Skip to main content

AI assistant

Sign in to chat with this filing

The assistant answers questions, extracts KPIs, and summarises risk factors directly from the filing text.

Sign up Log in

FRG Annual Report 2023

Jun 12, 2024

51973_rns_2024-06-12_9e290b5e-e1e7-4678-ade5-cc461f7b1cf4.pdf

Annual Report

Open in viewer

Opens in your device viewer

Stock Code: 2107

==> picture [123 x 116] intentionally omitted <==

Formosan Rubber Group Inc.

2023 Annual Report

The information declaration website designated by the FSC: MOPShttp://mops.twse.com.tw/ Website of the company’s annual report: http://www.frg.com.tw/

Printed on May 21, 2024

This English version is only a translation of the Chinese version. If there is any inconsistency or discrepancy between the Chinese and English versions, the Chinese version shall prevail for intents and purposes.

I. Spokesperson or deputy spokesperson information:

Spokesperson Name: Huang Hui-Xian Title: Assistant managerial officer Telephone: (02)2370-0988 Email: [email protected] Deputy spokesperson Name: Zheng Sheng-Yuan Title: Manager,Management Department and Construction Department Telephone: (02)2370-0988 Email: [email protected]

II. Addresses and Telephones of the Head office, Branches and Plants:

Head Office Address: 8F., No. 82, Sec. 1, Hankou St., Taipei City Telephone: (02)23700988 FAX: (02)23123313 Taoyuan Plant Address: No.1, Chaofeng Road, SanheVil, Longtan District, Taoyuan Telephone: (03)4893456 FAX: (03)4893476 Nankan International Logistics Center: Address: 2F, No.53, Hou-sheng Rd, Lu-chu Dist., Taoyuan City Telephone: (03)3216533 FAX: (03)3216433

III. Share administration agency:

Taishin Securities Co., Ltd Address: B1, No. 96, Sec. 1, Jianguo N. Rd., Taipei City Website: www.tssco.com.tw Telephone: (02)25048125

IV. CPAs for the most recent Independent External Auditor's Report:

Name of the CPAs: Lai Chia-Yu, Lai Yong-Ji Name of the Accounting Firm: Baker Tilly Clock & Co Clock & Co. Email: [email protected] Address: (Top floor) 14F., No. 111, Sec. 2, Nanjing E. Rd., Taipei City Telephone: (02)25165255

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

VI. Company’s website: http://www.frg.com.tw/

Table of Contents

One. Letter to Shareholders ................................................................................................... 1 Two. Company Profile .......................................................................................................... 13 I. Company Profile .......................................................................................................... 14 Three. CORPORATE GOVERNANCE REPORT ........................................................... 18 I. Organizational System ................................................................................................. 19 II. Background information of directors, president, Vice Presidents, assistant managerial officers, and the chief of various departments and branches ............... 22 III. Remuneration packages for directors (including independent directors), general manager and deputy general managerial officers. ...................................... 33 IV. Implementation of Corporate Governance ................................................................ 40 (I) Functionality of the Board of Directors ............................................................. 40 (II) Evaluation of the Board of Directors ................................................................ 43 (III) Operation and key tasks of the Audit Committee ............................................ 45 (IV) Corporate governance execution status and deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies" ... 49 (V) Independence evaluation of CPAs .................................................................... 56 (VI) The Composition, Duties and Operation of the Remuneration Committee .... 59 (VII) The implementation status of sustainable development premonition and deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx-Listed Companies, as well as the reasons; TWSE/TPEx-listed companies shall disclose climate-related information. ................................... 64 (VIII) The state of the company's performance in the area of ethical corporate management, any variance from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such variance: ........................................................................................... 74 (IX) If the Company established the corporate governance guidelines and related articles, please disclose the inquiry method .................................................... 79 (X) Other important information that is sufficient to enhance the understanding of the operation of corporate governance ........................................................ 79 (XI) Items shall be disclosed in the implementation status of the internal control system .............................................................................................................. 86 (XII) If there has been any legal penalties against the company or its internal personnel or any disciplinary penalties by the company against its internal personnel for violation of the internal control system, during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, where the results of such penalties could have a material effect on shareholder equity or securities

prices,the annual report shall disclose the penalty, the main shortcomings and condition of improvement: ............................................... 88 (XIII) Major resolutions at shareholders meetings and Board of Directors meetings in most recent year and as of the publication date of the annual report ............................................................................................... 88 (XIV) Any other documented objections or qualified opinions raised by directors against board resolutions in relation to matters, and their content in most recent year and as of the publication date of the annual report ................................................................................................ 94 (XV) Resignation or discharge of chairperson, president and managerial staff of accounting, finance, internal audit, chief corporate governance officer and research and development in most recent year and as of the printed date of the annual report .................................... 94 (XVI) Risk Management Policy and Organizational Structure of Formosan Rubber Group Inc. ........................................................................................ 94 V. Professional fees of the attesting CPAs ...................................................................... 96 VI. Change of CPA ......................................................................................................... 97 VII. Any of the Company’s chairperson, president, or managerial officer in charge of finance or accounting held a position in the CPA’s firm or its affiliates in the most recent year ................................................................................................ 98 VIII. Changes in shareholding and shares pledged by directors, managerial officers and shareholders with 10% shareholdings or more in most recent year and as of the publication date of the annual report ............................................................ 99 IX. Top 10 shareholders who are related parties, spouses, or within second-degree of kinship to each other ......................................................................................... 100 X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee................................................................ 102 Four. Funding Status .......................................................................................................... 105 I. Capital and Shares: .................................................................................................... 106 II. Corporate Bonds ....................................................................................................... 114 III. Preferred Stocks: ..................................................................................................... 114 IV. Global Depository Receipts .................................................................................... 114 V. Employee Stock Options .......................................................................................... 114 VI. New Restricted Employee Shares ........................................................................... 114 VII. New Shares Issued for Merger or Acquisition (including mergers, acquisitions, and demergers) ...................................................................................................... 114 VIII. Progress on Planned Use of Capital ..................................................................... 114

Five. Operational Highlights .............................................................................................. 115 I. Business Activities ..................................................................................................... 116 (I) Scope of Business ............................................................................................. 116 (II) Industry Overview ........................................................................................... 117 (III) Technology and R&D Status and the Progress of Future Plans and Estimated Investment Expenses .................................................................... 120 (IV) Long-Term and Short-Term Business Development Plans ........................... 123 II. Market and Production and Sales Overview ............................................................ 125 (I) Market Analysis ................................................................................................ 125 (II) Important Uses and Production Process of Major Products ............................ 133 (III) Supply Situation for Major Raw Materials .................................................... 133 (IV) The Major Customers that Accounted for more than 10% of the Total Procurement (sales) of Goods in any of the Past 2 Years and the Amount and Proportion of the Goods Sold ................................................................. 135 (V) Production Volume and Value in the Last 2 Years ......................................... 137 (VI) Sales Volume in the Last 2 Years .................................................................. 137 III. The Number of Employees Employed for the 2 Most Recent Years, and during the Current Year as of the Date of Publication of the Annual Report ....... 138 IV. Expenditure for Environmental Protection ............................................................. 139 V. Labor Relations and Employee Rights ..................................................................... 139 (I) Various aspects of employee welfare measures, continuing education, job training, retirement system and its implementation ......................................... 139 (II) Labor Disputes ................................................................................................. 142 (III) Education and Training System for Employees and its Implementation ....... 142 (IV) Code of Conduct or Ethics for Employees .................................................... 148 (V) Workplace and employees’ safety protection measures: ................................ 149 VI. Information security management .......................................................................... 151 VII. Important contracts ................................................................................................ 152 Six. An Overview of the Company's Financial Status ..................................................... 153 I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years ................................................................................................................. 154 II. Finance analysis for the past 5 fiscal years ............................................................... 158 III. Audit committee review report of the most recent annual financial report............. 162 IV. Financial report for the most recent fiscal year ....................................................... 163 V. A parent company only financial statement for the most recent fiscal year, certified by a CPA ................................................................................................... 257

VI. If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation ....................................... 347 Seven. A Review and Analysis of the Company's Financial Status and Financial Performance, and a Listing of Risks .................................................................................. 348 I. Financial Status .......................................................................................................... 349 II. Financial Performance .............................................................................................. 350 III. Cash Flow ................................................................................................................ 350 IV. Financial Impact of Major Capital Expenditures During the Most Recent Fiscal Year ............................................................................................................. 351 V. Investment policy for the most recent fiscal year, the main reasons for the profits or losses, improvement plans, and investment plans for the coming year .............. 352 VI. Risk Analysis .......................................................................................................... 352 VII. Other Important Matters ........................................................................................ 356 Eight. Special Disclosures ................................................................................................... 357 I. Information relating to the Company's affiliates ....................................................... 358 II. Transaction about the company’s private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of the publication of the annual report ............................................................................ 359 III. Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ................................................................ 359 IV. If any of the situations listed in Article 36, paragraph 3 subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ............................................................................................... 359 V. Other matters that require additional explanation .................................................... 360

One. Letter to Shareholders

  • 1 -

Letter to Shareholders

Dear Shareholders,

In 2023, factors such as high interest rates, high inflation and the underperformance of the post-pandemic Chinese economy led to sluggish global economic demand. This, combined with the expansion of the US-China chip ban, the Russia-Ukraine war and ongoing conflicts in the Middle East, have also had a significant impact on global economic development and social stability. Thanks to the diversified operations, the revenue, margin, and pre-tax incomes of the Company remained stable in 2023. To cope with the relocation of the industrial chain led by the investments of major domestic and foreign companies in Taiwan to build plants and the manufacturers' warehouses have been shifted to Taiwan and Southeast Asian countries. The Company’s construction project of logistics warehouse planned in Longtan Smart Park, Taoyuan is expected to be completed this year and bring positive impact to the Company's operating revenue.

Looking ahead to 2024, although the economies of the United States and China face unfavorable factors, other major economies such as Europe are expected to show signs of recovery. The economic performance of emerging markets and developing economies is anticipated to stabilize and grow steadily. Furthermore, with our company's continuous efforts to enhance the diversification of logistics services and improve product performance in 2024, the Company holds a cautiously optimistic view on the business outlook for the year.

Meanwhile, the Company will continue to enforce expanding business scopes as follows: I. Rubber manufacturing: through the investment and upgrade of equipment to improve the functions of products, while continuously developing new products and innovating the new market applications; II. Warehousing: proactively developing the policy of “business expansion and professional services” by constantly seeking new customers in order to bring different types of businesses into the park, increasing operating performance; III. Construction and development: flexibly operating various strategies to sell the completed construction project steadily, and suitable individual projects and land with potential profits will be sought out for development actively.

The overall 2023 operating revenue, gross profit, and pre-tax profit declined year-onyear, mainly due to the fact that the Company did not have completed project to be recognized in 2023, and the government policies resulted in a decrease in construction revenue. It is to report the consolidated business results of FRG in 2023 and the summary of the business plan for 2024 to all shareholders as follows:

  • 2 -

One.2023 Consolidated business performances I. Performance of business plan implementation

(I) Consolidated operating income, gross profit and pre-tax income:

Unit: thousand Unit: thousand
Item 2023 2022 Increase and
decrease amount		 Increase and
decrease %
Operating
income		 1,359,718 1,937,243 (577,525) (29.81) %
Operating
margin		 420,611 625,209 (204,598) (32.72) %
Pre-Tax
Income		 592,200 830,297 (238,097) (28.68) %

  • (II) The sales of the reserved apartments for “World Garden - Bridge Upto Zenith”, and “Modesty Home”

  • Reserved units apartments at “Qiao-Feng” and “Qian-Yue”. By judging the real estate market, we entrusted the sales of the residential apartments and took steps gradually, allowing steady sales, and we have now sold out all the residential apartments.

  • (III) Xindian “Legend River”

The MRT Circular Line commenced the operation, and the development of the Yangbei Replanning Area, the market has gradually recovered and the selling rate has stabilized.

  • (IV) “55Timeless” Project in Taipei City

With the building of high specifications and the public facilities of an art gallery, it has become one of the international-grade landmarks for luxury residential apartments. Sales of units of large size and higher prices are soaring due to the following factors: preference of high end customers attracted by good construction quality and word of mouth; funds back to Taiwan to get away from Sino-US conflicts are prominent. With the Company’s flexible use of strategies, the apartments continued selling.

  • (V) “La Bella Vita” Project in Taichung City

  • The real estate market of the 7th Phase, Taichung City is very active, and thus the selling prices are stabilized. The major selling point of “La Bella Vita” is planned to be the real model house designed for “La Bella Vita” specifically by the architecture Antonio Citterio and renowned cabinet brand, to increase the sales synergy with cross-industry alliance.

  • (VI) FRG Bridge Upto Zenith Business Plaza

  • FRG Qiao Feng Business Plaza is located on the first and second floors of No. 168-180, Section 1, Zhongshan Road, Banqiao, covering an area of 1,882 pings (6221 square meters). The first floor of the business plaza has been leased to E.SUN Commercial Bank; the second floor has been leased to Nan Shan Life Insurance Co., Ltd. and SinoPac Securities Corporation; the second floor of the business plaza at building B has been leased to the infant care center, Bell’s HOUSE. The occupancy rate is 100%. FRG Qiao Feng Business Plaza has become an exquisite business center of Banqiao.

  • (VII) San Francisco and Hotel Development Project

  • The subsidiary in the US (FRG US Corp.) was established in 2017Participated in investment construction, with investment in this project accounting for approximately 11.23%. Residential sales were restricted due to the high increase

  • 3 -

in US mortgage interest rates, while hotel operations gradually improved, benefiting from sustained brand visibility.

  • II. Budget Execution: No financial projection for year 2024 by FRG is required according to the “Regulations Governing the Publication of Financial Forecasts of Public Companies.”

III. Analysis of Consolidated financial Income and Expenditure, and Profitability

Consolidated financial income and expenditure

Unit: NT$thousand
Year
Item
2023		 2022
Net cash inflow (outflow) from
operatingactivities		 682,692 (21,411)
Net cash inflow (outflow) from
investments		 (1,158,593) (394,776)
Net cash inflow (outflow) from
financingactivities		 (702,078) 187,130

Analysis Table of Consolidated Profitability

Year
Item		 2022

2023
Return on Asset(%) 3.85 5.35
Return on Equity (%) 4.28 5.98
Pre-Tax Income to Paid-In Capital(%) 19.51 24.61
Profit Margin(%) 38.16 36.74
EPS after tax NT$1.61 NT$2.09

IV. Research & Development (R&D)

  1. FRG has been investing in R&D and pursuing innovation based on the vision of

  2. “Beauty in Creation” committed 72 years ago. What we have achieved in 2023 are:

  3. (1) In 2023, the Company obtained five new "invention" patents in the Republic of China:

  4. [1] Protective clothing fabric and manufacturing method thereof [2][Waterproof and soundproof material and manufacturing method ] thereof

  5. [3] Rubber inflatable fabric and manufacturing method thereof [4] Rubber film surface printing structure and printing method thereof [5] Fuel tank leather manufacturing method

  6. (2) There are eight R.O.C. patent applications pending.

  7. 4 -

Two. Summary of 2024 Business Plan

I. 2024 Business Guideline:

  1. The three management policies for manufacturing industry are: “ Innovation, ” ,

  2. “ globalization ” and “ service. ”

  3. "Innovation": Make good use of the characteristics of raw materials and appropriately stack and combine existing equipment and process technologies to create new products that meet market requirements and increase corporate profits in real terms.

  4. "International": Actively cultivate international talents and establish a marketing system in major economic regions. Participate in international exhibitions to improve the Company's brand position and expand business.

  5. "Service": Provide high-quality and efficient services to customers through technical teams that work with enthusiasm, actively interact and respond quickly to meet customer needs.

  6. 5 -

  7. The warehouse space rented by the Nankan leasing unit has reached the park's capacity. We will continue to interact closely with customers this year, as well as provide construction services for hardware and software setups, thereby strengthening our relationships with the customers. With the Nankan Logistics Park reaching full capacity, the Company is committed to the Phase I development of Longtan Smart Park in 2024. This phase is planned as a green building warehouse, and we will apply for licenses as Logistics Center Warehouse 3 to serve technology vendors in Nankan and provide quality logistics services for manufacturers. The Company utilize integrated system processes and enhance service models to increase efficiency for customers and create value for manufacturers, thereby driving annual revenue and profit growth.

  8. Real estate development and individual projects:

  9. (1) The reserved apartments of “ Bridge Up to Zenith A+ ” and "Modesty Home" sold gradually via agents, stabilizing the selling rate at reasonable prices.

  10. (2) The development of Xindian “ Legend River ” is located near the MRT Circular Line and the Yangbei Replanning Area have made the market together, and with the market gradually recovered, the sales have been stable.

  11. (3) The "55Timeless" project in Taipei City will catch eye balls of premium customers based on superior architectural quality and technology as well as by unique model house built by well-known international architect. Seeking target customers with flexible operation of sales strategies.

  12. (4) For the sales of “ La Bella Vita ” in Taichung City, the project is featured with the marketing campaign this year, is the real model apartment designed by Antonio Citterio and a renowned cabinet brank.

  13. (5) The San Francisco residential and hotel development project has completed in the Q4, 2021. Residential sales were restricted due to the high increase in US mortgage interest rates, while hotel operations gradually improved, benefiting from sustained brand visibility.

  14. (6) The reconstruction plan for the unsafe and old building has been completed for the Kaohsiung Ambassador Hotel and is currently undergoing architectural design, environmental impact assessment and urban design review.

  15. 6 -

II. Expected Sales and Their Basis

  1. Years of statistics in Germany suggest that the total global demand for rubber and plastics remain growing slowing; the segments of life-saving, medication, and environment protection are outperforming the remaining ones; FRG is leading in the first two with better technology. Since 2023, major countries' cumulative effects of significant interest rate hikes, underperformance in the post-pandemic Chinese economy and subdued global economic demand have led to a slowdown in manufacturing activities worldwide. Additionally, global geopolitics is moving toward a bloc confrontation, the expansion of the US-China chip ban and conflicts in Ukraine and the Middle East have contributed to uncertainties in global economic development and social stability. Looking ahead to 2024, international forecast institutions anticipate a continued slowdown in the worldwide economy, with expectations of a gradual recovery in global commodity trade. The major economies, such as Europe, are expected to show signs of recovery and stable growth is anticipated in emerging markets and developing economies. Based on the above factors, FRG is targeting to outsell the 8,735 thousand yards of rubber, plastic and synthetic leather (2023) in 2024.

  2. Nankan warehouse logistics and property management: established more than two decades ago, the FRGILC has built up a logistic park covering some 1.3 million square meter and 6 buildings for the business of warehouse leasing business and logistic center; the tenants of the Park include electronic distributors, boutique, apparel and e-commerce and most of them are famous brands. In order to meet customers' requirements for building and cargo security, the Company undergoes annual fire safety inspections and diligently maintains the buildings. As a result, more than seventy percent of customers who have been in the park for over five years can maintain an occupancy rate of over ninety percent in the long term. Currently, the Company provides professional hardware and software installation services or construction needs for contract customers. We utilize system integration processes and service models to strengthen customer relationships and enhance efficiency. This year, the Company will expand its logistics leasing business to the Longtan Smart Park, improving operational performance and aiming to become a benchmark in the logistics leasing industry. Income of warehouse leasing and logistic service is expected to go up by 1%-2% in 2024 than 2023.

  3. The sales of the remaining reserved apartments: - The available completed

  4. 7 -

apartments of “55Timeless and “La Bella Vita” are gradually being sold. Pending units of projects World Garden, Modesty Home, Legend River: keep on marketing them.

  1. FRG Bridge Up to Zenith Business Plaza: The first and second floors (1,882 Ping combined) were 100% leased; FRG will keep on improving customer service and mall management to build up the image of leading commercial center in Xinban Special Economic Zone.

III. Important Production and Sales Policy:

  1. The three management policies for manufacturing industry are: “Innovation”, “international” and “service”.

  2. "Innovation:" Make good use of the characteristics of raw materials, and appropriately stack and combine existing equipment and process technologies to create new products that meet market requirements and increase corporate profits in real terms.

  3. "International:" Actively cultivate international talents and establish a marketing system in major economic regions. Participate in international exhibitions to improve the Company's brand position and expand business.

  4. "Service:" Provide high-quality and efficient services to customers through technical teams that work with enthusiasm, actively interact and respond quickly to meet customer needs.

  5. To cope with the geopolitics and US-China war of trading and technologies, Taiwan must remove its reliance on China's AI supply chain. Amidst the chip war, some companies are shifting their warehouses in Hong Kong to Taiwan and Southeast Asian countries. For the direction of merchant recruitment of the year along with the trend and due to reaching storage capacity limits at the Nankan Logistics Center, FRG will shift its focus to Longtan Smart Park in Taoyuan. New logistics warehouses will be constructed, obtaining licenses for green buildings and logistics centers. Completion and license acquisition are anticipated in the fourth quarter. These facilities will serve businesses in southern Taoyuan. The Company will establish a comprehensive logistics smart park, increase the proportion of value-added logistics services and boost revenue. In addition, the development of phases two to three of the park will be tailored to cater to different industries, providing exclusive services to meet the needs of incoming businesses. We will continue to collaborate with international clients, constantly

  6. 8 -

upgrading and optimizing peripheral facilities such as truck identification systems, charging stations and security surveillance equipment. This will effectively enhance the overall development intensity of the park, aiming to become a preferred choice for customers and a representative of high-quality industrial parks.

  1. Based on lands in Xinyi District acquired in 2012, FRG is joint venture with CDC for the 55Timeless project in 2016; KPC for the Legend River project in Xindian with KPC in 2012; acquire lands of the La Bella Vita project in Taichung in 2015 and sell its units in 2016; in December 2022, FRG acquired a share of the base land of the Kaohsiung Ambassador Hotel and now it is in progress of architectural design. Efforts invested in land development will improve FRG’s earnings and images significantly.

Three. The Company’s Future Development Strategy

I. Secondary Processing Industries:

  • A. By signing annual sales contracts with major customers - ensuring stable performance of 60% or more.

  • B. By improving quality - continue to establish OEM/ODM partnership with international major manufactures to ensure turnover.

  • C. By making good use of equipment - develop multi-colored and multispecification productions, ensuring customers’ brand loyalty.

  • D. By the continual technical partnership with European, American and Japanese plants - create new products and introduce them to new markets applications

  • E. By developing compound products and adding new production lines, with one stop shop service, fulfilling customers’ needs.

  • F. By investing with precision - principles of full production, order delivery and gradually adjust the inventory.

II. Nankan Warehouse Logistics and Rental and Leasing Business:

The leasing service industry in Nankan continues to actively develop new customers. Customers’ needs in service have evolved from leasing relationships to providing construction of professional software and hardware to customers, enabling sustainable long-term partnership with customers. In the future, technology will be adopted to manage integration processes and integration services pattern, allowing customers to experience improved efficiency. This year, through the connection between the logistics system and equipment to improve the operation pattern, optimize the work process, and secure the future talents. As the

  • 9 -

upstream and downstream manufacturers of semiconductor manufacturers successively locate their factories in Taiwan, FRG Longtan Park will be the next key growth driver of FRG. The construction of warehouses will be completed this year, and it will be applied for a logistics center upon the completion next year, to serve manufacturers around South Taoyuan. This year, the merchant recruitment business will be extended to Longtan Park, to provide customers with more choices of different locations and make FRG the representative of the best professional leasing and logistics integration services.

III. Real Estate Development

In a bid to continue the real estate development experience and creating the longterm stable profit for the Company, not only do we have our own real estate assets, we also focus on other suitable land or individual projects. In addition to resident buildings, development of commercial spaces of considerable size are also planned. Not only can commercial real estate developments acquire long-term stable rent income, they also covers fields of business plaza operation, real estate management and property management. Due to the need of long-term development, other than the existing development projects, the Company will actively look for projects meeting the Company's conditions.

Four. Effects by External Competitive, Regulatory and Overall Operating Environments

I. Secondary Processing Industries:

Looking back on 2023, it marked the first year of the world's official emergence from the COVID-19 pandemic. After three years of global public health crisis, there was anticipation for a robust post-pandemic economic recovery. However, economic performance faced challenges due to a series of hawkish interest rate hikes by the Federal Reserve, lingering inflation risks, uncertainties in the economic outlook of the United States and Mainland China, as well as ongoing geopolitical conflicts such as the Russia-Ukraine war and escalating tensions in the Middle East. These crises dampened the expected momentum of recovery. EU’s carbon border tariffs and related policies has been launched, making an unstoppable trend to address environmental issues through economic policies. How are the increased costs on the supply side reflected in the consumer market and what are the implications, are also the topic that cannot be ignored. The overall environment

  • 10 -

remains filled with numerous uncertainties. Only by continuing to monitoring the global political and economic situation, and making timely adjustments based the stage of the business cycle, it is possible to seize the opportunities when the economy recovers. Therefore, by continuously developing new products, improving quality and strictly controlling costs based on the market orientation, the sustainable development of the Company may be ensured

II. Nankan Warehouse Logistics and Rental and Leasing Business:

Geopolitical pressure is elevating, the United States' control over China continues only is increasing and the trend of "new globalization" has taken shape. Technology manufacturers have launched globalization positioning around the world to expand their global presence accommodate customer needs. Since some heavyweight foreign companies decided to set up logistics centers in Taiwan after evaluation, other companies will inevitably be driven to relocate their warehouses to Taiwan. To seize these opportunities, FRG will continue to construct tailored warehouses and initiate collaboration plans with property-related industries, effectively enhancing the overall development strength of the park and opening up opportunities for diversified cooperation.

III. Land Developments

The Company's construction products are all located in good locations, and the sales targets are mostly loyal customers who hold real estate for a long time. There are not many remaining reserved units, so the sales conditions and prices are very stable. In recent years, both domestic and international inflationary pressures, coupled with significant increases in land prices and construction costs, resulting in the stubborn prices of the domestic real estates. However, it seems the national policy is to suppress the real estate markets with laws and regulation as well as the housing policy, imposing more uncertainty and difficulty on land development project. The Company will continue to insist the strategy of finding land with high potential of value raising and reasonable profits in high-quality urban areas, and make investment cautiously to ensure the Company's profits.

This is my great honor to present the business performances 2023 and summary of plan 2024 to all of you; My greatest thanks to each of our shareholders; we will do our best and continue to contribute better business results in the future.

  • 11 -

I wish you

Best wishes and good health to you.

