FORMOSA PETROCHEMICAL CORPORATION
AND SUBSIDIARIES
Consolidated Financial Statements
For The Years Ended
December 31, 2025 And 2024
Independent Auditors’ Report

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

Representation letter

The entities that are required to be included in the combined financial statements of Formosa Petrochemical Corporation as of and for the year ended December 31, 2025 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. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Formosa Petrochemical Corporation and its Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Formosa Petrochemical Corporation
Chairman: Tsao, Mihn
Date: March 5, 2026

安永聯合會計師事務所

11012 台北市基隆路一段333號9樓
9F, No. 333, Sec. 1, Keelung Road, Taipei City, Taiwan, R.O.C.

Tel: 886 2 2757 8888
Fax: 886 2 2757 6050
ey.com/zh_tw

Independent Auditors' Report Translated from Chinese

To the Board of Directors and Stockholders of Formosa Petrochemical Corporation

Opinion

We have audited the accompanying consolidated balance sheets of Formosa Petrochemical Corporation (the "Company") and its subsidiaries as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2025 and 2024, and notes to the consolidated financial statements, including the summary of material accounting policies (together "the consolidated financial statements").

In our opinion, based on our audits and the reports of the other auditors (please refer to the Other Matter – Making Reference to the Audits of Other Auditors section of our report), the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of December 31, 2025 and 2024, and their consolidated financial performance and cash flows for the years ended December 31, 2025 and 2024, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by 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 the 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 Company and its subsidiaries in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of the other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

A member firm of Ernst & Young Global Limited

EY安永

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2025 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue recognition

Revenue is primarily driven by refining and sales of petroleum. The Company and its subsidiaries recognized operating revenues of NT$626,159,096 thousand during 2025, which was a significant and material amount in terms of financial performance and earning distribution. Therefore, revenue recognition is determined as a key audit matter.

The audit procedures we performed regarding revenue recognition included but not limited to: evaluate the appropriateness of the accounting policies for revenue recognition; understand the transaction process and perform tests of control on the effectiveness of control points; inspect the terms of transaction to ensure obligation of customers contract; the appropriate timing of revenue recognition; obtain confirmation letter on revenue from the Company's and its subsidiaries' top 10 customers that are related parities; understand nature and rationality of transactions with the Company's and its subsidiaries' newly added top 10 customers, inspect the source document and proof of the accounts receivable collection, and confirm that the remitters match the customers; for a period before and after the balance sheet date, select significant sales and sales return transactions and inspect the supporting document to ensure proper cut off.

We also consider the appropriateness of the revenue disclosure included in note 4 and note 6(17) of the notes to the consolidated financial statements.

Valuation of inventories

As of December 31, 2025, the inventories amounted to NT$65,290,907 thousand, representing 16% of total assets, which was significant to the financial statements. Inventories consists of raw materials, finished goods and work in process which were measured at the lower of cost or net realizable value. As the fluctuation of material prices such as crude oil, could lead to value fluctuation of inventories, resulting in complex calculation of measurement of the lower of cost or net realizable value, therefore, valuation of inventories is identified as a key audit matter.

The audit procedures we performed regarding inventories valuation included but not limited to: evaluate the appropriateness of the accounting policies for inventories valuation; understand the transaction process and perform tests of control on the effectiveness of control points; inspect year-end inventory counting plan and observe the physical inventory count to verify the accuracy of inventory volume; test that inventory pricing correctly used weighted average method; perform tests on the net realizable value used by the management to verify its accuracy.

We also consider the appropriateness of inventories disclosure included in note 4 and note 6(6) of the notes to the consolidated financial statements.

A member firm of Ernst & Young Global Limited

EY安永

Other Matter – Making Reference to the Audits of Other Auditors

We did not audit the financial statements of certain associates and joint ventures accounted for under the equity method whose statements are based solely on the reports of the other auditors. These associates and joint ventures under equity method amounted to NT$6,985,692 thousand and NT$8,417,237 thousand, both representing 2% of consolidated total assets as of December 31, 2025 and 2024. The related shares of profit or loss of the associates and joint ventures under the equity method amounted to NT$(157,638) thousand and NT$(81,651) thousand, both representing (1)% of the consolidated net income before tax for the years ended December 31, 2025 and 2024, and the related shares of other comprehensive income (loss) from the associates and joint ventures under the equity method amounted to NT$70,979 thousand and NT$200,409 thousand, representing 0% and (1)% of the consolidated other comprehensive income for the years ended December 31, 2025 and 2024, respectively.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by 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 ability to continue as a going concern of the Company and its subsidiaries, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of the Company and its subsidiaries.

A member firm of Ernst & Young Global Limited

EY安永

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company and its subsidiaries.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Company and its subsidiaries. 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 Company and its subsidiaries to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

A member firm of Ernst & Young Global Limited

EY安永

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company and its subsidiaries 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2025 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

We have audited and expressed an unqualified opinion including an Other Matter Paragraph on the parent company only financial statements of the Company as of and for the years ended December 31, 2025 and 2024.

Chang, Cheng Tao
Huang, Chien Che
Ernst & Young, Taiwan
March 5, 2026

Notice to Readers

The accompanying consolidated financial statements are intended only to present the financial position, results of operations and cash flows in accordance with 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.

Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

A member firm of Ernst & Young Global Limited

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FORMOSA PETROCHEMICAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2025 AND DECEMBER 31, 2024

(Expressed in Thousands of Dollars)

ASSETS	Notes	December 31, 2025	December 31, 2024
CURRENT ASSETS
Cash and cash equivalents	4 & 6(1) & 12	$47,523,942	$22,987,569
Financial assets at fair value through profit or loss — current	4 & 6(2) & 12	1,849,655	1,846,201
Financial assets at fair value through other comprehensive income — current	4 & 6(3) & 12	74,552,833	26,379,548
Financial assets for hedging — current	4 & 6(4) & 12	77,055	9,712
Notes receivable, net	4 & 6(5) & 12	140	140
Notes receivable due from related parties, net	4 & 6(5) & 7 & 12	1,569,914	1,905,376
Accounts receivable, net	4 & 6(5) & 12	25,090,403	23,882,235
Accounts receivable due from related parties, net	4 & 6(5) & 7 & 12	17,918,346	20,620,730
Finance lease receivables, net	4 & 6(19) & 7 & 12	12,315	1,997,798
Other receivables (including from related parties)	7 & 12 & 13	6,833,365	6,576,609
Current tax assets	4 & 6(23)	639,619	758,531
Inventories	4 & 6(6)	65,290,907	77,546,460
Prepayments	6(7)	14,892,314	22,193,390
Other current assets	8	796,074	609,635
Total current assets		257,046,882	207,313,934
NONCURRENT ASSETS
Financial assets at fair value through other comprehensive income — non-current	4 & 6(3) & 12	17,010,078	17,226,256
Financial assets for hedging — non-current	4 & 6(4) & 12	-	15,710
Investments accounted for using the equity method	4 & 6(8)	35,338,671	36,845,272
Property, plant and equipment	4 & 6(9) & 7	85,841,722	87,534,779
Mineral resources	4	2,204,548	2,404,007
Right-of-use assets	4 & 6(19) & 7	3,373,624	3,741,754
Investment property	4 & 6(10)	394,859	398,020
Deferred tax assets	4 & 6(23)	3,250,416	3,466,850
Long-term finance lease receivable, net	4 & 6(19) & 7 & 12	102,841	115,156
Other non-current assets, others	6(11)	11,897,835	12,137,911
Total non-current assets		159,414,594	163,885,715
TOTAL ASSETS		$416,461,476	$371,199,649

The accompanying notes are an integral part of the financial statements.

(Forward)

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FORMOSA PETROCHEMICAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (continued)

DECEMBER 31, 2025 AND DECEMBER 31, 2024

(Expressed in Thousands of Dollars)

LIABILITIES AND EQUITY	Notes	December 31, 2025	December 31, 2024
CURRENT LIABILITIES
Short-term loans	6(12) & 12	$107,804	$6,781,361
Financial liabilities for hedging — current	4 & 6(4)& 12	22,748	61,984
Contract liabilities — current	4 & 6(17)	86,716	72,588
Notes payable	12	3,092	5,615
Accounts payable	12	9,970,466	8,033,128
Accounts payable to related parties	7 & 12	2,823,356	3,527,646
Other payables	12	13,196,217	15,459,011
Other payables to related parties	7 & 12	332,312	357,976
Current tax liabilities	4 & 6(23)	2,435,829	40,337
Current lease liabilities	4 & 6(19) & 7 & 12	1,058,021	1,113,193
Current portion of long-term liabilities	6(13) & 6(14) & 12	8,725,000	10,250,000
Other current liabilities, others	4 & 9	535,743	230,026
Total current liabilities		39,297,304	45,932,865
NONCURRENT LIABILITIES
Financial liabilities for hedging — non-current	4 & 6(4) & 12	58,508	51,135
Bonds payable	6(13) & 12	8,100,000	14,950,000
Long-term loans	6(14) & 12	725,000	464,670
Deferred tax liabilities	4 & 6(23)	92,799	104,828
Non-current lease liabilities	4 & 6(19) & 7 & 12	2,411,495	2,779,107
Defined benefit pension liability	4 & 6(15)	4,316,608	4,429,990
Other non-current liabilities, others		214,725	240,409
Total non-current liabilities		15,919,135	23,020,139
TOTAL LIABILITIES		55,216,439	68,953,004
EQUITY
Capital stock
Common stock	6(16)	95,259,597	95,259,597
Capital surplus		31,424,987	31,422,485
Retained earnings
Legal reserve		82,136,967	81,515,335
Special reserve		4,470,033	3,033,784
Unappropriated earnings		94,008,694	87,165,612
Total retained earnings		180,615,694	171,714,731
Other equity		48,491,810	(1,436,249)
Non-controlling interests	6(16)	5,452,949	5,286,081
TOTAL EQUITY		361,245,037	302,246,645
TOTAL LIABILITIES AND EQUITY		$416,461,476	$371,199,649

The accompanying notes are an integral part of the financial statements.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FORMOSA PETROCHEMICAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in Thousands of Dollars, Except for Earnings per Share)

	Notes	For the Year Ended December 31, 2025	For the Year Ended December 31, 2024
OPERATING REVENUES	4 & 6(17) & 7	$626,159,096	$663,823,047
OPERATING COSTS	4 & 6(6) & 6(20) & 7	604,090,793	653,509,262
GROSS PROFIT		22,068,303	10,313,785
OPERATING EXPENSES	4 & 6(15) & 6(18) & 6(20) & 7
Selling and marketing		5,913,928	5,889,140
General and administrative		4,924,817	4,726,959
Research and development		351,091	373,166
Expected credit losses (gains)		(479)	(24,045)
Total operating expenses		11,189,357	10,965,220
OPERATING INCOME/(LOSS)		10,878,946	(651,435)
NON-OPERATING INCOME AND EXPENSES
Interest income	6(21) & 7	944,389	946,352
Other income	6(21) & 7	2,477,819	2,667,873
Other gains and losses	6(21) & 7	(352,515)	2,772,752
Financial costs	6(21) & 7	(468,191)	(524,166)
Share of profit or loss of associates and joint ventures accounted for using the equity method	4 & 6(8)	(768,228)	1,355,734
Total non-operating income and expenses		1,833,274	7,218,545
INCOME BEFORE INCOME TAX		12,712,220	6,567,110
INCOME TAX EXPENSE	4 & 6(23)	2,837,415	756,225
NET INCOME		9,874,805	5,810,885
OTHER COMPREHENSIVE INCOME (LOSS)	6(8) & 6(22)
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit plans		78,265	206,154
Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income		56,197,465	(28,060,014)
Share of other comprehensive income of associates and joint ventures accounted for using equity method		1,269,621	92,233
Income tax (benefit) expense relating to items that will not be reclassified		15,653	41,231
Items that may be reclassified subsequently to profit or loss
Exchange differences arising from translation of foreign operations		(732,831)	1,121,767
Gains (losses) on hedging instrument		78,210	(131,169)
Share of other comprehensive income of associates and joint ventures accounted for using the equity method		(499,897)	825,533
Income tax (benefit) expense relating to items that may be reclassified		1,806	(6,017)
Total other comprehensive income (loss) for the period, net of income tax		56,373,374	(25,980,710)
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD		$66,248,179	$(20,169,825)
NET INCOME (LOSS) ATTRIBUTABLE TO:
Shareholders of the parent		$9,875,335	$5,970,918
Non-controlling interests		(530)	(160,033)
		$9,874,805	$5,810,885
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:
Shareholders of the parent		$66,449,790	$(20,322,274)
Non-controlling interests		(201,611)	152,449
		$66,248,179	$(20,169,825)
EARNINGS PER SHARE (NTD)	6(24)
Earnings per share — basic/diluted
Continuing operating income before tax		$1.32	$0.71
Net Income		$1.04	$0.63

The accompanying notes are an integral part of the financial statements.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FORMOSA PETROCHEMICAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in Thousands of Dollars)

Equity Attributable to Shareholders of the Parent

Items	Common Stock	Capital Surplus	Retained Earnings			Foreign Currency Translation Reserve	Other Component of Equity		Total Parent Equity	Non-controlling Interests	Total Equity
			Legal Reserve	Special Reserve	Unappropriated Earnings		Unrealized gains (losses) from Equity Instruments Investments measured at Fair Value through Other Comprehensive Income	Gains (losses) on Hedging Instruments
Balance as of January 1, 2024	$95,259,597	$31,422,014	$79,317,142	$3,033,784	$102,199,400	$465,272	$24,602,148	$34,929	$336,334,286	$4,883,912	$341,218,198
Appropriation of 2023 earnings:
Legal reserve	-	-	2,198,193	-	(2,198,193)	-	-	-	-	-	-
Cash dividends	-	-	-	-	(19,051,919)	-	-	-	(19,051,919)	-	(19,051,919)
Other change in capital surplus:
Other changes in capital surplus	-	471	-	-	-	-	-	-	471	-	471
Net income (loss) for the year ended December 31, 2024	-	-	-	-	5,970,918	-	-	-	5,970,918	(160,033)	5,810,885
Other comprehensive income (loss) for the year ended December 31, 2024	-	-	-	-	170,913	1,634,929	(27,973,882)	(125,152)	(26,293,192)	312,482	(25,980,710)
Total comprehensive income (loss)	-	-	-	-	6,141,831	1,634,929	(27,973,882)	(125,152)	(20,322,274)	152,449	(20,169,825)
Increase (decrease) in non-controlling interests	-	-	-	-	-	-	-	-	-	249,720	249,720
Disposal of equity instruments investments designated at fair value through other comprehensive income	-	-	-	-	74,493	-	(74,493)	-	-	-	-
Balance as of December 31, 2024	$95,259,597	$31,422,485	$81,515,335	$3,033,784	$87,165,612	$2,100,201	$(3,446,227)	$(90,223)	$296,960,564	$5,286,081	$302,246,645
Balance as of January 1, 2025	$95,259,597	$31,422,485	$81,515,335	$3,033,784	$87,165,612	$2,100,201	$(3,446,227)	$(90,223)	$296,960,564	$5,286,081	$302,246,645
Appropriation of 2024 earnings:
Legal reserve	-	-	621,632	-	(621,632)	-	-	-	-	-	-
Special reserve	-	-	-	1,436,249	(1,436,249)	-	-	-	-	-	-
Cash dividends	-	-	-	-	(7,620,768)	-	-	-	(7,620,768)	-	(7,620,768)
Other changes in capital surplus:
Changes in equity of associates and joint ventures accounted for using equity method	-	2,161	-	-	-	-	-	-	2,161	-	2,161
Other changes in capital surplus	-	341	-	-	-	-	-	-	341	-	341
Net income (loss) for the year ended December 31, 2025	-	-	-	-	9,875,335	-	-	-	9,875,335	(530)	9,874,805
Other comprehensive income (loss) for the year ended December 31, 2025	-	-	-	-	67,063	(1,031,504)	57,462,492	76,404	56,574,455	(201,081)	56,373,374
Total comprehensive income (loss)	-	-	-	-	9,942,398	(1,031,504)	57,462,492	76,404	66,449,790	(201,611)	66,248,179
Increase (decrease) in non-controlling interests	-	-	-	-	-	-	-	-	-	368,479	368,479
Disposal of equity instruments investments designated at fair value through other comprehensive income	-	-	-	-	6,579,333	-	(6,579,333)	-	-	-	-
Balance as of December 31, 2025	$95,259,597	$31,424,987	$82,136,967	$4,470,033	$94,008,694	$1,068,697	$47,436,932	$(13,819)	$355,792,088	$5,452,949	$361,245,037

The accompanying notes are an integral part of the financial statements.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FORMOSA PETROCHEMICAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in Thousands of Dollars)

	For the Year Ended December 31, 2025	For the Year Ended December 31, 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$12,712,220	$6,567,110
Adjustments to reconcile net income before tax to net cash provided by operating activities:
Depreciation and depletion	11,199,288	11,373,173
Amortization	1,963,718	1,594,212
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	(3,454)	(204,603)
Interest expense	468,191	524,166
Interest income	(944,389)	(946,352)
Dividends income	(407,644)	(511,487)
Share of loss (profit) of associates and joint ventures accounted for using equity method	768,228	(1,355,734)
Loss (gain) on disposal of property, plant and equipment	(8,554)	89,451
Loss (gain) on disposal of investment properties	3,390	(8,586)
Loss (gain) on disposal of other assets	-	4,412
Loss (gain) on disposal of investments accounted for using equity method	33,771	-
Impairment loss on non-financial assets	30,391	11,152
Reversal of impairment loss on non-financial assets	(3,721)	(15,197)
Other adjustments — (gain) loss on lease modifications	2,818	89
Changes in operating assets and liabilities:
(Increase) decrease in notes receivable (including related parties)	335,462	1,949,662
(Increase) decrease in accounts receivable (including related parties)	1,494,216	457,577
(Increase) decrease in other receivables (including related parties)	(654,998)	505,206
(Increase) decrease in inventories	12,257,841	(888,730)
(Increase) decrease in prepayments	5,213,727	974,997
(Increase) decrease in other current assets	(126,672)	132,290
Increase (decrease) in contract liabilities	14,128	5,340
Increase (decrease) in notes payable	(2,523)	671
Increase (decrease) in accounts payable (including related parties)	1,233,048	(6,396,739)
Increase (decrease) in other payables	(2,220,652)	(740,663)
Increase (decrease) in other current liabilities	305,717	(64,730)
Increase (decrease) in defined benefit pension liability, net	(35,117)	(4,435)
Cash from operating activities	43,628,430	13,052,252
Income taxes received (paid)	(136,065)	(3,849,862)
Net cash provided by (used in) operating activities	43,492,365	9,202,390

The accompanying notes are an integral part of the financial statements.

