total price		NTD 6,000,000,000	NTD 7,000,000,000
Coupon rate		10 years: 1.83% 12 years: 1.92%	5 years: 1.09% 7 years: 1.32%
Tenor		Coupon A: 10 years； Maturity: 2024.5.21 Coupon B: 12 years； Maturity: 2026.5.21	Coupon A: 5 years； Maturity: 2022.5.19 Coupon B: 7 years； Maturity: 2024.5.19
Guarantee		None	None
Trustee		Bank of Taiwan-Trust Department	Bank of Taiwan-Trust Department
Underwriting institution		None	Total 13 underwriting institutions, including Yuanta Securities and so on.
Certified lawyer		AY Commercial Law Offices: Frank Lin	AY Commercial Law Offices: Frank Lin
CPA		KPMG: Eric Wu, Astor Kou	KPMG: Delphi Chen, Winston Yu
Repayment method		1.Interest: paid annually on the outstanding amount of the bond. 2. Principle: Coupon A: Repayment of 50% of the principal in the ninth and tenth year respectively. Coupon B: Repayment of 50% of the principal in the eleventh and twelfth year respectively.	1.Interest: paid annually on the outstanding amount of the bond. 2. Principle: Coupon A: Repayment of 50% of the principal in the fourth and fifth year respectively. Coupon B: Repayment of 50% of the principal in the sixth and seventh year respectively.
Outstanding principal		NTD 6,000,000,000	NTD 3,700,000,000
Terms of redemption or advance repayment		None	None
Restrictive clause (Note 3)		None	None
Name of credit rating agency, rating date, rating of corporate bonds		Taiwan Ratings Corp.；2014.3.27； twAA-	None
Other rights attached	As of the publication date of this annual report, converted amount of (exchanged or subscribed) ordinary shares, GDRs or other securities	None	None
	Issuance and conversion (exchange or subscription) method	None	None
Issuance and conversion, exchange or subscription method, issuing condition dilution, and impact on existing shareholders’equity		None	None
Transfer agent		None	None

177

Corporate Bond Type (Note 1)	Corporate Bond Type (Note 1)	The 1stTranche of Unsecured Corporate Bonds, 2018	The 1st Tranche of Unsecured Corporate Bonds, 2020
Issue date		2018.6.26	2020.6.22
Denomination		NTD 1,000,000	NTD 1,000,000
Issuing and transaction location (Note 2)		Taiwan	Taiwan
Issue price		Issue by denomination	Issue by denomination
Total price		NTD 9,300,000,000	NTD 8,350,000,000
Coupon rate		5 years: 0.82% 7 years: 0.93% 10 years: 1.09%	5 years: 0.58% 7 years: 0.63% 10 years: 0.67%
Tenor		Coupon A: 5 years； Maturity: 2023.6.26 Coupon B: 7 years； Maturity: 2025.6.26 Coupon C: 10 years； Maturity: 2028.6.26	Coupon A: 5 years； Maturity: 2025.6.22 Coupon B: 7 years； Maturity: 2027.6.22 Coupon C: 10 years； Maturity: 2030.6.22
Guarantee		None	None
Trustee		Bank of Taiwan-Trust Department	Bank of Taiwan-Trust Department
Underwriting institution		Total 13 underwriting institutions, including Fubon Securities and so on.	Total 12 underwriting institutions, including Fubon Securities and so on.
Certified lawyer		AY Commercial Law Offices: Frank Lin	AY Commercial Law Offices: Jerry Huang
CPA		KPMG: Astor Kou, Winston Yu	KPMG: Astor Kou, Winston Yu
Repayment method		1.Interest: paid annually on the outstanding amount of the bond. 2. Principle: Coupon A: Repayment of 50% of the principal in the fourth and fifth year respectively. Coupon B: Repayment of 50% of the principal in the sixth and seventh year respectively. Coupon C: Repayment of 50% of the principal in the ninth and tenth year respectively.	1.Interest: paid annually on the outstanding amount of the bond. 2. Principle: Coupon A: Repayment of 50% of the principal in the fourth and fifth year respectively. Coupon B: Repayment of 50% of the principal in the sixth and seventh year respectively. Coupon C: Repayment of 50% of the principal in the ninth and tenth year respectively.
Outstanding principal		NTD 6,700,000,000	NTD 8,350,000,000
Terms of redemption or advance repayment		None	None
Restrictive clause (Note 3)		None	None
Name of credit rating agency, rating date, rating of corporate bonds		None	None
Other rights attached	As of the publication date of this annual report, converted amount of (exchanged or subscribed) ordinary shares, GDRs or other securities	None	None
	Issuance and conversion (exchange or subscription) method	None	None
Issuance and conversion, exchange or subscription method, issuing condition dilution, and impact on existing shareholders’equity		None	None
Transfer agent		None	None

178

Corporate Bond Type (Note 1)	Corporate Bond Type (Note 1)	The 1stTranche of Unsecured Corporate Bonds, 2021	The 1st Tranche of Unsecured Corporate Bonds, 2023
Issue date		2021.9.15	2023.6.27
Denomination		NTD 1,000,000	NTD 1,000,000
Issuing and transaction location(Note 2)		Taiwan	Taiwan
Issue price		Issue by denomination	Issue by denomination
Total price		NTD 7,500,000,000	NTD 11,100,000,000
Coupon rate		5 years: 0.46% 7 years: 0.52%	5 years: 1.55% 7 years: 1.62%
Tenor		Coupon A: 5 years； Maturity: 2026.9.15 Coupon B: 7 years； Maturity: 2028.9.15	Coupon A: 5 years； Maturity: 2028.6.27 Coupon B: 7 years； Maturity: 2030.6.27
Guarantee		None	None
Trustee		Bank of Taiwan-Trust Department	Bank of Taiwan-Trust Department
Underwriting institution		Total 14 underwriting institutions, including Fubon Securities and so on.	Total 14 underwriting institutions, including Fubon Securities and so on.
Certified lawyer		AY Commercial Law Offices: Jerry Huang	AY Commercial Law Offices: Jerry Huang
CPA		KPMG: Astor Kou, Winston Yu	KPMG: Astor Kou, Winston Yu
Repayment method		1.Interest: paid annually on the outstanding amount of the bond. 2. Principle: Coupon A: Repayment of 50% of the principal in the fourth and fifth year respectively. Coupon B: Repayment of 50% of the principal in the sixth and seventh year respectively.	1.Interest: paid annually on the outstanding amount of the bond. 2. Principle: Coupon A: Repayment of 50% of the principal in the fourth and fifth year respectively. Coupon B: Repayment of 50% of the principal in the sixth and seventh year respectively.
Outstanding principal		NTD 7,500,000,000	NTD 11,100,000,000
Terms of redemption or advance repayment		None	None
Restrictive clause (Note 3)		None	None
Name of credit rating agency, rating date, rating of corporate bonds		None	None
Other rights attached	As of the publication date of this annual report, converted amount of (exchanged or subscribed) ordinary shares, GDRs or other securities	None	None
	Issuance and conversion (exchange or subscription) method	None	None
Issuance and conversion, exchange or subscription method, issuing condition dilution, and impact on existing shareholders’equity		None	None
Transfer agent		None	None

179

Note 1: The number of columns is adjusted depending on the actual issuances.

Note 2: Fill in if it is overseas corporation bond.

• Note 3: Such as limiting the distribution of cash dividends, foreign investment or the requirement to maintain a certain proportion of assets, etc.

4.3 Issuance of Preferred Stock: None.

• 4.4 Issuance of Global Depositary Receipts: None.

• 4.5 Issuance of Employee Stock Options: None.

• 4.6 Issuance of New Shares in Connection with Mergers or Acquisitions or with Acquisitions of Shares of Other Companies: None.

4.7 The Implementation of the Company’s Capital Allocation Plans

4.7.1 Content of the Plan

1. For the period as of the quarter preceding the date of publication of the annual report, with respect to each uncompleted public issue or private placement of securities: None.

2. Issues and placements that were completed in the past 3 years but have not yet fully yielded the planned benefits: None.

4.7.2 The Status of Implementation

• With respect to funds usage under the plans referred to in the preceding subparagraph, the annual report shall (for the period as of the quarter preceding the date of publication of the annual report) analyze the status of implementation and compare actual benefits with expected benefits: None.

180

V. Operational Highlights

5.1 Business Activities

5.1.1 Scope of Business

1. Main areas of business operations:

2. (1) B202010: Nonmetallic Mining

3. (2) C199990: Other Food Manufacturing Not Elsewhere Classified

4. (3) C801010: Basic Industrial Chemical Manufacturing

5. (4) C801020: Petrochemical Manufacturing

6. (5) C801100: Synthetic Resin & Plastic Manufacturing

7. (6) C801120: Manmade Fiber Manufacturing

8. (7) C801990: Other Chemical Materials Manufacturing

9. (8) C802120: Industrial Catalyst Manufacturing

10. (9) C802170: Poisonous Chemical Material Manufacturing

11. (10)C805020: Plastic Sheets & Bags Manufacturing

12. (11)C901070: Stone Products Manufacturing

13. (12)CB01010: Machinery and Equipment Manufacturing

14. (13)CC01080: Electronic Parts and Components Manufacturing

15. (14)D101050: Steam and Electricity Paragenesis

16. (15)D301010: Water Supply

17. (16)D401010: Heat Energy Supplying

18. (17)E603050: Cybernation Equipments Construction

19. (18)H701010: Residence and Buildings Lease Construction and Development

20. (19)H701040: Specialized Field Construction and Development

21. (20)ID01010: Metrological Instruments Identify

22. (21)IZ99990: Other Industry and Commerce Services Not Elsewhere Classified

23. (22)J101050: Sanitary and Pollution Controlling Services

24. (23)ZZ99999: All business items that are not prohibited or restricted by law, except those that are subject to special approval

181

2. Revenue distribution

Divisions	(％) of Total Sales	Mainly Products
Plastics Division	34.12	Polyvinyl chloride(PVC), Caustic soda
Polyolefin Division	22.82	High density polyethylene (HDPE), Ethylene vinyl acetate copolymer (EVA), Linear low- density polyethylene (LLDPE), Low density polyethylene(LDPE)
Polypropylene Division	13.54	Polypropylene (PP)、Polyoxymethylene (POM)
Tairylan Division	16.25	Acrylic esters(AE), Carbon fiber, N-butanol (NBA), Super absorbentpolymer(SAP)
Chemicals Division	10.76	Acrylonitrile (AN), Methyl tert-butyl ether (MTBE), Methyl methacrylate(MMA), Epichlorohydrin(ECH)
Carbide Division	0.53	Calcium carbonate, Calcium oxide
Eng. & Const. Division	0.91	Water, Electricity, Steam
Electronic Materials Division	1.07	Distributed control system (DCS), etc.

1. Products:

2. (1) Petrochemical and plastic products: PVC, caustic soda (liquid, flakes, pearls), liquid chlorine, hydrochloric acid (HCl), vinyl chloride (VCM), ethylene dichloride (EDC), impact modifier (MBS), chlorinated solvent, processing aids (PA), lithium-ion battery electrolyte, acrylic acid and ester, SAP, NBA, butyraldehyde, iso-butyraldehyde, HDPE, LDPE, EVA, LLDPE, wax, acetonitrile (ACN), AN, ECH, MMA, methacrylic acid (MAA), MTBE, 1-butene (B1), PP, POM.

3. (2) Electronic control system: DCS, power management system (PMS), safety instrumented system (SIS), automated warehouse management system & logistics control system, cloud application integration & big data analysis, artificial intelligence application, the solution of the industrial internet of things, real-time production management system (RTPMS), laboratory information management system (LIMS).

4. (3) Others: calcium oxide, ground calcium carbonate, precipitated calcium carbonate, calcium carbonate masterbatch and white masterbatch

5. (4) Artificial fiber: Carbon fiber.

182

1. New product development plan:

2. Development of suspension PVC dedicated to chlorinated polyvinyl chloride (CPVC) manufacture, development of solid-state lithium battery electrolyte synthesis method ,optimization of the seed production process in slender reaction tank for ML plant, development of removing iodine from salt water, development of Anti-fouling Silicone Medical Products, optimization test of MBS stabilizer dosage, high tensile strength carbon fiber, thermoplastic carbon felt, low-cost carbon fiber, high-performance prepreg, next-generation SAP product for internationally renowned major corporation, High absorption capacity and high strength SAP, New SAP process, New SAP products for fresh food pads, high performance package material BOPE, PE50 pipe grade, HDPE PCR recycled grade, HDPE for hydrogen tank-transportation application, Machine direction orientation polyethylene grade, Hydrogen tank liner, EVA containing 33 % VA content, Hydrolysis resistance EVA material for solar encapsulant film, EVA PCR recycled grade, High impact transparent PP, Medical grade PP for pre-filled syringe, Medical grade PP for ultra-low-temperature-resistant lab consumables, Transparent post-consumer recycled PP, PP for lamination coating, Impact modifier precipitated calcium carbonate, PET-based calcium carbonate MB.

5.1.2 Industry Overview

1. The current status and development of the industry, and development trends and competition for the Company’s products:

2. (1) PVC: In 2023, China's PVC demand is 19.38 million tons, similar to 2022 level. Over the past three years, China's PVC demand has remained below 20 million tons, showing a stagnant trend in demand growth. In line with the new Southward sales strategy, FPC's PVC exports to China in 2023 account for a reduced proportion of total exports, decreasing from 19% to 9.9%.China's PVC production capacity has increased from 28.1 million tons in 2022 to 28.81 million tons in 2023, with a 74% operation rate. In 2023, India's PVC demand is 3.81 million tons, a growth of 22.6% compared to the previous year. FPC's PVC exports to India increase from 26% to 34% of total exports. Besides, FPC stably exported 160 thousand tons of PVC to Australia and New Zealand in 2023. Due to the continued interest rate hikes by

183

the Federal Reserve, the real estate market has frozen, affecting PVC demand. In 2023, the demand for PVC in the United States remains at 5.08 million tons, which is similar to 2022 level, with a capacity of 8.9 million tons and a operation rate of 88%. The ongoing Russia-Ukraine war and the resurgence of conflict in the Middle East have impacted the global economy during the post-pandemic era, causing a slow economic recovery. Polyvinyl chloride (PVC) demand, except for a recovery in the first quarter in India driven by substantial stock replenishment, remains weak in major markets such as the United States and China, influenced by high interest rates despite the lifting of pandemic restrictions. Throughout the year, PVC prices remain in a consolidating pattern due to subdued demand limiting upward movement and cost support preventing significant declines. In 2024, global PVC capacity is projected to increase by approximately 1.02 million tons, with a growth rate of 1.6%, reaching a total capacity of 64.98 million tons. China contributes an additional 600,000 tons of capacity, and the United States adds 380,000 tons. PVC demand is estimated to grow by 3.6% to reach 49.56 million tons in 2024, driven by the recovery of demand in major markets such as China and the United States, as well as significant growth in India. Expectations are for stable growth in PVC demand in 2024.

• (2) Caustic Soda: In the first half of 2023, as China controlled coal prices, Chlor-Alkali plants benefited from low coal prices and maintained at high operating rate. In addition, new capacity (such as Fujian Southeast Electrochemical, Guangxi Huayi and Fujian Huanyang total 720,000 dry tons/year) was started operation and the liquid caustic soda contract exported from Japan to India has not yet come into effect due to unsatisfactory freight rates. Japanese manufacturers can only resell elsewhere, resulting in fierce market competition. However, downstream domestic demand in various countries are affected by rising interest rates in the United States and global inflation. Alcoa’s Kwinana alumina plant in Western Australia (capacity: 2,200 KMT/Y),due to supply problems from local natural gas manufacturers, production was reduced by 30%, which affected caustic soda demand and caused market surplus. In the second half of the year, due to the poor pulp market and severe inflation in North America, local demand

184

was impacted, causing the United States to seek export with lower price. The price was even lower than the Asian export market. Later, with the intensive maintenance in China and the Hangzhou Asian Games (9/23~10/8) affected the transportation of liquid chlorine, caustic soda operation was reduced, and prices rose temporarily. With the end of maintenance and the traditional off-season, the market returned to surplus. In 2024, due to the poor global economic outlook, the recovery of demand for caustic soda main downstream industries such as textiles, alumina, electronics and petrochemicals is weak. In addition, 2.8 million dry tons/year of new capacity has been coming from mainland China. It is expected that the market surplus will continue. Prices are fluctuating at a low level. However, international coal prices are expected to gradually decline due to the rapid development of electric vehicles, global pressure to reduce carbon emissions, and downstream power plants such as cement and petrochemicals reduced electricity consumption due to reduced operations .Coal prices are expected to gradually decline, which will benefit the operation cost.

• (3) Acrylic esters (AE): In 2023, due to destocking and weak mainland China economic performance, East Asia demand is sidelined and not as expected. However, India is benefited from controlled inflation and rebounding demand. With the strong economic growth, India real estate and painting demands are stimulated, and AE import demands increase as well. In 2024, we will take advantage of Indian BIS certificate and interest-cut chance to expand the business in India, US and other regions. With painting peak season coming, it’s estimated market sentiment will be improved and with better margin.

• (4) Super Absorbent Polymer (SAP): In the first half of 2023, customers continued to destock SAP and only purchased on demand. Coupled with the poor demand in mainland China in whole 2023, severe oversupply, pushed peers in China competing for export orders at low prices to increase operating rate. Since the division made early arrangements at the end of 2022 and secured orders from American contract customers with better unit prices, it was able to maintain full production and full sales in 2023. Affected by the Red Sea crisis in the first quarter of 2024, transportation time was lengthened and costs increased significantly. It is expected that the situation will gradually improve in the second

185

quarter.

• (5) N-butanol (NBA): NBA is mainly used in various resins and solvents such as butyl acrylate (BA), butyl acetate and ethylene glycol butyl ether. In 2023, global economic growth slowed down and geopolitical tension, China economic performance is not as expected and resulted in poor demand for the coating and adhesive tape industry. With China loosening housing restriction and stabilizing economy, it is expected to drive the overall market demand. We will give its priority to the supply of NBA to AE plant, and strengthen the advantages from vertical integration. At the same time, the Company will expand China, East Asia and South Asia market, and develop n-butyraldehyde and isobutyraldehyde potential customers.

• (6) Polyethylene (PE): Due to the impact of the Israeli-Palestinian conflict, the Russia-Ukraine war, and global inflation, the global demand for PE in 2023 grew by only 1.4%. According to CMA’s estimation, in 2024, with global inflation easing and the interest rate hike cycle approaching its end, PE demand is forecasted to increase by 3.0% to 121.9 million tons. However, the total capacity of global PE is forecasted to increase by 2.2% to 150.77 million tons, resulting in an oversupply of 28.87 million tons. In 2024, the PE capacity in China will increase by 7.5% to 35.63 million tons; on the other hand, the PE demand in China will be 44.08 million tons. It said that China still needs to import 8.45 million tons to satisfy the demand, which is the major PE importer in the world. The Company is favorable to consolidate the China market with geographical advantage. However, the protracted war between Russia and Ukraine supported the high price of crude oil and ethylene, which pushed up the cost of PE and made the market competition fierce. In terms of the Ethylene Vinyl Acetate (EVA), the increased demand for solar encapsulation film in China in 2023 supported the price of EVA. Looking forward to the year 2024, China still needs to rely on a large amount of EVA from import. In addition, the demand of solar energy and shoe materials in China are growing steadily. It is anticipated that the Company's sales will remain steady in response to these market dynamics. However, China is forecasted to increase new EVA capacity with 0.45 million tons, an increase of 18.4%, in 2024. With the growing market supply, competition is anticipated to intensify.

186

• (7) Acrylonitrile (AN): In the first quarter of the year 2023, Dongfang Petrochemical (200,000 tons/year) and Jihua Group Jieyang (130,000 tons/year) in China successively commenced production, leading to an oversupply situation in the market and increased pressure, causing a decline in Acrylonitrile (AN) prices. Starting from the second quarter, despite the maintenance shutdowns of major production plants in mainland China, Japan, South Korea, and others, the global economic recovery fell short of expectations, resulting in a significant reduction in AN demand and a deepening price decline. In the third quarter, coinciding with the traditional off-season for acrylic fibers, market transactions slowed down, and the AN market further declined. In the fourth quarter, due to multiple AN manufacturers scheduling maintenance and delaying restarts, coupled with the sustained strength in raw material prices, the market trend experienced an upward push. Looking ahead to the year 2024, mainland China continues to introduce new AN production capacity, leading to a more abundant supply. It is anticipated that the AN market will continue to face downward pressure in the first half of the year, exhibiting a weak performance. However, in the third to fourth quarters, with the successive production start-ups of new Acrylonitrile-Butadiene-Styrene (ABS) plants downstream in mainland China, there is an expected increase in demand, providing potential support for a halt in the decline and a rebound in AN prices.

• (8) Methyl methacrylate (MMA): In the first quarter of the year 2023, Dongfang Petrochemical (70,000 tons/year) and Jihua Group Jieyang (50,000 tons/year) in China successively increased production capacity. However, following the end of the Chinese New Year holiday, the resumption of work by downstream operators did not meet expectations, contributing to a decline in the Methyl Methacrylate (MMA) market. In the second quarter, several factories planned both scheduled and unscheduled shutdowns. Additionally, as European MMA supply gaps needed to be filled by Asian imports, the MMA market experienced a reversal and an upward trend. In the latter half of the year, despite many MMA production plants implementing reduced operating rates due to facing losses, the decrease in supply still fell short of the contraction in downstream demand, leading to a decline in the MMA market. Looking ahead to the year 2024, China continues to introduce new MMA production capacity, and the market is expected to undergo a period of consolidation at lower levels in the first half of the year. In the latter half

187

of the year, benefiting from downstream products entering the traditional peak demand season, the MMA market is expected to rebound and recover.

• (9) Epichlorohydrin (ECH): At the beginning of the year 2023, due to persistent losses, Epichlorohydrin (ECH) suppliers in Japan, South Korea, Taiwan, and other regions insisted on raising prices. However, with poor end-user demand, downstream operators strongly resisted, resulting in a slight increase in the ECH market in February. Subsequently, as the Chinese mainland economy showed no signs of improvement and new plants such as Zhejiang Juhua (100,000 tons/year), Hubei Mintian Chemical (60,000 tons/year), and Fujian Huanyang (100,000 tons/year) successively began production, the increased supply led to a decline in the ECH market season by season. Looking ahead to the year 2024, given the unprofitable nature of ECH products and the absence of further downward space in the market, as many production plants have adjusted their capacity utilization rates and implemented production cuts to maintain prices, the ECH market may have the opportunity for a rebound if demand stabilizes and recovers.

• (10)Polypropylene (PP): (10) In 2023, Taiwan's three PP manufacturers (FPC, FCFC, and LCY) produced a total of 960 thousand tons. PP demand in Taiwan is about 520 thousand tons. Comparing with the output, the PP market is obviously oversupplied. Meanwhile, PP import volume about 150 thousand tons further intensified the competition. PP export are about 600 thousand tons, accounted for 63% of total output, mainly sold to China, South Asia, Southeast Asia, the US, and the rest to Middle East, Africa and other European countries. Although the economic recovery in China is not as good as expected, it is still the world's largest consumer of PP, with a demand of 36.23 million tons in 2022, of which 3.85 million tons depended on imports. Looking forward to 2024, due to global overcapacity and fierce market competition, FPC will continue to develop PP materials for medical use, expand the sales of differentiated products with better profits, and diversify sales into markets such as South Asia, Southeast Asia, and Central and South America.

188

1. The links between the upstream, midstream, and downstream of industry: The links of products of the Company with the upstream, midstream, and downstream of industry.

==> picture [455 x 469] intentionally omitted <==

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

Basic Raw Intermediate Plastics Chemical Processing
Materials Monomer Fiber Materials Applications
Salt Caustic Soda Aluminum Refinement, Paper Production,
Bleach, Neutralizing Agent, Dyes
LPG
Chlorine
Plastic Cloth, Hard Pipes, Bricks,
Gasoline EDC VCM PVC
Electrical Insulation, Blood Bag
Water tank, Food wrap,
LLDPE
Heavy duty sack
Naphtha Ethylene
Cap, Bottle, Chemical tank,
HDPE
Pressure pipe
Athletic shoe, Wire and Cable,
VAM EVA
Solar cell encapsulant film
Crude Oil BBR
MTBE Gasoline Additives
Woven Bags, Corrugated Boards,
Kerosine PP
Automotive Fiber Parts, Stretch Film
Aircraft Structure Materials, Mechanical
Diesel AN Carbon Fiber Arms, Wind Turbine Blades, Athletic
Equipment
Home Appliances, IT Products, Helmets,
Fuel Oil ABS
Briefcases, Automotive Parts
HCN
Lubricate Oil Propylene
LCD Guiding Plates, Advertisement
Asphalt MMA PMMA Billboards, LED TVs, Automotive Light
Covers
Synthetic Fibers, Resins, Adhesives,
NBA AE
Emulsion Paints
AA SAP Sanitary Products, Diapers
ECH Epoxy CCL Printed Circuit Boards (PCB)
----- End of picture text -----

189

5.1.3 Research and Development (R&D)

1. R&D expenditures (including R&D and improvement):

Unit: NTD thousands

		Unit: NTD thousands
Year	2023	2024(Estimated)
Amount	2,807,864	3,032,000

1. Technologies or products successfully develop Unit: NTD thousands

Items	R&D product project	R&D expenditures	R&D completion date	Explanation
1	Development and production of bimodal micro-suspension PR-N for foam application	950	2023/9	Novel micro- suspension porcess is utilized to produce micro-suspension products with bimodal particle size distribution. This process improves the fusion speed and foaming properties of the products, resulting in finer and more uniform foaming pores.
2	Development of silicone modifier K-211 for impact-resistant pipes	1,000	2023/4	Formosa Plastics has developed silicone- type impact modifier K-211, which has high impact resistance and good weather resistance. It has been successfully used in Nanya's high-value products of impact- resistant pipes, achieving vertical integration of upstream and downstream and increasing corporate profits.
3	Activated carbon adsorption/regeneration technologyis applied to	1,000	2023/6	Self-made fully automated activated carbon

190

Items	R&D product project	R&D expenditures	R&D completion date	Explanation
	MBS process gas			adsorption/regeneratio n equipment treats MBS process exhaust gas to reduce waste generation and protect the environment.
4	CNF application development in solder paste	1,000	2023/6	To uset CNF as the third phase additive of solder paste can refine the solder paste grains and improve the mechanical properties of the solderpaste.
5	The study of reducing dispersant dosage in suspension polymerization	600	2023/12	By developing high- performance suspension agent, the amount of dispersants used in the suspension polymerization process can be reduced, which results in both lower raw material costs, and an improved PVC resin quality, such as whiteness and bulk density. Based on these advantages, the competitiveness of FPC's products can be enhanced.
6	Increased production capacity of acrylic processing aids	1,000	2023/5	By increasing the solid content of the latex and productivity, the fixed costs can be reduced. Due to the electricity, water, gas can be saved, arranging the topic of reducing carbon emissions and carbon credits in advance.

191

Items	R&D product project	R&D expenditures	R&D completion date	Explanation
7	high tensile strength and intermediate modulus TC880 carbon fiber	517	2023/12	It is suitable for aerospace and advanced sports equipment.
8	New SAP with fast absorption rate	4,500	2023/12	It is applied to baby diapers with fast absorption rate.
9	Nano fiber applied to SAP surfacetreatment process	1,500	2023/12	New SAP surface treatment technique with Nano fiber could make diaper more permeable.
10	New SAP for adult incontinence	3,200	2023/12	To develop a new SAP with good urine absorption capability and permeability sold matched the customers' need.
11	New environmental- friendly SAP	6,400	2023/12	It is a biomass-balabce and environmentally friendly product for diaperproduction.
12	Decomposable PE film grade	10,000	2023/12	It is applied decomposable PE film material.
13	HDPE PCR recycled grade	10,000	2023/12	It is applied to products containing recycled materials.
14	High machanical strength EVA for wire and cable	45,00	2023/12	It is applied for high mechanical property and low smoke halogen free wire and cable application.
15	EVA for fully recycled physical foaming (EF- EVA)	20,000	2023/12	It is applied to shoe material for physical foaming.
16	Post-consumer recycled PP	2,820	2023/12	It is applied to recycled plastic woven bags and housewares.
17	Monomaterial PP gown	1,440	2023/10	It is applied to surgical gown and food processingclothing.

192

Items	R&D product project	R&D expenditures	R&D completion date	Explanation
18	Raw materials for biodegradable PP straws and water bottles	1,480	2023/8	It is applied to naturally biodegradable products, such as water bottles and straws.
19	High flow, high impact and high modulus PP for automotive	1,450	2023/11	It is applied to automotive interior parts and the high-end appliance skins.
20	high flow and shrink- stable thin-wall injection PP	1,200	2023/10	It is applied to large storage boxes.
21	low-temperature and high impact transparent PP	2,400	2023/9	It is applied to syringe, food containers and housewares.
22	High purity calcium carbonate	9,500	2023/3	It is applied to the electronic ceramic.