Chairperson: Hsu Zhen-Tsai President: Hsu Zhen-Ji

  • 12 -

Two. Company Profile

  • 13 -

Two. Company Profile

I. Company Profile:

  • (I) Date of establishment: January 22, 1963 (the predecessor of the Company was established in the 1952)

  • (II) Addresses and Telephones of the Head office, Branches and Plants:

  • Company address: 8th Floor, No. 82, Section 1, Hankou Street, Taipei Telephone: (02)23700988

  • Taoyuan plant: No. 1, Chaofeng Road, Sanhe Vil, Longtan District, Taoyuan Telephone: (03)4893456

  • Nankan International Logistics Center: 2F, No.53, Housheng Road, Luzhu District, Taoyuan

Telephone: (03)3216533

  • (III) Company History
1952 Established the Company, producingrecycled rubber.
1963 Technical cooperation with Radium Rubber of West Germany.
1976 Established theplasticplant from the technical cooperation with Maruyama Industrial.
1980 Production of plastic foam latex leather from the technical cooperation with Nankai Plastic.
Technical cooperation with GOODYEAR.
1981 Awarded with the “Gan Cheng Medal” for successfully developing military equipment
including floating bridges, water cabinets, scout boats, attack boats, life raft, life jackets, gas
proof clothingand aircraft fuel tanks.
1992 Officiallylisted on March 3.
1995 Established the PU Division for R&D and promotion of PU products. Established investment
committee to conduct diversified investments.
1996 Combined the plant and office to enhance customer services. Established the Construction
Department to effectivelydevelopthe land use values of Formosan.
1997 Launched the R&D building; established the precision lab to enhance the analysis of product
research and development.
1998 Established the CPU Division toproduce clear wet look PUproducts and PP syntheticpaper.
1999 Invested in Wanexe Securities which later merged with SinoPac Securities then Huaxin Bank
which has become the Sinopac Financial Holdings Company Established the Fenghe E-
Library.
2000 Established the IP project to proactively conduct the development of various patents, forming
a knowledge economy.
2001 Established the Silicone project to research and develop high-tech rubber products for the
new century.
2002 Became the biggest manufacturer for Taiwan TPU and laminating products.
  • 14 -
2003 Obtained the ISO9001 quality assurance; FRG International Logistics acquired the license of
the International Logistics Center.
Established a 100% holding subsidiary for the land development of the Banqiao Special
Project Six: Ban Chien Development Co.,Ltd.
2004 2. The installation of the 4-meter ultra-wide laminating machine and electronic-grade plastic
additive synthesizing machine was completed; entered the automotive interiors and
electronics market; received the third place in the 92nd "Excellent Trading Businesses".
In December, it issued the first unsecured convertible corporate bonds of NT$2.2 billion and
began tradingover-the-counter.
2005 Acquired ISO-14000 certification for environmental quality. The project of the land
development in Banqiao of 2005 was sent to the Urban Planning Committee for review and
began the development cooperation with China construction company.
2006 Signed the contract for the construction of land development project of Banqiao with the
China construction company. Established the logistics center in Longtan for chemical
products. The installation of the new steel belt drum vulcanization equipment and 2.4m ultra-
wide dust-free precision coating machine are completed. In order to meet the capital needs to
for the development of the Banqiao Special Project Six, a syndicated loan was signed with the
bank with a limit line of NT$3.1 billion.
2007 The first unsecured convertible corporate bonds of NT$2.2 billion has been fully converted,
and it was delisted on April 13. The pre-sale began in the end of January for the land
development project of “World Garden - Bridge Upto Zenith” in Banqiao; the construction
officiallystarted on March19. Launched the brand new Central Lab.
2008 Launched the brand new steel belt and tank rubber vulcanization plant that were the largest in
Asia.
Regarding the “Special Project one” land development project at Banqiao: entered joint
construction contract with CDC.
2009 The Company has passed the international quality certification of life rafts, biocompatibility,
and life jackets.
The Company cooperated with Qia-Chu Construction Company to develop the land at
Zhuangjing Section, Xindian City, Taipei County and a joint construction contract was
signed.
2010 The Company's new 10,Banbury mixer and plant were officially launched on June 17.
Ranked the second for the growth rate of Korea’s key export market in 2009.
The user’s license was acquired in December for the land development project of “World
Garden - Bridge Upto Zenith” in Banqiao.
The land development project of “Modesty Home” in Banqiao was approved by the urban
updateplanningof the New Taipei Government and the construction license was issued.
  • 15 -
2011 The new TPU polishing machine was put into production.
Fenghe Employee Sports & Health Center was completed.
60th Anniversary of Formosan Rubber Group Inc.
The apartments for the land development project of “World Garden - Bridge Upto Zenith” in
Banqiao were handed over to customers; helped the residents to set up the Community
Management Committee in September.
The pre-sale for the land development project of “Modesty Home” in Banqiao completed in
Februarywith a 100% sales rate;the construction started in March.
2012 The Company cooperated with the “Mainland Construction Company”, “Heng Bang
Construction Company and “Heng Ju Construction Company” for the development of third
Subsection of Xinyi Section,Xinyi District,Taipei;ajoint construction contract was signed.
2013 The second set of energy-saving and high-efficiency steam and heat medium boilers in
Taoyuan Plant was put into operation.
The power-saving and energy-saving conversion of the heavy-duty mixer in Taoyuan Plant
was completed.
The user’s license was acquired in December for the “ModestyHome”project in Banqiao.
2014 A construction license was acquired for the “development of third Subsection of Xinyi
Section, Xinyi District, Taipei (55Timeless)” and construction license was acquired in June
2014;thegroundbreakingceremonywas held in September in the sameyear(2014).
2015 The installation of the new steel belt drum vulcanization equipment was put into use in the
Taoyuan plant.
A construction license was acquired for the “development of Huiguo Section of Taichung (La
Bella Vita)” and a construction license was acquired in November 6, 2015; the
groundbreakingceremonywas held on March 4,2016.
2016 A regenerative thermal oxidizer (RTO) was added in December 2016, and testing was
completed in April 2017.
2017 In October 2017, the subsidiary “FRG US CORP.” in the US was registered; the businesses
are real estate investments, developments, and house and land leases/sales in the US.
An upright oven and sulfuration tank equipment were added in the Taoyuanplant.
2018 A regenerative thermal oxidizer (RTO) was added in 2018.
A xenon arc lamp weathering tester and an ozone resistance tester were added in the Taoyuan
lab.
To correspond to the government’s “National Vehicles Manufactured in Taiwan” policy, the
rubber floor mat of the Taoyuan Plant vigorous researched and developed and the test was
passed; orders of automobile floor mats were acquired by the “New Taipei City MRT Ankeng
Light Rail Transportation System”.
  • 16 -
The user’s license was acquired for the “55Timeless” project in December 2018; the transfer
ofpropertyrights and house deliverywere carried out in January2019.
2019 In 2019, two sets of gas heat medium boilers that met the requirements of the environmental
regulations were added in the Taoyuan plant.
A spectrophotometric testing machine for color matching was added in the lab in the Taoyuan
lab.
2020 The M07 coal-carbon steam boilers were altered to use biomass fuels, to complete the 2020
industrial low-carbon technology application subsidy program of the Industrial Development
Bureau, Ministry of Economic Affairs.
The “La Bella Vita” project was completed in January 2020. Delivery to customers of pre-
sale homes has been completed,and existinghome sales has been launched.
2021 Overhaul M06 & M07 steam boilers and M08 thermal kerosene boiler to use biomass fuel;
operation licenses acquired.
FRG purchase certain part of land of the Ambassador Hotel in Kaohsiung City, and entered a
joint development contract with CDC and the Ambassador Hotel Co.,Ltd.(AHC)
2022 Rubber sound insulation products, according to the measurement standard CNS15160-8
(2009) and the announcement standard CNS8465-2 (2007), have passed and acquired the test
report of sound insulation performance for floor impact.
FRG acquired a share of the base land of the Kaohsiung Ambassador Hotel and completed the
renovation plan for unsafe and old building.
The Company entered a construction contract for new buildings in Longtan Smart Park Zone
A with Ying-ChengConstruction Co.,Ltd.
2023 “Rubber Coasting 3-D Structured Textile” has obtained ISO 15372 certification from the
Bureau Veritas, with the certificate number 68532/A0 BV.
“Formosan Rubber Group’s Rubber Sound-proof Floor Sound Proofing System” has
obtained high-performance green building material (sound proofing) label certification from
the Ministry of the Interior, with the label number GBM0103120.
The new warehouse at Longtan Smart Park Zone A has begun, and it is expected to be
completed bythe thirdquarter of 2024,with the license obtained in the fourthquarter.
  • 17 -

Three. CORPORATE GOVERNANCE REPORT

I. Organizational System II. II.Background information of directors, president, Vice Presidents, assistant managerial officers, and the chief of various departments and branches III. Remuneration of Directors (Including Independent Directors), Supervisors, Presidents and Vice Presidents IV. Implementation of Corporate Governance V. Professional fees of the attesting CPAs VI. Change of CPA

VII. Any of the Company ’ s chairperson, president, or managerial officer in charge of finance or accounting held a position in the CPA ’ s firm or its affiliates in the most recent year

VIII. Changes in shareholding and shares pledged by directors, managerial officers and shareholders with 10% shareholdings or more in most recent year and as of the publication date of the annual report IX. Top 10 shareholders who are related parties, spouses, or within second-degree of kinship to each other X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee

  • 18 -

Three. CORPORATE GOVERNANCE REPORT

I. Organizational System Chart

==> picture [649 x 445] intentionally omitted <==

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

1. Organizational Structure
Shareholders
Board of Directors
Audit Committee
Remuneration
C i
Investment Decision-Making Committee
Audit Office Chairperson
Chief Operating Officer President Consultant
Assistant managerial officer
Assistant managerial officer
Production Division
Logistic Center Construction Management (Taoyuan Plant)
Department Development
Legal Finance Accounting General Economic Marketing Technical Production
Affairs Section Section Affairs Information Division Division Division
Office Section Section
----- End of picture text -----

  • 19 -

2. Operation of Main Departments/Divisions:

Department/Division Operation
Audit Committee In charge of inspecting the Company’s accounting
system, financial status, and procedures of financial
reports.
Review the operational procedures for the material
financial and business actions, such as acquisition or
disposal of assets, loaning of fund and making
endorsement/guarantee.
Appraise the internal auditors and their tasks, as well as
the internal control. Evaluate, inspect, and monitor the
existing or potential risks of the Company.
Inspect the legal compliance of the Company.
In accordance with Article 32 of the Corporate
Governance Best Practice Principles, review transactions
that require directors to recuse themselves from
exercising voting rights due to a conflict of interest,
particularly transactions involving interested parties,
asset acquisition or disposal, fund loans,
endorsement/guarantee and the establishment of
investment companies intended to make investments.
Remuneration
Committee		 Prescribe and periodically review the performance
review and remuneration policy, system, standards, and
structure for directors, supervisors and executive
officers, and evaluate and prescribe the remunerations of
directors,supervisors and executive officers.
Audit Office Comprehensive management of drafting and
implementing annual audit plans
Inspection and reviews of the internal control system
Inspection of the implementation of Board of Directors’
meeting agendas
Promotion of cooperate governance
Other inspection and reviews designated by the
competent authority
Legal Affairs Office Comprehensive management of contract reviews
Handling of litigation cases
Planningof legal support
Construction
Department		 Comprehensive management of the development and
constructions of real estates
Matters in relation to commission of construction, leases
and sales
Logistic Center Management of logistics and warehouses
Marketing Division Comprehensive management of sales services
Collection of market information
Development of domestic and overseas market
Customer service and execution of salesplans
Production Division Comprehensive management of matters in relation to
production, qualitycontrol,etc.
Technical Division Comprehensive management of matters in relation to
  • 20 -
R&D,design,etc.
Management
Development		 Comprehensive management of matters in relation to
company financial scheduling, capital management,
investment management, stock affairs, HR, accounting,
costs, general affairs, information, Board of Directors,
etc.
  • 21 -

II. Background information of directors, president, Vice Presidents, assistant managerial officers, and the chief of various departments and branches:

(I) Information of Directors

branches:
(I) Information of Directors		 branches:
(I) Information of Directors		 branches:
(I) Information of Directors		 branches:
(I) Information of Directors		 branches:
(I) Information of Directors		 branches:
(I) Information of Directors
Book closure:April 9,2024
Title
(Note 1)		 Nationalit
y or Place
of
Registrati
on
Name		 Gender
Age
(Note
2)		 Date
Elected		 Term
of
office		 Date of
first
election
(Note 3)		 Shareholding When
elected		 Current
Shareholding		 Shares Currently
Being Held by
Spouse and
Underage Children		 Shares Held by
Proxy		 Major
experiences
and
educations
(Note 4)		 Current Concurrent
Positions in the
Company and Other
Companies		 Other Managers, Directors or
Supervisors Who are Spouses
or within Second-Degree of
Kinshipto Each Other		 Remarks
(Note 5)
Number of
Shares		 Shareh
olding
Percen
tage		 Number of
Shares		 Shareh
olding
Percent
age		 Number of
Shares		 Shareh
olding
Percent
age		 Number
of Shares		 Shareh
olding
Percent
age		 Title Name Relatio
n
Chairpe
rson		 Republic
of China		 Hsu Zhen-
Tsai		 Male
60~70
years old		 2022.06.0
8		 3
years		 1981.11.
05		 3,389,588 0.99%
4,690,917
1.55%
3,362,170
1.11%
0
0%
Dropped out of
University of S
Francisco

Chief Executive
Officer of FRG
Formosan Rubber
Group Inc.,
Chairperson of Banjian
Development Co., Ltd.,
Chairperson of Hohe
Construction Co., Ltd.,
Chairperson of
Shanghai Ruifu
Property Development
Co.,Ltd.
Director and
President
Representati
ve of
juristic-
person
director		 Hsu
Zhen-Ji
Hsu
Zhen-
Xin		 Brother
Brother		 None
Director
and
Preside
nt
Republic
of China		 Hsu Zhen-Ji
Male
60~70
years old		 2022.06.0
8		 3
years		 1989.06.
12		 2,083,781 0.61%
3,130,466
1.03%
0
0%
0
0%
Department
of Chemical
Engineering,
Tamkang
University
International
Business,
National
Taiwan
University		 Chairperson of Ruifu
Development Co., Ltd.
CEO of FRG US CORP.
Chairperson
Representati
ve of
juristic-
person
director		 Hsu
Zhen-
Tsai
Hsu
Zhen-
Xin		 Brother
Brother		 None
Director Republic
of China		 Quanxinfen
g Co., Ltd.		 Not
applica
ble		 2022.06.0
8		 3
years		 2022.06.
08		 8,942,410 2.61%
8,049,069
2.65%
0
0%
0
0%		 None None None None None None
Juristic-
person
represe
ntative
of
director		 Republic
of China		 Representat
ive of
Quanxinfen
g Co., Ltd.
Hsu Zhen-
Xin		 Male
60~70
years old		 2022.06.0
8		 3
years		 1989.06.
12		 0 0.00%
2,529,820
0.83%
0
0%
0
0%
School of
Law, Fu Jen
Catholic
University		 Chairperson of Ruifu
Investment Co., Ltd.,
Hallmark Int'l Co.,
Ltd., Quanxinfeng Co.,
Ltd.
CFO of FRG US CORP.		 Chairperson
Director and
President		 Hsu
Zhen-
Tsai
Hsu
Zhen-Ji		 Brother
Brother		 None
Director Republic
of China		 Ruifu
Constructio
n Co.,Ltd.		 Not
applica
ble		 2022.06.0
8		 3
years		 2016.06.
07		 34,070,754 9.95% 30,663,678 10.10%
0
0%
0
0%		 None None None None None None
  • 22 -
Title
(Note 1)		 Nationalit
y or Place
of
Registrati
on
Name		 Gender
Age
(Note
2)		 Date
Elected		 Term
of
office		 Date of
first
election
(Note 3)		 Shareholding When
elected		 Shareholding When
elected		 Current
Shareholding		 Current
Shareholding		 Shares Currently
Being Held by
Spouse and
Underage Children		 Shares Currently
Being Held by
Spouse and
Underage Children		 Shares Held by
Proxy		 Shares Held by
Proxy		 Major
experiences
and
educations
(Note 4)		 Current Concurrent
Positions in the
Company and Other
Companies		 Other Managers, Directors or
Supervisors Who are Spouses
or within Second-Degree of
Kinshipto Each Other		 Other Managers, Directors or
Supervisors Who are Spouses
or within Second-Degree of
Kinshipto Each Other		 Other Managers, Directors or
Supervisors Who are Spouses
or within Second-Degree of
Kinshipto Each Other		 Remarks
(Note 5)
Number of
Shares		 Shareh
olding
Percen
tage		 Number of
Shares		 Shareh
olding
Percent
age		 Number of
Shares		 Shareh
olding
Percent
age		 Number
of Shares		 Shareh
olding
Percent
age		 Title Name Relatio
n
Juristic-
person
represe
ntative
of
director		 Republic
of China		 Representat
ive of Ruifu
Constructio
n Co., Ltd.:
Hsu Wei-
Zhi		 Male
60~70
years old		 2022.06.0
8		 3
years		 2007.06.
15		 0 0.00%
4,137
0.00%
58,320
0.02%
0
0%
Master,
Architecture
in Urban
Design,
Harvard
University,
USA
Master,
Architecture,
University of
California,
Berkeley
Adjunct
Lecturer,
Department
of
Architecture
Institute,
Tamkang
University		 Architect, Hsu Wei-Zhi
Law Firm
Adjunct Lecturer,
Department of
Architecture Institute,
Tamkang University
None		 None None None
Director Republic
of China		 Hohe
Constructio
n Co.,Ltd.		 Not
applica
ble		 2022.06.0
8		 3
years		 2016.06.
07		 14,632,726 4.27% 15,774,553
5.20%
0
0%
0
0%		 None None None None None None
Juristic-
person
represe
ntative
of
director		 Republic
of China		 Representat
ive of Hohe
Constructio
n Co., Ltd.:
Lin Kun-
Rong		 Male
70~80
years old		 2022.06.0
8		 3
years		 2007.06.
15		 0 0.00%
21,870
0.01%
0
0%
0
0%
Master of
Business
Administratio
n, NTPU
Chairperson
of Yingcheng
Construction
Co.,Ltd.		 Chairperson of
Yingcheng
Construction Co., Ltd.		 None None None None
Director Republic
of China		 Ascend
Gear
Internationa
l Inc.		 Not
applica
ble		 2022.06.0
8		 3
years		 2022.06.
08		 17,415,047 5.09% 15,931,342
5.25%
0
0%
0
0%		 None None None None None None
Juristic-
person
represe
ntative
of
director		 Republic
of China		 Representat
ive of
Ascend
Gear
Internationa
l Inc.: Chu,
Lung-Tsung
Male
60~70
years old		 2022.06.0
8		 3
years		 2022.06.
08		 0 0.00%
0
0.00%
0
0%
0
0%
EMBA,
National
Chengchi
University
President,
Wan-Sheng
Securities
President,
Chien-Hung
Futures
Director,		 None None None None None
  • 23 -
Title
(Note 1)		 Nationalit
y or Place
of
Registrati
on
Name		 Gender
Age
(Note
2)		 Date
Elected		 Term
of
office		 Date of
first
election
(Note 3)		 Shareholding When
elected		 Shareholding When
elected		 Current
Shareholding		 Current
Shareholding		 Shares Currently
Being Held by
Spouse and
Underage Children		 Shares Currently
Being Held by
Spouse and
Underage Children		 Shares Held by
Proxy		 Shares Held by
Proxy		 Major
experiences
and
educations
(Note 4)		 Current Concurrent
Positions in the
Company and Other
Companies		 Other Managers, Directors or
Supervisors Who are Spouses
or within Second-Degree of
Kinshipto Each Other		 Other Managers, Directors or
Supervisors Who are Spouses
or within Second-Degree of
Kinshipto Each Other		 Other Managers, Directors or
Supervisors Who are Spouses
or within Second-Degree of
Kinshipto Each Other		 Remarks
(Note 5)
Number of
Shares		 Shareh
olding
Percen
tage		 Number of
Shares		 Shareh
olding
Percent
age		 Number of
Shares		 Shareh
olding
Percent
age		 Number
of Shares		 Shareh
olding
Percent
age		 Title Name Relatio
n
Taiwan
Securities
Association
Indepen
dent
director		 Republic
of China		 Xiao
Sheng-Xian
(Date of
resignation:
July 1, 2023)		 Male
60~70
years old		 2022.06.0
8		 3
years		 2016.06.
07		 0 0.00%
0
0.00%
Not
applicable

0.00%
Not
applicable

0.00%
Doctor,
Laws,
University of
International
Business and
Economics
Master,
Laws,
Soochow
University
Bachelor,
Commerce,
National
Taiwan
University		 Director, Jianhe
Accounting Firm
Senior Advisor,
Myriad Attorney at
Law
Member of Mediation
Committee, Civil
Division, Taipei
District Court
Independent director,
APEX Science &
Engineering Corp.		 None None None None
Indepen
dent
director		 Republic
of China		 Wu Chun-
Lai		 Male
60~70
years old		 2022.06.0
8		 3
years		 2019.06.
05		 0 0.00%
0
0.00%
0
0%		 0 0% Doctor,
Management
, Shanghai
Jiao Tong
University
Master,
Department
of Public
Administrati
on, National
Chengchi
University		 General Consultant,
Jet-Go Consulting
Group
Executive Director,
Active Aging
Association Taiwan		 None None None None
Indepen
dent
director		 Republic
of China		 Lorraine
Yao		 Female
40 - 50
years old		 2022.06.0
8		 3
years		 2022.06.
08		 5,000 0.00%
4,500
0.00%
0
0%		 0 0% Bachelor,
Chaoyang
University of
Technology		 Partner CPA of
ShineWing
International		 None None None None

Note 1: If a juristic-person shareholder, please list its name and the representative's name (if the representative of a juristic-person shareholder, please indicate the name of the juristic-person shareholder) and fill in Table 1 below. Note 2: List the chronological age expressed in intervals, such as 41~50 or 51~60 years old.

  • Note 3: Fill in the date elected for the first time (either director or supervisor); give more details in case you have been re-elected one or more times afterwards.

  • Note 4: Regarding experiences related with current position, e.g. work with the attesting CPA firm or its associates in the said period, note down titles and functions then. Note 5: Regarding the chairman and the general manager or the person with the equivalent position (the top managerial officer) being the same person, spouse or a blood relative within the first degree of kinship: explain the reasons, rationality, necessity and countermeasures (e.g. add more independent directors and more than half of the directors are not concurrently employees or managerial officers): no such situation.

  • 24 -

Table 1: Major shareholders of juristic-person shareholders:

Closing of transfers: April 9, 2024
Name of juristic-person
shareholder (Note 1)
Major shareholders of the juristic-person shareholder (Note 2)
Ruifu Construction Co., Ltd. Hsu Zhen-Tsai (81.99%) Ascend Gear International Inc. (18%)
Hohe Construction Co., Ltd. Formosan Rubber Group Inc.(26.2%) Hsu Zhen-Tsai (22.41%) Ruifu Construction
Co., Ltd. (18.99%) Ascend Gear International Inc. (10.15%) Kuancheng
International Inc. (3.67%) Chengxi Investment Co., Ltd. (3.51%) Hsu Zhen-Ji
(3.11%) Hsu Mei-Ling (2.68%)Hsu Mei-Zhi (2.43%) Hsu Zhen-Qun (1.89%)
Quanxinfeng Co., Ltd. Hsu Zhen-Xin (41%); Li Yue Ling (41%); Hallmark Int'l Co., Ltd. (18%)
Ascend Gear International Inc. Hsu Zhen-Tsai (64%) Chen Hui-Jin (36%)

Note 1: If the Director is the representative of a juristic-person shareholder, please fill in the name of the juristic-person shareholder.

Note 2: Please fill in the name of the major shareholder of the juristic-person shareholder (top 10 in shareholding) and the shareholding ratio. If the major shareholder is a juristic-person shareholder, please also fill in Table 2.

Table 2: Major shareholders of the major shareholders in Table 1 who are juristic-person shareholders

shareholders
Juristic person
(Note 1)		 Major shareholders of the juristic-person shareholder(Note 2)
Formosan Rubber Group
Inc.		 Ruifu Construction Co., Ltd. (10.10%), Ascend Gear International Inc. (5.25%), Hohe
Construction Co., Ltd.(5.20%),Chengxi Investment Co., Ltd. (4.99%), Hsu Mei-Lun
(2.84%), Quanxinfeng Co., Ltd.(2.65%), Ren-Yu Investment Limited(1.81%), Hsu Zhen-
Tsai(1.55%),Hsu Zhen-Qun(1.14%),and Chen Hui-Jin(1.11%).
Ruifu Construction Co.,
Ltd.		 Hsu Zhen-Tsai (81.99%) Ascend Gear International Inc. (18%)
Chengxi Investment Co.,
Ltd.		 Hsu Zhen-Ji (99.5%), Yang Xunwen (0.2%), Xu Ruyi (0.15%), Xu Chengxi (0.15%)
Kuancheng International
Inc.		 Xu Zhengtai (88.257%), Xu Linqingrong (11.728%), Lin Qinghua (0.007%), Lin Cai Suai
(0.007%)
Ascend Gear
International Inc.		 Hsu Zhen-Tsai (64%) Chen Hui-Jin (36%)
Hallmark Int'l Co., Ltd. Hsu Zhen-Xin (84.12%), Li Yueling (12.53%), Xu Qiwen (1.67%), Xu Xiumin (1.68%)

Note 1: If the major shareholder in Table 1 is a juristic-person shareholder, please fill in their name.

Note 2: Please fill in the name of the juristic-person shareholder’s major shareholder (top 10 in shareholding) and the shareholding ratio.

  • 25 -

Information of Directors (II)

I. Professional qualifications of directors and the independence of independent directors:

April 9,2024
Conditions
Name
Professional qualifications and
experience (Note 1)		 Independence (Note 2) Number of Other
Public Companies in
Which the Individual
is Concurrently
Serving as an
Independent Director
Chairperson
Hsu Zhen-Tsai		  Chairman, FRG (now)
 Chairman of Hohe Construction
Co., Ltd., Banjian Development
Co., Ltd., and Shanghai Ruifu
Business Development Co., Ltd.
(in the past)
 Not under any circumstances set
in Article 30 of the CompanyAct		 Not applicable 0
Director
Hsu Zhen-Ji		  Director and general manager,
FRG (now)
 Ruifu Development Co., Ltd. (in
the past)
 Not under any circumstances set
in Article 30 of the CompanyAct		 Not applicable 0
Representative of
Quanxinfeng Co., Ltd.
Hsu Zhen-Xin		  Juristic-person director, FRG
(now)
 Chairman, Hallmark Int'l Co., Ltd.
and Ruifu Investment Co., Ltd. (in
the past)
 Not under any circumstances set
in Article 30 of the CompanyAct

Not applicable		 0
Representative, Ruifu
Construction Co., Ltd.
Hsu Wei-Zhi		  Juristic-person director, FRG
(now)
 Architect, Xu Weizhi Architect
Associate
 Adjunct lecturer, Department of
Architecture, Tamkang University.
 Not under any circumstances set
in Article 30 of the CompanyAct
Not applicable		 0
Representative, Hohe
Construction Co., Ltd.,
Lin Kun-Rong		  Juristic-person director, FRG
(now)
 Chairman, Yingcheng
Construction Co., Ltd. (in the
past)
 Not under any circumstances set
in Article 30 of the CompanyAct		 Not applicable 0
Representative of Ascend
Gear International Inc.
Chu, Lung-Tsung		  Juristic-person director, FRG
(now)
 Not under any circumstances set
in Article 30 of the CompanyAct		 Not applicable 0
  • 26 -
Independent director
Xiao Sheng-Xian
(Note 3)		  Independent director, FRG (now)
 Partner, Jianhe United Accounting
Firm
 Senior consultant, Myriad
Attorneys at Law
 Mediation committee member of
the Civil Division, Taipei District
Court and mediation committee
member of the Civil Division,
Shilin District Court.
 Independent director, Apex
Science & Engineering Corp.
 Not under any circumstances set
in Article 30 of the Company Act		 Independence compliance
1. Not a spouse, relative within
the second degree of kinship or
lineal relative within the third
degree of kinship of a managerial
officer under sub-paragraph 1 or
any of the persons listed in sub-
paragraphs 2 and 3, Article 3 of
the “Regulations Governing
Appointment of Independent
Directors and Compliance Matters
for Public Companies.”
2. The company's shares are not
held by the individual, his or her
spouse, or a relative within the
second degree of kinship (or in the
name of another).
3. Not serving as a director,
supervisor or employee of a
company with a specific
relationship to this company.
4. The individual did not receive
compensation for providing
commercial, legal, financial, and
accounting services to the
company or its affiliated
companies in the last twoyears.

1
Independent director
Wu Chun-Lai		  Independent director, FRG (now)
 General Counsel, Jet-Go
Consulting Group.
 Executive Director, Active Aging
Association Taiwan (now)
 Manager and spokesman of the
chairman's office, Farglory Group
(in the past).
 He used to be the Executive Vice
President of Heding Technology
(in the past).
 Deputy General Manager, Hung
Kuo Real Estate Development
Corp. (in the past).
 Chair Professor, National
Academy of Civil Service (in the
past).
 Not under any circumstances set
in Article 30 of the Company Act		 Independence compliance
1. Not a spouse, relative within
the second degree of kinship or
lineal relative within the third
degree of kinship of a managerial
officer under sub-paragraph 1 or
any of the persons listed in sub-
paragraphs 2 and 3, Article 3 of
the “Regulations Governing
Appointment of Independent
Directors and Compliance Matters
for Public Companies.”
2. The company's shares are not
held by the individual, his or her
spouse, or a relative within the
second degree of kinship (or in the
name of another).
3. Not serving as a director,
supervisor or employee of a
company with a specific
relationship to this company.
4. The individual did not receive
compensation for providing
commercial, legal, financial, and
accounting services to the
company or its affiliated
companies in the last twoyears.

0
  • 27 -
Independent director
Lorraine Yao		  Independent director, FRG (now)
 Partner CPA of ShineWing
International
 Former Audit Manager of KPMG
Taiwan
 Not under any circumstances set
in Article 30 of the Company Act		 Independence compliance
1. Not a spouse, relative within
the second degree of kinship or
lineal relative within the third
degree of kinship of a managerial
officer under sub-paragraph 1 or
any of the persons listed in sub-
paragraphs 2 and 3, Article 3 of
the “Regulations Governing
Appointment of Independent
Directors and Compliance Matters
for Public Companies.”
2. The individual only holds 4,500
shares and the company’s shares
are not held by his/her spouse or a
relative within the second degree
(or in the name of another).
3. Not serving as a director,
supervisor or employee of a
company with a specific
relationship to this company.
4. ShineWing Taiwan, the
accounting firm to which the
aforementioned individuals
belong, has received no more than
NT$500,000 in cumulative
remuneration in the last twoyears.


0

  • II. Diversity and independence of the board of directors

  • (I) Diversity of the board of directors

  • In accordance with Paragraph 4, Article 20 of Corporate Governance Best Practice Principles for TWSE/TPEx-Listed Companies, in order to achieve the ideal corporate governance objectives, the board of directors' overall competencies should include the following:

    • (1) Operational judgement competency

    • (2) Accounting and financial analysis competency

    • (3) Business management competency

    • (4) Risk management competency

    • (5) Industrial knowledge

    • (6) International market perspective

    • (7) Leadership competency

    • (8) Decision-making competency

  • In order to ensure the board of directors achieve the aforementioned objective of strengthening effectiveness, the company has established the policy of diversifying the board of directors. In accordance with Paragraph 3, Article 20 of the Corporate Governance Best-Practice Principles for TWSE/TPEx- Listed Companies, the board makeup should take into account diversification. In addition to the ratio of board members concurrently serving as managerial officers not exceeding one third of the total number of director seats,

    • (1) Basic conditions and values: gender, age, nationality and culture.

    • (2) Professional knowledge and skills: professional background (including law, accounting, industry, finance, marketing or technology), professional skills and industry experience.

  • The Board of Directors has eight directors (including two independent directors with one of them being female); with their professional areas covering financial

  • 28 -

accounting, law, public relations, chemical engineering). Two of the board members concurrently serve as employees; one of the two independent directors has served for about 3.5 years, one has served for 1 year and one has served for nearly one year. All directors are of Taiwan nationality. The diversity goal stipulated in the Corporate Governance Best Practice Principles is met. The implementation is as follows:

Name of
director		 Age Gender Professional
background		 Abilitiespossessed Abilitiespossessed Abilitiespossessed Abilitiespossessed Abilitiespossessed

Operation and
management
capabilities
Business
judgment
capabilities		 Finance and
accounting
analysis
capabilities
Crisis
management
capabilities		 Industry
knowledge		 Industryexperience Internat
ional
market
perspec
tive		 Leadersh
ip and
decision-
making
capabiliti
es

Rubber
and
plastic		 Construct
ion and
building		 Finance
and
investme
nt
Hsu Zhen-
Tsai		 60 - 69
years old		 Male Managemen
t,
construction
,building		 V V V V V V V ※ V V
Hsu Zhen-
Ji		 60 - 69
years old		 Male Managemen
t and
chemical
engineering		 V V V V V V ※ ※ V V
Hsu Zhen-
Xin		 60 - 69
years old		 Male Managemen
t and law		 V V V V V V V ※ V V
Hsu Wei-
Zhi		 60 - 69
years old		 Male Constructio
n and
design		 V V V V V ※ V ※ V V
Lin Kun-
Rong		 70 - 75
years old		 Male Managemen
t,
construction
,building		 V V V V V ※ V ※ V V
Chu,
Lung-
Tsung		 60 - 69
years old		 Male Finance V V V V V ※ ※ V V V
Xiao
Sheng-
Xian		 60 - 69
years old		 Male Accounting,
law
V		 V V V V ※ ※ V V V
Wu Chun-
Lai		 60 - 69
years old		 Male Public
relation,
construction
,building		 V V V V V ※ V ※ V V
Lorraine
Yao		 40 - 50
years old		 Female Finance,
accounting		 V V V V V ※ ※ V V V

※ Refers to experiences in other industries

  1. The company’s diverse management objectives

The board of directors should demonstrate industry experience in at least one of the company's main business items (such as rubber, plastic, construction, financial investment and logistics). In particular, there are more than two directors with experience in more than two of the company’s business items.

  1. The implementation status of the company’s diverse management: All the company's board of directors has met the management objectives.

  2. (II) Independence of the board of directors: note number and proportion of independent directors, independence of the board, circumstances set in Article 26-3, paragraph 3 and 4 of the Securities and Exchange Act (detailing spouse or a blood relative within 。

  3. the second degree of kinship among directors, and supervisors)

  4. The company’s board of directors at present is made up of three independent directors and six directors. The ratio of independent directors is 33%.

  5. The matters specified in Paragraphs 3 and 4 of Article 26-3 of the Securities and Exchange Act do not apply to company directors or independent directors.

  6. The following circumstances described do not apply to the independent directors two years prior to their term in office.

  7. 29 -

  8. (1) An employee of the company or any of its affiliates.

  9. (2) A director or supervisor of the company or any of its affiliates.

  10. (3) A natural-person shareholder who holds shares, together with those held by the person's spouse, minor children or held by the person under others' names, in an aggregate of 1% or more of the total number of issued shares of the company or ranking in the top 10 in holdings.

  11. (4) A spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under sub-paragraph 1 or any of the persons in the preceding two sub-paragraphs.

  12. (5) A director, supervisor or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act.