(Forward)

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FORMOSA PETROCHEMICAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(Expressed in Thousands of Dollars)

	For the Year Ended December 31, 2025	For the Year Ended December 31, 2024
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other comprehensive income	(90,000)	-
Proceeds from disposal of financial assets at fair value through other comprehensive income	8,293,649	92,470
Proceeds from capital reduction of financial assets at fair value through other comprehensive income	19,562	3,484
Acquisition of investments accounted for using the equity method	-	(2,569,073)
Proceeds from disposal of investments accounted for using the equity method	935,478	-
Acquisition of property, plant and equipment:
Cost paid	(6,473,419)	(9,483,021)
Interest paid	(14,676)	(683)
Proceeds from disposal of property, plant and equipment	16,516	13,719
Decrease in other receivables — due from affiliates	422,487	3,971,470
Proceeds from disposal of investment property	3,492	32,630
Decrease in long-term lease receivables	1,898,652	342,633
Increase in other financial assets	(59,767)	-
Decrease in other financial assets	-	8,365
Increase in other non-current assets	(1,723,515)	(2,604,262)
Interests received	920,144	988,700
Dividends received	965,800	2,240,073
Other investing activities	(126,299)	(1,240,587)
Net cash provided by (used in) investing activities	4,988,104	(8,204,082)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans	-	6,667,024
Decrease in short-term loans	(6,673,557)	-
Increase in short-term notes and bills payable	-	4,000,000
Decrease in short-term notes and bills payable	-	(4,000,000)
Repayment of bonds (including current portion)	(5,250,000)	(5,650,000)
Proceeds from long-term loans	1,510,330	3,464,670
Repayment of long-term loans	(4,375,000)	-
Decrease in other payables to related parties	(25,664)	(112,875)
Payments of lease liabilities	(1,215,351)	(1,223,230)
Decrease in other non-current liabilities	(25,343)	(17,575)
Cash dividends paid	(7,619,482)	(19,051,842)
Interest paid	(511,619)	(521,901)
Change in non-controlling interests	368,479	249,720
Net cash provided by (used in) financing activities	(23,817,207)	(16,196,009)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(126,889)	278,717
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	24,536,373	(14,918,984)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	22,987,569	37,906,553
CASH AND CASH EQUIVALENTS, END OF PERIOD	$47,523,942	$22,987,569

The accompanying notes are an integral part of the financial statements.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Formosa Petrochemical Corporation
Notes To Consolidated Financial Statements
For the Years Ended December 31, 2025 and 2024
(Amounts expressed in Thousands of New Taiwan Dollars, Unless Specified Otherwise)
(Audited)

HISTORY AND ORGANIZATION

Formosa Petrochemical Corporation (the "Company") had prepared for incorporation since March 1992 and was incorporated on April 6, 1992. The Company is located in the No.6 Naphtha Cracker Complex in Mailiao of Yunlin County. The Company's shares were approved to be listed on the Taiwan Stock Exchange on November 12, 2003 and were traded publicly starting from December 26, 2003. The major shareholders of the Company are Formosa Plastics Corporation, Formosa Chemicals & Fibre Corporation and Nan Ya Plastics Corporation with equity interests of 28.55%, 24.15% and 23.10%, respectively, as of December 31, 2025.

DATE AND PROCEDURES OF AUTHORIZATION OF FINANCIAL STATEMENTS FOR ISSUE

The consolidated financial statements of the Company and its subsidiaries ("the Group") for the years ended December 31, 2025 and 2024 were authorized for issue in accordance with a resolution of the Board of Directors on March 5, 2026.

NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS

(1) Changes in accounting policies resulting from applying for the first time certain standards and amendments

The Group applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission ("FSC") and become effective for annual periods beginning on or after January 1, 2025. The adoption of these new standards and amendments had no material impact on the Group.

(2) Standards or interpretations issued, revised or amended, by IASB which have been endorsed by FSC, and not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	IFRS 17 “Insurance Contracts”	January 1, 2023
b	Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7	January 1, 2026
c	Annual Improvements to IFRS Accounting Standards – Volume 11	January 1, 2026
d	Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7	January 1, 2026

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(a) IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after January 1, 2023 (from the original effective date of January 1, 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after January 1, 2023.

(b) Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7

The amendments include:

Clarify that a financial liability is derecognised on the settlement date and describe the accounting treatment for settlement of financial liabilities using an electronic payment system before the settlement date.
Clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features.
Clarify the treatment of non-recourse assets and contractually linked instruments.
Require additional disclosures in IFRS 7 for financial assets and liabilities with contractual terms that reference a contingent event (including those that are ESG-linked), and equity instruments classified at fair value through other comprehensive income.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(1) Amendments to IFRS 1
The amendments mainly improve the consistency in wording between first-time adoption of IFRS and requirements for hedge accounting in IFRS 9.

(2) Amendments to IFRS 7
The amendments update an obsolete cross-reference relating to gain or loss on derecognition.

(3) Amendments to Guidance on implementing IFRS 7
The amendments improve some of the wordings in the implementation guidance, including the introduction, disclosure of deferred difference between fair value and transaction price and credit risk disclosures.

(4) Amendments to IFRS 9
The amendments add a cross-reference to resolve potential confusion for a lessee applying the derecognition requirements and clarify the term "transaction price".

(5) Amendments to IFRS 10
The amendments remove the inconsistency between paragraphs B73 and B74 of IFRS 10.

(6) Amendments to IAS 7
The amendments remove a reference to "cost method" in paragraph 37 of IAS 7.

(d) Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7

The amendments include:

(1) Clarify the application of the 'own-use' requirements.
(2) Permit hedge accounting if these contracts are used as hedging instruments.
(3) Add new disclosure requirements to enable investors to understand the effect of these contracts on a company's financial performance and cash flows.

The abovementioned standards and amendments are applicable for annual periods beginning on or after January 1, 2026 and have no material impact on the Group.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(3) Standards or interpretations issued, revised or amended, by IASB which have not been endorsed by FSC, and not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures	To be determined by IASB
b	IFRS 18 “Presentation and Disclosure in Financial Statements”	January 1, 2027 (Note)
c	Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures (IFRS 19)	January 1, 2027
d	Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 and IAS 29)	January 1, 2027

Note: On September 25, 2025, the FSC announced in a press release that Taiwan will adopt IFRS 18 in 2028.

(a) IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors' interests in the associate or joint venture.

(b) IFRS 18 “Presentation and Disclosure in Financial Statements”

IFRS 18 replaces IAS 1 Presentation of Financial Statements. The main changes are as below:

(1) Improved comparability in the statement of profit or loss (income statement)

IFRS 18 requires entities to classify all income and expenses within their statement of profit or loss into one of five categories: operating; investing; financing; income taxes; and discontinued operations. The first three categories are new, to improve the structure of the income statement, and requires all entities to provide new defined subtotals, including operating profit or loss. The improved structure and new subtotals will give investors a consistent starting point for analyzing entities' performance and make it easier to compare entities.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(2) Enhanced transparency of management-defined performance measures
IFRS 18 requires entities to disclose explanations of those entity-specific measures that are related to the income statement, referred to as management-defined performance measures.

(3) Useful grouping of information in the financial statements
IFRS 18 sets out enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes. The changes are expected to provide more detailed and useful information. IFRS 18 also requires entities to provide more transparency about operating expenses, helping investors to find and understand the information they need.

This new standard and its amendments permit subsidiaries without public accountability to provide reduced disclosures when applying IFRS Accounting Standards in their financial statements. IFRS 19 is optional for subsidiaries that are eligible and sets out the disclosure requirements for subsidiaries that elect to apply it.

(d) Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 and IAS 29)

The amendments include:

(1) Clarify that when the entity’s functional currency is that of a non-hyperinflationary economy but its presentation currency is the currency of a hyperinflationary economy, the entity shall translate its results and financial position using the closing rate at the date of the most recent statement of financial position.

(2) In the above circumstances, when the presentation currency ceases to be hyperinflationary economy, the entity shall not retranslate amounts that arose before the beginning of the reporting period.

(3) When the entity’s functional currency and presentation currency are the currency of a hyperinflationary economy, the entity shall apply the relevant accounting treatment in accordance with paragraph 34 of IAS 29.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Group is still currently determining the potential impact of the new or amended standards and interpretations listed under (b), it is not practicable to estimate their impact on the Group at this point in time. The remaining new or amended standards and interpretations have no material impact on the Group.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Statement of compliance

The consolidated financial statements of the Group for the years ended December 31, 2025 and 2024 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”) and International Financial Reporting Standards, International Accounting Standards, Interpretations issued by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by the FSC (“TIFRS”).

(2) Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

(3) Basis of consolidation

A. Preparation principle of consolidated financial statements

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

(a) power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
(b) exposure, or rights, to variable returns from its involvement with the investee, and
(c) the ability to use its power over the investee to affect its returns

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

(a) the contractual arrangement with the other vote holders of the investee
(b) rights arising from other contractual arrangements
(c) the Group’s voting rights and potential voting rights

The Group re-assesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed 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.

If the Group loses control of a subsidiary, it:

(a) derecognizes the assets (including goodwill) and liabilities of the subsidiary;
(b) derecognizes the carrying amount of any non-controlling interest;
(c) recognizes the fair value of the consideration received;
(d) recognizes the fair value of any investment retained;
(e) reclassifies the parent's share of components previously recognized in other comprehensive income to profit or loss, or transfers directly to retained earnings; and
(f) recognizes differences in profit or loss.

B. The consolidated entities are listed as follows:

Investor	Subsidiaries	Main business	Percentage of ownership (%)
			December 31, 2025	December 31, 2024
The Company	Formosa Oil (Asia Pacific) Corp.	Retail of petrochemical	100%	100%
The Company	Formosa Petrochemical Transportation Corp.	Transportation Service	88%	88%
The Company	Formosa Grandseas Bunkering and Trading Corp.	Retail of petrochemical	60%	60%
The Company	FPCC USA, INC.	Oil drilling	100%	100%
The Company	FPCC DILIGENCE Corp.	Ship chartering	100%	100%
The Company	FPCC MAJESTY Corp.	Ship chartering	100%	100%
The Company	FPCC NATURE Corp.	Ship chartering	100%	100%
The Company	FG INC.	Investing	57%	57%
FG INC.	FG LA LLC	Petrochemical products manufacturing and selling	100%	100%
FPCC USA, INC.	MONTGOMERY GATHERING, LLC	Natural gas transportation	70%	70%

English Translation of Consolidated Financial Statements Originally Issued in Chinese

C. Subsidiaries are excluded from the consolidated financial statements and the reason are as follows:

Investor	Subsidiaries	Main business	Percentage of ownership (%)
			December 31, 2025	December 31, 2024
Formosa Oil (Asia Pacific) Corp.	Whalehome International Corp., Ltd.	Sales Retailer	53.80%	53.80%
Formosa Petrochemical Transportation Corp.	Whalehome International Corp., Ltd.	Sales Retailer	15.69%	15.69%

Note: The total percentages of ownership of Formosa Oil (Asia Pacific) Corporation and Formosa Petrochemical Transportation Corporation in Whalehome International Corp., Ltd. both were 69.49% as of December 31, 2025 and 2024. Whalehome International Corp., Ltd.'s assets, liabilities and net income only representing 0.08%, 0.02%, 0.01% and 0.09%, 0.02%, (0.04)% of the Group's corresponding accounts as of December 31, 2025 and 2024. Whalehome International Corp., Ltd was not significant for the Group, so it was not included in the consolidated financial statement.

(4) Foreign currency transactions

The Group's consolidated financial statements are presented in NT$, which is also the Company's functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

A. Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.

B. Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

C. Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

(5) Translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. The following are accounted for as disposals even if an interest in the foreign operation is retained by the Group: the loss of control over a foreign operation, the loss of significant influence over a foreign operation, or the loss of joint control over a foreign operation.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. In partial disposal of an associate or jointly controlled entity that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

(6) Current and non-current distinction

An asset is classified as current when:

A. The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle
B. The Group holds the asset primarily for the purpose of trading
C. The Group expects to realize the asset within twelve months after the reporting period
D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

A liability is classified as current when:

A. The Group expects to settle the liability in its normal operating cycle
B. The Group holds the liability primarily for the purpose of trading
C. The liability is due to be settled within twelve months after the reporting period
D. The Group does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

(7) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and 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.

(8) Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial assets or financial liabilities.

A. Financial instruments: Recognition and Measurement

The Group accounts for regular way purchase or sales of financial assets on the trade date.

The Group classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

(a) the Group’s business model for managing the financial assets and
(b) the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as notes receivable, accounts receivable (including financing lease receivables), financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

(a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

(a) purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

(b) financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

(a) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

(a) A gain or loss on a financial asset measured at fair value through other comprehensive income should be recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.

(b) When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income should be reclassified from equity to profit or loss as a reclassification adjustment.

(c) Interest revenue calculated by using the effective interest method (effective interest rate times the carrying amount of the financial asset) or the method stated below should be recognized in profit or loss.

(i) For purchased or originated credit-impaired financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset.

(ii) For financial assets that are not purchased or originated credit-impaired financial assets but subsequently become credit-impaired financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Group made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

Financial assets at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

B. Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument measured at fair value through other comprehensive income is recognized in other comprehensive income and does not reduce the carrying amount in the balance sheet.

The Group measures expected credit losses of a financial instrument in a way that reflects:

(a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
(b) the time value of money
(c) reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

The loss allowance is measured as follows:

(a) At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Group measures the loss allowance for a financial asset at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that condition is no longer met.

(b) At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.

(c) For trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

(d) For lease receivables arising from transactions within the scope of IFRS 16, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Group needs to assess whether the credit risk on a financial asset has been increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

C. Derecognition of financial assets

A financial asset is derecognized when:

(a) The rights to receive cash flows from the asset have expired

(b) The Group has transferred the asset and substantially all the risks and rewards of the asset have been transferred

(c) The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

D. Financial liabilities and equity

Classification between liabilities or equity

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from issuing price.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated at fair value through profit or loss.

A financial liability is classified as held for trading if:

(a) it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term
(b) on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking
(c) it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument)

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid is recognized in profit or loss.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include accounts payable, interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through amortization process of the effective interest rate method.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid or payable, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

E. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(9) Derivatives instrument and hedge accounting

The Group manages the risk of energy commodity price swaps using hedging instruments that are consistent with an economic relationship between the hedged item and the hedging instrument, and setting the hedge ratio that meets the hedge effectiveness requirement. If a hedging relationship ceases to meet the hedge effectiveness requirement regarding the hedge ratio but the risk management objective for that designated hedging relationship remains the same, an entity shall adjust the hedge ratio of the hedging relationship so that it meets the qualifying criteria again.

An entity shall discontinue hedge accounting prospectively only when the hedging relationship (or a part of a hedging relationship) ceases to meet the qualifying criteria (after taking into account any rebalancing of the hedging relationship, if applicable).

The types of hedging relationships for energy commodity price swap risks and their accounting treatment are as follows:

Cash flow hedge

A hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with all, or a component of, a recognised asset or liability (such as all or some future interest payments on variable rate debt) or a highly probable forecast transaction, and could affect profit or loss.

The cash flow hedge reserve is adjusted to the lower of either the cumulative gain or loss or the cumulative change in fair value (present value) of the hedged item from inception of the hedge.

The portion that is offset by the change in the cash flow hedge reserve must be recognised in other comprehensive income with any hedge ineffectiveness recognised in profit or loss.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(10) Fair value measurement

A fair value measurement assumes that the asset or liability is exchanged in an orderly transaction between market participants to sell the asset or transfer the liability at the measurement date under current market conditions. A fair value measurement assumes that the transaction to sell the asset or transfer the liability takes place either:

A. in the principal market for the asset or liability; or
B. in the absence of a principal market, in the most advantageous market for the asset or liability.

The main or the most advantageous market must enter by the group to conduct transaction.

An entity shall measure the fair value of an asset or a liability using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The group adopts the appropriate valuation technique(s) to use when measuring fair value. The valuation technique(s) used should maximize the use of relevant observable inputs and minimize unobservable inputs.

(11) Inventories

Inventories are valued at lower of cost and net realizable value item by item.

Costs incurred in bringing each inventory to its present location and condition is accounted for as follows:

Raw materials – Purchase cost on weighted average cost basis.

Finished goods and work in progress – Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs. The fix manufacturing cost is allocated based on normal operating capacity. If the actual capacity exceeds the normal capacity, then the fix manufacturing cost is allocated based on the actual capacity. Finished goods and work in progress are based on weighted average method.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Rendering of services is accounted in accordance with IFRS 15 but not within the scoping of inventories.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(12) Investments accounted for using the equity method

The Group’s investment in its associate is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Group has significant influence. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture.

Under the equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Group’s share of net assets of the associate or joint venture. After the interest in the associate or joint venture is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Unrealized gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the Group’s related interest in the associate or joint venture.

When changes in the net assets of an associate or a joint venture occur and not those that are recognized in profit or loss or other comprehensive income and do not affect the Group’s percentage of ownership interests in the associate or joint venture, the Group recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate or joint venture on a prorate basis.

When the associate issues or a joint venture new stock, and the Group’s interest in an associate or a joint venture is reduced or increased as the Group fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in Additional Paid in Capital and Investment accounted for using the equity method. When the interest in the associate or joint venture is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Group disposes of the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 Investments in Associates and Joint Ventures. If this is the case the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognizes the amount in the 'share of profit or loss of an associate' in the statement of comprehensive income in accordance with IAS 36 Impairment of Assets. In determining the value in use of the investment, the Group estimates:

A. Its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or
B. The present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture is not separately recognized, it is not tested for impairment separately by applying the requirements for impairment testing goodwill in IAS 36 Impairment of Assets.

Upon loss of significant influence over the associate or joint venture, the Group measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

(13) Property, plant and equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognized such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment. When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings: 25~55 years
Machinery and equipment: 5~40 years
Transportation equipment: 3~15 years
Other equipment: 3~25 years
Leasehold improvements: The shorter of lease terms or economic useful lives

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The assets' residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.

The Company changed the depreciation method from the straight-line method to the fixed-percentage-on-declining-base method on January 1, 2008 with respect to the related machines, transportation and other equipment of the Refinery and Oil Products Division (excluding the utilities factory and oil factory), Petrochemical Olefins Division and Maintenance Center in Mailiao plant. PP&E still in use after its service life are further depreciated over the newly estimated remaining useful lives.

(14) Investment property

The Group's owned investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, other than those that meet the criteria to be classified as held for sale (or are included in a disposal group that is classified as held for sale) in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, investment properties are measured using the cost model in accordance with the requirements of IAS 16 Property, plant and equipment for that model. If investment properties are held by a lessee as right-of-use assets and is not held for sale in accordance with IFRS 5, investment properties are measured in accordance with the requirements of IFRS 16.

Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

The Group transfers properties to or from investment properties according to the actual use of the properties.

Properties are transferred to or from investment properties when the properties meet, or cease to meet, the definition of investment property and there is evidence of the change in use.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(15) Leases

The Group assesses whether the 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. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Group assesses whether, throughout the period of use, has both of the following:

(a) the right to obtain substantially all of the economic benefits from use of the identified asset; and
(b) the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Group for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Group estimates the stand-alone price, maximising the use of observable information.

Group as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group recognizes right-of-use asset and lease liability for all leases which the Group is the lessee of those lease contracts.

At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

(a) fixed payments (including in-substance fixed payments), less any lease incentives receivable;
(b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
(c) amounts expected to be payable by the lessee under residual value guarantees;
(d) the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
(e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

After the commencement date, the Group measures the lease liability on an amortised cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Group measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

(a) the amount of the initial measurement of the lease liability;
(b) any lease payments made at or before the commencement date, less any lease incentives received;
(c) any initial direct costs incurred by the lessee; and
(d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Group measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use asset 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.

The Group applies IAS 36 "Impairment of Assets" to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Group accounted for as short-term leases or leases of low-value assets, the Group presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements comprehensive income.

For short-term leases or leases of low-value assets, the Group elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Group as a lessor

At inception of a contract, the Group classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Group recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Group allocates the consideration in the contract applying IFRS 15.