1. The Company attaches great importance to R&D, and constantly focus on new product development, technology of production improvement, technology of management improvement, process improvement, energy conservation, pollution prevention, industrial safety and hygiene research to ensure operational safety, pollution prevention and energy conservation work well and increase productivity. In recent years, it has been effective on improving product productivity and added value. As of 2023, the developed products are as follows:

Division

Developed Products

Plastics Division

impact modifier, lubrication type processing aid, PVC rasin for electronic transparent industrial board, PVC resin for high transparent rigid sheet, paste resin PR-L for foaming product, new process processing aid, high transparent paste resin PR-G, PVC with ultra-high degree of polymerization, antifouling agent for PVC polymerization, pseudo-plastic paste resin PR-700, high molecular weight paste resin PR-1060 with abrasion resistance grade, impact modifier for engineering plastics, low odor PVC for car interior, electrolyte for low-temperature start lithium battery of vehicles, electrolyte for high-capacity lithium battery of electric bus, ultra-high molecular weight processing aid, high molecular weight paste resin, low melting viscosity S-57 PVC resin for pipe fittings, foaming grade PVCpowder for buildingmaterials,matte PVCpowder,high

193

Division	Developed Products
	insulation PVC for wire and cable, PVC resin S-58 with low degree of polymerization, MASS PVC for CPVC process, fast gelation type processing aid P-251, ultra-high efficiency lubrication type processing aid P-1000, electrolyte for low-temperature power battery, PVC for car interior, low fogging paste resin PR-1500 for automotive interior parts, weather resistant impact modifier A-607, copolymer C-15R, reduce plate-out processing aid P-220, VC-VAc copolymer paste resin for underbody coatings, special PVC B65G for CPVC process with gas- solid phase method, PVC S-50 with ultra-low degree of polymerization, low odor PVC S-60M, semi-solid electrolyte of lithium ion battery, electrolyte with function of high temperature and long life for lithium battery of vehicle, low melting viscosity PVC resin S-57 for injection fitting, PVC emulsion PR-900G for medical gloves, bacterial cellulose composite membrane, processing aid P-701, high bulk density B-62S, eco-friendly paste resin for PVC foam, high transparence impact modifier M-45, electrolyte for 48V starter battery, dye-sensitized cell (DSC), cellulose nanofiber (CNF), transparence weatherability modifier, aerogel powder, EPVC granular products, E- 622 -MBS impact modifier for engineering plastics,development and production of bimodal micro-suspension PR-N for foam application,development of Silicone impact modifier K-211 for impact-resistant pipes, ,activated carbon adsorption/regeneration technology is applied to MBS process gas,CNF application development in solder paste,the study of reducing dispersant dosage in suspension polymerization,increased production capacity of acrylic processingaids
Tairylan Division	aerospace carbon fiber, large tow carbon fiber, middle modulus carbon fiber, carbon fibers for electric cable, high modulus carbon fiber, carbon safety shoes, carbon fiber for high pressure vessel, high tensile strength and intermediate modulus TC880 carbon fiber, New SAP process, New SAP with fast absorption rate, Nano fiber applied to SAP surfacetreatment process, New SAP for adult incontinence, New environmental-friendlySAP
Polyolefin Division	coated steel pipe grade HDPE, wire & cable grade HDPE, PE100 pipe grade HDPE, black PE100 pipe grade HDPE, large chemical tanks grade HDPE, small fuel tanks grade HDPE, pressure pipe grade HDPE, super thinness bag grade HDPE, high strength injection grade HDPE, monofilament grade HDPE, injection blow molding grade HDPE, flame-retarding grade HDPE, high cleanliness for electronic grade tank HDPE, high MI for light bottle grade HDPE, high barrier gas injection cap grade HDPE, PERT heat resistant pipe grade HDPE, special low- sagging grade HDPE, injection and compression molding grade HDPE, heat resistance fiber grade HDPE, high SCG (slow crack growth) pipe grade HDPE,HDPE high weatheringresistantgrade for floatingsolar

194

Division	Developed Products
	platform application, HDPE FM underground firefighting pipe grade, high impact resistance IBC grade HDPE, HDPE cap grade for carbonate beverage, seabed cable sheath HDPE pipe grade for the wind power, 5G wire and cable foam HDPE grade material, Black compound for injection-moulded pressure fittings 8001IM, HDPE cap grade for carbonate beverage, yarn grade HDPE 8009L, HDPE cap & closure grade 8020L/8040L , HDPE injection grade 8050L, HDPE fiber grade 7200FL, chemically foaming wire and cable grade, fruit bag grade LLDPE, high MI injection grade LLDPE, weatherability rotation molding grade LLDPE, LLDPE high-fluidity injection-grade powder, LLDPE fiber grade, LLDPE cable sheath material grade, Type I polyehtylene resistant to temperature, Medium density fiber grade, LLDPE high fluidity fiber grade, Decomposable PE film grade, LSFH for wire & cable grade EVA, high MI for hot melt grade EVA, powder coated grade EVA, lamination grade EVA, hot melt grade EVA, high VA content and low MI grade EVA, encapsulate film for silicon solar cell grade EVA, high strength EVA elastomer, super critical foaming grade EVA, white color EVA encapsulate film grade, High machanical strength EVA for wire and cable, EVA for fully recycled physical foaming (EF-EVA)
Polypropylene Division	high heat resistance blow bottle grade PP, PP for aluminum metallized homopolymer CPP grade, high crystal impact copolymer grade PP, PP for washing-machine, high stiffness and high fluidity homopolymer grade PP, PP for PPR pipe, good luster and low whiteness impact copolymer grade PP, high heat resistance electrical appliances grade PP, high stiffness impact copolymer grade PP, PP for high heat resistance BOPP, PP for aluminum metallized BOPP, high fluidity homopolymer injection grade PP, PP for bottle cap, PP for low heat seal layer for aluminum metallized CPP film, Lamination grade PP, high stiffness thin walled injection molding grade PP, low migration and transparent pharmaceutical grade PP, PP for low heat seal layer CPP, anti-whitening injection grade PP for luggage base, PP for ultra-high transparent sheet, PP for pressure forming cup, PP for shrink film, PP for IV bag,PP for contact lens mold grade, PP for low MI high stiffness impact sheet, high melt strength PP, high fluidity grade PP for PP filter, super high fluidity melt-blown grade PP, anti-gamma ray pharmaceutical grade PP, lithium battery PP separator film for Lithium battery, extrusion grade POM, low mold deposit POM, high liquidity, low odor and excellent transparency grade PP, high liquidity and low- temperature impact resistance transparent grade PP, high liquidity and high impact PP copolymer, special PP grade of high-standard and general-purpose car battery casing, high anti-scratch PP, PP for high heat resistance retort CPP film, PP for aluminum laminated CPP film, polypropylene resin for expandedpolypropylene(EPP)foam,

195

Division	Developed Products
	polypropylene resin for medicine container, PP for antibacterial luggage, anti-γ-ray homo PP for medical grade, high impact strength and high crystallinity PP, melt-blown PP for medical mask grade, impact PP copolymer for optical protective film grade, PP microfiber grade, anti-bacterial oyster shell powder PP,High toughness and flexible POM buckle for machine sewing,Highly transparent, anti- fouling and anti-bacterial medical PP consumables, Heat resistant PP homopolymer with high crystallinity, stiffness and fluidity,Super high fluidity impact PP copolymer, post-consumer recycled PP, monomaterial PP gown, raw materials for biodegradable PP straws and PP water bottles, high-impact and high-modulus PP for automotive and mobility, high flow and shrink-stable thin-wall injection PP, low- temperature and high impact transparent PP
Carbide Division	food additive calcium oxide, calcium carbonate for fine paper coating, calcium carbonate for high opacity paint, calcium carbonate for automotive underbody coating, calcium carbonate masterbatch for food packaging, high concentration and low gel white masterbatch, PET functional masterbatch, anti-bacterial oyster shell powder, matting agent with high haze, PBAT-based white masterbatch and calcium carbonate masterbatch,highpuritycalcium carbonate

196

5.1.4 Long-term and Short-term Business Development Plans

1. PVC: In the short term, FPC has obtained the PVC certification from the Bureau of Indian Standards, actively solidifying its presence in the Indian market. Looking at the long term, FPC aims to maintain stability in markets such as India, Vietnam, Australia, New Zealand, and actively explore opportunities in the Middle East, Europe, and remote markets. FPC continues to enhance customer relationships, promote the featured products, and adjust sales strategies based on the seasonal demands of different regions to diversify risks and pays attention to the global economy in the post-pandemic era.

2. Caustic Soda: In the short term, the market situation for caustic soda and PVC remains unfavorable. The cost of coal power generation is still higher than before the Russia-Ukraine conflict, resulting in losses in merger benefits. We plan to adjust our production and sales plan according to changes in costs and selling prices. Considering the poor economic environment, we continue to extend new contracts with customers in Western U.S. and Australia to stabilize caustic soda sales. We also plan to explore opportunities to expand into the Indonesian nickel mining and Western Australian lithium industry markets. In the long term, we will align with the expansion plans of TSMC’s semiconductor fabrication plants. In addition to maintaining sales at the Southern Science Park, we will expand sales to the Kaohsiung Park, and Hsinchu Park. Furthermore, we will actively compete for domestic public tender and replace imported sources to increase our domestic market share and maximize profits.

3. Acrylic esters (AE): In the short term, the Company allocates acrylic acid to increase downstream AE operation rate and fully meet domestic painting and adhesive industries demand. In the long term, the Company will continue to develop the export market and solidify long term customers in near-sea Asia regions and India, and also grasp the chance after global destocking and interest rate cut, to get higher margin order in Europe and the US.

4. Super absorbent polymer (SAP): In the short term, the company will keep strengthening cooperation with major regional manufacturers and expand sales to new customers in various regions to diversify market risks. In the long term, the Company will further strengthen cooperation with major international manufacturers to stabilize sales and avoid low-price

197

competition. In addition, in response to the needs of aging and environmental protection, we develop antibacterial, deodorizing and biodegradable specifications to potential customers from advanced countries, such as Europe and the United States.

1. N-butanol (NBA): In the short term, the Company supplies to Taiwan and Ningbo AE plants for captive use of butyl acrylate (BA) production, and also fully meets the needs of domestic customers. In the long term, we will cooperate with BA item to expand market sales, increase the proportion of self-use, and find out the stable customers from Mainland China and South Korea to maintain full production and full sales.

2. Polyethylene (PE): In the short term, the Company’s domestic marketing strategy is to import low-cost feedstock PE product from Formosa Industries Corporation and sales with the Company’s products to improve the share of the domestic market. Besides, the Company will continue to develop customized product to differentiate from the peers. Taking the advantage of the faster delivery and supplying the resins constantly could enhance our competitiveness. In addition, the Company is collaborating with domestic green energy industry, solar floating platform, and offshore wind turbine operators, striving to secure orders for blow-molding, pipe and cable sheath grades, to enhance the domestic market share. On the exporting side, the Company will continue to focus on the developing of the high value-added products and avoiding the pricing competition with Middle East and American supplier’s general film grades materials in China market. In terms of EVA, the Company has been working on the integration of three EVA lines in Ningbo and Mailiao. Aside from increasing the sales volume of existing high VA foam grade products, the Company is expanding on the niche products such as photovoltaic grade, melt adhesive grade, wire and cable grade. In the long term, the Company is focused on preventing overreliance on a single market, aiming to diversify its risks. In light of the the continuous expanding capacity in China, coupled with the challenges by low-cost competition from Middle Eastern and American materials and regional tariff barriers. The Company actively seeks to expand sales into regions with zero or lower tariff obstacles. This strategic approach involves diversifying into potential markets in Southeast Asia, South Asia, Africa, and Central and South America, ensuring a steady and robust growth in sales.

3. Acrylonitrile (AN): In the short term, the Company will meet the internal

198

demand from FPG group first. In the long term, the Company will strive for the contract supply opportunity of domestic and export orders, and increase the proportion of export contract sales, and expand orders in South Asia and European markets.

1. Methyl methacrylate (MMA): In the short term, the Company will increase its sales on higher margin domestic customers. In the long term, the Company will adjust its client portfolio based on clients’ profitability profile in the domestic and oversea.

2. Epichlorohydrin (ECH): In the short term, the Company will meet the internal demand from Nanya Plastics Corporation first. In the long term, the Company will strive for the supply opportunity for domestic Epoxy customers, and maintain stable trading relationships with European and American customers.

3. Polypropylene (PP): In the short term, use "process advantages" to expand high value-added products and increase the proportion of more profitable products (such as medical materials, home appliances, high melt index, etc.) to avoid competing with low-priced products from the Middle East. In the long term, as new production capacity in China continues to be put into operation, in addition to strengthening and stabilizing existing customers and markets, we will continue to expand the sales of differentiated products, cooperate with customers to develop new products, increase market competitiveness, and continue to expand into South Asia, Southeast Asia, and Central and South America. and other regions, diversify the sources of market orders to avoid excessive concentration in a single market, and at the same time strengthen the collection of market information to respond to changes in market conditions.

199

1. Sales regions and market share for major products Unit: MT；NTD thousands		Export location		China, India, Australia, Vietnam	U.S.A., Canada, Australia	China	China, Belgium, U.S.A.	Turkey, China, Mexico	China, Korea, India	China, Vietnam, Bangladesh	China, Vietnam, Indonesia	China, Vietnam, Bangladesh	China, Korea, Malaysia	No export	China, Vietnam, Philippines	China, India	China	Note: This table does not contain internal transfer. (Consolidation basis, domestic sales refer to Taiwan, and export sales refers to all deductions from Taiwan)
	2023	Export	％	82	47	100	78	98	72	51	98	83	60	-	54	2	80
			Amount	35,881,156	8,087,941	899,959	12,002,465	7,962,584	2,557,403	6,589,840	16,928,443	12,353,876	5,413,603	-	1,880,344	61,310	19,785,323
			Quantity	1,379,126	648,669	52,991	320,180	199,871	88,483	198,781	318,024	428,834	160,181	-	41,273	1,366	584,430
		Domestic	％	18	53	0	22	2	28	49	2	17	40	100	46	98	20
			Amount	7,661,398	9,013,540	367	3,450,734	137,188	974,720	6,416,308	383,824	2,511,299	3,644,314	3,428,340	1,616,792	2,719,694	4,830,100
			Quantity	287,221	477,153	13	88,640	3,819	31,768	171,823	6,756	72,028	91,312	121,266	36,073	73,914	132,698
	Year		Product	PVC	Caustic soda	VCM	AE	SAP	NBA	HDPE	EVA	LLDPE	AN	MTBE	MMA	ECH	PP

200

1. Market share of major products

PVC: 68 ％ Caustic soda: 66 ％ AE: 89 ％ Carbon fiber: 57% SAP: 72 ％ NBA: 95 ％ HDPE: 52 ％ EVA: 23 ％ LLDPE: 33 ％ AN: 45 ％ MMA: 41 ％ ECH: 65 ％ PP: 26 ％

1. Demand and supply conditions for the market in the future, the market’s growth potential, the Company’s competitive niche, positive and negative factors for future development, and the Company’s response to such factors: Please refer to Letter to Shareholders, 5.1.2 Industry Overview and 5.1.4 Long-term and Short-term Business Development Plans.

5.2.2 Main applications and production process of main products

1. PVC

 Main applications:

Sheet, film, pipe, insulation material, tile, vinyl record, paint, ink, toys, foaming article, blood bag, hemodialysis blood tumbling set.

• Production process:

VCM → distillation → main reactor → PVC slurry → drying → PVC silo → packing

1. Caustic Soda

2. Main applications:

paper production, textile, bleach, dyeing, water treatment, aluminum production, organic and inorganic chemistry.

• Production process:

industry salt → dissolution → crude brine → clarifier → pure

brine → electrolyzer → 32%caustic soda → evaporation → 50% caustic soda → tank → loading

201

3. AE

 Main applications:

synthetic fibers, fiber treatments, synthetic resins, emulsifier oil, solvent-base paints, paper finishes, adhesives, thermosetting industrial finishes.

 Production process:

• (a)propylene → oxidization reactor (by catalyst) → absorber → fractional distillation → crude acrylic acid

(b)crude acrylic acid, alcohols (e.g. methanol, ethanol, n-butanol, 2- ethylhexanol) → esterification reactor → fractional distillation → rectification → acrylic esters

4. Carbon fiber

• Main applications:

(a)aircraft (structural components, interior components).

• (b)industrial application: wind generators (blades), architecture reinforcement, automotive, yacht, roller, robotic arm, the fuel cell parts, oil well structure, cable core, high-pressure gas cylinders.

• (c)sporting goods: bicycle, tennis rackets, badminton rackets, golf club shafts, fishing rods, helmet, baseball bat

 Production process:

AE → polymerization → spinning → carbonization → carbon fiber

5. SAP

 Main applications:

baby diaper, adult diaper, sanitary napkin, pet sheet.

• Production process:

Acrylic acid (AA) + NaOH → neutralization → polymerization+cross

linker → dry → grinding → surface treatment → SAP

6. NBA

• Main applications:

butyl acrylate, butyl acetate, glycol ether.

• Production process:

Propylene, syn gas → hydroformylation → butyraldehyde → isolation → → and purification n-butyraldehyde hydrogenation and purification → NBA

202

7. HDPE

• Main applications:

shopping bags, garbage bags, salad oil bottles, milk bottles, labor boxes, ropes, file folders, fish net, woven bag, crate, beer boxes, toys.

• Production process:

→ polymerization reactor (HDPE slurry) centrifugation and drying

→ → (HDPE powder) pelletizing (HDPE particle) HDPE pellets

8. EVA

• Main applications:

greenhouse film, hot melt, foam sole, PEVA raincoat, shock absorber gasket, injection-articles, flexible items.

• Production process:

ethylene, vinyl acetate, peroxide → reaction → separation → extruder → EVA pellets

9. LLDPE

• Main applications:

duty sacks, agricultural film, light or medium duty film for shopping bag, crate, thin wall food container, greenhouse film, stretching film, overwrap film.

• Production process:

→ ethylene (monomer) + butene (co-monomer) + catalyst

polymerization → polyethylene powders → degassing → extrusion and → palletization LLDPE pellets

10. AN

• Main applications:

acrylic fiber, ABS/SAN resin, household appliances, car parts, stationery, helmet, luggage case, fitness equipment and nitrile butadiene rubber (NBR).

• Production process:

propylene and ammonia → reactors → quench columns → absorber columns → recovery column → purification column (AN product)

11. MMA

• Main applications:

PMMA plate and particles, MBS (Methyl methacrylate -Butadiene-

Styrene) resin, transparent ABS, adhesive, textile treatment, paint,

203

water-based overprint varnish.

• Production process:

• →

• acetone and hydrogen cyanide (HCN) reactors (to produce acetone cyanohydrin (ACH)) → amidation reactor → esterification (by →

• methanol) reactor purification column (MMA product)

12. ECH

• Main applications:

epoxy resin, plasticizer, polyamide-polyamine- epichlorohydrin (wet strength agent for papermaking, abbr. PPE), dyeing and finishing auxiliaries.

• Production process:

→ → propylene and chlorine reactors (to produce allyl chloride) → hypochlorous acid (HOCL) reactor saponification (by sodium → hydroxide) reactor purification column (ECH product)

13. PP

• Main applications:

automotive parts, bumpers, electric appliance parts, battery case, washing machine parts, general food & garment packaging case film, electrical appliances, housewares, pail, sports appliance, luggage base, high transparent container, woven bags, medical supplies, disposable syringes, medical mask.

• Production process:

propylene, ethylene, H2, catalyst → reactor → degas (solvent → → recovery) granulation package

5.2.3 Supply status of main materials

The Company conducts procurement operations through an internet electronic platform to ensure the fairness and justice of the procurement process and prevent procurement defects. The procurement cases are advertised on the internet, and the supplier submits quotes after confirming the identity with an electronic signature. This ensures the safety and fairness of the overall operation and shortens the time of procurement operations, as well as achieving a win-win situation between the Company and suppliers. At present, this electronic platform has more than 10,000 manufacturers involved in online quotation. The Company’s 2023 major raw materials usage status and suppliers are as follows:

204

Unit: NTD thousands

			Unit: NTD thousands
Major Raw Materials	Quantity (Metric Ton)	Amount	Main Supplier
Ethylene	1,929,678	50,565,339	Formosa Petrochemical Corp., CPC Corp., Taiwan, Mitsubishi Chemical Corp., Marubeni Corp., Formosa Plastics Corp. U.S.A., Apex Energy International Pte Ltd.
VCM	2,028,101	35,785,274	Self-supplied, Mitsubishi Chemical Corp., Marubeni Corp., Tosoh Corp., Hanwha Solutions Corp.,
EDC	1,424,249	9,784,053	Self-supplied
Salt	2,216,478	3,365,869	Mitsubishi Chemical Corp., Mitsui & Co.,Ltd., Marubeni Corp.,Sojitz Corp.
AN	256,591	9,736,861	Self-supplied
Propylene	1,456,442	40,120,768	Formosa Petrochemical Corp., CPC Corp., Taiwan, China Sinopec, China Jinshan Associated Trading Corp., Marubeni Corp., , Gammon International TradingLtd.
Coal Dust	1,080,372	5,622,906	Ecocarbon Limited, Suek Ag, Taiwan Branch, Wel-Hunt Materials Enterprise Co.,Ltd., Century Commodities Solution Pte. Ltd., Carbo One Limited, Lx International Corp., Kru Overseas Limited
Alcohol	358,642	8,705,267	Self-supplied, Sabic Asia Pacific Pte Ltd., Methanex Asia Pacific Ltd., Tianjin Red Triangle International Trading Co., Ltd., Jiangyin Goldenbridge Chemical Co. Ltd., Orient-Salt Chemicals (Shanghai) Co., Ltd., China Sinopec

205

5.2.4 The name, purchase (sale) amount, and ratio of the customers accounted for over 10% of the total purchase (sale) in one of the two most recent fiscal years, and the reason for the changes in purchase (sales) 1. List of major suppliers in the most recent two fiscal years Unit: NTD thousands					Net purchase amount 156,377,130 100.00 Net purchase amount 175,143,847 100.00 Explanation: The purchase amount in 2023 decreased compared to 2022 due to continuous interest rate hikes in Europe and the United States affecting consumer purchasing power. Additionally, China's economic recovery was below expectations, leading to a contraction in demand, which resulted in a decrease in our company's production and sales volume. Note 1: List the name of the suppliers with more than 10% of the total purchase amount, purchase amount, and purchase ratio in the two most recent fiscal years. Note 2: The listed companies or OTC companies shall disclose the financial information that audited or reviewed by a CPA as of the date of publication of the annual report. Note 3: Long-term equity investments under equity method. 2. Major clients: There is no client with ratio of the sales accounted for over 10% of the total sales in one of the most recent two fiscal years.
	2022	Relation with Issuer	Note 3
		%	44.87	55.13	100.00
		Amount	78,588,953	96,554,894	175,143,847
		Company Name	Formosa Petrochemical Corp.	Others	Net purchase amount
	2023	Relation with Issuer	Note 3
		%	42.25	57.75	100.00
		Amount	66,063,456	90,313,674	156,377,130
		Company Name	Formosa Petrochemical Corp.	Others	Net purchase amount
		Item	1	2

206

2022	Amount	64,940,468	64,940,468	32,184,601	13,645,621	13,905,056	16,149,954	22,028,757	7,934,014	6,783,910	9,179,237	3,126,760	2,966,309	3,817,792	28,230,088
	Quantity	1,606,843	1,593,709	1,586,535	363,587	287,184	454,637	556,131	191,589	224,295	197,613	131,163	62,007	85,822	731,928
	Capacity	1,777,000	1,700,000	1,644,000	566,000	340,000	664,000	680,000	200,000	250,000	280,000	174,000	98,000	100,000	996,000
2023	Amount	59,455,061		27,986,953	12,610,157	13,306,463	15,522,952	19,369,927	6,969,237	6,255,834	9,736,861	2,585,141	3,914,130	3,569,530	24,754,814
	Quantity	1,673,636	1,467,507	1,601,745	373,548	320,858	530,856	560,993	200,711	235,342	256,591	114,450	86,678	74,558	724,548
	Capacity	1,777,000	1,700,000	1,644,000	566,000	340,000	664,000	680,000	200,000	250,000	280,000	174,000	98,000	100,000	996,000
Year	Output Products	PVC	Caustic soda	VCM	HDPE	EVA	LLDPE	AE	SAP	NBA	AN	MTBE	MMA	ECH	PP

207

2022	Export	Amount	57,639,918	57,639,918	2,882,041	6,057,128	21,782,049	14,743,246	15,362,601	10,443,280	2,290,126	4,204,622	0	1,275,557	417,212	22,690,620	18,001,465	177,789,865
		Quantity	1,304,134	759,939	117,656	166,442	266,948	390,432	309,933	189,054	70,305	93,369	0	24,987	6,304	602,399
	Domestic	Amount	22,422,975		71,414	7,680,888	606,091	3,564,318	5,266,273	174,163	1,093,795	4,650,074	4,062,300	1,637,697	5,280,064	5,796,554	11,550,883	73,857,489
		Quantity	307,651	564,061	2,933	192,917	7,393	89,375	96,461	3,525	31,549	93,150	132,536	31,016	80,680	142,400
2023	Export	Amount	43,969,097		899,959	6,589,840	16,928,443	12,353,876	12,002,465	7,962,584	2,557,403	5,413,603		1,880,344	61,310	19,785,323	11,747,677	142,151,924
		Quantity	1,379,126	648,669	52,991	198,781	318,024	428,834	320,180	199,871	88,483	160,181		41,273	1,366	584,430
	Domestic	Amount	16,674,938		367	6,416,308	383,824	2,511,299	3,450,734	137,188	974,720	3,644,314	3,428,340	1,616,792	2,719,694	4,830,100	10,198,235	56,986,853
		Quantity	287,221	477,153	13	171,823	6,756	72,028	88,640	3,819	31,768	91,312	121,266	36,073	73,914	132,698
Year	Sales	Products	PVC	Caustic soda	VCM	HDPE	EVA	LLDPE	AE	SAP	NBA	AN	MTBE	MMA	ECH	PP	Others	Total

208

5.3 Employees

Employees are the most important asset of a company. The Company strives to ensure every employee can work safely and is willing to contribute his or her talent. To recruit talented employees, the Company offers stable and competitive salaries and benefits, comprehensive training, and promotion system so that every employee can fully utilize his or her talent under these basic conditions.

	Year	2022	2023	2024.3.31
Number of Employee	Executive and Management Level	1,570	1,592	1,572
	Supervisor Level	2,056	2,084	2,091
	Staff Level	3,811	3,729	3,712
	Total	7,437	7,405	7,375
Average Age		42.4	42.8	42.9
Average	Years of Service	16.7	17.1	17.2
Academy Ratio (％)	Ph.D.	0.55	0.51	0.50
	Masters	12.84	13.17	13.12
	Bachelor	14.48	14.39	14.31
	Senior High School	71.04	70.93	71.08
	Under Senior High	1.09	1.00	0.99

Note: The number of employees includes the consolidated financial reporting company.

209

5.4 Environmental Protection Expenditure

5.4.1 Total Losses and Penalties for Environmental Pollution

Unit: NTD thousands

Sanction Date	No.	Article	Violation	Sanction	Sanction
				Penalty	Others
2023.2.16	Environmental Protection Administration No. 1121011535	Article 17 of Environmental Impact Assessment Act	The Company does not comply with the environmental impact assessment commitments to keep the existing windbreak forest planting and maintain the surrounding natural environment around the sixth naphtha cracker industrial zone.	600	4 hours of environmental education training
2023.5.22	Environmental Protection Bureau Yunlin County Government, No. 1123605893	Article 20, Paragraph 1 of the Water Pollution Control Act	The Mailiao PVC plant has two wastewater collection tanks; however, the originally approved permit did not include these tank facilities.	36	2 hours of environmental education training
2023.6.5	Environmental Protection Bureau Yunlin County Government, No. 1120040493	Article 20, Paragraph 1 of the Air Pollution Control Act	The equipment components at the Mailiao LLDPE plant have a net detection value exceeding the standard of 10,000 ppm.	225	2 hours of environmental education training
2023.6.15	Environmental Protection Bureau Kaohsiung City Government, Air Pollution No. 11234254900	Article 20, Paragraph 1 of the Air Pollution Control Act	The odor pollution functional detection concentration value in the emission pipeline of the Linyuan acrylic ester plant exceeds the emission standard of 2,000 ppm.	195	2 hours of environmental education training
2023.6.21	Environmental Protection Bureau Yunlin County Government, No. 1120047339	Article 23, Paragraph 2 of the Air Pollution Control Act	The incident of the combustion tower at the Mailiao LLDPE plant was not reported to the local competent authority within one hour of occurrence.	150	2 hours of environmental education training

5.4.2 Future Countermeasures and Expected Expenditure:

1. In order to prevent industrial safety and environmental pollution incidents, it is planned to adopt countermeasures:

2. (1) Continue to promote intelligent security management.

210

• (2) Strengthen industry safety and health management.

• (3) Strengthen leadership and execution ability of leaders.

• (4) Promote employees to wear wristbands for life sensing and abnormal notification positioning systems.

• (5) Establish electronic fences in high-risk areas to prevent solo operations or failure to wear personal protective equipment as required.

• (6) Strengthen transportation safety management and joint accident prevention drills.

• (7) Continue to deepen process safety management (PSM) and hazard control practices.

• (8) Enhance risk identification in new and expanded projects to improve construction and operational safety.

• (9) Implement management of hazardous material storage and fire safety equipment.

• (10) Strengthen the functionality of the Southern Environmental Monitoring Center.

• (11) Arrange to set up air pollution monitoring system to quickly find the source of air pollution.

• (12) Strengthen the control of VOC equipment component leaks within the plant and promote component reduction.

• (13) Keep monitoring the plant air pollutants with FTIR.

• (14) Continue to promote strategy to reach the goal of carbon neutrality.

• (15) Strengthen the inspection of process pipelines.

• (16) Inspect of all hazardous fluid pipelines.

• (17) Control groundwater pollution.

• (18) Keep strengthening Volatile Organic Compounds (VOCs) emissions management.

• (19) Continue to promote zero discharge of wastewater.

• (20) Continue to promote noise improvement measures.

• (21) Update equipment pipeline.

• (22) Continue to promote ISO-14001 Environmental Management Systems, ISO-45001 Occupational Health and Safety Management Systems and Taiwan Occupational Safety & Health Management Systems (TOSHMS).

• At present, each pollution prevention measures of the Company has complied with the current national control standards. In order to achieve stricter control and in view of the gradual improvement of environmental quality requirements, the Company is constantly striving to reduce pollutant emission. The Company is expected to invest NTD 1,338,590 thousand to improve pollution prevention.

211

5.4.3 Summar of Environmental Im rovement Pro ect: y p j

Category	Category	Number of Project	Invested Amount (NTD thousands)
Completed	Soil	12	41,063
	Wastegas	42	1,101,976
	Wastewater	8	22,424
	Waste and noise	7	3,296
	Subtotal	69	1,168,759
Processing	Soil	1	715
	Wastegas	32	1,226,604
	Wastewater	7	91,453
	Waste and noise	1	19,818
	Subtotal	41	1,338,590
	Total	110	2,507,349

5.4.4 Environmental Protection Policy:

1. Safety and health environmental protection policy The Company convinced that both environmental protection and industrial development are equally important. Ensuring the safety of product, employees, contractors, plants and communities are not only a corporate social responsibility, but also a part of corporate competitiveness.

The Company believes that all disasters and accidents are preventable no matter how small it is. Through the values of the Company and the power of organization and system, the working level of each plant can reach to and acceptable standards. To achieve this goal, all supervisors must have appropriate participation and understanding of the system, provide adequate training and require thorough implementation and continuous improvement to ensure the policy and the goal are achieved.

All employees must constantly enhance their professional knowledge, and make all decisions by taking health and safety as prioritized concerns. Employees must thoroughly understand the spirit behind the health and safety system and carry out standards without compromise, in addition to holding the attitude of inquiring into the root of the matter and continuously making improvement by seeing themselves as a model employee.

Being self-disciplined, protecting the safety of colleagues, communities, and themselves always, keeping the natural environment clean, protecting corporate assets, and targeting effort at perpetual business operation – all

212

of these should be taken as necessary responsibilities by our employees.

1. Improvement of greenhouse gas reduction

2. The Company adheres to the business philosophy of both industrial development and environmental protection, and does a good job in environmental protection in the spirit of pursuing the roots. In order to fulfill the responsibility of the global village, the Company actively promoted greenhouse gas reduction and formed a greenhouse gas emission investigation team. At the end of 2005, the Company held the first and largest greenhouse gas inventory personnel training in Taiwan. The total of 309 people is responsible for checking the correctness of the greenhouse gas of plants under their jurisdiction, as a reference for greenhouse gas reduction strategies, in response to future domestic and international regulatory trends. In order to actively reduce greenhouse gas emissions, the Company carries out the following emission reduction measures for large emission sources such as petrochemical plants and HCFC plants:

3. (1) Energy saving: Improve the combustion efficiency of electrical power and combined heat and power plants, and improve the power transmission and distribution system.

4. (2) Process reduction: Improve greenhouse gas emission sources and reduce the consumption of raw materials per unit.

5. (3) Looking for alternatives: Strengthen the leakage control and recovery management of fluorochemicals (refrigerants, solvents) and seek alternatives that have a lower impact on the greenhouse effect.

The Company reviews the energy consumption targets year by year, sets up process improvement personnel, implements improvement projects and personal creative reward system, and sets the greenhouse gas emission control standard for per unit product. The improvement of material and energy consumption reduction is as follows:

Greenhouse gas reduction practices

Item	Category	Content
1	Review energy consumption targets year by year	Each plant reviews and sets energy consumption targets when preparing annual budget at each year, and compares the implementation results monthly. It also proposes project improvement and reporting on energy-specific issues.

213

Item	Category	Content
2	Set improvement project personnel atplants	Continue to improve to reduce materials and energyconsumption.
3	Award improvement project	Implement a reward system about project improvement, and reward NTD300 to 20,000 accordingto the improvement level.
4	Encourage personal creativity	Have implemented a reward system about IE improvement, and reward NTD300 to 20,000 accordingto the improvement level.
5	Set the greenhouse gas emission control standard for unit of each product	Understand the difference between the actual and baseline emissions of greenhouse gases at each plant, and improve the difference after review. The current implementation status is better than the international standards.

In order to comply with the operations of greenhouse gas inventory, reduction, internal audit and inventory report preparation, the Company promulgated and implemented the “Greenhouse Gas Inventory and Reduction Management Measures” in 2006. In addition, considering the long-term review of greenhouse gases, in order to save human operating time, ensure the correctness and consistency of the data, and improve the efficiency of the inventory operation, the Company also implements the “greenhouse gas inventory reduction computer operation” to computerize the manual form, which can directly obtain the statistical greenhouse gas emissions data and reduction performance from the computer to benefit comparison of emissions control.

1. Air pollution prevention and management measures

The Company has been actively improving in pollution prevention and control for a long time and has achieved good results and accumulated considerable experience in pollution prevention. Therefore, in order to do a good job in environmental protection, the Company continues to adopt the best process technology and comprehensive pollution prevention systems with long-term accumulated experience. The current pollution prevention effectiveness is not only better than national standards, but also meets the world’s best standards.