  13. (6) If a majority of the company's director seats or voting shares and those of any other company are controlled by the same person: a director, supervisor or employee of that other company.

  14. (7) If the chairperson, general manager or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses: a director (or governor), supervisor (inspector), or employee of that other company or institution.

  15. (8) A director (governor), supervisor (inspector), managerial officer, or shareholder holding 5% or more of the shares, of a specified company or institution that has a financial or business relationship with the company.

  16. (9) A professional individual who or an owner, partner, director (governor), supervisor (inspector) or managerial officer and spouse of a sole proprietorship, partnership, company or institution that, provides auditing services to the company or any affiliate of the company or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative remuneration exceeding NT$500,000 or a spouse thereof. provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

  17. Note 1: Professional qualifications and experience: note professional qualifications and experience of individual directors and supervisors; those being member of the audit committee and have accounting or financial expertise, note their accounting or financial background and work experience; note there is no circumstances set in Article 30 of the Company Act in existence.

  18. Note 2: Independent directors shall note their compliance with independence, including but not limited to: circumstance of he/she and his/her spouse, or relatives within the second degree of kinship being directors, supervisors or employees of FRG or its affiliated companies; shares and portion of shares hold by he/she and his/her spouse, or relatives (or in name of others); being directors, supervisors, or employees of companies having specific relationship with FRG (see Article 3, paragraph 1, subparagraph 5 ~ 8 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies Establishment of Independent Directors and Matters to be Complied with in Public Offering Companies); the amount of remuneration received for providing business, legal, financial, accounting and other services to FRG or its affiliates in the last two years.

  19. Note 3: Mr. Xiao Sheng-Xian resigned from his position as independent director on June 30, 2023, effective July 1 the same year.

  20. 30 -

(II) Information on Presidents, Vice Presidents, Assistant Managers, and the chief of various departments and branches:

Book closure: April 9,2024 Book closure: April 9,2024 Book closure: April 9,2024 Book closure: April 9,2024
Title National
ity		 Name Gende
r		 Date
Elected		 Shareholding Shares Held by
Spouse and
Underage
Children		 Shares Held by
Proxy		 Main Career (Academic)
Achievements		 Current
Concurrent
Positions in Other
Companies		 Managerial Officers Who
are Spouses or Within
Second-Degree of Kinship
to Each Other		 Remarks
(Note 1)
Number of
Shares
Sharehol
ding
Percenta
ge		 Number
of
Shares		 Sharehol
ding
Percenta
ge		 Number of
Shares
Shareho
lding
Percent
age		 Title Name Relation
President Republic
of
China
Hsu
Zhen-Ji		 Male 2022.06.0
8		 3,130,466
1.03%		 0 0% 0 0% Department of Chemical
Engineering, Tamkang
University
International Business,
National Taiwan University
President of Formosan Rubber
GroupInc.
Chairperson of
Ruifu
Development Co.,
Ltd.
CEO of FRG US
CORP.		 Director
and
Special
Assistant		 Hsu
Zhen-
Xin		 Brother None
Director
and
Special
Assistant		 Republic
of
China
Hsu
Zhen-
Xin		 Male 2014.07.0
4		 2,529,820
0.83%		 0 0% 0 0% School of Law, Fu Jen
Catholic University
Chairperson of Hallmark Int'l
Co., Ltd.
Chairperson of Quanxinfeng
Co., Ltd.		 Chairperson of
Ruifu Investment
Co., Ltd.,
Hallmark Int'l Co.,
Ltd., Quanxinfeng
Co., Ltd.
CFO of FRG US
CORP.
President
Hsu
Zhen-Ji		 Brother None
Assistant
managerial
officer		 Republic
of
China
Hsiao
Zheng-
Zhong		 Male 1998.01.0
1		 9,376
0.00%		 0 0% 0 0% Lunghwa University of
Science and Technology
Manager of Production
Development of Formosan
Rubber GroupInc.		 Supervisor of
Banjian
Development Co.,
Ltd.		 None None None None
Assistant
managerial
officer		 Republic
of
China
Huang
Hui
Xian		 Femal
e		 2010.03.0
1		 1,458
0.00%		 0 0% 0 0% Vanung University
EMBA National Tsing Hua
University
Manager of the Warehouse
Department Formosan Rubber
GroupInc.		 None None None None None
Supervisor
of
Manageme
nt and
Constructi
on
Departmen
t		 Republic
of
China
Cheng
Sheng
Yuan		 Male 2022.07.0
1		 0 0.00% 0 0% 0 0% Master, Institute of Political
Science, National Chengchi
University
Assistant Vice President,
Construction Department;
Formosan Rubber Group		 Chief financial
officer and
secretary of FRG
US
CORP.,Supervisor
of Department of
Management,
Banjian
Development Co.,
None		 None None None
  • 31 -
Ltd., and Ruifu
Development Co.,
Ltd.
Chief
financial
officer		 Republic
of
China
Bao Shi-
Rong		 Male 2022.07.0
1		 0 0.00% 0 0% 0 0% Department of Accounting,
National Taipei University
Assistant Vice President of
Finance, Formosan Rubber
Group


Chief financial
officer and chief
accounting officer
of Banjian
Development Co.,
Ltd. and Ruifu
Development Co.,
Ltd.		 None None None None
Head of
Accountin
g and Head
of
Corporate
Governanc
e
Republic
of
China
Shi
Ming-
De		 Male 2010.02.0
1		 298 0.00% 0 0 0 0% National Taipei University
Chief of KPMG Taiwan		 Chief accounting
officer of FRG US
CORP.		 None None None None
Internal
Audit
Officer		 Republic
of
China
Ou,
Chia-
Bao		 Male 2021.01.0
1		 3,130,466
1.03%		 0 0% 0 0% Aletheia University
Deputy Manager, Taipei
Branch, Citibank		 Ban Chien
Development Co.,
Ltd.
Internal Audit
Officer		 None None None None

Note 1: Regarding the general manager or the person with the equivalent position (the top managerial officer) being the same person, spouse or a blood relative within the first degree of kinship: explain the reasons, rationality, necessity and countermeasures (e.g. add more independent directors and more than half of the directors are not concurrently employees or managerial officers): no such situation.

  • 32 -

III. Remuneration packages for directors (including independent directors), general manager and deputy general managerial officers.

(1-1) Remuneration of directors (including independent directors) (name and payment method of individual directors) Unit: NT$

Title Name Remunera tion to Directors tion to Directors tion to Directors tion to Directors The sum of items
A, B, C and D and
percentage to the
net income after
tax(Note 10)		 The sum of items
A, B, C and D and
percentage to the
net income after
tax(Note 10)		 Remunerat Remunerat Remunerat ion as Companyemployee ion as Companyemployee ion as Companyemployee ion as Companyemployee ion as Companyemployee The sum of items A,
B, C, D, E, F and G
and percentage to the
net income after tax
(Note 10)		 The sum of items A,
B, C, D, E, F and G
and percentage to the
net income after tax
(Note 10)		 Remunera
tion from
investees
other than
subsidiari
es
(Note 11)
Remuneration (A)
(Note 2)		 Pens ion (B) Directors’
remuneration
(C) (Note 3)		 Fees for services
rendered (D)
(Note 4)		 Salaries, bonuses,
special allowances,
etc. (E) (Note 5)		 Pensi on (F) Employee remuneration(G)
(Note 6)
The
Company		 All
companies
included in
the
financial
reports
(Note 7)		 The
Comp
any		 All
compani
es
included
in the
financial
reports
(Note 7)		 The
Company		 All
companies
included in
the
financial
reports
(Note 7)		 The
Company		 All
companies
included
in the
financial
reports
(Note 7)		 The
Compan
y		 All
compani
es
included
in the
financial
reports
(Note 7)

The
Company		 All
companies
included
in the
financial
reports
(Note 7)		 The
Compan
y		 All
compani
es
included
in the
financial
reports
(Note 7)		 The Company All companies
included in the
financial reports
(Note 7)		 The
Company
All
companies
included in
the
financial
reports
(Note 7)

Cash
amount		 Stock
amount		 Cash
amount		 Stock
amount
Chairper
son		 Hsu Zhen-Tsai 11,631,900 11,631,900
0
0
1,543,144
1,543,144
96,000
96,000
13,271,044
2.56%
13,271,044
2.56%
0
0
0
0
0
0
0
0
13,271,044
2.56%

13,271,044
2.56%

0
Director
and
President
Hsu Zhen-Ji		 675,000
675,000
0
0
925,887
925,887
96,000
96,000		 1,696,887
0.33%
1,696,887
0.33%		 6,654,128 6,654,128
0
0		 300,000
0		 300,000
0
8,651,015
1.67%

8,651,015
1.67%

0
Director
and
Special
Assistant		 Quan Xin-Feng
Limited		 0
0
0
0
925,887
925,887
0
0
925,887
0.18%

925,887
0.18%

0
0
0
0
0
0
0
0
925,887
0.18%

925,887
0.18%

0

Juristic-person
representative:
Hsu Zhen-Xin		 675,000
675,000
0
0
0
0
96,000
96,000
771,000
0.15%

771,000
0.15%
6,543,841		 6,543,841
0
0		 300,000
0		 300,000
0
7,614,841
1.47%

7,614,841
1.47%

0
Director Ruifu
Construction
Co., Ltd.		 0
0
0
0
617,257
617,257
0
0
617,257
0.12%

617,257
0.12%

0
0
0
0
0
0
0
0
617,257
0.12%

617,257
0.12%

0
Juristic-person
representative:
Hsu Wei-Zhi		 675,000
675,000
0
0
0
0
96,000
96,000
771,000
0.15%

771,000
0.15%

0
0
0
0
0
0
0
0
771,000
0.15%

771,000
0.15%

0
  • 33 -
Title Name Remuneration to Directors Remuneration to Directors Remuneration to Directors Remuneration to Directors Remuneration to Directors Remuneration to Directors Remuneration to Directors Remuneration to Directors The sum of items
A, B, C and D and
percentage to the
net income after
tax(Note 10)		 The sum of items
A, B, C and D and
percentage to the
net income after
tax(Note 10)		 Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee The sum of items A,
B, C, D, E, F and G
and percentage to the
net income after tax
(Note 10)		 The sum of items A,
B, C, D, E, F and G
and percentage to the
net income after tax
(Note 10)		 Remunera
tion from
investees
other than
subsidiari
es
(Note 11)
Remuneration (A)
(Note 2)		 Pension (B) Directors’
remuneration
(C) (Note 3)		 Fees for services
rendered (D)
(Note 4)		 Salaries, bonuses,
special allowances,
etc. (E) (Note 5)		 Pension (F) Employee remuneration(G)
(Note 6)
The
Company		 All
companies
included in
the
financial
reports
(Note 7)		 The
Comp
any		 All
compani
es
included
in the
financial
reports
(Note 7)		 The
Company		 All
companies
included in
the
financial
reports
(Note 7)		 The
Company		 All
companies
included
in the
financial
reports
(Note 7)		 The
Compan
y		 All
compani
es
included
in the
financial
reports
(Note 7)
The
Company		 All
companies
included
in the
financial
reports
(Note 7)		 The
Compan
y		 All
compani
es
included
in the
financial
reports
(Note 7)		 The Company All companies
included in the
financial reports
(Note 7)		 The
Company		 All
companies
included in
the
financial
reports
(Note 7)

Cash
amount		 Stock
amount		 Cash
amount		 Stock
amount
Director Hohe
Construction
Co., Ltd.		 0
0
0
0
617,257
617,257
0
0
617,257
0.12%

617,257
0.12%

0
0
0
0
0
0
0
0
617,257
0.12%

617,257
0.12%

0
Juristic-person
representative:
Lin Kun-Rong		 675,000
675,000
0
0
0
0
96,000
96,000
771,000
0.15%

771,000
0.15%

0
0
0
0
0
0
0
0
771,000
0.15%

771,000
0.15%

0
Director Ascend Gear
International
Inc. Limited		 0
0
0
0
617,257
617,257
0
0
617,257
0.12%

617,257
0.12%

0
0
0
0
0
0
0
0
617,257
0.12%

617,257
0.12%

0
Juristic-person
representative:C
hu, Lung-Tsung		 675,000
675,000
0
0
0
0
96,000
96,000
771,000
0.15%

771,000
0.15%

0
0
0
0
0
0
0
0
771,000
0.15%

771,000
0.15%

0
Independ
ent
director		 Xiao Sheng-
Xian
(Note 2)		 195,000
195,000
0
0
150,358
150,358
36,000
36,000
381,358
0.07%

381,358
0.07%

0
0
0
0
0
0
0
0
381,358
0.07%

381,358
0.07%

0
Independ
ent
director		 Wu Chun-Lai 675,000
675,000
0
0
308,629
308,629
96,000
96,000		 1,079,629
0.21%

1,079,629
0.21%

0
0
0
0
0
0
0
0
1,079,629
0.21%
1,079,629
0.21%
0
Independ
ent
director		 Lorraine Yao 675,000
675,000
0
0
308,629
308,629
96,000
96,000		 1,079,629
0.21%

1,079,629
0.21%

0
0
0
0
0
0
0
0
1,079,629
0.21%
1,079,629
0.21%
0
1. Note the policy, system, standard and structure of remuneration to independent directors; note association between remuneration and responsibilities, risks, time spent, and other factors: the Board of Directors is authorized to
determine the remuneration of directors and independent directors on the basis of their participation and contribution value to the operation of the company and norms accepted by industries in Taiwan and foreign countries.
2. Remuneration to services rendered by directors for companies contained in the financial statements in the most recent year (e.g. non-employee consultant of the parent company, companies contained in the financial statements,
and investees)other than those disclosed in the said table: None

  1. Note the policy, system, standard and structure of remuneration to independent directors; note association between remuneration and responsibilities, risks, time spent, and other factors: the Board of Directors is authorized to determine the remuneration of directors and independent directors on the basis of their participation and contribution value to the operation of the company and norms accepted by industries in Taiwan and foreign countries. 2. Remuneration to services rendered by directors for companies contained in the financial statements in the most recent year (e.g. non-employee consultant of the parent company, companies contained in the financial statements, and investees) other than those disclosed in the said table: None Note 1: (1) Salary of the chairman's driver: NT$699,876; security guards: NT$609,544. (2) Salary of the general manager's driver: NT$747,139. Note 2: Mr. Xiao Sheng-Xian resigned on July 1, 2023.

  2. 34 -

Title Name Remuneration to Directors Remuneration to Directors Remuneration to Directors Remuneration to Directors Remuneration to Directors Remuneration to Directors Remuneration to Directors Remuneration to Directors The sum of items
A, B, C and D and
percentage to the
net income after
tax(Note 10)		 The sum of items
A, B, C and D and
percentage to the
net income after
tax(Note 10)		 Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee Remuneration as Companyemployee The sum of items A,
B, C, D, E, F and G
and percentage to the
net income after tax
(Note 10)		 The sum of items A,
B, C, D, E, F and G
and percentage to the
net income after tax
(Note 10)		 Remunera
tion from
investees
other than
subsidiari
es
(Note 11)
Remuneration (A)
(Note 2)		 Pension (B) Directors’
remuneration
(C) (Note 3)		 Fees for services
rendered (D)
(Note 4)		 Salaries, bonuses,
special allowances,
etc. (E) (Note 5)		 Pension (F) Employee remuneration(G)
(Note 6)
The
Company		 All
companies
included in
the
financial
reports
(Note 7)		 The
Comp
any		 All
compani
es
included
in the
financial
reports
(Note 7)
The
Company		 All
companies
included in
the
financial
reports
(Note 7)		 The
Company		 All
companies
included
in the
financial
reports
(Note 7)		 The
Compan
y		 All
compani
es
included
in the
financial
reports
(Note 7)

The
Company		 All
companies
included
in the
financial
reports
(Note 7)		 The
Compan
y		 All
compani
es
included
in the
financial
reports
(Note 7)
The Company		 All companies
included in the
financial reports
(Note 7)		 The
Company		 All
companies
included in
the
financial
reports
(Note 7)

Cash
amount		 Stock
amount		 Cash
amount		 Stock
amount

Remuneration bracket table

Remuneration bracket table Remuneration bracket table Remuneration bracket table Remuneration bracket table
Remunerations to individual directors in
respective brackets alongthe remuneration scale		 Name of director
Total remuneration (A+B+C+D) Total remuneration (A+B+C+D+E+F+G)
The Company (Note 8) All companies included in the
financial reports
(Note 9)H		 The Company (Note 8) All companies included in the
financial reports
(Note 9)I
Below NT$1,000,000 5
Hsu Zhen-Xin, Hsu Wei-Zhi,
Lin Kun-Rong, Chu Lung-
Tsung,Xiao Sheng-Xien		 5
Hsu Zhen-Xin, Hsu Wei-Zhi, Lin
Kun-Rong, Chu Lung-Tsung, Xiao
Sheng-Xien
4
Hsu Wei-Zhi, Lin Kun-Rong,
Chu, Lung-Tsung, Xiao Sheng-
Xien		 4
Hsu Wei-Zhi, Lin Kun-Rong,
Chu, Lung-Tsung, Xiao
Sheng-Xien
NT$1,000,000 (inclusive) - NT$2,000,000
(exclusive)		 3
Hsu Zhen-Ji, Wu Chun-Lai,
Lorraine Yao		 3
Hsu Zhen-Ji, Wu Chun-Lai,
Lorraine Yao		 2
Wu Chun-Lai, Lorraine Yao		 2
Wu Chun-Lai, Lorraine Yao
NT$2,000,000 (inclusive) - NT$3,500,000
(exclusive)
NT$3,500,000 (inclusive) - NT$5,000,000
(exclusive)
NT$5,000,000 (inclusive) - NT$10,000,000
(exclusive)		 2
Hsu Zhen-Ji,Hsu Zhen-Xin		 2
Hsu Zhen-Ji,Hsu Zhen-Xin
NT$10,000,000 (inclusive) - NT$15,000,000
(exclusive)		 1
Hsu Zhen-Tsai		 1
Hsu Zhen-Tsai		 1
Hsu Zhen-Tsai		 1
Hsu Zhen-Tsai
  • 35 -
NT$15,000,000 (inclusive) - NT$30,000,000
(exclusive)
NT$30,000,000 (inclusive) - NT$50,000,000
(exclusive)
NT$50,000,000 (inclusive) - NT$100,000,000
(exclusive)
Above NT$100,000,000
Total 9 9 9 9

  • Note 1: Directors' names are presented separately (for juristic-person shareholders, the name of the juristic-person shareholder and its representatives are stated separately), whereas the amount of benefits and allowances are presented in aggregate sums. Any directors who co-headed the President or Vice President positions are disclosed in this table and in Table (3-1) or (3-2) below.

  • Note 2: Refers to director's remuneration in the last year (including salaries, allowances, severance pay, various bonuses and incentives, etc.)

  • Note 3: Represents the amount of directors’ remuneration that the Board has proposed as part of the latest earnings appropriation.

  • Note 4: Refers to remuneration to directors for services rendered (including travel, special allowances, various subsidies, accommodation, corporate vehicle and other in-kind benefits). Where housing, cars, vehicles, or personal allowances were granted, the nature and cost of assets, the rental rates (calculated based on actual or fair value), cost of petrol and other subsidies are also disclosed. Where personal drivers were allocated, please make a footnote disclosure explaining the amount of salaries made to drivers, but do not count them as part of the remuneration paid to the above benefits.

  • Note 5: Refers to any salaries, allowances, severance pay, bonuses, incentives, travel allowances, special allowances, subsidies, accommodation, vehicles and in-kind benefits that the director received in the last year for assuming the role of a company employee (such as President, Vice President, managerial officer or other employee). Where housing, cars, vehicles, or personal allowances were granted, the nature and cost of assets, the rental rates (calculated based on actual or fair value), cost of petrol and other subsidies are also disclosed. Where personal drivers were allocated, please make a footnote disclosure explaining the amount of salaries made to drivers, but do not count them as part of the remuneration paid to the above benefits. Part of the salary expense was recognized according to IFRS2 - "Share-based Payment." Amounts including employee stock options, restricted employee shares and subscription to cash issues are treated as remuneration.

  • Note 6: Refers to any remuneration that the director has received (in cash or in shares) in the last year for assuming the role of an employee (such as President, Vice President, managerial officer or other employees). The amount of employee remuneration proposed by the Board of Directors in the last year has been disclosed (where the amount could not be estimated, the actual amount paid in the last year was presented instead). Table 1-3 has also been completed for reference.

  • Note 7: The disclosure includes all companies covered by the consolidated financial statements (including the Company), and represents total amount of remuneration paid by all companies above to the Company's directors.

  • Note 8: The amount of remuneration paid by the Company to each director has been disclosed in ranges.

  • Note 9: The details represent the range of remuneration paid by the consolidated entity (including the Company) to each director.

  • Note 10: Net income refers to the amount of profit shown in the latest financial reports of the consolidated/standalone entity; If International Financial Reporting Standards (“IFRS”) has been adopted, Net Income is the after-tax profit in the consolidated financial statement in the most recent years.

  • Note 11: a. This field represents all forms of remuneration that directors received from the Company's invested businesses other than subsidiaries.

  • b. For directors who received remuneration from invested businesses other than subsidiaries, amounts received from these invested businesses have been added to column I of the remuneration brackets table. In which case, column I will be renamed "All investees".

  • c. Remuneration refers to any returns, remuneration (including remuneration received as an employee, director and supervisor) and professional service fees which the director received for serving as directors, supervisors or managerial officers in invested businesses other than subsidiaries.

    • The basis of remuneration disclosed above is different according to the basis of the Income Tax Act; hence the above table has been prepared solely for information disclosure, and not for tax purpose.

  • 36 -

(2-1) Remuneration supervisors: NA as FRG has audit committee instead.

  • 37 -
(3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$ (3-1) Remuneration of General Manager and Deputy General Managers (name and payment method of individual directors) Unit: NT$

Name
Salary (A)
(Note 2)
Pension (B)
Bonuses, special
allowances, etc. (C)
(Note 3)
Employee remuneration (D)
(Note 4)
The sum of items A,
B, C and D and
percentage to the net
income after tax (%)
(Note 8)
Remuneration
from the investees
other than
subsidiaries or
parent company
(Note 9)
The
Company		 All
companies
included
in the
financial
reports
(Note 5)
The
Company		 All
companies
included
in the
financial
reports
(Note 5)
The
Company		 All
companies
included
in the
financial
reports
(Note 5)
The Company		 All companies
included in the
financial reports
(Note 5)		 The
Company		 All
companies
included
in the
financial
reports
(Note 5)
Cash
amount		 Stock
amount		 Cash
amount		 Stock
amount
President Hsu Zhen-Ji 3,007,200 3,007,200
0
0		 3,646,928 3,646,928
300,000
0
300,000
0		 6,954,128
1.34%

6,954,128
1.34%

0
Director and Special
Assistant		 Hsu Zhen-Xin 3,007,200 3,007,200
0
0		 3,536,641 3,536,641
300,000
0
300,000
0		 6,843,841
1.32%

6,843,841
1.32%

0

Remuneration bracket table

Remuneration bracket table Remuneration bracket table
Range of remunerations to the President and Vice Presidents Name of President and Vice Presidents
The Company (Note 6) All companies included in the financial reports (Note 7) E
Below NT$1,000,000
NT$1,000,000 (inclusive) - NT$2,000,000 (exclusive)
NT$2,000,000 (inclusive) - NT$3,500,000 (exclusive)
NT$3,500,000 (inclusive) - NT$5,000,000 (exclusive)
NT$5,000,000 (inclusive) - NT$10,000,000 (exclusive) 2
Hsu Zhen-Ji,Hsu Zhen-Xin		 2
Hsu Zhen-Ji,Hsu Zhen-Xin
NT$10,000,000 (inclusive) - NT$15,000,000 (exclusive)
NT$15,000,000 (inclusive) - NT$30,000,000 (exclusive)
NT$30,000,000 (inclusive) - NT$50,000,000 (exclusive)
NT$50,000,000 (inclusive) - NT$100,000,000 (exclusive)
Above NT$100,000,000
Total 2 2
  • 38 -

(4-1) Top 5 managers with the highest remuneration: Not applicable.

  • (I) Names of managerial officers who received employee remuneration

December 31, 2023

Title
(Note 1)		 Name
(Note 1)		 Stock amount Cash amount Total As a percentage
of net income
(%)
Managerial Officer President Hsu Zhen-Ji 0 NT$1,640,000 NT$1,640,000 0.32％
Director and
Special
Assistant		 Hsu Zhen-
Xin
Assistant
managerial
officer		 Hsiao
Zheng-
Zhong
Assistant
managerial
officer		 Huang Hui
Xian
Supervisor of
Management and
Construction
Department
Cheng
Sheng Yuan
Chief financial
officer		 Bao Shi-
Rong
Head of
Accounting and
Head of
Corporate
Governance		 Shi Ming-
De

  • Note 1: Names and titles have been disclosed separately, whereas the amount of remuneration has been disclosed in aggregate.

  • Note 2: Represents the amount of employee remuneration provided for the managerial officers (in cash or in shares), which the Board of Directors has proposed as part of the most recent earnings appropriation (where the amount could not be estimated, a calculation was made based on last year's payout ratio). Net income refers to the amount of profit shown in the latest financial reports of the consolidated/standalone entity. If International Financial Reporting Standards (“IFRS”) has been adopted, Net Income is the after-tax profit in the consolidated financial statement in the most recent years.

  • Note 3: Pursuant to FSC Letter No. Tai-Tsai-Cheng-3-0920001301 dated March 27, 2003; the role of managerial officer covers the following positions:

  • (1) President or other equivalent position.

  • (2) Vice-President or other equivalent position.

  • (3) Assistant managerial officer or other equivalent position.

  • (4) Chief of Finance Department

  • (5) Chief of Accounting Department

  • (6) Others with the right to manage affairs and sign for the Company

  • Note 4: Directors, President and Vice Presidents who receive employee remuneration (in cash or in shares) shall have details disclosed in this table in addition to Table 1-2.

  • (II) Compare and explain share of remuneration to directors, supervisors, general managerial officers and deputy general managerial officers by the company and all companies in the consolidated financial statements in last two years versus net income after tax indicated in parent company only financial statements; and explain the remuneration policy, criteria and portfolio, procedures for determining remuneration, and correlation with operating performance and future risks.

  • 39 -

Name Percentage of total remuneration to net
income after tax in 2023		 Percentage of total remuneration to net
income after tax in 2023		 Percentage of total remuneration to
net income after tax in 2022		 Percentage of total remuneration to
net income after tax in 2022
The Company Al companies in
consolidated reports		 The
Company		 Al companies in
consolidated reports
Director 7.18% 7.18% 5.72% 5.77%
President and
Vice Presidents		 2.66% 2.66% 2.02% 2.02%

  • (1) The Board of Directors is authorized to determine the fixed remuneration of directors on the basis of their participation and contribution value to the operation of the company and norms accepted by industries in Taiwan and foreign countries.

  • (2) The salary structures of Presidents and Vice Presidents are basic salary, job allowance, food allowance and bonuses are distributed based on the annual operating performance.