The Group recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

(16) Exploration and evaluation assets

Mineral resources means acquired mineral interests and the oil and gas wells and related facilities arising from oil and gas development activities. Necessary cost for the acquisition of mineral interest including acquisition, exploration, development and removal or restoration costs are capitalized as mineral resource assets.

(17) Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's ("CGU") fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset's or cash-generating unit's recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(18) Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

A provision (listed under other current liabilities) is recognized for the carbon fees levied in accordance with the "Climate Change Response Act" and its related sub-laws. Based on the relevant regulations and the greenhouse gases emissions within the scope in the current year's inventory, the Group is subject to the carbon fees levy. However, due to uncertainties related to factors such as the application of inventory methodologies and technologies, the impact of operational activities on emissions, or the results of auditing operations by the competent authority, or the implementation results of the self-determined reduction plan, the Group has made its best estimate based on a comprehensive consideration of available internal and external information, in accordance with the provisions of IAS 37 "Provisions, Contingent Liabilities and Contingent Assets".

(19) Revenue recognition

The Group's revenue arising from contracts with customers mainly include sale of goods and rendering of services. The accounting policies for the Group's types of revenue are explained as follows:

Sales of goods

The Group manufactures and sells goods. Sales are recognized when control of the goods is transferred to the customer (meaning that the customer has control over the use of the product and claims almost all of the remaining benefit) and the goods are delivered to the customers. The main product of the Group is petrochemical products and revenue is recognized based on the consideration stated in the contract. The remaining sales transactions are usually accompanied by volume discounts (based on the accumulated total sales amount for a specified period). Therefore, revenue from these sales is recognized based on the price specified in the contract, net of the estimated volume discounts. Accumulated experience is used to estimate and provide for the discounts, using the expected value method. Revenue is only recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. During the period specified in the contract, refund liability is recognized for the products expected to be returned.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

The Group has not provided any warranty to its products.

The credit period of the Group’s sale of goods is from 30 to 60 days. For most of the contracts, when the Group transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The period between the Group transfers the goods to customers and when the customers pay for that goods is usually short and have no significant financing component to the contract. For a small part of the contracts, the Group has the right to transfer the goods to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. Besides, in accordance with IFRS 9, the Group measures the loss allowance for a contract asset at an amount equal to the lifetime expected credit losses.

Rendering of services

The service provided by the Group is mainly terminal operations which have fixed price or negotiated price based on the number of times the service is provided. The performance obligation is fulfilled at a certain point so the revenue should be recognized when the performance obligation is fulfilled.

Most of the contractual consideration of the Group are claimed after services have been rendered. When services have been performed but the Group does not have the right to the consideration unconditionally, contract assets should be recognized. For part of the contracts where consideration is claimed upon signing the contract, then the Group has the obligation to provide the services subsequently and contract liabilities should be recognized.

The period between the transfers of contract liabilities to revenue is usually within one year, and thus, no significant financing component is raised.

(20) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(21) Post-employment benefits

All regular employees of the Company and its domestic subsidiaries are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence, not associated with the Company and its domestic subsidiaries. Therefore, fund assets are not included in the Group’s consolidated financial statements. Pension benefits for employees of the overseas subsidiaries and the branches are provided in accordance with the respective local regulations.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due. Overseas subsidiaries and branches make contribution to the plan based on the requirements of local regulations.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur. Past service costs are recognized in profit or loss on the earlier of:

A. the date of the plan amendment or curtailment, and
B. the date that the Group recognizes restructuring-related costs or termination benefits

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

(22) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the shareholders' meeting.

Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Deferred tax liabilities are recognized for all taxable temporary differences, except:

A. Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination; at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences.

B. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

A. Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination; at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences.

B. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

According to the temporary exception in the International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12), information about deferred tax assets and liabilities related to Pillar Two income tax will neither be recognized nor be disclosed.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

5. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company’s consolidated financial statements require management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

(1) Judgment

In the process of applying the Group’s accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognized in the consolidated financial statements:

Finance lease commitment — Group as the lessor/ lessee

The Group has entered into commercial property leases. The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as finance leases.

(2) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

A. Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the income approach (for example the discounted cash flows model) or market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

B. Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate, and changes of the future salary etc. Please refer to Note 6 for more details.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

C. Revenue recognition — sales returns and allowance

The Group estimates sales returns and allowance based on historical experience and other known factors at the time of sale, which reduces the operating revenue. The aforementioned sales returns and allowance is estimated based on the assumption that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

D. Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group’s domicile.

Deferred tax assets are recognized for all carry forward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

E. Inventories

Estimates of net realisable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 for more details.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

6. CONTENTS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

	As of
	December 31, 2025	December 31, 2024
Cash on hand and petty cash	$5,021	$5,046
Checking accounts	18,809	33,918
Demand deposits	14,926,399	4,324,029
Time deposits	23,410,383	10,454,651
Commercial paper	9,163,330	8,069,925
Repurchase bonds	-	100,000
Total	$47,523,942	$22,987,569

A. The Group's cash and cash equivalents were not pledged as collateral or restricted for uses as of December 31, 2025 and 2024, respectively.

B. Commercial paper and Repurchase bonds were short-term maturity and highly liquid investments.

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

	As of
	December 31, 2025	December 31, 2024
Mandatorily measured at fair value through profit or loss:
Funds	$1,849,655	$1,846,201

The profit (loss) arising from financial assets at fair value through profit or loss were NT$3,454 thousand and NT$204,603 thousand for the years ended December 31, 2025 and 2024, respectively.

The Group's financial assets at fair value through profit or loss were not pledged.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(3) Financial assets at fair value through other comprehensive income — current and non-current

	As of
	December 31, 2025	December 31, 2024
Equity instruments investments measured at fair value through other comprehensive income:
Listed companies’ stocks	$74,552,833	$26,379,548
Unlisted companies’ stocks	17,010,078	17,226,256
Total	$91,562,911	$43,605,804
Current	$74,552,833	$26,379,548
Non-current	17,010,078	17,226,256
Total	$91,562,911	$43,605,804

The Group’s financial assets at fair value through other comprehensive income were not pledge.

The Group’s dividend income related to equity instrument investments measured at fair value through other comprehensive income for the years ended December 31, 2025 and 2024 are as follow:

	For the year ended December 31, 2025	For the year ended December 31, 2024
Related to investments held at the end of the reporting period	$407,644	$511,487

In consideration of the Group’s investment strategy, the Group derecognized partial equity instrument investments measured at fair value through other comprehensive income, details on derecognition of the investments for the years ended December 31, 2025 and 2024 are as follow:

	For the year ended December 31, 2025	For the year ended December 31, 2024
The fair value of the investments at the date of derecognition	$8,293,649	$92,470
The cumulative gain or loss on disposal reclassified from other equity to retained earnings	6,513,100	73,308

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(4) Financial assets (liabilities) for hedging - current and non-current

	As of
	December 31, 2025	December 31, 2024
Financial assets for hedging
Derivatives
Energy commodity swap contracts	$77,055	$25,422
Current	$77,055	$9,712
Non-current	-	15,710
Total	$77,055	$25,422
	As of
	December 31, 2025	December 31, 2024
Financial liabilities for hedging
Derivatives
Energy commodity swap contracts	$81,256	$113,119
Current	$22,748	$61,984
Non-current	58,508	51,135
Total	$81,256	$113,119

A. As of December 31, 2025 and 2024 there were 529 and 200 energy commodity swap contracts outstanding. The Group used these contracts to hedge the fluctuations of international crude oil and petroleum product prices. The swap contracts entered into by the Group are highly correlated with the price movement of the hedged items and periodic reviews are conducted on the swap contracts undertaken. All energy commodity swap contracts currently held by the Group are held for purpose of hedging and hedge effective. Please refer to Note 12 for details of the company's financial risk management objectives and policies, hedging strategies and activities.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

B. For hedging fluctuations of international crude oil and petroleum product prices, the outstanding energy commodity swap contracts were as follows:

Type of Transaction	Pricing Period	December 31, 2025
		Notional Quantity	Carrying Amount
			Asset	Liability
Singapore gasoline / Dubai Crack Swap	Jan.1, 2026~Dec. 31, 2027	2,400(1,000 bbls)	$40,178	$189
Oil Dubai Crack Swap — M3 Settlement (Dub)	Jan.1, 2026~Feb. 29, 2028	21,600(1,000 bbls)	-	38,829
Oil Dubai Crack Swap — M1 Settlement (Dub)	Jan.1, 2026~Dec. 31, 2027	4,800(1,000 bbls)	2,415	3,587
Singapore 10ppm diesel oil / Dubai Crack Swap	Apr.1, 2026~Dec. 31, 2026	3,000(1,000 bbls)	34,462	-
Henry Hub Natural Gas Asian Swap	Jan. 27, 2026~Nov. 26, 2027	6,110,000(MMBtu)	-	38,651
Total			77,055	81,256
Less: Financial assets (liabilities) for hedging — current			77,055	22,748
Financial assets (liabilities) for hedging — non-current			$-	$58,508
Type of Transaction	Pricing Period	December 31, 2024
---	---	---	---	---
		Notional Quantity	Carrying Amount
			Asset	Liability
Singapore gasoline / Dubai Crack Swap	Jan.1, 2025~Dec. 31, 2025	300(1,000 bbls)	$5,704	$-
Singapore diesel oil / Dubai Crack Swap	Apr.1, 2025~Dec. 31, 2026	2,025(1,000 bbls)	19,718	-
Henry Hub Natural Gas Asian Swap	Jan. 29, 2025~Nov. 26, 2027	11,520,000(MMBtu)	-	113,119
Total			25,422	113,119
Less: Financial assets (liabilities) for hedging — current			9,712	61,984
Financial assets (liabilities) for hedging — non-current			$15,710	$51,135

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(5) Notes and accounts receivable

	As of
	December 31, 2025	December 31, 2024
A. Notes receivable	$140	$140
Less: Loss allowance	-	-
Notes receivable, net	$140	$140
B. Notes receivable – related parties	$1,569,914	$1,905,376
Less: Loss allowance	-	-
Notes receivable – related parties, net	$1,569,914	$1,905,376
C. Accounts receivable	$25,577,905	$24,370,216
Less: Loss allowance	(487,502)	(487,981)
Accounts receivable, net	$25,090,403	$23,882,235
D. Accounts receivable – related parties	$17,918,346	$20,620,730
Less: Loss allowance	-	-
Accounts receivable – related parties, net	$17,918,346	$20,620,730

Notes receivable and accounts receivable were from operations and were not held as collateral by any financial institution.

Accounts receivable are generally on 30~60 day terms. As of December 31, 2025 and 2024, the book value were NT$45,066,305 thousand and NT$46,896,462 thousand, respectively. Please refer to Note 6(18) for more details on loss allowance of accounts receivables for the years ended December 31, 2025 and 2024. Please refer to Note. 12 for more details on credit risk management.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(6) Inventories

	As of
	December 31, 2025	December 31, 2024
Raw materials	$25,764,685	$30,338,182
Supplies	6,538,999	6,411,451
Work in process	11,012,220	12,143,615
Finished goods	21,282,452	28,567,326
Goods in transit	689,222	82,035
By-product	3,329	3,851
Total	$65,290,907	$77,546,460

The cost of inventories (operating cost) recognized in expenses amounted to NT$604,090,793 thousand and NT$653,509,262 thousand for the years ended December 31, 2025 and 2024, including the expense (benefit) from inventory diluted to its respective net realizable value of NT$(405,815) thousand and NT$(395,178) thousand for the years ended December 31, 2025 and 2024, respectively.

Because of the dropping prices of the crude oil and naphtha, high priced inventory destocking, the cost of inventory decreased. The Group had recognized gain from price recovery of inventory in the amount of NT$405,815 thousand and NT$395,178 thousand for the years ended December 31, 2025 and 2024.

No inventories were pledged as of December 31, 2025 and 2024.

(7) Prepaid expense

	As of
	December 31, 2025	December 31, 2024
Prepaid expense — Maintenance	$9,049,555	$10,898,900
Prepaid expense — Material	3,319,513	8,719,661
Prepaid expense — Port handling and others	2,523,246	2,574,829
Total	$14,892,314	$22,193,390

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(8) Investments accounted for using the equity method

The following table lists the investments accounted for using the equity method of the Group:

Investee	As of
	December 31, 2025		December 31, 2024
	Amount	Percentage of Ownership (%)	Amount	Percentage of Ownership (%)
Investments in associates
Mai-Liao Power Corporation	$18,013,147	24.94	$16,149,274	24.94
Yi-Chi Construction Corporation	27,703	40.55	27,728	40.55
Mailiao Harbor Administration Corporation	2,530,987	44.96	2,497,433	44.96
Formosa Development Corporation	609,753	45.99	505,781	45.99
Formosa Marine Corporation	740,334	20.00	788,096	20.00
Simosa Oil Corporation	909,576	20.00	783,549	20.00
Formosa Environmental Technology Corporation	247,608	24.34	240,481	24.34
Formosa Plastics Synthetic Rubber (HK)	1,386,378	33.33	1,575,837	33.33
Nan Ya Photonics, Incorporation	312,368	28.77	313,294	28.77
Whalehome International Corp., Ltd	230,997	69.49	230,361	69.49
TMS Corp.	65,462	49.00	63,765	49.00
Formolight Technologies, Inc.	55,835	39.43	57,529	39.43
Formosa Engineering Technologies, INC.	4,803	20.00	4,575	20.00
Formosa Resources Corporation	4,062,093	25.00	6,403,506	25.00
Formosa Group (Cayman) Limited	-	-	968,838	25.00
Formosa Smart Energy Tech Corporation	4,158,658	25.00	4,174,692	25.00
Subtotal	33,355,702		34,784,739
Investments in jointly controlled entities
Caltex Taiwan Corporation	84,232	50.00	97,005	50.00
Formosa Kraton Chemical Co., Ltd.	1,440,656	50.00	1,429,661	50.00
Idemitsu Formosa Specialty Chemicals Corp.	-	50.00	-	50.00
NKFG	458,081	45.00	533,867	45.00
Subtotal	1,982,969		2,060,533
Total	$35,338,671		$36,845,272

English Translation of Consolidated Financial Statements Originally Issued in Chinese

A. Investments in associates

(a) The associates of the Group were not significant. The summary financial information of associates was listed below:

	For the year ended December 31, 2025	For the year ended December 31, 2024
Net income (loss)	$(828,410)	$1,494,580
Other comprehensive income (loss), net	769,724	917,766
Comprehensive income (loss) for the period	$(58,686)	$2,412,346

(b) The associates of the Group have no publicly quoted prices.

B. Investments in joint ventures

The joint ventures of the Group were not significant. The summary financial information of joint ventures was listed below:

	For the year ended December 31, 2025	For the year ended December 31, 2024
Net income (loss)	$60,182	$(138,846)
Other comprehensive income (loss), net	-	-
Comprehensive income (loss) for the period	$60,182	$(138,846)

C. The associates and joint ventures had no contingent liability, committed capital or provided guarantee on December 31, 2025 and 2024. The joint venture could not distribute profits before obtaining all partners' consent.

D. Whalehome International Corp., Ltd. was not included in the consolidated financial statements. Please refer to Note 4.(3).C.

E. Formosa Group (Cayman) Limited, the associate of the Group, was liquidated in 2025.

F. Long-term equity investments are not pledged as collaterals for bank loans as of December 31, 2025 and 2024.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(9) Property, plant and equipment

As of December 31, 2025, the property, plant and equipment for operating leases, representing 0.01% of total property, plant and equipment. Therefore, it is not intended to separately list Statement of changes in property, plant and equipment for operating leases.

	Land and land improvements	Buildings	Machinery and equipment	Other equipment	Transportation equipment	Leasehold Improvement	Construction in progress	Total
Cost
2025.1.1	$27,181,314	$48,141,602	$393,189,689	$5,129,271	$902,951	$347,272	$13,344,276	$488,236,375
Additions	-	425,137	196,186	108,081	113,914	-	5,644,777	6,488,095
Transfers	-	681,053	5,110,988	133,457	-	-	(3,844,279)	2,081,219
Disposals	-	-	(747,939)	(53,833)	(67,550)	-	-	(869,322)
Exchange differences	(156,914)	-	-	(3,529)	-	-	(259,637)	(420,080)
2025.12.31	$27,024,400	$49,247,792	$397,748,924	$5,313,447	$949,315	$347,272	$14,885,137	$495,516,287
2024.1.1	$26,846,473	$46,613,341	$385,306,632	$4,934,238	$884,956	$356,546	$14,073,689	$479,015,875
Additions	95,790	1,241,971	968,694	174,100	45,659	-	6,957,490	9,483,704
Transfers	-	286,290	7,567,924	135,041	195	-	(7,989,450)	-
Disposals	-	-	(653,561)	(117,217)	(27,859)	(9,274)	(96,367)	(904,278)
Exchange differences	239,051	-	-	3,109	-	-	398,914	641,074
2024.12.31	$27,181,314	$48,141,602	$393,189,689	$5,129,271	$902,951	$347,272	$13,344,276	$488,236,375
Depreciation and impairment:
2025.1.1	$-	$37,891,455	$357,638,143	$4,173,779	$710,992	$287,227	$-	$400,701,596
Depreciation	-	1,769,911	7,725,471	267,727	59,419	13,813	-	9,836,341
Disposals	-	-	(744,644)	(53,456)	(63,260)	-	-	(861,360)
Transfers	-	6,121	(6,492)	(183)	-	-	-	(554)
Exchange differences	-	-	-	(1,458)	-	-	-	(1,458)
2025.12.31	$-	$39,667,487	$364,612,478	$4,386,409	$707,151	$301,040	$-	$409,674,565
2024.1.1	$-	$36,100,890	$350,378,017	$4,026,443	$683,080	$282,664	$-	$391,471,094
Depreciation	-	1,793,468	7,904,432	262,208	55,682	13,837	-	10,029,627
Disposals	-	-	(646,929)	(117,046)	(27,859)	(9,274)	-	(801,108)
Transfers	-	(2,903)	2,623	191	89	-	-	-
Exchange differences	-	-	-	1,983	-	-	-	1,983
2024.12.31	$-	$37,891,455	$357,638,143	$4,173,779	$710,992	$287,227	$-	$400,701,596
Net carrying amount as of:
2025.12.31	$27,024,400	$9,580,305	$33,136,446	$927,038	$242,164	$46,232	$14,885,137	$85,841,722
2024.12.31	$27,181,314	$10,250,147	$35,551,546	$955,492	$191,959	$60,045	$13,344,276	$87,534,779

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Capitalized borrowing costs of property, plant and equipment are as follows:

Item	For the year ended December 31, 2025	For the year ended December 31, 2024
Construction in progress	$14,676	$683
Capitalization rate of borrowing costs	2.01%~2.23%	2.01%

A. The Group’s property, plant and equipment was not pledged as collaterals.

B. Interest expenses before capitalization were NT$482,867 thousand and NT$524,849 thousand for the years ended December 31, 2025 and 2024, respectively.