In order to accurately grasp the actual emission of air pollutants in the sixth naphtha cracker, the current implementation of the air pollution emission control operation in the Mailiao sixth naphtha cracker includes total

214

emission assessment, best available control technology (BACT) survey, pollution prevention technology research, plant maintenance dispatching plan, permitted total emission control, and total emission management.

In addition, the air pollution control of the plant includes environmental independent inspection in the plants, on-site inspection of equipment components, continuous emission monitoring systems (CEMS), chimney monitoring video of the whole plant, VOCs sampling analysis of storage tank and around each plant, air quality monitoring around the out of plants and weekly odor joint inspection. The Company is committed to maintaining the surrounding environment and work safety of the plant to avoid cost loss from leakage of raw materials or finished goods.

The Company installs continuous emission monitoring systems (CEMS) on large-scale emission sources, and performs 24-hour real-time monitoring through a distributed integrated electronic equipment and distributed control system (DCS). If an abnormality occurs, an alarm will be issued and it will be immediately addressed.

In order to strengthen the prevention of VOCs leakage, the Company builds a strict monitoring and control system, with 39 sets of forward-looking infrareds (FLIR) detectors to find out the source of leakage more quickly, which cannot easily be captured through the general camera, eyes, and portable VOCs detectors. By using a portable and easy-to-use forwardlooking infrared (FLIR) detector to scan, the source of leakage can be easily and clearly found, and it can be addressed immediately. The Company also purchased 14 sets of fourier transform infrared spectrometer (FTIR) to build a more comprehend plant air pollution protection network.

1. Water pollution prevention and management measures

2. In order to comply with the environmental regulations of and promote wastewater reduction operation, the Company eastablished the measures of water pollution prevention in accordance with government regulations are as follows:

3. (1) Implementation of wastewater source management

In order to implement wastewater source management, the Company have set up the operation control and monitoring management in the following terms:

• A. Collection and transportation facility about process wastewater.

• B. Collection and treatment facility about construction wastewater.

• C. Collection and transportation facility about Domestic sewage.

215

• D. Collection and transportation facility about another wastewater.

• E. Facility about Wastewater pre-treatment.

• F. Facility about water quality and quantity stabilization of

  • Wastewater source facility.

• (2) Relevant regulations for wastewater treatment processes:

• A. Scopes of regulation for plans of setting treatment facility and emission permit include a. plan for setting department b. wastewater treatment facility setting c. wastewater discharge permit.

• B. Scopes of regulation for operation management of wastewater treatment facility include a. wastewater treatment operation b. wastewater discharge operation c. wastewater treatment records and inputs d. wastewater treatment daily reports e. wastewater treatment periodic declaration f. wastewater treatment function evaluation analysis g. legal abnormal report.

• C. Scopes of regulation for wastewater treatment cost management include a. scope of cost b. wastewater cost center setting c. cost comparison unit setting d. wastewater cost item setting e. cost distribution f. wastewater treatment pricing g. cost summary review.

• D. Scopes of regulation for rainwater collection and discharge management include a. collection, transportation and pre-treatment facilities: report for rainwater collection and discharge facilities at the plant, rainwater discharge systems in public areas, and rainwater discharge hatch. b. management measures: regulation of rainwater discharge hatch, rainwater collection and discharge at plants, and inspection, maintenance and operation of rainwater drainage channels and gates in public areas.

• E. Scopes of wastewater and rainwater supervision (inspection) measurement management include a. wastewater discharge automatically monitors b. wastewater and rainwater discharge detection.

• (3) The regulation of wastewater reduction is as follows:

• A. Set the wastewater standard for unit of each product.

• B. Review and improve wastewater reduction.

216

(4) Supervision and inspection operations include:

• A. Supervision

• B. Inspection

• C. Audit

• D. Abnormal reaction and treatment

5. Waste management measures

In order to achieve sustainable use of resources and control the cost of waste disposal, the Company’s management of waste is mainly based on process waste reduction, and secondly, it is considered to be properly handled by the outside party, while the order of subcontracting treatment is given priority to reuse, followed by incineration and landfill. The management measures related to the classification, storage, and removal of wastes of the company are as follows:

(1) Classification and storage after waste production:

In imply with regulations of waste and waste removal and treatment, reclassified general waste, process waste and engineering waste should be stored in a collection tank (bag) or appropriate container which should be keep intact, no dirt, rust, leaks or irregularities. In addition, according to regulations, the waste storage place should be equipped with waterproof (rain) facilities, control facilities and signs of wastewater and odor.

(2) Waste removal and disposal operations:

To ensure that all business waste is legally reused or cleaned, the Company has established a waste management computer system including:

• A. Database of clean-up vendor to manage environmental information of waste contractor.

• B. Online reporting management operations to ensure that waste shipped from the plants have completed reporting.

• C. Clean-up plan management to ensure that the waste items and quantity of the plant meet the declaration information.

In addition, in order to grasp the flow of waste, the Company requires the contractor to cooperate with the network declaration, set the clearing flow tracking operation requirements, require on-site personnel to track the vehicle from time to time, and also require the waste manufacturers should attach a legal online triple list and proper documents when they

217

bill the waste cleaning fees to avoid pollution caused by illegal cleaning of waste.

• (3) Waste treatment performance management: Each department of the Company has set three standards: A. waste clearance standard B. waste outsourcing cost standard C. waste selfprocessing standard. Each department will review and improve that exceeding the control standard monthly.

• 5.4.5 Impact of the implementation of the European Union’s Restriction of Hazardous Substances (RoHS) on the financial operations of the Company: The Company’s products sold in Europe are not subject to RoHS regulations, so there is no impact on the Company’s business.

218

5.5 Labor Relations

• 5.5.1 Any employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees’ rights and interests:

• Employee benefit plans: the Company’s employee benefit plans to promote a balance in work, health and life are as follows:

• (1) The Company’s Employee Welfare Committee established in accordance with the “Employee Welfare Fund Act”, “ Organization Regulations on Employee Welfare Committee” and other regulations, appropriates employee welfare funds for handling welfare businesses for employees including welfare club, staff restaurants, barber shop, laundry department, catering departments, library, sports facilities, movie appreciation, holiday welfare products, birthday gifts, travel grants, group insurance, life lectures, jogging and hiking activities, etc.

• (2) Regulations on year-end bonuses and remuneration.

• (3) Regulations on attendance management: According to Labor Standards Act, set up regulations on regular leave day and holiday and overtime pay standard.

• (4) Regulations on salary: standardize the principles of employees’ payroll and salary adjustment

• (5) Regulations on consolation payment.

• (6) Regulations on marriage subsidies and funeral gifts.

• (7) Regulations on preferential treatment of Chang Gung Hospital for employees and their dependants.

• (8) Labor insurance and national health insurance.

• (9) Occupational Safety and Health Act and Labor Health Protection Rules: Each plant has a medical office, employs doctors and full-time nurses and regularly conduct health checkups for employees according to law.

• (10) Regulations on operating clothing and safety shoes provided.

• (11) Regulations on dorm (including single and dependants).

• (12) Regulations on stock ownership reward for employee.

• (13) Departmental funds and year-end meal subsidies.

• (14) Hospital condolences, senior staff commemorating gold coins and praise.

• (15) Counselling and legal advisory services.

219

• (16) Regulations on improvement proposal incentives: Set up an IE proposal bonus to encourage employees to discover abnormalities in their work, envisage a good improvement plan to improve the Company’s performance. The Company will reward the employee whose proposal adopted depending on the improving effect and period.

• (17) Regulations on innovative platform management: Set up an innovation platform website for employees to discuss professional issues and give appropriate rewards to those who provide good ideas for innovation.

• (18) Regulations on Artificial Intelligence incentives: For colleagues who hold AI licenses or lunch AI projects to increase the Company’s benefits, the Company will give the bonus and be a reference for promotion to encourage colleagues to actively participate.

• (19) Maternity Incentive Policy: In order to reduce the burden of parenting on colleagues and encourage childbirth, employees and their spouses will receive pregnancy congratulations gifts, childbirth congratulations gifts, maternity subsidies, and childcare subsidies (until 6 years old) when they become pregnant or give birth.

• (20) Electric Motorcycle Subsidy Incentive Program: To reduce carbon emissions and alleviate the financial burden on employees, subsidies are provided for the purchase or replacement of electric motorcycles.

• Advanced study system:

• (1) Regulations on foreign language development class.

• (2) Professional and managerial class for each level employee.

• Training system: The Company has a complete training system for new recruits, and has created a good working and learning environment, in order to cultivate professional talents with enthusiasm and innovative ideas. At the same time, through the complete training program at all stages of the career, each employee can become a talented person with professional and management practices under the gradual and self-transcending growth experience. Complete training programs include college management associate training, job basic training, job professional training, supervisor training at all levels, middle and high level supervisor training, etc., with online teaching, work rotation, external training opportunities, and external specialist to provide a working environment for continuous learning and development. The training system is as follows:

220

• (1) Regulations on training management.

• (2) Regulations on network knowledge base management.

• (3) Regulations on college new recruits training.

• (4) Regulations on dispatched training.

• (5) Regulations on middle and high-level supervisor talents cultivating.

4. Retirement system:

• (1) Retirement application:

Employees who are in one of the following conditions are eligible for retirement:

• 1 Those who have served for more than 15 years and are over 55 years old.

• 2 Those who have served for more than 25 years.

• 3 Those who have served for more than 10 years and are over 60 years old.

• (2) Mandatory retirement:

Employees who are in one of the following descriptions must retire:

• 1 Those who are 65 years old or older, but those at or above the level of senior manager may be extended to 70 years old, and the highlevel manager may be extended to 75 years old.

• 2 Employees are unable to perform their duties due to mental disorders or physical disabilities.

• (3) Retirement pensions disbursement:

Employees’ retirement pensions disbursement is as follows:

• 1 Pension for service period on and before July 31, 1984 is calculated based on Taiwan Provincial Factory Workers Retirement Rules, and the average salary of the three months prior to retirement is taken into account. Pension for service period on and after August 1, 1984 is calculated based on Article 55 of the Labor Standards Act, and the average salary of the six months prior to retirement is taken into account. However, the total of the above two is limited to a maximum number of 45 bases.

• 2 For an employee who has mental disorder or physical disability occurred in his or her work duties and can no longer fulfill the work responsibilities, the pension for the aforementioned employee is issued according to the preceding paragraph and plus 20%.

221

• (4) The new “Labor Pension Act “was implemented on July 1, 2005. If employees choose the old pension system, they will be handled according to the above retirement system. If employees choose the new pension system, the Company will appropriate 6% of the monthly salary to the employees’ pension account.

• (5) Employee Code of Conduct or Ethics:

• 1 In order to clearly define the rights and obligations of employers and employees, and to maintain order in the workplace, the Company has established “Working Rules” in accordance with the law and publicly disclosed at the approval of the competent authority as the base for employee management. Working Rules includes recruitment, promotion, working time, salary, discipline, reward and punishment, dismissal, severance, retirement, training and performance evaluation, compensation and consolation payment for accident, injury or disease, and welfare measures, etc.

• 2 In order to strengthen the behavior and ethical norms of the employees, the Company not only sets up “Regulations on Personal Information” but also requires employees to sign the “Formosa Plastics Corp. Employees’ Commitment to Observe the Operational Policy Statement,” which is summarized as follows:

  • A. Prohibition of unfair competition (antitrust) policy: Employees must fully comply with the Fair Trade Act. The Company encourages that employees obtain profit by using legal and proper ways, and takes all actions complying with relevant laws and regulations.

  • B. Conflict of interest policy: When employees are required to engage in business related to the Company, they should avoid damaging the interests of the Company. They should never directly or indirectly request or accept gifts, entertainment or other benefits from customers or competitors of the Company.

  • C. Internal data security policy: Employees handling the Company’s data should not reveal confidential data or other information that has not been published without the written permission of the Company. They should not use the information for personal gain or use it for any purpose that is not relevant to the Company’s operation. Employees should hand over all technological

222

information when they leave the Company.

     - D. Participation in political activity policy: Employees should not directly or indirectly donate money, provide services, or give valuable items to any candidates or political parties. They should not conduct any behavior forbidden by the law or give any illgotten gain to legislators, political figures, or government officials that may prevent them from performing their duties.

• (6) Work environment and employee personal safety protection measures:

  • 1 The Company sets up rules of safety and health management to ensure each department to comply with, which could prevent accidents and achieve the goals of “zero disasters” to ensure the safety and health of employees and neighborhood residents, maintain the integrity of the Company’s equipment, ensure operation smoothly, and improve the overall business performance.

  • 2 The scope of application includes the safety and health management system and the work responsibilities of each department, the establishment of various safety and health protection facilities, the establishment of safety standards for various operations, the regular automatic inspection of safety and health, personnel safety and health, fire prevention education training, safety and health performance evaluation, emergency response planning, disaster simulation exercises, and accident handling.

  • 3 The Company regularly conducts safety and health education training and publicity and ensure that all employees receive appropriate and necessary training, and have the ability to perform work. All departments should hang the safety and health policy of the Company and verification site at entrance and exist clearly.

  • 4 The Company regularly conducts employee health checks, such as general health (physical) checks, special health checks, foreign employee health (physical) checks and catering employee health checks, and manages health care unit settings, such as health care unit configuration, drug and equipment management, first-aid staff, drug configuration and ambulance setup and management, etc.

• Implementation status of employee benefit plans and retirement system: Well.

• Implementation status of employee advanced study and training: In 2023,

223

advanced study and training courses conducted by Company were 4,257 items. The average number of training hours per person was 51.6 hours, and the total cost was NTD 14,693 thousand. The courses include work safety on-the-job training, English and Japanese foreign language training, Labor law, standard operating procedure (SOP), job specialty, artificial intelligence (AI) and other professional course, etc.

1. Employee and employer negotiation:

   • (1) Participating in union representative meetings, board of directors meetings, and regularly convening labor-management meetings to establish a collective bargaining mechanism, we have implemented the spirit of honest and trustworthy conduct as outlined in the Collective Agreement Act. This ensures that both labor and management engage in collective bargaining in good faith and safeguards the employees' right to collective bargaining.

   • (2) Establish an employee complaints system to improve labor relations and gender equality, hold each level supervisory meetings regularly, issue corporate magazines quarterly. Employees can also express their opinions through employee suggestion boxes or reaction lines.

   • (3) Formulate working rules and personnel management rules, and clearly define the rights and obligations of employee and employer so that employees can fully understand and protect their rights and interests.

   • (4) In accordance with Occupational Safety and Health Act, conduct employee health checkups regularly, set labor safety and health personnel and rules to avoid accidents and maintain employee safety.

2. Status of implementation for preserving employees’ rights and interests: Well.

3. 5.5.2 Any loss sustained as a result of labor disputes, disclose an estimate of losses incurred to date or likely to be incurred in the future, and indicate mitigation measures being or to be taken: The Company had no major dispute on labor agreement in the latest year and up to the printing date of this Annual Report.

224

5.6 Information Security Management

• 5.6.1 Describe the information security risk management framework, information security policies, concrete management programs, and investments in resources for information security management.

• Information security risk management framework

  • The Company has formulated the Information Security Policy Management Measures, and a dedicated information security department is responsible for the Company's daily cyber security. Furthermore, to effectively implement information security work, the entire company has established the Information Security Management Committee to coordinate various direction and strategies for the development of information security in the Company, ensuring the continuous and robust operation of the information security management system. The convener of the preceding paragraph shall be the operating supervisor, and the executive secretary shall be assigned by the convener. The Committee shall establish the "Information Security Execution Team," "Emergency Response Team," and "Audit Team," and shall conduct at least one management review per year. The review scope includes the evaluation of improvement plans and change requirements of information security management system ensuring the applicability, appropriateness, and effectiveness of the operation of the information security management system.

• Information security policies

  • To ensure the confidentiality, integrity, and availability of the Company's information systems, and to establish a reliable information usage environment for smooth operation of all business operations to achieve the goal of corporate sustainable operation, the Company formulated the following information security policies:

  • (1) Comply with legal requirements and promote information security awareness.

  • (2) Attach importance to risk management and protect data security.

  • (3) Participate with all employees and pursue improvement continuously.

225

3. Management programs

Item	Description of Management Plan
Cybersecurity	 Adopting a multi-layered defense-in-depth structure to build firewalls and an intrusion detection system (IPS)  Malicious URL filtering and Advanced Persistent Threat (APT) defense
Device security	 All computers must install antivirus software and control the connection and access to USB devices  Update virus signature and security patches in real time,and schedule regular virus scans
Application security	 Set up a website application firewall (WAF) to protect external service website  Set up a source code detection system platform to conduct vulnerability detection of program source code
Data security protection	 Set up internet, email and personal/confidential and sensitive data loss prevention (DLP) control mechanisms  Establish secure access policies and strengthen authentication for system login
Education and training	 Conduct regular information security education, training and testing for employees annually  Enhance employees' awareness of email social engineering and regularly conduct exercises to enhance information securityawareness
Cyber security test	 Regularly engage external experts to conduct red teaming

1. Information Security Education Training and Publicity Implementation in 2023

2. (1) Held "AEO Security Certification Enterprise Information Security

226

Education and Training," with a total of 654 participants and a training duration of 6,540 hours.

• (2) Conducted "Information Security Education and Training" with 68 participants, totaling 34 hours of training.

• (3) To enhance the professional skills of the information security, the Company arranged the related personnel to attend 2 Information Security Alliance Seminar and 4 courses with a total of 246 hours of training in 2022. There are 4 employees of information security team passed to get the license of CompTIA Security+.

• (4) To enhance the awareness of email security, the Company send the counterfeit email about medical knowledge, winning notice, travel information randomly to employees. In March, 2023, 2,712 social engineering training emails were sent to employees. The 61 employees clicked the link, and the rate of opening the email was 2.2%. The employees who clicked the testing mail link had to finish the online course of email security awareness and pass the test.

• Resources invested in information security management:

• (1) A Chief Information Security Officer has been appointed at the executive management level, and a dedicated information security management unit with responsible personnel has been established.

• (2) Included core server system administrator accounts in the privileged account management system, managing a total of 2,308 accounts as of 2023.

• (3) Executed third-party red team attack and defense drills annually, with 100% completion of vulnerability patching for identified weaknesses.

• (4) Achieved ISO 27001 certification for the Taishan data center operations and completed the first round of re-certification in December 2023.

• (5) Conducted quarterly website vulnerability scans and annual system vulnerability scans, addressing detected deficiencies for improvement.

• (6) Implemented Web Application Firewalls (WAF) and source code detection system platforms.

• (7) Implemented Information Security and Event Management System (SIEM) and Security Operations Center (SOC) to comply with legal requirements.

• (8) Conducted annual email social engineering drills, with over 10,000 employees tested. In 2023, there was a 75% decrease in the personnel

227

click-through rate compared to 2022.

  - (9) Conducted annual information security awareness training courses for employees. In 2023, 12,625 personnel completed physical or online training courses related to information security management awareness.

  - (10) Introduced a privileged account management system for remote maintenance operations by suppliers in 2023, enabling monitoring and recording of supplier remote maintenance operation traces.

  - (11) The Company joined the Computer Emergency Response Team(CERT) and Computer Security Incident Response Team(CSIRT) in 2022 to share the information to keep the effect of joint defense.

1. Please refer to the Company’s sustainability website as following about the more detail and future plan for information security. http://csr.fpc.com.tw/FPC_CSR/coporate_governance/information_securit y.aspx

2. 5.6.2 List any losses suffered by the company in the most recent fiscal year and up to the annual report publication date due to significant information security incidents, the possible impacts therefrom, and measures being or to be taken: The Company had no major information security events in the latest year and up to the printing date of this Annual Report.

228

5.7 Im rtant Contracts po

Agreement	Counterparty	Period	Major Contents	Restrictions
Purchase contract	CPC Corp., Taiwan	2023.01~ 2023.12	Supply of ethylene, propylene and hydrogen for PVC and HDPE	None
Sale and purchase contract	Formosa Petrochemical Corp.	2023.01~ 2023.12	Supply of ethylene, propylene, butadiene, butadiene raffinate oil	None
Technical authorization contract	Lummus Technology LLC	2018.11~ 2033.11	Propane Dehydrogenation technology	None
Technical authorization contract	Univation Technologies, LLC	2014.10~ 2034.10	Full density vapor phase polyethylene technology	None
Technical authorization contract	Dow Chemical Company	2005.10~ 2025.10	N-butanol process technology	Note
Technical authorization contract	Mitsubishi Chemical Corporation	The contract was effective from 2022.04 and will end until the parties agree to terminate.	1-hexene process technology	None
Long-term loan contract	Bank of Taiwan	2022.8~ 2025.7	Financial structure improvement and workingcapital enrichment	None
Long-term loan contract	Mizuho Bank	2022.8~ 2024.12	Financial structure improvement and workingcapital enrichment	None
Long-term loan contract	Cooperative Bank and 17 other banks' syndicated loan case.	2023.7~ 2025.6	Financial structure improvement and working capital enrichment	None
Long-term loan contract	The Export-Import Bank of China	2023.1~ 2028.1	Supporting funding requirements for the PDH expansionproject.	None

Note: The important equipment of process does not allow changes arbitrarily.

229

VI. Financial Information

6.1 Consolidated Balance Sheet and Income Statement for the Last Five Fiscal Years

6.1.1 Condensed Balance Sheet- Based on Consolidated Financial

Statement Unit: NTD thousands

Stateme	Stateme	ntUnit: NTD thousands	ntUnit: NTD thousands	ntUnit: NTD thousands	ntUnit: NTD thousands	ntUnit: NTD thousands
Year Item		Financial information for the last five fiscal years (Note 1)
		2019	2020	2021	2022	2023
Current assets		175,616,860	165,635,760	189,262,221	160,820,260	159,638,262
Property, plant and equipment (Note2)		85,635,983	86,785,954	97,343,039	107,315,483	112,452,052
Intangible assets		423,488	590,274	623,165	607,382	563,243
Otherassets (Note2)		235,411,628	226,268,435	256,450,497	242,511,282	258,084,799
Totalassets		497,087,959	479,280,423	543,678,922	511,254,407	530,738,356
Current liabilities	Before distribution	89,283,378	68,255,027	74,541,216	95,863,320	103,101,676
	After distribution	117,292,637	83,532,805	126,740,290	122,599,431	109,467,417
Non-current liabilities		58,651,261	78,489,256	65,947,432	57,706,224	80,276,535
Total liabilities	Before distribution	147,934,639	146,744,283	140,488,648	153,569,544	183,378,211
	After distribution	175,943,898	162,022,061	192,687,722	180,305,655	189,743,952
Shareholder’s equity attributable to parent company		349,153,320	332,536,140	403,190,274	357,684,863	347,360,145
Capitalstock		63,657,408	63,657,408	63,657,408	63,657,408	63,657,408
Capital reserve		11,724,498	11,742,124	11,770,685	11,797,297	11,829,847
Retained earnings	Before distribution	198,347,860	190,229,876	246,258,845	230,270,354	210,804,324
	After distribution	170,338,601	174,952,098	194,059,771	203,534,243	204,438,583
Otherequityinterest		75,423,554	66,906,732	81,503,336	51,959,804	61,068,566
Treasury stock		-	-	-	-	-
Non-controllinginterest		-	-	-	-	-
Total equity	Before distribution	349,153,320	332,536,140	403,190,274	357,684,863	347,360,145
	After distribution	321,144,061	317,258,362	350,991,200	330,948,752	340,994,404

Note 1: It is required to specify the fiscal year that has not been audited by a CPA.

Note 2: If in the current year there is revaluation of assets, it is required to specify the revaluation date and the revaluation value.

• Note 3: A company whose stock is listed on an exchange or trade on OTC shall disclose the financial information that audited or reviewed by a CPA as of the date of publication of the annual report.

• Note 4: For the financial data of after distribution, please fill out in accordance with the resolutions approved by Board of Directors or Shareholders’ Meeting.

• Note 5: For those who have been notified by the competent authorities to revise or recomposed their financial data, all the figures/numbers used shall be the revised ones, and the status and reasons for such revision shall be noted.

• Note 6: The after-distribution data of 2023 are estimated by the earnings distribution approved by Board of Directors Meeting on March 6, 2024.

230

6.1.2 Condensed Balance Sheet– Based on the Parent Company only Financial Statement Unit: NTD thousands

Year Item	Year Item	Financial information for the last five fiscal years (Note 1)	Financial information for the last five fiscal years (Note 1)	Financial information for the last five fiscal years (Note 1)	Financial information for the last five fiscal years (Note 1)	Financial information for the last five fiscal years (Note 1)
		2019	2020	2021	2022	2023
Current assets		158,815,312	142,801,499	160,053,911	136,811,906	127,509,749
Property, plant and equipment(Note 2)		39,280,562	41,804,267	46,142,880	51,626,928	56,676,279
Intangible assets		124,762	124,762	124,762	140,000	132,381
Other assets(Note 2)		266,224,934	270,998,502	310,908,113	300,655,376	310,562,736
Total assets		464,445,570	455,729,030	517,229,666	489,234,210	494,881,145
Current liabilities	Before distribution	56,755,940	60,723,332	52,393,339	77,817,719	71,140,080
	After distribution	84,765,199	76,001,110	104,592,413	104,553,830	77,505,821
Non-current liabilities		58,536,310	62,469,558	61,646,053	53,731,628	76,380,920
Total liabilities	Before distribution	115,292,250	123,192,890	114,039,392	131,549,347	147,521,000
	After distribution	143,301,509	138,470,668	166,238,466	158,285,458	153,886,741
Shareholder’s equity attributable to parent company		349,153,320	332,536,140	403,190,274	357,684,863	347,360,145
Capital stock		63,657,408	63,657,408	63,657,408	63,657,408	63,657,408
Capital reserve		11,724,498	11,742,124	11,770,685	11,797,297	11,829,847
Retained earnings	Before distribution	198,347,860	190,229,876	246,258,845	230,270,354	210,804,324
	After distribution	170,338,601	174,952,098	194,059,771	203,534,243	204,438,583
Other equityinterest		75,423,554	66,906,732	81,503,336	51,959,804	61,068,566
Treasurystock		-	-	-	-	-
Non-controllinginterest		-	-	-	-	-
Total equity	Before distribution	349,153,320	332,536,140	403,190,274	357,684,863	347,360,145
	After distribution	321,144,061	317,258,362	350,991,200	330,948,752	340,994,404

Note 1: It is required to specify the fiscal year that has not been audited by a CPA.

Note 2: If in the current year there is revaluation of assets, it is required to specify the revaluation date and the revaluation value.

• Note 3: A company whose stock is listed on an exchange or trade on OTC shall disclose the financial information that audited or reviewed by a CPA as of the date of publication of the annual report.

• Note 4: For the financial data of after distribution, please fill out in accordance with the resolutions approved by Board of Directors or Shareholders’ Meeting.

• Note 5: For those who have been notified by the competent authorities to revise or recomposed their financial data, all the figures/numbers used shall be the revised ones, and the status and reasons for such revision shall be noted.

• Note 6: The after-distribution data of 2023 are estimated by the earnings distribution approved by Board of Directors Meeting on March 6, 2024.

231

6.1.3 Condensed Balance Sheet– Based on EAS: Not applicable.

6.1.4 Condensed Comprehensive Income- Based on Consolidated

Financial Statement Unit: NTD thousands

Financial S	tatementUnit: NTD thousands	tatementUnit: NTD thousands	tatementUnit: NTD thousands	tatementUnit: NTD thousands	tatementUnit: NTD thousands
Year Item	Financial information for the past five fiscal years (Note 1)
	2019	2020	2021	2022	2023
Operatingrevenue	207,848,572	185,813,405	273,598,301	251,647,354	199,138,777
Grossprofit	32,113,950	29,054,284	76,160,904	42,558,744	9,826,458
Grossprofit from operations	20,196,366	17,099,215	60,163,993	26,799,217	-4,028,519
Non-operating income and expense	22,022,786	7,067,452	25,792,821	16,995,170	11,025,150
Income before tax	42,219,152	24,166,667	85,956,814	43,794,387	6,996,631
Income from operations of continued segments - after tax	37,324,162	20,036,199	71,355,311	36,142,868	7,337,709
Income from discontinued operations(Note 3)	-	-	-	-	-
Net income(Loss)	37,324,162	20,036,199	71,355,311	36,142,868	7,337,709
Total other comprehensive income(net of tax)	-6,768,604	-8,609,003	14,545,006	-29,456,948	9,095,399
Total comprehensive income	30,555,558	11,427,196	85,900,317	6,685,920	16,433,108
Net income attributable to parent company’s shareholders	37,324,162	20,036,199	71,355,311	36,142,868	7,337,709
Net income attributable to non-controllinginterest	-	-	-	-	-
Comprehensive income attributable to parent company’s shareholders	30,555,558	11,427,196	85,900,317	6,685,920	16,433,108
Comprehensive income attributable to non- controllinginterest	-	-	-	-	-
Earningsper share	5.86	3.15	11.21	5.68	1.15元/股

Note 1: It is required to specify the fiscal year that has not been audited by a CPA.

Note 2: A company whose stock is listed on an exchange or trade on OTC shall disclose the financial information that audited or reviewed by a CPA as of the date of publication of the annual report.

Note 3: The net loss from discontinued operations is an amount net of income tax.

Note 4: For those who have been notified by the competent authorities to revise or recomposed their financial data, all the figures/numbers used shall be the revised ones, and the status and reasons for such revision shall be noted.

232

6.1.5 Condensed Comprehensive Income Statement– Based on the Parent Company only Financial Statement

Unit: NTD thousands

Year Item	Financial information for the past five fiscal years (Note 1)	Financial information for the past five fiscal years (Note 1)	Financial information for the past five fiscal years (Note 1)	Financial information for the past five fiscal years (Note 1)	Financial information for the past five fiscal years (Note 1)
	2019	2020	2021	2022	2023
Operatingrevenue	165,823,943	139,157,045	210,675,530	195,086,831	150,361,071
Grossprofit	27,914,090	24,683,662	61,680,515	39,146,334	9,742,055
Grossprofit from operations	17,493,179	14,379,667	47,635,584	25,385,900	-2,099,200
Non-operating income and expense	24,298,942	8,898,610	34,682,718	17,197,491	8,996,083
Income before tax	41,792,121	23,278,277	82,318,302	42,583,391	6,896,883
Income from operations of continued segments - after tax	37,324,162	20,036,199	71,355,311	36,142,868	7,337,709
Income from discontinued operations(Note 3)	-	-	-	-	-
Net income(Loss)	37,324,162	20,036,199	71,355,311	36,142,868	7,337,709
Total other comprehensive income(net of tax)	-6,768,604	-8,609,003	14,545,006	-29,456,948	9,095,399
Total comprehensive income	30,555,558	11,427,196	85,900,317	6,685,920	16,433,108
Net income attributable to parent company’s shareholders	37,324,162	20,036,199	71,355,311	36,142,868	7,337,709
Net income attributable to non-controllinginterest	-	-	-	-	-
Comprehensive income attributable to parent company’s shareholders	30,555,558	11,427,196	85,900,317	6,685,920	16,433,108
Comprehensive income attributable to non- controllinginterest	-	-	-	-	-
Earningsper share	5.86	3.15	11.21	5.68	1.15

Note 1: It is required to specify the fiscal year that has not been audited by a CPA.

Note 2: A company whose stock is listed on an exchange or trade on OTC shall disclose the financial information that audited or reviewed by a CPA as of the date of publication of the annual report.

Note 3: The net loss from discontinued operations is an amount net of income tax.

Note 4: For those who have been notified by the competent authorities to revise or recomposed their financial data, all the figures/numbers used shall be the revised ones, and the status and reasons for such revision shall be noted.

233

6.1.6 Condensed Balance Sheet– Based on EAS: Not applicable.

6.1.7 Matters of material significance which affected the

comparability of the above-mentioned condensed financial statements: None.

