FRG - Annual Report 2022 | FinancialReports.eu

Formosan Rubber Group Inc.

Parent Company Only Financial Statements

and Independent Auditors’ Report For the Years Ended December 31,2022 and 2021

Address: 8F, No. 82, Sec. 1, Hankou St., Zhongzheng District, Taipei City Tel No.: (02) 2370-0988

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

INDEPENDENT AUDITORS’ REPORT

NO.00111110EA

The Board of Directors and Shareholders Formosan Rubber Group Inc.

Opinion

We have audited the accompanying parent company only financial statements of Formosan Rubber Group Inc., which comprise the parent company only balance sheets as of December 31, 2022 and 2021, and the parent company only statements of comprehensive income, changes in equity, and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the accompanying parent company only financial position of Formosan Rubber Group Inc. as of December 31,2022 and 2021, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by 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 Parent Company Only Financial Statements section of our report. We are independent of Formosan Rubber Group Inc. in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31,2022. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for Formosan Rubber Group Inc.’ parent company only financial statements for the year ended December 31, 2022 are stated as follows: Valuation of Net Realizable Value of Real Estate For Sale

Summary of key issues for auditing

As of December 31, 2022, the value of real estate for sale on the parent company only balance sheet was NT$2,909,351 thousand primarily reflective of the completed properties and land held for sale. These items accounted for approximately 21% of the parent company only total assets. Please refer to Notes 4, 5 and 11 of the parent company only financial statements for detailed information. Formosan Rubber Group Inc. uses the lower of the cost or net realizable value for the valuation of real estate for sale. As the valuation of real estate for sale is subject to the effects of the cycle in the real estate market and the changes of the government policy and the determination of net realizable values for real estate for sale requires major judgment and estimates, it was listed as one of the audit priorities this year. Audit procedures

The audit procedures were carried out by CPAs as follows:

Acquisition of the data concerning the company’s assessment of lower of the costs and net realizable value;
Random inspection of the ownership documents for the properties held for sale, in order to validate the integrity of the assessment;
Random inspection of the data concerning the estimated selling price and the sale records of the most recent period, so as to determine the basis and reasonability of the management’s estimate of net realizable value.

Impairment of Property Investments

Summary of key issues for auditing

As of December 31, 2022, the value of property investments on the parent company only balance sheet was NT$2,598,861 thousand accounting for approximately 19% of the parent company only total assets. Please refer to Notes 4, 5 and 16 of the parent company only financial statements for detailed information. Management complies with IAS 36 “Impairment of Assets” by evaluating whether there are any signs indicating the investment properties may be impaired on each balance sheet date. Given the numerous assumptions involved, and the high uncertainty of accounting estimates, it was listed as one of the audit priorities this year.

Audit procedures

The audit procedures were carried out by CPAs as follows:

Acquisition of the data concerning the company’s assessment of asset impairments according to cash generating units;
Assessment of the reasonability of the management’s identification of impairment signs, assumptions and estimates used, such as the division of cash generating units, forecasting of cash flows, the appropriateness of the discount rate.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including members of the Audit Committee) are responsible for overseeing Formosan Rubber Group Inc.’ financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

Identify and assess the risks of material misstatement of the parent company only 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 Formosan Rubber Group Inc.’ internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Formosan Rubber Group Inc.’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only 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 Formosan Rubber Group Inc. to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Formosan Rubber Group Inc. to express an opinion on the parent company only 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 the parent company only financial statements for the year ended December 31, 2022 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.

BAKER TILLY CLOCK & CO.

March 15, 2023

Notes to Readers

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

Formosan Rubber Group Inc.

Parent Company Only Balance Sheet

Dec. 31, 2022 and 2021

Unit: In Thousands of NTD

Assets	Note	Dec. 31, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2021
Accounting item		Amount	％	Amount	％
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss-current Financial assets at fair value through other comprehensive income - current Notes receivable, net Accounts receivable, net Other receivables Inventories Real estate for sale and prepayment for land purchases Prepayments Other financial assets-current Other current assets-other Non-current assets Financial assets at fair value through other comprehensive income - non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred tax assets Refundable deposits Other financial assets - non-current Other non-current assets, others	6 7 8 9 9 10 11 12 8 13 14 15 16 27 12	$ 8,679,643	63	$ 8,005,000	61
		1,775,404 16,963 3,519,432 74,739 80,485 39,176 210,674 2,909,351 52,332 － 1,087	13 － 26 1 1 － 1 21 －－－	1,987,541 18,953 3,440,319 29,886 115,163 83,634 211,305 2,043,642 46,129 27,620 808	15 － 26 － 1 1 2 16 －－－
		5,073,155	37	5,107,075	39
		67,342 1,486,595 793,239 32,569 2,598,861 32,869 40,376 20,000 1,304	1 11 6 － 19 －－－－	124,105 1,363,660 808,863 36,087 2,656,889 53,591 39,626 20,000 4,254	1 11 6 － 20 1 －－－
Total assets		$ 13,752,798	100	$ 13,112,075	100

(The attached notes constitute a part of the parent company only financial statements.)

Formosan Rubber Group Inc.

Parent Company Only Balance Sheet (Continued)

Dec. 31, 2022 and 2021

Unit: In Thousands of NTD

Liabilities & equity	Note	Dec. 31, 2022	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2021
Accounting item		Amount	％	Amount	％
Current liabilities Short-term borrowings Short-term notes and bills payable Contract liabilities Notes payable Accounts payable Other payables Current tax liabilities Lease liabilities-current Other current liabilities Non-current liabilities Deferred tax liabilities Non-current lease liabilities Net defined benefit liability Guarantee deposits received Total liabilities Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Other equity interest Exchange differences on translation of foreign financial statements Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income Total equity	17 18 11、21 15 27 15 19 20 20 20 20	$ 1,641,219	12	$ 926,909	7
		1,240,000 39,894 － 92,132 33,910 136,345 74,783 5,775 18,380	9 －－ 1 － 1 1 －－	415,000 159,884 50,221 93,284 35,325 132,640 16,262 5,069 19,224	3 1 1 1 － 1 －－－
		248,994	2	247,340	2
		170,413 27,473 2,575 48,533	1 －－ 1	168,438 31,605 2,774 44,523	1 －－ 1
		1,890,213	14	1,174,249	9
		3,373,260	25	3,423,260	26
		449,745	3	456,341	4
		7,771,270	56	7,513,391	57
		1,745,695 296,475 5,729,100	13 2 41	1,666,856 297,955 5,548,580	13 2 42
		268,310	2	544,834	4
		(1,037) 269,347	－ 2	(36,371) 581,205	－ 4
		11,862,585	86	11,937,826	91
Total liabilities & equity		$ 13,752,798	100	$ 13,112,075	100

(The attached notes constitute a part of the parent company only financial statements.)

Formosan Rubber Group Inc.

Parent Company Only Comprehensive Income Statement

From Jan. 1 to Dec. 31, 2022 and 2021

Unit: In Thousands of NTD

Accounting item	Note	2022		2021
		Amount	％	Amount	％
Operating revenue Operating costs Gross profit Operating expenses Selling expenses General and administrative expenses Research and development expenses Operating profit Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Expected credit impairment (loss) gain Shares of profit (loss) of subsidiaries and associates Income before income tax Income tax (expense) profit Net income Other comprehensive income Items that will not be reclassified subsequently to profit or loss Remeasurements of defined benefit plans Unrealized gains (losses) on valuation of investments in equity instruments measured at fair value through other comprehensive income Shares of other comprehensive (loss) income of subsidiaries and associates Income tax benefit related to items that will not be reclassified subsequently Items that may be reclassified subsequently to profit or loss Exchange differences arising on translation of foreign operations Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Income tax related to items that may be reclassified subsequently Total comprehensive income for the year Earnings per share (NT dollars) Basic earnings per share Diluted earningsper share	21 22 23 24 25 27 19 27 27 28	$ 1,936,730 (1,311,365)	100 (68)	$ 2,794,944 (1,911,220)	100 (68)
		625,365 (240,759)	32 (12)	883,724 (248,809)	32 (9)
		(65,313) (165,812) (9,634)	(3) (9) －	(100,737) (137,605) (10,467)	(4) (5) －
		384,606	20	634,915	23
		444,071	23	188,396	7
		25,638 259,566 149,170 (8,789) 751 17,735	1 13 8 －－ 1	9,006 179,222 (35,577) (4,021) 323 39,443	－ 6 －－－ 1
		828,677 (116,993)	43 (6)	823,311 (45,355)	30 (2)
		711,684	37	777,956	28
		(270,318)	(14)	491,100	18
		(304,657)	(16)	500,181	18
		60 (276,052) (38,552) 9,887	－ (14) (2) －	148 310,436 187,734 1,863	－ 11 7 －
		34,339	2	(9,081)	－
		44,168 (1,192) (8,637)	2 －－	(12,141) 883 2,177	－－－
		$ 441,366	23	$ 1,269,056	46
		$ 2.09 $ 2.09		$ 2.27 $ 2.27

(The attached notes constitute a part of the parent company only financial statements.)

Formosan Rubber Group Inc.

Parent Company Only Statement of Changes in Equity

From Jan. 1 to Dec. 31, 2022 and 2021

Unit: In Thousands of NTD

Item	Share capital	Capital surplus		Retained earnings		Other equityinterest	Other equityinterest	Treasury stocks	Total equity
			Legal reserve	Special reserve	Clnappropriated undistributed retained earnings	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
Balance of Jan. 1,2021	$ 3,423,260	$ 456,341	$ 1,580,683	$ 304,771	$ 5,359,851	$ (26,658)	$ 84,011	$ －	$ 11,182,259
Legal reserve appropriated Cash dividend Reversal of special reserve Net income in 2021 Other comprehensive income for 2021, net of income tax Total comprehensive income (loss) in 2021 Disposal of financial assets at fair value through other comprehensive income - equityinstruments	－－－	－－－	86,173 －－	－－ (6,816)	(86,173) (513,489) 6,816	－－－	－－－	－－－	－ (513,489) －
	－－	－－	－－	－－	777,956 118	－ (9,713)	－ 500,695	－－	777,956 491,100
	－	－	－	－	778,074	(9,713)	500,695	－	1,269,056
	－	－	－	－	3,501	－	(3,501)	－	－
Balance of Dec. 31,2021	3,423,260	456,341	1,666,856	297,955	5,548,580	(36,371)	581,205	－	11,937,826
Legal reserve appropriated Cash dividend Reversal of special reserve Net income in 2022 Other comprehensive income for 2022, net of income tax Total comprehensive income (loss) in 2022 Purchase of treasury share Retirement of treasury share Disposal of financial assets at fair value through other comprehensive income - equityinstruments	－－－	－－－	78,839 －－	－－ (1,480)	(78,839) (410,791) 1,480	－－－	－－－	－－－	－ (410,791) －
	－－	－－	－－	－－	711,684 48	－ 35,334	－ (305,700)	－－	711,684 (270,318)
	－	－	－	－	711,732	35,334	(305,700)	－	441,366
	－ (50,000) －	－ (6,596) －	－－－	－－－	－ (49,220) 6,158	－－－	－－ (6,158)	(105,816) 105,816 －	(105,816) －－
Balance of Dec. 31,2022	$ 3,373,260	$ 449,745	$ 1,745,695	$ 296,475	$ 5,729,100	$ (1,037)	$ 269,347	$ －	$ 11,862,585

Note: For the years ended December 31, 2022 and 2021, the Company recognized the employees compensation of $8,456 thousand and $8,402 thousand rsepectively, and the

directors remuneration of $8,456 thousand and $8,402 thousand respectively, amounts recognised The amounts loss in the statement of comprehensive income .

(The attached notes constitute a part of the parent company only financial statements.)

Formosan Rubber Group Inc.

Parent Company Only Statement of Cash Flows

From Jan. 1 to Dec. 31, 2022 and 2021

	Unit: In Thousands of NTD 2022 2021 Amount Amount $ 828,677 $ 823,311 103,656 107,755 (751) (47) 1,990 (4,046) 8,789 4,021 (25,638) (9,006) (253,963) (166,921) (17,735) (39,443) (57) (4) 2,697 1,215 (1,454) 1,040 (45,306) 10,855 35,714 83,254 80,998 4,856 631 8,141 (865,709) 887,974 (6,203) 15,086 (279) 390 (50,221) (146,938) (1,152) 35,704 (1,415) 953 3,705 (3,603) － 2,272 (844) (116) (139) (149) (204,009) 1,616,554	Unit: In Thousands of NTD 2022 2021 Amount Amount $ 828,677 $ 823,311 103,656 107,755 (751) (47) 1,990 (4,046) 8,789 4,021 (25,638) (9,006) (253,963) (166,921) (17,735) (39,443) (57) (4) 2,697 1,215 (1,454) 1,040 (45,306) 10,855 35,714 83,254 80,998 4,856 631 8,141 (865,709) 887,974 (6,203) 15,086 (279) 390 (50,221) (146,938) (1,152) 35,704 (1,415) 953 3,705 (3,603) － 2,272 (844) (116) (139) (149) (204,009) 1,616,554
Item	2022	2021
	Amount	Amount
Cash flows from operating activities: Income before income tax Adjustments for: Depreciation expense Expected credit impairment loss (gain) Net loss (gain) on financial assets and (liabilities) at fair value through loss (profit) Interest expense Interest income Dividend income Share of loss (profit) of subsidiaries and associates Loss (gain) on disposal of property, plant and equipment Impairment loss on non-financial assets Unrealized foreign exchange loss (gain) Changes in operating assets and liabilities Notes receivable Accounts receivable Other receivables Inventories Real estate for sale and prepayment for land purchases Prepayments Other current assets Contract liabilities Notes payable Accounts payable Other payables Receipts in advance Other current liabilities Net defined benefit liability Cash generated by (used in) operations	$ 828,677 103,656 (751) 1,990 8,789 (25,638) (253,963) (17,735) (57) 2,697 (1,454) (45,306) 35,714 80,998 631 (865,709) (6,203) (279) (50,221) (1,152) (1,415) 3,705 － (844) (139)	$ 823,311 107,755 (47) (4,046) 4,021 (9,006) (166,921) (39,443) (4) 1,215 1,040 10,855 83,254 4,856 8,141 887,974 15,086 390 (146,938) 35,704 953 (3,603) 2,272 (116) (149)
	(204,009)	1,616,554

Formosan Rubber Group Inc.

Parent Company Only Statement of Cash Flows (Continued)

From Jan. 1 to Dec. 31, 2022 and 2021

Unit: In Thousands of NTD

	Unit:	In Thousands of NTD
Item	2022	2021
	Amount	Amount
Interest received Dividends received Interest paid Income tax paid Net cash generated by operating activities Cash flows from investing activities: Cash paid for acquisition of financial assets at fair value through other comprehensive income Proceeds from financial assets at fair value through other comprehensive income Return of capital from financial assets at fair value through other comprehensive income Cash paid for acquisition of financial assets at fair value through profit or loss Proceeds from financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Increase in refundable deposits (Increase) other in receivables – related parties Decrease in other financial assets (Increase) decrease in other non-current assets Net cash (used in) investing activities Cash flows from financing activities: Increase in short-term borrowings Increase in short-term notes and bills payable Increase in guarantee deposits received Payments of lease liabilities Cash dividends paid Payments to acquire treasury shares Net cash generated by (used in) financing activities Net Increase (Decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end ofyear	23,186 253,963 (8,789) (34,524)	11,458 166,921 (4,021) (27,860)
	29,827	1,763,052
	(410,103) 76,042 2,000 －－ (99,584) (27,218) 57 (750) － 27,620 2,950	(936,104) 86,685 9,000 (5,586) 62,773 － (7,797) 250 (37,335) (82,860) 88,033 (2,186)
	(428,986)	(825,127)
	825,000 (119,990) 4,010 (5,391) (410,791) (105,816)	65,000 149,892 1,060 (5,014) (513,489) －
	187,022	(302,551)
	(212,137) 1,987,541	635,374 1,352,167
	$ 1,775,404	$ 1,987,541

(The attached notes constitute a part of the parent company only financial statements.)