IV. The state of the company's implementation of corporate governance:

(I) Functionality of the Board of Directors

The Board of Directors held nine meetings (A) in the period from March 15, 2023 to March 12, 2024; see below for their attendance:

Title Name (Note 1) Actual Attendance
Ｂ		 Proxy
Attendance		 Percentage of actual
(proxy) attendance
(%) [B/A] (Note 1)		 Remarks
Chairperson
Hsu Zhen-Tsai		 9 0 100%
Director Hsu Zhen-Ji 9 0 100%
Director Quanxinfeng Co., Ltd.
Representative: Hsu Zhen-
Xin		 9 0 100%
Director Ruifu Construction Co.,
Ltd.
Representative: Hsu Zhen-
Ji		 9 0 100%
Director Hohe Construction Co.,
Ltd.
Representative: Lin Kun-
Rong		 9 0 100%
Director Ascend Gear International
Inc.
Representative: Chu, Lung-
Tsung		 9 0 100%
Independent
director
Xiao Sheng-Xian
(Resigned on July 1, 2023		 2 0 66.67% Mr. Xiao Sheng-Xian was
supposed to attend three
times this year, but he
only showed up twice, as
he resigned on July 1,
2023.
Independent
director
Wu Chun-Lai		 9 0 100%
Independent
director
Lorraine Yao		 9 0 100%
  • 40 -
Other information required: Other information required:
I. For Board of Directors meetings that meet any of the following descriptions, state the date, session, the discussed agenda,
independent directors' opinions and how the company has responded to such opinions:
(I) Matters listed in Article 14-3 of the Securities and Exchange Act:
1. The 8th board meeting by the 21st Board of Directors on March 15, 2023: Proposal to decrease the capital in cash.
Content: To improve the shareholders' equity and earnings per share, it was proposed to decrease capital in cash. The
capital decrease ratio was 10%, and shareholders would be refunded with NT$1 per share. After the proposal
was approved by the shareholders' meeting and submitted to the competent authority for approval, the chairman
was authorized to determine the base date of capital decrease and other related matters. The motion was passed
without objections after the chair consulted with all attending directors and the independent directors expressed
no other opinions.
2. The 8th board meeting by the 21st Board of Directors on March 15, 2023: Professional fees of the attesting CPAs.
Content: The Company’s current appointed CPAs of Baker Tilly Clock & Co. The renewed appointment contract with
Baker Tilly Clock & Co; the case has been discussed and approved by the Audit Committee on March 15. The
motion was passed without objections after the chair consulted with all attending directors and the independent
directors expressed no other opinions.
3. The 8th board meeting by the 21st Board of Directors on March 15, 2023: Proposal to adjust the
endorsements/guarantees for the investment project of 950 Market Street, San Francisco.
Content: Due to the high borrowing interest rate in the U.S., to reduce the burden and improve the financial structure,
the shareholders repaid the existing house mortgage loan of USD 118 million in cash to 950 Project. Therefore,
the amount of the borrowing that the Company had to make an endorsement/guarantee for the whole project so
far was USD109 million. The motion was passed without objections after the chair consulted with all attending
directors and the independent directors expressed no other opinions.
4. The 9th board meeting by the 21st Board of Directors on May 9, 2023: Proposal to the Company’s sustainable report
preparation and the establishment of the operating procedures.
Content: In accordance with Article 5 of the “Rules Governing the Preparation and Filing of Sustainability Reports by
TWSE Listed Companies,” a listed company shall establish the operational procedure for preparation and
validation of the sustainability report, and include this procedure in its internal control system. The motion was
passed without objections after the chair consulted with all attending directors and the independent directors
expressed no other opinions.
5. The 9th board meeting by the 21st Board of Directors on May 9, 2023: Proposal to update the Company’s internal
system.
Content: The Company's existing internal control system has been in place for years, and it is partially non-compliant
with the laws and regulations, as well as its current operating status, so it has been updated. The motion was
passed without objections after the chair consulted with all attending directors and the independent directors
expressed no other opinions.
6. The 14th board meeting by the 21st Board of Directors on December 22, 2023: Proposal to adjust the
endorsements/guarantees for the investment project of 950 Market Street, San Francisco.
Content: In order to optimize the cash flow in the investment project of 950 (hereinafter 950P) working fund in the
amount of US$15 million, and due to the bank's request to repay US$7 million in advance to reduce the 950
Hotel Property LLC (hereinafter 950H) and 950 Retail Property LLC (hereinafter 950R) borrowing amounts, an
application totaling US$22 million was added for 950P. Based on the investment ratio, the company provided
approximately 11.23% loan guarantee. The motion was passed without objections after the chair consulted with
all attending directors and the independent directors expressed no other opinions.
7. The 14th board meeting by the 21st Board of Directors on December 22, 2023: Proposal to update the delegation of
authorization.
Content: The Company updates the "Delegation of Authorization Table" based on its current operating needs and in
accordance with the "Regulations Governing the Establishment of Internal Control Systems by Public
Companies." The motion was passed without objections after the chair consulted with all attending directors and
the independent directors expressed no other opinions.
8. The 14th board meeting by the 21st Board of Directors on December 22, 2023:Proposal to amend some provisions of the
"Procedures for the Acquisition or Disposal of Assets."
Content: The Company amended Paragraph 2 of Article 5, Paragraph 1 of Article 8 and Paragraph 2 of Article 8. The
motion was passed without objections after the chair consulted with all attending directors and the independent
directors expressed no other opinions.
9. The 14th board meeting by the 21st Board of Directors on December 22, 2023: Proposal to amend the internal control
system.
  • 41 -

Content: The Company amended some of the provisions of the current sales, collection cycle and investment cycle. The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. 10. The 14th board meeting by the 21st Board of Directors on December 22, 2023: Proposal of the Company’s managerial officers concurrently serving as managerial officers in its affiliates. Content: Implement the Company's compliant management in accordance with the "Operational Regulations Governing Financial Business Among Related Parties." The Company consents to non-compete restrictions on the seven managerial officers listed below: General Manager Hsu Zhen-Ji, special assistant to Chairman Hsu Zhen-Xin, Assistant Manager Xiao Zhen-Zhong, Chief Auditor Ou Chia-Bao, and Associate Manager Shi Ming-De all serve as managerial officers. The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. 11. The 16th board meeting by the 21st Board of Directors on March 12, 2024: Professional fees of the attesting CPAs. Content: The Company’s current appointed CPAs of Baker Tilly Clock & Co. The renewed appointment contract with Baker Tilly Clock & Co; the case has been discussed and approved by the Audit Committee on March 12. The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. 12. The 16th board meeting by the 21st Board of Directors on March 12, 2024: Proposal to adjust the ratio of endorsements/guarantees for the investment project of 950 Market Street, San Francisco. Content: As the Mid-Market Center, LLC and Monkey Affairs, LLC are no longer able to repay CTBC Bank loans, the Continental Development Corporation made an independent investment on 3/1 and signed the first supplementary agreement to dilute its equity. As a result, the Company's provision for a loan guarantee of approximately 11.23% based on the investment ratio was adjusted to 11.24%. The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. (II) Any other documented objections or qualified opinions raised by independent directors against board resolutions in relation to matters other than those described above: None II. For the implementation and state of directors' recusal for conflicts of interests, the directors' name, topic discussed, reasons for the required recusal, and participation in the voting process: 1. The 14th board meeting by the 21st Board of Directors on December 22, 2023: Proposal of performance bonus for stock investment project Content: To encourage the Company's investment team to work together to achieve annual objectives and maximize capital gains, a portion of profits are allocated as a team bonus. Four directors, including Hsu Zhen-Tsai. Hsu Zhen-Ji, Hsu Zhen-Xin, and Chu Lung-Tsung recused themselves from the discussion and voting due to a conflict of interest; however, all other directors approved the proposal. III. For the disclosures of the cycles and periods, scopes, methods, and descriptions of the appraisal of the Board of Directors, please refer to (II) Evaluation of the Board of Directors IV. Measures the objectives to strengthen the functionality of the Board (e.g. establish an Audit Committee, enhance information transparency) and execution status in the current year and the recent years: The Company’s Board of Directors had nine board meetings in the current year. Important agendas are announced on the MOPS, making information public. Note 1: If a director is a juristic person, please disclose the name of the juristic person shareholder and their representative. Note 2: (1) If a director resigns before the end of the year, the resignation date shall be indicated in the Remarks field. The actual attendance rate (%) was calculated on the basis of the number of board meetings held during each director’s term and the number of meetings actually attended by that director. (2) If there is a re-election of a director before the end of the year, the new and old independent directors must be stated, and indicate if such independent director is old, new, or re-elected, as well as the re-election date. The percentage of actual (proxy) attendance (%) will be calculated based on the number of Board of Directors’ meetings held during active duty and the number of actual (proxy) attendance.

  • 42 -

(II) Evaluation of the Board of Directors

Evaluation
cycles		 Evaluation
periods		 Evaluation
scope		 Evaluation
method		 Evaluation content
Internal
performance
evaluation:
implemented
once per
year.		 From
January 1,
2023 to
December
31, 2023		 Including
the
performance
evaluation
of overall
and
individual
board
members
and
functional
committees.		 The
internal
self-
evaluation
is adopted.		 Evaluation is described as the following:
1. Board of Directors’ Performance Self-
Assessment:
Self-assessment 5
Major Aspect
Questions
Score
A. Participation in
the operation of the
company;
12 questions
26.1
B. Improvement of
the quality of the
board of directors'
decision making;
12 questions
26.1
C. Composition
and structure of the
board of directors;
7 questions
14.9
D. Election and
continuing
education of the
directors;and
7 questions
14.4
E. Internal control.
7questions
14.8
Total
45questions
96.3
The KPI of the Board of Directors comes in five
dimensions covering 45 items; scoring at 96.3
shows that the Board of Directors is functioning
well and met the requirements of corporate
governance.
2. Board Member’s Performance Self-
Assessment:
Self-Assessment 6
Major Aspect
Questions
Score
A. Alignment of the
goals and mission of
the company;
3 questions
12.8
B. Awareness of the
duties of a director;
3 questions
12.7
C. Participation in
the operation of the
company;
8 questions
33.2
D. Management of
internal relationship
and communication;
3 questions
13.0
E. The director's
professionalism and
continuingeducation
3 questions
12.8
F. Internal control.
3questions
12.8
Total
23questions
97.3
The KPIs of board member come in six
dimensions covering 23 indicators; scoring at
97.3 shows that directors are performing
with efficiency and effect and is contributing to
FRG.
3. Self performance evaluation by the functional
committees:
(1) Self performance evaluation of the
Remuneration Committee
  • 43 -
Self-assessment 5 Questions Score
Major Aspect
A. Participation in 4 questions 18.9
the operation of the
company;
B. Awareness of 5 questions 23.7
the duties of the
Remuneration
Committee
C. Improvement of 6 questions 28.4
quality of decisions
made by the
Remuneration
Committee
D. Makeup of the 3 questions 14.2
Remuneration
Committee and
election of its
members
E. Internal control. 1question 4.8
Total 19 questions 90.0
The KPIs of the Remuneration Committee come
in five dimensions covering 19 indicators; scoring
at 90.0,showing that the directors had positive
evaluations to the efficiency and effects of each
indicator’s operation.
Evaluation Evaluation Evaluation content
scope method
Evaluation Evaluation Evaluation Evaluation Evaluation content Evaluation content Evaluation content
cycles periods scope method
Internal
performance
evaluation:
implemented		 From
January 1,
2023 to
December		 Including
the
performance
evaluation		 The
internal
self-
evaluation		 (2) Self performance
Committee
Self-assessment 5
Major Aspect
A. Participation in		 evaluation by the Audit
Questions
Score
4 questions
15.7
once per 31, 2023 of overall is adopted. the operation of the
year. and company;
individual B. Awareness of 6 questions 23.5
board the duties of the
Audit Committee
members C. Improvement of 7 questions 30.1
and quality of decisions
functional made by the Audit
committees. Committee
D. Makeup of the 3 questions 12.6
Audit Committee
and election of its
members
E. Internal control. 3questions 12.0
Total 23questions 93.9
The Audit Committee performance indicators
come in five dimensions covering 23 indicators;
scoring at 93.9 shows that directors are
performing with efficiency and effect and is
contributing to FRG.
  • 44 -

(III) Operation and key tasks of the Audit Committee Deliberation of the Audit Committee mainly include:

  1. Fair presentation of the financial statements.

  2. Assessment of the effectiveness of the internal control system.

  3. Transactions involving material asset or derivatives trading.

  4. Material monetary loans, endorsements, or provision of guarantees.

  5. The offering, issuance, or private placement of any equity-type securities.

  6. Compliance with the related laws and regulations.

  7. Matters bearing on the personal interest of a director or supervisor.

  8. Control of the existing or potential risks.

  9. Appointment (dismissal) of CPAs and their independence and performance.

  10. The hiring, dismissal or remuneration of an attesting certified public accountant.

  11. The appointment or dismissal of a financial, accounting, or internal auditing officer. Reviewing financial report.

The board of directors has prepared the business report, financial statements and profit distribution proposals of year 2023; the financial statements have been audited by Baker Tilly Clock and Co.; the latter issued audit report as well. The aforesaid business report, financial statements and the motion for earnings distribution have been reviewed by the Audit Committee and deemed no inconsistency.

The Audit Committee held seven meetings (A) in the period from 2023.01.01 to 2024.03.12; see below for attendance of independent directors:

Title Name Actual attendance
(B)		 Proxy Attendance Actual
attendance (%)
(B/A) (Note)		 Remarks
Independent
director a		 Xiao Sheng-
Xian		 2 0 66.67% Note 4: Mr. Xiao
Sheng-Xian resigned
on July 1, 2023. The
expected attendances
during the office this
year were three.
Independent
director b		 Lorraine Yao 7 0 100%
Independent
director c		 Wu Chun-Lai 7 0 100%
  • 45 -
Other information required:
I.
Operation of the Year：
Meeting date
of the Audit
Committee
Motion content and follow-up
Objection,
reservation,
or material
recommenda
tions by
independent
directors
The matters
referred to in
Article 14-5
of the
Securities
and
Exchange
Act
Resolution(s
) not passed
by the Audit
Committee
but
receiving the
consent of
two thirds of
the Board of
Directors
Responses
to
recommend
ation by the
audit
committee
The 2nd
term
6th Meeting
2023.03.15
1. Annual business report and financial
statements 2022.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2.Proposal of the 2022 cash dividends paid
from earningdistribution.
3. 2022 Earnings distributionproposal.
4. Proposal of cash capital decrease.
5. Proposal of appointment and service fees of
CPAs.
6. 2022 internal control system statement.
7. Changes to endorsements/guarantees for the
investment project of 950 Market Street,
San Francisco
Resolution by the audit committee onMarch 15, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
7th Meeting
2023.05.09
1. Consolidated financial report ofQ1 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal to update the Company’s internal
control system.
Resolution by the audit committee on May 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
8th Meeting
2023.06.09
1. Sell the construction project premises and
parking spaces in Taipei City to related
persons. (withdrawn)
None
v
Withdrawn
as proposed
without
objection
from
directors
present at
the
meeting.
Resolution by the audit committee on June 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
9th Meeting
2023.08.08
1. Consolidated financial report ofQ2 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal of the Company’s establishment of
the “Ethical Corporate Management Best
Practice Principles.”
3. Proposal of the establishment of the
Company’s “Code of Ethical Conduct.”
Resolution by the audit committee on August 8, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
10th
1. Consolidated financial report ofQ3 2023.
None
v
Passed as
proposed
without
objection
from
2. Proposal of independence and competence
assessment for attestingCPA.
3. Motion of that Baker Tilly Clock and Co
intended to adjust the CPAs.		 Other information required:
I.
Operation of the Year：
Meeting date
of the Audit
Committee
Motion content and follow-up
Objection,
reservation,
or material
recommenda
tions by
independent
directors
The matters
referred to in
Article 14-5
of the
Securities
and
Exchange
Act
Resolution(s
) not passed
by the Audit
Committee
but
receiving the
consent of
two thirds of
the Board of
Directors
Responses
to
recommend
ation by the
audit
committee
The 2nd
term
6th Meeting
2023.03.15
1. Annual business report and financial
statements 2022.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2.Proposal of the 2022 cash dividends paid
from earningdistribution.
3. 2022 Earnings distributionproposal.
4. Proposal of cash capital decrease.
5. Proposal of appointment and service fees of
CPAs.
6. 2022 internal control system statement.
7. Changes to endorsements/guarantees for the
investment project of 950 Market Street,
San Francisco
Resolution by the audit committee onMarch 15, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
7th Meeting
2023.05.09
1. Consolidated financial report ofQ1 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal to update the Company’s internal
control system.
Resolution by the audit committee on May 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
8th Meeting
2023.06.09
1. Sell the construction project premises and
parking spaces in Taipei City to related
persons. (withdrawn)
None
v
Withdrawn
as proposed
without
objection
from
directors
present at
the
meeting.
Resolution by the audit committee on June 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
9th Meeting
2023.08.08
1. Consolidated financial report ofQ2 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal of the Company’s establishment of
the “Ethical Corporate Management Best
Practice Principles.”
3. Proposal of the establishment of the
Company’s “Code of Ethical Conduct.”
Resolution by the audit committee on August 8, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
10th
1. Consolidated financial report ofQ3 2023.
None
v
Passed as
proposed
without
objection
from
2. Proposal of independence and competence
assessment for attestingCPA.
3. Motion of that Baker Tilly Clock and Co
intended to adjust the CPAs.		 Other information required:
I.
Operation of the Year：
Meeting date
of the Audit
Committee
Motion content and follow-up
Objection,
reservation,
or material
recommenda
tions by
independent
directors
The matters
referred to in
Article 14-5
of the
Securities
and
Exchange
Act
Resolution(s
) not passed
by the Audit
Committee
but
receiving the
consent of
two thirds of
the Board of
Directors
Responses
to
recommend
ation by the
audit
committee
The 2nd
term
6th Meeting
2023.03.15
1. Annual business report and financial
statements 2022.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2.Proposal of the 2022 cash dividends paid
from earningdistribution.
3. 2022 Earnings distributionproposal.
4. Proposal of cash capital decrease.
5. Proposal of appointment and service fees of
CPAs.
6. 2022 internal control system statement.
7. Changes to endorsements/guarantees for the
investment project of 950 Market Street,
San Francisco
Resolution by the audit committee onMarch 15, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
7th Meeting
2023.05.09
1. Consolidated financial report ofQ1 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal to update the Company’s internal
control system.
Resolution by the audit committee on May 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
8th Meeting
2023.06.09
1. Sell the construction project premises and
parking spaces in Taipei City to related
persons. (withdrawn)
None
v
Withdrawn
as proposed
without
objection
from
directors
present at
the
meeting.
Resolution by the audit committee on June 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
9th Meeting
2023.08.08
1. Consolidated financial report ofQ2 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal of the Company’s establishment of
the “Ethical Corporate Management Best
Practice Principles.”
3. Proposal of the establishment of the
Company’s “Code of Ethical Conduct.”
Resolution by the audit committee on August 8, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
10th
1. Consolidated financial report ofQ3 2023.
None
v
Passed as
proposed
without
objection
from
2. Proposal of independence and competence
assessment for attestingCPA.
3. Motion of that Baker Tilly Clock and Co
intended to adjust the CPAs.		 Other information required:
I.
Operation of the Year：
Meeting date
of the Audit
Committee
Motion content and follow-up
Objection,
reservation,
or material
recommenda
tions by
independent
directors
The matters
referred to in
Article 14-5
of the
Securities
and
Exchange
Act
Resolution(s
) not passed
by the Audit
Committee
but
receiving the
consent of
two thirds of
the Board of
Directors
Responses
to
recommend
ation by the
audit
committee
The 2nd
term
6th Meeting
2023.03.15
1. Annual business report and financial
statements 2022.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2.Proposal of the 2022 cash dividends paid
from earningdistribution.
3. 2022 Earnings distributionproposal.
4. Proposal of cash capital decrease.
5. Proposal of appointment and service fees of
CPAs.
6. 2022 internal control system statement.
7. Changes to endorsements/guarantees for the
investment project of 950 Market Street,
San Francisco
Resolution by the audit committee onMarch 15, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
7th Meeting
2023.05.09
1. Consolidated financial report ofQ1 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal to update the Company’s internal
control system.
Resolution by the audit committee on May 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
8th Meeting
2023.06.09
1. Sell the construction project premises and
parking spaces in Taipei City to related
persons. (withdrawn)
None
v
Withdrawn
as proposed
without
objection
from
directors
present at
the
meeting.
Resolution by the audit committee on June 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
9th Meeting
2023.08.08
1. Consolidated financial report ofQ2 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal of the Company’s establishment of
the “Ethical Corporate Management Best
Practice Principles.”
3. Proposal of the establishment of the
Company’s “Code of Ethical Conduct.”
Resolution by the audit committee on August 8, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
10th
1. Consolidated financial report ofQ3 2023.
None
v
Passed as
proposed
without
objection
from
2. Proposal of independence and competence
assessment for attestingCPA.
3. Motion of that Baker Tilly Clock and Co
intended to adjust the CPAs.		 Other information required:
I.
Operation of the Year：
Meeting date
of the Audit
Committee
Motion content and follow-up
Objection,
reservation,
or material
recommenda
tions by
independent
directors
The matters
referred to in
Article 14-5
of the
Securities
and
Exchange
Act
Resolution(s
) not passed
by the Audit
Committee
but
receiving the
consent of
two thirds of
the Board of
Directors
Responses
to
recommend
ation by the
audit
committee
The 2nd
term
6th Meeting
2023.03.15
1. Annual business report and financial
statements 2022.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2.Proposal of the 2022 cash dividends paid
from earningdistribution.
3. 2022 Earnings distributionproposal.
4. Proposal of cash capital decrease.
5. Proposal of appointment and service fees of
CPAs.
6. 2022 internal control system statement.
7. Changes to endorsements/guarantees for the
investment project of 950 Market Street,
San Francisco
Resolution by the audit committee onMarch 15, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
7th Meeting
2023.05.09
1. Consolidated financial report ofQ1 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal to update the Company’s internal
control system.
Resolution by the audit committee on May 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
8th Meeting
2023.06.09
1. Sell the construction project premises and
parking spaces in Taipei City to related
persons. (withdrawn)
None
v
Withdrawn
as proposed
without
objection
from
directors
present at
the
meeting.
Resolution by the audit committee on June 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
9th Meeting
2023.08.08
1. Consolidated financial report ofQ2 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal of the Company’s establishment of
the “Ethical Corporate Management Best
Practice Principles.”
3. Proposal of the establishment of the
Company’s “Code of Ethical Conduct.”
Resolution by the audit committee on August 8, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
10th
1. Consolidated financial report ofQ3 2023.
None
v
Passed as
proposed
without
objection
from
2. Proposal of independence and competence
assessment for attestingCPA.
3. Motion of that Baker Tilly Clock and Co
intended to adjust the CPAs.		 Other information required:
I.
Operation of the Year：
Meeting date
of the Audit
Committee
Motion content and follow-up
Objection,
reservation,
or material
recommenda
tions by
independent
directors
The matters
referred to in
Article 14-5
of the
Securities
and
Exchange
Act
Resolution(s
) not passed
by the Audit
Committee
but
receiving the
consent of
two thirds of
the Board of
Directors
Responses
to
recommend
ation by the
audit
committee
The 2nd
term
6th Meeting
2023.03.15
1. Annual business report and financial
statements 2022.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2.Proposal of the 2022 cash dividends paid
from earningdistribution.
3. 2022 Earnings distributionproposal.
4. Proposal of cash capital decrease.
5. Proposal of appointment and service fees of
CPAs.
6. 2022 internal control system statement.
7. Changes to endorsements/guarantees for the
investment project of 950 Market Street,
San Francisco
Resolution by the audit committee onMarch 15, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
7th Meeting
2023.05.09
1. Consolidated financial report ofQ1 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal to update the Company’s internal
control system.
Resolution by the audit committee on May 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
8th Meeting
2023.06.09
1. Sell the construction project premises and
parking spaces in Taipei City to related
persons. (withdrawn)
None
v
Withdrawn
as proposed
without
objection
from
directors
present at
the
meeting.
Resolution by the audit committee on June 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
9th Meeting
2023.08.08
1. Consolidated financial report ofQ2 2023.
None
v
Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal of the Company’s establishment of
the “Ethical Corporate Management Best
Practice Principles.”
3. Proposal of the establishment of the
Company’s “Code of Ethical Conduct.”
Resolution by the audit committee on August 8, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
10th
1. Consolidated financial report ofQ3 2023.
None
v
Passed as
proposed
without
objection
from
2. Proposal of independence and competence
assessment for attestingCPA.
3. Motion of that Baker Tilly Clock and Co
intended to adjust the CPAs.
Resolution(s
The matters ) not passed
Objection,
referred to in by the Audit
Responses
reservation,
Article 14-5 Committee to
Meeting date or material
of the but recommend
of the Audit Motion content and follow-up recommenda
Securities receiving the
ation by the
Committee tions by
and consent of audit
independent
Exchange two thirds of
committee
directors
Act the Board of
Directors
The 2nd
term
6th Meeting
2023.03.15		 1. Annual business report and financial
statements 2022.		 None

 v Passed as
proposed
without
objection
from
directors
present at
the meeting
2.Proposal of the 2022 cash dividends paid
from earningdistribution.
3. 2022 Earnings distributionproposal.
4. Proposal of cash capital decrease.

5. Proposal of appointment and service fees of
CPAs.

6. 2022 internal control system statement.
7. Changes to endorsements/guarantees for the
investment project of 950 Market Street,
San Francisco
Resolution by the audit committee onMarch 15, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term
7th Meeting
2023.05.09		 1. Consolidated financial report ofQ1 2023. None
 v Passed as
proposed
without
objection
from
directors
present at
the meeting

2. Proposal to update the Company’s internal
control system.
Resolution by the audit committee on May 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
8th Meeting
2023.06.09
1. Sell the construction project premises and
parking spaces in Taipei City to related
persons. (withdrawn)		 None v Withdrawn
as proposed
without
objection
from
directors
present at
the
meeting.
Resolution by the audit committee on June 9, 2023: passed without objection from all members of the
Audit Committee.
The 2nd
term
9th Meeting
2023.08.08		 1. Consolidated financial report ofQ2 2023. None v Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Proposal of the Company’s establishment of
the “Ethical Corporate Management Best
Practice Principles.”

3. Proposal of the establishment of the
Company’s “Code of Ethical Conduct.”
Resolution by the audit committee on August 8, 2023: passed without objection from all members of
the Audit Committee.
The 2nd
term		 1. Consolidated financial report ofQ3 2023. None v Passed as
proposed
without
2. Proposal of independence and competence
assessment for attestingCPA.
10th 3. Motion of that Baker Tilly Clock and Co
intended to adjust the CPAs.		 objection
from
  • 46 -
Meeting
2023.11.07		 4. Proposal of “Operating Procedures for Ethical
Corporate Management and Code of
Conduct.”		 4. Proposal of “Operating Procedures for Ethical
Corporate Management and Code of
Conduct.”		 directors
present at
the meeting
Resolution by the audit committee on November 7, 2023: passed without objection from all members
of the Audit Committee.
The 2nd
term
11th
Meeting
2023.12.22		 1. Proposal of 2024 auditplan. None v Passed as
proposed
without
objection
from
directors
present at
the meeting
2. Changes to endorsements/guarantees for the
investment project of 950 Market Street, San
Francisco
3. Proposal to update the delegation of
authorization.
4. Proposal to amend the Procedures for Asset
Acquisition and Disposal
5. Proposal to amend the internal control
system.
6. Proposal of the Company’s managerial
officers concurrently serving as managerial
officers in its affiliates.
Resolution by the audit committee on December 22, 2023: passed without objection from all members
of the Audit Committee.
The 2nd
term
12th
meeting
2024.03.12		 1. Annual business report and financial
statements 2023.		 None v Passed
as
proposed
without
objection
from
directors
present
at
the meeting
2. Proposal of the 2023 cash dividends paid
from earningdistribution.

3. Proposal of the Company’s 2023 Earnings
Distribution Table.
4. Professional fees of the attestingCPAs.
5. 2023 internal control system statement.
6. Changes to the ratio of
endorsements/guarantees for the investment
project of950 Market Street,San Francisco.
Resolution by the audit committee on March 12, 2024: passed without objection from all members of
the Audit Committee.
Date Communicated matter Communication result
2023/03/15



 Report of the results of audit in February, 2023.
Recommendations of independent directors as below:
The Construction Department has been requested to provide
the real-estate appraisal report of subsidiary FRG US Corp.
The audit office has improved the contents of the
audit report as recommended by independent
directors.
Relevant departments have been requested to
provide relevant information as soon as possible.
2023/05/09


 Report on the results of the audit's implementation in March
2023.
Recommendations byindependent directors: None.		 The audit office has completed the audit plan
successfully.
112/06/09


 Report on the results of the audit's implementation in May
2023.
Recommendations by independent directors: None.		 The audit office has completed the audit plan
successfully.
2023/08/08





 Report on the results of the audit's implementation in July
2023.
Recommendations by independent directors: None.
The recommendations of the audit supervisors are as
follows:
The Continental Development Corporation has been asked		 The audit office has improved the contents of the
audit report as recommended by independent
directors.
Relevant departments have been requested to
provide relevant information as soon as possible.
  • 47 -
to provide a table of estimated cash flow for the investment
project of 950 in order to monitor its cash flow status.		 to provide a table of estimated cash flow for the investment
project of 950 in order to monitor its cash flow status.		 to provide a table of estimated cash flow for the investment
project of 950 in order to monitor its cash flow status.
2023/11/07 Report on the results of the audit's implementation in
October 2023.
Recommendations of independent directors: none		 The audit office has completed the audit plan
successfully.
2023/12/22 Report on the results of the audit's implementation in
November 2023.
Recommendations byindependent directors: None.		 The audit office has completed the audit plan
successfully.
(2)Policyreport of the communication between independent directors, the CPAs and internal auditingofficers
Communication result
Management Department has been requested to
handle such by complying with the
requirements of the competent authority.
Management Department has been requested to
handle such by complying with the
requirements of the competent authority.
Management Department has been requested to
handle such by complying with the
requirements of the competent authority.
Management Department has been requested to
handle such by complying with the
requirements of the competent authority.
Management Department has been requested to
handle such by complying with the
requirements of the competent authority.
Date Communicated matter Communication result
112/09/01 See below for two-way communication on corporate
governance matters:
1.
Description of the Audit Committee’s
interpretation of audit quality indicators (AQI)
& CPA.
2.
Focus of recent regulatory updates.
3.
Implementation of the internal control system
4.
Blueprint of Sustainability Disclosure
Standards (Financial Supervisory Commission
R.O.C. (Taiwan) 2023.08.17
5.
Notes for the same type of stock investment in
the same company, listed in different
measurement types.
1.
2.
3.
4.
5.		 Management Department has been requested to
handle such by complying with the
requirements of the competent authority.
Management Department has been requested to
handle such by complying with the
requirements of the competent authority.
Management Department has been requested to
handle such by complying with the
requirements of the competent authority.
Management Department has been requested to
handle such by complying with the
requirements of the competent authority.
Management Department has been requested to
handle such by complying with the
requirements of the competent authority.

Note:

  • ＊ If an independent director resigns before the end of the year, the resignation date shall be indicated in the Remarks field. The actual attendance rate (%) was calculated on the basis of the number of board meetings held during the term of the Audit Committee and the number of meetings actually attended during active duty.

  • ＊ If there is a re-election of an independent director before the end of the year, the new and old independent directors must be stated, and indicate if such independent director is old, new, or re-elected, as well as the re-election date. The percentage of actual (proxy) attendance (%) will be calculated based on the number of Audit Committee meetings held during active duty and the number of actual (proxy) attendance.

  • 48 -

(IV) Corporate governance execution status and deviations from Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies

Companies
Evaluation Item ImplementationStatus Deviations from "Corporate
Governance Best-Practice
Principles for TWSE/TPEx
Listed Companies" and
Reasons
Yes No Summary
I. Whether The Company establishes and discloses its
rules of corporate governance in accordance with
the Corporate Governance Best-Practice
Principles for TWSE/TPEx Listed Companies?		 The Company has passed the “Rules of Corporate
Governance” on the 8th session of the 20th Board held on
March 20, 2020 and it has been disclosed on the
Company’s website.		 There are no deviations from
"Corporate Governance Best-
Practice Principles for
TWSE/TPEx Listed
Companies".
II. Equity structure and shareholders’ equity
(I) Will the Company have the internal procedures
regulated to handle shareholders’ proposals,
doubts, disputes, and litigation matters; also,
have the procedures implemented accordingly?
(II) Will the Company possess the list of the
Company’s major shareholders and the list of
the ultimate controllers of the major
shareholders?
(III) Will the Company establish and implement the
risk control and firewall mechanisms with the
related parties?
(IV)Will the Companyset upinternal norms to



(I) The Company has established stock personnel and
legal affairs personnel to handle shareholders’
proposals, disputes, and litigation matters, and these
matters are enforced according to procedures.
(II) The Company has established stock affairs unit and
stock affairs agency that can get hold of the list of the
ultimate controllers of the major shareholders.
(III) The Company has established internal rules and
internal control system of relevant legal mechanism
in compliance with the laws and regulations and has
enforced the rules accordingly. Aside from
supervising important subsidiaries to establish
internal control system as required by Article 3 of the
"Corporate Governance Best-Practice Principles for
TWSE/TPEx- Listed Companies," the Company also
reviews its own and the important subsidiaries’
internal and external changes to thoroughly enforce
risk control and firewall mechanism.
(IV)In compliance with the Company’s “Procedures for
(I) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(II) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(III) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(IV)There are no deviations
  • 49 -
Evaluation Item ImplementationStatus ImplementationStatus ImplementationStatus Deviations from "Corporate
Governance Best-Practice
Principles for TWSE/TPEx
Listed Companies" and
Reasons
Yes No Summary
prohibit insiders from utilizing the undisclosed
information to trade securities?		 Handling Material Inside Information” to regulate
material inside information and disclosure
mechanism to avoid improper disclosure and ensure
that the information disclosed by the Company is
consistent and positive. Prevention of insider trading
will also be strengthened.		 from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
III. The Composition of the Board of Directors and
Their Duties
(I) Does the board of directors formulate policies and
specific management objectives for
diversification and implement them
accordingly?
(II) Apart from the Remuneration Committee and
Audit Committee, has the company assembled
other functional committees at its own
discretion?
(III) As the company established the Regulations
Governing the Board Performance Evaluation
and its evaluation methods, and does the
company perform a regular performance
evaluation each year and submit the results of
performance evaluations to the Board of
Directors and use them as reference in
determining compensation for individual
directors, their nomination, and additional
office terms?