6.1.8 The Name of the Certified Public Accountant and the

Auditor’s o inion p

Year	2019	2020	2021	2022	2023
Name	Hui-Chih Kou Chi-Lung Yu	Hui-Chih Kou Chi-Lung Yu	Hui-Chih Kou Chi-Lung Yu	Hui-Chih Kou Chi-Lung Yu	Hui-Chih Kou Hsin-Yi, Kuo
Auditor’s opinion	An unqualified opinion with emphasis of matter paragraph or other matter paragraph	An unqualified opinion with emphasis of matter paragraph or other matter paragraph	An unqualified opinion with emphasis of matter paragraph or other matter paragraph	An unqualified opinion with emphasis of matter paragraph or other matter paragraph	An unqualified opinion with emphasis of matter paragraph or other matter paragraph

234

6.2 Financial Analysis for the Last Five Fiscal Years

6.2.1 Consolidated Financial Analysis – Consolidated Financial

Statement Based on IFRSs

Item	Year	Financial analysis for the last five fiscalyears	Financial analysis for the last five fiscalyears	Financial analysis for the last five fiscalyears	Financial analysis for the last five fiscalyears	Financial analysis for the last five fiscalyears
		2019	2020	2021	2022	2023
Financial structure (%)	Debt ratio	29.76	30.62	25.84	30.04	34.55
	Ratio of long-term capital to property, plant, and equipment	476.21	473.61	481.94	387.07	380.28
Solvency (%)	Current ratio	196.70	242.67	253.90	167.76	154.84
	Quick ratio	172.37	210.51	216.24	139.97	129.68
	Interest coverage ratio	24.22	19.64	92.03	32.26	3.67
Operating performance	Accounts Receivable turnover(times)	14.00	12.60	13.16	12.14	13.23
	Average collectionperiod	26	29	28	30	28
	Inventoryturnover(times)	9.01	8.97	9.58	8.91	8.63
	Accounts payable turnover (times)	15.14	12.97	13.58	15.07	16.18
	Average days in sales	41	41	38	41	42
	Property, plant, and property turnover(times)	2.56	2.16	2.97	2.46	1.81
	Total asset turnover(times)	0.42	0.38	0.53	0.48	0.38
Profitability	Return on total assets(%)	7.69	4.30	14.07	7.01	1.73
	Return on stockholders’ equity (%)	10.59	5.88	19.40	9.50	2.08
	Pre-tax income to paid-in capital ratio(%)	66.32	37.96	135.03	68.80	10.99
	Profit margin(%)	17.96	10.78	26.08	14.36	3.68
	Earnings Per Share(NTD)	5.86	3.15	11.21	5.68	1.15
Cash flow	Cash flow ratio(%)	52.17	46.07	77.62	59.25	5.97
	Cash flow adequacy ratio (%)	116.90	100.76	103.56	95.40	82.82
	Cash reinvestment ratio (%)	1.69	0.59	6.61	0.78	-3.35
Leverage	Operating leverage	1.37	1.47	1.14	1.32	-1.00
	Financial leverage	1.07	1.08	1.01	1.04	0.66

235

Reasons for changes of financial ratios for the last two years (analysis is exempted for any change less than 20%):

1. Times interest earned, return on total assets, return on stockholders’ equity, ratio of income before tax to paid-in capital, profit margin before tax and earnings per share in 2023 were lower than which in 2022, because after-tax net income NTD 7,337,709 thousand in 2023 decreased by NTD28,805,159 thousand from 2022.

2. Cash flow adequacy ratio and cash reinvestment ratio in 2023 were lower than which in 2022, because cash inflow from operating activities NTD 6,157,311 thousand in 2023 decreased by NTD 50,644,304 thousand from 2022.

3. Operating leverage and financial leverage in 2023 were lower than which in 2022, because operating income -NTD 4,028,519 thousand in 2023 decreased by NTD 30,827,736 thousand from 2022.

236

• Note 1: The fiscal years for which reports were not CPA audited or reviewed shall be noted.

• Note 2: A company that is listed on the TWSE or traded at the place of business of a securities firm shall include in its analysis the then current financial data up to and until the quarter immediately preceding the printing date of the annual report’ publication date.

Note3: The following calculation formulas shall be listed at the end of this Table in the annual report:

1. Financial structure

2. (1) Debt ratio = Total liabilities/total assets.

3. (2) Long term funds to property, plant, and equipment ratio = (Total shareholders’ equity + non-current liabilities)/net property, plant, and equipment

4. Solvency

5. (1) Current ratio = Current assets/current liabilities

6. (2) Quick ratio = (Current assets - inventory - prepaid expenses)/current liabilities

7. (3) Times Interest Earned = Net income before tax and interest expense/current interest expense

8. Operating ability

9. (1) Accounts Receivable (including account receivable and note receivable from operating) turnover = Net sales/average Receivables (including account receivable and note receivable from operating) balance

10. (2) Average collection period = 365 days/ accounts receivable turnover

11. (3) Inventory turnover (times) = Cost of goods sold/average inventory

12. (4) Accounts Payable (including Account payable and Note payable from operating) turnover = Cost of goods sold/average accounts payable (including Account payable and Note payable from operating)

13. (5) Average inventory turnover days = 365 days/ inventory turnover

14. (6) Property, plant, and equipment turnover (times) = Net sales/ average net average property, plant, and equipment

15. (7) Total asset turnover = Net sales/average total assets

16. Profitability

17. (1) Return on total assets = [net income + interest expense x (1-tax ratio)]/average total assets

18. (2) Return on shareholder’s equity = Net income/average total shareholder’s equity

19. (3) Profit margin = Net income/ net sales

20. (4) Earnings per Share = (Net income attributable to parent company’s shareholders - preferred stock dividend)/ weighted average number of shares issued (Note 4)

21. Cash flow

22. (1) Cash flow ratio = Cash flow from operating activities/current liabilities

23. (2) Net cash flow adequacy ratio = Five-year sum of cash from operations / Five-year sum of capital expenditures, inventory additions, and cash dividends

24. (3) Cash reinvestment ratio = (Net cash flow from operating activities - cash dividends)/ (gross property, plant, and equipment + long-term investments + other non-current assets + working capital) (Note 5)

25. Leverage

26. (1) Operating leverage = (Net operating income - variable operating cost and expense)/operating income (Note 6)

27. (2) Financial leverage = Operating income/ (operating income - interest expenses)

Note 4: When the above formula for calculation of earnings per share is used during measurement, give special

• attention to the following matters:

• 1.Measurement should be based on the weighted average number of common shares, not the number of issued shares at year end.

• 2.In any case where there is a cash capital increase or treasury stock transaction, the period of time in circulation shall be considered in calculating the weighted average number of shares.

• 3.In the case of capital increase out of earnings or capital surplus, the calculation of earnings per share for the past fiscal year and the fiscal half-year shall be retrospectively adjusted based on the capital increase ratio, without the need to consider the issuance period for the capital increase.

• 4.If the preferred shares are non-convertible cumulative preferred shares, the dividend of the current year (whether issued or not) shall be subtracted from the net profit after tax, or added to the net loss after tax. In the case of non-cumulative preferred shares, if there is net profit after tax, dividend on preferred shares shall be subtracted from the net profit after tax; if there is loss, then no adjustment need be made.

237

• Note 5: Give special attention to the following matters when carrying out cash flow analysis:

• 1.Net cash flow from operating activities means net cash in-flow amounts from operating activities listed in the statement of cash flows.

• 2.Capital expenditures means the amounts of cash out-flows for annual capital investment.

• 3.Inventory increase will only be entered when the ending balance is larger than the beginning balance. An inventory decrease at year end will be deemed zero for calculation.

• 4.Cash dividend includes cash dividends from both common shares and preferred shares.

• 5.Gross property, plant and equipment value means the total value of property, plant and equipment prior to the subtraction of accumulated depreciation.

• Note 6: Issuers shall separate operating costs and operating expenses by their nature into fixed and variable categories. When estimations or subjective judgments are involved, give special attention to their reasonableness and to maintaining consistency.

• Note 7: In the case of a company whose shares have no par value or have a par value other than NTD10, for the calculation of the above-mentioned paid-in capital ratio, the ratio of equity attributable to owners of the parent as stated in the balance sheet shall be substituted.

238

6.2.2 Financial Analysis– Based on the Parent Company only Financial Statement

Item	Year	Financial analysis for the last five fiscalyears	Financial analysis for the last five fiscalyears	Financial analysis for the last five fiscalyears	Financial analysis for the last five fiscalyears	Financial analysis for the last five fiscalyears
		2019	2020	2021	2022	2023
Financial structure (%)	Debt ratio	24.82	27.03	22.05	26.89	29.81
	Ratio of long-term capital to property, plant, and equipment	1,037.89	944.89	1,007.38	796.90	747.65
Solvency (%)	Current ratio	279.82	235.17	305.49	175.81	179.24
	Quick ratio	256.90	214.00	273.43	153.30	155.49
	Interest coverage ratio	45.03	29.11	124.39	52.87	5.50
Operating performance	Accounts Receivable turnover(times)	14.41	12.65	14.28	12.96	12.93
	Average collectionperiod	25	29	26	28	28
	Inventoryturnover(times)	11.09	11.22	12.39	10.90	9.95
	Accounts payable turnover (times)	13.56	11.50	13.16	15.03	16.63
	Average days in sales	33	33	29	33	37
	Property, plant, and property turnover(times)	4.28	3.43	4.79	3.99	2.78
	Total asset turnover(times)	0.35	0.30	0.43	0.39	0.31
Profitability	Return on total assets(%)	8.08	4.49	14.77	7.29	1.70
	Return on stockholders’ equity (%)	10.59	5.88	19.40	9.50	2.08
	Pre-tax income to paid-in capital ratio(%)	65.65	36.57	129.31	66.89	10.83
	Profit margin(%)	22.51	14.40	33.87	18.53	4.88
	Earnings Per Share(NTD)	5.86	3.15	11.21	5.68	1.15
Cash flow	Cash flow ratio(%)	70.41	43.29	90.04	56.49	5.94
	Cash flow adequacy ratio (%)	124.32	103.25	108.43	94.32	79.97
	Cash reinvestment ratio (%)	0.56	-0.32	5.25	-1.48	-3.94
Leverage	Operating leverage	1.23	1.27	1.09	1.17	-1.22
	Financial leverage	1.06	1.06	1.01	1.03	0.62

6.2.3 Financial Analysis– Based on EAS: Not applicable.

239

• 6.3 Audit Committee’s Review Report for the Most Recent Year’s Financial Statement

Formosa Plastics Corporation Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2023 Business Report, Financial Statements, including Consolidated and Individual Financial Statement, and Proposal for Profits Distribution. The CPA firm of KPMG was retained to audit Formosa Plastics Corporation’s Financial Statements and has issued an audit report relating to Financial Statements. The Business Report, Financial Statements, and Proposal for Profits Distribution have been reviewed and determined to be correct and accurate by the Audit Committee members of Formosa Plastics Corporation. According to the Securities and Exchange Act and the Company Act, we hereby submit this report. Please be advised accordingly.

Formosa Plastics Corporation

Chairman of the Audit Committee: Chi-Lin, Wei

March 6, 2024

240

• 6.4 Consolidated Financial Statements for the Years Ended December 31, 2023 and 2022, and Independent Auditors’ Report: Please refer to the pages 269 to 358 of the Annual Report.

• 6.5 The Parent Company Only Financial Statements for the Years Ended December 31, 2023 and 2022, and Independent Auditors’ Report: Please refer to the pages 359 to 465 of the Annual Report.

• 6.6 The Financial Difficulties of the Company and its Affiliated Companies: None.

241

VII. Review of Financial Conditions, Financial Performance, and Risk Management

7.1 Analysis of Financial Status

The reasons for, and impact of, any significant change over the two most recent fiscal years in its assets, liabilities, or equity. Where the impact is significant, describe further how the company plans to respond.

escribe further how the company plans to respond.	escribe further how the company plans to respond.	escribe further how the company plans to respond.
			Unit: NTD thousands
Year Item	2023	2022	Difference
			Amount	％
Current Assets	159,638,262	160,820,260	-1,181,998	-0.73
Fixed Assets	371,100,094	350,434,147	20,665,947	5.90
Total Assets	530,738,356	511,254,407	19,483,949	3.81
Current Liabilities	103,101,676	95,863,320	7,238,356	7.55
Long-term Liabilities	80,276,535	57,706,224	22,570,311	39.11
Total Liabilities	183,378,211	153,569,544	29,808,667	19.41
Capital Stock	63,657,408	63,657,408	-	-
Capital Reserve	11,829,847	11,797,297	32,550	0.28
Retained Earnings	210,804,324	230,270,354	-19,466,030	-8.45
Other EquityInterest	61,068,566	51,959,804	9,108,762	17.53
Total Stockholders’ Equity	347,360,145	357,684,863	-10,324,718	-2.89

Explanation:

Non-Current liabilities increased 39.11%, because long-term debts increased NTD 14,924,725 thousand.

242

7.2 Analysis of Financial Performance

The annual report shall list the main reasons for any material change in operating revenues, operating income, or income before tax in the two most recent fiscal years, provide a sales volume forecast and the basis therefor, and describe the effect upon the company’s financial operations as well as measures to be taken in response. Unit: NTD thousands

in response.			Unit: NTD thousands	Unit: NTD thousands
Year Item	2023	2022	Difference
			Amount	％
Operating revenues Cost of sales Gross profit Operating expenses Operating income Non-operating income and expense Net income before tax Income tax expense Net income	199,138,777 189,312,319 9,826,458 13,854,977 -4,028,519 11,025,150 6,996,631 -341,078 7,337,709	251,647,354 209,088,610 42,558,744 15,759,527 26,799,217 16,995,170 43,794,387 7,651,519 36,142,868	-52,508,577 -19,776,291 -32,732,286 -1,904,550 -30,827,736 -5,970,020 -36,797,756 -7,992,597 -28,805,159	-20.87 -9.46 -76.91 -12.09 -115.03 -35.13 -84.02 -104.46 -79.70

Explanation:

Net income in 2023 was down 79.7% from 2022. In 2023, major central banks in the US and Europe implemented measures to curb high inflation, including continuous interest rate hikes and monetary tightening. Additionally, the ongoing technology and trade tensions between the US and China, coupled with the economic recovery in mainland China falling short of expectations postreopening, led to a slowdown in global demand and a decline in economic growth momentum. Furthermore, factors such as geopolitical issues and supply chain rebalance contributed to a challenging market environment. The petrochemical industry faced oversupply issues as competitors expanded production capacity, resulting in intense price competition. Consequently, the global demand contraction, coupled with a decrease in product prices, led to a 21% decline in the Company's 2023 consolidated revenue. The consolidated operating loss was NTD 4.03bn, a decrease of NTD30.83bn, representing a decline of 115% from 2022.

Despite recognizing investments income of NTD 7.94bn in 2023 (+NTD 2.18bn vs. 2022) from companies like Formosa Petrochemical and Mai-Liao Power Corporation, a decrease in cash dividend income of NTD4.77bn resulted in a substantial decline of 84% in consolidated pre-tax profit in 2023 compared to 2022.

243

1. Gross profit variance analysis: Unit: NTD thousands

1. Gross	profit varian	ce analysis:Unit: NTD thousands	ce analysis:Unit: NTD thousands	ce analysis:Unit: NTD thousands	ce analysis:Unit: NTD thousands
Item	Variances between 2023 and 2022	Effect of variances
		Sales variances	Cost variances	Product mix	Quantity variances
Gross Profit	-32,732,286	-54,519,770	25,363,238	-1,164,005	-2,411,749

• Explanation: The gross profit in 2023 decreased from 2022, because the continued high interest rates in the US and EU caused a decline in purchasing power and terminal demand Moreover, the economic recovery in mainland China after the lifting of restrictions is not as strong as expected. The petrochemical industry has been continuously expanding its production capacity, leading to a severe oversupply in the market. This has resulted in price competition and a narrowing of product spreads.

• Provide a sales volume forecast and the basis therefor, and describe the effect upon the Company’s financial operations as well as measures to be taken in response: Please refer to “1.2 A Summary of the Business Plan for 2024” of “I. Letter to Shareholders”.

7.3 Analysis of Cash Flow

• Describe and analyze any cash flow changes in the most recent fiscal year, describe corrective measures to be taken in response to illiquidity, and provide a liquidity analysis for the coming year.

• Cash flow analysis for the current year: Unit: NTD thousands

1. Cash flow a	nalysis for the	currentyear:		Unit: NTD thousands	Unit: NTD thousands
Cash, Beginning of Year	Net Cash Flow from Operating Activities	Cash Outflow	Cash Surplus (Deficit)	Remedies of Cash Deficit
				Investment Plans	Financing Plans
17,110,163	6,157,311	17,120,433	6,147,041	-	-

Explanation:

• (1) Operating activities: The net cash inflow from operating activities in 2023 was NTD 6,157,311 thousand, because net cash inflow generated from operations of NTD 5,153,034 thousand, interest received of NTD 517,219 thousand, dividends received of NTD 7,925,321 thousand, interest paid of NTD 2,181,458 thousand and income tax of NTD 5,256,805 thousand.

• (2) Investing activities: The net cash outflow from investing activities in 2023 was NTD 27,488,683 thousand, because acquisition of property, plant and equipment of NTD 13,609,178 thousand.

244

• (3) Financing activities: The net cash inflow from financing activities in 2023 was NTD 12,531,474 thousand, because increase short-term borrowings of NTD 158,969,929 thousand.

• Remedy for cash deficit and liquidity analysis

• (1) There was no cash deficit in this year.

• (2) Liquidity analysis in the two most recent fiscal years:

Year Item	2023	2022	Variation (%)
Cash flow ratio	5.97%	59.25%	-53.28%
Cash flow adequacyratio	82.82%	95.40%	-12.58%
Cash reinvestment ratio	-3.35%	0.78%	-4.13%

Explanation: Cash flow ratio, cash flow adequacy ratio and cash reinvestment ratio in 2023 decreased from 2022, because the cash inflow from operating activities in 2023 decreased by NTD 50,644,304 thousand from 2022.

1. Liquidity analysis for the coming year

Unit: NTD thousands

Estimated Cash, Beginning of Year	Estimated Net Cash Flow from Operating Activities	Estimated Cash Outflow	Estimated Cash Surplus (Deficit)	Remedies	of Cash Deficit
				Investment Plans	Financing Plans
6,147,041	28,262,130	15,389,454	19,019,717	-	-

Explanation:

• (1) Operating Activities: It is projected that there will be a net cash inflow of 28,262,130 thousand yuan from operating activities in 2024.

• (2) Investing Activities: It is projected that there will be a net cash outflow of 9,899,527 thousand yuan from investing activities in 2024. This is mainly due to the acquisition of real estate, plants, and equipment.

• (3) Financing Activities: It is projected that there will be a net cash outflow of 5,489,927 thousand yuan from financing activities in 2024. This is primarily due to the payment of cash dividends and the redemption of corporate bonds.

245

7.4 The Effect upon Financial Operations of Any Major Capital Expenditures in the Most Recent Year

7.4.1 Major Capital Expenditure Items and Source of Capital:

Unit: NTD thousands

Project	Actual or Planned Source of Capital	Actual or Planned Date of Completion	Total Capital	Actual or Expected Capital Expenditure	Actual or Expected Capital Expenditure	Actual or Expected Capital Expenditure	Actual or Expected Capital Expenditure
				2023	2024	2025	2026
PVC debottleneck project	Working Capital	2023.12.31	271,950	33,604	45,000
PDH expansion project in Ningbo	Working Capital, Bank loan	2024.06.30	23,596,319	1,586,612	1,084,750
Carbon Fiber expansion project	Working Capital	2024.07.3	5,819,324	233,030	2,627,947	343,731
New 1-hexene plant construction project in the U.S.A.	Working Capital, Bank loan	2025.12.31	271,950	33,604	45,000	2,627,947

Note: If material change is expected in the corresponding cost of capital of future borrowings and

capital increase or in the policy of borrowing and capital increase, an explanation shall be provided.

246

7.4.2 Expected Benefits:

1. Estimated increase in production, sales, and gross profits:

Unit: Metric tons ； NTD thousands

Year	Item	Quantity of Production	Quantity of Sales	Amount of Sales	Gross Profit
2024	PVC debottleneckproject	73,480	73,480	1,792,177	67,528
2025	PDH expansion project in Ningbo	600,000	600,000	19,150,827	752,572
2025	Carbon Fiber expansion project	1,600	1,600	1,496,800	438,621
2026	New 1-hexene plant construction project in the U.S.A.	100,000	100,000	3,257,240	778,800

1. Other benefits (such as the quality of products, pollution prevention, cost reduction and so on): None.

2. 7.5 Reinvestment Policy in the Most Recent Years, the Main Reasons for the Profits/Losses Generated Thereby, the Plan for Improving Reinvestment Profitability, and Investment Plans for the Coming Year:

Unit: NTD thousands

Remark Item	Amounts	Policies	Reasons for Gain or Loss	Action Plan	Investment Plan
Formosa Smart Energy Tech Corp.	750,000	Long-term investment	Formosa Smart Energy Tech Corp. started the construction of the cell plant with 2.1 GWh and the module plant with 1.1 GWh at Changhua Coastal Industrial Park which will commence production in July, 2024.	None	Investment in new energy storage facilities and equipment related to battery cells, along with an increase in capital to meet funding requirements.
Formosa Resources Corp	798,600	Long-term investment	Formosa Steel IB Pty Ltd and Australian iron ore miner FMG	To ensure stable production, it's crucial to actively	None

247

Remark Item	Amounts	Policies	Reasons for Gain or Loss	Action Plan	Investment Plan
(Investing in Formosa Steel IB Pty Ltd.)			Group jointly invested in the Iron Bridge iron ore development project, which commenced production in September 2023. However, there are still unresolved issues and optimization needed for some equipment and production line technologies during the initial production phase. As a result, the current iron ore project has not yet become profitable due to the lack of increased production yield.	evaluate and improve certain segments of the long-term pipeline for the iron ore project.
Formosa Plastics Construction Corp	500,000	Long-term investment	The urban renewal plan for the FPG building was approved and announced by the Taipei City Government on August 4th, 2023. Construction is scheduled to commence at the end of June in 2024 after obtaining the constructionpermit.	None	The urban renewal project for FPG building continues to progress.
Taiwan Tokuyama	574,081	Long-term investment	According to the joint venture agreement	None	None

248

Remark Item	Amounts	Policies	Reasons for Gain or Loss	Action Plan	Investment Plan
Corp			between FPC and Japan's Tokuyama Corp, the establishment of FTAC has been executed on April 18th, 2014.

• Note 1: The Board of Directors of the Company approved to invest Formosa Smart Energy Tech Corp. with NTD 1,750,000 thousand on May 10, 2022. The payment of NTD 1,000,000 thousand was made on May 30, 2022, and the payment of NTD 750,000 thousand was completed on July 28, 2023

• The information on investees was referred to the page 354~355 of this annual report.

249

7.6 Risks

• 7.6.1 The impact of interest rate, exchange rate, and inflation rate changes on the Company’s revenue, as well as corresponding actions:

• Interest rate:

  • In terms of long-term liabilities under floating interest rate basis (corporate bond included), the Company will carefully assess financial market conditions and consider the implementation of interest rate swap when the interest rate is relatively low to avoid interest rate fluctuation risks. The Company strives to make sure the undertaking interest rate is below the estimated cost of capital of investment plans.

• Exchange rate fluctuation:

  • Insufficient foreign exchange funds in daily operations are addressed by making spot or forward foreign exchange purchases when the exchange rate is favorable. Long-term foreign exchange liabilities are addressed by implementing long-term forward foreign exchange contracts or exchangefor-exchange contracts when the exchange rate is relatively low to minimize the impact of exchange rates on profitability.

• Inflation:

According to Directorate of Budget, Accounting, and Statistics, Executive Yuan, the annual growth rate of consumer prices in 2023 was 2.5%, and the annual growth rate of core consumer prices was 2.58%, both the second highest in 15 years, The increase in raw materials and operating costs affected the Company’s profitability but inflation is expected to slow down in the coming year.

• 7.6.2 Policies on high risk, highly leveraged investments, loans to other parties, endorsements, and derivative trading policies, main reasons for profits or losses, and future response measures:

• Investment under high risks and leverage:

  • The Company mainly invests in the petrochemical industry. The petrochemical industry is a mature and stable industry with low risks. The Company has always maintained stable operations and a sound financial structure. It does not engage in any high leverage investment.

• Lending of Capital:

250

In principle, the Company only issues loans to affiliated companies. The amount is in accordance with Article 15 of the Company Law and Procedures for Loaning Funds to other Parties of the Company, and granted with the approval of the Board of Directors. Since the issuance of loans are mostly for short-term funding purposes, and the borrowers are subsidiaries and affiliated companies, no bad debt loss has occurred.

1. Endorsement:

The Company only endorses and guarantees subsidiaries, affiliated companies or where all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages. The endorsement is mostly for funding. The endorsement is in accordance with Procedures for Providing Endorsements and Guarantees to other Parties of the Company and granted with the approval of the Board of Directors. The Company has never been losses due to endorsement.

1. Derivative product transactions:

The Company’s various derivative commodity transactions are for the purpose of avoiding market risks caused by fluctuations in exchange rates and interest rates instead of arbitrage and speculation. Any of the implementation of derivative product transactions is based on not only relevant regulations and International Financial Reporting Standards (IFRS) promulgated by the competent authority, but also “Procedures for Derivatives Transaction Processing” and the “Foreign Exchange Trading and Risk Management Measures” defined by the Company.

251

7.6.3 Future Research & Development (R&D) Plans and Expected R&D

Expenses: Unit: NTD thousands

	Expenses:			Unit: NTD thousands
Item	R&D project products	Expected R&D Investments	Expected R&D period	Explanation
1	Development of suspension PVC dedicated to chlorinated polyvinyl chloride (CPVC) manufacture.	1,000	2024.01~2024.06	In response to the substantial growth in demand for PVC for CPVC purposes in India, PVC suitable for CPVC is developed by suspension process.
2	Development of solid- state lithium battery electrolyte synthesis method	660	2023.01~2025.12	The current ionic conductivity of solid-state electrolyte is about 1/100 of that of liquid electrolyte. To improve the synthesis method, techniques such as doping, grinding, and calcination processes are employed to enhance the ionic conductivity by at least tenfold before it is applied in lithium batteries.
3	Optimization of the seed production process in slender reaction tank	700	2024.01~2024.12	Due to poor vertical convection of the slender reaction tank, the yield is often compromised. The optimization of the seed production process is the key to overcome equipment bottleneck.
4	Development of removing iodine from salt water	3,000	2024.01~2025.12	A higher concentration of iodine in the salt water used for caustic soda production will decrease the service life of ionic membrane and increase the cost of production. The issue can be solved by removing iodine from salt water with ion-exchange resin adsorption.
5	Development of Anti-fouling Silicone Medical Products	600	2023.01~2025.01	By employing blending process with zwitterionic polymer and medical-grade silicone, we produce medicalproducts which

252

Item	R&D project products	Expected R&D Investments	Expected R&D period	Explanation
				are the world’s first. These products have anti-adhesive properties that can prevent tissue and bacterial adhesion. It makes them suitable for long-term implantation in the human body and reduces the risk of bacterial infection.
6	Optimization test of MBS stabilizer dosage	1,000	2023.09~2024.05	Stabilizer is an important auxiliary material of MBS. It can protect MBS in high-temperature processing environment and maintain excellent color and physical properties. It is also mainly used to maintain the storage stability of MBS. The technical department gradually reduces the dosage of stabilizer winox1697 without affecting the performance of MBS. Under the premise of quality and safety, the effect of reducing production costs is achieved.
7	High tensile strength carbon fiber	318	2021.06~2024.12	It is suitable for lightweight, tensile strength critical applications such as the aerospace, high pressure vessel, electric cable, and advanced sports equipment.
8	Thermoplastic carbon felt	1,500	2022.12~2024.12	Using carbon fiber and carbon fiber reinforced thermoplastic production scrapbit, or recycled carbon fiber makes carbon fiber matt for 3C, bicycles and other applications.
9	Ultra-high tensile strength TC1280 carbon fiber	5,500	2022.10~2024.12	It is suitable for aerospace, artificial satellite, rocket, UAV, and advanced sports equipment.

253

Item	R&D project products	Expected R&D Investments	Expected R&D period	Explanation
10	Low-cost carbon fiber	238	2021.11~2024.12	Its cost is lower than the regular carbon fiber modulus, and it is suitable for wind power, cooling water tower, automobile industry, and normal sports equipment.
11	High- performance prepreg	100	2021.09~2024.09	It is applied to high-end and aerospace applications.
12	New SAP process	26,250	2022.01~2024.06	SAP product of this novel process enables the premade core baby diaper to have excellent dryness performance.
13	A next-generation SAP product for internationally renowned major corporation	6,321	2023.01~2024.06	It is applied to baby diapers with fast absorption rate and liquid permeability
14	High absorption capacity and high strength SAP	4,740	2023.06~2024.06	Providing SAP products with a balance of absorption capacity and strength
15	Low rewet SAP product	5,267	2023.09~2024.06	To develop a new SAP with good absorption capability and low rewet in diaper.
16	New SAP products for fresh food pads	7,986	2022.08~2024.06	Applied as a water-absorbing pad for fresh food, serving as an absorbent material.
17	High performance package material BOPE	10,000	2020.01~2024.06	It is applied to high mechanical and transparency package application.
18	PE50 pipe grade	10,000	2020.03~2024.06	It is a soft characteristic water pipe material.
19	HDPE PCR recycled grade	10,000	2022.06~2024.06	It is applied to products containing recycled materials.
20	HDPE for hydrogen tank, transportation application	10,000	2023.06~2024.12	It is applied to products hydrogen gas tank of Type IV
21	Machine direction orientation polyethylenegrade	2,100	2023.06~2024.12	It is applied to the multi-layer film for food.

254

Item	R&D project products	Expected R&D Investments	Expected R&D period	Explanation
22	Hydrogen tank liner	1,000	2023.06~2024.12	It is applied to the hydrogen tank for car and bus.
23	EVA containing 33 % VA content	10,000	2023.12~2024.07	It is applied for high resilience shoe mid-sole and flame retardant cable.
24	Hydrolysis resistance EVA material for solar encapsulant film	5,000	2023.08~2024.07	It is applied for solar encapsulant film.
25	EVA PCR recycled grade	10,000	2023.05~2024.07	It is applied for post-consumer recycled(PCR)EVA material.
26	Reactor-grade high impact transparent PP	2,280	2024.01~2024.12	It is applied to transparent container, package, medical consumables.
27	Medical grade PP for ultra-low-temperature- resistant lab consumables	1,800	2023.11~2024.09	It is applied to labware.
28	Medical grade PP for pre-filled syringe	1,680	2024.01~2024.10	It is applied to pre-filled syringe.
29	transparent post- consumer recycled PP	1,820	2023.10~2024.08	It is applied to screw container boxes,storage boxes.
30	PP for lamination coating.	1,550	2023.12~2024.11	It is applied to paper cup, meal boxes.
31	Impact modifier precipitated calcium	600	2023.09~2024.06	It is applied to PVC building material.
32	PET-based calcium carbonate MB	500	2023.10~2024.12	It is applied to PET shutters

255

• 7.6.4 Effect on the Company’s financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response:

• On October 21, 2021, the Environmental Protection Administration announced the draft amendment to the "Climate Change Response Act", which was passed by the Legislative Yuan in the third reading on January 10, 2023. The Ministry of Environment has also proposed the imposition of carbon fees on manufacturing and electricity industries that have carbon emissions exceeding 25,000 metric tons, starting from 2025. The collection method will be based on the greenhouse gas emissions of the previous year, and the specific rates have not yet been announced. The Company has been conducting provisional estimates on relevant carbon fees at reasonable rates since 2024, and will continue to pay attention to regulatory developments and ensure compliance accordingly. Furthermore, regarding carbon credits, in coordination with the official launch of the Taiwan Carbon Solution Exchange on August 7, 2023, and the commencement of carbon credit trading, the Company will evaluate the demand for trading in a timely manner..