Formosan Rubber Group Inc.

Notes to Parent Company Only Financial Statements

From Jan. 1 to Dec. 31, 2022 and 2021

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

1. Company profile

Formosan Rubber Group Inc. (hereafter referred to as the “Company”) was founded in 1963 under the Company Act of the Republic of China. The company produces and markets rubber sheets, plastic sheets, plastic foam sheets and PVC resin sheets, as well as the relevant materials. In order to diversity its operations, the Company started in September 1995 the property development business and the leasing, sale and management operations for its own properties and land. the Company became a listed company on the Taiwan Stock Exchange in March 1992. The parent company only financial statements has the New Taiwan dollars as the Company’s functional currency.

2. Date and procedure approving financial statements

The parent company only financial statements were approved and published by the board of directors on March 15, 2023.

3. Application of new standards, amendments and interpretations

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

Initial application of the amendments to the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, there is no significant impact on the company's financial status and operating results.

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

The IFRSs of new standards, interpretations and amendments endorsed by FSC effective from 2023 are as follows:

New, Revised or Amended Standards and Interpretations

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

Effective Date Issued by IASB January 1, 2023 January 1, 2023 January 1, 2023

The Company is evaluating the impact of its initial adoption of the abovementioned standards and interpretations on the Company’s financial position and company’s financial performance. The related impact will be disclosed when the company completes the evaluation.

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

As of the date the following IFRSs that have been issued by the IASB, but not yet endorsed by the FSC:

yet endorsed by the FSC:
New, Revised or Amended Standards, and Interpretations	Effective Date Issued byIASB(Note 1)
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” Amendments to IFRS 16 “Leases Liability in a Sale and leaseback” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants”	To be determined by IASB January 1, 2024 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2024 January 1, 2024

yet endorsed by the FSC:

New, Revised or Amended Standards, and Interpretations

Effective Date Issued
byIASB(Note 1)

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of
Assets between An Investor and Its Associate or Joint Venture”

Amendments to IFRS 16 “Leases Liability in a Sale and
leaseback”
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17
Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS
17 - Comparative Information”
Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”
Amendments to IAS 1 “Non-current Liabilities with Covenants”

To be determined by IASB
January 1, 2024
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2024
January 1, 2024

4. Summary of significant accounting policies

(1) Compliance statement

This is the Company’s first set of parent company only financial statements prepared according to the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Preparation bases

Other than the financial assets measured at the fair value and the pension liability recognized with the net value (assets less the present value of the liabilities due to defined benefits), the parent company only financial statements are based on historical costs, usually the fair value paid for the acquisition of assets.

The subsidiaries, associates are incorporated in the parent company only financial statements under the equity method. To make net profit for the year, other comprehensive income and equity in the parent company only financial statements equal to those attributed to owners of the Company on parent company only financial statements, the effect of the differences between basis of parent company only and basis of consolidation are adjusted in the investments accounted for using equity method, the related share of the profit or loss, the related share of other comprehensive income of subsidiaries and associates and related equity.

(3) Foreign Currency

The individual financial statements for the parent company only entities are prepared and presented in the functional currency for these entities (i.e. the currency used in the economy they operate in). The functional currency and the presentation currency of the Company’s Parent company only financial statements is NT Dollars. All the financial performances and statuses are converted into the NT dollars for the preparation of the parent company only financial statements.

Any transactions not in the functional currency shall be converted and recognized according to the exchange rate on the transaction dates in the preparation of the individual financial statements for the parent company only entities. The monetary items in foreign currencies shall be recalculated according to the spot exchange rate on the end-of-the-period date. Any difference resultant from exchange rates shall be recognized as profits or losses during the period. The non-monetary items in foreign currencies measured with the fair value shall be recalculated according to the exchange rate on the date of fair value determination. Any different resultant from exchange rates shall be recognized as profits or losses during the period. However, any difference as a result of changes in the fair value shall be recognized as other comprehensive incomes or losses. The non-monetary items in foreign currencies measured by historical costs shall not be recalculated.

For the purpose of presenting parent company only financial statements, the functional currencies of the group entities are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

On the disposal of a foreign operation, all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Corporation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Corporation losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

(4) Standards to classify current and non-current assets and liabilities

The basis for current and non-current assets and liabilities for the real estate development business is based on the operating cycle. All the other items following the principles below:

Current assets are the assets held for trading purposes or expected to be realized or exhausted within one year. Any assets not classified as current are non-current assets. Current liabilities are the liabilities held for trading purposes or expected to be repaid within one year. Any liabilities not classified as current are non-current liabilities.

(5) Cash equivalents

Cash equivalents can be converted into a fixed amount of cash at any time. They are short-term, highly liquid investments with minimum changes in value. Bank overdrafts, a credit facility that can be immediately repaid, are part of the Company’s cash management. They are reported under cash and cash equivalents in the statement of cash flows, and as an item in short term loans in current liabilities on the balance sheet.

(6) Inventory and real estate for sale and real estate under construction

Inventories include raw materials, supplies, finished goods and work-in-process. Inventories are measured at the lower of cost or net realizable value. Comparisons between cost and net realizable value are made on an item-by-item basis, except for inventories of the same type. Net realizable value is the estimated selling price under normal circumstances, less estimated costs to complete and estimated costs to sell. The cost of inventories is calculated using the weighted-average method.

If a house is exchanged for land under a subdivision contract and is classified as land for sale, no gain or loss is recognized on the exchange and revenue is not recognized until the land is sold to the buyer.

(7) Investments accounted for under equity method

Investments accounted for using the equity method is investments in subsidiaries and associates.

A. A subsidiary

A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

The acquisition cost exceeding the amount of the share of the fair value of the subsidiary’s recognizable assets and liabilities received by the Company on its acquisition day is listed as goodwill. Such goodwill includes the investment’s book value which cannot be amortized. The amount exceeding the share of the fair value of the subsidiary’s recognizable assets and liabilities received by the Company on its acquisition day is listed as the current income.

When losing the control of its subsidiary, the Company measures its residual investment in the aforesaid subsidiary according to the fair value at the day that the Company loses its control of the subsidiary. The difference between the residual investment’s fair value as well as any disposal amount and the investment book value at the day that the Company loses its control is listed as the current profit or loss. In addition, the accounting treatment of all the amounts related to the subsidiary in question and recognized in the comprehensive income is same as the basis required to be complied with in the Company’s direct handling of related assets or liabilities.

When the Company transacts with its subsidiaries, profits and losses resulting from the transactions with the subsidiaries are recognized in the Company’s parent company only financial statements only to the extent of interests in the subsidiaries that are not owned by the Company.

B. Investments in associates are reported.

Associates are the companies over which the Company has significant influence. Associates are not entitles of subsidiaries.

The investment in associates shall be recognized as costs under the equity method. After the asset acquisition, the book value shall change in line with the Company’s share of profits and losses, other comprehensive income and profit distributions. Meanwhile, the recognized equity value of the associates also changes in line with any increase or decrease in the Company’s shares.

If the Company does not subscribe to the new shares of associates on a pro-rata basis according to existing holdings, and any increase or decrease is incurred to the percentage of the Company’s holdings and hence net equity value of the investment, the adjustment shall be reflected with the change in capital surplus and according to the equity method. If the Company has not subscribed or acquired to new shares on a pro-rata basis and seen a reduction in its stake in the associates, the amounts recognized in other comprehensive income and the reclassification as a result of the values for the associates concerned should have the same basis for accounting treatment as if the assets or the liabilities of the associates were directly disposed. Any debit should be made from the capital surplus. However, if the capital surplus is insufficient for debits incurred by investments under the equity method, the debit may be drawn from retained earnings.

The residual investment of the previous associates should be measured with the fair value on the date of loss of significant influence. The delta between the sum of the fair value of the residual investment and the disposal amounts and the book value of the investment on the date of loss of significant control shall be recognized in the income statement during the period. Meanwhile, the values recognized in relation to the associates concerned in other comprehensive income shall have the same accounting basis as if the assets or the liabilities of the associates were directly disposed.

Only the profits and losses resultant from upstream, downstream and lateral transactions with associates not relevant to the Company’s stake in the associates can be recognized in the parent company only financial statements.

(8) Property, plant and equipment

The property, plant and equipment are listed in accordance with cost less depreciation and accumulated impairment. Cost shall include the incremental cost able to be directly attributed to acquisition or asset implementation.

Straight-line method is applied to depreciation, by indicating the amount of an asset within the durable service life offset its cost and less its residual value. All the major components of the non-current assets shall be depreciated on a standalone basis. Depreciation is accrued in accordance with the following durable service years: building, 3-55 years; machinery equipment, 3-26 years; transportation and other equipments, 3-10 years.

Estimated durable service life, residual value and depreciation method shall be reviewed at the end of the reporting period; prospective application shall be made for any impact on estimation change.

The profit or loss incurred during disposition or obsolescence of property, plant and equipment shall be recognized in the income statement with the differential amount between the disposition price and asset book account.

(9) Investment property

Only if investment properties is attempted for earning rental or capital appreciation or both may it be classified as the investment properties. The investment properties shall be measured according to its original cost, including related transaction cost, and related interest capitalization shall be made during the construction period. Cost model shall be applied to follow-up measurement, to be measured by cost less the amounts of accumulated depreciation and accumulated impairment.

In case straight-line method is applied to depreciation and building depreciation accrued by 3-50 years.

Estimated durable service life, residual value and depreciation method shall be reviewed at the end of the reporting period; prospective application shall be made for any impact on estimation change.

(10) Lease

A. The Company as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

When a lease includes both land and building elements, the Company assesses the classification of each element separately as a finance or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the Company. The lease payments are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of a contract. If the allocation of the lease payments can be made reliably, each element is accounted for separately in accordance with its lease classification. When the lease payments cannot be allocated reliably between the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease. B. The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the parent company only balance sheets. Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the parent company only balance sheets.

(11) Impairment of non-financial assets

The Company shall review the book amounts of tangible assets and intangible financial assets at the end of the reporting period to decide whether there is any impairment with such assets. In case it shows any impairment situation, the estimated recoverable amount of assets shall decide the recognized loss amount. In case there is no way of estimating the recoverable amount of an individual asset, the Company shall estimate the recoverable amount of the cash-generating unit of the said asset. In case it can be amortized according to a reasonable and conforming basis, shared assets shall also be amortized to an individual cash product sector. Otherwise it shall be amortized to the minimal cash-generating unit group according to a reasonable and conforming basis.

The recoverable amount shall be fair value less sales cost and its use value whichever is higher.

In case the recoverable amount of an asset or cash-generating unit is anticipated to be lower than the book amount, the book amount of the said asset or cash-generating unit shall be adjusted and decreased to its recoverable amount; any impairment loss shall be immediately recognized to the current profit and loss.

When any impairment loss reverses in a subsequent period, the book amount of asset or cash-generating unit shall be adjusted and increased to the estimated recoverable amount after revision, provided the book amount after increase shall be limited to the reasonable book amount under the situation when the said asset or cash-generating unit did not recognize an impairment loss in the past years (except for goodwill). The reversed impairment loss shall be immediately recognized to the current profit and loss.

(12) Employee benefits cost

The short-term employee benefits obligation is measured with the basis without discount, and shall be recognized as expenses when providing the related service. Concerning the anticipated payable amount concerning short-term cash bonus or a bonus sharing plan, if it is a current legal or prescribed obligation to be borne by a company due to the past service provided by employees, and the said obligation can be estimated in a reliable manner, such amount shall be listed as liability.

When an expense belongs to defined contribution plans, during the service period provided by employees, it is required to recognize the pension amount contributable as the current expense.

The cost of defined benefits (including service costs, net interests and re-measurements) shall be calculated according to the projected unit credit method. Service costs and net interests of the defined benefits liabilities shall be recognized as employee benefits expenses when incurred, or when the defined benefit plans is modified, shortened or repaid. The re-measurement shall be recognized as other comprehensive income and the retained earnings. There is not reclassification into profits and losses during subsequent periods.

Net defined benefit liabilities refer to the shortfall appropriation of the defined benefit retirement plan, whereas net defined benefit assets shall not exceed the plan’s refunded amount or may reduce the present value of the future appropriation amount.

(13) Financial Instrument

Financial assets and financial liabilities shall be recognized when the Company becomes a party of the said financial instrument clause.

Upon the original recognition of financial assets and financial liabilities, they shall be measured according to fair values. Upon the original recognition, concerning the acquired or distributed transaction cost directly attributable to financial assets and financial liabilities (except for the financial assets and financial liabilities classified as measurement according to fair value of profit and loss), it shall be increased or decreased from the fair values of the said financial assets or financial liabilities. The transaction costs of financial assets and financial liabilities directly attributable to the ones measured according to fair values through profit and loss shall be immediately recognized as profit and loss.

(14) Financial assets

The convention trading of financial assets is recognized and removed by trading day accounting.

A. Type of measurement

Financial assets are classified into the following categories: financial assets at FVTPL, financial assets at amortized cost, investment in debt instruments measured at FVTOCI, and investments in equity instruments at FVTOCI.

a. Financial asset at FVTPL

Financial assets measured at fair value through profit or loss are financial assets mandatorily measured at fair value through profit or loss and financial assets at fair value through profit or loss, designated as upon initial recognition. Financial assets mandatorily measured at fair value through profit or loss include investments in equity instruments that are not designated by the Company to be measured at fair value through other comprehensive income and investments in debt instruments that fail to meet the criteria as to be measured at amortized cost or at fair value through other comprehensive income.

Financial assets measured at fair value through profit or loss are measured at fair value. The dividends and interests generated are recognized in other income and interest income, respectively, and any gain or loss arising from remeasurement is recognized in other gains and losses.

b. Measured at amortized cost
When a company after merger simultaneously meets the following two conditions in its investment in financial assets, the financial assets are classified as the ones carried at cost after amortization:
A) The financial assets are held under a specific operation mode, in which the purpose of the mode is to hold the financial assets in order to collect contract cash flows.
B) The cash flow generated on a specific date due to contract clauses is completely for the payment of the principal and the interest accrued from the outstanding principal amount.

Subsequent to initial recognition, financial assets measured at amortized cost are measured at amortized cost, which equals to carrying amount determined by the effective interest method less any impairment loss. Foreign exchange gains and losses are recognized in profit or loss.

Except for the two conditions below, the interest income is calculated by multiplying the effective interest rate by the total book value of the financial assets:

A) The interest income of the purchased or originated credit-impaired financial assets is calculated by multiplying the credit-adjusted effective interest rate by the cost of amortized financial assets.
B) The interest income of the financial assets which are not purchased or originated credit-impairment but subsequently become credit-impaired financial assets is calculated by multiplying the effective interest rate by the cost of amortized financial assets.

c. Investment in debt instruments measured at FVTOCI

Debt instruments that meet the following two conditions are classified as financial assets at fair value through other comprehensive income:

A) The debt instruments are held within a business model whose objective is to collect the contractual cash flows and to sell the financial assets; and
B) The contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Investments in debt instruments at fair value through other comprehensive income are measured at fair value. Changes in the carrying amount of investments in debt instruments at fair value through other comprehensive income, such as interest revenue calculated using the effective interest method, gain (loss) on foreign exchange and impairment loss or gain on reversal, are recognized in profit or loss. Other changes in the carrying amount of such instruments are recognized in other comprehensive income and will be reclassified to profit or loss when such instruments are disposed of.

d. Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent considerate on recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, they will be transferred to retained earnings.

Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

B. Impairment of financial assets

At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable) investments in debt instruments at fair value through other

comprehensive income, lease payments receivable due, and contract assets based on their expected credit losses on each balance sheet date.