(10) Investment property and other non-current assets

A. Investment property:

	2025.1.1	Additions	Disposals	2025.12.31
Land:
Cost	$921,562	$-	$(6,882)	$914,680
	2025.1.1	Impairment	Reversal of impairment loss	2025.12.31
Land:
Accumulated impairment	$523,542	$-	$(3,721)	$519,821
	2025.1.1			2025.12.31
Land:
Net carrying amount as of	$398,020			$394,859
	2024.1.1	Additions	Disposals	2024.12.31
Land:
Cost	$945,606	$-	$(24,044)	$921,562
	2024.1.1	Impairment	Reversal of impairment loss	2024.12.31
Land:
Accumulated impairment	$538,739	$-	$(15,197)	$523,542
	2024.1.1			2024.12.31
Land:
Net carrying amount as of	$406,867			$398,020

(a) The Group's investment property was not pledged as collaterals.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(b) The Group measures its investment property not by the fair value, however it discloses its information by the fair value, and it is belong to level 3. The fair value of the investment property held by the Group amounted to NT$394,859 thousand and NT$398,020 thousand as of December 31, 2025 and 2024, respectively. The fair value of investment property was valued by an independent external appraisal expert - CCIS Real Estate Joint Appraisers Firm and Honda Real Estate Appraisers Firm. The fair value was determined based on the market evidence, and the evaluation method was the comparison method, which input is estimated by the price of square meters.

(11) Other non-current assets

	As of
	December 31, 2025	December 31, 2024
Refundable deposits	$430,211	$510,305
Prepaid expense — land and equipment	5,130,613	4,138,307
Advance	218,770	255,317
Unamortized expense	2,452,508	2,928,659
Other assets — land	10,584	10,584
Prepaid expense — Maintenance	3,195,207	3,434,069
Other assets — Others	459,942	860,670
Total	$11,897,835	$12,137,911

As of December 31, 2025 and 2024, the above land was temporarily registered under a third party's name, both at cost amounting to NT10,584 thousand. A lien has been created on the land through the land administration authority of the government, and the registered amounts of the lien were both NT$85,160 thousand in order to protect the interest of the Company. The land was accounted for as the other non-current asset.

(12) Short-term loans

	As of
	Interest Rate	December 31, 2025	December 31, 2024
Purchase loans	Floating interest rate	$18,804	$273,927
Credit loans	1.85%	89,000	6,349,172
Others	-	-	158,262
Total		$107,804	$6,781,361

The Group's unused short-term loans of credits amounted to NT$30,946,626 thousand and NT$27,526,642 thousand as of December 31, 2025 and 2024, respectively.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(13) Bonds payable

	As of
	December 31, 2025	December 31, 2024
Domestic unsecured unconvertible bonds	$14,950,000	$20,200,000
Less: current portion	(6,850,000)	(5,250,000)
Long-term bonds payable	$8,100,000	$14,950,000

As of December 31, 2025, the terms of the domestic bonds were as follows:

Domestic unsecured unconvertible bonds

Item	Unsecured Bonds No.35	Unsecured Bonds No.36		Unsecured Bonds No.37
Type of bonds	Bond C	Bond B	Bond C	Bond B	Bond C
Issue date	2014.9.12	2019.7.24	2019.7.24	2020.8.6	2020.8.6
Principal amount	1,400,000	4,500,000	2,100,000	7,800,000	2,100,000
Ending balance	700,000	2,250,000	2,100,000	7,800,000	2,100,000
Face value	1,000	1,000	1,000	1,000	1,000
Issue price	Par value	Par value	Par value	Par value	Par value
Maturity	12 years	7 years	10 years	7 years	10 years
Coupon rate	Fixed rate 1.99%	Fixed rate 0.78%	Fixed rate 0.87%	Fixed rate 0.64%	Fixed rate 0.68%
Interest payment	Annually	Annually	Annually	Annually	Annually
Repayment	Repay 50% of the principal at the end of the 11thand 12thyear	Repay 50% of the principal at the end of the 6thand 7thyear	Repay 50% of the principal at the end of the 9thand 10thyear	Repay 50% of the principal at the end of the 6thand 7thyear	Repay 50% of the principal at the end of the 9thand 10thyear
Conversion exchange or stock warrants	Not applicable	Not applicable	Not applicable	Not applicable	Not applicable
Securities and Futures Bureau approved document number	Financial Supervisory Commission approved document No.1030029158, July 31, 2014	Taipei Exchange approved document No.10800082232, July 22, 2019	Taipei Exchange approved document No.10800082232, July 22, 2019	Taipei Exchange approved document No.10900087591, July 28, 2020	Taipei Exchange approved document No.10900087591, July 28, 2020

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(14) Long-term loans

Banks	Repayment Method	Types	December 31, 2025		December 31, 2024
			Amount	Interest Rate	Amount	Interest Rate
Bank of Taiwan, CTBC Bank and the other 8 banks	The period of the loan is from July 11, 2023 to July 11, 2026. Interest is payable monthly. The credit period is two years starting from the date of the first drawdown, with one-year extension.	As working capital	$1,875,000	1.849%~ 1.853%	$5,000,000	1.790%~ 1.845%
First Commercial Bank	The period of the loan is from September 27, 2024 to September 26, 2031. Interest is payable monthly. After receive the loan seven years later, the principal should be repaid on maturity date. An early repayment may be requested based on the borrower's needs	As expansion	725,000	2.010%~ 2.230%	464,670	2.009%
Less: Current portion reclassified to current liability			(1,875,000)		(5,000,000)
Long-term loans – due after one year			$725,000		$464,670

(15) Post-employment benefits

A. Defined contribution plan

The defined contribution plan of the Company and its subsidiaries' Employee Retirement Plan is regulated according to the provisions of the Labor Pension Act. In accordance with the Act, contributions made by the employer cannot be lower than 6% of the participant's monthly wages. Therefore, The Company makes 6% contributions of the monthly wages to the Labor Pension personal account of the Bureau of the Labor Insurance on a regular basis.

For the years ended December 31, 2025 and 2024, the expenses related to defined contribution plan amounted to NT$297,926 thousand and NT$298,453 thousand respectively.

B. Defined benefits plan

The defined benefit plan of the Company and its subsidiaries' Employee Retirement Plan is regulated according to the Labor Standards Act. 2. Retirement benefits are based on such factors as the employee's length of service and final pensionable salary. In accordance with the Act, 2 bases are given for each full year on the first 15 years of service and 1 base is given for each full year after 15 years of service. The total bases given shall not exceed 45. Under the retirement plan, the Company contributes monthly an amount equal to 2% of gross salary to the pension reserve fund, which is deposited into a designated depository account with the Bank of Taiwan. At the end of each year, if the balance in the designated labor pension reserve funds is inadequate to cover the benefit estimated to be paid in the following year, the Company should make up the difference in 1 appropriation before the end of March in the following year.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Safeguard and Utilization of the Labor Retirement Fund is regulated by the Ministry of Labor. Investment of the fund is made by outsourcing and self-management. A long-term investment strategy is adopted with both initiative and passive approach. Considering market risk, creditability and liquidity etc., the Ministry of labor has set limit for fund risk and risk management plan so that the target rate of return can be reached without excess exposure to risk. Because the Company is not authorized to manage the Fund, it cannot disclose the classification of the fair value of the plan asset according to IAS 19. As of December 31, 2025, the amount of contribution expected to be made in the following accounting year is NT$64,439 thousand.

As at December 31, 2025 and 2024, both the defined benefit plan of the Group was expected to be expired in 2034.

Amounts to be recognized in profit or loss for the years ended December 31, 2025 and 2024 are summarized as follows:

	For the year ended December 31, 2025	For the year ended December 31, 2024
Current period service cost	$37,039	$40,092
Net interest on the net defined benefit liability (asset)	63,620	57,460
Total	$100,659	$97,552

Reconciliation of the present value of the defined benefit obligation and fair value of plan assets of the defined benefit plan is as follows:

	As of
	December 31, 2025	December 31, 2024
Present value of defined benefit obligation	$5,498,991	$5,544,305
Fair value of plan assets	(1,182,383)	(1,114,315)
Other non-current liabilities — Accrued pension liabilities recognized on the balance sheets	$4,316,608	$4,429,990

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Reconciliation of net defined benefit liabilities (assets):

	Present value of defined benefit obligation	Fair value of plan assets	Net defined benefit liabilities (assets)
2024.1.1	$5,678,729	$(1,038,150)	$4,640,579
Current service cost	40,092	-	40,092
Interest expense (income)	70,984	(13,524)	57,460
Subtotal	5,789,805	(1,051,674)	4,738,131
Remeasurement of defined benefit liabilities/assets
Actuarial gains and losses arising from changes in financial assumptions	(90,619)	-	(90,619)
Experience adjustment	(24,426)	-	(24,426)
Return on plan assets	-	(91,109)	(91,109)
Subtotal	(115,045)	(91,109)	(206,154)
Payments from the plan	(161,478)	113,423	(48,055)
Contributions by employer	-	(84,955)	(84,955)
Net liabilities (assets) transferred from associates	31,023	-	31,023
2024.12.31	5,544,305	(1,114,315)	4,429,990
Current service cost	37,039	-	37,039
Interest expense (income)	80,393	(16,773)	63,620
Subtotal	5,661,737	(1,131,088)	4,530,649
Remeasurement of defined benefit liabilities/assets
Actuarial gains and losses arising from changes in financial assumptions	76,677	-	76,677
Experience adjustment	(76,703)	-	(76,703)
Return on plan assets	-	(78,239)	(78,239)
Subtotal	(26)	(78,239)	(78,265)
Payments from the plan	(185,738)	129,795	(55,943)
Contributions by employer	-	(102,851)	(102,851)
Net liabilities (assets) transferred from associates	23,018	-	23,018
2025.12.31	$5,498,991	$(1,182,383)	$4,316,608

English Translation of Consolidated Financial Statements Originally Issued in Chinese

The following significant actuarial assumptions are used to determine the present value of the defined benefit obligation:

	December 31, 2025	December 31, 2024
Discount rate	1.25%	1.45%
Expected rate of salary increases	2.85%	2.85%

A sensitivity analysis for significant assumption as at December 31, 2025 and 2024 is shown below:

	For the year ended December 31, 2025		For the year ended December 31, 2024
	Increase defined benefit obligation	Decrease defined benefit obligation	Increase defined benefit obligation	Decrease defined benefit obligation
Discount rate increase by 0.25%	$-	$(92,243)	$-	$(106,425)
Discount rate decrease by 0.25%	94,939	-	109,767	-
Future salary increase by 1.0%	390,965	-	455,236	-
Future salary decrease by 1.0%	-	(355,988)	-	(410,868)

The sensitivity analyses above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analyses compared to the previous period.

(16) Equities

A. Common stock

The Company's authorized and issued capital was both amounted to NT$95,259,597 thousand and consisted of 9,525,960 thousand shares at $10 par value each as of December 31, 2025 and 2024, respectively. Each share has one vote and the right to receive dividends.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

B. Capital surplus

	As of
	December 31, 2025	December 31, 2024
Additional paid-in capital – premium in excess of the par value of shares issued	$24,864,000	$24,864,000
Additional paid-in capital – bond conversion	6,379,284	6,379,284
Joint venture and associates change in equity under equity method	175,761	173,600
Subsidiary change in equity	2,994	2,994
Others	2,948	2,607
Total	$31,424,987	$31,422,485

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them. Also, the capital reserve arisen from equity investments cannot be use for any purpose.

C. Retained earnings and dividend policies

Pursuant to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be appropriated in the following order:

(a) Payments of all taxes, if any
(b) To offset prior year’s deficit, if any
(c) To set aside 10% of the remaining amount as legal reserve after deducting items (a) and (b)
(d) To set aside special reserve, if required
(e) To set aside an amount for dividends
(f) The remaining amount (the “appropriable after-dividend earnings”), if any, the appropriation of shareholders’ bonuses plan is drafted by the board of directors combination with prior year’s accumulated unappropriated earnings. For the resolution of cash dividends distribution should be adopted by a majority vote at a meeting of the board of directors attended by two-thirds of the total number of directors and should be reported to the shareholders’ meeting. For the resolution of stock dividends distribution should be adopted by shareholders’ meeting.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

The above special reserve includes:

(a) Reserve recorded for special purposes
(b) Investment income recognized under equity method
(c) Net assessment income arising from financial transactions, however, when the cumulative decreases, the special reserve should be reduced accordingly to the extent that has been set aside;
(d) The special reserve required by other laws and regulations.

The Company's business is in its maturity stage. As a result, the dividends can be distributed in a combination of cash and capital increase out of earnings and paid-in capital. The total amount distributed should be at least 50% of the earnings available after setting aside legal reserve and special reserve, provided that cash dividends take precedence and capital increase out of earnings and paid-in capital do not exceed 50% of the total distribution.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

When the Company distributing distributable earnings, it shall set aside to special reserve, an amount equal to "other net deductions from shareholders" equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements for the adoption of IFRS, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders' equity. For any subsequent reversal of other net deductions from shareholders' equity, the amount reversed may be distributed from the special reserve.

The FSC on March 31, 2021 issued Order No. Financial-Supervisory-Securities-Corporate-1090150022, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders' equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the Company can reverse the special reserve by the proportion of the special reserve first appropriated and distribute it.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

For the years ended December 31, 2025 and 2024, the details of earnings distribution and dividends per share as proposed by the board meeting on March 5, 2026 and resolved by the shareholder's meeting on May 29, 2025, were as follows:

	Appropriation of earnings		Dividend per share
	2025	2024	2025	2024
Legal reserve	$1,652,173	$621,632
Special reserve	(1,436,249)	1,436,249
Common stock — cash dividend	11,431,152	7,620,768	$1.20	$0.80
Total	$11,647,076	$9,678,649

The reserve of 2025 will be resolved by the shareholder's meeting on May 26, 2026. The cash dividends distribution was resolved at the board meeting held on March 5, 2026 and will be reported to the shareholder's meeting.

Please refer to Note 6(20) for details on employees' compensation.

D. Non-controlling interests

	For the year ended December 31,2025	For the year ended December 31,2024
Beginning balance	$5,286,081	$4,883,912
Cash dividends from subsidiaries	(9,525)	(5,261)
Net loss attributed to the non-controlling interest	(530)	(160,033)
Other comprehensive income attributed to the non-controlling interest:
Remeasurements of defined benefit plans	179	139
Exchange differences resulting from translating the financial statements of a foreign operation	(201,224)	312,370
Income tax (expense) benefit relating to items that will not be reclassified	(36)	(27)
Acquisition of a second-tier subsidiary	-	17,381
Acquisition of new shares in a subsidiary	381,600	237,600
Return of capital from subsidiaries	(3,596)	-
Ending balance	$5,452,949	$5,286,081

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(17) Operating revenues

	For the year ended December 31, 2025	For the year ended December 31, 2024
Revenue from contracts with customer
Sales of goods
Gasoline	$92,796,827	$108,064,182
Petrochemical products (ethylene and propylene, etc.)	111,520,424	120,264,375
Diesel oil	182,168,367	182,462,046
Jet fuel	47,306,949	46,732,575
Electricity	33,833,018	29,839,444
Steam	7,732,937	9,917,925
Others	149,787,177	165,485,984
Subtotal	625,145,699	662,766,531
Service revenues	1,013,397	1,056,516
Total	$626,159,096	$663,823,047

Analysis of revenue from contracts with customers during the years ended December 31, 2025 and 2024 are as follows:

(1) Disaggregation of revenue

For the year ended December 31, 2025

	Petrochemical Division	Utility Division	Others	Total
Sale of goods
Gasoline	$81,845,847	$-	$10,950,980	$92,796,827
Petrochemical products (ethylene and propylene, etc.)	111,520,424	-	-	111,520,424
Diesel oil	177,585,411	-	4,582,956	182,168,367
Jet fuel	47,306,949	-	-	47,306,949
Electricity	-	33,833,018	-	33,833,018
Steam	-	7,732,937	-	7,732,937
Others	147,600,469	1,401,193	785,515	149,787,177
Subtotal	565,859,100	42,967,148	16,319,451	625,145,699
Service revenues	-	-	1,013,397	1,013,397
Total	$565,859,100	$42,967,148	$17,332,848	$626,159,096
Revenue recognition point: At a point in time	$565,859,100	$42,967,148	$17,332,848	$626,159,096

English Translation of Consolidated Financial Statements Originally Issued in Chinese

For the year ended December 31, 2024

	Petrochemical Division	Utility Division	Others	Total
Sales of goods
Gasoline	$96,980,430	$-	$11,083,752	$108,064,182
Petrochemical products (ethylene and propylene, etc.)	120,264,375	-	-	120,264,375
Diesel oil	177,729,631	-	4,732,415	182,462,046
Jet fuel	46,732,575	-	-	46,732,575
Electricity	-	29,839,444	-	29,839,444
Steam	-	9,917,925	-	9,917,925
Others	163,538,853	1,393,461	553,670	165,485,984
Subtotal	605,245,864	41,150,830	16,369,837	662,766,531
Service revenues	-	-	1,056,516	1,056,516
Total	$605,245,864	$41,150,830	$17,426,353	$663,823,047
Revenue recognition point:
At a point in time	$605,245,864	$41,150,830	$17,426,353	$663,823,047

(2) Contract balances

Contract liabilities — current

	As of
	December 31, 2025	December 31, 2024	January 1, 2024
Sales of goods	$86,716	$72,588	$67,248

The significant changes in the Group's balances of contract liabilities for the years ended December 31, 2025 and 2024 are as follows:

	For the year ended December 31, 2025	For the year ended December 31, 2024
Revenue recognized during the year that was included in the balance at the beginning of the year	$72,588	$67,248

(3) Transaction price allocated to unsatisfied performance obligations

The Group's contracts are all shorter than one year, there is no need to provide information on outstanding performance obligations.

(4) Assets recognized from costs to fulfil a contract

None.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(18) Expected credit losses/ (gains)

	For the year ended December 31, 2025	For the year ended December 31, 2024
Operating expenses—Expected credit losses/ (gains)
Accounts receivable	$(479)	$(24,045)

The Group does not expect that any significant losses will incur because the counterparty fail to fulfill the agreement. Please refer to Note 12 for information of credit risks.

The Group measures the loss allowance of receivables (including notes and accounts receivable) at an amount equal to lifetime expected credit losses. The explanation of the loss allowance measured for the years ended December 31, 2025 and 2024 are as follows:

The Group needs to consider the grouping of receivables by past experiences and its loss allowance is measured by using a provision matrix, details as follows:

As at December 31, 2025		Past due
	Neither past due	Within 30 days	31-60 days	61-90 days	Over 90 days	Total
Gross carrying amount	$42,043,370	$3,022,935	$-	$-	$-	$45,066,305
Loss ratio	1%	1%	-	-	-
Lifetime expected credit losses	457,273	30,229	-	-	-	487,502
Total	$41,586,097	$2,992,706	$-	$-	$-	$44,578,803
As at December 31, 2024		Past due
---	---	---	---	---	---	---
	Neither past due	Within 30 days	31-60 days	61-90 days	Over 90 days	Total
Gross carrying amount	$46,528,392	$368,070	$-	$-	$-	$46,896,462
Loss ratio	1%	1%	-	-	-
Lifetime expected credit losses	484,300	3,681	-	-	-	487,981
Total	$46,044,092	$364,389	$-	$-	$-	$46,408,481

English Translation of Consolidated Financial Statements Originally Issued in Chinese

For the years ended December 31, 2025 and 2024, the movement in the provision for impairment of notes receivable and accounts receivable are as follows:

	Receivables
Balance as at January 1, 2025	$487,981
Addition/(reversal) for the current period	(479)
Balance as at December 31, 2025	$487,502
	Receivables
Balance as at January 1, 2024	$512,026
Addition/(reversal) for the current period	(24,045)
Balance as at December 31, 2024	$487,981

(19) Lease

(1) Group as lessee

The Group has entered into commercial leases on land and buildings. These leases have an average life of more than one to twenty years with no restrictions placed upon the Group in the contracts.