• Tai-Zheng-Zhi-Li-Zi No. 11200147631 of the Taiwan Stock Exchange Corporation, dated August 23, 2023, has announced the amendment to the "Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers", stipulating that the minimum number of independent directors of a TWSE listed company is one-third of the seats in the board. This requirement will be applicable to TWSE listed companies with a paid-in capital reaching NT$10 billion starting from 2024. However, for directors whose terms do not expire in 2024, this requirement shall apply upon the expiration of their terms. In addition, starting from 2024, more than half of independent directors of TWSE listed companies shall not serve beyond three consecutive terms. However, for directors whose terms do not expire in 2024, this requirement shall apply upon the expiration of their terms. Starting from 2027, all independent directors shall not serve beyond three consecutive terms. However, for directors whose terms do not expire in 2027, this requirement shall apply upon the expiration of their terms. The Company's Directors will be re-elected when their terms expire in 2024,

256

which will be handled in accordance with the regulations.

• 7.6.5 Effect on the Company’s financial operations of developments in science and technology (including cyber security risks) as well as industrial change, and measures to be taken in response: None.

• 7.6.6 Effect on the Company’s crisis management of changes in the company’s corporate image, and measures to be taken in response: The Company has built up the good image by adhering to the business philosophy of “diligence, perseverance, frugality and trustworthiness; aiming at the sovereign good; perpetual business operation; dedication to the society”. In the future, we will keep carrying out the philosophy and devoting more resources to the society.

• 7.6.7 Expected benefits and possible risks associated with any merger and acquisitions, and mitigation measures being or to be taken: None.

• 7.6.8 Expected benefits and possible risks associated with any plant expansion, and mitigation measures being or to be taken: Please refer to 7.4 The Expected benefits of major capital expenditures in recent years. The potential risks and measures to be taken in response: None.

• 7.6.9 Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken:

• Purchases: The Company’s raw materials, ethylene and propylene, are mainly from Formosa Petrochemical Corp. and CPC Corp., Taiwan. If those two companies arrange maintenance or reduce the output, the Company also has to cooperate with maintenance or reduce production. Therefore, the Company sets up an ethylene storage tank lease contract with CPC Corp., Taiwan, and China General Terminal & Distribution Corp. In addition, the Company also to build the salt warehouse and storage tanks for ethylene and propylene at the Phase II intercontinental petrochemical zone in Kaohsiung. It is in case that the Company could purchase the

257

imported ethylene and propylene supplement from abroad, when its supply is insufficient. The Company also applies for a foreign ship to carry the ethylene from Mailiao to Kaohsiung or exchanges with the trading company to carry ethylene to Kaohsiung to avoid that CPC Corp., Taiwan could not supply the sufficient materials when it arranges maintenance or reduces the output. However, if the petrochemical market is at a high level, there will be a risk of being forced to import high-priced raw materials to maintain production. In addition, the raw material, industry salt, is imported from Mexico, Australia and other regions by diversifying import areas to avoid purchasing concentration. Coal is also purchased in a decentralized manner from Australia, Indonesia or Vietnam etc.

1. Sales: At present, most of the Company’s petrochemical products are exported to China. However, there are potential risks associated with the rapid increase in production capacity or policy changes in China. To mitigate these risks, we have diversified our export markets to other regions. Taking PVC as an example, the top three export markets are currently India, Vietnam, and Australia, with mainland China ranking fourth. This diversification has helped reduce our reliance on the previously Chinacentric market. However, the tax barriers, and the Middle East materials competing at a low price are not conducive to the product sales of the Company. In order to mitigate those risks, the Company actively expands the differentiated or high-yield products, and diversifies markets risk by actively expanding areas of zero tariffs (such as Vietnam) or lower tariff barriers (such as Bangladesh), and spreading to other potential markets. In addition, the Company sets up overseas delivery warehouses to shorten the delivery period, and sets up technical service offices outside China, such as Germany, India and Vietnam, with sales and technical personnel to stay in the station, to strengthen relationship with foreign customers and promote business and technical services to increase sales.

2. 7.6.10 Effect upon and risk to the Company in the event a major quantity of shares belonging to a director, or shareholder holding greater than a 10 percent stake in the Company has been transferred or has otherwise changed hands, and mitigation measures being or to be taken: None.

3. 7.6.11 Effect upon and risk to company associated with any change in

258

governance personnel or top management, and mitigation measures being or to be taken: None.

• 7.6.12 Litigious and non-litigious matters. List major litigious, nonlitigious or administrative disputes that: (1) involve the company and/or any company director, any company president, any person with actual responsibility for the firm, any major shareholder holding a stake of greater than 10 percent, and/or any company or companies controlled by the company; and (2) have been concluded by means of a final and unappealable judgment, or are still under litigation, where such a dispute could materially affect shareholders’ equity or the prices of the company’s securities: The civil lawsuit about 74 people including Shu-fen Zhang from Taixi Township against five company, Formosa Plastics Corp., Nanya Plastics Corp., Formosa Chemicals & Fibre Corp., Formosa Petrochemical Corp. and Mai-Liao Power Corp. for NTD70,176,986.

• (1) Disputes: 74 people including Shu-fen Zhang from Taixi Township claimed that the five company including the Company in the sixth nephra cracker’s gas emission caused that 20 persons in their families died and 9 persons suffered from cancer. Hence, they filed damaged lawsuit from Taiwan Yulin District Court, asking compensation. However, despite that fact that plaintiff makes the case that petrochemical industry is the direct cause to the death and caner by the air pollution it produced, but never provide evidence about the pollution tolerance, air quality, causation to cancer by its operation. None of them filed by scientific evidence. Therefore, the Company actively defended to protect our own interest.

• (2) Target amount: NTD70,176,986

• (3) The commencement date of the lawsuit: August 13, 2015

• (4) Main litigants: 74 people including Shu-fen Zhang from Taixi Township.

• (5) Current situation: This lawsuit belongs to the Yunlin District Court. The litigation agents of plaintiffs are appointed by the Legal Aid Foundation with lawyers. They have submitted to the court as public nuisance dispute. Therefore, Yunlin District Court had ruled to stop

259

the litigation procedure. After three rounds of mediation by the Yunlin County Government, the plaintiff has withdrawn the mediation. The case is currently being heard by the Yunlin District Court.

• 7.6.13 Other important risks, and mitigation measures being or to be taken Information Security Risk Assessment: None.

260

7.6.14 The Or anization Structure of Risk Mana ment: g ge

Risk Evaluation Items	Risk Management Unit	Risk Review
1. Interest rate, fluctuation in foreign exchange rate, and inflation	President Office, Accounting Department, Financial Department, President Office of the General Administrative Office of Formosa Plastics Group	Computer audit and regular self-inspection, monthly fund meeting, joint meeting of financial executives, internal auditing office, and the Board of Directors
2.High-risk, high leverage investments, loaning funds to other parties, providing endorsements and guarantees to other parties, and derivatives transaction	President Office, Financial Department, President Office of the General Administrative Office of Formosa Plastics Group	Computer audit and regular self-inspection, monthly fund meeting, joint meeting of financial executives, internal auditing office, and the Board of Directors
3. R&D plan	President Office, Support Department of each business division, General Administrative Office of Formosa Plastics Group	Production and sales meeting, business performance meeting, R&D project meeting, the Board of Directors, and internal auditing office
4. Important policy and legal changes at home and abroad	President Office, Manager Office and Support Department of each business division, Legal Affairs Office, President Office of the General Administrative Office of Formosa Plastics Group	Production and sales meeting, business performance meeting, the Board of Directors, and internal auditing office
5. Technology Changes	President Office, Manager Office of each business division, R&D Department, General Administrative Office of Formosa Plastics Group	Production and sales meeting, business performance meeting, internal auditing office, and the Board of Directors

261

Risk Evaluation Items	Risk Management Unit	Risk Review
6. Changes in Corporate Image	President Office, Manager Office of each business division, General Administrative Office of Formosa Plastics Group	Production and sales meeting, business performance meeting, and the Board of Directors
7. M&A or reinvestment	President Office, Manager Office of each business division, General Administrative Office of Formosa Plastics Group	Production and sales meeting, business performance meeting, internal auditing office, and the Board of Directors
8. Expansion of Plants	President Office, Manager Office and Factory Affairs Office of each business division, General Administrative Office of Formosa Plastics Group	Production and sales meeting, business performance meeting, internal auditing office, and the Board of Directors
9. Purchase or turnover concentration	President Office, Manager Office of each business division, Procurement Department, President Office of the General Administrative Office of Formosa Plastics Group	Market weekly meeting, production and sales meeting, business performance meeting, auditing department, and the Board of Directors
10. Directors and supervisors and major shareholders equitytransfer	President Office, Share Unit of Financial Department	Business management meeting and the Board of Directors
11. Changes in Operation Right	President Office, General Administrative Office of Formosa Plastics Group	Business management meeting and the Board of Directors
12. Litigious and non- litigious matters	President Office, Manager Office of each business division, Legal Affairs Office	Production and sales meeting, business performance meeting, internal auditing office, and the Board of Directors

262

Risk Evaluation Items	Risk Management Unit	Risk Review
13. Information Security	President Office, Manager Office of each business division, General Administrative Office of Formosa Plastics Group	Business management meeting, internal auditing office and the Board of Directors

7.7 Other Important Matters: None.

263

==> picture [38 x 370] intentionally omitted <==

==> picture [22 x 23] intentionally omitted <==

==> picture [43 x 12] intentionally omitted <==

==> picture [22 x 21] intentionally omitted <==

==> picture [22 x 23] intentionally omitted <==

==> picture [43 x 12] intentionally omitted <==

==> picture [22 x 22] intentionally omitted <==

==> picture [38 x 370] intentionally omitted <==

==> picture [15 x 4] intentionally omitted <==

==> picture [15 x 34] intentionally omitted <==

==> picture [22 x 21] intentionally omitted <==

==> picture [22 x 22] intentionally omitted <==

==> picture [37 x 214] intentionally omitted <==

==> picture [43 x 4] intentionally omitted <==

==> picture [43 x 12] intentionally omitted <==

==> picture [16 x 5] intentionally omitted <==

==> picture [16 x 33] intentionally omitted <==

==> picture [37 x 214] intentionally omitted <==

==> picture [21 x 21] intentionally omitted <==

==> picture [23 x 21] intentionally omitted <==

==> picture [15 x 34] intentionally omitted <==

==> picture [22 x 22] intentionally omitted <==

==> picture [42 x 5] intentionally omitted <==

264

(2) The basic information of affiliated companies 2023.12.31 Name of Company Incorporation Date Address Paid-in capital Unit: USD thousands Main Business Items	Main Business Items	Investment	Investment	PVC, acrylic acid and ester, polypropylene, super absorbent polymer, ethylene vinyl acetate copolymer	Distributed control system (DCS)	High density polyethylene or Linear low density polyethylene
	Paid-in capital Unit: USD thousands	78	991,283	989,023	2,260	577,255
	Address	Corporate Centre, West Bay Road, P.O. Box 31106 SMB, Grand Cayman, Cayman Islands, British West Indies	7/F, Citicorp Centre, 18 Whitfield Rd, Causeway Bay, HK	Petrochemical Economical & Technological Development Zone, Beilun District, Ningbo City, Zhejiang Province, China	No. 1-10, Linganger 2nd Road, Xiapu Sub-District, Beilun District, Ningbo City, Zhejiang Province, China	9 Peach Tree Hill Road, Livingston, NJ, U.S.A.
	Incorporation Date	2002	2007	2002	2004	2015
	Name of Company	Formosa Plastics Corporation (Cayman) Limited	Formosa Industries (Hong Kong) Limited	Formosa Industries (Ningbo) Co., Ltd.	Formosa Electronic (Ningbo) Co., Ltd.	Formosa Industries Corporation

265

(5) Directors, Supervisors and Presidents of affiliated companiesUnit: share；％; 2023.12.31 Shareholding	Shareholding	Shareholding Ratio (Investment Holding)	0	100.00	0	100.00	0	0	0	0	0	0	0	0	100.00	0	0	0	0	100.00	0	0	0	100.00
		Shares (Investment Amount)	0	FPC holds 78,000 shares	0	Investment of Formosa Plastics Corporation (Cayman) Limited USD 991,283 thousand.	0	0	0	0	0	0	0	0	Investment of Formosa Industries (Hong Kong) Limited USD 989,023 thousand.	0	0	0	0	Investment of Formosa Industries (Hong Kong) Limited USD 2,260 thousand.	0	0	0	FPC holds 5,772.55 shares
		Name or Representative	Jason Lin		Jason Lin		Jason Lin	Wen-Bee Kuo	Tony Liang	Tien-Show Shih (Note)	Cheng-Chang Wu	T. T. Chen (Note)	Feng-Chou Chuang	Chia-Hung Chien		Jason Lin	Y.Y. Lee	Te-Tsung Tsai	Chia-Hung Chien		Jason Lin	Wen-Bee Kuo	Jen-Long Wu
		Title	Chairman		Chairman		Chairman	Director	Director	Director	Director	Director	Director	Supervisor		Chairman	Director	Director	Supervisor		Chairman	Director	Director
		Name of Company	Formosa Plastics Corporation (Cayman) Limited		Formosa Industries	(Hong Kong) Limited	Formosa Industries (Ningbo) Co., Ltd.									Formosa Electronic (Ningbo) Co., Ltd.					Formosa Industries Corporation

266

Earnings per share (NTD)	1,821.94				-418,907.97	Note: The account in balance sheet is with the exchange rate at the end of year. The account in comprehensive income statement is with the annual average exchange rate. 1.USD: NTD: 1:30.7350 (2023.12.31)；1:31.1782 (annual average of 2023). 2.CNY: NTD: 1:4.3394 (2023.12.31)；1:4.4245 (annual average of 2023).
Net income (after tax)	142,111	321,649	228,116	93,533	-2,418,167
Operating income	-177	0	123,176	108,100	-2,159,594
Operating revenue	0	0	45,700,503	800,781	10,947,903
Net worth	53,944,730	53,996,224	53,328,437	667,787	11,536,884
Total liabilities	154,825	0	20,650,325	1,193,259	15,316,472
Total assets	54,099,555	53,996,224	73,978,762	1,861,046	26,853,356
Capital	2,588	31,263,157	31,188,509	74,648	17,736,955
Name of Company	Formosa Plastics Corporation (Cayman) Limited (Note 1)	Formosa Industries (Hong Kong) Limited (Note 1)	Formosa Industries (Ningbo) Co., Ltd. (Note 2)	Formosa Electronic (Ningbo) Co., Ltd. (Note 2)	Formosa Industries Corporation (Note 1)

267

• 8.1.2 Affiliated company’s consolidated financial statements: same as the Company financial statements.

• 8.2 The Status of Private Placement of Securities in the Most Recent Year and as of the Date of Publication of the Annual Report: None.

• 8.3 The Subsidiaries of the Company Acquired, Disposed of the Shares of the Company in the most Recent Year and as of the Date of Publication of the Annual Report: None.

• 8.4 Other Necessary Supplement: None.

• 8.5 The Significant Impacts on Shareholders’ Right or Share Prices as Stated in Item 3 Paragraph 2 of Article 36 of Securities and Exchange Law of Taiwan in the Most Recent Year and as of the Date of Publication of the Annual Report: None.

268

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.

269

Table of Contents

	Table of Contents
	Contents	Page
1.	Cover Page	269
2.	Table of Contents	270
3.	Representation Letter	271
4.	Independent Auditors’ Report	272～275
5.	Consolidated Balance Sheets	276
6.	Consolidated Statements of Comprehensive Income	277
7.	Consolidated Statements of Changes in Equity	278
8.	Consolidated Statements of Cash Flows	279
9.	Notes to the Consolidated Financial Statements
	(1) Company history	280
	(2) Approval date and procedures of the consolidated financial	280
	statements
	(3) New standards, amendments and interpretations adopted	280～281
	(4) Summary of significant accounting policies	282～299
	(5) Significant accounting assumptions and judgments, and major	300
	sources of estimation uncertainty
	(6) Explanation of significant accounts	301～340
	(7) Related-party transactions	340～347
	(8) Pledged assets	347
	(9) Commitments and contingencies	347～348
	(10) Losses due to major disasters	348
	(11) Subsequent events	348
	(12) Other	348
	(13) Other disclosures
	(a) Information on significant transactions	349～354
	(b) Information on investees	355
	(c) Information on investment in mainland China	356
	(14) Segment information	357～358

270

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

271

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.

272

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.

273

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:

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

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

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

4. 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.

5. 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.

6. 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.

274

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.

275

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

276

(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.

277

																Total equity	403,190,274		36,142,868	(29,456,948)	(29,456,948)	6,685,920			-	-	(52,199,074)	(18,869)		171	26,441		357,684,863	7,337,709	9,095,399		16,433,108			-	-	(26,736,112)	(54,264)		230	32,320		347,360,145
															Revaluation	surplus	-		-	1,002,593		1,002,593			-	-	-	-		-	-		1,002,593	-	-		-			-	-	-	-		-	-		1,002,593
						Total other equity interest	Unrealized	gains (losses)	from financial	assets	measured at	fair value		through other Gains (losses)	comprehensive on hedging	income instruments	94,230,777 10,962		- -	(42,592,303) (88,872)		(42,592,303) (88,872)			- -	- -	- -	- -		- -	- -		51,638,474 (77,910)	- -	10,420,158 9,787		10,420,158 9,787			- -	- -	- -	- -		- -	- -		62,058,632 (68,123)
(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 of parent	Retained earnings				Exchange	differences on	translation of		Unappropriated foreign	Ordinary Capital Legal Special retained financial	shares surplus reserve reserve earnings statements	$ 63,657,408 11,770,685 67,780,313 71,352,267 107,126,265 (12,738,403)		- - - - 36,142,868 -	- - - - 86,584 12,135,050		- - - - 36,229,452 12,135,050			- - 7,130,675 - (7,130,675) -	- - - 11,168,703 (11,168,703) -	- - - - (52,199,074) -	- - - - (18,869) -		- 171 - - - -	- 26,441 - - - -		63,657,408 11,797,297 74,910,988 82,520,970 72,838,396 (603,353)	- - - - 7,337,709 -	- - - - (13,363) (1,321,183)		- - - - 7,324,346 (1,321,183)			- - 3,621,058 - (3,621,058) -	- - - 5,038,899 (5,038,899) -	- - - - (26,736,112) -	- - - - (54,264) -		- 230 - - - -	- 32,320 - - - -		$ 63,657,408 11,829,847 78,532,046 87,559,869 44,712,409 (1,924,536)
																	Balance on January 1, 2022		Net Income for the period	Other comprehensive income for the period, net of income tax		Total comprehensive income for the period		Appropriation and distribution of retained earnings:	Legal reserve appropriated	Special reserve appropriated	Cash dividends of ordinary share	Changes in equity of associates and joint ventures accounted for using equity method	Other changes in capital surplus:	Changes in equity of associates and joint ventures accounted for using equity method	Other changes in capital surplus		Balance on December 31, 2022	Net Income for the period	Other comprehensive income for the period, net of income tax		Total comprehensive income for the period		Appropriation and distribution of retained earnings:	Legal reserve appropriated	Special reserve appropriated	Cash dividends of ordinary share	Changes in equity of associates and joint ventures accounted for using equity method	Other changes in capital surplus:	Changes in equity of associates and joint ventures accounted for using equity method	Other changes in capital surplus		Balance on December 31, 2023

278

(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.

279

(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)

280

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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

Standards or Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture” Amendments to IAS21“Lack of Exchangeability”

Content of amendment Effective date per IASB The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011) in dealing with the sale or contribution of 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. Effective date to be determined by IASB The amendments set out: ●when a currency is exchangeable into another currency; and ●how a company determines an estimated spot rate when a currency lacks exchangeability. January 1, 2025

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)

281

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)

282

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)

283

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)

284

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)

285

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)

286

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)

287

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)

288

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)

289

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)

290

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)

291

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)

292

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)

293

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)

294

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)

295

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)

296

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)

297

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)

298

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)

299

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.

• (c) Judgment of whether the Group has substantive control over Sky Dragon Investments Limited

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)

300

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)

301

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.

• (c) Notes receivable and accounts receivable:

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:

Current 1 to 30 days past due 31 to 60 days past due More than 61 days past due Current 1 to 30 days past due 31 to 60 days past due More than 61 days past due	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)

302

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:

KC de Mexico KC de Mexico			December 31, 2023	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)

303

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)

304

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)

305

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)

306

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)

307

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)

308

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)

309

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)

310

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)

311

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (i) Short-term borrowings

• (i) 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)

312

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.

• (k) Long-term debts

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

Currency Unsecured long-term debts NTD Less: Current portion Total Currency Unsecured long-term debts NTD Less: Current portion Total 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		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 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
	Currency	Interest rate
	NTD
	Currency	Interest rate
		1.173%~1.52%

(ii) Issuance and redemption of loan

(Continued)

313

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)

314

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)

315

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)

316

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)

317

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)

318

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)

319

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)

320

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)

321

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)

322

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)

323

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)

324

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)

325

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Revenue from contracts with customers

(i) Disaggregation of revenue

Primary geographical markets： Taiwan Mainland China Others Major products： PVC Liquid caustic soda HDPE LLDPE EVA PP POM AE SAP Carbon fiber n-Butanol AN MMA ECH Others Primary geographical markets： Taiwan Mainland China Others Major products： PVC Liquid caustic soda HDPE LLDPE EVA PP POM AE SAP Carbon fiber n-Butanol AN MMA ECH Others			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)

326

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)

327

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)

328

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.

Carrying amount December 31, 2023 Non-derivative financial liabilities Unsecured bank loans $ 23,466,921 Unsecured bonds payable (including current portion) 38,364,189 Short-term notes and bills payable 30,663,374 Long-term debts (including current portion) 22,905,502 Accounts payable (including related parties) 11,631,240 Other payables (including related parties) 2,357,855 Loans from related parties 15,385,773 Other current liabilities 8,869,214 Employees’ savings (record other current liabilities) 192,573 Lease liabilities 1,355,067 $ 155,191,708 December 31, 2022 Non-derivative financial liabilities Unsecured bank loans $ 14,900,000 Unsecured bonds payable (including current portion) 36,120,673 Secured bank loans 19,430,865 Short-term notes and bills payable 11,437,383 Notes and accounts payable (including related parties) 11,774,229 Other payables (including related parties) 8,665,570 Loans from related parties 11,208,420 Other current liabilities 9,386,661 Employees’ savings (record other current liabilities) 153,533 Lease liabilities 634,430 $ 123,711,764	Carrying amount		Contractual cash flows		Within 6 months		6~12months		1~2years		2~5years - 15,254,853 - 3,806,845 - - - - - 348,182 19,409,880 - 19,160,278 - - - - - - - 157,459 19,317,737	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)

329

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)

330

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:	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:

Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Subtotal				December 31, 2023	December 31, 2023	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)

331

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Carrying value Financial assets at fair value through OCI Domestic listed stocks $ 90,590,581 Domestic listed stocks (Emerging stock board) 148,850 Unquoted equity instruments at fair value 18,408,990 Accounts receivable 382,492 Subtotal 109,530,913 Financial assets measured at amortized cost Cash and cash equivalents 6,147,041 Notes and accounts receivable (including related parties) 13,867,091 Other receivables (including related parties) 20,859,552 Subtotal 40,873,684 Total $ 152,046,195 Financial liabilities measured at amortized cost Bonds payable (including current portion) $ 38,364,189 Short-term notes and bills payable 30,663,374 Short-term borrowings 23,466,921 Long-term debts (including current portion) 22,905,502 Loans from related parties 15,385,773 Accounts payable (including related parties) 11,631,240 Other payables (including related parties) 2,357,855 Other current liabilities 8,869,214 Employees’ savings (record other current liabilities) 192,573 Lease liabilities 1,355,067 Total $ 155,191,708			December 31, 2023	December 31, 2023	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)

332

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Subtotal Financial assets at fair value through OCI Domestic listed stocks Domestic listed stocks (Emerging stock board) Unquoted equity instruments at fair value Accounts receivable Subtotal Financial assets measured at amortized cost Cash and cash equivalents Notes and accounts receivable (including related parties) Other receivables (including related parties) Subtotal Total Financial liabilities measured at amortized cost Bonds payable (including current portion) Short-term notes and bills payable Short-term borrowings Long-term debts (including current portion) Loans from related parties Notes and accounts payable (including related parties) Other payables (including related parties) Other current liabilities Employees’ savings(record other current liabilities) Lease liabilities Total			December 31, 2022	December 31, 2022	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)

333

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)

334

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)

335

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)

336

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)

337

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)

338

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)

339

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 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)

340

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)

341

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)

342

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)

343

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:

1)

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)

344

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)

345

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)

346

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)

347

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)

348

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)

349

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)

350

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	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)

351

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)

352

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)

353

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% -%

• Note 1: Companies are numbered as follows: 1. Parent company － 0

• Subsidiary － starting from 1

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

1. Parent company and subsidiary － 1

2. Subsidiary and parent company － 2

3. 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)

354

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)

355

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	Investment flows	Investment flows	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)

356

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:

Revenue: Revenue from external customers Intersegment revenues Total revenue Interest expense Depreciation and amortization Reportable segment profit or loss Capital expenditure of non-current assets Reportable segment assets Reportable segment liabilities Revenue: Revenue from external customers Intersegment revenues Total revenue Interest expense Depreciation and amortization Reportable segment profit or loss Capital expenditure of non- current assets Reportable segment assets Reportable segment liabilities				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)

357

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.

• (c) Major customers

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

358

Stock Code:1301

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Parent Company Only 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 Telephone: (02)2712-2211

The independent auditors’ report and the accompanying parent company only 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 parent company only financial statements, the Chinese version shall prevail.

359

Table of Contents

	Table of Contents
	Contents	Page
1.	Cover Page	359
2.	Table of Contents	360
3.	Independent Audits’ Report	361～364
4.	Balance Sheets	365
5.	Statements of Comprehensive Income	366
6.	Statements of Changes in Equity	367
7.	Statements of Cash Flows	368
8.	Notes to the Financial Statements
	(1) Company history	369
	(2) Approval date and procedures of the financial statements	369
	(3) New standards, amendments and interpretations adopted	369～370
	(4) Summary of significant accounting policies	371～388
	(5) Significant accounting assumptions and judgments, and major	388
	sources of estimation uncertainty
	(6) Explanation of significant accounts	389～427
	(7) Related-party transactions	428～433
	(8) Pledged assets	433
	(9) Commitments and contingencies	434
	(10) Losses due to major disasters	435
	(11) Subsequent events	435
	(12) Other	435～436
	(13) Other disclosures
	(a) Information on significant transactions	437～442
	(b) Information on investees	443
	(c) Information on investment in mainland China	444
	(d) Major shareholders	444
	(14) Segment information	444～465

360

Independent Auditors’ Report

To the Board of Directors of Formosa Plastics Corporation:

Opinion

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

In our opinion, based on our audits and the reports of other auditors, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuer.

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 Financial Statements section of our report. We are independent of the Company 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 financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters for the Company's financial statements are stated as follows:

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 revenue recognition were discussed in Notes 4(o) and 6(r) to the financial statements.

361

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 a 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(g), 5 and 6(e) to the 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 equity method and the relevant information on the reinvestment business in Note 13 of the financial report has not been checked by this accountant, but is checked by other accountants. The Company's investments in the aforementioned investee companies constituted 34.86% and 33.57% of the 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 107.87% and 19.29% of the income before tax for the years ended December 31, 2023 and 2022, respectively. The 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.

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

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

In preparing the financial statements, management is responsible for assessing the Company’ 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 Company 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 Company’s financial reporting process.

362

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

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

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

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

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

4. 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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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

6. Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

363

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.

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 parent company only financial statements are intended only to present the 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 parent company only financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ audit report and the accompanying parent company only 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 parent company only financial statements, the Chinese version shall prevail.

364

December 31, 2022	Amount %			14,900,000 3	19,430,865 4	2,002,962 -	2,519,710 1	5,978,718 1	5,574,796 1	1,822,200 -	26,811 -	8,846,341 2	5,000,000 1	11,715,316 3	11,715,316 3	77,817,719 16			27,274,332 6	2,500,000 -	19,369,512 4	607,619 -	3,886,866 1	93,299 -		53,731,628 11		131,549,347 27		63,657,408 13		11,797,297 2	11,797,297 2		74,910,988 15	82,520,970 17	72,838,396 15		230,270,354 47		51,959,804 11	51,959,804 11	357,684,863 73		489,234,210 100	489,234,210 100
December 31, 2023	Amount %			$ 14,491,600 3	30,663,374 6	1,309,623 -	4,100,419 1	4,316,575 1	207,392 -	1,184,430 -	60,234 -	3,699,403 1	1,500,000 -	9,607,030 2		71,140,080 14			34,664,786 7	17,500,000 4	19,209,135 4	1,294,833 -	3,609,170 1	102,996 -		76,380,920 16		147,521,000 30		63,657,408 13		11,829,847 2			78,532,046 16	87,559,869 18	44,712,409 9		210,804,324 43		61,068,566 12		347,360,145 70		$ 494,881,145 100
	Liabilities and Equity		Current liabilities:	Short-term borrowings (Note 6(i))	Short-term notes and bills payable (Note 6(j))	Current contract liabilities (Note 6(r))	Accounts payable	Accounts payable－related parties (Note 7)	Other payables	Other payables－related parties (Note 7)	Current lease liabilities (Note 6(m))	Current portion of bonds payable (Note 6(l))	Current portion of long-term borrowings (Notes 6(k) and 8)	Other current liabilities		Total current liabilities	Non-Current liabilities:		Bonds payable (Note 6(l))	Long-term debts (Notes 6(k) and 8)	Deferred income tax liabilities (Note 6(o))	Non-current lease liabilities (Note 6(m))	Net defined benefit liabilities-non-current (Note 6(n))	Other non-current liabilities		Total non-current liabilities		Total liabilities	Equity(Note 6(p)):	Ordinary shares		Capital surplus		Retained earnings:	Legal reserve	Special reserve	Unappropriated retained earnings		Total retained earnings		Other equity		Total equity		Total liabilities and equity
				2100	2110	2130	2170	2180	2200	2220	2280	2321	2322	2399					2530	2540	2570	2580	2640	2670						3110		3200			3310	3320	3350				3400
December 31, 2022	Amount %			8,979,747 2	1,562,720 -	86,948,159 18		7,694,413 2	4,687,408 1	1,205,377 -	7,523,237 1	14,302,555 3	3,908,290 1	136,811,906 28			16,428,859 3		275,797,968 57	51,626,928 11	631,554 -	140,000 -	1,098,911 -	6,698,084 1		352,422,304 72																			489,234,210 100
December 31, 2023	Amount %			$ 1,590,917 -	1,641,598 -	90,739,431 19		6,885,974 1	3,995,752 1	1,825,263 -	3,868,172 1	13,973,181 3	2,989,461 1	127,509,749 26			18,308,129 4		282,247,552 57	56,676,279 11	1,336,947 -	132,381 -	1,058,474 -	7,611,634 2		367,371,396 74																			$ 494,881,145 100
	Assets		Current assets:	Cash and cash equivalents (Note 6(a))	Current financial assets at fair value through profit or loss (Note 6(b))	Current financial assets at fair value through other comprehensive income	(Note 6(b))	Notes and accounts receivable, net (Note 6(c))	Accounts receivable－related parties (Notes 6(c) and 7)	Other receivables (Note 6(d))	Other receivables－related parties (Notes 6(d) and 7)	Inventories (Note 6(e))	Other current assets	Total current assets		Non-current assets:	Financial assets at fair value through other comprehensive income-non-	current (Note 6(b))	Investments accounted for using equity method (Note 6(f))	Property, plant and equipment (Notes 6(g), 7 and 8)	Right-of-use assets (Note 6(h))	Intangible assets	Deferred income tax assets (Note 6(o))	Other non-current assets (Note 8)		Total non-current assets																			Total assets
				1100	1110	1120		1170	1180	1200	1210	130X	1470				1510		1550	1600	1755	1780	1840	1900

365

(English Translation of Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

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 5920 Add: Realized profit (loss) on from sales 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 loss Total operating expenses Operating (loss) income Non-operating income and expenses (Notes 6(f), (n), (t) and 7): 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of associates and joint ventures accounted for using equity method Total non-operating income and expenses Profit from continuing operations before income tax 6400 Less: Income tax (benefit) expenses (Note 6(o)) Profit 8300 Other comprehensive income (loss) (Notes 6(n), (o) and (p)): 8310 Items that may not be reclassified subsequently 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 8330 Share of other comprehensive income of subsidiaries, 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 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences on translation of foreign financial statements 8380 Share of other comprehensive income of subsidiaries, 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 income that will be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income (loss) Total comprehensive income 9710 Basic/Diluted earnings per share (NT dollars) (Note 6(q))

2023

See accompanying notes to financial statements.