The loss allowance for accounts receivable and lease payments receivable due is measured at an amount equal to lifetime expected credit losses. For financial assets at amortized cost, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from possible default events of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.

The expected credit loss is calculated according to the average weighted credit loss in which the risk rated ratio of default occurrence is used in calculation. The 12-month expected credit loss represents the credit loss expected to occur to the financial instruments within 12 months after their reporting day due to possible default. The expected credit loss in the duration period refers to the credit loss expected to occur to the financial instruments in the expected duration period due to possible default.

The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at fair value through other comprehensive income, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial assets.

(15) Income recognition

After identifying the performance obligations of contracts with the customers, the Company allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are met.

(16) Borrowing costs

The cost of borrowing for the funds directly used to acquire, construct or produce the assets (which will reach the status ready for use or available for sale after a long period of time) can be treated as part of the asset costs, until the completion of almost all the necessary activities to get the assets ready for use or available for sale.

Other than the above, all the borrowing costs shall be recognized in the income statement during the current period.

(17) Income tax

Income tax expenses include income taxes during the period and deferred income taxes, and should be recognized as income taxes in the profit and loss income, except for the income taxes during the period and deferred income taxes recognized as other comprehensive incomes or directly as an equity item. A. Current tax

The current income tax is based on the taxed income of the said year. Since partial income and expense is taxable item or deductible of other years, or not attributing to taxable or deductible item in accordance with related tax laws, it causes the taxable income to differ from the reported net profit in the parent company only income statement. The related liabilities of the current income tax are calculated by the legislated or substantially legislated tax rate at the end of the reporting period. It is estimated by the income tax of the previous year, serving as the adjustment of the current income tax.

According to the provisions of Income Tax Law, The unallocated earnings of the Company adding profit-seeking enterprise income tax shall be recognized as the current expense in the allocated earning year resolved in the shareholders’ meeting

B. Deferred tax

Deferred income tax is recognized by the temporary differential calculation generated from the taxation basis of book amounts of the recorded assets and liabilities and income through taxation calculation. Deferred income tax liabilities in general are recognized by the temporary differences of all future taxes payable. Deferred income tax assets are recognized by all likely future taxes less the deductible temporary difference in use.

Deferred income tax assets and deferred income tax liabilities may only be mutually offset when concurrently conforming to the following conditions: (1) a company has legal execution right to mutually offset the current income tax assets and income tax liabilities; and (2) deferred income tax assets and deferred income tax liabilities are levied by the same taxation authority towards the same tax payment major entity, or levied towards different tax payment corporate entities, yet each major entity attempts to, at each future period of the deferred income tax liabilities or assets pay-off or recovery of the major amount, pay off the current income tax liabilities and assets on net-amount basis, or concurrently realize assets and pay off liabilities.

The temporary differences in tax payables related to invested subsidiary company and associates are all recognized as deferred income tax liabilities, provided if the Company can control the time point of temporary difference reverse, and the said temporary differences may very likely not be reversed in the foreseeable future are excluded. The deferred income tax assets generated from the related deductible temporary differences to this kind of investment and equity can only be recognized in the gains very likely with sufficient taxable income used to realize the temporary differences, and be within the scope of reverse within the anticipated future.

The book amounts of deferred income tax assets shall be reviewed at the end of the reporting period, and adjust and decrease the book amounts for all or partial assets without sufficiently taxable income to serve it to recover. Concerning the ones originally not recognized deferred income tax assets, they shall also be reviewed at the end of the reporting period, and adjust and increase the book amounts for all or partial assets very likely to generate taxable income to serve it to recover.

The deferred income tax assets and liabilities are measured by expected liabilities pay-off or assets in realizing the current tax rate, while the said tax rate shall be based on the legislated or already substantially legislated tax rate at the end of the reporting period. The measurement of deferred income tax liabilities and assets shall reflect the tax consequences of a company generated in expected recovery or pay-off of the book amounts of its assets and liabilities at the end of the reporting period.

(18) Treasury stocks

The recovered issued stock shall be recognized as treasury stocks I accordance with the paid cost upon buy-back. In case the disposition price in disposing treasury stocks is higher than the book value, its difference shall be listed as capital surplus – treasury stocks trade; in case the disposition price in disposing treasury stocks is lower than the book value, its difference shall be offset the capital surplus generated from the trade of the treasury stocks of the same category of treasury stocks; in case of any deficit, it shall be debited to keep the surplus. Weighted average shall be applied to the book value of treasury stocks and be separately calculated in accordance with the recovery reasons.

Upon cancellation of treasury stocks, it shall be debited to keep the capital surplus – stock issue premium and share capital; in case its book value is higher than the total sum of par value and stock issue premium, its difference shall offset the capital surplus generated from the trade of the treasury stocks of the same category of treasury stocks; in case of any deficit, it shall be debited to offset retained earnings; in case the book value of treasury stocks is lower than the total amount of par value and stock issue premium, it shall be credited as the capital surplus generated from the trade of the treasury stocks of the same category of treasury stocks.

5. Citical Accounting Judgements, And Key Sources Of Estimation And Uncertainty

The Company upon applying the accounting policy stated in Note 4 provides related judgments, estimations and assumptions for the information acquired from other resources which are based on historical experience and other factors deemed crucial. The actual result may differ from what is estimated.

The Company shall be continuously reviewing estimations and basic assumptions. In case the revision of estimations would influence the current period, then the current recognition shall be revised in accounting estimations. In case the revision of accounting estimations would concurrently influence the current period and future period, then the estimations revision shall be recognized in both the current period and future period.

The following shows the information related to major assumptions made in the future, and other major sources of uncertainty at the end of the financial reporting period; the said assumptions and estimations have risks of causing book amounts of assets and liabilities to incur major adjustments in the following fiscal year.

(1) Evaluation of inventory and real estate for sale

Since inventory and real estate for sale shall be priced by cost and net cash realizable value whichever is lower, therefore the Company shall use judgments and estimations to determine the net cash realizable value at the end of the financial reporting period.

Since industry rapidly changes, the inventory and real estate for sale of the Company at the end of the financial reporting period due to the amounts of normal wear and tear, obsolescence, or without market selling price, offsets its cost to decrease to its net cash realizable value. The evaluation of this inventory and real estate for sale mainly based on the product demand in the future specific period as estimation basis; therefore, it may generate major changes.

(2) Impairment evaluation of tangible assets and intangible assets (except for goodwill)

During the asset impairment evaluation process, the Company shall rely on subjective judgments and, with basis on asset use mode and rubber, real estate industry characteristics, determine parent company only cash flow asset durable years and future likely generated revenues and expenses of specific asset groups; any change in estimations from changes in economic status or corporate policies may likely cause major impairment in the future.

6. Cash and cash equivalents

Dec. 31, 2022 Dec. 31, 2021 Cash and petty cash $ 519 $ 562 Cash in bank 366,229 958,369 Cash equivalent Commercial paper 195,906 855,810 Time deposits with maturity 1,212,750 172,800 Total $ 1,775,404 $ 1,987,541 Financial assets at fair value through profit or loss-current Dec. 31, 2022 Dec. 31, 2021 Current financial assets at fair value through profit or loss, designated as upon initial recognition Fund $ 16,963 $ 18,953 Financial assets at fair value through other comprehensive income Dec. 31,2022 Dec. 31,2021 Equity instruments Stock of domestic listed (OTC) companies $ 3,456,980 $ 3,072,894 Stock of foreign listed (OTC) companies 2,329 2,329 Stock of emerging companies － 7,860 Stock not classified to listed (OTC) and emerging companies 88,526 162,454 Debt instruments Financial bond 14,712 13,257 Plus (Less): adjustment of financial assets for transaction 24,227 305,630 Total $ 3,586,774 $ 3,564,424 Current $ 3,519,432 $ 3,440,319 Non-current $ 67,342 $ 124,105	Dec. 31, 2022 Dec. 31, 2021 Cash and petty cash $ 519 $ 562 Cash in bank 366,229 958,369 Cash equivalent Commercial paper 195,906 855,810 Time deposits with maturity 1,212,750 172,800 Total $ 1,775,404 $ 1,987,541 Financial assets at fair value through profit or loss-current Dec. 31, 2022 Dec. 31, 2021 Current financial assets at fair value through profit or loss, designated as upon initial recognition Fund $ 16,963 $ 18,953 Financial assets at fair value through other comprehensive income Dec. 31,2022 Dec. 31,2021 Equity instruments Stock of domestic listed (OTC) companies $ 3,456,980 $ 3,072,894 Stock of foreign listed (OTC) companies 2,329 2,329 Stock of emerging companies － 7,860 Stock not classified to listed (OTC) and emerging companies 88,526 162,454 Debt instruments Financial bond 14,712 13,257 Plus (Less): adjustment of financial assets for transaction 24,227 305,630 Total $ 3,586,774 $ 3,564,424 Current $ 3,519,432 $ 3,440,319 Non-current $ 67,342 $ 124,105	Dec. 31, 2021
		$ 562 958,369 855,810 172,800
		$ 1,987,541
		Dec. 31, 2021
		$ 18,953
Equity instruments Stock of domestic listed (OTC) companies Stock of foreign listed (OTC) companies Stock of emerging companies Stock not classified to listed (OTC) and emerging companies Debt instruments Financial bond Plus (Less): adjustment of financial assets for transaction Total Current Non-current	Dec. 31,2022 $ 3,456,980 2,329 － 88,526 14,712 24,227 $ 3,586,774 $ 3,519,432 $ 67,342
		$ 3,072,894 2,329 7,860 162,454 13,257 305,630
		$ 3,564,424
		$ 3,440,319
		$ 124,105

(1) The Company signed a loan business trust contract with MasterLink Securities Corporation on June 5, 2015, delivering the trust of partial listed (OTC) companies stocks to MasterLink Securities Corporation for management, use, while the beneficiary of the trust revenue was the Company. The trust and credit line loan contract with MasterLink Securities Corporation was terminated on July 16, 2022.
(2) The Company signed a securities lending agreement with SinoPac Securities Corporation on April 10, 2021. Dividends and bonuses, being generated during the loan period should be repaid to the company. According to the agreement, when there is no loan transaction for more than three consecutive years, the agreement would be terminated. As of December 31, 2022, there was no stock lending.
(3) Credit risk management for investments in debt instruments

Investments in debt instruments were classified as at FVTOCI ：

Gross carrying amount Less: Allowance for impairment loss Amortized cost Adjustment to fair value Total	Dec. 31, 2022 $ 14,712 (41) 14,671 (728) $ 13,943	Dec. 31, 2021
		$ 13,257 (209)
		13,048 255
		$ 13,303

The Company only invests in debt instruments that have low credit risk for the purpose of impairment assessment. The Company continuously tracks information to monitor changes in the credit risk of the debt instruments that it invests in, and also reviews other information such as material information about the debtor to assess whether there is a significant increase in credit risk since the investment was recognized.

The Company considers the historical default rates of each credit rating supplied by external rating agencies to estimate 12-month or lifetime expected credit losses.

The book amounts of investments in each credit level debt instrument and the applicable expected credit loss rates are as follows:

Dec. 31, 2022

	Dec. 31, 2022
Credit Rating Performing	Expected credit loss rate 0.30％ Dec. 31, 2021	Through other comprehensive income measured at fair value of book amount
		$ 14,712
Credit Rating Performing	Expected credit loss rate 1.55％	Through other comprehensive income measured at fair value of book amount
		$ 13,257

The allowance for impairment loss of investments in debt instruments at FVTOCI is as follows:

FVTOCI is as follows:
Balance, beginning of year New purchase in this period Derecognise in this period Changes in risk parameters Balance, end of year Notes and accounts receivable ,net Notes receivable Allowance for doubtful accounts Net amount Accounts receivable Allowance for doubtful accounts Allowance for sales returns and discounts Net amount	For the Year Ended December 31, 2022 $ 209 －－ (168) $ 41 Dec. 31, 2022 $ 75,494 (755) $ 74,739 Dec. 31, 2022 $ 84,123 (1,750) (1,888) $ 80,485	For the Year Ended December 31, 2021
		$ 532 209 (532) －
		$ 209
		Dec. 31, 2021
		$ 30,188 (302)
		$ 29,886
		Dec. 31, 2021
		$ 117,949 (2,786) －
		$ 115,163

9. Notes and accounts receivable ,net

(1) The crediting period of the Company to a customer in principle shall be 30 days after the invoice date, while partial customers are credit time 30 days to 90 days. In addition to the actual credit impairment of individual customers, the Company makes reference to historical experience, considers the financial situation of individual customers and the industry, competitive advantage and prospects, and differentiates customers into different risk groups and incorporates forward-looking information. The expected loss rate of the Company recognizes the allowance loss.

(2)Aging analysis of accounts receivable of the Company is stated as follows:

	Dec. 31, 2022
Carrying amount of accounts receivable	Expected credit loss rate	Loss allowance for lifetime expected credit losses
$ 156,673 2,091 787 － 66	1～2％ 2～5％ 10～20％ 50％ 100％ Dec. 31, 2021	$ 2,352 87 －－ 66
$ 159,617		$ 2,505

Carrying amount of accounts receivable	Expected credit loss rate	Loss allowance for lifetime expected credit losses
$ 138,004 6,667 3,202 － 264	1～2％ 2～5％ 10～20％ 50％ 100％	$ 2,444 142 238 － 264
$ 148,137		$ 3,088

(3) Movements of the loss allowance of notes and accounts receivable were as

follow:

follow:
Balance, beginning of year Expected credit impairment loss (gain) Amount written off Balance, end of year	2022 $ 3,088 (583) － $ 2,505	2021
		$ 2,812 276 －
		$ 3,088

10. Inventories

Inventories
Dec. 31, 2022 Raw materials $ 78,208 Work-in-process 19,426 Finished goods 113,040 Total $ 210,674 The cost of sales related to inventory is as follows: 2022 Cost of inventories sold $ 773,309 Provision for (Reversal of) loss on inventories (15,088) Unamortized fixed manufacturing costs 9,963 Total $ 768,184	Dec. 31, 2021
	$ 79,837 21,079 110,389
	$ 211,305
	2021
	$ 715,210 2,118 9,617
	$ 726,945

Reversal of loss on inventories is due to the removal part of the inventory that has been listed for decline in price.

11. Real estate for sale and prepayment for land purchases/ Contract liabilities

Real estate for sale and prepayment for landpurchases	Real estate for sale and prepayment for landpurchases	Contract liabilities	Contract liabilities	Contract liabilities
Dec. 31,2022	Dec. 31,2021	Dec. 31,2022	Dec. 31,2021	Jan. 1,2021
	$ 51,276 14,923 92,728 236,653 571,120 933,065 － 143,877	$ －－－－－－－－	$ －－－－ 34,552 15,669 －－	$ －－－－ 162,233 34,926 －－
$ 2,909,351	$ 2,043,642	$ －	$ 50,221	$ 197,159

(1) Please see note 31 for the status of transactions with related parties.

12. Other financial assets

Other financial assets
Pledged time deposits Time deposits with maturity over three months Total Current Non-current Interest rate range %	Dec. 31, 2022 $ 20,000 － $ 20,000 $ － $ 20,000 0.595～1.45	Dec. 31, 2021
		$ 20,000 27,620
		$ 47,620
		$ 27,620
		$ 20,000
		0.2～0.825

The pledged time deposit serves as guaranty for logistics business and it is shown in Note 32.