The effect that leases have on the financial position, financial performance and cash flows of the Group are as follow:

A. Amounts recognized in the balance sheet

(a) Right-of-use asset

The carrying amount of right-of-use asset

	As of
	December 31, 2025	December 31, 2024
Land	$189,617	$210,397
Buildings	28,370	34,915
Machinery and equipment	19,251	18,832
Transportation equipment	613,989	1,132,932
Gas station	2,522,397	2,344,678
Total	$3,373,624	$3,741,754

For the years ended December 31, 2025 and 2024, the additions to right-of-use assets of the Group amounting to NT$876,427 thousand and NT$580,840 thousand, respectively.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(b) Lease liability

	As of
	December 31, 2025	December 31, 2024
Lease liability	$3,469,516	$3,892,300
Current	$1,058,021	$1,113,193
Non-current	$2,411,495	$2,779,107

Please refer to Note 6 (21)D. for the interest on lease liability recognized for the years ended December 31, 2025 and 2024, and besides, refer to Note 12 (5) for the maturity analysis for lease liabilities.

B. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

	For the year ended December 31, 2025	For the year ended December 31, 2024
Land	$18,868	$36,331
Buildings	10,194	14,321
Machinery and equipment	3,108	30,900
Transportation equipment	471,071	485,146
Gas station	660,610	624,219
Total	$1,163,851	$1,190,917

C. Income and costs relating to leasing activities

	For the year ended December 31, 2025	For the year ended December 31, 2024
The expense relating to short-term leases	$11,136	$14,754

As at December 31, 2025 and 2024, the Group has no committed short-term lease portfolio.

D. Cash outflow relating to leasing activities

For the year ended December 31, 2025, the Group's total cash outflow for lease liabilities amounting to NT$1,215,351 thousand, interest charge on lease liabilities NT$60,714 thousand and short-term leases NT$11,136 thousand.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

For the year ended December 31, 2024, the Group's total cash outflow for lease liabilities amounting to NT$1,223,230 thousand, interest charge on lease liabilities NT$72,298 thousand and short-term leases NT$14,754 thousand.

E. Other information relating to leasing activities

None.

(2) Group as lessor

The Group has entered into leases on certain equipment of vessel equipment and automated storage and retrieval systems. These leases have terms of between ten years and fifteen years, respectively. These leases are classified as finance leases as they do transfer substantially all the risks and rewards incidental to ownership of underlying assets.

	For the year ended December 31, 2025	For the year ended December 31, 2024
Lease income for operating leases
Income relating to fixed lease payments	$1,253,309	$1,284,705
Lease income for finance leases
Finance income on the net investment in the lease	34,109	93,284
Total	$1,287,418	$1,377,989

For finance leases entered by the Group, the undiscounted lease payments to be received and a total of the amounts for the remaining years as at December 31, 2025 and 2024 are as follow:

	As of
	December 31, 2025	December 31, 2024
Not later than one year	$15,051	$2,033,540
Later than one year but not later than two years	15,051	15,051
Later than two years but not later than three years	15,051	15,051
Later than three years but not later than four years	15,051	15,051
Later than four years but not later than five years	15,051	15,051
Later than five years	52,675	67,725
Total undiscounted lease payments	127,930	2,161,469
Less: Unearned finance income to finance leases	(12,774)	(48,515)
Net investment in the lease (Finance lease receivables)	$115,156	$2,112,954
Current	$12,315	$1,997,798
Non-current	$102,841	$115,156

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(20) Summary statement of employee benefits, depreciation and amortization expenses by function is as follows:

| Function
Description | For the year ended
December 31, 2025 | | | For the year ended
December 31, 2024 | | |
| --- | --- | --- | --- | --- | --- | --- |
| | Operating Cost | Operating Expense | Total | Operating Cost | Operating Expense | Total |
| Employee benefits expense | $5,432,125 | $3,856,987 | $9,289,112 | $5,359,957 | $3,713,562 | $9,073,519 |
| Salaries and wages | 4,693,961 | 3,376,851 | 8,070,812 | 4,616,687 | 3,249,996 | 7,866,683 |
| Labor and health insurance | 364,730 | 258,991 | 623,721 | 363,378 | 246,600 | 609,978 |
| Pension | 248,583 | 150,002 | 398,585 | 250,549 | 145,456 | 396,005 |
| Other employee benefits expense | 124,851 | 71,143 | 195,994 | 129,343 | 71,510 | 200,853 |
| Depreciation and depletion | 10,072,844 | 1,126,444 | 11,199,288 | 10,267,954 | 1,105,219 | 11,373,173 |
| Amortization | 1,957,380 | 610 | 1,957,990 | 1,586,149 | 673 | 1,586,822 |

The amortization recognized as non-operating income and expenses are NT$5,728 thousand and NT$7,390 thousand for the years ended December 31, 2025 and 2024, respectively.

According to the Company's Articles of Incorporation, 0.02% to 0.1% of the profit of the period should be distributed as employee's compensation. However, if there is accumulated deficit, the deficit should be covered first. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders' meeting. Information on the board of directors' resolution regarding the employee compensation can be obtained from the "Market Observation Post System" on the website of the TWSE.

The Company's employee compensation was NT$2,523 thousand, estimated as 0.02% of the Company's net profit and recognized as employee's compensation for the year ended December 31, 2025. According to resolution of the board on March 5, 2026, the compensation will be granted in cash.

The Company resolved to distribute NT$1,349 thousand of employee compensation in cash on the board of director's meeting on February 27, 2025, and announced the resolution on the shareholder's meeting on May 29, 2025. There is no difference between the employee bonus 2024 paid and the employee bonus recognized as expense on the financial report of 2024.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(21) Non-operating income and expenses

A. Interest income

	For the year ended December 31, 2025	For the year ended December 31, 2024
Bank interest income	$794,535	$701,050
Interest income — due from affiliates	62,224	99,616
Interest income — financial leasing	34,109	93,284
Other interest income	53,521	52,402
Total	$944,389	$946,352

B. Other income

	For the year ended December 31, 2025	For the year ended December 31, 2024
Rental income	$1,253,309	$1,284,705
Others	816,866	871,681
Dividends income	407,644	511,487
Total	$2,477,819	$2,667,873

C. Other gains and losses

	For the year ended December 31, 2025	For the year ended December 31, 2024
Gains (losses) on disposal and abandon of property, plant and equipment	$8,554	$(89,451)
Gains (losses) on disposal of investment property	(3,390)	8,586
Gains (losses) on disposal of other assets	-	(4,412)
Loss (gain) on disposal of investments accounted for using equity method	(33,771)	-
Foreign exchange gains (losses), net	(157,091)	3,084,359
Impairment loss/Reversal of impairment loss
Investment property	3,721	15,197
Exploration and evaluation assets	(27,230)	(11,152)
Other Assets	(3,161)	-
Other gains (losses) — others	(143,601)	(434,978)
Gains (losses) on financial assets at fair value through profit or loss (Note)	3,454	204,603
Total	$(352,515)	$2,772,752

Note: Balance in current period arose from financial assets mandatorily measured at fair value through profit or loss.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

D. Financial costs

	For the year ended December 31, 2025	For the year ended December 31, 2024
Interest on borrowings from bank	$138,586	$98,803
Interest on bonds payable	140,973	189,768
Interest for lease liabilities	60,714	72,298
Other interest expenses	127,918	163,297
Total financial costs	$468,191	$524,166

(22) Components of other comprehensive income (loss)

For the year ended December 31, 2025

	Arising during the period	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans	$78,265	$-	$78,265	$15,653	$62,612
Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income	56,197,465	-	56,197,465	-	56,197,465
Share of other comprehensive income of associates and joint ventures accounted for using the equity method	1,269,621	-	1,269,621	-	1,269,621
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising from translation of foreign operations	(732,831)	-	(732,831)	-	(732,831)
Gains (losses) on hedging instrument	635,341	(557,131)	78,210	1,806	76,404
Share of other comprehensive income of associates and joint ventures accounted for using the equity method	(519,866)	19,969	(499,897)	-	(499,897)
Total	$56,927,995	$(537,162)	$56,390,833	$17,459	$56,373,374

English Translation of Consolidated Financial Statements Originally Issued in Chinese

For the year ended December 31, 2024

	Arising during the period	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans	$206,154	$-	$206,154	$41,231	$164,923
Unrealized gains (losses) from equity instruments
investments measured at fair value through other comprehensive income	(28,060,014)	-	(28,060,014)	-	(28,060,014)
Share of other comprehensive income of associates and joint ventures accounted for using the equity method	92,233	-	92,233	-	92,233
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising from translation of foreign operations	1,121,767	-	1,121,767	-	1,121,767
Gains (losses) on hedging instrument	18,625	(149,794)	(131,169)	(6,017)	(125,152)
Share of other comprehensive income of associates and joint ventures accounted for using the equity method	825,533	-	825,533	-	825,533
Total	$(25,795,702)	$(149,794)	$(25,945,496)	$35,214	$(25,980,710)

(23) Income taxes

The major components of income tax expense (income) for the years ended December 31, 2025 and 2024 were as follows:

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Income tax expense (income) recognized in profit or loss

	For the year ended December 31, 2025	For the year ended December 31, 2024
Current income tax expense (income):
Current income tax charge	$2,547,764	$620,372
Adjustments in respect of current income tax of prior periods	111,180	(79,401)
Deferred tax expense (income):
Deferred tax expense (income) relating to origination and reversal of temporary differences	183,413	317,370
Deferred tax expense (income) relating to origination and reversal of tax loss and tax credit	(4,942)	(102,116)
Total income tax expense (income)	$2,837,415	$756,225

Income tax relating to components of other comprehensive income

	For the year ended December 31, 2025	For the year ended December 31, 2024
Deferred tax expense (income):
Gains (losses) on hedging instruments	$1,806	$(6,017)
Remeasurements of defined benefit plans	15,653	41,231
Total	$17,459	$35,214

Reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates was as follows:

	For the year ended December 31, 2025	For the year ended December 31, 2024
Accounting profit (loss) before tax from continuing operations	$12,712,220	$6,567,110
Tax at the parent company statutory income tax rate	2,542,444	1,313,422
Tax rate difference of foreign jurisdiction	(57,926)	48,863
Dividend Income	(81,529)	(102,297)
Income (loss) from equity investments	352,789	(265,420)
Tax effect of revenues exempt from taxation	(757)	(45,677)
Tax effect of non-deductible expense	165	99
Others	18,316	(7,497)
Tax effect of deferred tax assets/liabilities	(47,267)	(105,867)
Adjustments in respect of current income tax of prior periods	111,180	(79,401)
Total income tax expense (income) recognized in profit or loss	$2,837,415	$756,225

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Deferred tax assets (liabilities) relate to the following:

For the year ended December 31, 2025

	Beginning balance as at January 1, 2025	Deferred tax income (expense) recognized in profit or loss	Deferred tax income (expense) recognized in other comprehensive income	Exchange rate change	Ending balance as at December 31, 2025
Temporary differences
Depreciation difference for tax purpose	$1,280,787	$(75,677)	$-	$-	$1,205,110
Foreign currency assets / liabilities losses (gains)	(47,663)	11,701	-	-	(35,962)
Non-current — defined benefit liability, net	785,000	(11,589)	(15,653)	-	757,758
Inventory evaluation	327,421	(80,520)	-	-	246,901
Hedging derivative financial instruments sharing the same period(gains)	(5,084)	-	(1,806)	-	(6,890)
Others	763,458	(27,328)	-	2,049	738,179
Unused tax credits	258,103	4,942	-	(10,524)	252,521
Deferred tax income (expense)		$(178,471)	$(17,459)	$(8,475)
Net deferred tax assets (liabilities)	$3,362,022				$3,157,617
Reflected in balance sheet as follows:
Deferred tax assets	$3,466,850				$3,250,416
Deferred tax liabilities	$(104,828)				$(92,799)

For the year ended December 31, 2024

	Beginning balance as at January 1, 2024	Deferred tax income (expense) recognized in profit or loss	Deferred tax income (expense) recognized in other comprehensive income	Exchange rate change	Ending balance as at December 31, 2024
Temporary differences
Depreciation difference for tax purpose	$1,393,845	$(113,058)	$-	$-	$1,280,787
Foreign currency assets / liabilities losses (gains)	68,651	(116,314)	-	-	(47,663)
Non-current — defined benefit liability, net	832,567	(6,336)	(41,231)	-	785,000
Inventory evaluation	407,036	(79,615)	-	-	327,421
Hedging derivative financial instruments sharing the same period(gains)	(11,101)	-	6,017	-	(5,084)
Others	768,624	(2,047)	-	(3,119)	763,458
Unused tax credits	144,293	102,116	-	11,694	258,103
Deferred tax income (expense)		$(215,254)	$(35,214)	$8,575
Net deferred tax assets (liabilities)	$3,603,915				$3,362,022
Reflected in balance sheet as follows:
Deferred tax assets	$3,663,847				$3,466,850
Deferred tax liabilities	$(59,932)				$(104,828)

English Translation of Consolidated Financial Statements Originally Issued in Chinese

The following table contains information of the unused tax losses of the Group:

Year	Tax losses for the period	Unused tax losses as of		Expiration
		December 31, 2025	December 31, 2024
FPCC USA, INC.
2024	$809,905	$809,905	$-	indefinite
FG INC.
2018	68,406	68,406	68,406	indefinite
2019	154,371	154,371	154,371	indefinite
2020	177,665	177,665	177,665	indefinite
2021	132,785	132,785	132,785	indefinite
2022	85,934	85,934	85,934	indefinite
2023	43,766	43,766	43,766	indefinite
2024	471,457	471,457	-	indefinite
Formosa Grandseas
Bunkering and Trading Corporation
2022	448	448	448	2032
2023	9,692	9,692	9,692	2033
2024	8,210	8,210	8,210	2034
2025	6,500	6,500	-	2035
		$1,969,119	$681,277

Unrecognized deferred tax assets

As of December 31, 2025 and 2024, the Group's deferred tax assets have not been recognized amounting to NT$4,880 thousand and NT$3,579 thousand, respectively.

Unrecognized deferred tax liabilities relating to the investment in subsidiaries

The Group did not recognize any deferred tax liability for taxes that would be payable on the unremitted earnings of the Group's overseas subsidiaries, as the Group has determined that undistributed profits of its subsidiaries will not be distributed in the foreseeable future. As at December 31, 2025 and 2024, the taxable temporary differences associated with investment in subsidiaries, for which deferred tax liabilities have not been recognized, aggregate to NT$2,354,397 thousand and NT$2,444,749 thousand, respectively.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

The assessment of income tax returns

As of December 31, 2025, the assessment of the income tax returns of the Company and its subsidiaries was as follows:

	The assessment of income tax returns
The Company	Assessed and approved up to 2023
Subsidiary- Formosa Oil (Asia Pacific) Corporation	Assessed and approved up to 2023
Subsidiary- Formosa Petrochemical Transportation Corporation	Assessed and approved up to 2023
Subsidiary- Formosa Grandseas Bunkering and Trading Corporation	Assessed and approved up to 2023

(24) Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

	For the year ended December 31, 2025	For the year ended December 31, 2024
Basic/Diluted earnings per share
Profit attributable to ordinary equity holders of the Company (in thousands)	$9,875,335	$5,970,918
Weighted average number of ordinary shares outstanding for basic/diluted earnings per share (in thousands)	9,525,960	9,525,960
Basic/Diluted earnings per share	$1.04	$0.63

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of the financial statements.

(25) Subsidiaries that have material non-controlling interests

The Group does not have subsidiaries that have material non-controlling interests.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

7. RELATED PARTY TRANSACTIONS

Information of the related parties that had transactions with the Group during the financial reporting period is as follows:

Name and nature of relationship of the related parties

Name of the related parties	Nature of relationship of the related parties
Formosa Plastics Corporation	Significant influence over the Company
Formosa Chemicals & Fibre Corporation	Significant influence over the Company
Nan Ya Plastics Corporation	Significant influence over the Company
Mai-Liao Power Corporation	Associate
Mailiao Harbor Administration Corporation	Associate
Formosa Development Corporation	Associate
Formosa Marine Corporation	Associate
Simosa Oil Corporation	Associate
Formosa Environmental Technology Corporation	Associate
TMS Corporation	Associate
Formosa Resources Corporation	Associate
Formosa Group (Cayman) Limited	Associate
Nan Ya Photonics Incorporation	Associate
NKFG	Joint venture
Caltex Taiwan Corporation	Joint venture
Formosa Kraton Chemical Co., Ltd.	Joint venture
Idemitsu Formosa Specialty Chemicals Corp.	Joint venture
Formosa FCFC Carpet Corporation	Other
Formosa Chemicals Industries (Ningbo) Co., Ltd.	Other
Formosa Biomedical Technology Corp.	Other
Formosa BP Chemicals Corporation	Other
Formosa Taffeta Co., Ltd	Other
Formosa Advanced Technologies Co., Ltd.	Other
Formosa Energy Management Corporation	Other
Formosa Ha tinh (Cayman) Limited	Other
Hong Jing Resource Co., Ltd	Other
Nan Ya Printed Circuit Board Corporation	Other
Nan Chung Petrochemical Corporation	Other
Formosa Heavy Industries Corporation	Other
Hwa Ya Power Corporation	Other
National Petroleum Co., Ltd.	Other
Formosa Plastics Maritime Corporation	Other
Chang Gung Medical Foundation	Other
Simosa Shipping Co., Ltd.	Other
Simosa International Co., Ltd	Other
Simosa Marine Corporation	Other
Formosa Waters Technology Co., Ltd.	Other
Formosa Steel IB PTY LTD	Other
Asia Pacific Investment Corporation	Other
Asia Pacific Development Corporation.	Other

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Significant transactions with the related parties

(1) Sales

	For the year ended December 31, 2025	For the year ended December 31, 2024
Entity with joint control or significant influence over the Company
Formosa Chemicals & Fibre Corporation	$111,810,667	$140,590,191
Formosa Plastics Corporation	59,939,002	66,378,370
Nan Ya Plastics Corporation	21,534,057	20,754,781
Subtotal	193,283,726	227,723,342
Associate	7,967,332	7,748,609
Joint venture	9,071,407	9,201,598
Others	40,790,899	33,285,969
Total	$251,113,364	$277,959,518

The terms and conditions of sales (including prices) to related parties are similar to those with non-related parties. The credit term is 30 days from the day the related party confirms the sale.

(2) Purchase

	For the year ended December 31, 2025	For the year ended December 31, 2024
Entity with joint control or significant influence over the Company	$33,213,200	$42,042,605
Associate	62,117	103,282
Joint venture	56,980	75,665
Others	592,698	775,874
Total	$33,924,995	$42,997,426

The Group did not receive special discounts when purchasing from the related parties. Payment term is 30 days after receiving the goods.