366

													Total	equity	403,190,274	403,190,274	36,142,868	(29,456,948)	(29,456,948)	6,685,920	6,685,920		-	-	(52,199,074)	(18,869)		171	26,441	26,441	357,684,863	7,337,709	9,095,399	9,095,399	16,433,108	16,433,108		-	-	(26,736,112)	(54,264)		230	32,320	32,320	347,360,145	347,360,145
													Revaluation	surplus	-		-	1,002,593		1,002,593			-	-	-	-		-	-		1,002,593	-	-		-			-	-	-	-		-	-		1,002,593
					Total other equity interest	Unrealized	gains (losses)	from financial	assets	measured at	fair value	through other Gains (losses)	comprehensive on hedging	income instruments	94,230,777 10,962		- -	(42,592,303) (88,872)		(42,592,303) (88,872)			- -	- -	- -	- -		- -	- -		51,638,474 (77,910)	- -	10,420,158 9,787		10,420,158 9,787			- -	- -	- -	- -		- -	- -		62,058,632 (68,123)
(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)	FORMOSA PLASTICS CORPORATION	Statements of Changes in Equity	For the years ended December 31, 2023 and 2022	(Expressed in Thousands of New Taiwan Dollars)		Retained earnings			Exchange	differences on	translation of	Unappropriated foreign	Ordinary Capital Legal Special retained financial	shares surplus reserve reserve earnings statements	Balance on January 1, 2022 $ 63,657,408 11,770,685 67,780,313 71,352,267 107,126,265 (12,738,403)		Net Income for the period - - - - 36,142,868 -	Other comprehensive income (loss) for the period, net of income tax - - - - 86,584 12,135,050		Total comprehensive income (loss) for the period - - - - 36,229,452 12,135,050		Appropriation and distribution of retained earnings:	Legal reserve appropriated - - 7,130,675 - (7,130,675) -	Special reserve appropriated - - - 11,168,703 (11,168,703) -	Cash dividends of ordinary share - - - - (52,199,074) -	Changes in equity of associates and joint ventures accounted for using equity method - - - - (18,869) -	Other changes in capital surplus:	Changes in equity of associates and joint ventures accounted for using equity method - 171 - - - -	Other changes in capital surplus - 26,441 - - - -		Balance on December 31, 2022 63,657,408 11,797,297 74,910,988 82,520,970 72,838,396 (603,353)	Net Income for the period - - - - 7,337,709 -	Other comprehensive income (loss) for the period, net of income tax - - - - (13,363) (1,321,183)		Total comprehensive income (loss) for the period - - - - 7,324,346 (1,321,183)		Appropriation and distribution of retained earnings:	Legal reserve appropriated - - 3,621,058 - (3,621,058) -	Special reserve appropriated - - - 5,038,899 (5,038,899) -	Cash dividends of ordinary share - - - - (26,736,112) -	Changes in equity of associates and joint ventures accounted for using equity method - - - - (54,264) -	Other changes in capital surplus:	Changes in equity of associates and joint ventures accounted for using equity method - 230 - - - -	Other changes in capital surplus - 32,320 - - - -		Balance on December 31, 2023 $ 63,657,408 11,829,847 78,532,046 87,559,869 44,712,409 (1,924,536)

367

(English Translation of and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

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 profit (loss): Depreciation expenses Amortization expenses Expected credit losses Interest expenses Net gains on financial assets at fair value through profit Interest revenue Dividend income Share of profit of associates and joint ventures accounted for using equity method Gains on disposal of property, plant and equipment Gains on early termination of contract Realized losses (gains) from sales Unrealized foreign exchange losses Unrealized gains from affiliated company Total adjustments to reconcile loss Changes in operating assets and liabilities: Changes in operating assets: Notes and 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 Decrease (Increase) in other receivables - related parties Acquisition of intangible assets 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 debt Repayments of long-term debt Payment of lease liabilities Decrease in other non-current liabilities Cash dividends paid Net cash flows 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 beginning of period Cash and cash equivalents at end of period	2023 $ 6,896,883 4,408,735 282,352 11,826 1,300,703 (78,878) (268,584) (3,667,671) (5,378,110) (388,794) - 36,035 292,032 - (3,450,354) 532,941 691,656 (808,689) 786,787 381,039 918,828 2,502,562 1,598,556 (1,662,143) 493,122 (637,770) (2,880,181) (434,752) (3,523,168) (1,020,606) (4,470,960) 2,425,923 248,927 7,925,321 (1,281,897) (5,089,161) 4,229,113 6,848 - (2,048,600) (9,806,239) 772,761 2,862,928 - (1,160,400) (9,372,702) 148,307,926 (148,716,326) 11,300,000 11,100,000 (8,850,000) 12,500,000 (1,000,000) (72,235) (24,668) (26,745,324) (2,200,627) (44,614) (7,388,830) 8,979,747 $ 1,590,917	2022 42,583,391 4,111,118 266,160 236 689,196 (192,016) (127,158) (8,441,831) (6,108,735) (34,240) (2,319) (60,304) 123,984 (419,631) (10,195,540) 3,735,430 1,607,903 151,245 330,086 (27,122) (1,403,923) 4,393,619 (1,841,141) (2,032,412) 84,904 593,428 1,614,418 (2,128,934) (3,709,737) 683,882 (9,511,658) 33,071,733 98,035 20,940,421 (718,942) (9,433,672) 43,957,575 4,250 2,422,695 (3,096,710) (9,506,929) 37,625 (2,730,465) (15,873) (268,607) (13,154,014) 129,692,300 (119,276,976) 17,350,000 - (9,400,000) 7,500,000 - (47,076) (1,433,847) (52,172,634) (27,788,233) 18,188 3,033,516 5,946,231 8,979,747

See accompanying notes to financial statements.

368

(English Translation of Financial Statements and Report Originally Issued in Chinese) FORMOSA PLASTICS CORPORATION

Notes to the 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 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 financial statements:

The accompanying financial statements of the Company for the years ended 2023 were approved and 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 Company has initially adopted the following new amendments, which do not have a significant impact on its 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 Company has initially adopted the new amendment, which do not have a significant impact on its 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 Company 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 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)

369

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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

Standards or Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture” Amendments to IAS21“Lack of Exchangeability”

Content of amendment Effective date per IASB The amendments address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28 (2011) in dealing with the sale or contribution of 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. Effective date to be determined by IASB The amendments set out: ●when a currency is exchangeable into another currency; and ●how a company determines an estimated spot rate when a currency lacks exchangeability. January 1, 2025

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

The Company 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 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)

370

FORMOSA PLASTICS CORPORATION Notes to the 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 financial statements.

(a) Statement of compliance

These annual 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 financial statements have been prepared on a historical cost basis:

• (i) Financial assets at fair value through other comprehensive income are measured at fair value;

• (ii) The 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 Company is determined based on the primary economic environment in which the entities operate. The financial statements are presented in NTD, which is the Company’ s functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

• (c) Foreign currencies

• (i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company 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. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

(Continued)

371

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

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.

• (ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations, are translated into the presentation currency at the average exchange rate. Exchange 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 Company disposes of only 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 noncontrolling interest. When the Company 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 planed nor likely 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.

• (d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and 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.

(Continued)

372

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

A liability is classified as current under one of the following criteria. and all other liabilities are classified as non-current.

• (i) It is expected to be settled in 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; or

• (iv) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and 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.

(f) Financial instruments

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

(i) Financial assets

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.

(Continued)

373

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

• 1) Financial assets measured at amortized cost

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

• ‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

• 2) Fair value through other comprehensive income (FVOCI )

Some accounts receivables are held within a business model whose objective is achieved by both collecting contractual cash flows and selling by the Company, 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 Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

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 Company’s right to receive payment is established.

(Continued)

374

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

• 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 Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

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

4) Business model assessment

The Company 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;

• ‧ how the performance of the portfolio is evaluated and reported to the Company’ 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 Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

(Continued)

375

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

• 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 Company 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 Company 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 Company’s claim to cash flows from specified assets (e.g. nonrecourse features)

• 6) Impairment of financial assets

The Company 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 Company 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

• ‧ 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 Company is exposed to credit risk.

(Continued)

376

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

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

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

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company 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 Company 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 Company’s procedures for recovery of amounts due.

• 7) Derecognition of financial assets

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

(Continued)

377

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

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

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

• 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 Company 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.

(Continued)

378

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(g) 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.

(h) Investment in associates

Associates are those entities in which the Company has significant influence, but not control, or joint control, over their 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 arising from the acquisition less any accumulated impairment losses.

The consolidated financial statements include the or 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 Company, from the date on which significant influence commences until the date on which significant influence ceases. The 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 the transactions between the Company and an associate are recognized only to the extent of unrelated Company’s interests in the associate.

When the Company’s share of losses of an associate equals or exceeds its interest in associates, 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 Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(i)

Subsidiaries

The Company accounts the investee companies that it possesses control using the equity. Net income, other comprehensive income, and shareholder’ s equity in the financial reports of the Company and the net income, other comprehensive income, and shareholder’s equity that belongs to the Consolidated Company in the consolidated financial reports should be the same.

The Company accounts the changes in equity, under the condition that control is still present, as equity transactions between the proprietors. 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.

(Continued)

379

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(j) Joint venture

A joint venture is a joint arrangement whereby the Company has joint control of the arrangement in which the Company has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. The Company recognizes its interest in a joint venture as an investment and accounts for that investment using the equity method in accordance with IAS 28 “Investments in Associates and Joint Ventures”, unless the Company qualifies for exemption from that Standard. Please refer to note 4(h) for the application of the equity method.

When assessing the classification of a joint arrangement, the Company 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 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 25 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)

380

FORMOSA PLASTICS CORPORATION Notes to the 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 Company 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 Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

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

• － fixed payments, 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 Company’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,

• － 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)

381

FORMOSA PLASTICS CORPORATION Notes to the 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 Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents 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 Company has elected not to recognize right-of-use assets and lease liabilities for shortterm leases of plant and building that have a lease term of 12 months or less and leases of lowvalue assets. The Company 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 Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

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

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 Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

(Continued)

382

FORMOSA PLASTICS CORPORATION Notes to the 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 Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use. 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, deferred tax assets and investment properties and biological assets, measured at fair value, less costs) 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 cash-generating units (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.

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

(Continued)

383

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

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

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

The Company manufactures and sells plastic raw materials, chemical fibers, and petrochemical products to downstream manufacturers. The Company 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 Company has objective evidence that all criteria for acceptance have been satisfied.

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

2) Construction contracts

The Company enters into contracts to the development of electronic components and software products. Because its customers controls the development process of the said items, the Company recognizes 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 Company 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 Company has recognized revenue, but not issued a 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)

384

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

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

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

(p) Contract costs

• (i) Incremental costs of obtaining a contract

The Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Company expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Company 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 Company 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 Company 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 Company can specifically identify;

• ‧ the costs generate or enhance resources of the Company 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)

385

FORMOSA PLASTICS CORPORATION Notes to the 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 Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations(or partially satisfied performance obligations), the Company recognizes these costs as expenses when incurred.

(q) Employee benefits

(i) Defined contribution plans

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

(ii) Defined benefit plans

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

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

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

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

(iii) Short-term employee benefits

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

(Continued)

386

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

• (r) Income taxes

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

The Company 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 Company 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 tax comprises 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 Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• (iii) Taxable temporary differences arising on the initial recognition of goodwill.

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

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

• (i) the 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.

(Continued)

387

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

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 Company 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

The Company discloses its information on operating segments in its consolidated financial statements, so it need not disclose such information in the parent company only financial statements.

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

The preparation of the 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.

Judgment of whether the Group has substantive control over its investees, the Company discloses its information on operating segments in its consolidated financial statements by 2023.

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 Company 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)

388

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Cash on hand Bank deposit Cash equivalents Repurchase bonds Time deposits	December 31, 2023 $ 362 948,233 - 642,322 $ 1,590,917	December 31, 2022
		298 2,079,851 6,899,598 -
		8,979,747

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

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

December 31, 2023 (i) Mandatorily at FVTPL Private fund $ 1,641,598 Please refer to Notes 6(t) 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 13,180,969 Total $ 109,047,560	December 31, 2022
	1,562,720
	December 31, 2022
	86,772,334 175,825 5,232,499 11,196,360
	103,377,018

Equity investments at fair value through other comprehensive income

The Company designated the investments shown above as equity instruments as 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.

(Continued)

389

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

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.

• (c) Notes receivable and accounts receivable:

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 $ 149,200 10,427,089 382,492 (77,055) $ 10,881,726	December 31, 2022 178,029 12,141,515 127,506 (65,229) 12,381,821

The Company 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,notes receivables and accounts receivables have been grouped based on shared credit risk characteristics according to the customers contract regulations of payment ability on due date; and the days past due, as well as the incorporated forward-looking information.The Company's note receivables and account receivables expected credit losses are analysed as follows: The loss allowance provision were determined as follows:

Current 1 to 30 days past due 31 to 60 days past due More than 61 days past due	December 31, 2023	December 31, 2023
	Gross carrying amount $ 10,006,386 857,297 86,958 8,140 $ 10,958,781	Weighted- average loss rate 0.001~0.139% 3.222% 35.183% 76.867%	Loss allowance provision
			12,584 27,619 30,595 6,257
			77,055

Current 1 to 30 days past due 31 to 60 days past due More than 61 days past due	December 31, 2022	December 31, 2022
	Gross carrying amount $ 12,036,577 351,204 36,669 22,600 $ 12,447,050	Weighted- average loss rate 0.192% 4.384% 34.373% 68.902%	Loss allowance provision
			21,652 15,398 12,607 15,572
			65,229

(Continued)

390

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

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

Beginning balance Impairment losses recognized Ending balance	For the years ended December 31,	For the years ended December 31,
	2023 $ 65,229 11,826 $ 77,055	2022 64,993 236 65,229

The Company 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 Company and the financial institution was as follows:

KC de Mexico KC de Mexico			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 receivable－loans to related parties Other receivable－related parties Other receivables	December 31, 2023 $ 2,489,727 1,378,445 1,825,263 $ 5,693,435	December 31, 2022
		5,352,654 2,170,583 1,205,377
		8,728,614

As of December 31, 2023 and 2022, the aging analysis of other receivables were not recognized which estimated by the Company.

(Continued)

391

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

(e) Inventories

Finished goods Work in process Raw materials Supplies Machinery and accessories in process Others Change of net realizable value of inventories Loss from devaluation of inventories	December 31, 2023 December 31, 2022 $ 9,534,023 9,518,797 1,089,469 1,542,207 1,567,923 1,291,295 233,507 243,065 1,512,904 1,698,273 35,355 8,918 $ 13,973,181 14,302,555 For the years ended December 31,	December 31, 2022
		9,518,797 1,542,207 1,291,295 243,065 1,698,273 8,918
		14,302,555
	2023 $ 4,471	2022 438,590

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:

Subsidiaries Formosa Plastics Corp. (Cayman Ltd.) Formosa Industries Corporation Associates Formosa Petrochemical Corporation Formosa Plastics Corp., U.S.A. Formosa Heavy Industries Corp. Sky Dragon Investment 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 Wha Ya Park Management Consulting Corporation Ltd.

December 31, 2023 December 31, 2022 $ 53,929,869 54,723,698 11,536,884 13,908,448 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

(Continued)

392

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

Formosa Environmental Technology Corporation Formosa Resources Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Smart Energy Tech Corporation Joint ventures Formosa Asahi Spandex Co., Ltd. Formosa Daikin Advanced Chemical Co., Ltd. Formosa Tokuyama Advanced Chemicals Co., Ltd.	December 31, 2023 $ 234,962 7,714,128 1,051,647 835,318 1,733,910 979,254 1,336,390 229,284 $ 282,247,552	December 31, 2022
		231,815 8,358,827 578,907 766,964 1,000,818 1,261,244 1,345,390 337,734
		275,797,968

For the years ended 2023 and 2022, the share of net income (loss) of subsidiaries, associates and joint ventures were as follows:

Subsidiaries Formosa Plastics Corp. (Cayman Ltd.) Formosa Industries Corporation Associates Formosa Petrochemical Corporation Formosa Plastics Corp., U.S.A. Formosa Heavy Industries Corp. Sky Dragon Investment 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 Wha Ya Park Management Consulting Corporation Ltd. Formosa Environmental Technology Corporation Formosa Resources Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Smart Energy Tech Corporation

For the years ended December 31, 2023 2022 $ 142,111 2,589,699 (2,418,167) (2,788,445) 6,234,378 4,218,733 1,205,482 3,997,097 (617,732) (590,385) (2,489,269) (1,487,779) 3,104,370 (1,126,063) 1,005,129 1,401,186 29,662 (15,579) (13,791) (11,008) (16) (15) (16) 294 76,565 216,682 128 419 3,126 2,586 (766,156) (213,612) (7,719) (14,878) 68,656 31,789 (16,908) 818

(Continued)

393

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Joint ventures Formosa Asahi Spandex Co., Ltd. Formosa Daikin Advanced Chemical Co., Ltd. Formosa Tokuyama Advanced Chemicals Co., Ltd.	For the years ended December 31,	For the years ended December 31,
	2023 $ (44,431) (8,842) (108,450) $ 5,378,110	2022
		3,551 13,010 (119,365)
		6,108,735

(i) Subsidiaries

• 1) On July 29, 2022, the Company participated in the capital increase by cash of Formosa Industries Corporation, by acquiring additional shares of stock amounting to US$70,000 thousand (equivalent to $2,096,710 thousand).

(ii) Associates

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

Associates	Relationship	Registration Country	Percentage of ownership
			December 31, 2023 December 31, 2022 % 28.56 % 28.56 % 22.66 % 22.66
Formosa Petrochemical Corporation Formosa Plastic Corp. U.S.A.	Formosa Petrochemical Corporation, the supplier of raw materials for the Company, 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 Company.	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)

394

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

The financial information of Formosa Petrochemical Corporation was as follows:

Current assets Non-current assets Current liabilities Non-current liabilities Net asset Net asset contributed to non-controlling interest of Formosa Petrochemical Corporation Net asset contributed to Formosa Petrochemical Corporation Revenue Net income Other comprehensive income (loss) Total comprehensive income (loss) Comprehensive (loss) income allocated to non-controlling interest of Formosa Petrochemical Corporation Comprehensive income (loss) allocated to Formosa Petrochemical Corporation Beginning balance of share of net assets of associates at January 1 Total comprehensive income (loss) allocated to the Company Dividend Received Share of net assets of affiliates as of December 31 Add : share premium acquired not according to holding percentage Add : adjustment of net value Total carrying amount of equity of the major associate as of December 31

December 31, 2023 December 31, 2022 $ 257,789,731 267,202,843 158,371,896 154,578,625 (44,489,619) (69,784,532) (30,453,810) (34,711,571) $ 341,218,198 317,285,365 $ 4,883,912 4,796,931 $ 336,334,286 312,488,434 For the years ended December 31, 2023 2022 $ 712,576,194 848,048,496 $ 21,875,854 14,399,662 12,439,351 (22,673,007) $ 34,315,205 (8,273,345) $ (8,458) 448,211 $ 34,323,663 (8,721,556) For the years ended December 31, 2023 2022 $ 89,018,096 101,830,792 9,838,584 (2,483,120) (2,992,604) (10,338,086) 95,864,076 89,009,586 213 168 29,265 8,342 $ 95,893,554 89,018,096

(Continued)

395

FORMOSA PLASTICS CORPORATION Notes to the 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 share of net assets of associates at January 1 Total comprehensive income allocated to the Company 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 information of the minor associate of the investments accounted for using the equity method was as follows:

Total carrying amount of equity of the minor associates	December 31, 2023 $ 41,743,849	December 31, 2022
		39,991,342

(Continued)

396

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Attributable to the Company: Net income (loss) Other comprehensive income Total comprehensive income (loss)	For the years ended December 31, 2023 2022 $ 376,029 (1,805,545) 346,172 270,187 $ 722,201 (1,535,358)
	2023 $ 376,029 346,172 $ 722,201

• 3) On November 9, 2023, the Company participated in the capital increase by cash of Formosa Plastics Construction Corporation, an associate owned by the Company, with the totalinvestment amounting to $500,000 thousand based on its original shareholding ratio of 25%.

• 4) On August 23, 2023, the Company participated in the capital increase by cash of Formosa Resources Corporation, an associate owned by the Company, 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 Company participated in the capital increase by cash of Formosa Smart Energy Tech Corporation, an associate owned by the Company, with the total investment amounting to $750,000 thousand and $1,000,000 thousand based on its original shareholding ratio of 25%.

• (iii) Joint ventures

The Company’s investments in joint ventures are not significant. The financial information of the minor joint ventures of the investments accounted for using equity method was as follows:

Total carrying amount of investments in the minor joint ventures Attributable to the Company: Net loss Other comprehensive income (loss) Total comprehensive loss	December 31, 2023 December 31, 2022 $ 2,544,928 2,944,368 For the years ended December 31, 2023 2022 $ (161,723) (102,804) 362 (2,045) $ (161,361) (104,849)
	2023 $ (161,723) 362 $ (161,361)

• (iv) Collaterals

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

(Continued)

397

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(g) Property, plant and equipment

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

Land Cast: Balance as of January 1, 2023 $ 11,771,035 Additions 63,385 Disposals (380,870) Reclassification - Balance as of December 31, 2023 $ 11,453,550 Balance as of January 1, 2022 $ 10,983,940 Additions 787,095 Disposals - Reclassification - Balance as of December 31, 2022 $ 11,771,035 Accumulated depreciation/impairment: Balance as of January 1, 2023 $ - Depreciation for the year - Disposals - Reclassification - Balance as of December 31, 2023 $ - Balance as of January 1, 2022 $ - Depreciation for the year - Disposals - Reclassification - Balance as of December 31 , 2022 $ - Carrying amounts:： Balance as of December 31 , 2023 $ 11,453,550 Balance as of December 31 , 2022 $ 11,771,035	Land		Buildings and constructions		Machinery and equipment		Other facilities		Construction in progress 14,886,928 8,380,125 - (5,220,810) 18,046,243 9,905,333 7,212,080 - (2,230,485) 14,886,928 - - - - - - - - - - 18,046,243 14,886,928	Total 196,893,114 9,806,239 (1,941,410) (51,054)
										204,706,889
										188,457,297 9,506,929 (1,113,909) 42,797
										196,893,114
										145,266,186 4,321,256 (1,557,443) 611
										148,030,610
										142,314,417 4,061,358 (1,110,524) 935
										145,266,186
										56,676,279
										51,626,928

• (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 Company’ 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 Company has implemented a deed of trust with the authorities to secure the Company’s rights related to the abovementioned properties.

• (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.

(Continued)

398

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(h) Right-of-use assets

The Company leases many assets including land and buildings, vehicle and machinery Information about cost, depreciation and impairment are as follows:

Cost: Balance at January 1, 2023 Additions Disposals Balance at December 31, 2023 Balance at January 1, 2022 Additions Disposals Balance at December 31, 2022 Accumulated depreciation: Balance at January 1, 2023 Depreciation for the period Disposals Balance at December 31, 2023 Balance at January 1, 2022 Depreciation for the period Disposals Balance at December 31, 2022 Carrying amount: Balance at December 31, 2023 Balance at December 31, 2022	Land $ 647,848 792,872 (15,877) $ 1,424,843 $ 167,923 627,248 (147,323) $ 647,848 $ 16,294 87,479 (15,877) $ 87,896 $ 22,828 49,760 (56,294) $ 16,294 $ 1,336,947 $ 631,554	Buildings - - - - - - - - - - - - - - - - - -	Total 647,848 792,872 (15,877) 1,424,843 167,923 627,248 (147,323) 647,848 16,294 87,479 (15,877) 87,896 22,828 49,760 (56,294) 16,294 1,336,947 631,554

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

(i) Short-term borrowings

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

Unsecured short-term borrowings Interest rate	December 31, 2023 $ 14,491,600 0.0165%~1.69%	December 31, 2022
		14,900,000
		0.776%~1.540%

(Continued)

399

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(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

		Total
	$	14,900,000
		148,307,926
		(148,716,326)
		-
	$	14,491,600
		Total
	$	4,484,676
		129,692,300
		(119,276,976)
	$	14,900,000

(j) 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 Short-term notes and bills payable

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

	December 31, 2023	December 31, 2023
	Institutions	Interest rate		Amount
	Union Bank of Taiwan Co., Ltd.	1.4000%	$	400,000
	International Bills Finance	1.510%~1.545%		1,400,000
	Corporation
	China Bills Finance Corporation	1.430%~1.545%		7,650,000
	Bank SinoPac	1.500%~1.545%		550,000
	Yuanta Commercial Bank Co.,	1.510%		1,000,000
	Ltd.
	Taishin International Bank Co.,	1.405%~1.455%		2,700,000
	Ltd.
	Mega Bills Finance Co., Ltd.	1.430%~1.545%		3,550,000
	CTBC Bank Co., Ltd.	1.430%~1.545%		8,200,000
	E.SUN Commercial Bank, Ltd.	1.554%~1.560%		3,800,000
	Fubon Commercial Bank, Ltd.	1.500%~1.525%		1,500,000
				30,750,000
				(86,626)
			$	30,663,374

(Continued)

400

FORMOSA PLASTICS CORPORATION Notes to the 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.

(k) Long-term debts

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

Unsecured long-term debts Less: Current portion Total Repayment period Interest rate	December 31, 2023 $ 19,000,000 (1,500,000) $ 17,500,000 2024 1.173%~1.79%	December 31, 2022 7,500,000 (5,000,000) 2,500,000 2024 1.173%~1.52%

(ii) Issuance and redemption of loan

Balance of January 1, 2023 New issuance during the period Repayment during the period Balance of December 31, 2023 Balance of January 1, 2022 New issuance during the period Balance of December 31, 2022	Total $ 7,500,000 12,500,000 (1,000,000) $ 19,000,000 Total $ - 7,500,000 $ 7,500,000

(Continued)

401

FORMOSA PLASTICS CORPORATION Notes to the 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 long-term 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 2023~2030

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

• 1) Issuance

Amount Interest rate Expiry	2023 $ 11,100,000 1.55%~1.62% 2029、2031	2022
		-
		-
		-

(Continued)

402

FORMOSA PLASTICS CORPORATION Notes to the 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

• 3) The term of domestic corporate bonds as December 31, 2023 and 2022 were as follows:

Issue amount 2023.12.31 Ending balance 2023.12.31 Current portion 2022.12.31 Ending balance 2022.12.31 Current portion Issuance date Coupon rate Interest payment date Repayment method Issue amount 2023.12.31 Ending balance 2023.12.31 Current portion 2022.12.31 Ending balance 2022.12.31 Current 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 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 7,500,000 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 and 2027~2028, respectively.	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 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.	8,500,000 - - 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		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
		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, 2026~2027and 2029~2030, 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)

403

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(m) Lease liabilities

Lease liabilities consisted of the following:

Lease liabilities consisted of the following:
Current Non-current financial assets	December 31, 2023 $ 60,234 $ 1,294,833	December 31, 2022
		26,811
		607,619

Please refer to Note 6 (u) the maturity analysis.

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 amount recognized in profit or loss was as follows:

Interest on lease liabilities Expenses relating to short-term leases The amount recognized in cash flows statement was as follows: Total cash outflow for leases	December 31, 2023 $ 26,999 $ 107,672 December 31, 2023 $ 206,906	December 31, 2022
		6,431
		101,277
		December 31, 2022
		154,784

The amount recognized in cash flows statement was as follows:

(i) Real estate leases

As of December 31, 2023, the Company leases land and buildings for Ship berthing, loading, unloading, storage and transfer operations. The leases typically run for a period of 2 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.

Certain leases provide for additional rent payments that are based on changes in the local price indices, or sales that the Company incurred at the leased store in the period ； others require the Company 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 Company also leases its buildings with contract terms of one year. These leases are shortterm and the Company has elected not to recognize its right-of-use assets and lease liabilities for these leases.

(Continued)

404

FORMOSA PLASTICS CORPORATION Notes to the 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 Company 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 Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of 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 Company's Bank of Taiwan labor pension reserve account balance amounted to $4,776,892 thousand 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)

405

FORMOSA PLASTICS CORPORATION Notes to the 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 and 2022 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

(Continued)

406

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Based on the actuarial report, the Company is expected to make contributions of $116,817 thousand 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.

7)

Sensitivity analysis

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

As the year ended of 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 Decrease $ (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 Company 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 Company is not required to bear the regulated or putative obligation subsequent to the payment of fixed-rate contribution.

The Company’ s pension costs under the defined contribution pension plan amounted to $273,642 thousand and $265,095 thousand for the years ended 2023 and 2022, respectively.

(Continued)

407

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(o) Income tax

• (i) The details of income tax (benefits) expense for the years ended 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 $ (525,358) 84,532 $ (440,826)	2022
		5,956,740 483,783
		6,440,523

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

Items that could not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plan Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign financial statements	For the years ended December 31,	For the years ended December 31,
	2023 $ 31,411 $ 173,061	2022
		(28,677)
		(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 $ 1,379,377 (2,842) (819,271) (472,732) (525,358) $ (440,826)	2022
		8,516,678 (154,405) (1,688,366) (233,366) (18) 6,440,523

(Continued)

408

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(ii) Recognized deferred tax assets and liabilities

Movements in deferred tax assets and liabilities were as follows:

For the year ended December 31, 2022 Deferred tax assets Unrealized gross loss Unamortized fixed manufacturing expense Accrued pension liability Unrealized impairment loss on financial assets Unrealized foreign currency exchange loss Total Deferred tax liabilities Foreign investment income under equity method Cumulative translation adjustment Depreciation Unrealized gross profit Total	Beginning balance	Recognized in income or loss		Recognized in other comprehensive income - - 31,411 - - 31,411 - (173,061) - - (173,061)	Ending balance
	$ - 32,346 855,873 185,895 24,797 $ 1,098,911 $ 19,010,020 285,445 69,812 4,235 $ 19,369,512				2,972 44,901 800,333 151,934 58,334
					1,058,474
					19,035,600 112,384 61,151 -
					19,209,135

For the year ended December 31, 2023 Deferred tax assets Unrealized gross loss Unamortized fixed manufacturing expense Accrued pension liability Unrealized impairment loss on financial assets Unrealized foreign currency exchange loss Total Deferred tax liabilities Foreign investment income under equity method Unrealized foreign currency exchange gain Cumulative translation adjustment Depreciation Unrealized gross profit Total	Beginning balance	Recognized in income or loss		Recognized in other comprehensive income - - (28,677) - - (28,677) - 154,405 - - 154,405	Ending balance
	$ 7,826 11,773 1,310,337 220,420 9,699 $ 1,560,055 $ 18,945,319 7,996 131,040 79,436 - $ 19,163,791				- 32,346 855,873 185,895 24,797
					1,098,911
					19,010,020 - 285,445 69,812 4,235
					19,369,512

(iii) The Company’s income tax returns have been examined and approved through 2021 by the ROC tax authorities.

(Continued)

409

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(iv) 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 Company is closely monitoring the legislative developments related to the introduction of the Global minimum top-up tax in the jurisdictions where it operates.

The Company 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 Company during the year will be recognized as current tax. (see Note 4 (r)).

The Company 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 (see Note 4 (r)).