13. Investments accounted for using equity method

in Note 32. Investments accounted for using equity	method
Investments in subsidiaries Investments in associates Total	Dec. 31, 2022 $ 1,383,224 103,371 $ 1,486,595	Dec. 31, 2021
		$ 1,261,085 102,575
		$ 1,363,660

(1) The investment of subsidiaries is listed as follows:

Name of Investee	Book	value	The percentage of ownership interest and voting right directly held by the Company	The percentage of ownership interest and voting right directly held by the Company
	Dec. 31, 2022	Dec. 31, 2021 $ 854,763 406,322 － $ 1,261,085	Dec. 31, 2022	Dec. 31, 2021
Unlisted (OTC) companies Ban Chien Development Co., Ltd. (Taiwan) FRG US Corp. (San Francisco) KINGSHALE INDUSTRIAL LIMITED (Hong Kong) Total	$ 901,586 481,638 －		100.00 100.00 99.99	100.00 100.00 99.99
	$ 1,383,224

The Company invests in the development project of 950 Market Street in San Francisco, USA with Continental Construction Group, the establishment of FRG US Corp. was approved by the board of directors in 2017, with an investment limit of USD 32,000 thousand. Its main businesses are real estate investment, development and rental and sales of premises.

As of December 31, 2022 and 2021, FRG has remitted Investment funds are NT$ 560,933 thousand (USD 18,252 thousand) and NT$ 461,349 thousand (USD 15,052 thousand).

(2) The investment of associates is listed as follows:

Name of Investee	Book	value	The percentage of ownership interest and voting right directly held by the Company	The percentage of ownership interest and voting right directly held by the Company
	Dec. 31, 2022	Dec. 31, 2021 $ 61,540 32,570 8,465 $ 102,575	Dec. 31, 2022	Dec. 31, 2021
Unlisted (OTC) companies Formosan Construction Corp. (Taiwan) Fenghe Development Co., Ltd. (Taiwan) Rueifu Development Co., Ltd. (Taiwan) Total	$ 63,226 31,741 8,404		26.20 39.90 48.26	26.20 39.90 48.26
	$ 103,371

(3) Information about associates that are not individually material was as follows

The Company’s share of: Net profit (loss) from continuing operations for the year Other comprehensive income Total comprehensive profit (loss)	2022 $ 5,476 (4,680) $ 796	2021
		$ 7,079 (6,470)
		$ 609

(4) The investment gains and losses and other comprehensive income for the subsidiaries and associates under the equity method have been recognized according to their audited financials.

14. Property, plant and equipment

Item		For the Year Ended December 31,2022	For the Year Ended December 31,2022	For the Year Ended December 31,2022
	Balance, Beginning of Year	Additions	Disposals	Reclassification	Balance, End of Year
	$ 444,026 580,509 795,359 11,991 154,227 －	$ － 19,191 3,460 － 4,195 372	$ －－－ (2,190) －－	$ －－－－－－	$ 444,026 599,700 798,819 9,801 158,422 372
	1,986,112	27,218	(2,190)	－	2,011,140
		13,535 18,545 122 10,640	－－ (2,190) －	－－－－	387,009 695,998 9,537 125,357
Building Machinery equipment Transportation equipment Other equipment Total Net Item
	1,177,249	$ 42,842	$ (2,190)	$ －	1,217,901
	$ 808,863				$ 793,239

	Balance, Beginning of Year	Additions	Disposals	Reclassification	Balance, End of Year
	$ 444,026 579,218 790,373 13,859 152,886	$ － 1,291 4,986 180 1,341	$ －－－ (2,048) －	$ －－－－－	$ 444,026 580,509 795,359 11,991 154,227
	1,980,362	7,798	(2,048)		1,986,112
		13,499 18,625 54 14,949	－－ (1,801) －	－－－－	373,474 677,453 11,605 114,717
Building Machinery equipment Transportation equipment Other equipment Total Net
	1,131,923	$ 47,127	$ (1,801)	$ －	1,177,249
	$ 848,439				$ 808,863

(1) The book values of land are adjusted with basis on the government published

land value of 1975, 1979, 1980 and 1981 as well as current government-declared land value of 1992 and 2000; plant buildings and various equipments are re-evaluated in accordance with the commodity price indices in 1973 and 1980. Besides, the original revaluation increments are adjusted in relation to the tax rates of land value increment in compliance with land tax laws in January 2005.

(2) The situation of pledge & guarantee in detail is shown in Note 32.

15. Lease

(1) Right-of-use assets

e ight-of-use assets
Cost Building Transportation equipment Total Accumulated depreciation & impairment Building Transportation equipment Total Net Cost Building Transportation equipment Total Accumulated depreciation & impairment Building Transportation equipment Total Net		For the Year Ended	December 31,2022
	Balance, Beginning of Year	Additions	Disposals	Balance, End of Year
	$ 51,552 －	$ － 1,965	$ －－	$ 51,552 1,965
	51,552	1,965	－	53,517
	15,465 －	5,155 328	－－	20,620 328
	$ 15,465	$ 5,483	$ －	$ 20,948
	$ 36,087	For the Year Ended	December 31,2021	$ 32,569

	Balance, Beginning of Year	Additions	Disposals	Balance, End of Year
	$ 51,552 －	$ －－	$ －－	$ 51,552 －
	51,552	－	－	51,552
	10,310 －	5,155 －	－－	15,465 －
	$ 10,310	$ 5,155	$ －	$ 15,465
	$ 41,242			$ 36,087

(2) Lease liabilities

For the Year Ended December 31, 2022

Less 1 year Over 1 years Total	Future minimum lease payments	Interest	Present value of minimum lease payments
	$ 6,108 28,201	$ 333 728	$ 5,775 27,473
	$ 34,309	$ 1,061	$ 33,248

Range of discount rate for lease liabilities were as 1.09 ％ .

For the Year Ended December 31, 2021

Less 1 year Over 1 years Total	Future minimum lease payments	Interest $ 370 1,033 $ 1,403	Present value of minimum lease payments
	$ 5,439 32,638		$ 5,069 31,605
	$ 38,077		$ 36,674

Range of discount rate for lease liabilities were as 1.09 ％ .

(3) Other lease information

Other lease information
Expenses relating to short-term leases Total cash (outflow) for all lease agreements	2022 $ － $ (5,391)	2021
		$ －
		$ (5,014)

(4) Please see note 31 for the status of transactions with related parties.

16. Investment property, net

Item		For	the Year Ended	December 31,2022	December 31,2022
	Balance, Beginning of Year	Additions	Disposals	Impairment	Reclassification	Balance, End of Year
	$ 1,098,862 2,653,319	$ －－	$ －－	$ －－	$ －－	$ 1,098,862 2,653,319
	3,752,181	－	－	－	－	3,752,181
			－－	2,697 －	－－	231,549 921,771
Land Building Total Net Fair value	228,852 866,440
	1,095,292	$ 55,331	$ －	$ 2,697	$ －	1,153,320
	$ 2,656,889					$ 2,598,861
	$ 4,451,589					$ 4,242,553

Item		For	the Year Ended	December 31,2021	December 31,2021
	Balance, Beginning of Year	Additions	Disposals	Impairment	Reclassification	Balance, End of Year
	$ 1,098,862 2,653,319	$ －－	$ －－	$ －－	$ －－	$ 1,098,862 2,653,319
	3,752,181	－	－	－	－	3,752,181
			－－	1,215 －	－－	228,852 866,440
Land Building Total Net Fair value	227,637 810,967
	1,038,604	$ 55,473	$ －	$ 1,215	$ －	1,095,292
	$ 2,713,577					$ 2,656,889
	$ 4,133,740					$ 4,451,589

(1) Details of land:

Details of land:
Oiashui Section, Longtan Dahu Section, Miaoli Nankan Section, Taoyuan Xinban Section, Banqiao Zhuangjing Section, Xindian Total	Dec. 31, 2022		Dec. 31, 2021
	Ping	Cost	Ping	Cost
	14,447 230,253 14,696 140 53	$ 42,643 473,971 265,779 311,775 4,694	14,447 230,253 14,696 140 53	$ 42,643 473,971 265,779 311,775 4,694
		$ 1,098,862		$ 1,098,862

(2) The Company leases the real estate held for investment, with the lease period as January 1, 2008 to December 31, 2028. Provisions for the lessee to adjust the rent based on market rents when exercising the renewal rights. The lessee does not have a preferential purchase right for the real property at the end of the lease term.

The maturity analysis of lease payments receivable under operating leases of investment properties as of was as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Over 5 years Total	Dec. 31, 2022 $ 139,586 90,963 24,433 11,226 11,226 1,755 $ 279,189	Dec. 31, 2021
		$ 139,745 113,179 77,226 21,864 11,226 12,981
		$ 376,221

(3) As of December 31, 2022 and December 31, 2021, the book value of the investment properties let out stood at NT$2,299,014 thousand and NT$2,354,345 thousand , respectively. The rent incomes during 2022 and 2021 totaled NT$212,998 thousand and NT$191,080 thousand, respectively.

(4) The fair value of investment properties is based on the transaction prices of adjacent assets, the economic environment and changes in the current land values published by the Taiwanese government. The assessment is based on market comparators and discounted cash flows. It is Level 3 fair value according to IFRS.
(5) As of December 31, 2022 and 2021, the land at Dahu Section of Miaoli accumulated losses of reduction were NT$231,549 thousand and NT$228,852 thousand respectively.
(6) Details of the farm land lots registered in others’ names due to legal restrictions:

restrictions:
Oiashui Section, Longtan Dahu Section, Miaoli Nankan Section, Taoyuan Total	Dec. 31, 2022 $ 35,100 94,241 17,631 $ 146,972	Dec. 31, 2021
		$ 35,100 94,241 17,631
		$ 146,972

For the security measures of the aforementioned pieces of farm land, the Company has already periodically checked relevant land transcripts and dispatched its personnel to conduct investigation at any time in order to keep abreast of the use of the land. Part of the land has been pledged to the Company. Please see note 31 (2) D for the status of transactions with related parties.

(7) The situation of already providing to serve as loan guarantees from financial industries in detail is shown in Note 32.
Short-term borrowings

industries in detail is shown in Note Short-term borrowings	32.
Bank unsecured borrowings Bank guaranteed loan Total Interest rate range %	Dec. 31, 2022 $ 740,000 500,000 $ 1,240,000 1.48～2.19	Dec. 31, 2021
		$ 415,000
		$ 415,000
		0.52～0.99

18. Short-term notes and bills payable

Short-term notes and bills payable
Commercial paper payable Less: Unamortized discount Net amount Interest rate range%	Dec. 31, 2022 $ 40,000 (106) $ 39,894 1.5～2.39	Dec. 31, 2021
		$ 160,000 (116)
		$ 159,884
		0.5～0.79

The situation of pledge & guarantee in detail is shown in Note 32.

19. Employee pensions

(1) Defined contribution plans

The employee retirement plan established by the Company in accordance with “Labor Pension Act” belongs to a defined contribution plans. Concerning the above, the Company would contribute 6% of the monthly salaries of employees to the exclusive individual accounts of Labor Insurance Bureau. In accordance with the above related regulations, the pension costs recognized as expenses in the parent company only comprehensive income statement in 2022 and January 1 to December 31, 2021 are respectively NT$6,112 thousand and NT$6,135 thousand.

(2) Defined benefit plans

A. The employee retirement plan established by the Company in accordance with “Labor Standard Act” is a defined benefit plans. In accordance with the regulations of the said plan, the employee pensions are calculated by service years and the average wage of six months prior to retirement. For the above, the Company would contribute 2% of the total employee salaries as employee pension fund, to the Supervisory Committee of Workers’ Pension Preparation Fund to be deposited into an exclusive account of Bank of Taiwan. Before the end of year, if it is estimated the balance in the exclusive account is insufficient to pay the estimated labors conforming to retirement conditions in the following year, the Company would contribute the differential amount at once before the end of March in the following year.

The retired pension cost amount in parent company only comprehensive income statement listed to expense related to defined benefit plan is as follows:

follows:
Service cost Net interest cost (income) List to (profit) loss Re-measurements Plan assets returns (excl. amount that covered in net interest income) Actuarial profit (loss)-Change of the demographic assumption Actuarial profit (loss)-Change of the financial assumption Actuarial profit (loss)- Adjustment with experience Listed to other comprehensive income	2022 $ － 19 $ 19 218 (3) 358 (513) $ 60	2021
		$ － 10
		$ 10
		39 (31) 223 (83)
		$ 148

The details of the various costs and expenses recognized in profit or loss are

as follows:

as follows:
Operating costs Operating expenses Total	2022 $ 19 －	2021
		$ 10 －
	$ 19	$ 10

The amount listed in the parent company only balance sheet for the

obligation occurring from the defined benefit plan is as follows

Defined benefit obligation present value Plan asset fair value Net defined benefit liability (assets)	Dec. 31, 2022 $ 5,387 (2,812) $ 2,575	Dec. 31, 2021
		$ 5,632 (2,858)
		$ 2,774

The changed of defined benefit obligation present value of this Company is as follows:

as follows:
2022 Beginning defined benefit obligation $ 5,632 Service cost current period － Interest expense 39 Benefits paid from plan assets (442) Re-measurements Actuarial (profit) loss- Change of the demographic assumption 3 Actuarial (profit) loss- Change of the financial assumption (358) Actuarial (profit) loss- Adjustment with experience 513 Ending defined benefit obligation $ 5,387	2021
	$ 5,866 － 21 (146) 31 (223) 83
	$ 5,632

The changed of plan asset fair value of this Company is as follows:

Beginning plan asset fair value Interest income Re-measurements Plan assets returns (excl. amount that covered in net interest income) Contribution by employer Benefits paid from plan assets Redemption or curtailments payment Ending plan asset fair value	2022 $ 2,858 19 218 159 (442) － $ 2,812	2021
		$ 2,796 10 39 159 (146) －
		$ 2,858

The assets of defined benefits held by our company are deposited in financial institutions and invested in equity securities in Taiwan and overseas within the percentages and absolute amounts stipulated by the Bank of Taiwan for the discretionary investment of the funds for specific years. The operation of the funds is under the oversight by the Labor Pension fund Supervisory Committee. The minimum yields on the funds p.a. shall not fall below the two-year time deposit rates offered by local banks. Any insufficiency shall be made up by the national treasury following the approval from competent authorities.

Classification of Fair Values for Planned Assets

Cash and cash equivalents	Dec. 31, 2022 $ 2,812	Dec. 31, 2021
		$ 2,858

B. The main assumptions of the Company’s actuarial valuation are as follows:

Discount rate Expected increase in future salaries	Dec. 31, 2022 1.30％ 2.00％	Dec. 31, 2021
		0.70％ 2.00％

The Company is exposed to the following risks due to the pension system stipulated by the Labor Standards Act:

a. The impact of the book value of the retirement pensions is as follows for any delta of each 0.25 basis points between the discount rate (or the expected increase in future salaries) and management estimates in 2022 and 2021.

Effect on present value of defined benefit obligation

Dec. 31, 2022 Discount rate Expected increase in future salaries	Actuarial assumption increased 0.25％ $ (141) $ 144	Actuarial assumption decreased 0.25％
		$ 146
		$ (140)

Dec. 31, 2021 Discount rate Expected increase in future salaries	Effect on present value of defined benefit obligation	Effect on present value of defined benefit obligation
	Actuarial assumption increased 0.25％ $ (155) $ 158	Actuarial assumption decreased 0.25％
		$ 161
		$ (153)

Since actuarial assumptions may be mutually related, the possibility of change in an only one assumption is not high. Therefore, the above sensitivity analysis may be unable to reflect the actual change situation of the current value of defined benefits. Besides, in the above sensitivity analysis, the actuary of current value of defined benefits obligations at the end of the reporting period applies projected unit credit method, measured by the same basis of defined benefits liabilities listed in the parent company only balance sheet.

b. The Company expects to contribute the amount of NT$140 thousand to the defined benefit plans within one year after December 31, 2022; the weighted average duration of defined benefits obligations is 10 years.