(I) The Company’s Board of Directors currently has 9
directors and has adopted the nomination system. As
the Board of Directors nominates candidates, aside
from basic legal qualifications, they are also required
to have knowledge and professional experience in
terms of relevant business, law and industry in order
to reach the goal of the implementation of diversified
board members.
(II) The company has set up remuneration committee,
audit committee and employee welfare committee;
establishment of other functional committees will be
determined in accordance with the Company Act at
the discretion of FRG or its actual needs.
(III) The company established the Regulations Governing
the Board Performance Evaluation and its evaluation
methods in the 8th meeting of Board of directors,
20th Term on March 20, 2020. The external board
performance evaluation shall be executed by an
external professional independent institution or an
external team of scholars and experts once every
three years. The outcomes of the performance
evaluation is submitted to the meeting of Board of
directors in the firstquarter of the nextyear. In		 (I) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(II) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(III) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
  • 50 -
Evaluation Item ImplementationStatus ImplementationStatus ImplementationStatus Deviations from "Corporate
Governance Best-Practice
Principles for TWSE/TPEx
Listed Companies" and
Reasons
Yes No Summary
(IV) Is an external auditor's independence assessed on
a regular basis?		 addition, it periodically review the performance
review and remuneration policy, system, standards,
and structure for directors, supervisors and executive
officers, and the recommendations are submitted to
the meeting of Board of directors for discussion.
(IV) The management department of the company will
assess the independence of the attesting CPA
annually and report the results to the Audit
Committee on November 7, 2023 and the Board of
Directors on November 7, 2023. Mr. Lai Chia-Yu
and Lai Yung-Ji, CPA of Baker Tilly Clock & Co.,
met FRG’s independence criteria as assessed by the
management department of FRG; they are qualified
to serve as attesting CPA of the company. See P56-
P58 (V) of annual report for shareholders’ meeting
for details of “independence assessment of the
attestingCPA.”		 (IV) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
IV. Is the company a TWSE/TPEX listed company,
and has the company designated an appropriate
number of personnel that specialize (or are
involved) in corporate governance affairs
(including but not limited to providing
directors/supervisors with the information needed
and assist directors and supervisors in complying
with the laws and regulations to perform their
duties, convention of board meetings and
shareholders meetings, preparation of board
meeting and shareholders meeting minutes, etc)?
The Board of Directors on May 11, 2021 company has
passed the resolution to appoint Mr. Shi Mingde, Assistant
Manager, as the director of corporate governance to
protect the rights and interests of shareholders and
strengthen the functions of the board of directors. Mr. Shi
Mingde has more than three years of experience as an
accounting supervisor in a TWSE listed company. The
main responsibilities of the director of corporate
governance are: take care of matters related to the board of
directors and shareholders' meeting according to law,
prepare minutes of the board of directors and shareholders'
meeting, assist directors in their appointment and
continuous education, provide directors with the
information they need to execute their business, and assist
directors to complywith laws and regulations.


There are no deviations from
"Corporate Governance Best-
Practice Principles for
TWSE/TPEx Listed
Companies".
  • 51 -
Evaluation Item ImplementationStatus ImplementationStatus ImplementationStatus Deviations from "Corporate
Governance Best-Practice
Principles for TWSE/TPEx
Listed Companies" and
Reasons
Yes No Summary
V. Does the Company establish mechanisms for
communicating with stakeholders (including but
not limited to stockholders, employees, customers
and suppliers), and a stakeholder site on the
company website to appropriately respond to
material CSR topics theyconcern about?
Aside from appointing dedicated personnel to handle
stakeholder channels, the Company has also set pup a
stakeholder section on its website and responses
accordingly to issues concerning stakeholders in terms of
corporate social responsibility.		 There are no deviations from
"Corporate Governance Best-
Practice Principles for
TWSE/TPEx Listed
Companies".
VI. Has the company appointed a professional
shareholders service agent to process the affairs
related to shareholders’ meetings?		 The Company has appointed Stock Agency Department of
Taishin International Bank as stock agency to handle stock
related affairs.
There are no deviations from
"Corporate Governance Best-
Practice Principles for
TWSE/TPEx Listed
Companies".
VII. Information disclosure
(I) Does the Company have a website setup and the
financial business and corporate governance
information disclosed?
(II) Has the Company adopted other information
disclosure methods (such as, establishing an
English website, designating a responsible
person for collecting and disclosing
information of the Company, substantiating the
spokesman system, placing the juristic person
seminar program on the Company’s website,
etc.)?
(III) Has the company published and reported its
annual financial report within two months after
the end of a fiscal year, and published and
reported its financial reports for the first,
second,and thirdquarters,as well as its
(I) The Company has set up a website to disclose
information in relation to the Company’s financial
matters and businesses and is updated on a regular
basis. The Company’s website is www.frg.com.tw.
(II) The Company has a spokesperson and an acting
spokesperson and has established a website in both
traditional Chinese and English. A dedicated
personnel has been assigned to collect company
information and information disclosure. There is
related company introduction, production
introduction and its latest news on the Company's
website
(III) The Company has published and reported financial
reports and operating status for each month based on
the regulations specified in the “List of Matters
Required to Be Handled by Issuers of Listed
Securities”;however,the Companyhas not been		 (I) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(II) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(III) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
  • 52 -
Evaluation Item ImplementationStatus ImplementationStatus ImplementationStatus Deviations from "Corporate
Governance Best-Practice
Principles for TWSE/TPEx
Listed Companies" and
Reasons
Yes No Summary
operating status for each month before the
specified deadline.		 publicly announced and reported the financial report
within two months after the end of the fiscal year.
The Company announces and reports the financial
statements of the first, second, and third quarter and
monthly operations before deadlines as statutorily
scheduled.		 Companies".
VIII. Are there any other important information
(including but not limited to the interests of
employees, employee care, investor relations,
supplier relations, the rights of stakeholders, the
advanced study of directors and supervisors, the
implementation of risk management policies and
risk measurement standards, the execution of
customer policy, the purchase of liability
insurance for the Company’s directors and
supervisors) that are helpful in understanding the
corporate governance operation of the Company?		 (I) Employees’ rights and benefits: The Company has
reasonable salary system in accordance with the
Labor Standards Act to protect the legal rights of
employees.
(II) Employees’ care: The Company’s various
management rules are formulated based on the on the
interests of employees and also purchases various
types of insurance for employees such as health,
nursing, employment, work injury and public
welfare. The Company organizes annual health
check-ups to protect employees.
(III) Investor relations: The Company has a spokesperson
and an acting spokesperson who are responsible for
the Company’s external communication; dedicated
personnel has also been set up to disclose the
Company's information on MOPs as required by the
law.
(IV) Supplier relations: The Company has exceptional
supply relations with suppliers, reaching overall
production cost optimization.		 (I) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(II) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(III) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(IV) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
  • 53 -
Evaluation Item ImplementationStatus ImplementationStatus ImplementationStatus Deviations from "Corporate
Governance Best-Practice
Principles for TWSE/TPEx
Listed Companies" and
Reasons
Yes No Summary
(V) Rights of stakeholders: The Company maintains
positive communication channels with stakeholders
and respects and protects their legal rights. The
Company also has a spokesperson and acting
spokesperson system to handle issues and
suggestions with regards to shareholders.
(VI) Further training for directors: The Company’s
directors have participated in further training courses
as required by the law. In the future, the Company
will arrange suitable further training courses for
directors in the future on an unscheduled basis.
(VII)Implementation of risk management policy and risk
assessment standards: Various internal rules internal
control system have been formulated as required by
the law, and the Company conducts various risk
management and evaluation. The internal audit unit
carries out inspection of the implementation of the
internal control system on a regular basis or on an
unscheduled basis.
(VIII)Implementation of customer service policy: The
Company has exceptional relations with customers
and provides customer service based on various
internal control measures. The "customer
satisfaction" is treated as an important part of the
quality policy.
(IX) The Company purchases liability insurance for
directors.		 (V) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(VI) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(VII)There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(VIII)There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
(IX) There are no deviations
from "Corporate
Governance Best-Practice
Principles for
TWSE/TPEx Listed
Companies".
  • 54 -
Evaluation Item ImplementationStatus ImplementationStatus ImplementationStatus Deviations from "Corporate
Governance Best-Practice
Principles for TWSE/TPEx
Listed Companies" and
Reasons
Yes No Summary
IX. Please note progress of improvements made and propose remedial measures against those pending for improvements based on the corporate governance
assessment report (2023) issued by the Corporate Governance Center of the TWSE:
1. Has the company established full-time (part-time) sustainable development units in accordance with the principle of materiality? Does the company
conduct risk assessments on environmental, social and corporate governance issues related to company operations and formulate relevant risk management
policies or strategies?
In addition, does the board of directors supervise sustainable development promotions and disclose them on the company’s website and annual report? The
company has established full-time (part-time) sustainable development units. In accordance with the principle of materiality, it has conducted risk
assessments on environmental, social and corporate governance issues related to company operations and has formulated relevant risk management policies
or strategies. Furthermore, the board of directors has supervised the sustainable development promotions, which have been disclosed on the company’s
website and annual report.
2. Has the Company established full-time (part-time) corporate integrity operation units responsible for supervising and implementing integrity management
policies and prevention plan? Have the established units' operational and implementation statuses been explained on the company's website and annual
report and have they been reported to the board of directors at least once a year? The Company has established full-time (part-time) corporate integrity
operation units responsible for supervising and implementing integrity management policies and prevention plan. The established units' operational and
implementation statuses have been explained on the company's website and annual report, and they have been reported to the board of directors at least
once a year.

IX. Please note progress of improvements made and propose remedial measures against those pending for improvements based on the corporate governance assessment report (2023) issued by the Corporate Governance Center of the TWSE: 1. Has the company established full-time (part-time) sustainable development units in accordance with the principle of materiality? Does the company conduct risk assessments on environmental, social and corporate governance issues related to company operations and formulate relevant risk management policies or strategies? In addition, does the board of directors supervise sustainable development promotions and disclose them on the company’s website and annual report? The company has established full-time (part-time) sustainable development units. In accordance with the principle of materiality, it has conducted risk assessments on environmental, social and corporate governance issues related to company operations and has formulated relevant risk management policies or strategies. Furthermore, the board of directors has supervised the sustainable development promotions, which have been disclosed on the company’s website and annual report. 2. Has the Company established full-time (part-time) corporate integrity operation units responsible for supervising and implementing integrity management policies and prevention plan? Have the established units' operational and implementation statuses been explained on the company's website and annual report and have they been reported to the board of directors at least once a year? The Company has established full-time (part-time) corporate integrity operation units responsible for supervising and implementing integrity management policies and prevention plan. The established units' operational and implementation statuses have been explained on the company's website and annual report, and they have been reported to the board of directors at least once a year.

Note: Regardless of clicking “yes” or “no”, it should be explained in the summary field.

  • 55 -

(V) Independence evaluation of CPAs

(1) Audit Quality Indicator (AQIs) Assessment:

(1)AuditQualityIndicator(AQIs)Assessment: (1)AuditQualityIndicator(AQIs)Assessment: (1)AuditQualityIndicator(AQIs)Assessment: (1)AuditQualityIndicator(AQIs)Assessment: (1)AuditQualityIndicator(AQIs)Assessment: (1)AuditQualityIndicator(AQIs)Assessment: (1)AuditQualityIndicator(AQIs)Assessment: (1)AuditQualityIndicator(AQIs)Assessment: (1)AuditQualityIndicator(AQIs)Assessment: (1)AuditQualityIndicator(AQIs)Assessment: (1)AuditQualityIndicator(AQIs)Assessment:
Item
number		 Evaluation Item Evaluation opinions
1. Do CPAs and their affiliated accounting firms have the necessary professionalism and
management skills to carryout audits?
Sub-item indicators
Level of
the case
Level of the
accountingfirm
(1-1-1)Inspection experience of CPAs(chief CPA)
6years
16.6years
(1-1-1) Inspection experience of CPAs (counter-
signingCPA)
30 years
16.6 years
(1-1-2) Engagement quality control review (EQCR)
accountinginspection experience
6 years
14.9 years
(1-1-3) Inspection experience of inspectors above
managerial level(excludingCPAs)
7 years
18.9 years
Sub-item indicators
Level of the accounting
firm
(1-2-1)Traininghours for CPAs
48.8 hours
(1-2-2) Training hours for inspectors above managerial
level(excludingCPAs).
48.6 hours
(1-3-1) Turnover rate of inspectors above managerial level
(excludingCPAs)
0%
(1-4-1) Ratio of professionals in support of inspections by
the Department
4.4%
(1-4-2) Number of hours spent by professionals in cases
involvingTWSE/TPEx listed companies
0.1%		 CPAs have more
than 20 years of
auditing-related
experience; thus,
they have adequate
auditing knowledge.
Sub-item indicators Level of
the case		 Level of the
accountingfirm
(1-1-1)Inspection experience of CPAs(chief CPA) 6years 16.6years
(1-1-1) Inspection experience of CPAs (counter-
signingCPA)		 30 years 16.6 years
(1-1-2) Engagement quality control review (EQCR)
accountinginspection experience		 6 years 14.9 years
(1-1-3) Inspection experience of inspectors above
managerial level(excludingCPAs)		 7 years 18.9 years
Sub-item indicators Level of the accounting
firm
(1-2-1)Traininghours for CPAs 48.8 hours
(1-2-2) Training hours for inspectors above managerial
level(excludingCPAs).		 48.6 hours
(1-3-1) Turnover rate of inspectors above managerial level
(excludingCPAs)		 0%
(1-4-1) Ratio of professionals in support of inspections by
the Department		 4.4%
(1-4-2) Number of hours spent by professionals in cases
involvingTWSE/TPEx listed companies		 0.1%
2. Are CPAs overburdened with work, and is the inspection team has appropriate involvement
in various inspection stages?
Dimensi
ons
Sub-item indicators
Level of the
case
Level of the accounting
firm
(2-1-1)
The number of publicly offered
companies with CPAs serving as
the chief CPA.
7 companies
3.8 companies
The number publicly offered
companies with CPAs serving as
the chief CPA.
3 companies
3.8 companies
(2-1-2)
Ratio of CPAs who can put in
workinghours-chief CPAs
51.65%
34.7%
Ratio of CPAs who can put in
working hours-counter-signing
CPAs
35.1%
34.7%
Ratio of
inspection hours
Level of the case inspected in 2021
CPA
Managerial officer
Inspector
Total
Planningstage
6%
7%
28%
41%
Implementation
stage
5%
8%
46%
59%
Total
11%
15%
74%
100%
Ratio of
inspection hours
Level of the accountingfirm inspected in 2021
CPA
Managerial officer
Inspector
Total
Planningstage
3.2%
5.2%
25.9%
34.3%
Implementation
stage
4.9%
9.3%
51.5%
65.7%
Total
8.1%
14.5%
77.4%
100%		 The ratio of publicly
offered companies
with chief CPAs and
counter-signing
CPAs and the ratio
of CPAs who can
put in working
hours are considered
reasonable.
Dimensi
ons		 Sub-item indicators Level of the
case		 Level of the accounting
firm
(2-1-1) The number of publicly offered
companies with CPAs serving as
the chief CPA.		 7 companies 3.8 companies
The number publicly offered
companies with CPAs serving as
the chief CPA.		 3 companies 3.8 companies
(2-1-2) Ratio of CPAs who can put in
workinghours-chief CPAs		 51.65% 34.7%
Ratio of CPAs who can put in
working hours-counter-signing
CPAs		 35.1% 34.7%
Ratio of
inspection hours		 Level of the case inspected in 2021
CPA Managerial officer Inspector Total
Planningstage 6% 7% 28% 41%
Implementation
stage		 5% 8% 46% 59%
Total 11% 15% 74% 100%
Ratio of
inspection hours		 Level of the accounting firm inspected in 2021
CPA Managerial officer Inspector Total
Planningstage 3.2% 5.2% 25.9% 34.3%
Implementation
stage		 4.9% 9.3% 51.5% 65.7%
Total 8.1% 14.5% 77.4% 100%
3. Do engagement quality control review (EQCR) CPAs put in sufficient hours to implement
auditing case reviews and if accounting firms have sufficient quality control manpower to
support their inspection teams?		 The ratio of review
hours among EQCR
CPA accountants is
  • 56 -
Sub-item indicators Level of the case Level of the accountingfirm Level of the accountingfirm higher when
compared to the
level of the
accounting firm.
Furthermore, the
ratio of quality
control personnel
supporting the Audit
Department is
reasonable and
sufficient to
maintain the
Company's audit
quality.
(2-3-1) Ratio of EQCR CPAs’
review hours		 2% 0.82%
Sub-item indicators Level of the accountingfirm
(2-4-1) Equivalent number of full-time quality control
personnel		 10
(2-4-2) Ratio of quality control personnel supporting the
AuditingDepartment.		 8.8%
4. If accounting firms and their affiliated businesses collect excessive non-audit service fees
and if accounting firms provide financial reports and auditing services to the Company for
an inordinatelylong period of time.
Sub-item indicators
2021
2020
(3-1)Ratio of audit cases of non-audit service fees
32.13%
28.71%
Sub-item indicators
2021
(3-2) Cumulative number of years of audit cases certifying annual
financial reports at accountingfirms
29 years		 Although
accounting firms
have provided audit
services to the
Company for 29
years, CPAs have
not provided audit
services for more
than seven years and
non-audit fees do
not account for
more than 40%;
thus, when CPAs
and their affiliated
accounting firms
perform audit work,
they can maintain
independence and
express their
opinions fairly.
Sub-item indicators 2021 2020
(3-1)Ratio of audit cases of non-audit service fees 32.13% 28.71%
Sub-item indicators 2021
(3-2) Cumulative number of years of audit cases certifying annual
financial reports at accountingfirms		 29 years

(2) Independence and competence evaluation:


Item
numb
er
Evaluation Item		 Evaluation result Evaluation result
Yes/compliant No/non-
compliant
Independent evaluation
1. CPAs, their families (including spouses, persons living with CPAs, and minor
children)and the Companyhave no direct or significant indirect financial interests.
2. The accountant is not currently serving as a director, managerial officer or in a
position that has a significant impact on audit cases and has not done so in the
previous twoyears.
3. The CPA is not a spouse, direct blood relative, direct relative by marriage, relative
within the second degree or collateral relative by blood of the Company's directors,
managerial officers, or personnel whose positions have a significant impact on audit
cases.
4. CPAs, their accounting firms and affiliated enterprises do not provide non-audit
services that could jeopardize the Company's independence.
5. There are no circumstances in which CPAs have provided audit services to the
Companyfor seven consecutiveyears.(Note 3)
6. In the previous year, the individual did not hold the position of director, managerial
officer or otherposition with a significant impact on audit cases at the company.
7. Do CPAs maintain an impartial and objective stance when implementing professional
services to ensure that professional judgment is not influenced by bias, conflict of
interest or vital interest.
  • 57 -
Competence evaluation
8. Do CPAs and their affiliated accounting firms have the necessary professionalism
and management skills to carryout audits?
9. Do CPAs and their affiliated accounting firms possess adequate audit quality control
competence?
10. If CPAs have not received disciplinary action from the CPA Disciplinary Committee
within the last twoyears.
11. If CPAs timely complete the review or inspection of the Company’s quarterly
financial reports?

Note 1: When the above evaluation result is "no/not met," the situation should be described in detail to serve as a basis for determining the impact on independence and competence, as well as whether pr not a CPA replacement is required.

Note 2: In accordance with Article 68 of the Standard for Quality Control No. 1 and Article 29 of the Corporate Governance Best-Practice Principles, in order to prevent long-term relationship with the CPAs for providing services to the Company and the CPAs have become over-familiar with the Company's management and further lose their independence, the TWSE has clearly stipulated that CPAs must be replaced on a fixed period (usually not exceeding 7 years). Before 7 years of providing services to the same client is due, the CPAs must be changed from time to time. Note 3: The rotation periods (7 years) for the Company’s attesting CPAs is as below:

Note 3: The rotation periods (7 years) for the Company’s attesting CPAs is as below:
Non-audit services Amount
1.Reviewtheannualshareholders’ meetinghandbook andtheannual report NT$30,000
2. The consolidated financial report and parent company only financial report
2021(Englishversion)		 NT$160,000
3. Report on the 2021 taxation attestation NT$300,000

  • (3) Following an initial evaluation, the Company’s CPA independence and competence evaluation standards were met.

  • (VI) Composition, responsibilities and operation of the Remuneration Committee:

  • The Company has established the Remuneration Committee after passing the formulation of the “Remuneration Committee Charter” by the Board of Directors. The main duties of the Remuneration Committee are as follows and should submit suggestions to the Board of Directors for discussion.

    • (1) Establish and regularly review policies, system, standards and structures for performance evaluation and remuneration for directors and managerial officers.

    • (2) Regularly assess and set up the 2salary remuneration for directors and managerial officers.

  • The Company has appointed Wu Chun-Lai, Hsiao Sheng-Hsien, and Lorraine Yao as members of the Company’s 5th Remuneration Committee on the first meeting of the 21st Board of Directors’ meeting (June 14, 2022). It was proposed that the term of appointment should be June 14, 2022 to June 7, 2025, same as this board.

    1. The 5th Remuneration Committee held five meetings between June 14, 2022 and March 15, 2023 to assist the Board of Directors in implementing and evaluating the company's overall remuneration policies, as well as making recommendations to the Board of Directors.

  • 58 -

Information on Remuneration Committee members

April 9, 2024
Number of Other
Title
(Note 1)		 Conditions
Name
Professional qualifications and experience (Note 2)		 Independence (Note 3) Public Companies in
Which the Individual
is Concurrently
Serving as a Member
of the Remuneration
Committee
Convener Wu Chun-
Lai		  Independent director, FRG (now)
 General Counsel, Jet-Go Consulting Group.
 Executive Director, Active Aging Association Taiwan (now)
 Manager and spokesman of the chairman's office, Farglory
Group (in the past).
 He used to be the Executive Vice President of Heding
Technology (in the past).
 Deputy General Manager, Hung Kuo Real Estate Development
Corp. (in the past).
 Chair Professor, National Academy of Civil Service (in the past).
 Not under any circumstances set in Article 30 of the Company
Act
Independence compliance
1. Not a spouse, relative within the second degree of kinship, or
lineal relative within the third degree of kinship, of a managerial
officer under sub-paragraph 1 or any of the persons in
subparagraphs 2 and 3, Article 3 of the “Regulations Governing
Appointment of Independent Directors and Compliance Matters
for Public Companies.”
2. In no circumstances he/she, his/her spouse or blood relatives (or
in the name of others) hold shares of FRG.
3. In no circumstances he/she is serving as a director, supervisor or
employee of a company having specific relationship with FRG.
4. In no circumstances he/she is compensated by FRG or its
affiliated companies for business, legal, financial, accounting
and other services rendered in the last twoyears.		 0
  • 59 -
Member Xiao
Sheng-
Xian
(Resigned
on July 1,
2023)
 Independent director, FRG (now)
 Partner, Jianhe United Accounting Firm
 Senior consultant, Myriad Attorneys at Law
 Mediation committee member of the Civil Division, Taipei
District Court and mediation committee member of the Civil
Division, Shilin District Court.
 Independent director, Apex Science & Engineering Corp.
 Not under any circumstances set in Article 30 of the Company
Act		 Independence compliance
1. Not a spouse, relative within the second degree of kinship, or
lineal relative within the third degree of kinship, of a managerial
officer under sub-paragraph 1 or any of the persons in
subparagraphs 2 and 3, Article 3 of the “Regulations Governing
Appointment of Independent Directors and Compliance Matters
for Public Companies.”
2. In no circumstances he/she, his/her spouse or blood relatives (or
in the name of others) hold shares of FRG.
3. In no circumstances he/she is serving as a director, supervisor or
employee of a company having specific relationship with FRG.
4. In no circumstances he/she is compensated by FRG or its
affiliated companies for business, legal, financial, accounting
and other services rendered in the last twoyears.		 1
Member Lorraine
Yao		  Independent director, FRG (now)
 Partner CPA of ShineWing International
 Former Audit Manager of KPMG Taiwan
 Not under any circumstances set in Article 30 of the Company
Act		 Independence compliance
1. Not a spouse, relative within the second degree of kinship, or
lineal relative within the third degree of kinship, of a managerial
officer under sub-paragraph 1 or any of the persons in
subparagraphs 2 and 3, Article 3 of the “Regulations Governing
Appointment of Independent Directors and Compliance Matters
for Public Companies.”
2. The independent director only holds 4,500 shares, and his/her
spouse or blood relatives (or in the name of others) hold shares
of FRG.
3. In no circumstances he/she is serving as a director, supervisor or
employee of a company having specific relationship with FRG.
4. ShineWing International, the accounting firm the independent
director belongs to, had received no more than NT$500,000 as
the accumulated compensation in the most recent twoyears.
0

Note 1: Please profile members of the remuneration committee including relevant working years, professional qualifications and experience and independence in the form; regarding those being independent directors, add remark “please refer to page OO of directors and supervisors Information form (1). Regarding the “Role” cell: fill in “independent director” or other data (for conveners, remark them accordingly). Note 2: Professional qualifications and experience: note these data of individual compensation committee members.

Note 3: Compliance with independence: note remuneration committee members’ compliance with independence including but not limited to: circumstance of he/she and his/her spouse, or relatives within the second degree of kinship being directors, supervisors or employees of FRG or its affiliated companies; shares and portion of shares hold by he/she and his/her spouse, or relatives (or in name of others); being directors, supervisors, or employees of companies having

  • 60 -

specific relationship with FRG (see Article 6, paragraph 1, subparagraph 5 ~ 8 of the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange); the amount of remuneration received for providing business, legal, financial, accounting and other services to FRG or its affiliates in the last two years.

  • 61 -

Information on the Operation of the Remuneration Committee

I. The Company's Remuneration Committee is comprised of 3 members.

  • II. The term of the members: June 14, 2022 to June 7, 2025. The Remuneration Committee convened six meetings (A) from January 1, 2023 to March 12, 2024; qualifications and attendance of members are:
Title Name Actual attendance (B) Proxy Attendance Actual attendance
(%)
(B/A)
(Note)		 Remarks
Convener Wu Chun-Lai 6 0 100% None
Member Xiao Sheng-Xian 2 0 66.7% Resigned on July 1, 2023
The expected attendances during the office
this year were three, and the actual
attendances were two.
Member Lorraine Yao 6 0 100%
Member Lin Ying-Ji 2 0 100% Newly appointed on September 22, 2023.
The expected attendances during the office
this year were two and the actual attendances
were two.
Other information required:
I. If the board of directors defy or amend the recommendations by the remuneration committee, note down date of the meeting, term of the board, the content of
the proposal, the resolution of the board of directors, and measures taken by FRG against the recommendations made; (if the package approved by the
board is better than that of the remuneration committee, give variations’ value and reasons): none, see page 63 for details.
II. If with respect to any resolution of the remuneration committee, any member has a dissenting or qualified opinion that is on record or stated in a written
statement, the opinion shall be stated in the meeting minutes, including meeting date, term of the committee, the content of the proposal, the measures
taken byFRGfor the said members and their recommendation:none,seepage63for details.

  • Note: (1) If a member of the Remuneration Committee resigns before the end of the year, the resignation date shall be indicated in the Remarks field. The actual attendance rate (%) was calculated on the basis of the number of board meetings held during the term of the Remuneration Committee and the number of meetings actually attended during active duty.

  • (2) If there is a re-election of the Remuneration Committee before the end of the year, the new and old members of the Remuneration Committee must be stated, and indicate if such member is old, new, or re-elected, as well as the re-election date. The percentage of actual (proxy) attendance (%) will be calculated based on the number of Remuneration Committee meetings held during active duty and the number of actual (proxy) attendance.

  • 62 -

III. Other information required:

1. Motion contents and resolution results of the Remuneration Committee

Meeting date of the
Remuneration Committee		 Motion content Objections, reservations
or material
recommendations		 Resolution result The Company’s handling
of the Remuneration
Committee’s opinions
The 4th meeting of the 5th
Remuneration Committee
(February17,2023)		 Motion of performance, reward and punishment
for each department and project in 2022.		 None. Approved by all attending members as
proposed without dissent, and submitted
to the Board for resolution.		 Approved by all attending
directors as proposed
without dissent.
The 5th meeting of the 5th
Remuneration Committee
(March 15, 2023)		 1. Proposal for remuneration of directors and
remuneration distribution of employees (2022).
2. Dragon boat festival bonus (2023) of FRG and
Banjian subsidiary.		 None. Approved by all attending members as
proposed without dissent, and submitted
to the Board for resolution.		 Approved by all attending
directors as proposed
without dissent.
The 5th meeting of the 6th
Remuneration Committee
(May 9, 2023)		 1. Proposal to appoint consultants of the
Company’s subsidiary Banjian Development
Co., Ltd.
2. 2022 The performance project retention fund
distribution case of the Production Division and
Logistic Center		 None. Approved by all attending members as
proposed without dissent, and submitted
to the Board for resolution.		 Approved by all attending
directors as proposed
without dissent.
The 5th meeting of the 7th
Remuneration Committee
(August 8,2023)		 1. The semi-annual settlement of the performance
reward and punishment case of the Production
Division and Logistics Center.		 None. Approved by all attending members as
proposed without dissent, and submitted
to the Board for resolution.		 Approved by all attending
directors as proposed
without dissent.
The 5th meeting of the 8th
Remuneration Committee
(December 22, 2023)		 1. Proposal for year-end bonus (2023).
2. Proposal for year-end bonus (2023) of the
subsidiary, Banjian.
3. Proposal for remuneration of associate vice-
president, manager, vice-manager and assistant
managerial officer level(2024).		 None. Approved by all attending members as
proposed without dissent, and submitted
to the Board for resolution.		 Approved by all attending
directors as proposed
without dissent.
The 5th meeting of the 9th
Remuneration Committee
(March 12, 2024)		 1. Proposal for remuneration of directors and
remuneration distribution of employees (2023).
2. Dragon boat festival bonus (2023) of FRG and
Banjian subsidiary.		 None. Approved by all attending members as
proposed without dissent, and submitted
to the Board for resolution.		 Approved by all attending
directors as proposed
without dissent.

  1. If the board of directors defy or amend the recommendations by the remuneration committee, note down date of the meeting, term of the board, the content of the proposal, the resolution of the board of directors, and measures taken by FRG against the recommendations made; (if the package approved by the board is better than that of the remuneration committee, give variations’ value and reasons): None.

  2. If with respect to any resolution of the remuneration committee, any member has a dissenting or qualified opinion that is on record or stated in a written statement, the opinion shall be stated in the meeting minutes, including meeting date, term of the committee, the content of the proposal, the measures taken by FRG for the said members and their recommendation: none.

  3. Information and operation of the members of the nomination committee: FRG has no nomination committee as of now, FRG is expected to set up one in coming years.