(3) Notes receivable – related parties

	As of
	December 31, 2025	December 31, 2024
Others
National Petroleum Co., Ltd.	$1,569,914	$1,905,376
Total	1,569,914	1,905,376
Less: loss allowance	-	-
Net	$1,569,914	$1,905,376

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(4) Accounts receivable – related parties

	As of
	December 31, 2025	December 31, 2024
Entity with joint control or significant influence over the Company
Formosa Chemicals & Fibre Corporation	$6,952,208	$9,785,022
Formosa Plastics Corporation	4,842,410	4,676,457
Nan Ya Plastics Corporation	1,408,409	2,295,644
Subtotal	13,203,027	16,757,123
Associate	371,807	362,742
Joint venture	786,226	723,971
Others	3,557,286	2,776,894
Total	17,918,346	20,620,730
Less: loss allowance	-	-
Net	$17,918,346	$20,620,730

(5) Accounts payable – related parties

	As of
	December 31, 2025	December 31, 2024
Entity with joint control or significant influence over the Company
Formosa Chemicals & Fibre Corporation	$2,138,271	$2,844,930
Others	539,958	511,714
Subtotal	2,678,229	3,356,644
Associate	80,514	85,956
Joint venture	11,107	14,687
Others	53,506	70,359
Total	$2,823,356	$3,527,646

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(6) Transaction of property, plant and equipment

Commissioned construction

The Company commissioned the following related parties to construct items of property, plant and equipment:

	Items	For the year ended December 31, 2025	For the year ended December 31, 2024
Entity with joint control or significant influence over the Company	Maintenance	$144,374	$171,281
Entity with joint control or significant influence over the Company	Expansion of facilities	48,643	31,574
Associate	Expansion of facilities	35,997	29,387
Others	Maintenance	550,992	322,711
Others	Expansion of facilities	131,717	1,460,629
Total		$911,723	$2,015,582

The Company followed the general procedures to commission Formosa Heavy Industries Corporation, Nan Ya Plastics Corporation and Nan Ya Photonics Incorporation to expand its facilities and the maintenance of them. The payment period is one month after the acceptance of the construction work.

(7) Financing

Other receivables – due from affiliates

	As of
	December 31, 2025	December 31, 2024
Others
Formosa Heavy Industries Corporation	$1,900,000	$2,000,000

The lending of funds condition to the associates was charged in accordance with the contract schedule after loan received. For the years ended December 31, 2025 and 2024, interest income from related parties were NT$54,848 thousand and NT$78,583 thousand, respectively. Interest charged on New Taiwan Dollars at the rate of 2.18% while interest charged on US Dollars at the rate of 4.56%~4.92% for the year ended December 31, 2025, and interest charged on New Taiwan Dollars at the rate of 1.99%~2.18% for the year ended December 31, 2024.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(8) Other receivables, other payables

Receivables from/payables to related parties (bear no interest) are as follows:

A. Other receivables – sale of raw materials, etc.

	As of
	December 31, 2025		December 31, 2024
	Amount	%	Amount	%
Entity with joint control or significant influence over the Company	$9,627	0.14	$2,909	0.04
Associate	232,260	3.40	48,117	0.73
Joint venture	4,331	0.06	3,951	0.06
Others	18,116	0.27	3,645	0.06
Total	$264,334	3.87	$58,622	0.89

They are payments received from selling raw material. The payment term is within 30 days following confirmation with the counterparty.

B. Other payables

	As of
	December 31, 2025		December 31, 2024
	Amount	%	Amount	%
Associate	$24,958	0.18	$13,492	0.08
Others	307,354	2.27	344,484	2.18
Total	$332,312	2.45	$357,976	2.26

Other payables are purchases of raw material for construction. The payment term is within 30 days after inspection and approval of accepting the materials.

(9) Leases

A. Group as a lessee

(a) Right-of-use assets

The carrying amount of right-of-use assets

	As of
	December 31, 2025	December 31, 2024
Entity with joint control or significant influence over the Company	$35,851	$20,478
Associate	65,753	93,402
Others	609,302	1,129,897
Total	$710,906	$1,243,777

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(b) Lease liabilities

	As of
	December 31, 2025	December 31, 2024
Entity with joint control or significant influence over the Company	$36,007	$20,529
Associate	74,426	102,473
Others	684,110	1,262,994
Total	$794,543	$1,385,996
Current	$576,731	$579,517
Non-current	$217,812	$806,479

	For the year ended December 31, 2025	For the year ended December 31, 2024
Entity with joint control or significant influence over the Company	$271	$163
Associate	1,147	1,441
Others	20,590	32,630
Total	$22,008	$34,234

B. Group as a lessor

(a) The revenue relating to short-term leases

The Group derived the following rental income from leasing oil storage facilities and land to related parties:

	As of
	For the year ended December 31, 2025	For the year ended December 31, 2024
Entity with joint control or significant influence over the Company	$178,793	$220,127
Associate	27,594	26,888
Joint venture	32,485	32,485
Others	9,888	14,065
Total	$248,760	$293,565

(b) The income relating to finance leases

The Group derived the following rental income from leasing automated storage and retrieval systems to related parties:

	As of
	For the year ended December 31, 2025	For the year ended December 31, 2024
Joint venture	$3,039	$3,335

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(10) Other related party transactions

A. Use of labor

The details of use of the related parties’ labor force are as follows:

	Items	For the year ended December 31, 2025	For the year ended December 31, 2024
Associates	Harbor labor force	$1,483,942	$1,380,613
Joint venture	Refuel, labor force	62,613	59,913
Others	Labor force	2,495	2,256
Total		$1,549,050	$1,442,782

The payments include harbor usage, towage, and fuel delivery. The payment is mutually agreed to be made one month after the monthly closing.

B. Notes endorsements and guarantees

	As of
	December 31, 2025	December 31, 2024
Associates	$-	$8,195,250

(11) Key management personnel compensation

	For the year ended December 31, 2025	For the year ended December 31, 2024
Short-term employee benefits	$110,926	$115,292

8. ASSETS PLEDGED AS SECURITY

The following assets were pledged to banks as collaterals for bank loans:

Pledged Assets	Contents	As of
		December 31, 2025	December 31, 2024
Other current assets	Certificates of deposit	$302,293	$233,459

9. SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACTUAL COMMITMENTS

As of December 31, 2025, the Group’s commitments and contingent liabilities were as follows:

(1) Finance lease commitments: Simosa Shipping Co. Ltd. leased vessel and equipment to the Group. The lease term is from January 2012 to December 2026 at US$33,500 per day. When the lease expires, the ownership of the shipping equipment will transfer to the Group.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(2) Guarantee notes received from counterparties as collateral for payment, construction completion commitment and others for operational needs were NT$318,787 thousand.

(3) Guarantee notes issued for borrowings (financing) were NT$168,410,010 thousand.

(4) The unutilized portion of letters of credit issued by banks for importing raw materials was NT$3,632,158 thousand.

(5) Idemitsu Formosa Specialty Chemicals Corp., a joint venture of the Group, borrowed NT$3.3 billion from CA Corporation & Investment Bank and KGI Bank. To secure the rights of its shareholders, the Company is required to issue a letter of support to ensure the borrower has fulfilled its obligation for repayment.

(6) Formosa Ha Tinh (Cayman) Limited, the investee of the Group, and Formosa Ha Tinh Steel Corporation, the indirect investee owned by Formosa Ha Tinh (Cayman) Limited, borrowed credit line of US$3,020.05 million and US$2,137.5 million from different banks, respectively. To secure the rights of its shareholders, the Company is required to issue a commitment letter to ensure the borrower has fulfilled its obligation for repayment.

(7) Formosa Resources Corp., the investee of the Group, borrowed credit line of totaled US$340 million from several banks for operating need. According to the requirements of the bank, the Company should issue a commitment letter to ensure the borrower has fulfilled its obligation for repayment, due to the Company's direct shareholding percentage is 25%.

(8) Formosa Resources Corp., the investee of the Group, and Formosa Resources Australia Pty Ltd., the 100% indirect investee owned by Formosa Resources Corp., borrowed credit line of US$257 million from Bank for operational needs. To secure the rights of its shareholders, the Company is required to issue a commitment letter to ensure the borrower has fulfilled its obligation for repayment.

(9) Formosa Resources Corp., the investee of the Group, and Formosa Steel IB Pty Ltd., the 100% indirect investee owned by Formosa Resources Corp., borrowed a credit line of US$1,105.6 million from banks due to its operating need. The Company issued a commitment letter to exercise the relevant rights of the Company to the shareholders of the Borrower to supervise and ensure that the Borrower fulfills its financial obligations.

10. SIGNIFICANT DISASTER LOSSES

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

None.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

12. OTHER

(1) Categories of financial instruments

Financial Assets	As of
	December 31, 2025	December 31, 2024
Financial assets at fair value through profit or loss:
Mandatorily measured at fair value through profit or loss	$1,849,655	$1,846,201
Financial assets at fair value through other comprehensive income	91,562,911	43,605,804
Financial assets at amortized cost:
Cash and cash equivalents (excluding cash on hand)	47,518,922	22,982,523
Notes and accounts receivable, net (including related party)	44,578,803	46,408,481
Finance lease receivables	115,156	2,112,954
Other receivables	6,833,365	6,576,609
Subtotal	99,046,246	78,080,567
Financial assets for hedging	77,055	25,422
Total	$192,535,867	$123,557,994
	As of
Financial Liabilities	December 31, 2025	December 31, 2024
Financial liabilities at amortized cost:
Short-term borrowings	$107,804	$6,781,361
Notes and accounts payables (including related party)	12,796,914	11,566,389
Other payables (including related party)	13,528,529	15,816,987
Bonds payable (including current portion)	14,950,000	20,200,000
Long-term borrowings(including current portion)	2,600,000	5,464,670
Lease liabilities	3,469,516	3,892,300
Subtotal	$47,452,763	63,721,707
Financial liabilities for hedging	81,256	113,119
Total	$47,534,019	63,834,826

(2) Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Group identifies measures and manages the above mentioned risks based on the Group’s policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Company’s Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(3) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market risk. Market risk comprises currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variable, and there are usually interdependencies between risk variables. However, the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's operating activities (when revenue or expense are denominated in a different currency from the Group's functional currency) and the Group's net investments in foreign subsidiaries.

To avoid the risk of foreign currency assets impairment and future cash flow changes, the Company uses forward contracts and foreign currency loans to hedge the foreign currency risk. However, the abovementioned method can reduce the risk arise from changes of foreign currency exchange rate, it cannot completely eliminate the risk.

The Group has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group's profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. When NTD appreciate/depreciate against US dollars by US$1, the profit decreases/ increases by NT$692,119 thousand and NT$683,492 thousand for the years ended December 31, 2025 and 2024, respectively.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's investments with variable interest rates, bank borrowings with fixed interest rates and variable interest rates.

The Group manages its interest rate risk by having a balanced portfolio of fixed and variable loans and borrowings and entering into interest rate swaps. Hedge accounting does not apply to these swaps as they do not qualify for it.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 25 basis points of interest rate in a reporting period could cause the profit to decrease/increase by NT$6,548 thousand and NT$30,095 thousand for the years ended December 31, 2025 and 2024, respectively.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Equity price risk

The Group’s listed and unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group’s listed equity securities are classified under held for trading financial assets or available-for-sale financial assets, while unlisted equity securities are classified as available-for-sale. The Group manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior management on a regular basis. The Group’s board of directors reviews and approves all equity investment decisions.

The Group did not hold any listed and OTC equity securities classified under fair value through profit or loss.

When the price of the listed equity securities at fair value through other comprehensive income increases/ decreases 1%, it could have impacts of NT$745,528 thousand and NT$263,795 thousand for the years ended December 31, 2025 and 2024, on the equity attributable to the Group.

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for accounts receivables and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to credit risk management. Credit limits are established for all counter parties based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Group’s internal rating criteria etc.

Certain customer’s credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.

As of December 31, 2025 and 2024, accounts receivable from top ten customers represented 74.32% and 73.86% of the total accounts receivable of the Group, respectively. The credit concentration risk of other accounts receivable is insignificant.

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Group’s treasury in accordance with the Group’s policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating. Consequently, there is no significant credit risk for these counterparties.

The Group did not hold any debt instrument investments which were measured at fair value through profit or loss for the year ended December 31, 2025.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(5) Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, bank borrowings, convertible bonds and finance leases. The table below summarizes the maturity profile of the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial instruments

	Less than 1 year	1 to 2 years	2 to 3 years	3 to 4 years	4 to 5 years	> 5 years	Total
December 31, 2025
Borrowings	$2,018,945	$-	$-	$-	$-	$739,935	$2,758,880
Accounts payable	12,796,914	-	-	-	-	-	12,796,914
Other payables	13,528,529	-	-	-	-	-	13,528,529
Bonds payable	6,903,348	3,930,373	1,058,177	2,116,355	1,058,177	-	15,066,430
Lease liabilities	1,101,154	606,328	375,358	320,588	263,322	967,442	3,634,192
December 31, 2024
Borrowings	$11,847,031	$-	$-	$-	$-	$474,004	$12,321,035
Accounts payable	11,566,389	-	-	-	-	-	11,566,389
Other payables	15,816,987	-	-	-	-	-	15,816,987
Bonds payable	5,292,152	6,904,999	3,931,313	1,058,430	2,116,861	1,058,430	20,362,185
Lease liabilities	1,168,416	970,882	501,100	268,584	233,065	932,057	4,074,104

Derivative instruments

	Less than 1 year	2 to 3 years	4 to 5 years	> 5 years	Total
December 31, 2025
Inflows	$77,055	$-	$-	$-	$77,055
Outflows	(22,748)	(58,508)	-	-	(81,256)
Net	$54,307	$(58,508)	$-	$-	$(4,201)
December 31, 2024
Inflows	$9,712	$15,710	$-	$-	$25,422
Outflows	(61,984)	(51,135)	-	-	(113,119)
Net	$(52,272)	$(35,425)	$-	$-	$(87,697)

The table above contains the undiscounted net cash flows of derivative financial instruments.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(6) Reconciliations of the liabilities from financing activities

Reconciliations of the liabilities for the year ended December 31, 2025:

	Short-term loans	Other payable to related parties	Bonds payable (including current portion)	Long-term loans	Lease liabilities (current and non-current)	Increase (decrease) in other non-current liabilities	Total liabilities from financing activities
2025.1.1	$6,781,361	$357,976	$20,200,000	$5,464,670	$3,892,300	$240,409	$36,936,716
Cash flows	(6,673,557)	(25,664)	(5,250,000)	(2,864,670)	(1,215,351)	(25,343)	(16,054,585)
Non-cash changes	-	-	-	-	849,505	(341)	849,164
Exchange rate changes	-	-	-	-	(56,938)	-	(56,938)
2025.12.31	$107,804	$332,312	$14,950,000	$2,600,000	$3,469,516	$214,725	$21,674,357

Reconciliations of the liabilities for the year ended December 31, 2024:

	Short-term loans	Other payable to related parties	Bonds payable (including current portion)	Long-term loans	Lease liabilities (current and non-current)	Increase (decrease) in other non-current liabilities	Total liabilities from financing activities
2024.1.1	$114,337	$470,851	$25,850,000	$2,000,000	$4,436,280	$258,455	$33,129,923
Cash flows	6,667,024	(112,875)	(5,650,000)	3,464,670	(1,223,230)	(17,575)	3,128,014
Non-cash changes	-	-	-	-	577,306	(471)	576,835
Exchange rate changes	-	-	-	-	101,944	-	101,944
2024.12.31	$6,781,361	$357,976	$20,200,000	$5,464,670	$3,892,300	$240,409	$36,936,716

(7) Fair values of financial instruments

A. The methods and assumptions applied in determining the fair value of financial instruments:

The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

(a) The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate their fair value because of its shorter maturities.

(b) For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities, beneficiary certificates, bonds and futures etc.) at the reporting date.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(c) Fair value of equity instruments without market quotations (including private placement of listed equity securities and unquoted public company) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).

(d) The fair value of bank loans, corporate bonds and lease liabilities is determined by the counterparty's quotation or valuation technique. The valuation technique is discounted cash flow analysis with interest and discount rate selected with reference to those of similar financial instruments (E.g. the yield curve reference of Taipei Exchange, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)

(e) The fair value of derivative financial instrument is based on market quotations.

B. Fair value of financial instruments measured at amortized cost

The carrying amount of the Group's financial assets (including held-to-maturity financial assets, loans and receivables) and liabilities (including loan, bonds payable and lease payable) measured at amortized cost approximate their fair value.

C. Information about financial instrument fair value hierarchy

For the information of fair value hierarchy please refer to related Note 12(9).

(8) Derivatives financial instruments

Derivatives financial instruments the Group holds for trading are mainly energy commodity contracts. Please refer to Note 6(4) for related information.

(9) Fair value hierarchy

A. Definition

For the assets and liabilities measured and disclosed under fair value, the fair value hierarchy is categorized on the basis of the lowest level input that is significant to the fair value measurement in its entirety. The inputs of each level are as follows:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: inputs other than quoted market prices included within level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: unobservable inputs for the asset or liabilities.

At the end of each reporting period, the fair value hierarchy for each financial instrument is revaluated to decide if there is any transfer into or out of any hierarchy.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

B. The fair value at each fair value hierarchy for financial instruments of the Group is as follows:

December 31, 2025

	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through profit or loss
Funds	$-	$1,849,655	$-	$1,849,655
Financial assets at fair value through other comprehensive income
Investments in equity instruments measured at fair value through other comprehensive income	74,552,833	-	17,010,078	91,562,911
Financial assets for hedging
Energy commodity swap contracts	77,055	-	-	77,055
Financial liabilities at fair value:
Financial liabilities for hedging
Energy commodity swap contracts	$(81,256)	-	-	$(81,256)
December 31, 2024
	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through profit or loss
Funds	$-	$1,846,201	$-	$1,846,201
Financial assets at fair value through other comprehensive income
Investments in equity instruments measured at fair value through other comprehensive income	26,379,548	-	17,226,256	43,605,804
Financial assets for hedging
Energy commodity swap contracts	25,422	-	-	25,422
Financial liabilities at fair value:
Financial liabilities for hedging
Energy commodity swap contracts	$(113,119)	-	-	$(113,119)

Fair value hierarchy transfer between level 1 input and level 2 input

The Group had no recurring assets and liabilities transfer between level 1 input and level 2 input for the years ended December 31, 2025 and 2024.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Movements of fair value measurements in Level 3 of the fair value hierarchy

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

	Asset
	At fair value through other comprehensive income
	Stocks
2025.1.1	$17,226,256
Acquisition	90,000
Proceeds from capital reduction	(19,562)
Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income)	(269,469)
Write-down the long-term equity in Associates and Joint Ventures	(17,147)
2025.12.31	$17,010,078
	Asset
	At fair value through other comprehensive income
	Stocks
2024.1.1	$14,554,519
Proceeds from capital reduction	(3,484)
Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income)	2,813,429
Write-down the long-term equity in Associates and Joint Ventures	(138,208)
2024.12.31	$17,226,256

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As at December 31, 2025:

	Valuation technique	Material unobservable inputs	Quantitative information	Inputs and the fair value relationship	Inputs and the fair value relationship’s sensitivity analysis value relationship
Financial assets :
Financial assets at fair value through other comprehensive income
Stocks	Market approach	Discount for lack of marketability	19.20%~20.70%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in decrease/increase in the Group’s equity by NT$2,084,238 thousand
Stocks	Assets approach	Discount for lack of marketability	20%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in decrease/increase in the Group’s equity by NT$37,557 thousand

As at December 31, 2024:

	Valuation technique	Material unobservable inputs	Quantitative information	Inputs and the fair value relationship	Inputs and the fair value relationship’s sensitivity analysis value relationship
Financial assets :
Financial assets at fair value through other comprehensive income
Stocks	Market approach	Discount for lack of marketability	19.20%~20.70%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in decrease/increase in the Group’s equity by NT$2,125,134 thousand
Stocks	Assets approach	Discount for lack of marketability	20%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in decrease/increase in the Group’s equity by NT$24,646 thousand

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Group's accounting department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group's accounting policies at each reporting date.