20. Equity

(1) Share capital - common stock

uity Share capital - common stock
Authorized capital Issued capital	Dec. 31, 2022 $ 6,800,000 $ 3,373,260	Dec. 31, 2021
		$ 6,800,000
		$ 3,423,260

The face value of the issued ordinary shares is NT$10 per share. Each share has one vote and the right to dividends.

Treasury stocks of NT$50,000 thousand was cancelled from January 1 to December 31, 2022.

(2) Capital surplus

December 31, 2022. Capital surplus
Premium on capital Conversion premium of corporate bonds Gains of disposal of assets Equity net value change of associates by equity method Total	Dec. 31, 2022 $ 716 444,133 1,238 3,658 $ 449,745	Dec. 31, 2021
		$ 727 450,718 1,238 3,658
		$ 456,341

In accordance with regulations in laws, the capital surplus shall not be used except for covering company losses, but concerning the overage obtained from issued stock over par value (including issuance of common stock above par value, the premium on capital stock of stock issued for merge, corporate bond conversion premium and treasury stocks transaction, etc.) and capital surplus generated from income of receiving gifts. In the absence of accumulated losses, the Company may issue cash dividends or bonus shares to existing shareholders on a pro rata basis. Per the requirements of the Securities and Exchange Act, the appropriation of capital surplus to share capital is limited to 10% of the paid-in capital.

(3) Retained earnings

A. In accordance with the Company’s Articles of Incorporation, any earnings during the year should be used to pay all the due taxes and make up the prior losses before distributions as follows:
a. Provide 10% legal reserve, but it is not applicable to the case where the legal reserve already attains the total capital amount.
b. If necessary, in accordance with regulations of laws, allowance or reversal of special reserve shall be provided.
c. The earnings during the year available for distributions, along with the undistributed earnings from previous years, shall be distributed according to the proposal from the board. The distribution to shareholders shall be no less than 5% of the distributable accumulated earnings and shall be approved by the shareholders’ meetings.
The enterprise life cycle of the Company belongs to “maturity period”. However, in order to pursue business sustainable development, respond to the future market demands and consider the future capital expenditure budget of the Company as well as maintenance stable dividend allocation, in which cash dividend shall be no lower than 10% of the total amount of shareholders’ dividend. But in case of fund requirements concerning any major investment plan, major operation change matters and productivity expansion or other major capital expenditures, etc., the board may propose it to be changed to distribution in stock dividend form in whole, and actions may be taken after a report to and consent from the shareholders’ meeting.

According to the Articles of Incorporation revised by the shareholders’ meeting on June 8, 2022, the Board of Directors is authorized to pass a resolution for the Company to distribute all or part of dividends or statutory surplus reserves and capital reserves in cash with the attendance of two thirds of the directors and the consent of more than half of the directors in attendance, which shall be reported to the shareholders’ meeting.

B. Legal reserve

Per the regulations set forth by the Company Act, the Company shall appropriate 10% of after-tax earnings as the legal reserve, until the amount of legal reserve is equivalent to that of paid-in capital, or use the earnings to reverse prior losses. In the absence of losses, the portion of reserves exceeding 25% of the paid-in capital can be used to issue cash dividends or bonus shares.

C. Special reserve

bonus shares. Special reserve
The number of appropriation arising from the first adoption of IFRSs Decrease in other equity items Total	Dec. 31, 2022 $ 296,475 － $ 296,475	Dec. 31, 2021
		$ 297,955 －
		$ 297,955

Official Letter “Securities Issue” No. 1010012865 and No. 1010047490 released by the Financial Supervisory Commission and the IFRS standards provide answers to the questions regarding the appropriation, utilization and reversal of special reserve. If there is any reversal of the reduction of shareholders’ equity, the reserved portion may be used for earnings distributions.

D. The Company’s earnings distributions for 2021 and 2020 were approved by the annual general meetings on March 18, 2022 and August 5, 2021, respectively, as proposed by the board.

2021

2020

Legal reserve Cash dividend Total	Amount	Dividend per share (TWD)	Amount	Dividend per share (TWD)
	$ 78,839 410,791	1.2	$ 86,173 513,489	$ 1.5
	$ 489,630		$ 599,662

E. The status for the board of the Company proposed to approve the 2022 earnings allocation proposal on March 15, 2023 is as follows:

Legal reserve Cash dividend Total	2022	2022
	Amount $ 67,015 404,791 $ 471,806	Dividend per share (TWD)
		$ 1.2

The Company’s earnings distribution for 2022 is still pending for the approval from the annual general meeting in 2023.

(4) Other equity interest

(4) Other equity interest
Balance on Jan. 1, 2022 Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Share of loss (profit) of associates accounted for using equity method Disposal of financial assets at fair value through other comprehensive income - equity instrument Balance on Dec. 31, 2022	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total
	$ (36,371) 35,334 －－－	$ 581,205 － (276,948) (28,752) (6,158)	$ 544,834 35,334 (276,948) (28,752) (6,158)
	$ (1,037)	$ 269,347	$ 268,310

Exchange differences on translation of foreign financial statements	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total
$ (26,658) (9,713) －－－		$ 84,011 － 311,821 188,874 (3,501)		$ 57,353 (9,713) 311,821 188,874 (3,501)
$ (36,371)		$ 581,205		$ 544,834
	Number of shares (thousand shares) － 5,000 (5,000) －			Amount
			$	－ 105,816 (105,816)
				－

A. The Company in accordance with the regulations of Article 28-2 of Securities Exchange Act, in order to maintain company credit and shareholders’ equity, purchased back treasury stocks through resolutions of the board.
B. The quantity percentage of a company in purchase back outstanding shares in accordance with the regulations of Securities Exchange Act shall not exceed 10% of the total number of shares issued by a company, and the total amount of purchase shares shall not exceed the retained earnings adding the premium of issued shares and the amount of realized capital surplus.
C. The treasury stocks held by The Company in accordance with the regulations of Securities Exchange Act shall not be pledged, nor shall it enjoy such rights as dividend allocation and voting right, etc.

21. Operating revenue

Operating revenue
Net sales revenue Construction revenue Rental and logistics revenue Total	2022 $ 986,339 668,816 281,575 $ 1,936,730	2021
		$ 912,233 1,637,012 245,699
		$ 2,794,944

The amount of revenue recognized at the beginning from the contractual liabilities for the period from January 1 to December 31, 2022 and 2021 are respectively NT$50,221 thousand and NT$197,159 thousand.

22. Operating costs

22.	Operating costs
23. 24.	Cost of sales Cost of construction sales Cost of rental and logistics Total Other income Dividend income Other Total Other gains and losses Loss (gain) on disposal of property, plant and equipment Foreign currency exchange gain (loss) Net (gain) loss on financial assets and liabilities at fair value through profit or loss Miscellaneous expense Impairment loss Total	2022 $ 768,184 438,332 104,849 $ 1,311,365 2022 $ 253,963 5,603 $ 259,566 2022 $ 57 154,578 (1,990) (778) (2,697) $ 149,170	2021
			$ 726,945 1,078,791 105,484
			$ 1,911,220
			2021
			$ 166,921 12,301
			$ 179,222
			2021
			$ 4 (37,825) 4,046 (587) (1,215)
			$ (35,577)

25. Finance costs

Finance costs
Interest of bank loan Interest of lease liabilities Total	2022	2021 $ 3,595 426 $ 4,021
	$ 8,406 383
	$ 8,789

26. Extra information on the items with the expense characteristics

The employee benefits, depreciation, depletion and amortization expenses incurred in this period are summarized below:

	2022			2021
Operating costs	Operating expense	Total	Operating costs $ 93,760 7,115 4,079 － 2,732 $ 107,686 $ 91,991	Operating expense	Total
$ 96,250 7,196 4,086 － 2,112	$ 50,802 4,630 2,046 26,308 1,075	$ 147,052 11,826 6,132 26,308 3,187		$ 48,371 4,701 2,066 25,919 1,439	$ 142,131 11,816 6,145 25,919 4,171
$ 109,644	$ 84,861	$ 194,505		$ 82,496	$ 190,182
$ 87,780	$ 15,876	$ 103,656		$ 15,764	$ 107,755

As of December 31, 2022 and 2021, the Company had 195 and 200 employees,

respectively. There were 7 non-employee directors and 7 non-employee directors, respectively.

The Company’s average employee benefit expense and the Company’s average salary expense for the year ended December 31, 2022 and 2021 were NT$895 thousand, NT$782 thousand, NT$851 thousand, NT$736 thousand, respectively.

The Company’s average salary expense adjustment for the year ended December 31, 2022 increased by 6.3%.

The Company did not have a supervisor in 2022 and 2021; hence, no remuneration to supervisors had accrued.

The Company's salary compensation policy is as follows:

(1) Employee Salary: Employee salary mainly includes basic salary (including basic salary and meal allowance), performance bonus, annual salary adjustment for individual performance and year-end bonus. The salary is approved with reference to the market rate of the industry, job category, academic experience, professional knowledge and skills, and professional years of experience, and is better than the average market rate of the industry.
(2) The compensation policy of the manager is based on the usual industry standard, and takes into account the reasonableness of the relationship with personal performance, the company's operating performance and future risks. The proposal made by the Salary and Compensation Committee will be implemented after the board of directors has approved it.
(3) Personal performance bonus: The bonus is paid according to the company's operational performance and employees' personal performance.
(4) Annual salary adjustment: The Company conducts annual salary adjustment with reference to the overall economic environment, operating profit, employee performance assessment results, and long-term development of the employees, taking into account the salary level of the industry and the overall salary adjustment status of the industry.

Correlation between operating performance and employee compensation:

The Company shall set aside no less than 1% of the Company's annual profit as employee compensation, which shall be distributed in shares or cash as determined by the Board of Directors, and shall be paid to employees of subordinate companies under the conditions set by the Board of Directors; the Company shall set aside no more than 2% of the Company's annual profit as director compensation as determined by the Board of Directors. The remuneration to employees and remuneration to directors shall be reported to the shareholders' meeting. If the Company has an accumulated deficit, the Company shall reserve the amount to cover the deficit in advance, and then allocate the remuneration to employees and directors in accordance with the aforementioned ratio.

The remuneration of directors and other key management personnel is determined by reference to the industry standard, taking into account the reasonableness of the relationship with individual performance, the Company's operating performance and future risks. The proposal made by the Salary and Compensation Committee will be implemented after the board of directors has approved it.

The compensations to employees and the remunerations to directors determined by the board on March 15, 2023 for the year 2022 and on March 18, 2022 for the year 2021 are as follows:

2021 are as follows:
Compensations to employees Remunerations to directors	2022		2021
	Amount	Estimated proportion	Amount	Estimated proportion
	$ 8,456 8,456	1％ 1％	$ 8,402 8,402	1％ 1％

The Company shall allocate from annual profits no less than 1% for compensations to employees and no more than 2% for remunerations to directors. However, annual profits should be prioritized for the reversal of cumulated losses if any.

The abovementioned compensations to employees may be paid with cash or shares. The employees include the employees of subsidiaries which meet the criteria set by the board. However, the remunerations to directors shall be paid in cash only. Any changes to the published parent company only financial statements shall be treated as changes to accounting estimates and adjusted during the following year. There was no difference between the distributed amount of compensations to employees and remunerations to directors for 2021 and 2020, the recognized amount on the parent company only financial statements for 2021 and 2020.

Please refer to the details published on TSE Market Observation Post System for the information regarding the decisions by the board and annual general meetings on compensations to employees and remunerations to directors.

27. Income tax

(1) Income tax recognized in profit & loss

The income tax expense listed as profit & loss is composed of as follows:

Income tax current period: Occurred in current year Additionally imposed undistributed earnings Paid for land value increment tax Deferred income tax: Occurred in current year Income tax expense listed as profit & loss	2022 $ (68,183) (14,938) (9,925) (93,046) (23,947) $ (116,993)	2021
		$ (2,837) (15,241) (25,323)
		(43,401) (1,954)
		$ (45,355)

The accounting benefit and income tax expense of current period are adjusted as follows:

as follows:
Income tax calculated according to the regulated tax rate of before-tax net income The effect of tax in reconciliation items of income tax: When determining taxable income, adjustments should be made to increase (decrease) Exemption of domestic securities transaction income Tax-exempt income Other Income tax expense (gain) current period	2022 $ 165,735 (14,573) － (87,518) 4,539 $ 68,183	2021
		$ 164,662 (20,468) 700 (143,317) 1,260
		$ 2,837

(2) Income tax expense recognized in other comprehensive income

Remeasurement of defined benefit plans Unrealized loss on valuation of investments in equity instruments measured at fair value through other comprehensive income Exchange differences on translation of foreign financial statements Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Income tax related to other comprehensive income	2022 $ (12) 9,899 (8,834) 197 $ 1,250	2021
		$ (30) 1,893 2,428 (251)
		$ 4,040

(3) Deferred tax assets and liabilities

The analysis on deferred income tax assets and liabilities in balance sheet is as

follows:

follows:
Net defined benefit liability Unrealized loss on valuation of investments in equity instruments measured at fair value through other comprehensive income Exchange differences on translation of foreign financial statements Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Unrealized exchange loss Other Tax loss carry forwards Investment credits Deferred income tax assets Net defined benefit asset Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Unrealized exchange gain Other Land value increment tax Deferred income tax (liabilities)		2022
	Balance, beginning of year	Recognized in profit (loss)	Recognized in other comprehensive income	Balance, end of year
	$ 554 1,489 9,093 － 208 34,978 6,593 676	$ (27) －－－ 4,649 (19,274) (6,593) (676)	$ (12) 9,899 (8,834) 146 －－－－	$ 515 11,388 259 146 4,857 15,704 －－
	$ 53,591	$ (21,921)	$ 1,199	$ 32,869
	(1,389) (51) (278) (363) (166,357)	1,389 － (221) (3,194) －	－ 51 －－－	－－ (499) (3,557) (166,357)
	$ (168,438)	$ (2,026)	$ 51	$ (170,413)

2021

Balance, beginning of year	Recognized in profit (loss)	Recognized in other comprehensive income	Balance, end of year
$ 584 － 6,665 200 1,821 30,145 15,966 994	$ －－－－ (1,613) 4,833 (9,373) (318)	$ (30) 1,489 2,428 (200) －－－－	$ 554 1,489 9,093 － 208 34,978 6,593 676
$ 56,375	$ (6,471)	$ 3,687	$ 53,591
(1,359) (404) －－ (5,188) (166,357)	(30) －－ (278) 4,825 －	－ 404 (51) －－－	(1,389) － (51) (278) (363) (166,357)
$ (173,308)	$ 4,517	$ 353	$ (168,438)

(4) The Company’s income tax settlement application case approved by the competent authority is approved to 2020.

28. EPS

(1) Basic earnings per share

S Basic earnings per share
Net income for the period attributable to owners of the Corporation Weighted average number of ordinary shares (in thousand shares) Basic EPS (NT dollars)	2022 $ 711,684 340,126 $ 2.09	2021
		$ 777,956
		342,326
		$ 2.27

(2) Diluted earnings per share

Diluted earnings per share
Net income for the period attributable to owners of the Corporation Weighted average number of ordinary shares (in thousand shares) Potentially ordinary stock- Employee bonus (in thousand shares) Number of shares of diluted EPS (in thousand shares) Diluted EPS (NT dollars)	2022 $ 711,684 340,126 485 340,611 $ 2.09	2021
		$ 777,956
		342,326 459
		342,785
		$ 2.27

If the Company can choose to distribute stocks or cash as the bonus for the employees, when calculating the earnings per share, the distribution of shares to the employees should be taken into consideration. In addition, the potential common shares which will dilute the earnings should be added into the weighted average number to calculate the diluted earnings per share. The distributed number of shares is estimated by the closing price of the common shares at the end of the reporting period (the effect of exclude right and exclude dividends is considered). The dilutive effect of the potential shares distributed to the employees will be taken into consideration when calculating the diluted EPS before the resolution concerning the number of shares to be delivered as bonus for employees is made in the shareholder meeting the following year.