  4. 63 -

(VII) Progress in practicing sustainable development; status of and causes to deviations from Sustainable Development Best Practice Principles for TWSE/TPEx-Listed Companies:

Item Progress (Note 1) Progress (Note 1) Progress (Note 1) status of and causes to
deviations from Sustainable
Development Best Practice
Principles for TWSE/TPEx
Listed Companies
Yes No Summary
I. Does the company establish a governance
structure to promote sustainable
development, and set up a dedicated (or
acting) unit to promote sustainable
development, authorize the senior
management to act accordingly, and status of
supervision by the board of directors?		 The Company has established the "Sustainable Development
Team"in 2023 to take charge of promoting the annual goals for all
ESG aspects, tracking and reviewing the implementation results of
various aspects of ESG, and greenhouse gas inventory. The
chairman serves as the convener of the team, the president serves
as the deputy convener, and the associate vice president and
advisors serve as members. The team selects one secretary general
and one secretary to take charge of the communications and
coordination of the team's duties, and the compilation and
provision of the information related the team's duties. The tasks
forces include the operation governance team, sustainable
manufacturing team, and social care team.
1. Operation governance team: assisting in the improvement and
implementation of the internal control system of the Company,
and integrating relevant departments to formulate various
corporate governance-related regulations and systems, while
establishing a high-quality team and learning-type organization
to improve business performance.
2. Sustainable manufacturing team: promoting product innovation,
research and development technologies, managing the
Company's tasks of environmental protection, waste, safety and
health, energy-saving, water-saving and greenhouse gas, while
enhancing sustainable competitiveness.
3. Social care team: in charge of maintaining labor-management
relations, planning various remuneration and benefits for
employees, and providing a diverse and competitive incentive
system to attract and develop outstanding talents. It also
promotes communication with external communities and
society,and works with the Formosan Rubber Charity		 Conformed to the Sustainable
Development Best Practice
Principles for TWSE/TPEx
Listed Companies
  • 64 -
Item Progress (Note1) Progress (Note1) Progress (Note1) status of and causes to
deviations from Sustainable
Development Best Practice
Principles for TWSE/TPEx
ListedCompanies
Yes No Summary
Foundation to promote social welfare activities and charity
donations.
The “Sustainable Development Team” reports to the Board on
ESG implementation and development direction recommendations,
to ensure that the Company's daily operations incorporate the
concept of sustainable management at least once a year.
At least once a year, the company's board of directors hears the
operating team's report (including ESG reports).
The management level must propose company strategies to the
board; the board must assess the likelihood of these strategies'
success and regularly inspect the implementation of strategies.
When necessary,
itwillprompt the management team to make adjustments.
II. Does the company conduct risk assessments on
environmental, social and corporate
governance issues related to company
operations in accordance with the principle of
materiality, and formulate relevant risk
management policies or strategies? (Note 2)
1. The Company shall conduct a detailed assessment and
classification of environmental, social and corporate
governance issues related to its operations for effective
management and control based on the principle of materiality
and establish relevant policies, strategies or operating
procedures, while disclosing such in the sustainability report in
accordance with the corporate governance 3.0-sustainable
roadmap, GRI, and TCFD related regulations.
2. The Company’s“Sustainable Development Team”will carry
out an analysis based on the principle of materiality in the
sustainability report, as well as communicate with interested
parties. Furthermore, the ESG majority issues are evaluated by
inspecting domestic and foreign research reports, literature and
integrating department and subsidiary evaluation data. This
enables the establishment of effective risk identification,
measurement, evaluation, supervision and control procedures,
as well as the implementation of specific action plans to
mitigate the effects of related risks.

Conformed to the Sustainable
Development Best Practice
Principles for TWSE/TPEx
Listed Companies
  • 65 -
Item Progress (Note1) Progress (Note1) Progress (Note1) status of and causes to
deviations from Sustainable
Development Best Practice
Principles for TWSE/TPEx
ListedCompanies
Yes No Summary
3. Based on the identified risks after an evaluation, the following
risk management policies orstrategies are asfollows:
Major issues
Risk assessment items Description ofpolicies or strategies
Corporate
governance
Social, economic, and
legal compliance
1. Establish governance
organizations and implement
internal control mechanisms to
ensure all the personnel in the
Company and operations are in
compliance with related laws and
regulations.
2. The products researched and
developed by the Company have
applied for patents to protect the
Company’s rights.
Strengthen board
functionality.
1. Plan relevant training topics for
the board and provide it with the
most recent regulations, system
development and policies every
year.
2. Acquire liability insurance for
the board to shield them against
lawsuits or claims for
reimbursement.
Communication with
interested parties.
1. Every year, the Company
analyzes important issues that are
important and concerning to them
in order to prevent interested parties
and the Company from taking
opposing positions, resulting in
misunderstandings and operating or
lawsuit risks.
2. Set up multiple communication
channels and actively communicate
to reduce opposition and
misunderstandings. Establish an
investor mailbox that will be tended
to by a spokesperson who will also
be responsible for answering
questions.
Major issues Risk assessment items Description ofpolicies or strategies
Corporate
governance		 Social, economic, and
legal compliance		 1. Establish governance
organizations and implement
internal control mechanisms to
ensure all the personnel in the
Company and operations are in
compliance with related laws and
regulations.
2. The products researched and
developed by the Company have
applied for patents to protect the
Company’s rights.
Strengthen board
functionality.		 1. Plan relevant training topics for
the board and provide it with the
most recent regulations, system
development and policies every
year.
2. Acquire liability insurance for
the board to shield them against
lawsuits or claims for
reimbursement.
Communication with
interested parties.		 1. Every year, the Company
analyzes important issues that are
important and concerning to them
in order to prevent interested parties
and the Company from taking
opposing positions, resulting in
misunderstandings and operating or
lawsuit risks.
2. Set up multiple communication
channels and actively communicate
to reduce opposition and
misunderstandings. Establish an
investor mailbox that will be tended
to by a spokesperson who will also
be responsible for answering
questions.
  • 66 -
Item Progress (Note1) Progress (Note1) Progress (Note1) status of and causes to
deviations from Sustainable
Development Best Practice
Principles for TWSE/TPEx
ListedCompanies
Yes No Summary
III. Environmental Issues
(I)
Does the company have an appropriate
environmental management system
established in accordance with its
industrial characteristics?
(II) Does the company committed to improve
energy efficiency and employ recycled
materials with low impact on the
environment?
(III)
Has the company assessed the potential
risks and opportunities for business
operations now and the future regarding
climate change and will it adopt response
measures related to climate issues?
(IV)
Has the Company tallied the greenhouse
gas emissions, water consumption and
total weight of waste over the past two
years and formulated policies on
greenhouse gas reduction, water
consumption reduction or other waste
management?


(I) FRG is implementing the environmental management system
(ISO14001) to perfect the system and enhance safety, health
and environmental management.
(II) FRG has been striving to improve the efficiency of resources
consumed including: no paper provided and requirement to
prepare personal cup by employees; requirement for
employees to bring their own environmentally friendly
utensils; use envelopes and Kraft paper bags repeatedly for
document delivery. The boilers in plants uses LPG & wooden
grains as fuels; commitment to garbage classification and
recycling renewable resources, and contribute to environment
protection, energy conservation and carbon reduction.
(III) The global climate has changed dramatically due to the
greenhouse effect and its impact scope poses potential risk for
a corporate sustainable operation. The Company has
established emergency response measures as to minimize the
impact when disaster strikes.
(IV) The Company is conducting an internal inventory of
greenhouse gases, and will set a goal to reduce greenhouse
gas emissions after the external verification is completed; the
Company strengthens the promotion for the concept of water-
saving, and the plant production lines will use recycled water
to reduce water consumption; the energy-saving and carbon
reduction are actively promoted, to achieve the waste
reduction target; the use of paper is reduced by digitalization;
the office temperature control is set with energy-saving light
bulbs to achieve the purpose of energy saving and carbon
reduction.
Conformed to the Sustainable
Development Best Practice
Principles for TWSE/TPEx
Listed Companies
  • 67 -
Item Progress (Note1) Progress (Note1) Progress (Note1) status of and causes to
deviations from Sustainable
Development Best Practice
Principles for TWSE/TPEx
ListedCompanies
Yes No Summary
IV. Social Issues
(I)
Does the company have the relevant
management policies and procedures
stipulated in accordance with the relevant
laws and regulations and international
conventions on human rights?
(II)
Has the company established and
implemented reasonable measures for
employee benefits (including:
remuneration, holidays and other benefits)
and appropriately reflect the business
performance or achievements in the
employee remuneration?
(I) The United Nations Global Covenant, the United Nations
Universal Declaration of Human Rights and the International
Labor Organization Declaration on Fundamental Principles
and Rights at Work are just a few examples of international
human rights conventions that the company supports and
abides by. It also respects employee rights and interests in the
workplace and works to end forms of discrimination, forced
labor and other human rights violations. To safeguard the
fundamental rights and interests of employees, all applicable
labor laws, employee appointment and dismissal procedures
and compensation are compliant with the company's
employee appointment management regulations.
(II) The Company outlines a number of welfare measures for its
employees. In addition to receiving meal subsidies during
working hours, all employees are also eligible for group
insurance, labor insurance, national health insurance, wedding
and childcare allowances, birthday and festival gift cards and
grants and scholarships for children's education. An
Employee Welfare Committee has also been created.
To ensure the retirement rights of the employees opted the
old pension system, the Company contributes 2% of the total
salary as a retirement fund every month, and deposits such in
a dedicate account in the name of the Labor Retirement
Reserve Supervisory Committee in the Trust Department of
Bank of Taiwan; 6% is contributed for the employees under
the new system as the labor pension to their personal account
in the Labor Insurance Bureau.
The Company calculates and pays wages, working hours,
leaves, pensions, labor and national health insurance,
occupational disaster compensation to employees pursuant to
labor laws and regulations. According to the Company’s
Articles of Incorporation, the Company distributesnoless
(I) Conformed to the
Sustainable Development
Best Practice Principles for
TWSE/TPEx Listed
Companies
(II) Conformed to the
Sustainable Development
Best Practice Principles for
TWSE/TPEx Listed
Companies
  • 68 -
Item Progress (Note1) Progress (Note1) Progress (Note1) status of and causes to
deviations from Sustainable
Development Best Practice
Principles for TWSE/TPEx
ListedCompanies
Yes No Summary
(III) Does the company provide employees with
a safe and healthy work environment, and
provide safety and health education to
employees regularly?
(IV) Does the company establish effective
training programs for employee's career
development?
(V)
Does the company comply with relevant
laws and international standards regarding
customer health and safety with respect to
its product and service, customer privacy,
marketing and labeling; formulate relevant
policies and complaint procedures for
consumer or customer rights protection?
(VI) Has the company established supplier
management policies demanding
compliance with relevant regulations and
their execution status regarding issues such
as environmental, occupational safety, and
healthor labor rights?

than 1% of profit before tax as remuneration to employees.
For relevant measures, please refer to the Company’s
website.
The Company's remuneration policy is based on personal
abilities, contribution to the Company, and performance,
which are positively correlated with business performance.
(III) Employee health examinations, on-site health services,
disaster prevention drills and labor safety and health
education and training are all scheduled on a regular basis to
help employees develop their ability to respond to
emergencies and self-manage their health and safety. The
Company has also established an emergency response
operation process to deal with emergencies that arise as a
result of operating activities, ensuring that employees work in
a safe and healthy environment.
(IV) The Company periodically sends staff members to technical
personnel training and on-the-job training, among other
training programs, in order to integrate internal and external
resources, strengthen career capabilities and enhance
performance and quality.
(V) The Company has set up a section for stakeholders on the
website and dedicated personnel has been assigned to handle
questions in relation to customers as a means to protection the
rights of consumers. The Company continues to update and
comply with relevant laws and regulations, and internal
standards.
(VI) The Company has not created pertinent policies, but domestic
and overseas suppliers have mostly had a long-term business
relationship with the Company, and all products are
compliant with laws and regulations.
(III) Conformed to the
Sustainable Development
Best Practice Principles for
TWSE/TPEx Listed
Companies
(IV) Conformed to the
Sustainable Development
Best Practice Principles for
TWSE/TPEx Listed
Companies
(V) Conformed to the
Sustainable Development
Best Practice Principles for
TWSE/TPEx Listed
Companies
(VI) Formulation of applicable
policies will be discussed.
  • 69 -
Item Progress (Note1) Progress (Note1) Progress (Note1) status of and causes to
deviations from Sustainable
Development Best Practice
Principles for TWSE/TPEx
ListedCompanies
Yes No Summary
V. Has the Company referred to the
internationally accepted reporting standards
or guidelines to prepare reports, such as ESG
reports that discloses the Company’s non-
financial information? Have the reports
mentioned previously obtained the assurance
of third party verification?		 The Company already provided a complete report before
September 30, 2023. The current sustainable report is the first
sustainable report prepared; and the verification unit has limited
capacity for verification, so the verification cannot be scheduled.
Currently, the assurance report and guarantee opinion from the
third-party verification unit is not obtained		 The sustainability report will be
provided on September 30,
2023. The verification unit has
limited capacity for verification,
so the verification cannot be
scheduled. Because the third-
party verification is not a
mandatory requirement,
verification commission is not
currentlyconsidered.
VI. If the company has its own sustainable development code in accordance with the Sustainable Development Best Practice Principles for TWSE/TPEx Listed
Companies, please note their implementation and differences between the two:
The company’s sustainable development best practice principles and related regulations were approved in 2023, which are in line with the Sustainable
Development Best Practice Principles for TWSE/TPEx Listed Companies.
VII. Other important information helpful to understand the implementation of sustainable development:
List of donations by FRG for community participation, social contribution, social service, social welfare at an amount over NT$600,000 in 2023:
1. Donation made to the academic research fundingof molecular cardiologyand cell medicine at Taipei Medical UniversityHospital
NT$600,000

  • Note 1: Regarding implementation progress checked by “Y”: please note important policies, strategies, measures adopted and their implementation situation; if “No”, please note reasons and status in the “deviations from Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” section along with program to execute relevant policies, strategies and measures in the future. However, regarding promotion items 1 and 2, the TWSE/TPEx listed companies shall describe the governance and supervision framework of sustainable development, including but not limited to management guidelines, strategy and goal establishment, and review measures. The Company's risk management policies or strategies for environmental, social and corporate governance issues related to operations, and its assessment status shall be specified as well.

  • Note 2: The principle of materiality refers to environmental, social and corporate governance issues with significant impact on the company's investors and other stakeholders.

Note 3: See cases of best practices displayed on the website of Corporate Governance Center by TWSE for disclosure methods.

  • 70 -

(VII-I) TWSE/TPEx-listed companies shall disclose information related to climate:

1. Climate-related information implementation

1. Climate-related information implementation
Item Progress
1.State the board's supervision and governance over climate-related risks
and opportunities.		 The board is the most senior level of the company's risk management,
and environmental risks are included in the scope of the company's risk
management policy.The management should oversee and govern climate-
related risks in accordance with the Company's risk management
policy.In addition, greenhouse gas inventory and verification should be
completed as scheduled. Progress must be reported to the board on a
regular basis in accordance with regulations.
2. Describe how identified climate risks and opportunities impact
businesses' business, strategies, and finances (short-term, medium-term,
and long-term).		 The company's climate-related risks and opportunities have been
published in the sustainability report and official website.
3. Describe the effects of extreme climate events and transformation
activities on finance.		 The company's financial impact, adaptation and response behaviors to
extreme climate events have been published in the sustainability report
and official website.
4.Describe how climate risk identification, assessment, and measurement
procedures are integrated into the overall risk management system.		 The company's overall risk management policy includes environmental
risks, which are treated the same as other risks and reported to the board
on a regular basis in accordance with regulations.
5. If a situation analysis is used to evaluate resilience to climate change
risk, describe the situations used, parameters, hypotheses, analysis
factors,and the expected effects on finance.		 The company currently does not utilize situation analysis to evaluate
resilience to climate change risks.
6. If there are transformation plans in place to manage climate-related
risks, explain the plan's content as well as the indicators and goals used in
identifyingand managing physical and transformation risks.		 The Company's transformation plan to manage
still under evaluation and formulation.		 climate-related risks is
7.If internal carbon pricing is used as a planning tool, specify the pricing
basis.		 Will wait for the government to announce the
before making plans.		 carbon price standards
8. If climate-related objectives are established, explain activities covered,
as will the scope of greenhouse emissions, schedule planning, annual
progress, and other information. If carbon offsets or renewable energy
certifications(RECs)are used to achieve relatedgoals, please specifythe		 The company's climate-related objectives are still being evaluated and
formulated.
  • 71 -

carbon offset cost and quantity, as well as the quantity of renewable energy certifications.

  1. Greenhouse gas inventory, validation status, reduction goals, Please refer to 1-1 and 1-2 strategies, and specific action plans (completed separately for 1-1 and 1- 2).

1-1 The Company’s Greenhouse Gas Inventory and Validation Status in the Most Recent Two Years

  • 1-1-1 Greenhouse Gas Inventory Information

Describe the greenhouse gas emissions in the most recent two years (metric tons of CO2e), density (metric tons of CO2e/NT$ thousand), and scope of information coverage.

The company began taking inventory in 2022.

The greenhouse gas inventory mechanism was established in accordance with the Greenhouse Gas Protocol released by the World Business Council Sustainable Development (WBCSD)and World Resources Institute (WRI)/ISO14064-1 Greenhouse Gas Inventory Standards released by the International Organization for Standardization (ISO).Since 2022, the Company's greenhouse gas emissions have been regularly inventoried in order to gain a comprehensive understanding of greenhouse gas use and emission status, as well as to validate the effectiveness of reduction actions. Furthermore, the greenhouse gas inventory data for the two most recent years is based on the management control method, which summarizes the Company's greenhouse gas emissions and appears in the consolidated financial statements:

Scope 2022 2023
Scope 1 (Category 1)
Directgreenhousegas emissions		 890.847 604.818
Scope 2 (Category 2)
Indirectgreenhousegas emissions		 7,743.72 3,141.33
Totalgreenhousegas emissions(unit: metric tons of CO2e) 8,634.57 3,746.15
Turnover(Unit: NT$ thousand)
1,937,243		 1,359,718
Intensity of greenhouse gas emissions (unit: metric tons of
CO2 e/NT$thousand)
0.004457		 0.002755

Note:

  1. The source of the conversion coefficient is the Environmental Protection Administration's greenhouse gas emission coefficient management table (6.0.4 version).

  2. The operational control method is used to define organizational boundaries.

  3. The estimated values from the IPCC's fifth assessment report are used to calculate the global warming potential of various greenhouse gases.

  4. The carbon emission coefficient of electricity in 2021 was 0.509 kg CO2e/kWh; in 2022, it is 0.495 kg CO2e/kWh. The emission coefficient in 2023 has yet to be released; therefore, the 2022 emission coefficient was used in the calculation.

  5. Greenhouse gas intensity=total greenhouse gas emissions÷turnover

  6. 72 -

  7. Because 2022 was the first year that carbon foot verification (CFV) was implemented, it served as the baseline year for greenhouse gas emissions, which were 8,634.565 metric tons of CO2e.

1-2Greenhosue Gas Reduction Goals, Strategies, and Specific Action Plans

Describe the baseline year of greenhouse gas reduction, its data, reduction goals, strategies, and the achievement status of the specific action plans and reduction goals. Beginning in 2022, Formosan Rubber Group has been conducting greenhouse gas inventory in accordance with the ISO 14064-1 greenhouse gas inventory standard, including Scope 1 (Category 1) and Scope 2 (Category 2) greenhouse gas emissions inventory, with 2022 serving as the baseline year.The Formosan Rubber Group intends to obtain the ISO 14064-1:2018 Greenhouse Gas Inventory Declaration in accordance with regulations. In 2023, the Formosan Rubber Group's greenhouse gas Scope 1 emissions were 604.818 metric tons of CO2e, while its Scope 2 emissions were 3,141.333 metric tons of CO2e, totaling 3,746.151 metric tons of CO2e.Total greenhouse gas emissions decreased by 4,888.414 metric tons of CO2e from 2022.

  • 73 -

(VIII) Status of performing honest business operations and the status of and causes to deviations from Honest Business Operations Best Practice Principles for TWSE/TPEx Listed Companies:

Principles for TWSE/TPEx Listed Companies:
Evaluation Item ImplementationStatus(Note 1) Nonconformity to the thical
Corporate Management
Best Practice Principles for
TWSE/TPEx Listed
Companies, and reasons
thereof
Yes No Summary
I. Ethical Management Policies and Action Plans
(I) Has the company established an ethical management policy
that has been passed by its Board of Directors, and clearly
specified in its rules and external documents the ethical
corporate management policies and the commitment by
the Board of Directors and senior management on
rigorous and thorough implementation of such policies
and methods?
(II) Has the company established a risk assessment mechanism
against unethical behavior, analyzed and assessed
business activities within their business scope on a
regular basis which are at a higher risk of being involved
in unethical behavior, and established prevention
programs at least covering the preventive measures
specified in Paragraph 2, Article 7 “Ethical Corporate
Management Best Practice Principles for TWSE/TPEx
Listed Companies”?
(III) Has the company specified operational procedures,
behavioral guidelines, disciplines of violations, as well as
an appeal system in the program against unethical
behavior, and implemented such programs, and reviewed
and revised the previous program on a regular basis?


(I) The Company’s board passed the ethical
management operating procedure and code of
conduct on November 7, 2023. Its rules and
external documents clearly specify ethical corporate
management policies, as well as the Board of
Directors' and senior management's commitment to
rigorous and thorough implementation of such
policies and methods.
(II) The company has established a risk assessment
mechanism against unethical behavior, analyzed
and assessed business activities within their
business scope on a regular basis that are at a higher
risk of being involved in unethical behavior and
established prevention programs that at least cover
the preventive measures specified in Paragraph 2,
Article 7 of the "Ethical Corporate Management
Best Practice Principles for TWSE/TPEx Listed
Companies."
(III) On November 7, 2023, the company's board
approved reporting and disciplinary guidelines for
unethical behavior and ethical management, which
were implemented accordingly. The preceding
plans were also periodically reviewed and revised.

(I) It has met the
requirements
stipulated in the
Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies.
(II) It has met the
requirements
stipulated in the
Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies.
(III) It has met the
requirements
stipulated in the
Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies.
  • 74 -
Evaluation Item ImplementationStatus(Note 1) ImplementationStatus(Note 1) ImplementationStatus(Note 1) Nonconformity to the thical
Corporate Management
Best Practice Principles for
TWSE/TPEx Listed
Companies, and reasons
thereof
Yes No Summary
II. Implementation of Ethical Management
(I)
Does the company evaluate the integrity of all
counterparties it has business relationships with? Are there
any integrity clauses in the agreements it signs with
business partners?
(II)
Has the company set up a dedicated responsible unit to
promote corporate ethical management under the Board of
Directors, and has such unit reported its execution in terms
of ethical management policy and preventive programs
against unethical behaviors and the supervision status to
the Board of Directors on a regular basis (at least once a
year)?
(III) Does the company have any policy that prevents conflict
of interest, and channels that facilitate the reporting of
conflicting interests?


(I) Prior to having a business relationship with a
counterparty, the Company shall take into
consideration of their legality and goodwill, and the
contract is advised to include ethical terms and
conditions.
(II) 1.The Company’s Department of Management
promotes the Company’s “ethical management
unit”.The unit is responsible for the planning,
promotion, and implementation of relevant matters.
In addition, it shall report its execution in terms of
ethical management policy and preventive
programs against unethical behaviors and the
supervision status to the Board of Directors on a
regular basis (at least once a year). The most recent
update to the board on the implementation status
was on January 31, 2024.
2.The Company's 2023 implementation status in
meeting the requirements of its ethical management
policy:
A.The Company approved the “Ethical
Management Policy”, “Ethical Corporate
Management Best Practice Principles”,
“Operating Procedures for Ethical
Management”, “Code of Conduct”, and
“Guidelines for Reporting and Penalties for		 (I) It has met the
requirements
stipulated in the
Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies.
(II) It has met the
requirements
stipulated in the
Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies.
(III) It has met the
requirements
stipulated in the
Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies.
  • 75 -
Evaluation Item ImplementationStatus(Note 1) ImplementationStatus(Note 1) ImplementationStatus(Note 1) Nonconformity to the thical
Corporate Management
Best Practice Principles for
TWSE/TPEx Listed
Companies, and reasons
thereof
Yes No Summary
(IV) Has the company established an effective accounting
system and internal control system in order to implement
ethical management, and propose relevant audit plans
according to the assessment results of the risks of unethical
behaviors, and review the compliance status of the
prevention of unethical behaviors, or entrust an account to
carry out the review?
(V)
Does the company organize internal or external training on
a regular basis to maintain business integrity?


Violation of Ethical Behaviors and Ethical
Management” for 2023, which were announced
on the website.The Company is carrying out the
implementation as provisioned. In 2023, no
reports of violations of ethical behavior or
ethical management were received.
B. The Company’s Ethical Commitment Letter
were signed by 181 people.
(III) As a means to prevent conflict of interest, when a
proposal at a given Board of Directors meeting
concerns the personal interest of, or the interest of
the juristic person represented by any of the
directors, managerial officers and other
stakeholders attending or present at board meetings
of the Company, the concerned person shall state
the important aspects of the relationship of interest
at the given board meeting. If his or her
participation is likely to prejudice the interest of the
company, the concerned person may not participate
in discussions of or voting on the proposal and shall
recuse himself or herself from the discussion or the
voting and may not exercise voting rights as a
proxy for another director. The directors shall
practice self-discipline and must not support one
another in improper dealings.
(IV)All units shall complywith the CompanyAct,
(IV) It has met the
requirements
stipulated in the
Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies.
(V) It has met the
requirements
stipulated in the
Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies.
  • 76 -
Evaluation Item ImplementationStatus(Note 1) ImplementationStatus(Note 1) ImplementationStatus(Note 1) Nonconformity to the thical
Corporate Management
Best Practice Principles for
TWSE/TPEx Listed
Companies, and reasons
thereof
Yes No Summary
Securities and Exchange Act, Business Entity
Accounting Act and other relevant laws and
regulations, and audit and internal rules which
specify the compliance of employees. Internal
auditors shall inspect the implementation status of
ethical management on an unscheduled basis in the
form of a project.
(V) Regular promotion is carried out, so that employees
understand the Company’s policy and consequences
to a violation.
III. Whistleblowing system
(I)
Has the Company formulated a specific whistleblowing and
reward system, established a convenient whistleblowing
method, and assigned appropriate personnel to handle the
party accused?
(II) Has the Company formulated standard operating
procedures for investigation of reported cases, the follow-
up measures to be taken after the investigation is
completed, and a confidentiality mechanism?
(III) Has the company taken appropriate measures to protect the
whistle-blower from suffering any consequences of
reporting an incident?

(I) The Company has not formulated any concrete
whisteblowing and reward system. However,
employees of the Company can make a report to the
management or HR unit through communication
channels such as the Company’s internal website
and the complain mailbox of the HR unit.
(II) Although the Company has not formulated relevant
operational procedures and confidentiality
mechanism, the Company handles reports with
confidentiality.
(III) The Company protects the identity of the
whistleblower.
(I) Formulation of
specific reporting and
incentive systems will
be discussed.
(II) Formulation of
relevant operational
procedures and
confidentiality
mechanism will be
discussed.
(III) It has met the
requirements
stipulated in the
Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies.
  • 77 -
Evaluation Item ImplementationStatus(Note 1) ImplementationStatus(Note 1) ImplementationStatus(Note 1) Nonconformity to the thical
Corporate Management
Best Practice Principles for
TWSE/TPEx Listed
Companies, and reasons
thereof
Yes No Summary
IV. Strengthening of Information Disclosure
Does the company have the contents of ethical corporate
management and its implementation disclosed on the
website and MOPS?		 The Company shall disclose its implementation status in
the annual report as required by the Regulations
Governing Information to be Published in Annual
Reports of Public Companies,
and disclose the annual report on the
Company’s website: www.frg.com.tw.		 It has met the requirements
stipulated in the Ethical
Corporate Management
Best Practice Principles for
TWSE/TPEx Listed
Companies.
V. For companies who have established Ethical Corporate Management Best Practice Principles in accordance with the “Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies”, please describe the current practice and any deviations from the code of conduct:
The Company’s Ethical Corporate Management Best Practice Principles and relevant rules were approved in 2023.It has met the requirements stipulated in the
Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies.
VI. Other material information that helps to understand the practice of ethical management of the company: (e.g., the review and revision of the best-practice
principles of the Company in ethical management)
The Company adheres to its philosophy of the 7 highest principles including ‘making a contribution to the society’, “being loyal and honest”, “being modest”,
“being responsible”, “refinement”, “striving for success” and “being grateful”. The Company requires all employees to abide by the spirit of these 7 principles
and all laws and regulations as well as measures. Various employee rules have been formulated to ensure the implementation of ethical management and law
compliance.

Note 1: Regardless of clicking “yes” or “no”, it should be explained in the summary field.

  • 78 -

  • (IX) If the company has established corporate governance principles and related regulations, their search method (http://www.frg.com.tw/m/stcg16.html) should be made public.

  • (X) Disclose other important information helpful in enhancing the understanding of the operation of corporate governance together:

  • See Item (16) of Section III of “Risk Management Policy and Organizational Structure of Formosan Rubber Group Inc.”

  • Further education of corporate governance for managerial officers and chief internal auditor:

Title Name Date of
Appointment		 Date of the Continuing
**Education **		 Date of the Continuing
**Education **		 Organizer Course Name Hours
of
Course
Whether the
Continuing
Education
Meets the
Requirements
(Note 1)

From		 To
President Hsu
Zhen-Ji		 2022/06/14 2023/11/14 2023/11/14 Taiwan Corporate Governance Association New money-launderingmodes and regulatorytrends 3 Yes
2023/12/01 2023/12/01 The era of enhanced monitoring and control over
personal information.		 3
Audit Officer Ou,
Chia-
Bao		 2021/01/01 2023/05/25 2023/05/25 Securities and Futures Institute The legal compliancepractice of board operations. 6 Yes
2023/09/12 2023/09/12 Practice of investment in circular auditing 6
Chief accounting
officer		 Shi
Ming-
De		 2010/02/01 2023/04/20 2023/04/21 Accounting Research and Development
Foundation
Accounting supervisor advance training courses		 12 Yes
Chief corporate
governance officer		 Shi
Ming-
De		 2021/06/30 2023/04/27 2023/04/27 TWSE Promotion conferences for sustainable development
actionplans of TWSE/TPEx listed companies		 3 Yes
2023/06/02 2023/06/02 Securities and Futures Institute 2023 Insider Trading Prevention Promotion
Conference		 3
2023/06/02 2023/06/02 The Chinese National Association of
Industryand Commerce,Taiwan(CNAIC)
2023 Taishin Net Zero Power Summit Forum		 3
2023/07/04 2023/07/04 TWSE 2023 Cathay Sustainable Finance and Climate
Change Summit Forum		 6

(Note 1) Whether continuing education hours, scope of continuing education, continuing education system, arrangement of continuing education and disclosure of information are in compliance as required in the “Regulations Governing Establishment of Internal Control Systems by Public Companies”.