C. Not measure by the fair value but have to disclose by the fair value hierarchy information

December 31, 2025

	Level 1	Level 2	Level 3	Total
Only disclose fair value of assets:
Investment property
(please refer to Note 6(10))	$-	$-	$394,859	$394,859

December 31, 2024

	Level 1	Level 2	Level 3	Total
Only disclose fair value of assets:
Investment property
(please refer to Note 6(10))	$-	$-	$398,020	$398,020

(10) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

English Translation of Consolidated Financial Statements Originally Issued in Chinese

	December 31, 2025			December 31, 2024
	Foreign currency	Exchange rate	Amount	Foreign currency	Exchange rate	Amount
Financial assets
Monetary items:
USD	$913,841	31.438	$28,729,333	$875,463	32.781	$28,698,553
EUR	3,665	36.696	134,491	5,675	34.065	193,319
YEN	100,113	0.200	20,023	40,611	0.209	8,488
Long-term equity Investments - equity method
USD	$44,099	31.438	$1,386,378	$77,627	32.781	$2,544,675
Financial liabilities
Monetary items:
USD	$221,722	31.438	$6,970,496	$191,971	32.781	$6,293,001
EUR	27,240	36.696	999,599	52,556	34.065	1,790,320
YEN	69,884	0.200	13,977	71,022	0.209	14,844

The above information is disclosed based on book value transferred to functional currency.

The foreign exchange gains (losses) that was material and recognized are NT$(157,091) thousand and NT$3,084,359 thousand for the years ended December 31, 2025 and 2024, respectively.

(11) Capital management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

13. OTHER DISCLOSURE

(1) Significant transaction information

A. Financings provided to others:

No. (Note1)	Financing Company	Counterparty	Financial Statement Account (Note2)	Related Party	Maximum Balance for the Period (Approved by the Board) (Note3)	Ending Balance (Approved by the Board) (Note8)	Amount Actually Drawn	Interest Rate%	Nature of Financing (Note4)	Reason for Financing (Note6)	Loss allowance	Collateral		Limit of Financing Amount for Individual Counterparty (Note7)	Limit of Total Financial Amount for Financing Company (Note7)
												Item	Value
0	The Company	Formosa Plastics Corporation	Other receivables from related parties	Yes	$6,000,000	$4,500,000	$-	-	(2)	Need for operating	N/A	N/A	N/A	Financing to individual entity is limited to 10% of the Company's net asset	Financing to others is limited to 50% of the Company's net asset
0	The Company	Nan Ya Plastics Corporation	Other receivables from related parties	Yes	6,000,000	4,500,000	-	-	(2)	Need for operating	N/A	N/A	N/A	15,579,209 thousand; financing to related party and party with business transaction	177,896,044 thousand; financing to nonbusiness but in need for capital is limited to 40% of the Company's net asset
0	The Company	Formosa Chemicals & Fibre Corporation	Other receivables from related parties	Yes	6,000,000	4,500,000	-	-	(2)	Need for operating	N/A	N/A	N/A	142,316,835 thousand.
0	The Company	Formosa Plastics Marine Corporation	Other receivables from related parties	No	602,916	182,340	182,340	2.18	(2)	Need for operating	N/A	N/A	N/A	to others is limited to 20% of the Company's net asset
0	The Company	Formosa Heavy Industries Corporation	Other receivables from related parties	Yes	10,524,200	7,000,000	1,900,000	2.18 -4.92	(2)	Need for operating	N/A	N/A	N/A
0	The Company	Formosa Oil (Asia Pacific) Corporation (Note 9)	Other receivables from related parties	Yes	500,000	500,000	-	-	(2)	Need for operating	N/A	N/A	N/A
					Total	$21,182,340	$2,082,340

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Note1: The Company and its subsidiaries are coded as follows:
(1) The Company is coded "0".
(2) The subsidiaries are coded starting from "1" in the order.

Note 2: Total amount of the financing is disclosed herein if the financing related to business transactions.

Note 3: Maximum financing balance provided to others for the period.

Note 4: Nature of financing is coded as follows:
(1) The financing occurred due to business transactions is coded "1".
(2) The financing occurred due to short-term financing is coded "2".

Note 5: Total amount of the business transactions between financing company and counterparty should be disclosed herein if the financing occurred due to business transactions.

Note 6: The necessity and rationality of the loan application should be specifically illustrated herein if the financing occurred due to short-term financing.

Note 7: The limits and the calculation methods of financing amount for individual counterparty and total financing amount for financing company are disclosed in accordance with company's operating procedure of financing.

Note 8: According to Paragraph 1, Article 14 of Guidelines for Lending of Capital, Endorsements and Guarantees by Public Companies, each financing should be approved by the board of directors. To fairly expose the company's risk, even if the fund doesn't be utilized, the financing amount approved by the board of directors still includes in the financing balance. To reflect the adjustment of the company's risk, while the counterparty repay the fund, it should disclose the balance after the repayment. Although the chairman is authorized to handle the financing in installment or revolver under the specific amount approved by the board of directors within one year, according to Paragraph 2, Article 14 of Guidelines for Lending of Capital, Endorsements and Guarantees by Public Companies, it still uses the financing amount approved by the board of directors as the reporting balance. While the counterparty repay the fund, considering the possibility of another utilization, it still uses the financing amount approved by the board of directors as the reporting balance.

Note 9: All transactions listed above are eliminated in the consolidated financial statements.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

B. Endorsement/guarantee provided to others:

No. (Note1)	Endorser/Guarantor	Receiving Party		Limit of the Endorsement / Guarantee Amount for Receiving Party (Note3)	Maximum Balance for the Period (Note4)	Ending Balance (Note5)	Actual Amount Borrowed (Note6)	Amount of Collateral	Percentage	Limit on the Endorsement/Guarantee Amount (Note3)	Parent Company Endorsed / Guaranteed for the Subsidiaries (Note7)	Subsidiaries Endorsed /Guaranteed for the Parent Company (Note7)	Endorsement or Guarantee for Entities in China (Note7)
		Company Name	Relationship
0	The Company	Formosa Group (Cayman) Limited	(6)	$231,264,857	$8,295,500	$-	$-	N/A	-	The Company may provide endorsement/guarantee to others but shall not exceed 130% of its net assets. The limit is 462,529,714 thousand. For endorsement/guarantee to individual entity, the amount is limited to 50% of the limit.	N	N	N
0	The Company	FPCC USA, INC	(2)	231,264,857	995,460	943,140	943,140	N/A	0.27	+	Y	N	N

Note 1: The Company and its subsidiaries are coded as follows:

(1) The Company is coded "0".
(2) The subsidiaries are coded starting from "1" in the order.

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

(1) Having business relationship.
(2) The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(3) The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.
(4) The endorser/guarantor company and endorsed/guaranteed company both are owned directly or indirectly more than 90% voting shares by the company.
(5) Mutual guarantee of the trade as required by the construction contract.
(6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed guaranteed company in proportion to its ownership.
(7) Jointly guarantee of the pre-construction real estate sales contract in accordance with Consumer Protection Law.

Note 3: The limits and the calculation methods of endorsement/guarantee amount for individual counterparty and maximum balance are disclosed in accordance with company's operating procedure of endorsement/guarantee.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Note 4: Maximum balance of endorsement/guarantee provided to others for the period.

Note 5: It should be filled in the amount which approved by the board of directors. However, it should be filled in the amount which utilized by the chairman, whom authorized by the board of directors in accordance with Subparagraph 8, Article 12 of Guidelines for Lending of Capital, Endorsements and Guarantees by Public Companies.

Note 6: It should be filled in the amount which is actual utilized by the endorsed/guaranteed company within the limit of endorsement/guarantee amount.

Note 7: It should be filled in “Y”, if it is the public parent company endorsed/guaranteed for the subsidiaries, subsidiaries endorsed/guaranteed for the public parent company, or endorsement or guarantee for entities in China.

C. Material securities held as of December 31, 2025 (not including subsidiaries, associates and joint ventures):

Shares: In thousand

Company	Type and Name of the Securities (Note1)	Relationship (Note2)	Financial Statement Account	As of December 31, 2025
				Shares (In thousand)	Carrying Amount (Note3)	Percentage of Ownership (%)	Market Value (Note4)
The Company	Stock - Formosa Plastics Corporation	Entity with joint control or significant influence over the Company	Financial assets at fair value through other comprehensive income-current	131,460	$5,126,954	2.07%	$39.00
The Company	Stock - Nan Ya Plastics Corporation	Entity with joint control or significant influence over the Company	Financial assets at fair value through other comprehensive income-current	179,214	10,788,708	2.26%	60.20
The Company	Stock - Formosa Chemicals & Fibre Corporation	Entity with joint control or significant influence over the Company	Financial assets at fair value through other comprehensive income-current	48,568	1,559,019	0.83%	32.10
The Company	Stock - National Petroleum Co., Ltd.	Others	Financial assets at fair value through other comprehensive income-current	60,082	3,430,675	19.44%	57.10
The Company	Stock - Nan Ya Technology Corporation	-	Financial assets at fair value through other comprehensive income-current	272,843	52,658,778	8.81%	193.00
The Company	Stock - TSRC Corporation	-	Financial assets at fair value through other comprehensive income-current	41,201	638,616	4.99%	15.50
The Company	Fund - Mega USD Fend-Shou Private Market Fund	-	Financial assets at fair value through profit or loss-current	4,554	1,849,655	-	406.14
The Company	Stock - Formosa Ha Tinh (Cayman) Limited	Others	Financial assets at fair value through other comprehensive income-non-current	621,178	6,249,152	11.43%	10.06

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Company	Type and Name of the Securities (Note1)	Relationship (Note2)	Financial Statement Account	As of December 31, 2025
				Shares (In thousand)	Carrying Amount (Note3)	Percentage of Ownership (%)	Market Value (Note4)
The Company	Stock - Asia Pacific Investment Corporation	Others	Financial assets at fair value through other comprehensive income-non-current	8,950	207,372	2.11%	23.17
The Company	Stock - Formosa Network Technology Corporation	-	Financial assets at fair value through other comprehensive income-non-current	2,925	371,459	12.50%	126.99
The Company	Stock - Formosa Heavy Industries Corporation	Others	Financial assets at fair value through other comprehensive income-non-current	25,350	444,901	1.26%	17.55
The Company	Stock - Formosa Ocean Group Marine Investment Corporation	-	Financial assets at fair value through other comprehensive income-non-current	3	9,179,041	19.00%	3,500,778.49
The Company	Stock - Amtrust Capital Corporation	-	Financial assets at fair value through other comprehensive income-non-current	2,344	21,266	3.91%	9.07
The Company	Stock - Mega Growth Venture Capital Co., Ltd.	-	Financial assets at fair value through other comprehensive income-non-current	492	3,084	1.97%	6.27
The Company	Stock - Idemitsu Formosa Specialty Chemicals Corporation	Joint venture	Financial assets at fair value through other comprehensive income-non-current	50,000	344,645	100.00%	10.00
The Company	Stock - Young Ray Co., Ltd	-	Financial assets at fair value through other comprehensive income-non-current	3,000	90,000	13.29%	30.00

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities, as defined in IFRS 9 "Financial Instruments".
Note 2: If the securities listed above are issued by related parties, the column is specified with further information.
Note 3: For securities measured at fair value, fill in the book value column with fair value of the securities less accumulated impairment. For securities not measured at fair value, fill in the book value column with the original cost or amortized cost less accumulated impairment.
Note 4: If the securities listed above are subject to restrictions on use due to providing guarantees, pledging loans, or other agreements, the number of shares provided as security or pledged, the amount of the security or pledge, and the restrictions on use should be disclosed.
Note 5: This table lists the securities that the company determines, based on the materiality principle, should be disclosed.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

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

Purchaser / Seller	Counterparty	Relationship with the counterparty	Transaction				Differences in transaction terms compared to third party transactions		Notes/accounts receivable (payable)		Note
			Purchases (Sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
The Company	Formosa Plastics Corporation	Entity with joint control or significant influence over the Company	Sales Purchases	$59,939,002 4,796,808	9.57 0.87	30 days after receiving the goods	N/A	N/A	$4,842,410 397,300	11.26 3.10
The Company	Nan Ya Plastics Corporation	Entity with joint control or significant influence over the Company	Sales Purchases	21,534,057 1,534,646	3.44 0.28	30 days after receiving the goods	N/A	N/A	1,408,409 142,658	3.27 1.11
The Company	Formosa Chemicals & Fibre Corporation	Entity with joint control or significant influence over the Company	Sales Purchases	111,810,667 26,881,746	17.86 4.89	30 days after receiving the goods	N/A	N/A	6,952,208 2,138,271	16.16 16.71
The Company	National Petroleum Co., Ltd.	Others	Sales Purchases	19,496,446 -	3.11 -	60 days after receiving the goods	N/A	N/A	2,019,207 1,569,914 (Notes Receivable)	4.69 99.99 -
The Company	Formosa Oil (Asia Pacific) Corporation	Subsidiary	Sales Purchases	13,651,257 -	2.10 -	30 days after receiving the goods	N/A	N/A	1,220,490 -	2.84 -	(Note)
The Company	Formosa Taffeta Co., Ltd	Others	Sales Purchases	8,812,094 53,797	1.41 0.01	30 days after receiving the goods	N/A	N/A	411,258 6,015	0.96 0.05
The Company	Caltex Taiwan Corporation	Joint venture	Sales Purchases	7,696,428 -	1.23 -	30 days after receiving the goods	N/A	N/A	729,592 7,476	1.70 0.06
The Company	Simosa Oil Corporation	Associate	Sales Purchases	4,445,675 -	0.71 -	30 days after receiving the goods	N/A	N/A	359,086 -	0.83 -
The Company	Formosa BP Chemicals Corporation	Others	Sales Purchases	1,850,343 419,217	0.30 0.08	30 days after receiving the goods	N/A	N/A	186,150 43,963	0.43 0.34
The Company	TMS Corp.	Associate	Sales Purchases	3,193,355 -	0.51 -	30 days after receiving the goods	N/A	N/A	- -	- -
The Company	Formosa Kraton Chemical Co., Ltd.	Joint venture	Sales Purchases	912,695 -	0.15 -	30 days after receiving the goods	N/A	N/A	17,086 -	0.04 -
The Company	Mai-Liao Power Corporation	Associate	Sales Purchases	104,466 -	0.02 -	30 days after receiving the goods	N/A	N/A	4,125 -	0.01 -

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Parchaser / Seller	Counterparty	Relationship with the counterparty	Transaction				Differences in transaction terms compared to third party transactions		Notes/accounts receivable (payable)
			Purchases (Sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
The Company	Formosa Plastics
Marine Corporation	Associate	Sales Purchases	144,701	0.02	30 days after receiving the goods	N/A	N/A	3,537
446	0.01
0.00
The Company	Idemitsu Formosa Specialty Chemicals Corp.	Joint venture	Sales Purchases	462,284
56,582	0.07
0.01	30 days after receiving the goods	N/A	N/A	39,548
3,627	0.09
0.03
The Company	Simosa International Co., Ltd	Others	Sales Purchases	10,527,087	1.68	30 days after receiving the goods	N/A	N/A	935,248	2.17

Note: All transactions are eliminated in the consolidated financial statements.

E. Receivables from related parties with amounts exceeding NT$100 million or 20 percent of capital stock:

Creditor	Counterparty	Relationship with the counterparty	Balance	Turnover rate	Overdue receivables		Amount collected subsequent to the balance sheet date	Loss Allowance	Note
					Amount	Action taken
	Receivables
The Company	Formosa Chemicals & Fibre Corporation	Entity with joint control or significant influence over the Company	$6,952,208	14.96	-	-	$6,952,208	N/A
The Company	Formosa Plastics Corporation	Entity with joint control or significant influence over the Company	4,842,410	11.33	-	-	4,842,410	N/A
The Company	Nan Ya Plastics Corporation	Entity with joint control or significant influence over the Company	1,408,409	11.56	-	-	1,408,409	N/A
The Company	National Petroleum Co., Ltd.	Others	3,589,121	4.74	-	-	1,777,738	N/A
The Company	Formosa Oil (Asia Pacific) Corporation	Subsidiary	1,220,490	10.78	-	-	1,220,490	N/A	(Note)
The Company	Formosa Taffeta Co., Ltd	Others	411,258	22.13	-	-	411,258	N/A
The Company	Formosa BP Chemicals Corporation	Others	186,150	12.69	-	-	186,150	N/A
The Company	Simosa Oil Corporation	Associate	359,086	11.45	-	-	359,086	N/A
The Company	Caltex Taiwan Corporation	Joint venture	729,592	11.64	-	-	729,592	N/A
The Company	Simosa International Co., Ltd	Others	935,248	6.54	-	-	935,248	N/A
	Other receivables from related parties
The Company	Formosa Heavy Industries Corporation	Others	1,900,000	-	-	-	-	N/A

Note: All transactions are eliminated in the consolidated financial statements.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

F. Significant intercompany transactions between consolidated entities:

No. (Note 1)	Company name	Counterparty	Relationship (Note 2)	Transaction
				Account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
0	The Company	Formosa Oil (Asia Pacific) Corporation	1	Sales revenue	$13,651,257	Prices similar to those with non-related parties	2.18%
				Accounts receivable	1,220,490	Receive in the following month	0.29%
0	The Company	Formosa Grandseas Bunkering and Trading Corporation	1	Labor force revenue	20,963	Prices similar to those with non-related parties	0.00%
1	Formosa Oil (Asia Pacific) Corporation	The Company	2	Labor force revenue	193,675	Prices similar to those with non-related parties	0.03%
	Formosa Petrochemical Transportation Corporation	The Company	2	Labor force revenue	563,816	Prices similar to those with non-related parties	0.09%
3	FPCC DILIGENCE Corp.	The Company	2	Labor force revenue	620,235	Prices similar to those with non-related parties	0.10%

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

(1) Parent Company is coded "0".
(2) The subsidiaries are coded starting from "1" in the order.

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

(1) Parent company to subsidiary.
(2) Subsidiary to parent company
(3) Subsidiary to subsidiary.