29. Capital Management

The enterprise life cycle of the Company belongs to “maturity period”. However, in order to pursue business sustainable development, respond to the future market demands and consider the future capital expenditure budget of the Company as well as maintenance stable dividend allocation, on the whole, the Company applies a prudent risk management policy.

30. Financial instruments

(1) The types of financial instruments

ancial instruments The types of financial instruments
Financial assets Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Amortized cost Cash and cash equivalents Trade receivables Other financial assets Refundable deposits Total Financial liabilities Amortized cost Short-term loans Short-term bills payable Trade payables Guarantee deposits received Total	Dec. 31,2022 $ 16,963 3,586,774 1,775,404 194,400 20,000 40,376 $ 5,633,917 $ 1,240,000 39,894 262,387 48,533 $ 1,590,814	Dec. 31,2021
		$ 18,953 3,564,424 1,987,541 228,683 47,620 39,626
		$ 5,886,847
		$ 415,000 159,884 261,249 44,523
		$ 880,656

(2) Fair values of financial instruments
A. Financial instruments not measured with the fair value

The financial assets and financial liabilities not measured by fair values of this company include cash and equivalent cash, accounts receivable, other financial assets, short-term loan, short-term bonds payable and accounts payable. The maturity dates of this kind of financial products are rather short that their book values should belong to a reasonable foundation of estimating fair values. The above financial products shall not include refundable deposits and deposit received either, because their repayment dates are uncertain; therefore, their fair values are evaluated by the book values in balance sheets.

B. Fair value measurement of recognitions in balance sheet

The following table provides related analysis of financial instruments measured by fair values after original recognition, and the observable levels of fair values are divided into the first to the third level.

a. The first-level fair value measurement refers to an open offer of the same asset or liability from an active market (without being adjusted).
b. The second-level fair value measurement refers to a derived fair value of an observable input value belong to the said asset or liability either directly (i.e., price) or indirectly (i.e., to be derived from price) in addition to a first-level open offer.
c. The third-level fair value measurement refers to a derived fair value of an input value of asset or liability not based on observable market data (non-observable input value) as the evaluation technique.
C. Concerning the financial instruments measured by fair values, the basic classification analysis of the Company in accordance with the nature, characteristics and risk as well as fair value level of asset and liability shall be as follows:
a. The financial asset and liability measured by fair value on repeatable foundation:

foundation:
Financial assets at fair value through profit or loss Fund Financial assets at fair value through other comprehensive income Stock of Listed (OTC) companies Stock of emerging companies Stock not classified to listed (OTC) and emerging companies Financial bond Total		Dec. 31, 2022
	Level 1	Level 2	Level 3	Total
	$ 16,963	$ －	$ －	$ 16,963
	$ 3,505,489 －－ 13,943	$ －－－－	$ －－ 67,342 －	$ 3,505,489 － 67,342 13,943

	$ 3,519,432	$ －	$ 67,342	$ 3,586,774

Dec. 31, 2021

Level 1	Level 2	Level 3	Total
$ 18,953	$ －	$ －	$ 18,953
$ 3,426,807 －－ 13,512	$ － 14,893 －－	$ －－ 109,212 －	$ 3,426,807 14,893 109,212 13,512

$ 3,440,319	$ 14,893	$ 109,212	$ 3,564,424

b. The financial asset and liability measured by fair value on non-repeatable

foundation: none

D. The first-level fair value measurement item applies a market offer as the fair

value input value, with breakdown as follows:

Item Stock of Listed (OTC) companies Fund and Financial bond	Market quoted
	Close price The net assets

E. The second-level fair value measurement item applies the observable input values of recent transaction price and offer data of GreTai Securities Market, to serve as the foundation of evaluating fair values.
F. The emerging stocks of Brightek Optoelectronics Co., Ltd., measured at Level 2 fair value, became TWSE-listed in January 2022, and were reclassified as a financial asset measured at Level 1 fair value.

G. Adjustment of financial assets with the third-level fair value measurement:

Beginning balance Purchases Capital return due to disinvestment Listed to other comprehensive income of this year Disposal for the current period Ending balance	2022 $ 109,212 － (2,000) (5,782) (34,088) $ 67,342	2021
		$ 92,112 － (9,000) 26,100 －
		$ 109,212

H. Level 3 fair value measurement is based on net asset values. The Company

takes great caution in the selection of valuation models and valuation parameters for the key, non-observable values. Therefore, the measurement of fair values should be reasonable. The use of different valuation models or valuation parameters may result in different numbers. For example, If the evaluation parameter's share price net multiplier increases, the market liquidity discount decreases, and the weighted average capital cost discount rate decreases, the fair value of the investment will be increased.

(3) Objective of financial risk management

The financial risk management of the Company is to manage currency exchange rate risk, interest rate risk, credit risk and liquidity risk related to operation activities. In order to reduce related financial risks, the Company has devoted to identification, evaluation and avoiding uncertainty of market, to reduce any potential unfavorable impact of market changes on the corporate financial performance.

The important financial activities of the Company are specified by the board and in accordance with related specifications and double checked through an internal control system. During the execution period of financial planning, the Company shall scrupulously observe the related financial operation procedures concerning comprehensive financial risk management and division of authority and responsibility.

(4) Market risk

The Company mainly exposes to such market risks as changes in foreign currency exchange rate and changes in interest rate, etc.

A. Foreign currency exchange rate risk

The foreign currency exchange rate risk of the Company mainly comes from Cash and cash equivalents, accounts receivable, other payables priced by foreign currency exchange, Financial assets at fair value through profit or loss as fund, Financial assets at fair value through other comprehensive income as overseas company stock and financial bond, and foreign currency time deposit with maturity period above three months.

The information concerning foreign currency financial assets and liabilities under material impacts of foreign currency exchange rate fluctuation shall be as follows:

	Dec. 31,2022			Dec. 31,2021
foreign currency	Exchange rate	Amount	foreign currency	Exchange rate	Amount
45,298 16 235,628 1,452 328 138 2 39 2	30.65 3.911 0.2305 4.384 30.65 30.75 3.971 0.2346 4.434	1,388,394 63 54,312 6,365 10,052 4,236 8 9 7	38,545 14,338 423,910 51,408 2,685 123 1 147 32	27.62 3.521 0.2385 4.32 27.62 27.72 3.581 0.2426 4.37	1,064,615 50,485 101,103 222,083 74,169 3,410 4 36 142

The sensitivity analysis concerning foreign currency exchange rate risk is calculated mainly for the monetary items of foreign currency at the end of the financial reporting period. When the appreciation/ depreciation of NT Dollar vs. foreign currency reaches 1%, the pre-tax profit and loss of the Company from January 1 to December 31, 2022 and 2021 would separately increase/decrease by NT$14,449 thousand and NT$14,347 thousand, respectively.

Due to a large variety and volumes of foreign currency transactions, the Company discloses the exchange gains/losses for the summary of monetary items. The recognized foreign currency gain/loss (realized and unrealized) was NT$154,577 thousand for 2022 and NT$37,825 thousand for 2021.

B. Interest rate risk

The interest rate risk refers to the risk in fair values of non-derivative financial instruments cause by changes of market interest rate. The interest rate risk of the Company mainly comes from short-term loans and short-term bonds payable.

Concerning the sensitivity analysis of interest rate risk, it is calculated on basis of the fixed interest rate loan at the end of the financial reporting period, and it is assumed to be held for one year. In case the interest rate rises/drops 1%, the pre-tax profit and loss of the Company from January 1 to December 31, 2022 and 2021 would separately increase/ decrease by NT$12,799 thousand and NT$5,749 thousand, respectively.

C. Other price risks

The price risk of equity instruments of the Company mainly comes from the investment classified as Financial assets at fair value through other comprehensive income; and all major equity instrument investments may only be conducted after the approval of the board of the Company.

Concerning the sensitivity analysis of equity instrument price risks, it is calculated on basis of the changes in fair values at the end of the financial reporting period. In case the price equity instruments rises/drops 1%, the profit and loss of the Company from January 1 to December 31, 2022 and 2021 would separately increase/decrease by NT$35,728 thousand and NT$35,509 thousand, respectively.

(5) Credit risk management

The credit risk management refers to the opposing party of trade violates contract obligations and causes risks of financial loss to the Company. The credit risk of the Company comes mainly from the accounts receivable generated from operation activities, and bank deposits generated from investment activities and other financial instruments. Operation related credit risks and financial credit risks are under separate management.

A. Operation related credit risks

In order to maintain the quality of accounts receivable, the Company already establishes the procedures of operation related credit risks. The risk evaluation of an individual customer considers such numerous factors with potential impacts on customer payment abilities as the financial status of the said customer, internal credit ratings of the Company, historical trade record and current economic status, etc. The Company would also in due time uses certain credit enhancement tools, such as sales revenue received in advance and credit insurance, etc., to reduce credit risks of specific customers.

Up to December 31, 2022 and December 31, 2021, the accounts receivable balances of the top 10 major customers account for the accounts receivable balances of the Company respectively as 54% and 61%; the risk concentration risks of the rest accounts receivable are relatively not major.

B. Financial credit risk

The credit risks of bank deposit and other financial instruments are measured and supervised by the Finance Department of the Company. Since the trade parties of the Company are all domestic banks with commendable credit, there is no suspicion of major contract performance; therefore, there is no major credit risk.

(6) Liquidity risk management

The object of liquidity risk management of the Company is to maintain cash and equivalent cash required for operation, securities with high liquidity, and sufficient bank financing quota, etc., to ensure the Company to possess sufficient financial flexibility, operation fund sufficient to cope up with the financial liabilities with agreed repayment periods.

A. The liquidity of non-derivative financial assets and liabilities

			Dec. 31, 2022
Less than 1 year	2～3 years		4～5 years	Over 5 years		Total
$ 1,240,000 39,894 262,387 6,108 19,987	$ －－－ 11,882 26,592		$ －－－ 10,879 1,680	$ －－－ 5,440 274		$ 1,240,000 39,894 262,387 34,309 48,533
$ 1,568,376	$ 38,474		$ 12,559	$ 5,714		$ 1,625,123
			Dec. 31, 2021
Less than 1 year	2～3 years		4～5 years	Over 5 years		Total
$ 415,000 159,884 261,249 5,439 16,760	$ －－－ 10,879 19,469		$ －－－ 10,879 8,020	$	－－－ 10,880 274	$ 415,000 159,884 261,249 38,077 44,523
$ 858,332	$ 30,348		$ 18,899	$	11,154	$ 918,733

		$ － 90,000			$ － 90,000
		$ 90,000			$ 90,000

B. Loan commitments

Unsecured bank loan limit -Amount used -Amount unused Secured bank loan limit -Amount used -Amount unused	Dec. 31, 2022 $ 780,000 2,165,000 $ 2,945,000 $ 500,000 810,000 $ 1,310,000	Dec. 31, 2021
		$ 575,000 2,370,000
		$ 2,945,000
		$ － 170,000
		$ 170,000

31. Related party transaction

(1) Name and relation ship with related parties

Name of related parties Relationship with the Company

Ban Chien Development Co., Ltd. The Company’s subsidiaries FRG US Corp. The Company’s subsidiaries

Formosan Construction Corp. (Taiwan) Eurogear Corporation

[Investee company accounted for using ] the equity method

[The president is the spouse (2nd degree ] of kinship) of the Company’s president.

[The president is the spouse of the ] general manager of the Company

Chen Hsi Investment CO, LTD general manager of the Company The president is the spouse (1st degree Hung He Development CO, LTD of kinship) of the Company’s president Ascend Gear International Inc.[The president is the spouse of the ] Company’s president The president is the spouse (2nd degree Fenghe International Co., Ltd. of kinship) of the Company’s president Engtown Construction Corp[The president is the representative of the ] Company’s legal person director FRG Charity Foundation[Its president is the same as president of ] the Company HSU, ZHEN-TSAI President of Company HSU Mei-Zhi[Representative of the Company’s ] corporate director.

(2) Major transaction with related parties

A. Operating revenue -Rental

Operating revenue-Rental
Other Guarantee deposits received	2022 $ 1,185 Dec. 31, 2022 $ 274	2021
		$ 1,185
		Dec. 31, 2021
		$ 274

The subsidiaries and related enterprise lease the office to the Company, and the lease content is determined by the agreement between the two parties, and the rent is collected monthly.

B. Lease agreement

Lease agreement signed by the Company with Formosan Construction Corp. (Taiwan), Eurogear Corporation, Chen Hsi Investment CO, LTD., Ltd. and Hung He Development CO, LTD in December 2018., with the lease period as of December, 2018 to December, 2028. The lease agreement is based on the Consumer Price Index (CPI) in the sixth, and it adjusts the rent according to the accumulated average CPI increase in the previous year. The Company does not have a preferential purchase right for the real property at the end of the lease term. The rent is the monthly payment.

payment.
lease liabilities Formosan Construction Corp. (Taiwan) Eurogear Corporation Chen Hsi Investment CO, LTD Hung He Development CO, LTD Total Refundable deposits	Dec. 31, 2022 $ 6,275 6,017 12,777 6,536 $ 31,605 Dec. 31, 2022 $ 1,167	Dec. 31, 2021
		$ 7,281 6,982 14,826 7,585
		$ 36,674
		Dec. 31, 2021
		$ 1,167

C.	2022 Interest expense $ 383 Depreciation expense $ 5,483 Labor remuneration and expenses 2022 Other $ 6,010	2021
		$ 426
		$ 5,155
		2021
	Other
		$ －

D. As of December 31, 2022 and 2021, the farmland of investment property held in the name of the major management of FRG amount to NT$109,204 thousand. Its ownership certificate is under custody of the Company, and its pledge is set to the Company for security purpose.
E. Sale of real estate
(a) In 2021, the Company sales the real estate and parking space of the 55 TIMELESS Project in Taipei City to Ascend Gear International Inc., which is jointly developed and constructed with Continental Development Corporation. The total contract price (including tax) is NT$310,500 thousand. Base on the capital contribution ratio, the transaction price of the Company is NT$62,100 thousand and the disposition benefit is NT$12,794 thousand.
(b) The subsidiary Da Guan Entertainment Co., Ltd., which had been dissolved and liquidated in January 2022, sold the land in Puli Township, Nantou County to Fenghe International Co., Ltd. with the total sales price of NT$ 6,350 thousand and the gain on disposal in the amount of NT$ 5,118 thousand.
F. The Company commissioned Engtown Construction Corp. in 2022 to work on the new construction project in Longtan Intelligent Park - Area A on the self-owned land. The total contract amount is NT$ 770,000 thousand (tax inclusive). The project is expected to be completed within 2 years from the date of commencement of work.

G. Donation expense

G.	Donation expense
H.	FRG Charity Foundation Donation expense FRG US Corp.	2022 $ 7,500 2022 $ －	2021
			$ 10,000
			2021
			$ 82,860

In 2022, the recognized interest revenue is NT$296 thousand and interest receivable is NT$0 thousand.

(3) Reward to major management

The remuneration information to board directors and other major management members shall be as follows:

members shall be as follows:
Short-term benefits Retirement benefit Total	2022 $ 56,724 547 $ 57,271	2021
		$ 53,220 503
		$ 53,723

32. Pledged assets

The following assets are already provided to serve for guarantee of financial industry loans, material purchase and international logistics business, with the

book amounts as follows:

book amounts as follows:
Other financial assets Land under construction Property, plant and equipment Investment property - house and land Total	Dec. 31, 2022 $ 20,000 1,440,362 287,640 182,383 $ 1,930,385	Dec. 31, 2021
		$ 20,000 － 287,640 186,501
		$ 494,141

33. Material contingent liabilities and unrecognized contract promise

(1) The total price of the construction contract signed by the Company on December 31, 2022 for the new construction project was NT$770,000 thousand, for which the payment has not been made.