  • 79 -

3. Continuing Education for Directors:

Title Name Date of
Appointment		 Date of the Continuing
Education		 Date of the Continuing
Education		 Organizer Course Name Hours of
Course		 Whether the
Continuing
Education
Meets the
Requirements
(Note 1)

From		 To
Chairperson Hsu Zhen-
Tsai		 2022/06/08 2023/11/15 2023/11/15 Securities and Futures Institute 2030/2050 Green Industrial Revolution 6 Yes
2023/12/12 2023/12/12 Grouptaxation concepts, practices and tools
Director
and
President		 Hsu Zhen-
Ji		 2022/06/08 2023/11/14 2023/11/14 Taiwan Corporate Governance
Association		 New money-launderingmodes and regulatorytrends 6 Yes
2023/12/01 2023/12/01 The era of enhanced monitoring and control over personal
information.
Representat
ive of
juristic-
person
director		 Hsu Zhen-
Xin		 2022/06/08 2023/07/12 2023/07/12 Greater China Financial and Economic
Development Association
Taiwan Listed Companies Association		 AI thinkingand digital transformation 9 Yes
2023/09/13 2023/09/13
Domestic and foreign economics, industrial trends and
copingstrategies of enterprises
2023/10/11 2023/10/11 Enterprise talent competition: Discussion of employee
incentive strategies and keyissues.
Representat
ive of
juristic-
person
director		 Hsu Wei-
Zhi		 2022/06/08 2023/09/07 2023/09/07 Securities and Futures Institute Technology Development and Business Opportunities of
Electric Vehicles and Smart Vehicles		 6 Yes
2023/10/19 2023/10/19 ChatGPT technology development and business
opportunities arising from its applications
Representat
ive of
juristic-
person
director		 Lin Kun-
Rong		 2022/06/08 2023/05/30 2023/05/30 Taiwan Corporate Governance
Association		 New enterprise risks: climate change 6 Yes
2023/09/19 2023/09/19 Carbon credit for enterprises, carbon asset management,
and responses under global carbon trade mechanisms
Representat
ive of
juristic-
person
director		 Chu,
Lung-
Tsung		 2022/06/08 2023/06/30 2023/06/30 Taiwan Corporate Governance
Association		 Future global risks and opportunities for sustainable
transformation		 6 Yes
2023/07/21 2023/07/21 How start-up companies engage in equity planning and
organizational structure design
Independent
director
Xiao
Sheng-
Xian
(Resigned on
July1,2023)		 2022/06/08 2023/04/21 2023/04/21 Taiwan Corporate Governance
Association		 How did the 2023 board develop ESG sustainable
governance strategies?		 6 Yes
2023/05/30 2023/05/30 New enterprise risks: climate change
Independent
director
Wu Chun-
Lai		 2022/06/08 2023/10/26 2023/10/26 ESG Sustainable Thinking Academy 【Certification Forum】New Trend of Sustainability:
The new era of leader risks and information security under
digitalgovernance		 6 Yes
2023/12/26 2023/12/26 Online board and shareholders in practice in the era of
digitalization
Independent
director
Lorraine
Yao		 2022/06/08 2023/12/19 2023/12/19 Taiwan Corporate Governance
Association		 Analysis of the practice of criminal liability in illegal
securities cases.		 15 Yes
2023/09/06 2023/09/06 Certified Public Accountant Apreliminarydiscussion of the impact of actionplans for
  • 80 -
Associations, R.O.C. sustainable development and valuation institution
managementguidelines on the accountingindustry.
2023/10/23 2023/10/23 The most recent anti-money laundering trends and
businesses
2023/11/09 2023/11/09 Investment-level sustainable report
2023/12/29 2023/12/29 Introduction to Climate Change Response Act

(Note 1): Whether continuing education hours, scope of continuing education, continuing education system, arrangement of continuing education and disclosure of information are in compliance as required in the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE/TPEx Listed Companies.”

  • 81 -

4. Procedures for Handling Material Inside Information:

Procedures for Handling Material Inside Information Formosan Rubber Group Inc.

Article 1 (Purpose of these Procedures)

These Procedures are specially adopted to establish sound mechanisms for the handling and disclosure of material inside information by the Company, in order to prevent improper information disclosures and to ensure the consistency and accuracy of information released by the Company to the public.

Article 2 (Material inside information shall be handled in accordance with applicable

laws and regulations and these Procedures)

The Company handles and discloses internal material information pursuant to relevant laws, orders, and regulations of the Taiwan Stock Exchange, as well as the operational procedures, or after further evaluation of the materiality, any decision or event affecting the Company's finances, business, shareholders' equity or securities prices materially, the material information shall be released as soon as possible within the timeframe required laws.

Article 3 (Scope of application)

These Procedures shall apply to all directors, managerial officers, and employees of this Corporation.

This Corporation shall ensure that any other person who acquires knowledge of this Corporation's material inside information due to their position, profession, or relationship of control shall comply with the applicable provisions of these Procedures.

Article 4 (Scope of material inside information)

For the purposes of these Procedures, the term "material inside information" refers to information that, with reference to the Securities and Exchange Act, other applicable laws and regulations, and the applicable rules and regulations of the TWSE or the TPEx, is defined as material inside information by the responsible unit in charge of handling of such information and is further approved by a resolution of the Board of Directors.

Article 5 (Responsible unit in charge of the handling of material inside information)

The Company has assigned the management division as the responsible unit with handling material inside information. The unit shall have the following functions and authorities:

  • I. Responsibility for formulating the drafts of these Procedures and any amendments to them.

  • II. Responsible for handling internal material information processing operations and operations of evaluation, review, approval, and release related to the operational procedures. Electronical approval is only permitted for emergencies, non-business hours, or natural disasters of force majeure, otherwise, the "approval of material information release" shall be documented in writing and reported to the president for approval of action. If the evaluation or approval is done electronically, such shall be archived in

  • 82 -

written documents afterwards. The previous evaluation records, approval documents and related materials shall be retained for at least five years.

  • III. Responsibility for receiving reports on unauthorized disclosures of material inside information and formulation of corresponding measures.

  • IV. Responsibility for designing a system for preserving all documents, files, electronic records, and other materials related to these Procedures.

  • V. Other activities related to these Procedures.

Article 6 (Confidentiality firewall operations - Personnel)

The Company's directors, managerial officers, and employees shall exercise the due care and fiduciary duty of a good administrator and act in good faith when performing their duties, and shall sign confidentiality agreements.

No director, managerial officer, or employee with knowledge of material inside information of this Corporation may divulge the information to others.

No director, managerial officer, or employee of this Corporation may inquire about or collect any non-public material inside information of this Corporation not related to their individual duties from a person with knowledge of such information, nor may they disclose to others any non-public material inside information of this Corporation of which they become aware for reasons other than the performance of their duties.

Article 7 (Confidentiality firewall operations - Documents and information)

Proper protection of confidentiality shall be given to files and documents containing the Company's material inside information when transmitted in written form. When transmitted by e-mail or other electronic means, such files and documents must be processed with appropriate security technology such as encryption or electronic signatures.

Files and documents containing the Company's material inside information shall be backed up and stored in a secure location.

Article 8 (Operation of confidentiality firewalls)

The Company shall ensure that the firewalls specified in the preceding two articles are established, and take the following additional steps:

I.Adopt adequate control measures for the firewalls and perform periodic testing.

II.Enhance measures for custody and maintaining the secrecy of files and documents containing non-public material inside information of this Corporation.

Article 9 (Confidentiality obligations of outside organizations and persons)

Any organization or person outside of this Corporation that is involved in any corporate action of this Corporation relating to a merger or acquisition, major memorandum of understanding, strategic alliance, other business partnership plans, or the signing of a major contract shall be required to sign a confidentiality agreement, and may not disclose to another party any material inside information of this Corporation's thus acquired.

Article 10 (Principles of disclosure of material inside information)

  • 83 -

The Company shall comply with the following principles when making external disclosures of material inside information:

  • I. The information disclosed shall be accurate, complete, and timely.

  • II. There shall be a well-founded basis for the information disclosure.

  • III. The information shall be disclosed fairly.

Article 11 (Implementation of the spokesperson system)

Any disclosure of the Company's material inside information, except as otherwise provided by law or regulation, shall be made by this Corporation's spokesperson, or by a deputy spokesperson acting in such capacity in a confirmed sequential order. When necessary, the disclosure may be made directly by a responsible person of this Corporation.

The Company's spokesperson or deputy spokesperson shall communicate to outside parties only information within the scope authorized by the Company, and no personnel of the Company's other than those serving as the Company's responsible person, spokesperson, or deputy spokesperson may disclose any material inside information of the Company's to outside parties without authorization.

Article 12 (Record of disclosure of material inside information)

The Company shall keep records of the following in respect of any disclosure of information to outside parties:

  • I. The person who discloses the information, the date, and the time.

  • II. How the information is disclosed.

  • III. What information is disclosed.

  • IV. What written material is delivered.

  • V. Any other relevant details.

Application form for public announcements: please see Table 1 and Table 2

Article 13 (Response to false media coverage)

If a media agency releases information that is in any respect inconsistent with material information disclosed by this Corporation, the Company shall promptly issue a clarification on the Market Observation Post System (MOPS) and request the media agency to correct the information.

Article 14 (Reporting of unusual events)

Any director, managerial officer, or employee of the Company that becomes aware of any unauthorized disclosure of the Company's material inside information shall report to the responsible unit and the internal audit department of the Company as soon as practicable.

Upon receipt of a report made pursuant to the preceding paragraph, the responsible unit shall formulate corresponding measures. When necessary, it may invite members from the internal audit and other departments to meet for discussion of the measures, and shall keep a record of the results of the measures for future reference. The internal auditors shall also perform such audits as their duties may require.

  • 84 -

Article 15 (Disciplinary measures)

The Company shall take measures to discover those responsible and take appropriate legal action against any personnel under either of the following circumstances:

  • I. Personnel of the Company disclose material inside information without authorization to any outside party, or otherwise violate these Procedures or any other applicable law or regulation.

  • II. A spokesperson or deputy spokesperson of this Corporation communicates to any outside party any information beyond the scope authorized by the Company, or otherwise violates these Procedures or any other applicable law or regulation.

If any person outside the Company divulges any material inside information of the Company, thereby causing damage to any property or interest of the Company, the Company shall pursue appropriate measures to hold the person divulging the information legally liable.

Article (Internal controls)

These Procedures shall be incorporated into the Company's internal control system. The internal auditors shall keep themselves regularly informed of the status of compliance with these Procedures and shall prepare related audit reports, so as to ensure full implementation of the procedures for handling material inside information.

Article 17 (Awareness campaigns)

At least once per year, the Company shall conduct educational campaigns to promote awareness among all directors, managerial officers, and employees with respect to these Procedures and related laws and regulations.

The Company shall also provide educational campaigns to new directors, managerial officers, and employees in a timely manner.

Article 18

These Procedures, and any amendments to them, shall be implemented upon approval by the Board of Directors.

Article 19

These Operational Procedures were formulated on June 9, 2011

The Operational Procedures were amended on March 15, 2023.

  • 85 -

  • (XI) The progress of the internal control system implementation of shall disclose the following matters:

  • Internal Control Statement:

Formosan Rubber Group Inc.

Internal Control Statement

Date: March 12, 2024

The following is hereby declared based on the self-assessment results in 2023 in accordance with FRG's internal control system:

  • I. FRG confirms that the establishment, implementation and maintenance of the internal control system is the responsibility of the company's board of directors and managerial officers, and the company has established such a system. It is aimed to reasonably ensure the achievement of effectiveness and efficiency of operations (including profit, performance, and asset security), reporting reliability, timeliness, transparency, and compliance with relevant norms and regulations.

  • II. The internal control system has its inherent limitations. Regardless its perfectness, what is can do is nothing more than meeting the said goals in acceptable level, let alone its effectiveness will go in line with changing environment and circumstances. The internal control system of FRG comes with built-in selfmonitoring; that is, any deficiencies once identified, immediate steps will be exercised to remedy them.

  • III. FRG determines effectiveness of its internal control system ’ s design and execution according to criteria set by the “ Regulations Governing Establishment of Internal Control Systems by Public Companies ” (hereinafter referred to as "the Regulations"). Criteria of internal control system set by the Regulations are management control process specific and come in five dimensions: 1. Control environment, 2. Risk assessment, 3. Control operations, 4. Information and communication, and 5. Supervision of operations. Each element further encompasses several sub-elements. Please refer to “ the Regulations ” for details.

  • IV. FRG employs these criteria to assess effectiveness of design and performances of internal control system.

  • V. Based on the aforementioned assessment results, it is deemed that the Company's internal control system on December 31, 2023 (including the supervision and management of subsidiaries), including an understanding of the level of operational effectiveness and efficiency and objective achievement level. The report's reliability, timeliness, transparency, and compliance with relevant regulations, as well as related internal control systems, are deemed effective in terms of design and implementation. Furthermore, they ensure the reasonable achievement of the aforementioned objectives.

  • VI. This statement will be part of the company's annual report and prospectus, and will be made public. In case of any false, concealment or other illegal circumstances in the said public information, FRG may subject to legal liabilities under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.

  • 86 -

  • VII. The board of directors of FRG approved this statement on March 12, 2024. None of the eight directors present raised any objections, and all agreed with the content of this statement, which is hereby declared.

Formosan Rubber Group Inc.

Chairman: Hsu Zhen-Tsai (Signature)

General Manager: Hsu Zhen-Ji (Signature)

  • 87 -

  • If an accountant is entrusted to perform a special audit on the internal control system, the audit report shall be disclosed: None.

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

  • (XIII) Important resolutions of the shareholders' meeting and the board of directors from the beginning of last to the publication date of the annual report:

  • Review of the execution of the resolutions of the shareholders meeting: The matters resolved by the previous shareholders’ meeting on June 9, 2023 have all been enforced according to the resolution; the review of the execution is as follows:

have all been enforced according
is as follows:		 have all been enforced according
is as follows:		 have all been enforced according
is as follows:		 to the resolution; the review of the execution to the resolution; the review of the execution
Importantresolutions Execution review
1. Proposal to recognize the Company’s 2022 business
report and financial statements.
2. Proposal to recognize the Company’s 2022 earning
distribution.
3. The proposal of cash capital decrease was approved.
4. Ratify the proposal to amend some of the provisions
of the company's " Operational Procedures for
Acquisitionor Disposalof Assets".		 1. The proposal was passed as proposed by the
shareholders present at the meeting.
2. The motion was passed without objections after
the chair consulted with all attending directors.
3. The proposal was passed as proposed by the
shareholders present at the meeting.
Listing of new shares on September 18th, 2023,
and cash reduction and return of money paid on
shares on September 18, 2023.
4. The proposal was passed as proposed by the
shareholders present at the meeting.
2. Important resolutions of the Board of Directors’meeting:
Date of important resolutions
Important discussions
Resolution
The 7th meeting of the 21st board
of directors (February 17, 2023)		 1. Motion of credit limit with corresponding banks.
2. Proposal of authorization for the Company's 2023
investment limit of overseas financial assets.
3. Motion of performance, reward and punishment
for each department and project in 2022
(presented by each unit)		 1. The motion has been approved by
all attending directors without any
dissenting opinion.
2. After deliberated by the Investment
Decision-Making Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
3. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
The 8th meeting of the 21st board
of directors (March 15, 2023)		 1. Annual business report and financial statements
2022.
2. Remuneration of directors and remuneration
distribution of employees (2022).
3. Proposal of the 2022 cash dividends paid from
earning distribution.		 1. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion, and was submitted for
recognition at the shareholders
meeting.
2. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting, and reported
to the shareholders’ meeting.
3. After reviewed by the Audit
Committee, the proposal was passed
as proposed without objection from
directorspresent at the meeting,and
  • 88 -
Date of important resolutions Important discussions Resolution
4. Proposal of the Company’s 2022 Earnings
Distribution
5. The proposal for return of paid-in capital in cash
for capital reduction.
6. Matters related to convening the regular
shareholders’ meeting 2023.
7. Dragon boat festival bonus (2023) of FRG and
Banjian subsidiary.
8. Motion of appointed CPAs’ fees.
9. 2022 internal control system statement.
10.Changes to endorsements/guarantees for the
investment project of 950 Market Street, San
Francisco
11.Revise some provisions of the "Code of Practice
on Corporate Governance".
12.Motion of amendments of part of the Company’s
“Procedures for Handling Material Inside
Information.”
13.Motion of amendments to part of the provisions of
the Company’s “Rules of Procedure for Board of
Directors’ Meetings”.
reported to the regular shareholders’
meeting.
4. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion, and was submitted for
recognition at the shareholders
meeting.
5. After reviewed by the Audit
Committee, the proposal was passed
as proposed without objection from
directors present at the meeting, and
submitted to the regular
shareholders’ meeting for
discussion.
6. The motion has been approved by
all attending directors without any
dissenting opinion.
7. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
8. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
9. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
10.After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
11.The motion has been approved by
all attending directors without any
dissenting opinion.
12.The motion has been approved by
all attending directors without any
dissenting opinion.
13.The motion has been approved by
all attending directors without any
dissentingopinion.
The 9th meeting of the 21st board
of directors (May 9, 2023)		 1. Consolidated financial report of Q1 2023.
2. Proposal to re-appoint consultants of the
Company’s subsidiary Banjian Development Co.,
Ltd.
3. Proposal of bank credit limit for the construction
of Smart Park A Area Warehouse in Longtan.		 1. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
2. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
3. The motion has been approved by
all attending directors without any
dissentingopinion.
  • 89 -
Date of important resolutions Important discussions Resolution
4. Proposal of the establishment of operating
procedures for the Company’s sustainability report
preparation and verification.
5. Proposal to update the Company’s internal control
system.
6. 2022 The performance project retention fund
distribution case of the Production Division and
Logistic Center.
4. The motion has been approved by
all attending directors without any
dissenting opinion.
5. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
6. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
The 10th meeting of the 21st board
of directors (June 9, 2023)
1. Proposal of disposal fee for Land No. 698
designated for agriculture and animal husbandry at
the Taoyuan Plant.
2. Proposal of the Company’s investment in
Mercuries F&B Co., Ltd.
3. The Company’s disposal of the construction
project premises and parking spaces in Taipei City
(withdrawn).
1. The motion has been approved by
all attending directors without any
dissenting opinion.
2. The motion has been approved by
all attending directors without any
dissenting opinion.
3. The motion has been withdrawn by
all attending directors without any
dissentingopinion.
The 11th meeting of the 21st board
of directors (August 8, 2023)
1. Consolidated financial report of Q2 2023.
2. The semi-annual settlement of the performance
reward and punishment case of the Production
Division and the Logistic Center.
3. Proposal to subscribe the cash capital increase of
Material-KY
4. Proposal of the establishment of the Company's
Ethical Corporate Management Best Practice
Principles.
5. Proposal of the establishment of the Company's
Code of Ethical Conduct.
6. Proposal of the Company’s Sustainable
Development Best Practice Principles.”		 1. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
2. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
3. The motion has been approved by
all attending directors without any
dissenting opinion.
4. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
5. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
6. The motion has been approved by
all attending directors without any
dissentingopinion.
The 12th meeting of the 21st board
of directors (September 22, 2023)
1. Proposal to the Company’s appointment of the
fifth Remuneration Committee members.
2. Proposal to change land designated for agricultural
1. The motion has been approved by
all attending directors without any
dissenting opinion.
2. The motion has been approved by
  • 90 -
Date of important resolutions Important discussions Resolution
and animal husbandry On Land No. 964, Qiashui
Section, Longtan District to Type D land
designated for construction.		 all attending directors without any
dissenting opinion.
The 13th meeting of the 21st board
of directors (November 7, 2023)
1. Consolidated financial report of Q3 2023.
2. Proposal of independence and competence
assessment for attesting CPA.
3. Motion of that Baker Tilly Clock & Co intended
to adjust the CPAs.
4. Added proposal of investment limit for the 2023
domestic TWSE/TPEx listed shares to the
Company.
5. Proposal of information security dedicated unit
and information security dedicated supervisor
appointment.
6. Proposal of “Operating Procedures for Ethical
Corporate Management and Code of Conduct.”
7. Proposal of reporting and punishment guidelines
for violations of ethical conduct and integrity
management.
8. Proposal of Operating regulations governing
financial businesses among the related parties of
the Company.		 1. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
2. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
3. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
4. The motion has been approved by
all attending directors without any
dissenting opinion.
5. The motion has been approved by
all attending directors without any
dissenting opinion.
6. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
7. The motion has been approved by
all attending directors without any
dissenting opinion.
8. The motion has been approved by
all attending directors without any
dissentingopinion.
The 14th meeting of the 21st board
of directors (December 22, 2023)
1. Proposal of 2024 Company Operation Plan
2. Proposal for year-end bonus (2023) of FRG and
the subsidiary, Banjian.
3. Proposal for remuneration of associate vice-
president, manager, vice manager and assistant
managerial officer level (2024).
4. Proposal of Performance Bonus for the
Management Debarment in the first half of 2023.		 1. The motion has been approved by
all attending directors without any
dissenting opinion.
2. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
3. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
4. After deliberated by the
Remuneration Committee, the
proposal waspassed asproposed
  • 91 -
Date of important resolutions Important discussions Resolution
5. Proposal of Performance Bonus for Stock
Investment Project in 2023.
6. Proposal of 2024 audit plan.
7. Proposal for the Company’s incoming managerial
officers.
8. Appointment of consultants.
9. Changes to endorsements/guarantees for the
investment project of 950 Market Street, San
Francisco
10.Proposal of the Company’s 2024 credit limit with
corresponding banks.
11.Proposal of the 2024 limit of investment in
domestic TWSE/TPEx listed shares.
12.Proposal of authorization for the Company's 2024
investment limit of overseas financial assets.
13.Proposal for the establishment of the Company’s
cyber security policy.
14.Proposal for risk management policy and
procedures.
15.Proposal to update the delegation of authorization.
16.Proposal to amend the Procedures for Asset
Acquisition and Disposal
17.Proposal of the Company’s internal control
system.
without objection from directors
present at the meeting.
5. The motion has been approved by
all attending directors without any
dissenting opinion.
6. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
7. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
8. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
9. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
10.The motion has been approved by
all attending directors without any
dissenting opinion.
11.The motion has been approved by
all attending directors without any
dissenting opinion.
12.The motion has been approved by
all attending directors without any
dissenting opinion.
13.The motion has been approved by
all attending directors without any
dissenting opinion.
14.The motion has been approved by
all attending directors without any
dissenting opinion.
15.After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
16.After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
17.After the motion has been delivered
to the Audit Committee for review,
  • 92 -
Date of important resolutions Important discussions Resolution
18.Proposal of the Company’s managerial officers
concurrently serving as managerial officers in its
affiliates.		 it was approved by all attending
directors without any dissenting
opinion.
18.After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
The 15th meeting of the 21st board
of directors (January 30, 2024)
1. Proposal to amend the management regulations for
“Fund Utilization and Investment and Trading of
Domestic Shares.”
2. Proposal of project plan discussions for respective
departments and projects in 2024.
1. The motion has been approved by
all attending directors without any
dissenting opinion.
2. The motion has been approved by
all attending directors without any
dissentingopinion.
The 16th meeting of the 21st board
of directors (March 12, 2024)
1. Annual business report and financial statements
2023.
2. Remuneration of directors and remuneration
distribution of employees (2023).
3. Proposal of the 2023 cash dividends paid from
earnings distribution.
4. Proposal of the Company’s 2023 Earnings
Distribution Table.
5. Matters related to convening the regular
shareholders’ meeting 2024.
6. Election of a by-election of an independent
director.
7. Proposal for nominating independent director
candidates.
8. Proposal of the Company's investment in Henghai
Construction and Land Development in Toufen,
Miaoli.
9. Dragon boat festival bonus (2024) of FRG and
Banjian subsidiary.
10.Motion ofperformance,reward andpunishment		 1. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion, and was submitted for
recognition at the shareholders
meeting.
2. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting, and reported
to the shareholders’ meeting.
3. After reviewed by the Audit
Committee, the proposal was passed
as proposed without objection from
directors present at the meeting, and
reported to the regular shareholders’
meeting.
4. After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion, and was submitted for
recognition at the shareholders
meeting.
5. The motion has been approved by
all attending directors without any
dissenting opinion.
6. The proposal was passed as
proposed without objection from
directors present at the meeting;
submit to the shareholders’ meeting
for election.
7. The proposal was passed as
proposed without objection from
directors present at the meeting;
submit to the shareholders’ meeting
for election.
8. The motion has been withdrawn by
all attending directors without any
dissenting opinion.
9. After deliberated by the
Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
10.After deliberated bythe
  • 93 -
Date of important resolutions Important discussions Resolution
for each department and project in 2023.
11.Motion of appointed CPAs’ fees.
12.2023 internal control system statement.
13.Proposal to change endorsements/guarantees for
the investment project of 950 Market Street, San
Francisco
14.Proposal to amend part of the provisions of the
Company’s “Rules of Procedure for Board of
Directors’ Meetings.”		 Remuneration Committee, the
proposal was passed as proposed
without objection from directors
present at the meeting.
11.After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
12.After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
13.After the motion has been delivered
to the Audit Committee for review,
it was approved by all attending
directors without any dissenting
opinion.
14.The motion has been approved by
all attending directors without any
dissentingopinion.

  • (XIV) Outline of different opinions (in writing or on record) by directors on major resolutions passed by the Board of Directors from the beginning of last year to the publication date of the annual report: None.

  • (XV) List of chairperson, general manager, accounting supervisor, financial supervisor, internal audit supervisor, corporate governance supervisor, and R&D supervisors who resigned or were dismissed between the beginning of last year and the publication date of the annual report: None.

(XVI) Risk Management Policy and Organizational Structure of FRG:

(1) Description of the Company's risk management policy

1 The risk management policy has been enacted for the Company to strengthen internal
control and improve corporate risk management, including risk detection, assessment,
reportingand how to handle risks.,
2 The Company has set up a 3-level risk management organization. Specific operating
method has been formulated from responsibilities of main departments→audit
office→Board of Directors with a set goal of achieving risk control for all employees
from all aspects.
3 The Company has set up a 3-level risk management organization (main
departments→audit office→Board of Directors) and specific operating method has
been formulated with a goal of achieving risk control for all employees from all
aspects.
4 As a means to improve the transparency of information disclosure for “risk control”,
the Company discloses information in terms of its organization and operation of risk
management policy, important risk assessments and risk management on the website
and in the annual report as required bythe competent authority.
  • 94 -

(2) Important risk assessments for risk management

0 Designated
items for
information
disclosure		 0-1 External factors such as exchange rate, interest rate, inflation, law and
politics, causing the risk of segment loss.
1 Risk of
business or
service		 1-1 Poor quality of business or service. Compensation risk of delivery
disputes (such as incompliance of specifications) or violation of the law
(such aspoison or infringement)
1-2 Compensation risk of business or service production process (such as
environmentalpollution or accidents)
1-3 Risks directly or indirectly causes business or service loss due to
misplacement of business or service personnel’s duties/concurrent job/
salary/ assessment
2 Risk of
finance		 2-1 Accounts receivable with insufficient guarantee or collection and
payment
2-2 Accumulated loss unrecognized thisyear
2-3 Engaging in risk operation specified by the Securities and Exchange
Bureau (such as lending funds to others, providing endorsement for
others, financial operation of derivatives and related party
transactions).
3 Risk of
assets		 3-1 Risks of disasters (such as fires or explosion) or natural disasters (such
as floods,windstorms and earthquakes.
3-2 Risks of vandalism or theft

(3) Organizational Operation of Risk Management

Organizational
Risk
Management		 Level 1 Level 2 Level 3
Responsible
department		 Main departments Audit Office Board of
Directors
Operation
method		 When carrying out daily control
activities or self-assessments on
annual important risk assessment
items, departmental management
risks, if occurrence estimates of
management risks is moderate -
high, such important risk
assessment item and its
measures to reduce operating
risks shall be reported to the
Organizational Risk
Management at Level 2 and
Level 3. It shall be included in
the next year’s internal control
system amendment.

When carrying out a risk self-
assessment on the
departmental operations or
performing an annual audit
plan, if the operating risk
estimate occurrence is
moderate - high of the level 1
of Organizational Risk
Management, such important
risk assessment item and its
measures to reduce operating
risks shall be included in the
next year’s internal control
system amendment and audit
plan adjustment. It shall also
be reported to the
Organizational Risk
Management at Level 3.		 In terms of
Organizational
Risk Management
at Level 1 and
Level 2, it is
submitted to the
next year’s
internal control
system
amendment and
audit plan
adjustment
according to the
risk management
items listed and
shall be
implemented upon
approval.
  • 95 -

V. Information on the professional fees of the attesting CPAs (external auditors):

Unit: NT$1,000 Unit: NT$1,000
Name of
the
Accounti
ng Firm
Name of
the
CPAs		 Audit period Audit Fee Non-Audit
Fee		 Total Remarks
Baker
Tilly
Clock &
Co Clock
& Co.		 Zhou
Yin-Lai		 2023.01.01~2023.09.30 1,500 600 2,100 Adjustments
made to the
internal
organization of
the accounting
firm
Lai Chia-
Yu		 2023.10.01~2023.12.31
Lai
Yongji		 2023.01.01~2023.12.31

(1) In 2023, the Baker Tilly Clock and Co. provided non-audit service items. In terms of the nature and amount, it is determined after an assessment that they will not affect the independence of the attesting CPA, and the related non-audit services are as following:

Non-audit services Amount
1. Taxation attestation: NT$400,000
2. Review of the annual shareholders’ meeting
handbook and shareholders’ annual report		 NT$30,000
3. The consolidated financial report and parent
company only financial report 2023 (English
version)		 NT$160,000
4.Declaration of “information on the salary
information of full-time employees not taking on
supervisory duties”
Checkingof operations		 NT$10,000
  • (2) Replace CPA firm with auditing fees of the year after replacement lower than that of the year before:

None.

  • (3) Audit fees down more than 10% from the year before: None

  • 96 -

VI. Change of CPA

(I) Regarding the former CPAs

Date of change Passed bythe board of directors on November 7, 2023 Passed bythe board of directors on November 7, 2023 Passed bythe board of directors on November 7, 2023 Passed bythe board of directors on November 7, 2023 Passed bythe board of directors on November 7, 2023
Reason and explanation
of replacement		 Due to the internal organization adjustment and needs of work
deployment of the accounting firm, the original CPAs certified the
Company’s financial statements, Zhou Yin-Lai and Lai Yung-Chi, were
replace byLai Chia-Yu and Lai,Yung-Chi fromQ3,2023.
Specifying whether it was
the CPAs that voluntarily
ended the engagement or
declined further
engagement, or the
company that terminated
or discontinued the
engagement.
Party
Situation
CPA		 The Company
Voluntarily
ended
the engagement
Not applicable
Declined
(discontinue) further
engagement
Any audit report
expressing other than an
unqualified opinion
during the 2 most recent
years, furnish the opinion
and reason		 Not applicable
Disagreement with the
issuer		 Yes Accounting principles orpractices
Financial report disclosure
Auditingscope orprocedure
Others
None V
Description Not applicable
Additional Disclosures
(Circumstances to be
disclosed as specified in
Subparagraph 1-4 to 1-7,
Paragraph 6, Article 10 of
the Regulations)		 None

(II) Regarding the successor CPAs

Name of the AccountingFirm Baker TillyClock & Co Clock & Co.
Name of the CPAs Lai Chia-Yu and Lai Yung-Chi
Date of Appointment Passed bythe board of directors on November 7,2023
Prior to the formal engagement, any
consultancy regarding the accounting
treatment of or application of
accounting principles to a specified
transaction, or the type of audit
opinion that might be rendered on the
financial report		 Not applicable
Written comments on items with
opposing viewpoints from the
succeedingCPA and the former CPA.
Not applicable

  • 97 -

  • (III) The reply of the former CPAs regarding the Subparagraph 1 and 2-3, Paragraph 6, Article 10 of the Regulations: not applicable.