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

Note 4: Whether the Company discloses the significant transaction in this sheet is according to materiality principle.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(2) Investee information

A. Names, locations and related information of investee companies as of December 31, 2025 (excluding Mainland China)

Investor	Investee (Note1 - 2)	Region	Main Business	Original cost		At the end of period			Investees company net income (Note2(2))	Share of Profits/Losses (Note2(3),3)	Note
				Balance at December 31, 2025	Balance at December 31, 2024	Number of shares (in thousand)	Percentage	Amount
The Company	Formosa Oil (Asia Pacific) Corporation	ROC	Retail of petrochemical	$1,097,992	$1,097,992	100,000	100.00	$1,919,878	$289,390	$289,390	(Note4)
The Company	Formosa Petrochemical Transportation Corporation	ROC	Transportation	176,019	176,019	19,378	88.00	338,854	61,243	53,893	(Note4)
The Company	Formosa Grandseas Bunkering and Trading Corporation	ROC	Retail of petrochemical	1,081,009	508,609	108,101	60.00	1,018,950	(6,500)	(24,863)	(Note4)
The Company	FPCC USA, INC.	US	Oil drilling	1,784,197	1,784,197	10	100.00	2,348,463	72,001	72,001	(Note4)
The Company	FPCC DILIGENCE Corp.	Liberia	Ship chartering	894,723	894,723	-	100.00	329,226	203,847	203,847	(Note4)
The Company	FPCC MAJESTY Corp.	Liberia	Ship chartering	1,092,467	1,092,467	-	100.00	1,964,413	8,139	8,139	(Note4)
The Company	FPCC NATURE Corp.	Liberia	Ship chartering	1,126,902	1,126,902	-	100.00	2,045,087	22,882	22,882	(Note4)
The Company	FG INC.	US	Investing	6,506,856	6,506,856	11	57.00	6,206,971	(18,137)	(10,337)	(Note4)
The Company	Mai-Liao Power Corporation	ROC	Electricity generation	5,985,983	5,985,983	868,884	24.94	18,013,147	3,048,346	760,376
The Company	Yi-Chi Construction Corporation	ROC	Construction	18,508	18,508	1,695	40.55	27,703	(61)	(25)
The Company	Mailiao Harbor Administration Corporation	ROC	Harbor manage	1,348,137	1,348,137	98,907	44.96	2,530,987	586,636	263,738
The Company	Formosa Development Corporation	ROC	Development of land	229,970	229,970	52,302	45.99	609,753	77,003	35,414
The Company	Formosa Marine Corporation	ROC	Transportation	20,000	20,000	21,646	20.00	740,334	400,369	80,074
The Company	Simosa Oil Corporation	ROC	Retail of other oil products and manufacturing	54,000	54,000	41,748	20.00	909,576	654,486	130,832
The Company	Caltex Taiwan Corporation	ROC	Retail of petrochemical products and airport refueling	21,501	21,501	2,400	50.00	84,232	68,564	34,281
The Company	Formosa Environmental Technology Corporation	ROC	Crop cultivating, Disposals of waste and sewage	417,145	417,145	41,714	24.34	247,608	28,913	7,038
The Company	Formosa Plastics Synthetic Rubber(HK)	HK	Investing	4,244,064	4,244,064	138,333	33.33	1,386,378	(465,673)	(155,208)
The Company	Formosa Kraton Chemical Co., Ltd.	ROC	Synthetic Rubber Manufacturing	1,237,500	1,237,500	-	50.00	1,440,656	237,668	118,834
The Company	Formolight Technologies, Inc.	ROC	LED	80,361	80,361	8,036	39.43	55,835	2,341	891
The Company	Formosa Resources Corporation	ROC	Mining	9,099,071	9,099,071	909,907	25.00	4,062,093	(7,627,797)	(1,906,950)

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Investor	Investee (Note1 + 2)	Region	Main Business	Original cost		At the end of period			Investees company net income (Note2(2))	Share of Profits/Losses (Note2(3),3)	Note
				Balance at December 31, 2025	Balance at December 31, 2024	Number of shares (in thousand)	Percentage	Amount
The Company	Formosa Group (Cayman) Limited	Cayman	Investing	-	377	-	-	-	163,920	40,980
The Company	Idemitsu Formosa Specialty Chemicals Corp.	ROC	Retail of petrochemical products	750,000	750,000	75,000	50.00	-	(34,294)	(17,147)
The Company	NKFG	ROC	Electronic components manufacturing & selling	1,379,700	1,379,700	71,342	45.00	458,081	(168,413)	(75,786)
The Company	Nan Ya Photonics Incorporation	ROC	Lighting equipment manufacturing	339,657	339,657	13,262	28.77	312,368	56,368	16,288
The Company	Formosa Smart Energy Corporation	ROC	Manufacture of power generation, transmission and distribution machinery	4,250,000	4,250,000	425,000	25.00	4,158,658	(485,056)	(121,264)
Formosa Oil (Asia Pacific) Corporation	TMS Corp.	ROC	Vehicle and parts export and import	40,000	40,000	3,920	49.00	65,462	25,880	13,171
Formosa Oil (Asia Pacific) Corporation	Whalehome International Corp., Ltd	ROC	Retail of petrochemical	167,323	167,323	16,463	53.80	178,845	8,643	4,650
Formosa Oil (Asia Pacific) Corporation	Formosa Engineering Technologies, INC.	ROC	Electrical and mechanical, telecommunications and circuits Equipment maintenance	10,000	10,000	1,000	20.00	4,803	1,157	229
Formosa Petrochemical Transportation Corporation	Whalehome International Corp., Ltd	ROC	Retail of petrochemical	48,209	48,209	4,801	15.69	52,152	8,643	1,356
FG INC.	FG LA LLC	US	Petrochemical products manufacturing & selling	11,086,296	11,126,660	-	100.00	10,587,077	(4,853)	(4,853)	(Noted)
FPCC USA	MONTGOMERY GATHERING, LLC	US	Natural gas transportation	32,166	40,557	-	70.00	31,825	8,399	5,879	(Noted)

Note 1: If a public company has holding company in other country and had issued consolidated financial statement under local regulations, about these investees could disclosed their holding company's relevant information.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Note 2: If not belong to Note 1, filled in by the following rules

(1) In "Investee", "Region", "Main Business", "Original cost" and "At the end of period" columns should filled in in order follow the company invest directly or invest indirectly and explain each relationship in "Note" column.
(2) In "Investees company net income" column should fill in each investee net income.
(3) In "Share of Profits/Losses" column only need to fill in the share of profit or loss of each subsidiary and the company under equity method. Regarding to the profit or loss of each subsidiary should contain the share of profit or loss of its investee.

Note3: It includes the unrealized gross profit of the current period.

Note4: All transactions are eliminated in the consolidated financial Statements.

B. The company has controlling power over Formosa Petrochemical Transportation Corporation, Formosa Oil (Asia Pacific) Corporation, Formosa Grandseas Bunkering and Trading Corporation, FPCC USA, INC., MONTGOMERY GATHERING, LLC, FG INC., FG LA LLC, FPCC DILIGENCE Corp., FPCC MAJESTY Corp. and FPCC NATURE Corp.. Although the total assets and total operating revenue has not reached 10% of the company's account, but the significant transaction should be disclosed.

(a) Financing provided to others

| No
(Note 1) | Creditor | Borrower | General
Leger
account
(Note 2) | Related
party | Maximum
outstanding
balance during
the year ended
December 31,
2025(Note3) | Balance at
December 31,
2025 (Credits
approved by
the Boards)
(Note 8) | Actual
amount | Interest
rate% | Nature for
Financing
(Note 4) | Reason for
Financing
(Note 6) | Loss
Allowance | Collateral | | Financing
Limits for Each
Borrowing
Company
(Note 7) | Financing
Company's
Total
Financing
Amount
Limits
(Note 7) |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | | | | | | | | Item | Value | | |
| 1 | Formosa Oil
(Asia
Pacific)
Corporation | Whalehome
International
Corp., Ltd | Other
receivables
from related
parties | yes | $50,000 | $50,000 | $- | - | (2) | Need for
operating | N/A | N/A | N/A | $959,939 | $1,919,878 |
| 1 | Formosa Oil
(Asia
Pacific)
Corporation | Formosa
Petrochemical
Transportation
Corporation | Other
receivables
from related
parties | yes | 40,000 | 40,000 | - | - | (2) | Need for
operating | N/A | N/A | N/A | 959,939 | 1,919,878 |

Note 1: The Company and its subsidiaries are coded as follows:

(1) The Company is coded "0".
(2) The subsidiaries are coded starting from "1" in the order.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Note 2: Total amount of the financing is disclosed herein if the financing related to business transactions.

Note 3: Maximum financing balance provided to others for the period.

Note 4: Nature of financing is coded as follows:

(1) The financing occurred due to business transactions is coded "1".

(2) The financing occurred due to short-term financing is coded "2".

Note 5: Total amount of the business transactions between financing company and counterparty should be disclosed herein if the financing occurred due to business transactions.

Note 6: The necessity and rationality of the loan application should be specifically illustrated herein if the financing occurred due to short-term financing.

Note 8: According to Paragraph 1, Article 14 of Guidelines for Lending of Capital, Endorsements and Guarantees by Public Companies, each financing should be approved by the board of directors. To fairly expose the company's risk, even if the fund doesn't be utilized, the financing amount approved by the board of directors still includes in the financing balance. To reflect the adjustment of the company's risk, while the counterparty repays the fund, it should disclose the balance after the repayment. Although the chairman is authorized to handle the financing in installment or revolver under the specific amount approved by the board of directors within one year, according to Paragraph 2, Article 14 of Guidelines for Lending of Capital, Endorsements and Guarantees by Public Companies, it still uses the financing amount approved by the board of directors as the reporting balance. While the counterparty repays the fund, considering the possibility of another utilization, it still uses the financing amount approved by the board of directors as the reporting balance.

Note 9: All transactions listed above are eliminated in the consolidated financial statements.

(b) Endorsement/guarantee provided to others for the year ended December 31, 2025: None.

103

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Holding Company	Type and Name of the Securities	Relationship	Financial Statement Account	As of December 31, 2025
				Shares (In thousand)	Carrying Value	Percentage of Ownership (%)	Market Value
Formosa Oil (Asia Pacific) Corporation	Stock – National Petroleum Co., Ltd.	Others	Financial assets at fair value through other comprehensive income - current	717	$40,930	0.23%	$57.10
Formosa Oil (Asia Pacific) Corporation	Stock – North-Star International Co., Ltd.	-	Financial assets at fair value through other comprehensive income - current	12,855	309,153	3.00%	24.05
Formosa Oil (Asia Pacific) Corporation	Stock – Tai Yi Feng Co.,Ltd	-	Financial assets at fair value through other comprehensive income - non-current	2,500	99,158	5.00%	39.66

(d) Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: None.

(e) Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.

C. Investment in Mainland China as of December 31, 2025

Investee company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of January 1, 2025	Investment Flows
					Outflow	Inflow
Formosa Plastics Synthetic Rubber (Ningbo)	Synthetic Rubber Manufacturing	US$415,000
NT$13,046,770	(2)	US$138,333
NT$4,244,059	-	-	US$138,333
NT$4,244,059	NT$(465,673)	33.33%	NT$(155,208)	NT$1,386,378	$-
Accumulated Investment in Mainland China	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note 3)
---	---	---
US$138,333	US$138,333	NT$216,747,022
NT$4,244,059	NT$4,244,059

Note1: The methods for engaging in investment in Mainland China include the following:

(1) Directly invested in China
(2) Investment in Mainland China companies through a company invested and established in a third region (The third region company is Formosa Plastics Synthetic Rubber (HK))
(3) Other method

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Note2: Recognized based on valuation in financial statements audited by investee companies' independent accountants.

Note3: According to MOEA's regulation, the company set its upper limit on investment is based on 60% of consolidated equity.

14. OPERATING SEGMENT INFORMATION

For management purposes, the Group is organized into business units based on its products and services and has two reportable segments as follows:

A. Petrochemical segment: Producing and selling petroleum, and petrochemical products.
B. Public utility segment: Producing and selling water, electricity and steam.

For information regarding the segment reporting and operating activities, please refer to “Other” section of the Note.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements. However, group finance costs, finance income and income taxes are managed on a group basis and are not allocated to operating segments.

The transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties.

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

Information for the year ended December 31, 2025

	Petrochemical Division	Utility Division	Others	Adjustment and eliminations	Consolidated Amount
Revenue
External customer	$565,859,100	$42,967,148	$17,332,848	$-	$626,159,096
Inter-segment	13,651,257	11,867,522	2,770,482	(28,289,261)	-
Total revenue	$579,510,357	$54,834,670	$20,103,330	$(28,289,261)	$626,159,096
Interest revenue	-	-	944,389	-	944,389
Rent revenue	1,094,364	-	158,945	-	1,253,309
Interest expense	272,587	121,818	73,786	-	468,191
Depreciation and depletion	5,219,666	4,003,252	1,976,370	-	11,199,288
Amortization	1,952,244	-	11,474	-	1,963,718
Segment profit	$721,391	$10,262,947	$1,096,179	$631,703	$12,712,220
Assets
Investments accounted for using the equity method	-	-	35,338,671	-	35,338,671
Segment assets	$160,025,961	$25,497,820	$252,879,038	$(21,941,343)	$416,461,476
Segment liabilities	$27,816,521	$6,552,424	$26,538,144	$(5,690,650)	$55,216,439

English Translation of Consolidated Financial Statements Originally Issued in Chinese

Information for the year ended December 31, 2024

	Petrochemical Division	Utility Division	Others	Adjustment and eliminations	Consolidated Amount
Revenue
External customer	$605,245,864	$41,150,830	$17,426,353	$-	$663,823,047
Inter-segment	13,938,988	12,769,134	2,360,952	(29,069,074)	-
Total revenue	$619,184,852	$53,919,964	$19,787,305	$(29,069,074)	$663,823,047
Interest revenue	-	-	946,352	-	946,352
Rent revenue	1,119,789	-	164,916	-	1,284,705
Interest expense	290,574	143,446	90,146	-	524,166
Depreciation and depletion	5,486,777	3,942,405	1,943,991	-	11,373,173
Amortization	1,586,822	-	7,390	-	1,594,212
Segment profit	$(9,342,854)	$8,853,796	$648,701	$6,407,467	$6,567,110
Assets
Investments accounted for using the equity method	-	-	36,845,272	-	36,845,272
Segment assets	$179,639,232	$28,226,578	$181,656,408	$(18,322,569)	$371,199,649
Segment liabilities	$27,260,359	$8,411,417	$36,742,688	$(3,461,460)	$68,953,004

Note1: Revenues were from segments below the quantitative thresholds, such as load and unload process, transportation services and sales of petroleum products. None of those segments has ever met the quantitative thresholds for determining reportable segments assets.
Note2: Inter-segment revenues are eliminated upon consolidation and reflected in the 'adjustments and eliminations' section. All other adjustments and eliminations are part of detailed reconciliations presented further below.
Note3: Profit or loss of each reportable segment does not include the share of profits of associates and joint venture and the foreign currency exchange gains and losses.

(2) Information on reconciliations of revenue, profit or loss, assets, liabilities and other material items of reportable segments:

A. Revenue:

	For the year ended December 31, 2025	For the year ended December 31, 2024
Total revenue from reportable segments	$634,345,027	$673,104,816
Other revenue	20,103,330	19,787,305
Elimination of inter-segment revenue	(28,289,261)	(29,069,074)
Total revenue	$626,159,096	$663,823,047

English Translation of Consolidated Financial Statements Originally Issued in Chinese

B. Profit or loss

	For the year ended December 31, 2025	For the year ended December 31, 2024
Net income from reportable segments	$10,984,338	$(489,058)
Net income from other segments	1,096,179	648,701
Adjustment	631,703	6,407,467
Net income from continuing operations	$12,712,220	$6,567,110

C. Assets:

	As of
	December 31, 2025	December 31, 2024
Total assets of reportable segments	$185,523,781	$207,865,810
Total assets of other segments	252,879,038	181,656,408
Adjustment	(21,941,343)	(18,322,569)
Segment assets	$416,461,476	$371,199,649

D. Liabilities:

	As of
	December 31, 2025	December 31, 2024
Total liabilities of reportable segments	$34,368,945	$35,671,776
Total liabilities of other segments	26,538,144	36,742,688
Adjustment	(5,690,650)	(3,461,460)
Segment liabilities	$55,216,439	$68,953,004

E. Other material items:

For the year ended December 31, 2025

	Reportable segments	Others	Consolidated
Interest revenue	$-	$944,389	$944,389
Rent revenue	1,094,364	158,945	1,253,309
Interest expense	394,405	73,786	468,191
Depreciation and depletion	9,222,918	1,976,370	11,199,288
Amortization	1,952,244	11,474	1,963,718
Equity accounted investments	-	35,338,671	35,338,671

English Translation of Consolidated Financial Statements Originally Issued in Chinese

For the year ended December 31, 2024

	Reportable segments	Others	Consolidated
Interest revenue	$-	$946,352	$946,352
Rent revenue	1,119,789	164,916	1,284,705
Interest expense	434,020	90,146	524,166
Depreciation and depletion	9,429,182	1,943,991	11,373,173
Amortization	1,586,822	7,390	1,594,212
Equity accounted investments	-	36,845,272	36,845,272

(3) Geographical information

Revenue from external customers

	For the year ended December 31, 2025	For the year ended December 31, 2024
Taiwan	$324,557,370	$363,055,275
Australia	68,450,446	71,956,725
Korea	19,346,613	14,811,592
Philippines	18,427,086	9,691,933
Singapore	60,361,562	64,806,322
Malaysia	29,626,341	36,130,998
Mainland China	11,752,957	9,350,053
Other countries	93,636,721	94,020,149
Total	$626,159,096	$663,823,047

The revenue information above is based on the location of the customer.

Non-current assets

	As of
	December 31, 2025	December 31, 2024
Taiwan	$87,512,193	$88,943,061
Other countries	12,826,772	13,531,656
Total	$100,338,965	$102,474,717

The non-current assets are including property, plant and equipment, mineral resources, investments property and other assets, but financial instruments and deferred tax assets are excluded.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

(4) Information about major customers

For the year ended December 31, 2025

Customer	Sales Amount	Division
Formosa Chemicals & Fibre Corporation	$111,810,667	Petrochemical and utility divisions
Formosa Plastics Corporation	59,939,002	Petrochemical and utility divisions
Total	$171,749,669

For the year ended December 31, 2024

Customer	Sales Amount	Division
Formosa Chemicals & Fibre Corporation	$140,590,191	Petrochemical and utility divisions
Formosa Plastics Corporation	66,378,370	Petrochemical and utility divisions
Total	$206,968,561

AI assistant

FPCC — Audit Report / Information 2025

52574_rns_2026-04-14_92b935a5-588c-469f-8cb6-a8be9f20b1dd.pdf

Representation letter

Independent Auditors' Report Translated from Chinese

Opinion

Basis for Opinion

Key Audit Matters

Revenue recognition

Valuation of inventories

Other Matter – Making Reference to the Audits of Other Auditors

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

English Translation of Consolidated Financial Statements Originally Issued in Chinese

FORMOSA PETROCHEMICAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(a) IFRS 17 “Insurance Contracts”

(b) Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Statement of compliance

(2) Basis of preparation

(3) Basis of consolidation

A. Preparation principle of consolidated financial statements

(7) Cash and cash equivalents

(8) Financial instruments

Financial assets measured at amortized cost

Financial assets at fair value through profit or loss

B. Impairment of financial assets

Equity instruments

Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at amortized cost

Derecognition of financial liabilities

E. Offsetting of financial instruments

(9) Derivatives instrument and hedge accounting

Cash flow hedge

(10) Fair value measurement

(11) Inventories

(12) Investments accounted for using the equity method

(13) Property, plant and equipment

(14) Investment property

(15) Leases

Group as a lessee

Group as a lessor

(16) Exploration and evaluation assets

(17) Impairment of non-financial assets

(18) Provisions

(19) Revenue recognition

Sales of goods

Rendering of services

(20) Borrowing costs

(21) Post-employment benefits

5. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

(1) Judgment

(2) Estimates and assumptions

A. Fair value of financial instruments

B. Pension benefits

6. CONTENTS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

(4) Financial assets (liabilities) for hedging - current and non-current

(5) Notes and accounts receivable

(6) Inventories

(7) Prepaid expense

(8) Investments accounted for using the equity method

(9) Property, plant and equipment

(13) Bonds payable

(14) Long-term loans

(15) Post-employment benefits

A. Defined contribution plan

B. Defined benefits plan

(16) Equities

A. Common stock

B. Capital surplus

C. Retained earnings and dividend policies

(17) Operating revenues

(1) Disaggregation of revenue

(18) Expected credit losses/ (gains)

FPCC Audit Report / Information 2025