(2) The notes payable used as security issued by the Company on December 31, 2022 and December 31, 2021 due to the guarantee of the credit extension contract were both in the amount of NT$3,205,000 thousand.
(3) The farmland in the Luzhu district of Taoyuan purchased by the Company in the previous year (with a book value of NT$17,631 thousand on December 31, 2022) was registered in the name of the former employee who had the status of yeoman. In order to protect the rights and interests of the Company, the Company has completed the enforcement procedures of provisional injunction or provisional attachment on the land under the said employee’s name, for both of which the foreclosure registration has also been completed. A lawsuit was also filed with the Taoyuan District Court, requesting the return of the land with nominee registration. In July 2022, the Taoyuan District Court ruled against the Company. The Company has filed an appeal in August 2022, which is currently on trial in court.
Important disaster loss: None
Important subsequent events

FRG US Corp., a subsidiary of the Company, increased its investment in Trimosa Holdings LLC in the amount of USD$12.55 million in February 2023.

36. Additional disclosed items

(1) Information regarding the material transaction items

A. The status of lending capital to others:

The status of lending capital to others

No. (Note 1)	Financing company	Counterparty	Financial statement account	Related party	Maximum balance for the Period	Ending balance (Note 2)	Amount actually drawn	Interest rate	Nature for financing	Transaction amounts	Reason for financing	Allowance for bad debt	Collateral	Collateral	Financing limits for each borrowing company (Note 3)	Financing company’s total financing amount limits (Notes 3)
													Item	Value
0	The Company	FRG US Corp.	Other receivables	Yes	$ 96,480 (US$ 3,000)	$ － (US$ －)	$ － (US$ －)	0.35%	Short-term financing	－	Replenish working capital (Purchase of real estate)	－	－	－	$4,745,034	$4,745,034

Note 1: The explanation for the number column is as follows:

(1) Put “0” for the company.
(2) Put the serial No. starting from 1 for the investees by company category.

Note 2: The ending balance was approved by the Board of Directors.

Note 3: According to the Operation procedures of lending capital to others, the Company’s lending capital total amount should be no more than 40% of this Company’s net value, and its lending capital amount to an individual enterprise should be no more than 40% of the Company’s net value.

Note 4 ： US$1 ＝ NT$30.65

B. The status of endorsement and guarantee for others:

No. (note 1)	Company name of the endorsement / guarantee provider	Recipient of the endorsement/ guarantee	Recipient of the endorsement/ guarantee	Endorsement/ guarantee quota for a individual enterprise (note 3)	Max. balance of the endorsement/ guarantee this period	Ending balance of the endorsement/ guarantee	Actual drawing amount	The endorsement / guarantee amount guaranteed by properties	Percentage of accumulated endorsement / guarantee amount in net value of the latest financial statements	Max. limit of the endorsement / guarantee (note 3)	Endorsement / guarantee from parent company to subsidiary	Endorsement / guarantee from subsidiary to parent company	Endorsement / guarantee to Mainland China
		Company name	Relation
0	The Company	950 Property LLC	Note 2	$ 1,779,388	$ 427,490 (USD 13,251.4)	$ 407,481 (USD 13,251.4)	$ 384,217 (USD 12,494.9)	－	3.44％	$ 3,558,776	－	－	－
0	The Company	950 Property LLC and 950 Retail Property LLC	Note 2	1,779,388	358,657 (USD 11,117.7)	341,869 (USD 11,117.7)	331,999 (USD 10,796.7)	－	2.88％	3,558,776	－	－	－

Note 1: The explanation for the number column is as follows:

(1) Put “0” for the company.
(2) Put the serial No. starting from 1 for the investees by company category.

Note 2: The relationships between endorsement/ guarantee provider and recipient: A company that is endorsed by each of the contributing shareholders in accordance with their shareholding ratio because of the joint investment relationship.

Note 3: According to the Operating procedures of endorsement and guarantee for others, the Company’s endorsement/ guarantee total amount should be no more than 30% of this company’s net value, and its endorsement/ guarantee amount to an individual enterprise should be no more than 15% of the Company’s net value.

Note 4 ： US$1 ＝ NT$ 30.75

C. The status of securities held at the end of the period

Name of this Company	Type and name of securities	Relation with securities issuer	Item listed on book		The end of the period	The end of the period		Remarks
				Share / unit numbers	Book value	Ratio of share holding %	Fair value
FRG	Fund Allianz Global Investors Preferred Securities and Income Fund NN(L) US Credit X Cap USD Stock Taiwan Cement Corporation Formosa Plastics Corporation Nan Ya Plastics Corporation Formosa Chemicals & Fibre Corporation Far Eastern New Century Corporation China Steel Corporation Taiwan Semiconducter Manufacturing Co., Ltd. ASUSTeK Computer Inc. Quanta Computer Inc. Huaku Development Co., Ltd. E. SUN Financial Holding Co., Ltd. Shin Kong Financial Holding Co., Ltd. Shin Kong Financial Holding Co., Ltd. -Preferred Shares B		Financial assets at fair value through profit or loss - current 〃 Financial assets at fair value through other comprehensive income - current 〃〃〃〃〃〃〃〃〃〃〃〃	997,009 202 1,363,911 583,000 3,847,900 4,599,170 4,101,761 1,640,000 293,000 760,000 2,047,000 3,552,000 138,821 2,000,000 666,000	$ 8,654 8,309 45,896 50,604 273,201 324,241 130,846 48,872 131,411 204,060 147,998 316,128 3,339 17,540 23,909	－－ 0.02 0.01 0.05 0.08 0.08 0.01 － 0.10 0.05 1.28 － 0.01 0.01	$ 8,654 8,309 45,896 50,604 273,201 324,241 130,846 48,872 131,411 204,060 147,998 316,128 3,339 17,540 23,909	Note Note

Note: The situation of being provided to financial loan business trust in detail is shown as in Note 8.

Name of this Company	Type and name of securities	Relation with securities issuer	Item listed on book		The end of the period	The end of the period		Remarks
				Share / unit numbers	Book value	Ratio of share holding %	Fair value
FRG	SinoPac Financial Holdings Company Limited Far Eastern Group WPG Holdings Continental Holdings Corp. (CHC) Jinan Acetate Chemical Co., Ltd. Far Eas Tone Telecommunications Co., Ltd. Pegatron Corporation Brightek Optoelectronic Co., Ltd. Farglory Land Development Co., Ltd. Chong Hong Construction Co., Ltd. Grand Fortune Securities Co., Ltd. Formosa Petrochemical Corp. Shine More Technology Materials Corporation., Ltd. Phison Electronics Co. Citigroup Inc. Ford Motor Company Formosan Chemical Industrial Co. Formosan Glass & Chemical Industrial Co. Tai Yang Co., Ltd. Eslite Corporation		Financial assets at fair value through other comprehensive income - current 〃〃〃〃〃〃〃〃〃〃〃〃〃〃〃 Financial assets at fair value through other comprehensive income – non-current 〃〃〃	36,329,397 5,656,447 1,916,600 4,669,000 78,000 2,210,000 1,894,000 267,241 3,552,000 2,593,000 1,023,951 1,678,000 579,125 14,000 1,000 1,000 22,516 7,283 111,395 895,300	$ 608,517 121,614 92,188 130,732 13,884 145,639 120,269 7,082 201,754 191,104 10,291 134,743 3,475 4,410 1,386 356 16,652 826 7,444 8,540	0.32 0.40 0.10 0.57 0.12 0.07 0.07 0.39 0.45 0.89 0.28 0.02 1.22 0.01 －－ 2.25 5.02 1.24 1.65	$ 608,517 121,614 92,188 130,732 13,884 145,639 120,269 7,082 201,754 191,104 10,291 134,743 3,475 4,410 1,386 356 16,652 826 7,444 8,540	Note Note Note Note

Note: The situation of being provided to financial loan business trust in detail is shown as in Note 8.

Name of this Company	Type and name of securities	Item listed on book		The end of the period	The end of the period
			Share / unit numbers	Book value	Ratio of share holding %	Fair value
FRG	Yu Chi Venture Investment Co., Ltd. Tashee Golf & Country Club -preferred stock Corporate Bond Dialine International Airport Limited	Financial assets at fair value through other comprehensive income – non-current 〃 Financial assets at fair value through other comprehensive income - current	1,150,000 1 480,000	$ 17,480 16,400 13,943	10.00 －－	$ 17,480 16,400 13,943
Ban Chien Development Co., Ltd.	Stock SinoPac Financial Holdings Company Limited Chong Hong Construction Co., Ltd. Taiwan Cement Corporation Farglory Land Development Co., Ltd. Yuanta Financial Holding Co., Ltd. Wistron Corporation Yuanta Taiwan Dividend Plus ETF Qisda Corporation	Financial assets at fair value through other comprehensive income - current 〃〃〃〃〃〃	42,482,945 904,000 791,954 380,000 214,240 345,000 740,000 210,000	711,589 66,625 26,649 21,584 4,649 10,143 18,796 5,912	0.37 0.31 0.01 0.05 －－－－	711,589 66,625 26,649 21,584 4,649 10,143 18,796 5,912
FRG US Corp.	Stock TRIMOSA HOLDINGS LLC	Financial assets at fair value through other comprehensive income - non-current	－	414,883	14.67	414,883

D. The same securities in which the accumulated amount of buying or selling reached NT$300 million or was more than 20% of the paid-up capital: None
E. The amount acquiring real estate which reached NT$300 million or was over 20% of the paid-up capital

Real estate acquired by	Real estate	Date of the event	Transaction currency	Transaction amount (in thousands)	Status of payment	counterparty	Relationship	Information on prior transaction if the counterparty is a related party	Information on prior transaction if the counterparty is a related party	Information on prior transaction if the counterparty is a related party	Information on prior transaction if the counterparty is a related party	Basis or reference used in setting the price	Purpose of acquisition and utilization	Other commitments
								Owner	Relationship with the issuer	Date of transfer	Amount
FRG	Land	Nov. 15, 2021	NTD	$ 1,438,766	Based on the terms in the purchase order	The Ambassador Hotel Co., Ltd.	None	－	－	－	$－	Evaluation report	Real estate development	None

F. The amount disposing property which reached NT$300 million or was over 20% of the paid-up capital: None
G. The amount of purchases or sales from or to related parties which reached NT$100 million or was over 20% of the paid-up capital:

None

H. The amount of related party receivables which reached NT$100 million or was more than 20% of the paid-up capital: None
I. Information regarding transactions of derivative financial products: None

(2) Related information to re-investment businesses

Investing company	Investee	Area	Business items	Original investment amount	Original investment amount	Holding at the end of the period	Holding at the end of the period	Holding at the end of the period	Investee’s profit (loss) of current period	Investment profit (loss) recognized current period	Remarks
				End of period for current period	End for last year	Share	Ratio (%)	Book value
The Company	Ban Chien Development Co., Ltd. FRG US Corp. KINGSHALE INDUSTRIAL LIMITED Formosan Construction Corp. (Taiwan) Fenghe Development Co., Ltd. Rueifu Development Co., Ltd.	Taiwan U.S.A. Hong Kong Taiwan Taiwan Taiwan	Consign a contractor to build residential and commercial building for lease and sale Real estate investment, development and rental and sales of premises. Investment Consign a contractor to build commercial building and public housing for lease and sale Consign a contractor to build residential and commercial building for lease and sale International trade, investment consultancy, office building for lease and building/land brokerage.	$ 560,000 560,933 34 75,979 59,850 483	$ 560,000 461,349 34 75,979 59,850 483	56,000,000 9,126,000 9,999 7,597,927 3,990,000 48,260	100.00 100.00 99.99 26.20 39.90 48.26	$ 901,586 481,638 － 63,226 31,741 8,404	$ 31,696 (19,437) － 23,198 (2,078) (77)	$ 31,696 (19,437) － 6,342 (829) (37)	Subsidiary Subsidiary Subsidiary

(3) Information of the investment in China: None

(4) Information on major shareholders

Shareholding Name of major shareholder	Number of shares	Percentage of ownership
Ruifu Construction Co., Ltd.	34,070,754	10.10％
Chen Hsi Investment CO, LTD	16,872,989	5.00％
Ascend Gear International Inc.	17,487,047	5.18％

Note: A. The major shareholders information was calculated by Taiwan Depository & Clearing Corporation in accordance with the common shares (including treasury shares) and preferred shares in dematerialised form which were registered and held by the shareholders above 5 ％ on the last operating date of each quarter. The share capital which was recorded on the financial statements might be different from the number of shares held in dematerialised form because of the different calculation basis.
B. As per information above, if the shareholder delivers the shares to the trust, shares will be disclosed based on the trustee’s account. Additionally, according to the Securities and Exchange Act, internal stakeholder whom holds more than 10% of the Company’s share, which includes shares held by the stakeholder and parts delivered to the trust that have decision making rights, should be declared. For information regarding internal stakeholder declaration, please refer to the Market Observation Post System website of the Taiwan Stock Exchange Corporation.

37. Department information

The Company has provided the operating segments disclosure in the consolidated

financial statements.

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2022

DECEMBER 31, 2022	DECEMBER 31, 2022	DECEMBER 31, 2022
STATEMENT 1
Item	Description	Amount
Cash on hand Petty cash Checking accounts Savings accounts Cash equivalent Commercial paper Time deposits with maturity	Including RMB 20 thousand, exchange rate of $4.384 Including USD 4,394 thousand, exchange rate of $ 30.65 RMB 942 thousand, exchange rate of $ 4.384 HKD 16 thousand, exchange rate of $ 3.911 JPY225,013 thousand, exchange rate of $ 0.2305 Expiration date 2023/01/06～2023/02/03 Interest rates at 0.75％～0.432％ Expiration date 2023/01/09～2023/02/07 Interest rates at 0.85％～4.7％	$ 274 245 74,076 292,153 195,906 1,212,750
Total		$ 1,775,404

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT

DECEMBER 31, 2022

STATEMENT 2

Name of Securitie	Description	Units	Par value	Total price	Rates	Acquisition	Accumulated impairment	Fair value	Fair value
								Unit price	Total price
Fund Allianz Global Investors Preferred Securities and Income Fund NN(L) US Credit X Cap USD	USD	997,009 202.45	－	$ －－	－	$ 10,000 9,400	$ －－	8.68 41,041.58	$ 8,654 8,309
Total				$ －		$ 19,400	$ －		$ 16,963

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - CURRENT

DECEMBER 31, 2022

STATEMENT 3

Name of Securitie	Description	Share / unit numbers	Par value	Total price	Rates	Acquisition	Accumulated impairment	Fair value	Fair value	Remarks
								Unit price	Total price
Stock Taiwan Cement Corporation Formosa Plastics Corporation Nan Ya Plastics Corporation Formosa Chemicals & Fibre Corporation Far Eastern New Century Corporation China Steel Corporation Taiwan Semiconducter Manufacturing Co., Ltd. ASUSTeK Computer Inc. `Quanta Computer Inc.` Huaku Development Co., Ltd. E. SUN Financial Holding Co., Ltd Shin Kong Financial Holding Co., Ltd. Shin Kong Financial Holding Co., Ltd. -Preferred Shares B SinoPac Financial Holdings Company Limited Far Eastern Group WPG Holdings Continental Holdings Corp. (CHC) Jinan Acetate Chemical Co., Ltd. Far Eas Tone Telecommunications Co., Ltd. Pegatron Corporation Brightek Optoelectronic Co., Ltd. Farglory Land Development Co., Ltd. Chong Hong Construction Co., Ltd. Grand Fortune Securities Co., Ltd. Formosa Petrochemical Corp. Shine More Technology Materials Corporation., Ltd. Phison Electronices Copr. Citigroup Inc. Ford Motor Company Corporate Bond Delta Air Lines Inc.	Expires before 2026	1,363,911 583,000 3,847,900 4,599,170 4,101,761 1,640,000 293,000 760,000 2,047,000 3,552,000 138,821 2,000,000 666,000 36,329,397 5,656,447 1,916,600 4,669,000 78,000 2,210,000 1,894,000 267,241 3,552,000 2,593,000 1,023,951 1,678,000 579,125 14,000 1,000 1,000 480,000	10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10	$ 13,639 5,830 38,479 45,992 41,018 16,400 2,930 7,600 20,470 35,520 1,388 20,000 6,660 363,294 56,564 19,166 46,690 780 22,100 18,940 2,672 35,520 25,930 10,240 16,780 5,791 140	－－－－－－－－－－－－－－－－－－－－－－－－－－－	$ 63,779 45,532 283,471 455,604 135,008 51,292 149,505 263,677 169,390 290,224 1,510 16,400 29,970 287,351 156,825 93,393 90,908 7,800 144,792 117,606 7,860 183,408 210,960 11,980 174,619 9,795 4,321 1,889 440 13,639	$ －－－－－－－－－－－－－－－－－－－－－－－－－－－－－	33.65 86.80 71.00 70.50 31.90 29.80 448.50 268.50 72.30 89.00 24.05 8.77 35.90 16.75 21.50 48.10 28.00 178.00 65.90 63.50 26.50 56.80 73.70 10.05 80.30 6.00 315.00 1,386.30 356.46 29.05	$ 45,896 50,604 273,201 324,241 130,846 48,872 131,411 204,060 147,998 316,128 3,339 17,540 23,909 608,517 121,614 92,188 130,732 13,884 145,639 120,269 7,082 201,754 191,104 10,291 134,743 3,475 4,410 1,386 356 13,943	Note Note Note Note
Total						$ 3,472,948	$ －		$ 3,519,432

Note: The situation of being provided to financial loan business trust in detail is shown as in Note 8.