(p) Capital and other equity

As the year ended of 2023 and 2022, the Company’s government registered total authorized capital and issued capital stock both amounted to $63,657,408 thousand, 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:

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)

410

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(ii) Retained earnings

According to the Company’s Articles of Association, the Company’s annual net profit, after providing for income tax and covering the losses of previous years, is first set aside for legal reserve at the rate of 10% thereof. In addition, a special reserve shall also be set aside as necessary. The remainder plus the undistributed earnings of the previous years are distributed or left undistributed for business purposes according to the resolution of the stockholders’ dividend distribution plan, which are initially proposed by the Board of Directors and adopted by the shareholders in 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)

411

FORMOSA PLASTICS CORPORATION Notes to the 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 balanceof 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 Other equity (net of tax) Balance at January 1, 2023 Exchange differences on foreign operations Exchange differences on associates and joint ventures acc for using equity method Unrealized gains (losses) from financial assets measured a value through other comprehensive income Unrealized gains from financial assets measured at fair val through other comprehensive income, associates and ventures accounted for using equity method Share of cash flow hedge of associates and joint ventures Balance at December 31, 2023	2022	2022	2022	2022			2021 Dividends per share Amount 8.20 52,199,074 Gains (losses) on hedging instruments Revaluation surplus Total (77,910) 1,002,593 51,959,804 - - (633,499) - - (687,684) - - 5,677,390 - - 4,742,768 9,787 - 9,787 (68,123) 1,002,593 61,068,566	2021 Dividends per share Amount 8.20 52,199,074 Gains (losses) on hedging instruments Revaluation surplus Total (77,910) 1,002,593 51,959,804 - - (633,499) - - (687,684) - - 5,677,390 - - 4,742,768 9,787 - 9,787 (68,123) 1,002,593 61,068,566	2021 Dividends per share Amount 8.20 52,199,074 Gains (losses) on hedging instruments Revaluation surplus Total (77,910) 1,002,593 51,959,804 - - (633,499) - - (687,684) - - 5,677,390 - - 4,742,768 9,787 - 9,787 (68,123) 1,002,593 61,068,566	2021 Dividends per share Amount 8.20 52,199,074 Gains (losses) on hedging instruments Revaluation surplus Total (77,910) 1,002,593 51,959,804 - - (633,499) - - (687,684) - - 5,677,390 - - 4,742,768 9,787 - 9,787 (68,123) 1,002,593 61,068,566
	Dividends per share				Amount		Dividends per share 8.20 Gains (losses) on hedging instruments Re (77,910) - - - - 9,787 (68,123)
	$ ounted t fair ue joint	4.20 Exchange differences o translation o foreign financ statements	n f ial		26,736,112
									valuation surplus 1,002,593 - - - - -
									1,002,593	61,068,566

(iii) Other equity (net of tax)

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 Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates and joint ventures accounted for using equity method 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 - - (30,685,509) (11,906,794) - - 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 (30,685,509) (11,906,794) 1,002,593 (88,872)
				1,002,593	51,959,804

(Continued)

412

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(q) Earnings per share

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

Profit attributable to ordinary shareholders Weighted average number of outstanding ordinary shares (in thousands) Basic earnings per share Profit attributable to ordinary shareholders Weighted average number of outstanding ordinary share (basic) (in thousands) Effect on employee's profit sharing bonus (in thousands) Weighted average number of outstanding ordinary share (diluted) (in thousands) Diluted earnings per share	For the years ended December 31,	For the years ended December 31,
	2023 $ 7,337,709 6,365,741 $ 1.15 $ 7,337,709 6,365,741 229 6,365,970 $ 1.15	2022
		36,142,868
		6,365,741
		5.68
		36,142,868
		6,365,741 921
		6,366,662
		5.68

(r) Revenue from Contracts with Customers

(i) Revenue Segmentation

Major market： Taiwan Mainland China Others Major goods： PVC Liquid caustic soda HDPE LLDPE EVA PP POM AE SAP Carbon fiber n-Butanol AN MMA ECH Others			For the year	s ended Decemb	er 31, 2023
	Plastic division $ 20,019,243 8,763,114 32,525,461 $ 61,307,818 $ 31,881,910 17,101,481 - - - - - - - - - - - - 12,324,427 $ 61,307,818	Polyolefin division 9,477,264 10,586,016 9,283,823 29,347,103 - - 13,002,747 4,262,300 11,830,349 - - - - - - - - - 251,707 29,347,103	Polypropylene division 5,149,501 5,042,078 3,725,832 13,917,411 - - - - - 11,565,645 2,351,766 - - - - - - - - 13,917,411	Tairylan division 5,516,264 5,043,721 9,357,652	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	Others divisions 3,807,123 13,200 626,319 4,446,642 - - - - - - - - - - - - - - 4,446,642 4,446,642	Total 56,985,676 31,667,340 61,708,055
				19,917,637			150,361,071
				- - - - - - - 6,252,644 4,659,554 2,934,163 5,529,594 - - - 541,682			31,881,910 17,101,481 13,002,747 4,262,300 11,830,349 11,565,645 2,351,766 6,252,644 4,659,554 2,934,163 5,529,594 9,057,917 3,497,136 2,781,004 23,652,861
				19,917,637			150,361,071

(Continued)

413

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Major market： Taiwan Mainland China Others Major goods： PVC Liquid caustic soda HDPE LLDPE EVA PP POM AE SAP Carbon fiber n-Butanol AN MMA ECH Others			For the year	s ended Decembe	r 31, 2022
	Plastic division $ 26,976,726 15,047,958 46,522,834 $ 88,547,518 $ 40,314,826 25,557,163 - - - - - - - - - - - - 22,675,529 $ 88,547,518	Polyolefin division 11,967,519 13,533,210 10,837,600 36,338,329 - - 13,580,368 5,677,864 16,917,863 - - - - - - - - - 162,234 36,338,329	Polypropylene division 6,302,961 6,077,241 3,640,221 16,020,423 - - - - - 12,870,899 3,149,524 - - - - - - - - 16,020,423	Tairylan division 7,772,232 6,470,953 11,629,127 25,872,312 - - - - - - - 8,793,942 6,346,274 4,364,813 5,756,867 - - - 610,416 25,872,312	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 11,515 481,229 3,668,792 - - - - - - - - - - - - - - 3,668,792 3,668,792	Total 73,854,174 42,204,374 79,028,283
							195,086,831
							40,314,826 25,557,163 13,580,368 5,677,864 16,917,863 12,870,899 3,149,524 8,793,942 6,346,274 4,364,813 5,756,867 8,854,696 2,913,254 5,697,276 34,291,202
							195,086,831

(ii) Balance of contracts

Notes receivable Accounts receivable (including related parties) Less: allowance for impairment Total Contract liabilities - unearned sales	December 31, 2023 $ 149,200 10,809,581 (77,055) $ 10,881,726 December 31, 2023 $ 1,309,623	December 31, 2022 178,029 12,269,021 (65,229) 12,381,821 December 31, 2022 2,002,962	January 1, 2022 107,109 17,683,274 (64,993) 17,725,390 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.

(Continued)

414

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(s) Employee bonus

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 Total interest income (ii) Other income Rental income Dividends income	2023 $ 118,838 149,746 $ 268,584 2023 $ 185,729 3,667,671 $ 3,853,400	2022 24,979 102,179 127,158 2022 188,694 8,441,831 8,630,525
	$ $

• (iii) Other gains and losses

Gains on disposal of property, plant and equipment Foreign currency exchange gains Gains on financial assets at fair value through profit or loss Other gains Other losses Net of other gains and losses	2023 $ 388,794 140,236 78,878 355,980 (167,196) $ 796,692	2022 34,240 2,508,771 192,016 502,259 (217,017) 3,020,269

(iv) Finance costs

Interest expense Less: capitalized interest Interest expense from bank loans Capitalized interest rate	2023 $ 1,491,355 (190,652) $ 1,300,703 1.060%	2022 818,426 (129,230) 689,196 1.060%~1.150%

(Continued)

415

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(u) Financial instruments

• (i) Credit risk

• 1) Maximum credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk exposure.

• 2) Concentration of credit risk

The Company’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 Company regularly monitors and reviews the recoverable amount of the trade receivables to its clients, but the company usually doesn’t ask its clients to provide collateral.

• 3) Credit risk of receivables

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

• (ii) Liquidity risk

The following are the remaining contractual maturities at the end of the reporting period of financial liabilities, including estimated interest payments but excluding the impact of netting agreements:

agreements:
Carrying amount December 31, 2023 Non-derivative financial liabilities Unsecured bank loans $ 14,491,600 Unsecured Bonds payable (including current portion) 38,364,189 Short-term notes and bills payable 30,663,374 Long-term debts (including current portion) 19,000,000 Accounts payable (including related parties) 8,416,994 Other payables (including related parties) 1,391,822 Other current liabilities 7,243,095 Employees’ savings (record other current liabilities) 192,573 Lease liabilities 1,355,067 $ 121,118,714	Carrying amount		Contractual cash flow		Within 6 months		6~12months		1~2years		2~5years - 15,254,853 - - - - - - 348,182 15,603,035	Over 5 years
			14,612,919 40,140,283 30,750,000 19,607,565 8,416,994 1,391,822 7,243,095 193,969 1,630,389		14,612,919 2,366,785 30,750,000 - 8,416,994 1,391,822 7,243,095 193,969 43,618		- 1,362,555 - 1,535,190 - - - - 43,618		- 7,961,770 - 18,072,375 - - - - 87,236			- 13,194,320 - - - - - - 1,107,735
			123,987,036		65,019,202		2,941,363		26,121,381			14,302,055

(Continued)

416

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Carrying amount December 31, 2022 Non-derivative financial liabilities Unsecured bank loans $ 14,900,000 Unsecured Bonds payable (including current portion) 36,120,673 Short-term notes and bills payable 19,430,865 Long-term debts (including current portion) 7,500,000 Accounts payable (including related parties) 8,498,428 Other payables (including related parties) 7,396,996 Other current liabilities 8,529,924 Employees’ savings (record other current liabilities) 153,533 Lease liabilities 634,430 $ 103,164,849		Contractual cash flow		Within 6 months		6~12months		1~2years		2~5years - 19,160,278 - - - - - - 157,459 19,317,737	Over 5 years
		15,014,752 37,189,448 19,450,000 7,621,150 8,498,428 7,396,996 8,529,924 154,139 770,073		15,014,752 2,610,660 19,450,000 - 8,498,428 7,396,996 8,529,924 154,139 19,730		- 6,356,080 - 5,062,500 - - - - 19,730		- 5,613,130 - 2,558,650 - - - - 39,460			- 3,449,300 - - - - - - 533,694
		104,624,910		61,674,629		11,438,310		8,211,240			3,982,994

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

(iii) Currency risk

1) Exposure to currency risk

The Company’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 60,626 30.7080 1,861,695 3,904 32.7026 127,685 54,235 0.2306 12,507 38 4.4091 168 23,281 30.7080 714,917 194 32.7026 6,355 22,949 0.2306 5,292	December 31, 2022 Foreign currency (in thousand) Exchange Rate New Taiwan Dollars 60,626 30.7080 1,861,695 3,904 32.7026 127,685 54,235 0.2306 12,507 38 4.4091 168 23,281 30.7080 714,917 194 32.7026 6,355 22,949 0.2306 5,292
	Foreign currency (in thousand)	Exchange Rate	New Taiwan Dollars		Exchange Rate New Taiwan Dollars 30.7080 1,861,695 32.7026 127,685 0.2306 12,507 4.4091 168 30.7080 714,917 32.7026 6,355 0.2306 5,292
	$ 280,685 1,603 55,243 636 32,186 1,213 175,520	30.7350 33.9755 0.2172 4.3394 30.7350 33.9755 0.2172	8,626,853 54,463 11,999 2,760 989,237 41,212 38,123	60,626 3,904 54,235 38 23,281 194 22,949

2) Sensitivity analysis

The Company exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade and other receivables, loans and borrowings; and trade and other payables that are denominated in foreign currency.

(Continued)

417

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

A strengthening (weakening) of 1% of the NTD against the USD, EUR, JPY and CNY as of December 31, 2023 and 2022 would have increased (decreased) net profit before tax by $76,275 thousand and $12,755 thousand. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The analysis is performed on the same basis for 2023 and 2022.

• 3) Foreign exchange gains and losses on monetary items

Since the Company has many kinds of functional currency, the information on foreign exchange gains (losses) on monetary items is disclosed by total amount. For years 2023 and 2022, foreign exchange gains (losses) (including realized and unrealized portions) amounted to $140,236 thousand and $2,508,771 thousand, respectively.

(iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Company'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 liabilities 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 Company management's assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 1%, the company’s net income would have decreased or increased by $195,276 thousand and by $224,000 thousand for the year ended December 31, 2023 and 2022, with all other variable factors remaining constant. This is mainly due to the Company’s borrowing at variable rates.

(v) Other market price risk

If the securities price changes at the reporting date (sensitivity analyses were performed using the same basis for both twelve-month period ended December 31, 2023 and 2022, and other factors remain unchanged), impacts on comprehensive income are as below:

Prices of securities at the reporting date	2023	2023	2022	2022
	Other comprehensive income after tax $ 907,394 $ (907,394)	Net income - -	Other comprehensive income after tax 869,482 (869,482)	Net income
Increasing 1% Decreasing 1%				-
				-

(Continued)

418

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(vi) Fair value

• 1) Types and fair value of financial instruments

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 Company'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:

Carrying value Financial assets at fair value through profit or loss Mandatorily at FVTPL $ 1,641,598 Subtotal 1,641,598 Financial assets at fair value through OCI Domestic listed stocks 90,590,581 Domestic listed stocks (Emerging stock board) 148,850 Unquoted equity instruments at fair value 18,308,129 Accounts receivable 382,492 Subtotal 109,430,052 Financial assets measured at amortized cost Cash and cash equivalents 1,590,917 Notes and accounts receivable (including related parties) 10,499,234 Other receivables (including related parties) 5,693,435 Subtotal 17,783,586 Total $ 128,855,236			December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2023
	Carrying value				Fair value
			Level 1		Level 2		Level 3 - - - - 18,308,129 382,492 18,690,621 - - - - 18,690,621	Total
			-		1,641,598			1,641,598
			-		1,641,598			1,641,598
			90,590,581 - - -		- 148,850 - -			90,590,581 148,850 18,308,129 382,492
			90,590,581		148,850			109,430,052
			- - -		- - -			- - -
			-		-			-
			90,590,581		1,790,448			111,071,650

(Continued)

419

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Financial liabilities measured at amortized cost Bonds payable (including current portion) Short-term notes and bills payable Short-term borrowings Long-term loans (including current portion) Employees’ savings (record other current liabilities) Accounts payable (including related parties) Other payables (including related parties) Other current liabilities Lease liabilities Total			December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2023
	Carrying value				Fair value
			Level 1		Level 2		Level 3 - - - - - - - - - -	Total
	$ 38,364,189 30,663,374 14,491,600 19,000,000 192,573 8,416,994 1,391,822 7,243,095 1,355,067 $ 121,118,714		- - - - - - - - -		- - - - - - - - -			- - - - - - - - -
			-		-			-

Carrying value Financial assets at fair value through profit or loss Mandatorily at FVTPL $ 1,562,720 Subtotal 1,562,720 Financial assets at fair value through OCI Domestic listed stocks 86,772,334 Domestic listed stocks (Emerging stock board) 175,825 Unquoted equity instruments at fair value 16,428,859 Accounts receivable 127,506 Subtotal 103,504,524 Financial assets measured at amortized cost Cash and cash equivalents 8,979,747 Notes and accounts receivable (including related parties) 12,254,315 Other receivables (including related parties) 8,728,614 Subtotal 29,962,676 Total $ 135,029,920			December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
	Carrying value				Fair value
			Level 1		Level 2		Level 3 - - - - 16,428,859 127,506 16,556,365 - - - - 16,556,365	Total
			-		1,562,720			1,562,720
			-		1,562,720			1,562,720
			86,772,334 - - -		- 175,825 - -			86,772,334 175,825 16,428,859 127,506
			86,772,334		175,825			103,504,524
			- - -		- - -			- - -
			-		-			-
			86,772,334		1,738,545			105,067,244

(Continued)

420

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Financial liabilities measured at amortized cost Bonds payable (including current portion) Short-term notes and bills payable Short-term borrowings Long-term debts (including current portion) Accounts payable (including related parties) Other payables (including related parties) Other current liabilities Employees’ savings (record other current liabilities) Lease liabilities Total			December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
	Carrying value				Fair value
			Level 1		Level 2		Level 3 - - - - - - - - - -	Total
	$ 36,120,673 19,430,865 14,900,000 7,500,000 8,498,428 7,396,996 8,529,924 153,533 634,430 $ 103,164,849		- - - - - - - - -		- - - - - - - - -			- - - - - - - - -
			-		-			-

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

The Company’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 Company 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 on active liquid markets are determined with reference to quoted market prices (includes publicly traded stocks).

(Continued)

421

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

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

• 4) There were no transfer between the fair value hierarchy levels for the years ended 2023 and 2022.

• 5) Movement of financial instruments grouped into level 3

January 1, 2023 Total gains and losses recognized: In other comprehensive income Proceeds from capital reduction Reclassification December 31, 2023 January 1, 2022 Total gains and losses recognized: In other comprehensive income Proceeds from capital reduction Reclassification December 31, 2022	Financial assets at fair value through other comprehensive income Unquoted equity instruments Accounts receivable $ 16,428,859 127,506 1,886,118 - (6,848) - - 254,986 $ 18,308,129 382,492 $ 24,749,907 175,365 (8,316,798) - (4,250) - - (47,859) $ 16,428,859 127,506
	Unquoted equity instruments $ 16,428,859 1,886,118 (6,848) - $ 18,308,129 $ 24,749,907 (8,316,798) (4,250) - $ 16,428,859

• 6) The valuation procedures for fair value measurements being categorized within Level 3 is to ensure the valuation results are reasonable by applying independent information to make the results close to the current market conditions, to confirm whether the resource of information is independent, reliable and in line with other resources, and to represent the independent information as the exercisable price. According to the Company’ s accounting policy, the analysis on the value changes of remeasured or reevaluated assets and liabilities is performed to ensure the reasonability of the evaluation results at the reporting date.

• 7) The quantitative information of significant unobservable inputs (Level 3)

Most of the Company’ s financial instruments that use Level 3 inputs have only one significant unobservable input, except for equity investment without an active market which have multiple significant unobservable inputs.

(Continued)

422

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income – unquoted equity instruments	Valuation technique Market comparable companies 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 EBITA multiple, discount for lack of marketability The higher the multiple, the higher the fair value Not applicable Not applicable

• 8) Valuation model used in Level 3 fair value measurement - sensitivity analysis of the fair value to the reasonable replaceable assumption

The valuation models and assumptions used to measure the fair value of the financial instruments is reasonable. However, the use of different valuation models or assumptions may result in different measurements. The following is the effect of other comprehensive income from financial assets and liabilities categorized within Level 3 when the inputs used to valuation models have changed:

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	Input Price to earnings ratio multiple price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability Price to earnings ratio multiple price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability	Recognized in other comprehensive income Change Favorable change Unfavorable change ± 1% $ 134,754 (134,754) ± 1% $ 121,366 (121,366)

(Continued)

423

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(v) Financial risk management

The Company seeks to ensure sufficient cost-efficient funding readily available when needed. The Company 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
1. Interest rate, exchange rate, and inflation General manager department; accounting department; finance department; and general management department 2.Investments of high risk and leverage, loans to others, guarantees and endorsements, and trade of derivatives General manager department; finance department; and general management department 3.R&D plans General manager department; technology department of each business division; and general management department 4.Changes on significant domestic and international policies and regulations General manager department; manager department and technology department of each business division; legal department; and general management department 5.Changes on technologies General manager department; and manager department of each business division; R&D center; and general management department 6.Changes on corporate imagesGeneral manager department; and manager department of each business division; and general management department 7.Merge and reinvestments General manager department; manager department of each business division; and general management department 8.Expansion of factories General manager department; factory affair department of each business division; manager department; and general management department		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 Purchases & sales meeting; operation performance meeting; board meeting; and internal audit department Purchase & sales meeting; operation performance meeting; internal audit department; and board meeting Purchase & sales meeting; operation performance meeting; and board meeting Purchase & sales meeting; operation performance meeting; internal audit department; and board meeting Purchase & sales meeting; operation performance meeting; internal audit department; and board meeting

(Continued)

424

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Items	Risk Management Department	Risk Detection
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 of each business division; purchase department; and general management department General manager department; and shares management division of finance department General manager department; and general management department General manager department; general management department; and legal department General manager department; general management department; and general management department	Weekly marker price meeting; purchase & sales meeting; operation performance meeting; internal audit department; and board meeting Operation management meeting and board meeting Operation management meeting and board meeting Purchase & sales meeting, operation performance meeting, internal audit department, and board meeting. 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 Company. The Company is exposed to credit risk from operating activities, primarily trade receivables, and from financing activities, primarily deposits, fixed-income investments and other financial instruments with banks.

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

(Continued)

425

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

3) Guarantee

The Company’ 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 Company believes that they are expecting no significant losses from endorsement.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as 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 Company’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 Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, 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 Company 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.

2) Interest rate risk

The Company 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 Company utilized interest rate swap contracts to partially hedge its exposure.

(w) Capital management

Although business operated by the Company 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 Company’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.

(Continued)

426

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

The Company 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 Company’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 $ 147,521,000 (1,590,917) 145,930,083 347,360,145 % 42.01	December 31, 2022 131,549,347 (8,979,747) 122,569,600 357,684,863 % 34.27

• (x) Changes of liabilities arising from financing activities

Changes of liabilities arising from financing activities were as follows:

Short-term borrowings Short-term notes and bills payable Long-term debts (including current portion) Bonds payable (including current portion) Lease liabilities Total liabilities arisings from financing activities	2023.1.1 $ 14,900,000 19,430,865 7,500,000 36,120,673 634,430 $ 78,585,968	Change in cash flows from financing activities (408,400) 11,300,000 11,500,000 2,250,000 (72,235) 24,569,365	Changes in non-cash - (67,491) - (6,484) 792,872 718,897	Effect of exchange rate changes - - - - - -	December 31, 2023
					14,491,600 30,663,374 19,000,000 38,364,189 1,355,067
					103,874,230

Short-term borrowings Short-term notes and bills payable Long-term debts (including current portion) Bonds payable (including current portion) Lease liabilities Total liabilities arisings from financing activities	2022.1.1 $ 4,484,676 2,099,824 - 45,509,254 147,607 $ 52,241,361	Change in cash flows from financing activities 10,415,324 17,350,000 7,500,000 (9,400,000) (47,076) 25,818,248	Changes in non-cash - (18,959) - 11,419 533,899 526,359	Effect of exchange rate changes - - - - - -	December 31, 2022
					14,900,000 19,430,865 7,500,000 36,120,673 634,430
					78,585,968

(Continued)

427

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(7) Related-party transactions:

• (a) Name of related parties

Name of related party

Relationship with Consolidated Company

Formosa Plastics Corp. (Cayman Ltd.) Subsidiary Formosa Industries Corporation Subsidiary Formosa Industries (Hong Kong) Limited Subsidiary Formosa Industries (Ningbo) Co., Ltd. Subsidiary 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 Ya Tai Development Corp. Associates Wha Ya Park Management Consulting Corporation Associates Ltd. Formosa Environmental Technology Corporation Associates Formosa Resources Corporation Associates Formosa Group (Cayman) Limited Associates Hua Ya Power Corp. Associates Formosa Plastics Construction Corporation Associates Japan Formosa Sumco Technology Corp. Associates Formosa Automobile Corp. Associates Fujian Fuxin Special Steel Co., Ltd. Associates Formosa Asahi Spandex Co., Ltd. Joint venture Formosa Daikin 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 Nan Ya PCB Corporation Other related parties Nan Chung Petrochemical Corporation Other related parties PFG Fiber Glass Corporation Other related parties Nan Ya Plastics (Hong Kong) Co., Ltd. Other related parties Nan Ya Plastics (Guangzhou) Co., Ltd. Other related parties Nan Ya Plastics (Nantong) Co., Ltd. Other related parties Nan Ya Plastics Corporation America Other related parties Formosa Industries Corp., Vietnam Other related parties Formosa Taffeta Co., Ltd. Other related parties

(Continued)

428

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

Name of related party Relationship with Consolidated Company

Formosa INEOS Chemicals Corporation Formosa Biomedical Technology Corp. Formosa Carpet Co., Ltd. Formosa Idemitsu Petrochemical Corp. Hong Jing Resources Corp. Formosa ABS Plastics (Ningbo) Co., Ltd. Formosa Waters Technology Co., Ltd. Formosa Plastics Marine Corp. Formosa Group Ocean Marine Corp. Nan Ya Technology Corporation Inteplast Taiwan Corporation Formosa Ha Tinh (Cayman) Ltd. Formosa Technologies Corporation Formosa Petrochemical Transportation Corporation, Ltd. Chang Gung Biotechnology Corporation Nan Ya Plastics Corporation USA Formosa Ha Tinh Steel Corporation Chang Gung University Kaohsiung Cultural Foundation of Brothers Wang Yung-ching and Wang Yung-tsal Park

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

• (b) Significant related-party transactions

• (i) Sales to related parties

Significant sales to related parties and the balance of accounts receivable were as follows:

Subsidiaries Associates Joint ventures Other related parties	Sales for the years ended December 31, 2023 2022 $ 7,133,843 10,818,840 10,833,379 14,537,740 384,185 287,674 16,048,022 22,101,447 $ 34,399,429 47,745,701		Accounts receivable –related parties	Accounts receivable –related parties
	2023 $ 7,133,843 10,833,379 384,185 16,048,022 $ 34,399,429		December 31, 2023 1,051,441 1,445,900 26,641 1,471,771 3,995,753	December 31, 2022
				815,430 2,038,840 39,250 1,793,888
				4,687,408

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

(Continued)

429

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(ii) Purchase from related parties

Purchases from related parties and the balance of accounts payables were as follows:

Subsidiaries Associates Formosa Petrochemical Corporation Others Other related parties	Purchases for the years ended December 31, 2023 2022 $ 1,308,181 2,493,193 66,063,456 78,588,953 1,559,307 1,547,139 4,094,647 4,116,617 $ 73,025,591 86,745,902	Accounts payable –related parties	Accounts payable –related parties
	2023 $ 1,308,181 66,063,456 1,559,307 4,094,647 $ 73,025,591	December 31, 2023 43,557 4,038,790 10,156 224,072 4,316,575	December 31, 2022
			57,901 5,562,011 8,789 350,017
			5,978,718

The purchase price and payment terms for the purchase from 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. The terms of receivables are O/A 90 days for subsidiaries.

• (iii) Property transaction

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

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

There was no receivable on December 31, 2023.

• 2) Purchase of equipment (recognized as property, plant and equipment) from related parties and the balance of accounts payable were as follow:

Other related parties	For the years ended December 31, 2023 2022 $ 420,566 1,300,192	Other payables –related parties	Other payables –related parties
	2023 $ 420,566	December 31, 2023 53,788	December 31, 2022
			411

(Continued)

430

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

3) Acquisition of financial assets

Associates- Formosa Resources Corporation Formosa Plastics Construction Corporation Formosa Smart Energy Tech Corporation Subsidiaries Formosa Industries Corporation	Financial Statement Account Number of Shares (in thousands) Investments accounted for using equity method 79,860 Investments accounted for using equity method 50,000 Investments accounted for using equity method 75,000 Financial Statement Account Number of Shares (in thousands) Investments accounted for using equity method 1	Transaction Shares For the year ended December 31, 2023 Shares of stock of Formosa Resources Corporation $ 798,600 Shares of stock of Formosa Plastics Construction Corporation 500,000 Shares of stock of Formosa Smart Energy Tech Corporation 750,000 $ 2,048,600 Transaction Shares For the year ended December 31, 2022 Shares of stock of Formosa Industries Corporation $ 2,096,710

(iv) Financing transactions

Financing transactions with related parties were as follows:

Associates Formosa Heavy Industries Corp. Formosa Steel IB Other related parties Formosa Group Ocean Marine Corp.	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 1,622,500 567,227 $ 2,489,727	December 31, 2022
		2,900,000 - 2,452,654
		5,352,654

As of December 31, 2023 and 2022, the interest receivable from the abovementioned transactions amounted to $4,294 thousand and $8,166 thousand, respectively, which were recognized as other receivables–related parties.

(Continued)

431

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

• (v) Endorsements and guarantees

• 1) The Company’ s endorsements 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) Purchases of raw materials on behalf of related parties

The detailed information of buying raw materials on behalf of related parties were as follows:

Subsidiaries	Amount of purchases of raw materials on behalf for the years ended December 31, 2023 2022 $ 7,772,459 15,070,674	Amount of purchases of raw materials on behalf for the years ended December 31, 2023 2022 $ 7,772,459 15,070,674	Amount of purchases of raw materials on behalf for the years ended December 31, 2023 2022 $ 7,772,459 15,070,674	Other receivables –related parties	Other receivables –related parties
	2023 $ 7,772,459			December 31, 2023 57,417	December 31, 2022
			15,070,674		571,808

• (vii) Other transactions

The Company's utility and steam expenses paid to related parties were as follow:

Associates Formosa Petrochemical Corporation	Other payables–related parties	Other payables–related parties
	December 31, 2023 $ 1,130,642	December 31, 2022 1,821,789

• (viii) Receivables from payment on behalf of related parties

The Company paid for construction design service fees on behalf of related parties as follows:

Associates Fujian Fuxin Special Steel Corp., Ltd	Other receivables －related parties	Other receivables －related parties
	December 31, 2023 $ 1,316,734	December 31, 2022
		1,590,609

(Continued)

432

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(ix) Rental (recognized as other income)

The Company lease its office and building to related parties, and derived rental income thereon as follows:

Associates Formosa Petrochemical Corporation Formosa Heavy Industries Corp. Others Joint ventures Formosa Daikin Advanced Chemical Co., Ltd. Others Other related parties Nan Ya Plastics Corporation Others	For the years ended December 31,	For the years ended December 31,
	2023 $ 14,016 57,801 11,877 21,490 9,189 21,974 14,870 $ 151,217	2022
		16,568 58,221 34,634 17,397 8,625 20,817 14,371
		170,633

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).

(c) Compensation of key management

The compensation to key management was as follows:

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

(8) Pledged assets:

The Company’s assets pledged to secure loans were as follows:

Classification of assets Nature of Pledged Assets Property, plant and equipment land and building Refundable deposits (recognized as 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

(Continued)

433

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(9) 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 outstanding letters	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 of US$4,848,500 thousand and US$2,453,500 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 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.

• (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.

(Continued)

434

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(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) Other:

• (a) The nature of operating costs and expenses of the Company were as follows:

	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2023	For the year ended December 31, 2022	For the year ended December 31, 2022	For the year ended December 31, 2022	For the year 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	4,964,819 370,725 248,834 - 135,151 4,010,458 254,468	4,238,599 262,313 145,323 9,610 77,633 398,277 -	- - - - - - 27,884	9,203,418 633,038 394,157 9,610 212,784 4,408,735 282,352	5,228,735 366,521 239,859 - 165,393 3,764,422 254,742	4,534,933 264,465 139,049 9,720 96,011 346,696 -	- - - - - - 11,418	9,763,668 630,986 378,908 9,720 261,404 4,111,118 266,160
The Company's number of employees and additional information on employee benefits were as follows: 2023 2022 Number of employees 6,770 6,820 Number of directors who were not employees 11 11 The average employee benefit $ 1,545 1,621 The average salaries and wages $ 1,362 1,434 Adjustment of the average salaries and wages % (5.02) % 12.38 Remuneration of supervisors $ - -

(Continued)

435

FORMOSA PLASTICS CORPORATION Notes to the Financial Statements

(i) Policy for directors’ remuneration:

• 1) The Company's independent directors will receive the remuneration monthly, and they are also provided with transportation allowances based on their board meeting attendance. However, no variable remuneration was paid by the Company.

• 2) According to the Company's articles, the directors’ remuneration is approved by the board of directors in accordance with the degree of participation and value of contributions of each director to the operation of the Company, as well as the salary standards of the same peer or industry. Also, they are provided with transportation allowances based on their board meeting attendance. However, no variable remuneration was paid by the Company

• 3) On June 5, 2009, the Company had approved to abolish the appropriation earnings for directors and supervisors as remuneration at the annual stockholders’ meeting.

• (ii) Policy for remuneration to supervisors:

On June 25, 2015, the Company has established an Audit Committee to replace its supervisors.