STATEMENT OF NOTES RECEIVABLE, NET

DECEMBER 31, 2022

STATEMENT 4

			STATEMENT 4
Client Name	Description	Amount	Remarks
Non related parties： Client A Client B Others Total Less: Loss allowance	Payment for goods 〃〃	$ 58,459 9,060 7,975	The amount of individual client included in others does not exceed 5% of the account balance.
		75,494 (755)
Net		$ 74,739

STATEMENT OF ACCOUNTS RECEIVABLE, NET

DECEMBER 31, 2022

STATEMENT 5

			STATEMENT 5
Client Name	Description	Amount	Remarks
Non related parties： Client A Client B Client C Client D Client E Client F Others Total Less: Loss allowance Less: Allowance for sales returns and discounts	Payment for goods 〃〃〃〃〃 Payment for goods and real property	$ 10,998 10,135 9,921 5,992 4,290 4,243 38,544	USD 331 thousand USD 324 thousand USD 195 thousand USD 140 thousand The amount of individual client included in others does not exceed 5% of the account balance.
		$ 84,123 (1,750) (1,888)
Net		$ 80,485

STATEMENT OF INVENTORIES

DECEMBER 31, 2022

		STATEMENT 6	STATEMENT 6	STATEMENT 6
Item	Description	Amount		Remarks
		Cost	Net Realizable Value
Raw materials Work-in-process Finished goods Subtotal Less: allowance for loss	Chemical raw materials and Original cloth, etc. Rubber Sheet, Eco-Friendly Synthetic Leather, Synthetic Leather, Rubberized fabric machining, and Rubber raw materials and Plastic raw materials, etc. Rubber Sheet, Eco-Friendly Synthetic Leather, and Synthetic Leather, etc.	$ 127,041 19,462 131,557	$ 78,208 19,426 113,040	Net realizable value is the estimated except that raw materials are based on replacement cost, the selling price of inventories less all estimated costs of completion and costs necessary to make the sale.
		278,060 (67,386)	$ 210,674

Net		$ 210,674

STATEMENT OF OTHER FINANCIAL ASSETS-CURRENT

DECEMBER 31, 2022

			STATEMENT 7
Item	Description	Amount	Remarks
Pledged time deposits Less: maturity over one year transferred to noncurrent	Cooperative bank-Bansin (Interest rates at 0.200％～0.825％) (Period 2020.11.02～2023.11.02)	$ 20,000 (20,000)	Guarantee of logistics business
Total		$ －

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

FOR THE YEAR ENDED DECEMBER 31, 2022

STATEMENT 8

Name of Securities	As of January 1, 2022	As of January 1, 2022	Additions	Additions	Decrease	Decrease	As of December 31, 2022	As of December 31, 2022	Accumulated impairment
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Fair value
Stock Brightek Optoelectronic Co., Ltd. Formosan Chemical Industrial Co. Formosan Glass & Chemical Industrial Co. Tai Yang Co., Ltd. Formosan Rubber Group Inc. (Ningpo) Eslite Corporation Yu Chi Venture Investment Co., Ltd. Tashee Golf & Country Club	267,241 22,516 9,795 111,395 － 1,604,379 1,350,000 1	$ 14,893 14,991 3,379 7,014 34,088 14,397 19,143 16,200	－－－－－－－－	$ － 1,661 － 430 －－ 337 200	267,241 (Note 1) － 2,512 (Note 2) －－ 709,079 (Note 2) 200,000 (Note 3) －	$ 14,893 － 2,553 34,088 (Note 4) 5,857 2,000 －	－ 22,516 7,283 111,395 － 895,300 1,150,000 1	$ － 16,652 826 7,444 － 8,540 17,480 16,400	N/A N/A N/A N/A N/A N/A N/A N/A
Total		$ 124,105		$ 2,628		$ 59,391		$ 67,342

Note 1: Reclassified after getting listed as financial assets measured at fair value through other comprehensive income – current

Note 2: Capital reduction to make up for accumulated losses. Note 3: Capital return due to disinvestment

Note 4: Transferred to other accounts receivable after liquidation and dissolution.

STATEMENT OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2022

STATEMENT 9

Name	As of January 1, 2022	As of January 1, 2022	As of January 1, 2022	Additions	Additions	Decrease	Decrease	As of	December 31, 2022	December 31, 2022	Fair value / Net assets value	Fair value / Net assets value	Collateral
	Shares		Amount	Shares	Amount	Shares	Amount	Shares	%	Amount	Unit Price (NT$)	Total Amount
Ban Chien Development Co., Ltd. FRG US Corp. KINGSHALE INDUSTRIAL LIMITED Formosan Construction Corp. (Taiwan) Fenghe Development Co., Ltd. Rueifu Development Co., Ltd.	56,000,000 7,526,000 9,999 7,597,927 3,990,000 48,260		$ 854,763 406,322 － 61,540 32,570 8,465	－ 1,600,000 －－－－	$ 46,823 143,752 － 6,342 －－	－－－－－－	$ － 68,436 － 4,656 829 61	56,000,000 9,126,000 9,999 7,597,927 3,990,000 48,260	100.00 100.00 99.99 26.20 39.90 48.26	$ 901,586 481,638 － 63,226 31,741 8,404	－	$ －	None None None None None None
Total			1,363,660		$ 196,917		$ 73,982			$ 1,486,595
Note：Increase(Decrease)		for the period including shares of profit (loss) of subsidiaries and associates, shares of other comprehensive (loss) income of subsidiaries and associates.

Note ： Increase(Decrease) for the period including shares of profit (loss) of subsidiaries and associates, shares of other comprehensive (loss) income of subsidiaries and associates.

STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2022

STATEMENT 10

Type	Explanation	Balance, End of Year	Contract Period	Range of Interest Rates (%)	Loan Commitments	Collateral	Remarks
Unsecured borrowings Mortgage	Cooperative bank First Commercial Bank Bank of Taiwan Chang Hwa Bank The Export-Import Bank of the Republic of China Bank of Kaohsiung Mega International Commercial-Bank E.SUN Bank Land Bank Bank Sinopac Taishin Bank	$ 200,000 20,000 110,000 20,000 75,000 10,000 80,000 185,000 20,000 20,000 500,000	2022.03.01～2023.03.01 2022.12.13～2023.12.13 2022.12.08～2023.12.08 2022.05.31～2023.05.31 2022.12.22～2023.12.22 2022.02.22～2023.02.22 2022.12.29～2023.06.17 2022.12.21～2023.12.21 2023.01.31～113.01.31 2022.12.15～2023.12.15 2029.03.31	1.54 1.88 1.8 1.59 1.65 1.98 1.53 1.48 1.86 1.8 2.19	$ 200,000 100,000 130,000 200,000 75,000 180,000 120,000 200,000 150,000 180,000 1,140,000
Total		$ 1,240,000

STATEMENT OF SHORT-TERM NOTES AND BILLS PAYABLE

DECEMBER 31, 2022

STATEMENT 11

Item	Guarantee/Acceptin g Institution	Contract Period	Range of Interest Rates (%)		Amount
				Issue Amount	Discount Amount	Carrying Amount
Commercial paper	China Bills Mega Bills International Bills Ta Ching Bills	2022/11/30～2023/02/24 2022/12/02～2023/01/19 2022/12/23～2023/01/18 2022/12/28～2023/02/23	1.5％ 1.99％ 1.722％ 2.39％	$ 10,000 10,000 10,000 10,000	$ 41 14 13 38	$ 9,959 9,986 9,987 9,962
Total				$ 40,000	$ 106	$ 39,894

STATEMENT OF NOTES PAYABLE

DECEMBER 31, 2022

STATEMENT 12

			STATEMENT 12
Vendor Name	Description	Amount	Remarks
Vendor A Vendor B Vendor C Vendor D Others	Payment for the purchase 〃〃〃 Payment for the purchase, expenses, etc.	$ 22,985 9,194 8,439 5,288 46,226	The amount of individual client included in others does not exceed 5% of the account balance.
Total		$ 92,132

STATEMENT OF ACCOUNTS PAYABLE

DECEMBER 31, 2022

STATEMENT 13

			STATEMENT 13
Vendor Name	Description	Amount	Remarks
Vendor A Vendor B Vendor C Vendor D Others	Payment for the purchase 〃〃 Payment for the purchase, processing charges, etc.	$ 9,367 2,493 3,298 2,018 16,734	The amount of individual client included in others does not exceed 5% of the account balance.
Total		$ 33,910

STATEMENT OF LEASE LIABILITIES

DECEMBER 31, 2022

STATEMENT 14

Item	Description	Lease Term	Discount Rate	Balance End of Year
Buildings	Offices	107.12～117.12	1.09％	$ 33,248 (5,775)
Less: Current portion
				$ 27,473

STATEMENT OF OPERATING REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2022

		STATEMENT 15	STATEMENT 15
Item	Shipments	Amount	Remarks
Sales revenue: Synthetic Leather Rubber Sheet Eco-Friendly Synthetic Leather Others Less: Sales returns Sales discounts Subtotal Construction revenue Rental and logistics revenue	5,307 thousand yards 1,947 thousand yards 3,986 thousand yards 683 metric tons	$ 250,490 483,489 205,278 51,271 (185) (4,004)	The amount does not exceed 10% of the total revenue.
		986,339 668,816 281,575
Total		$ 1,936,730

STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2022

STATEMENT 16

			STATEMENT 16
Item		Amount	Remarks
	Subtotal	Total
Direct material Raw material, beginning of year Add: raw material purchased Less: raw material, end of year Sale of raw materials Transferred to expenses Indirect material (Supplies) Supplies, beginning of year Add: supplies purchased Less: transferred to manufacturing expenses Sale of supplies Direct labor Manufacturing expenses Manufacturing cost Work in process, beginning of year Add: transferred from finished goods Less: work in process, end of year Cost of finished goods Finished goods, beginning of year Add: finished goods purchased Cost of outsourcing Less: finished goods, end of year Finished goods transferred to costs Finished goods Transferred to expenses Product cost of sales Raw materials and supplies transferred to sales Provision for loss on inventories Unamortized fixed manufacturing costs Total cost of sales Cost of construction Cost of rental and logistics	$ 135,808 551,934 (127,041) (9,019) (856)	$ 550,826 － 62,525 137,247
	2,719 (2,701) (18)
	21,079 2,424 (19,462)
		750,598
	136,894 3,117 4,880 (131,557) (3,566) (134)	754,639
		764,273 9,037 (15,089) 9,963
		768,184 438,332 104,849
Total operating costs		$ 1,311,365

STATEMENT OF SELLING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2022

STATEMENT 17

			STATEMENT 17
Item	Description	Amount	Remarks
Wages and salaries Freight Selling expenses of construction Other expenses		$ 14,820 13,201 26,613 10,679	The amount of each item in others does not exceed 5% of the account balance.
Total		$ 65,313

STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2022

STATEMENT 18

			STATEMENT 18
Item	Description	Amount	Remarks
Wages and salaries Donation Taxes Depreciations Other expenses		$ 59,628 9,300 11,767 14,681 70,436	The amount of each item in others does not exceed 5% of the account balance.
Total		$ 165,812

STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2022

STATEMENT 19

			STATEMENT 19
Item	Description	Amount	Remarks
Wages and salaries Depreciations Contracted research expense Other expenses		$ 5,599 812 1,585 1,638	The amount of each item in others does not exceed 5% of the account balance.
Total		$ 9,634

AI assistant

FRG — Annual Report 2022

51973_rns_2022-11-14_64f365b6-034c-4296-9a69-2ad7bbca09bf.pdf

INDEPENDENT AUDITORS’ REPORT

NO.00111110EA

Opinion

Basis for Opinion

Key Audit Matters

Impairment of Property Investments

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Notes to Readers

Formosan Rubber Group Inc.

Parent Company Only Balance Sheet

Formosan Rubber Group Inc.

Parent Company Only Balance Sheet (Continued)

Formosan Rubber Group Inc.

Parent Company Only Comprehensive Income Statement

Formosan Rubber Group Inc.

Parent Company Only Statement of Changes in Equity

From Jan. 1 to Dec. 31, 2022 and 2021

Formosan Rubber Group Inc.

Parent Company Only Statement of Cash Flows

Formosan Rubber Group Inc.

Parent Company Only Statement of Cash Flows (Continued)

Formosan Rubber Group Inc.

Notes to Parent Company Only Financial Statements

1. Company profile

2. Date and procedure approving financial statements

3. Application of new standards, amendments and interpretations

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

4. Summary of significant accounting policies

(1) Compliance statement

(2) Preparation bases

(3) Foreign Currency

(4) Standards to classify current and non-current assets and liabilities

(5) Cash equivalents

(6) Inventory and real estate for sale and real estate under construction

(7) Investments accounted for under equity method

(8) Property, plant and equipment

(9) Investment property

(10) Lease

A. The Company as lessor

(13) Financial Instrument

(14) Financial assets

(15) Income recognition

(16) Borrowing costs

(17) Income tax

B. Deferred tax

(18) Treasury stocks

5. Citical Accounting Judgements, And Key Sources Of Estimation And Uncertainty

6. Cash and cash equivalents

9. Notes and accounts receivable ,net

10. Inventories

11. Real estate for sale and prepayment for land purchases/ Contract liabilities

12. Other financial assets

13. Investments accounted for using equity method

14. Property, plant and equipment

15. Lease

(1) Right-of-use assets

16. Investment property, net

(1) Details of land:

18. Short-term notes and bills payable

19. Employee pensions

(1) Defined contribution plans

(2) Defined benefit plans

20. Equity

(1) Share capital - common stock

(2) Capital surplus

(3) Retained earnings

C. Special reserve

21. Operating revenue

22. Operating costs

25. Finance costs

26. Extra information on the items with the expense characteristics

27. Income tax

(1) Income tax recognized in profit & loss

(2) Income tax expense recognized in other comprehensive income

(3) Deferred tax assets and liabilities

28. EPS

FRG Annual Report 2022