• (iii) Policy for managers’ remuneration:

According to the Company’ s articles and Article 29 of the R.O.C. Company Act, the Company’s managers will receive a monthly remuneration, annual bonus,performance bonus and managers’ bonus. Also, The Company monthly allocates retirement pension (including both old and new) and welfare payments to their personal accounts in accordance with the provisions of the Company's Pension. Furthermore, an additional remuneration will be provided to managers under exceptional situations, such as executive retirement bonuses, severance payment, etc. Also, a fixed monthly remuneration will be adjusted based on the annual standard adjustment for general employees. Besides, the chairman of the board of directors will propose the adjustment to the remuneration committee after considering and evaluating the overall performance of the manager's responsibilities (including operational effectiveness, financial performance, industrial safety incidents, environmental sustainability, energy saving, etc.) as well as the achievement of the individual's "annual work target".

(iv) Policy for employee remuneration:

The Company's employees are paid monthly. They will also receive their annual bonus, festival bonus, performance bonus and managers’ bonus, depending on the business condition of the Company.Besides, the monthly wages are adjusted with reference to the Consumer Price Index (CPI), industry salary level, and relevant economic data.

(Continued)

436

FORMOSA PLASTICS CORPORATION

Notes to the 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)

437

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

(ii) Guarantees and endorsements for other parties:

									(In Thousands of New Taiwan Dollars)	(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 guarantor	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		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
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 -

(Continued)

438

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
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

(Continued)

439

FORMOSA PLASTICS CORPORATION

Notes to the 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:

(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	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.	Other related parties 〃 Associates Associates Joint venture Other related parties	(Sales) 〃 〃 〃 〃 〃	(9,612,342) (3,959,026) (7,004,036) (110,891) (259,856) (179,834)	% 6.39 % 2.63 % 4.66 % 0.07 % 0.17 % 0.12	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	7.16% 2.63% 3.56% 0.03% 0.14% 0.08%

(Continued)

440

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

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)	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 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	Inteplast Taiwan Corporation Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Industries Corp., Vietnam Formosa Industries (Ningbo) Co., Ltd. Formosa SumcoTechnolo gyCorporation 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.	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 〃	(Sales) 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 Purchases 〃 〃 〃	(199,518) (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	% 0.13 % 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	Before the 27th of the following month 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	- - - - - - - - - - - - - - -		17,636 318,384 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) -	0.16% 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% -%

(Continued)

441

FORMOSA PLASTICS CORPORATION

Notes to the 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 FormosaIndustri es(Ningbo) Co., Ltd. Formosa Industries U.S.A Co. Ltd.	FormosaINEOS ChemicalsCorp oration FormosaIndustri es(Ningbo) Co., Ltd. The Company Formosa Plastics U.S.A Co. Ltd.	Other relatedparties Parent- subsidiary 〃 Associates	Purchases 〃 〃 Purchases	144,267 966,553 14,906,312 8,040,094	% 0.12 % 0.84 % 37.17 % 91.69	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	- - - -		(12,406) 20,022 1,108,858 517,512	0.15% 0.24% 34.98% 78.09%	Note

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

(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 - - - - - - - -	- - - - - - - - - - - - - -

(ix) Trading in derivative instruments: None.

(Continued)

442

FORMOSA PLASTICS CORPORATION

Notes to the Financial Statements

(b) Information on investees:

The followings are the information on investees for the year 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	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2023	December 31, 2022	Shares (thousands)	Ownership	Carrying value
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 7,714,129 234,961 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)	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)	Note1, Note 2 Note1, Note 2 Note1, Note 2 Note1, Note 2 Note, Note 1 Note1, Note 2 Note1, Note 2 Note1, Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note1, Note 2 Note1, Note 2 Note 2 Note1, Note 2 Note 1 Note 2 Note 2 Note 1, Note 3 Note, Note 2, Note 3 Note, Note 2, Note 3

Note1 ： Including cumulative translation adjustments.

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)

443

FORMOSA PLASTICS CORPORATION

Notes to the 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	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%	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:

itation 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.

(14) Segment information:

Please refer to the consolidated financial statements in 2023.

(Continued)

444

Formosa Plastics Corporation

List of Cash and Cash Equivalents

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items	Description	Amount
Cash on hand	$	162
Petty cash		200
Bank deposit	Checking account	77,576
	Demand account	180,783
	USD 21,896 thousand	672,973
	JPY 55,243 thousand	11,999
	EUR 63 thousand	2,143
	CNY 636 thousand	2,759
		948,233
Cash equivalents	Time deposits-NTD	642,322
	$	1,590,917
Note: Exchange rate on December 31, 2023 USD 1.00=NTD 30.7350
	JPY 1.00=NTD 0.2172
	EUR 1.00=NTD 33.9755
	CNY 1.00=NTD 4.3394

445

Formosa Plastics Corporation

List of Assets Designated at FVTPL - Current

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Name of financial assets Private equity of Mega International Commercial Bank Co. Ltd	Description Funds	Shares/Units 4,554	Face value $ 328.34	Total amount 1,495,338	Cost 1,495,338	Fai	r value Total amount Note 1,641,598 -
						Unit price 360.47

446

Formosa Plastics Corporation

List of Assets Measured at Fair Value Through Other Comprehensive Income - Current

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Name of financial assets Nan Ya Plastics Corporation Formosa Chemicals and Fiber Corporation Nan Ya Technology Corporation Puriblood Medical Co.,Ltd	Description Stocks Stocks Stocks Stocks	Shares/ Units 783,357 198,744 334,815 1,300	Face value Total amount $ 10 7,833,570 10 1,987,440 10 3,348,150 10 13,000 $ 13,182,160	Cost 16,930,051 1,775,505 10,215,315 91,000 29,011,871	Fair	value Total amount Note 52,093,232 - 12,381,747 - 26,115,602 - 148,850 - 90,739,431
					Unit price 66.50 62.30 78.00 114.50

447

Formosa Plastics Corporation

Statement of notes receivable

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Item		Amount
FSSC	$	8,112
TWYK		2,774
YCCYQ		11,614
SUNWEL		97,751
TMSY		8,870
YCCY14		3,918
Others(Note)		16,161
Total	$	149,200
Note: Items that do not reach the five percent benchmark for this account.

Statement of trade receivables

Items	Description		Amount
AUVI	General Customer	$	1,061,576
Others(Note)	"		5,752,253
Less:allowance for impairment	"		(77,055)
Total		$	6,736,774
Formosa Industries(Ningbo) Co., Ltd.	Related Parties	$	1,051,441
Nan Ya Plastics Corporation	"		779,662
Others(Note)	"		2,164,649
Total		$	3,995,752
Note: Items that do not reach the five percent benchmark for this account.

448

Formosa Plastics Corporation

List of Other Current Assets and Other Receivables

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Prepaid expense Prepaid material expense Payment on behalf of others Other current assets Other receivables	Description Amount Insurance $ 36,925 Construction Materials 935,276 Others 777,026 1,749,227 Materials from third party 1,174,660 65,574 $ 2,989,461 Interest $ 62,854 Materials 498,305 Sales tax and Tax refund of sales tax 1,156,360 Allocation of common expense 63,276 Payment on behalf of related parties 4,338 Rent 8,277 Others 31,853 $ 1,825,263

449

Formosa Plastics Corporation

List of Inventory

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Raw materials Supplies Work in process Finished goods Machinery and accessories in process Less : allowance to reduce inventory to NRV Total	Amount Cost NRV Annotations $ 1,568,531 1,567,923 NRV 762,582 233,507 ″ 1,108,517 1,089,469 ″ 9,991,145 9,569,378 ″ 1,512,904 1,512,904 ″ 14,943,679 13,973,181 (970,498) $ 13,973,181
	Cost $ 1,568,531 762,582 1,108,517 9,991,145 1,512,904 14,943,679 (970,498) $ 13,973,181

450

January, 1 Acquisition Disposal Equity method Dividends from investees Others (Note2) December, 31	Share dividends	Name Shares Amount Shares Amount Shares Amount Share profit Share loss (shares) Cash dividends Shares Amount Shares Holding % Amount Note	Formosa Petrochemical Corporation 2,720,549 $ 88,895,784 - - - - 6,234,378 - - 2,992,604 - 3,623,477 2,720,549 28.56 95,761,035 -	Formosa Plastics Corp., U.S.A. 70 73,752,455 - - - - 1,205,482 - - - - 167,004 70 22.66 75,124,941 -	Formosa Heavy Industries Corp. 661,458 7,370,058 - - - - - 617,732 - - - 130,898 661,458 32.92 6,883,224 -	Sky Dragon Investments Limited 425,800 3,348,562 - - - - - 2,489,269 - - - - 425,800 50.00 859,293 -	Formosa Plastics Corp. (Cayman Ltd) 78 54,549,382 - - - - 142,111 - - - - (70,612) 78 100.00 54,620,881 -	Mai Liao Power Corp. 764,201 9,887,171 - - - - 3,104,370 - - - - 933,339 764,201 24.94 13,924,880 -	Formosa Sumco Technology Corporation 112,708 7,229,423 - - - - 1,005,129 - - 822,766 - 2,773 112,708 29.06 7,414,559	Formosa Transportation Corp. 6,566 1,229,109 - - - - 29,662 - - - - 892 6,566 33.33 1,259,663	Formosa Fairway Corp. 4,698 22,825 - - - - - 13,791 - - - (3,462) 4,698 33.33 5,572 -	Yi-Jih Development Corp. 1,200 19,667 - - - - - 16 - - - - 1,200 28.72 19,651 -	Ya Tai Development Corp. 1,306 19,662 - - - - - 16 - - - - 1,306 45.04 19,646 -	Formosa Asahi Spandex Co., Ltd. 50 1,261,244 - - - - - 44,431 - 245,993 - 8,434 50 50.00 979,254 -	Formosa Automobile Corporation 27,044 508,991 - - - - 76,565 - - 196,287 - 1,588 27,044 45.00 390,857 -	Wha Ya Park Management Consulting Corporation 33 4,140 - - - - 128 - - - - 31 33 33.00 4,299 -	Ltd	Formosa Daikin Advanced Chemical Co., Ltd. 24 1,345,390 - - - - - 8,842 - - - (158) 24 50.00 1,336,390 -	Formosa Environmental Technology Corporation 41,714 231,786 - - - - 3,126 - - - - 104 41,714 24.34 235,016 -	Formosa Resources Corporation 830,047 7,301,722 79,860 798,600 - - - 766,156 - - - - 909,907 25.00 7,334,166 -	Formosa Plastics Construction Corporation 60,000 578,907 50,000 500,000 - - - 7,719 - - - (19,541) 110,000 33.33 1,051,647 -	Formosa Group (Cayman) Limited 13 783,265 - - - - 68,656 - - - - - 13 25.00 851,921 -	Formosa Plastics International (Cayman) Limited 33 - - - - - - - - - - - 33 - - -	Japan Tokuyama Co., Ltd. 50,000 337,734 - - - - - 108,450 - - - - 50,000 50.00 229,284 -	Formosa Industries Corp.,U.S.A 6 13,756,981 - - - - - 2,418,167 - - - - 6 100.00 11,338,814 -	Formosa Smart Energy Tech Corporation 100,000 1,000,818 75,000 750,000 - - - 16,908 - - - - 175,000 25.00 1,733,910 -	Total 273,435,076 2,048,600 - 11,869,607 6,491,497 4,257,650 4,774,767 281,378,903	Cumulative translation adjustments 2,362,892 - - - - - (1,494,243) 868,649 Note 1	Long-term investment using equity method, net $ 275,797,968 2,048,600 - 11,869,607 6,491,497 4,257,650 3,280,524 282,247,552		Note 1 : cumulative translation adjustments come from exchanging financial statements of Formosa Plastics Corp., U.S.A., Formosa Plastics Corp. (Cayman Ltd), Sky Dragon Investments Limited, Formosa Industries Corp.,U.S.A, Formosa Group (Cayman) Limited, into	NTD, which are 1,473,527 thousand, (691,012) thousand, (227,690) thousand, 198,070 thousand and (16,603) thousand, respectively, and from translation adjustments of investees Formosa Petrochemical Corporation, Formosa Heavy Industries Corp., Mai Liao	Power Corp., Formosa Sumco Technology Corporation, Formosa Transportation Corp., Formosa Environmental Technology Corporation, Formosa Resources Corporation, which are 132,519 thousand, (218,562) thousand, (119,835) thousand, (19,199) thousand,	(22,474) thousand, (54) thousand and 379,962 thousand.	Note 2 : others come from recognition based on holding percentage of investees' pension actuarial report adjustment capital surplus and unrealized gains (losses) from financial assets in shareholder equity.The amount shown in Formosa Plastics Corp. (Cayman Ltd)	includes realized gross profit of transactions between related parties.

451

			Note		-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-
		Guarantee	/Pledge		N/A	〃	〃	〃	〃	〃	〃	〃	〃	〃	〃	〃	〃	〃	〃	〃	〃	〃	〃
	December, 31		Shares Amount		68,743 2,335,200	39,574 1,147,440	1,103 29,505	1,769 67,336	1,287 11,628	20,471 257,935	2,071 -	2,642 96,758	2,925 265,371	11,657 501,865	3 6,307,880	2,160 54,810	354 190,447	- -	3,750 31,275	2,373 -	1,390 11,039	7,405 126,551	621,178 6,873,089		18,308,129
Measurement	Gain or Loss		2018		46,058	(194,592)	15,524	1,787	1,792	(4,403)	-	10,764	84,582	98,408	2,550,825	7,939	(178,259)	-	11,025	-	(5,001)	(963)	(566,216)		1,879,270
Dividends from	investees	Cash	dividends		137,486	137,597	110	-	798	-	-	6,033	14,625	46,142	-	-	70,662	-	975	-	1,087	-	-		415,515
			Amount		-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	6,848	-	-		6,848
	Disposal																				685
			Shares		-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-		-	-
	Acquisition		Shares Amount		- -	- -	- -	- -	- -	702 -	- -	- -	- -	9,228 -	- -	- -	- -	- -	- -	- -	- -	- -	- -		-
	January, 1		Shares Amount		68,743 $ 2,289,142	39,574 1,342,032	1,103 13,981	1,769 65,549	1,287 9,836	19,769 262,338	2,071 -	2,642 85,994	2,925 180,789	2,429 403,457	3 3,757,055	2,160 46,871	354 368,706	- -	3,750 20,250	2,373 -	2,075 16,040	7,405 127,514	621,178 7,439,305		$ 16,428,859
			Name		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.	Formosa Petrochemical Transportation Corporation, Ltd.	Formosa Technologies Corporation	Formosa Plastics Marine Corp.	Formosa Group Ocean Investment Corp.	Inteplast Taiwan Corporation	Formosa Plastics Maritime Corp.	Taiwan Times	Guangyuan Investment Corp.	Central Leasing International Corp.	Mega Growth Venture Capital Co., Ltd	Minima Technology Co., Ltd.	Formosa Ha Tinh (Cayman) Ltd.		Financial assets, net

452

Formosa Plastics Corporation

List of Other Assets-Non current

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items		Amount
Materials for repairment and maintenance	$	752,980
Prepaid equipment expense		1,566,157
Others		5,292,497
Total	$	7,611,634

453

Formosa Plastics Corporation

List of Short-term Borrowings

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Banks Taiwan Cooperative Bank (Nanking- East-Road Branch) Taishin International Commercial Bank First Commercial Bank (Nanking- East-Road Branch) HSBC Bank (Taiwan) Ltd. Hua Nan Commercial Bank (Min- Sheng Branch) Land Bank of Taiwan Taiwan Business Bank, Ltd. Bank of China (Taipei Branch) Bank of Communication (Taipei Branch) DBS Bank Ltd. Mega International Commercial Bank Co., LTD. (Foreign Department) Oversea-Chinese Banking Corporation Limited Banco Bilbao Vizcaya Argentaria S.A. Bank of Taiwan (Chung-Shan Branch) Sumitomo Mitsui Banking Corporation	Description Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Unsecured Loan for Material	Rate 1.650% 1.690% 1.650% 0.8% 1.650% 1.650% 1.650% 1.690% 1.690% 1.690% 0.0165% 1.690% 0.973% 1.630% 1.69%	Amount Mortgages or Guarantees $ 500,000 NA 700,000 〃 500,000 〃 700,000 〃 491,600 〃 700,000 〃 500,000 〃 1,500,000 〃 1,400,000 〃 2,500,000 〃 500,000 〃 500,000 〃 3,000,000 〃 500,000 〃 500,000 〃 $ 14,491,600

454

	Pledge/	Guarantee			N/A		N/A		N/A			N/A		N/A			N/A		N/A			N/A		N/A			N/A		N/A		N/A	N/A	N/A		N/A		N/A			N/A		N/A		N/A		N/A		N/A		N/A
		Repayment method			Payable in 2 equal installments at the end of the fourth and	fifth year after the issuance day	Payable in 2 equal installments at the end of the sixth and	seventh year after the issuance day	Payable in 2 equal installments at the end of the nineth and	tenth year after the issuance day		Payable in 2 equal installments at the end of the third and	fourth year after the issuance day	Payable in 2 equal installments at the end of the nineth and	tenth year after the issuance day		Payable in 2 equal installments at the end of the fourth and	fifth year after the issuance day	Payable in 2 equal installments at the end of the nineth and	tenth year after the issuance day		Payable in 2 equal installments at the end of the nineth and	tenth year after the issuance day	Payable in 2 equal installments at the end of the eleventh and	twelfth year after the issuance day		Payable in 2 equal installments at the end of the fourth and	fifth year after the issuance day	Payable in 2 equal installments at the end of the sixth and	seventh year after the issuance day	Payable in 2 equal installments at the end of the fourth and	fifth year after the issuance day	Payable in 2 equal installments at the end of the sixth and	seventh year after the issuance day	Payable in 2 equal installments at the end of the nineth and	tenth year after the issuance day		Payable in 2 equal installments at the end of the fourth and	fifth year after the issuance day	Payable in 2 equal installments at the end of the sixth and	seventh year after the issuance day	Payable in 2 equal installments at the end of the nineth and	tenth year after the issuance day	Payable in 2 equal installments at the end of the fourth and	fifth year after the issuance day	Payable in 2 equal installments at the end of the sixth and	seventh year after the issuance day	Payable in 2 equal installments at the end of the fourth and	fifth year after the issuance day	Payable in 2 equal installments at the end of the sixth and		seventh year after the issuance day
Interest	payment	made			November		November		November			June		June			November		November			May		May			May		May			June	June		June			June		June		June		September		September		June		June
		Coupon rate			1.25%, annual , simple, once a year		1.39%, annual , simple, once a year		1.53%, annual , simple, once a year			1.23%, annual , simple, once a year		1.52%, annual , simple, once a year			1.42%, annual , simple, once a year		1.94%, annual , simple, once a year			1.83%, annual , simple, once a year		1.92%, annual , simple, once a year			1.09%, annual , simple, once a year		1.32%, annual , simple, once a year			0.82%, annual , simple, once a year	0.93%, annual , simple, once a year		1.09%, annual , simple, once a year			0.58%, annual , simple, once a year		0.63%, annual , simple, once a year		0.67%, annual , simple, once a year		0.46%, annual , simple, once a year		0.52%, annual , simple, once a year		1.55%, annual , simple, once a year		1.62%, annual , simple, once a year
		Issue Date			2012.11.5		2012.11.5		2012.11.5			2013.6.10		2013.6.10			2013..11.8		2013..11.8			2014.5.21		2014.5.21			2017.5.19		2017.5.19			2018.6.26	2018.6.26		2018.6.26			2020.6.22		2020.6.22		2020.6.22		2021.9.15		2021.9.15		2023.6.27		2023.6.27
	Ending	Balance																				499,772		4,998,678			-		1,849,631				2,699,012		1,397,035			3,599,110		3,747,923		996,143		4,297,300		3,195,337		7,493,556		3,590,692			38,364,189
	Premiums/	Discounts			-		-		-			-		-			-		-			228		1,322			-		369			-	988		2,965			890		2,077		3,857		2,700		4,663		6,444		9,308			35,811
	Amount	Paid			2,200,000		4,300,000		2,500,000			10,000,000		1,500,000			2,200,000		6,300,000			500,000		-			3,300,000		1,850,000			5,200,000	-		-			-		-		-		-		-		-		-			39,850,000
	Amount	Issued			2,200,000		4,300,000		2,500,000			10,000,000		1,500,000			2,200,000		6,300,000			1,000,000		5,000,000			3,300,000		3,700,000			5,200,000	2,700,000		1,400,000			3,600,000		3,750,000		1,000,000		4,300,000		3,200,000		7,500,000		3,600,000			78,250,000
																																																					$
		Name		The third issuance of domestic corporate bonds in 2012 (November)	－type A		－type B		－type C		The first issuance of domestic corporate bonds in 2013 (June)	－type A		－type B		The second issuance of domestic corporate bonds in 2013 (November)	－type A		－type B		The first issuance of domestic corporate bonds in 2014(May)	－type A		－type B		The first issuance of domestic corporate bonds in 2017(May)	－type A		－type B		The first issuance of domestic corporate bonds in 2018(June)	－type A	－type B		－type C		The first issuance of domestic corporate bonds in 2020(June)	－type A		－type B		－type C		The first issuance of domestic corporate bonds in 2021(September)	－type A	－type B		The first issuance of domestic corporate bonds in 2023(June)	－type A	－type B

455

Formosa Plastics Corporation

List of Other Current Liabilities

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Accrued expense Unearned revenue Withholding payment Temporary receipt Other notes payable	Description Amount Salary (includes bonus) $ 3,060,728 Tax 75,120 Utilities expense 2,904,011 Freight fee 59,807 Interest expense 305,552 Insurance premiums 173,197 Pension 63,206 Others 794,047 7,435,668 Loan 1,291,955 Rent 4,664 Transfer money of bid 8,519 Others 380,039 1,685,177 Health and labor insurance expense 49,264 Others 9,178 58,442 Others 422,855 4,888 $ 9,607,030

456

Formosa Plastics Corporation

List of Operating Revenue (1)

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Products PVC PA Processing Aid Modifier Chloromothane Liquid Caustic Soda Flake Caustic Soda Hydrogen CI HCL VCM EPC Hydrofluoric Acid Micropearls Caustic Soda Chlorine Trifluoride Others Plastic Division HPAA MA Butyl Acrylate 2-Ethylhexyl Acrylate Ethyl Acrylate Syngas N-Butanol N-Butyraldehyde Isobutyraldehyde SAP Tairy Carbon Fiber Others Tairylan Division	Unit MT 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 KG MT 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃	Quantity 1,233,377.614 7,611.350 19,099.640 28,338.146 1,125,822.148 33,409.775 8,072.094 43,834.635 90,268.127 357,581.577 82,678.644 31,792.996 57,491.192 70,575.000 19,776.795 24,565.300 8,931.130 98,740.009 25,494.125 5,154.770 2,965.584 182,800.540 9,539.460 7,211.390 112,389.080 6,146.921 10,418.011	Amount
			$ 31,881,910 500,254 1,161,486 432,871 17,101,481 706,254 418,824 219,173 835,677 5,935,775 738,576 93,308 1,178,066 32,124 72,039 61,307,818 797,240 370,264 3,676,243 1,177,922 230,975 59,846 5,529,594 289,094 186,940 4,659,554 2,934,163 5,802 19,917,637

457

Formosa Plastics Corporation

List of Operating Revenue (2)

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Products PCC GCC TAICAL U-CAL Taiso Lime Nano-Ca Others Carbide Division HDPE LDPE EVA LLDPE Paraffin D.F.P level GZ Process Fuel Polyolefin Division Acrylonitrile MTBE MTBE Residual Acetonitrile B-1 Epichlorohydrin 30% HCL Methyl Methacrylate MMA DCP Chemistry Division DCS WMS Automation Maintenance RTPMS Electronics Special Project Department Extrusion Molding General Purpose Injection Molding Multi-Filament Molding Film Molding Block Copolymer Random Copolymer Compound Copolymer PP Products Out Of Standard POM Polypropylene Division DSC models DSC application element DSC Special project Department Total of Sales Revenue Total of Other Revenue Net Operating Revenue	Unit MT 〃 〃 〃 〃 〃 MT 〃 〃 〃 〃 〃 MT 〃 〃 〃 〃 〃 〃 〃 〃 〃 MT 〃 〃 〃 〃 〃 〃 〃 〃	Quantity 9,036.680 50,416.545 2,678.775 3,236.775 1,572.897 99,911.640 669.075 370,078.035 4,035.350 228,672.065 126,205.155 4,301.540 776.620 251,493.026 121,265.850 51,953.910 4,800.140 13,535.475 75,280.141 25,217.958 77,345.660 13,888.435 206.090 60,757.785 4,445.950 41,635.475 26,402.967 43,455.610 118,048.885 33,671.050 - 160.525 3,548.830 45,512.100 - - -		Amount
			107,229 201,569 38,976 72,881 150,537 444,619 32,467 127 1,048,405 13,002,747 128,005 11,830,349 4,262,300 123,158 544 29,347,103 9,057,917 3,428,340 957,749 273,121 428,914 2,781,004 236,303 3,497,136 762,946 1,030 21,424,460 744,132 331,475 270,987 151,689 81,650 1,579,933 2,224,123 150,173 1,420,099 892,899 1,485,994 4,023,154 1,283,808 52 7,643 77,700 2,351,766 13,917,411 704 331 1,035 148,543,802 1,817,269 $ 150,361,071

458

Formosa Plastics Corporation

List of Operating Cost

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Direct materials Raw materials at the beginning of period (includes inventories in transit) Purchase Add : others Less : raw materials at the end of period (includes inventories in transit) others Subtotal of raw materials Supplies Supplies at the beginning of period Purchase Add : others Less : supplies at the end of period others Subtotal of supplies Direct labor Manufacturing overhead Manufacturing cost Add : work in process at the beginning of period (includes Machinery and accessories in process) others Less : work in process at the end of period (includes Machinery and accessories in process) others Cost of finished goods Add : Finished goods at the beginning of period Less : Finished goods at the end of period Others Differences of transfer pricing Cost of goods sold Idle Capacity Loss on write-down of inventory Gain from sale of scraps Stock gain Stock loss Other operating costs Total of operating costs

Amount $ 1,301,689 88,304,340 66,322,368 (1,568,531) (2,957,316) 151,402,550 726,622 27,301,168 8,091 (762,582) (27,273,299) - 2,797,745 63,449,577 217,649,872 3,280,702 1,550,477 (2,621,421) (66,223,955) 153,635,675 9,959,569 (9,991,145) (16,866,874) (5,853) 136,731,372 2,330,390 4,471 (159,108) (16,161) 2,414 1,689,603 $ 140,582,981

459

Formosa Plastics Corporation

List of Manufacturing Expense

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Salaries Employees bonus expense Meals expense Pension Main by-product Depreciation expense Fuel expense Steam expense Package expense Utilities expense Repair and maintenance expense Rental expense Insurance expense Tax expense Miscellaneous expense Consumables Travel expense Internal arrangement expense Freight fee Pollution prevention fee Security expense Project improving expense Research expense - researchers salaries Research expense - researchers bonus Research expense - researchers meal expense Research expense - researchers pension Research expense - depreciation Research expense - repair and maintenance Research expense - development Research expense - travel expense Research expense - project improving expense Research expense - others Other manufacturing expense Total

Amount

$ 2,319,967 2,754 45,635 104,089 5,113,774 4,004,208 9,125,891 2,027,694 1,419,555 15,538,911 8,321,937 66,472 89,454 141,860 78,383 1,219,978 30,618 187,579 245,155 1,326,068 1,329,447 379,153 408,436 479 7,502 16,589 6,250 518,169 31,244 4,335 3,531 32,095 9,302,365 $ 63,449,577

460

Formosa Plastics Corporation

List of Administration Expense

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Salaries Meals expense Pension Bonus expense Benefit expense Depreciation expense Repair and maintenance expense Rental expense Insurance expense Tax expense Entertainment expense Postage and phone expense Transportation expense Books and publications expense Printing & supplies expense Office equipment expense Travel expense Utilities expense Freight fee Medical expense Internal arrangement expense Miscellaneous expense Computer user fee Remuneration Security expense Donations Material test expense Advertisement expense Overseas promotion expense Pollution prevention expense Fines Others Total

Amount

$ 2,059,561 46,897 105,694 2,489 41,212 298,016 441,458 25,089 7,437 103,387 35,828 21,283 37,838 5,093 4,508 1,311 103,234 140,962 7,539 5,649 11,765 347,459 165,124 16,138 73,555 359,611 9,180 4,184 15,166 125,950 681 156,090 $ 4,779,388

461

Formosa Plastics Corporation

List of R&D Expense and Selling Expense

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

R&D Expense ：

Items Salary expense of researchers Meal expense of researchers Pension of researchers Bonus for researchers Depreciation Materials test expense R&D expense Travel expense Utilities expense Repair and maintenance expense Security expense Others Total Selling Expense: Items Salary expense Meal expense Pension Employees bonus Export freight fees of sea & air Export insurance expense Export commission Export freight fees of ground Export miscellaneous expense Customs clearance fee Export package expense Export port administration expense User fee of port facilities regards to export Export terminal handling charge Port user fee due to export Export storage expense Freight fee of domestic sales Employees benefit expense Depreciation Rental expense Entertainment expense Postage and phone expense Travel expense Miscellaneous expense Others Total	Amount	Amount
	$ 642,469 11,701 25,609 719 99,237 83,111 344,182 35,461 118,038 202,861 28,663 187,183 $ 1,779,234 Amount
		Amount
	$ 348,786 6,678 14,020 409 1,159,841 5,885 177,849 493,353 186,442 473 401,232 133,892 57,650 552,104 212,745 142,922 1,180,076 43,742 1,024 15,902 4,860 5,550 16,325 3,261 105,786 $ 5,270,807

Selling Expense:

462

Formosa Plastics Corporation

List of Other Revenue

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Interest revenue Dividend revenue Rent revenue

Description Amount Demand account $ 149 Time deposits 118,689 Related parties - loans & receivables from payment on behalf of related parties 62,130 Others 87,616 $ 268,584 Nan Ya Plastics Corporation $ 2,350,070 Formosa Chemicals and Fiber Corporation 188,807 Nan Ya Technology Corporation 713,278 Asian Pacific Investment Corp. 137,486 Mai-Liao Harbor Administration Corp. 137,598 Taiwan Aerospace Corp. 110 China Investment & Development Co., Ltd. 798 Formosa Petrochemical Transportation Corporation, Ltd. 6,033 Formosa Plastics Marine Corporation 46,142 Formosa Technologies Corporation 14,625 Formosa Plastics Maritime Corp. 70,662 Mega Growth Venture Capital Co., Ltd. 1,087 Guangyuan Investment Corp. 975 $ 3,667,671 $ 185,729

463

Formosa Plastics Corporation

List of Other Gains and Losses

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Gain on disposal of property, plant and equipment Net gain from foreign exchange Net gain on disposal and appraisal of financial assets Other gains Other losses

Description Amount $ 388,794 Realized net gain from foreign exchange $ 432,269 Unrealized foreign exchange loss - accounts receivable (263,672) Unrealized foreign exchange loss - other receviables (1,594) Unrealized foreign exchange loss - bank deposit & cash equivalent (44,614) Unrealized foreign exchange gain - financing of import using foreign currency 17,847 $ 140,236 Gain on disposal of assets $ 78,878 Expense estimate surplus ( actual cost less than estimated cost) $ 36,449 Gain from purchases of raw materials on behalf of others 89,055 Revenue from claims 971 Others 229,505 $ 355,980 Expense estimate deficit ( actual cost greater than estimated cost) $ (44,697) Loss on materials (106,813) Others (15,686) $ (167,196)

464

Formosa Plastics Corporation

List of Financing Cost

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Items Interest expense

Description Amount Interest of short-term unsecured loans $ 216,400 Interest of payable benefit to employees 2,727 Discount interest (banks financing interest paid by seller due to L/C export & discount interest of bill of exchange of D/A export) 206,787 Interest of financing and reimbursement between related parties 56 Interest of short-term notes and bills payable 352,983 Interest of domestic bonds payable 426,814 Interest of long-term debts - syndicated loan agreement with Mega Bills Finance Co., Ltd. & other long-term debts 219,887 Interest on rental expense 26,999 Service expense 38,686 Others 16 less : capitalized interest (190,652) $ 1,300,703

465

Formosa Plastics Corporation

Chairman: Jason Lin