  • VII. Any of the Company’s chairperson, president, or managerial officer in charge of finance or accounting held a position in the CPA’s firm or its affiliates in the most recent year: None.

  • 98 -

VIII. Changes in shareholding and shares pledged by directors, managerial officers and shareholders with 10% shareholdings or more in most recent year and as of the publication date of the annual report

(I) Changes in shareholding by directors and managers and major Shareholders

Title Name 2023 2023 As of April 9,2024. As of April 9,2024.
Net Change in
Shareholding		 Net Change in Shares
Pledged		 Net Change in
Shareholding		 Net Change in Shares
Pledged
Chairperson Hsu Zhen-Tsai
(521,213)		 0
0
0
Director Hsu Zhen-Ji
(347,830)		 0
0
0
Director Ruifu Construction Co.,Ltd.
(3,407,076)		 (1,394,093) 0
0
Director representative Hsu Wei-Zhi (460) 0
0
0
Director Hohe Construction Co.,Ltd. 267,827
(584,011)		 160,000
0
Director representative Lin Kun-Rong (2,430) 0
0
0
Director QuanxinfengCo.,Ltd. (894,341) (2,025,003) 0
0
Director representative Hsu Zhen-Xin (281,092) 0
0
0
Director Ascend Gear International Inc. (1,675,705) (636,601) 120,000
0
Director representative Chu,Lung-Tsung 0
0
0
0
Independent director Xiao Sheng-Xian(date of dismissal: 2023/07/01) 0
0
Not applicable
Not applicable
Independent director Wu Chun-Lai 0
0
0
0
Independent director Lorraine Yao (500) 0
0
0
President Hsu Zhen-Ji
(347,830)		 0
0
0
Assistant
managerial
officer
Huang Hui Xian		 (162)
0
0
0
Assistant
managerial
officer
Hsiao Zheng-Zhong		 (1,042)
0
0
0
Head of Management and
Construction Department
Cheng Sheng Yuan		 0
0
0
0
Chief financial officer Bao Shi-Rong (600) 0
0
0
Chief accountingofficer Shi Ming-De 0
0
0
0
Others Hsu Zhen-Tsai (521,213) 0
0
0
Major Shareholders Ruifu Construction Co.,Ltd. (3,407,076) (1,394,093) 0
0

(II) Information on the equity transfer’s counterpart being a related party: NA.

(III) Information on the equity pledge’s counterpart being a concerned party: NA.

  • 99 -

IX. Top 10 shareholders who are related parties, spouses, or within second-degree of kinship to each other: Relationships among top-10 shareholders

Serial
number		 Name (Note 1) Shares Held In Own Name Shares Held In Own Name Shares Held by Spouse
and Underage Children		 Shares Held by Spouse
and Underage Children		 Number of Shares Held
Under Another Person's
Name		 Number of Shares Held
Under Another Person's
Name

Names and Relationship of Top 10 Shareholderswho
are Related Parties, Spouses or Within Second-
Degree of Kinshipto Each Other(Note 3).

Names and Relationship of Top 10 Shareholderswho
are Related Parties, Spouses or Within Second-
Degree of Kinshipto Each Other(Note 3).
Remarks
Number of
Shares		 Shareholding
Percentage		 Number
of Shares		 Shareholding
Percentage
Number
of Shares
Shareholding
Percentage
Title (or Name)		 Relation
1 Ruifu Construction
Co.,Ltd.
30,663,678
10.10%
0
0%
0
0%
None
 Not applicable None
Representative:
Hsu Wei-Zhi		 4,137
0.00%
58,320
0.02%
0
0%
2 Ascend
Gear
International Inc.
15,931,342
5.25%
0
0%
0
0%		 Chengxi/Quanxinfeng
Co., Ltd.
Hsu Mei-Lun
Hsu Zhen-Tsai
Xu Zhengqun
 Are relatives by marriage of
representatives of institutional
shareholders.
Relatives by marriage
Are spouses of representatives of i
shareholders.
Relatives bymarriage		 n
None
Representative:
Chen Hui-Jin		 3,362,170
1.11%		 4,690,917
1.55%
0
0%
3 Hohe Construction
Co.,Ltd.
15,774,553
5.20%
0
0%
0
0%
None
 Not applicable None
Representative:
Lin Kun-Rong		 21,870
0.01%
0
0%
0
0%
4 Chengxi Investment
Co.,Ltd.
15,146,990
4.99%
0
0%
0
0%		 Ascend Gear
International
Inc./Quanxinfeng Co.,
Ltd.
Hsu Mei-Lun
Hsu Zhen-Tsai
Xu Zhengqun
Chen Hui-Jin		 Are relatives by marriage of
representatives of institutional
shareholders.
Relatives by marriage
Relatives by marriage
Relatives by marriage
Relatives by marriage		 None
Representative:
Yang Xun-wen		 0
0%
0
0%
0
0%
5 Hsu Mei-Lun 8,637,048
2.84%
0
0%
0
0%
Ascend Gear
International
Inc./Chengxi/Quanxinfe
g Co., Ltd.
Hsu Zhen-Tsai
Xu Zhengqun
Chen Hui-Jin		 n
Are relatives by marriage or
relatives within second-degree of
kinship of representative of
institutional shareholders.
Relatives within second-degree of
kinship
Relatives within second-degree of
kinship
Relatives bymarriage		 None
6 Quanxinfeng
Co.,		 8,049,069
2.65%
0
0%
0
0%		 Ascend Gear Are relatives bymarriage of None
  • 100 -
Ltd. International
Inc./Chengxi
Hsu Mei-Lun
Hsu Zhen-Tsai
Xu Zhengqun
Chen Hui-Jin		 representatives of institutional
shareholders.
Relatives within second-degree of
kinship
Relatives within second-degree of
kinship
Relatives within second-degree of
kinship
Relatives bymarriage

Representative:
Hsu Zhen-Xin		 2,529,820
0.83%
0
0%
0
0%
7 Ren-Yu Investment
Limited
5,490,000
1.81%
0
0%
0
0%		 None Not applicable None
8 Hsu Zhen-Tsai 4,690,917
1.55%		 3,362,170
1.11%
0
0%
Ascend Gear
International
Inc./Chengxi/Quanxinfe
ng Co., Ltd.
Hsu Mei-Lun
Xu Zhengqun
Chen Hui-Jin		 Are the spouses/relatives by
marriage/relatives within second-
degree of kinship of institutional
shareholders.
Relatives within second-degree of
kinship
Relatives within second-degree of
kinship
Spouse

None
9 Xu Zhengqun 3,458,394
1.14%
0
0%
0
0%		 Ascend Gear
International
Inc./Chengxi/Quanxinfe
ng Co., Ltd.
Hsu Mei-Lun
Hsu Zhen-Tsai
Chen Hui-Jin		 Are relatives by marriage or
relatives within second-degree of
kinship of representative of
institutional shareholders.
Relatives within second-degree of
kinship
Relatives within second-degree of
kinship
Relatives bymarriage
10 Chen Hui-Jin 3,362,170
1.11%		 4,690,917
1.55%
0
0%		 Chengxi/Quanxinfeng
Co., Ltd.
Hsu Mei-Lun
Hsu Zhen-Tsai
Xu Zhengqun		 Are relatives by marriage of
institutional shareholders.
Relatives by marriage
Spouse
Relatives bymarriage

Note 1: List the top 10 shareholders. List both the titles of the shareholders and the names of the representatives for institutional shareholders. Note 2: The calculation of proportion of shareholding shall be the holding by the person, spouse, and dependents or in the name of a third party separately. Note 3: The aforementioned shareholders for disclosure shall include institutional shareholders and natural persons, with the relations between the shareholders as required by the Criteria for the Compilation of Financial Statements by Securities Issuers.

  • 101 -

X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee:

mber of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and
ectly or indirectly controlled entities on the same investee:		 mber of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and
ectly or indirectly controlled entities on the same investee:		 mber of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and
ectly or indirectly controlled entities on the same investee:		 mber of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and
ectly or indirectly controlled entities on the same investee:		 mber of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and
ectly or indirectly controlled entities on the same investee:		 mber of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and
ectly or indirectly controlled entities on the same investee:		 mber of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and
ectly or indirectly controlled entities on the same investee:
Unit: shares; %; December 31, 2023
Reinvestment business
(Note 1)		 The Company’s investments Investments by the Directors, supervisors,
managerial officers, and companies
directly or indirectly controlled by the
Company		 Comprehensive investments
Shares/units Proportion of
Shareholding (%)		 Shares/units Proportion of
Shareholding (%)		 Shares/units Proportion of
Shareholding (%)
Banjian Development Co., Ltd.
Ruifu Development Co., Ltd.
Fenghe Development Co., Ltd.
Hohe Construction Co., Ltd.
FRG US CORP.
TRIMOSA HOLDINGS LLC (Note 2)
KINGSHALE INDUSTRIAL LIMITED
Formosan Chemical Ind. Corp.
Formosan Glass & Chemical Industrial
Co.
Taiyang Co., Ltd.
Brightek Optoelectrnic Co., Ltd.
Huaku Development Co., Ltd.
Sinopac Financial Holdings Company
Limited.
Formosa Chemicals & Fibre Corporation
ShineMore Technology Materials Co.,
Ltd.
Formosa Plastics Corp.
Nan Ya Plastics Corporation
Grand Fortune Securities Co., Ltd.
Yuji Venture Capital Co., Ltd.
The Eslite Corporation
Far EasTone Telecommunications Co.,
Ltd.		 56,000,000
48,260
3,990,000
7,597,927
15,401,000
27,958,532 (USD)
9,999
22,516

2,510
111,395
267,241
3,552,000

37,097,366
2,502,170

579,125
1,658,000
3,847,900
1,105,830

750,000
895,300
2,210,000
100.00

48.26

39.90

26.20

100.00


14.67
99.99

2.25

5.02

1.24

0.39

1.28

0.30

0.04

1.22

0.03

0.05

0.28


10.00
1.65

0.07
－

42,160

328,333

16,334,355

－


13,979,266 (USD)
－

－

－

－

－

－

43,424,515

－

－

－

－

－


－
－

－		 －

42.16

3.28

56.32
－

7.34
－
－
－
－
－
－

0.35
－
－
－
－
－
－
－
－		 56,000,000

90,420

4,318,333

23,932,282
15,401,000

41,937,798 (USD)
9,999
22,516
2,510
111,395
267,241
3,552,000

80,521,881
2,502,170
579,125
1,658,000
3,847,900
1,105,830
750,000
895,300
2,210,000
100.00

90.42

43.18

82.52

100.00


22.01
99.99

2.25

5.02

1.24

0.39

1.28

0.65

0.04

1.22

0.03

0.05

0.28


10.00
1.65

0.07
  • 102 -
Reinvestment business
(Note 1)		 The Company’s investments The Company’s investments Investments by the Directors, supervisors,
managerial officers, and companies
directly or indirectly controlled by the
Company		 Investments by the Directors, supervisors,
managerial officers, and companies
directly or indirectly controlled by the
Company		 Comprehensive investments Comprehensive investments
Shares/units Proportion of
Shareholding (%)		 Shares/units Proportion of
Shareholding (%)		 Shares/units Proportion of
Shareholding (%)
Far Eastern Department Stores Ltd.
Taiwan Semiconductor Manufacturing
Co.,Ltd.		 5,656,447
295,000

0.40
－
－
－		 －
－		 5,656,447
295,000

0.40
－
Far Eastern New Century
Tashee Recreation Co., Ltd. - Preferred
stock
ASUSTeK Computer Inc.
WPG Holding Co Ltd.
Farglory Construction Co., Ltd.
Class B preference share, Shin Kong
Financial Holding Co., Ltd
Citigroup Inc.
Continental Holdings Ltd.
Formosa Petrochemical Corp.
Pegatron Corporation
Chong Hong Construction Co., Ltd.
E.SUN Financial Holding Co., Ltd.
Allianz Global Investors Preferred
Securities and Income Fund
NN(L) Investment Grade Corporate Bond
Fund
Ford Motor Company
Delhi International Airport Limited
Taiwan Cement Corp.
China Steel Corporation.
Quanta Computer Inc.
Shin Kong Financial Holdings Co., Ltd.
Qisda Corporation
0056 High Dividend		 4,101,761
1
233,000
1,916,600
4,044,000
666,000
1,000
4,669,000
1,678,000
1,347,000
2,593,000
150,134
997,009

202
1,000
480,000
1,363,911
1,640,000
1,005,000
1,400,000
－
－

0.08
－

0.03

0.11

0.52

0.22

－

0.57

0.02

0.05

0.89

－

－

－

－

－


0.02
0.01

0.03

0.01
－
－
－
－

－

－

380,000

－
－

－

－

－

904,000
－
－
－
－
－


791,954
－

－

－
210,000
740,000		 －
－
－
－

0.05
－
－
－
－
－

0.31
－
－
－
－
－

0.01
－
－
－

－

－		 4,101,761
1
233,000
1,916,600

4,424,000
666,000
1,000
4,669,000
1,678,000
1,347,000

3,497,000
150,134
997,009
202
1,000
480,000

2,155,865
1,640,000
1,005,000
1,400,000
210,000
740,000

0.08
－

0.03

0.11

0.57

0.22

－

0.57

0.02

0.05

1.20

－

－

－

－

－


0.03
0.01

0.03

0.01

－

－
  • 103 -
Reinvestment business
(Note 1)		 The Company’s investments The Company’s investments Investments by the Directors, supervisors,
managerial officers, and companies
directly or indirectly controlled by the
Company		 Investments by the Directors, supervisors,
managerial officers, and companies
directly or indirectly controlled by the
Company		 Comprehensive investments Comprehensive investments
Shares/units Proportion of
Shareholding (%)		 Shares/units Proportion of
Shareholding (%)		 Shares/units Proportion of
Shareholding (%)
Yuanta Financial Holding Co., Ltd.
KGI Taiwan Premium Selection High
Dividend 30 ETF
United Taiwan High Dividend Recovery
30 ETF
Capital Tip Customized Taiwan Select
High Dividend ETF
JSL CONSTRUCTION &
DEVELOPMENT CO.,LTD.		 －
230,000
230,000
400,000
147,048		 －

－

－

－

0.04		 217,453
－
－
－

－
－
－
－
－
－		 217,453
230,000
230,000
400,000
147,048
－

－

－

－

0.04
EVERGREEN MARINE CORP.
(TAIWAN) LTD.
NICHIDENBO CORPORATION
LEO SYSTEMS, INC.
NAN YA PRINTED CIRCUIT BOARD
CORPORATION
TOYOTA MOTOR CORP
NEXT FUNDS TOPIX Exchange
Traded Fun
Mitsubishi Heavy Ind
Mercuries F&B
LMT Lockheed Martin
Apple Computer Inc.
RADIANT OPTO-ELECTRONICS
CORP.		 443,000
346,000
279,000
100,000
35,000
30,000
5,000
555,000
500,000
1,000,000
－
0.02

0.16

0.31

0.02

－

－

－

0.48

－

－
－
－

－

－

－
－
－
－

－
－
－
20,000		 －
－
－
－
－
－
－
－
－
－

－		 443,000
346,000
279,000
100,000
35,000
30,000
5,000
555,000
500,000
1,000,000
20,000
0.02

0.16

0.31

0.02

－

－

－

0.48

－

－

－

Note 1: Refers to the Company's long-term or short-term investment.

Note 2: The number for unissued shares is listed as their original investment amount.

  • 104 -

Four. Funding Status

I. Capital and Shares:

  • II. Corporate Bonds

  • III. Preferred Stocks:

  • IV. Global Depository Receipts

  • V. Employee Stock Options

  • VI. New Restricted Employee Shares

VII. New Shares Issued for Merger or Acquisition (including mergers, acquisitions, and demergers)

VIII.Progress on Planned Use of Capital

  • 105 -

I. Capital and Shares:

(I) Source of Capital Formation of Capital:

Unit: NTD/Share

Year/Mo
nth		 Issue
Price		 Authorized capital Authorized capital Paid-upcapital Paid-upcapital Remarks Remarks Remarks
Number of
Shares		 Amount Number of
Shares		 Amount Source of Capital Paid in
Properties
Other Than
Cash		 Others
1963.1 10 240,000
2,400,000
240,000
2,400,000		 Partnership was registered in 1952 when founded; it became a
companyin 1963
None
1964.08 10 500,000
5,000,000
500,000
5,000,000		 Cash Capital Increase - NT$2,600,000 None
1966.08 10 1,200,000
12,000,000
1,200,000
12,000,000		 Cash Capital Increase - NT$7,000,000 None
1970.06 10 1,800,000
18,000,000
1,800,000
18,000,000		 Cash Capital Increase - NT$6,000,000 None
1971.08 10 3,000,000
30,000,000
3,000,000
30,000,000		 Cash Capital Increase - NT$12,000,000 None
1972.10 10 6,000,000
60,000,000
6,000,000
60,000,000		 Cash Capital Increase - NT$30,000,000 None
1973.09 10 8,000,000
80,000,000
8,000,000
80,000,000		 Cash Capital Increase - NT$20,000,000 None
1974.01 10 10,000,000
100,000,000
10,000,000
100,000,000		 Cash Capital Increase - NT$20,000,000 None
1974.12 10 11,500,000
115,000,000
11,500,000
115,000,000		 Capital Reserve to Increase Capitalization - NT$15,000,000 None
1975.12 10 14,500,000
145,000,000
14,500,000
145,000,000		 Cash Capital Increase - NT$10,000,000, Capital Reserve to
Increase Capitalization - NT$20,000,000
None
1978.09 10 16,000,000
160,000,000
16,000,000
160,000,000		 Capitalization of Retained Earnings - NT$15,000,000 None
1979.10 10 19,000,000
190,000,000
19,000,000
190,000,000		 Capitalization of Retained Earnings - NT$30,000,000 None
1980.09 10 22,500,000
225,000,000
22,500,000
225,000,000		 Cash Capital Increase - NT$15,000,000, Capitalization of Retained
Earnings - NT$20,000,000
None
1983.12 10 36,000,000
360,000,000
36,000,000
360,000,000		 Cash Capital Increase - NT$135,000,000 None Approved under Taiwan-Finance-Securities-(1)
2777 dated December 17,1983(1983)
1985.10 10 42,353,000
423,530,000
42,353,000
423,530,000		 Cash Capital Increase - NT$63,530,000 None Approved under Taiwan-Finance-Securities-(1)
304 dated October 29,1985
1986.11 10 66,000,000
660,000,000
60,003,000
600,030,000		 Cash Capital Increase - NT$136,500,000, Capital Reserve to
Increase Capitalization - NT$40,000,000
None		 Approved under Taiwan-Finance-Securities-(1)
13053 dated September 23,1986(1986)
1987.09 10 66,000,000
660,000,000
66,000,000
660,000,000		 Cash Capital Increase - NT$59,970,000 None Approved under Taiwan-Finance-Securities-(1)
3440 dated August 7,1987
1988.11 10 76,000,000
760,000,000
76,000,000
760,000,000		 Cash Capital Increase - NT$100,000,000 None Approved under Taiwan-Finance-Securities-(1)
08958 dated August 26,1988(1988)
1989.12 10 130,000,000
1,300,000,000
130,000,000
1,300,000,000		 Cash Capital Increase - NT$375,000,000, Capitalization of
Retained Earnings - NT$145,200,000, Capital Reserve to Increase
Capitalization - NT$19,800,000

None		 Approved under Taiwan-Finance-Securities-(1)
02539 dated December 19, 1988 (1989)
1991.10 10 180,000,000
1,800,000,000
156,000,000
1,560,000,000		 Capitalization of Retained Earnings - NT$130,000,000, Capital
Reserve to Increase Capitalization - NT$130,000,000
None		 Approved under Taiwan-Finance-Securities-(1)
02944 dated October 11,1992(1992)
1993.07 10 180,000,000
1,800,000,000
180,000,000
1,800,000,000		 Capital Reserve to Increase Capitalization - NT$240,000,000 None Approved under Taiwan-Finance-Securities-(1)
30829 dated July31,1993(1993)
1994.09 10 234,000,000
2,340,000,000
207,000,000
2,070,000,000		 Capital Reserve to Increase Capitalization - NT$270,000,000 None Approved under Taiwan-Finance-Securities-(1)
32558 dated September 7,1994(1994)
1995.03 10 234,000,000
2,340,000,000
234,000,000
2,340,000,000		 Cash Capital Increase - NT$270,000,000 None Approved under Taiwan-Finance-Securities-(1)
55170 dated March 16,1995(1995)
1995.06 10 269,100,000
2,691,000,000
269,100,000
2,691,000,000		 Capitalization of Retained Earnings - NT$135,720,000, Capital
Reserve to Increase Capitalization - NT$215,280,000
None		 Approved under Taiwan-Finance-Securities-(1)
37123 dated June 23,1995(1995)
  • 106 -
Year/Mo
nth		 Issue
Price		 Authorized capital Authorized capital Paid-upcapital Paid-upcapital Remarks Remarks Remarks
Number of
Shares		 Amount Number of
Shares		 Amount Source of Capital Paid in
Properties
Other Than
Cash		 Others
1996.07 10 285.246,000
2,852,460,000
285.246,000
2,852,460,000		 Capital Reserve to Increase Capitalization - NT$161,460,000 None Approved under Taiwan-Finance-Securities-(1)
41715 dated July10,1996(1996)
1997.06 10 373,770,600
3,737,706,000
313,770,600
3,137,706,000		 Capital Reserve to Increase Capitalization - NT$285,246,000 None Approved under Taiwan-Finance-Securities-(1)
51629 dated June 27,1997(1997)
1998.06. 10 411,423,072
4,114,230,720
351,423,072
3,514,230,720		 Capital Reserve to Increase Capitalization - NT$376,524,720 None Approved under Taiwan-Finance-Securities-(1)
54404 dated June 22,1998(1998)
1999.06 10 435,319,840
4,353,198,400
375,319,840
3,753,198,400		 Capital Reserve to Increase Capitalization - NT$238,967,680 None Approved under Taiwan-Finance-Securities-(1)
54833 dated June 11,1999(1999)
2000.06 10 457,088,390
4,570,883,900
397,088,390
3,970,883,900		 Capital Reserve to Increase Capitalization - NT$217,685,500 None Approved under Taiwan-Finance-Securities-(1)
50705 dated June 13,2000(2000)
2003.07 10 457,088,390
4,570,883,900
389,869,390
3,898,693,900		 Cancellation of Treasury Shares NT$72,190,000 None Approved under Taiwan-Finance-Securities-(3)
0920134406 dated July25,2003
2004.07 10 680,000,000
6,800,000,000
385,264,400
3,852,643,900		 Cancellation of Treasury Shares NT$46,050,000 None Approved under Letter No. Jing-Shou-Shang-
09301112810 dated July9,2004
2005.04 10 680,000,000
6,800,000,000
461,767,899
4,617,678,990		 Conversion of Corporate Bonds to Common Shares -
NT$765,035,090		 None Approved under Taiwan-Finance-Securities-(3)
09401061520 dated April 15,2005
2005.07 10 680,000,000
6,800,000,000
469,023,521
4,690,235,210		 Conversion of Corporate Bonds to Common Shares -
NT$72,556,220		 None Approved under Taiwan-Finance-Securities-(3)
09401130940 dated July15,2005
2005.10 10 680,000,000
6,800,000,000
475,812,986
4,758,129,860		 Conversion of Corporate Bonds to Common Shares -
NT$67,894,650		 None Approved under Taiwan-Finance-Securities-(3)
09401210150 dated October 20,2005
2005.12 10 680,000,000
6,800,000,000
455,812,986
4,558,129,860		 Cancellation of treasury shares NT$200,000,000 None Approved under Taiwan-Finance-Securities-(3)
09401260020 dated December 16,2005
2006.01 10 680,000,000
6,800,000,000
455,828,023
4,558,280,230		 Conversion of Corporate Bonds to Common Shares - NT$150,370 None Approved under Taiwan-Finance-Securities-(3)
09501016010 dated January26,2006
2006.03 10 680,000,000
6,800,000,000
452,980,023
4,529,800,230		 Cancellation of Treasury Shares NT$28,480,000 None Approved under Taiwan-Finance-Securities-(3)
09501036310 dated March 6,2006
2006.04 10 680,000,000
6,800,000,000
467,303,329
4,673,033,290		 Conversion of Corporate Bonds to Common Shares -
NT$143,233,060		 None Approved under Taiwan-Finance-Securities-(3)
09501064670 dated April 12,2006
2006.07 10 680,000,000
6,800,000,000
474,310,828
4,743,108,280		 Conversion of Corporate Bonds to Common Shares -
NT$70,074,990		 None Approved under Taiwan-Finance-Securities-(3)
09501141160 dated July10,2006
2006.10 10 680,000,000
6,800,000,000
481,431,107
4,814,311,070		 Conversion of Corporate Bonds to Common Shares -
NT$71,202,790		 None Approved under Taiwan-Finance-Securities-(3)
09501228400 dated October 12,2006
2006.11 10 680,000,000
6,800,000,000
477,684,107
4,776,841,070		 Cancellation of Treasury Shares NT$37,470,000 None Approved under Taiwan-Finance-Securities-(3)
09501262890 dated November 21,2006
2007.01 10 680,000,000
6,800,000,000
512,526,074
5,125,260,740		 Conversion of Corporate Bonds to Common Shares -
NT$348,419,670		 None Approved under Taiwan-Finance-Securities-(3)
09601003550 dated January9,2007
2007.04 10 680,000,000
6,800,000,000
523,962,133
5,239,621,330		 Conversion of Corporate Bonds to Common Shares -
NT$114,360,590		 None Approved under Taiwan-Finance-Securities-(3)
09601077550dated April 14,2007
2007.04 10 680,000,000
6,800,000,000
524,082,432
5,240,824,320		 Conversion of Corporate Bonds to Common Shares -
NT$1,202,990		 None Approved under Taiwan-Finance-Securities-(3)
09601091420 dated April 30,2007
2008.03 10 680,000,000
6,800,000,000
523,296,432
5,232,964,320		 Cancellation of Treasury Shares NT$7,860,000 None Approved under Taiwan-Finance-Securities-(3)
09701071000 dated March 27,2008
2008.12 10 680,000,000
6,800,000,000
503,652,432
5,036,524,320		 Cancellation of Treasury Shares NT$196,440,000 None Approved under Taiwan-Finance-Securities-(3)
09701317960 dated December 18,2008
  • 107 -
Year/Mo
nth		 Issue
Price		 Authorized capital Authorized capital Paid-upcapital Paid-upcapital Remarks Remarks Remarks
Number of
Shares		 Amount Number of
Shares		 Amount Source of Capital Paid in
Properties
Other Than
Cash		 Others
2011.12 10 680,000,000
6,800,000,000
501,980,432
5,019,804,320		 Cancellation of Treasury Shares NT$16,720,000 None Approved under Taiwan-Finance-Securities-(3)
10001273350 dated December 1,2011
2012.03 10 680,000,000
6,800,000,000
497,689,432		 4,976,894,320 Cancellation of Treasury Shares NT$42,910,000 None Approved under Taiwan-Finance-Securities-(3)
10101035730 dated March 2,2012
2012.08 10 680,000,000
6,800,000,000		 497,189,432 4,971,894,320 Cancellation of Treasury Shares NT$5,000,000 None Approved under Taiwan-Finance-Securities-(3)
10101166240 dated August 13,2012
2015.12 10 680,000,000
6,800,000,000		 490,468,432 4,904,684,320 Cancellation of Treasury Shares NT$67,210,000 None Approved under Taiwan-Finance-Securities-(3)
10401267800 dated December 18,2015
2016.5 10 680,000,000
6,800,000,000
481,777,432
4,817,774,320		 Cancellation of Treasury Shares NT$86,910,000 None Approved under Taiwan-Finance-Securities-(3)
10501087510 dated May5,2016
2016.8 10 680,000,000
6,800,000,000
433,600,000
4,336,000,000		 Capital Reduction - NT$481,774,320 None Approved under Taiwan-Finance-Securities-(3)
10501192820dated August 15,2016
2016.2 10 680,000,000
6,800,000,000
425,000,000
4,250,000,000		 Cancellation of Treasury Shares NT$86,000,000 None Approved under Taiwan-Finance-Securities-(3)
10601017260 dated February13,2017
2017.5 10 680,000,000
6,800,000,000
422,222,000
4,222,220,000		 Cancellation of Treasury Shares NT$27,780,000 None Approved under Taiwan-Finance-Securities-(3)
10601055000 dated May1,2017
2017.8 10 680,000,000
6,800,000,000
380,000,000
3,800,000,000		 Capital Reduction - NT$422,220,000 None Approved under Taiwan-Finance-Securities-(3)
10601111970 dated August 3,2017
2018.3 10 680,000,000
6,800,000,000
370,000,000
3,700,000,000		 Cancellation of Treasury Shares NT$100,000,000 None Approved under Taiwan-Finance-Securities-(3)
10701029640 dated March 20,2018
2019.2 10 680,000,000
6,800,000,000
350,000,000
3,500,000,000		 Cancellation of treasury shares NT$200,000,000 None Approved under Taiwan-Finance-Securities-(3)
10801013940 dated February15,2019
2020.6 10 680,000,000
6,800,000,000
342,326,000
3,423,260,000		 Cancellation of Treasury Shares NT$76,740,000 None Approved under Taiwan-Finance-Securities-(3)
10901105320 dated June 22,2020
2022.11 10 680,000,000
6,800,000,000
337,326,000
3,373,260,000		 Cancellation of Treasury Shares NT$50,000,000 None Approved under Jin-Shou-Shang-Zhi No.
11101205470 dated November 17,2022.
2023 10 680,000,000
6,800,000,000
303,593,400
3,035,934,000		 Cash reduction NT$337,326,000 None Approved under Taiwan-Finance-Securities-(3)
11230150900 dated August 8,2023.

Note 1: Shall be filled with the data of the current year as of the publication date of the annual report. Note 2: Effective (approval) date and letter number shall be filled in for increase of capital. Note 3: Shares issued lower than their par value shall be marked in a clear manner. Note 4: Offsetting shares using currency claims, technology or goodwill shall be indicated with information on type and amount of offset. Note 5: Private placements shall be marked in a clear manner.

  • 108 -
Stock Class Authorized capital Authorized capital Authorized capital Remarks
OutstandingShares Unissued shares Total
Registered Stocks
303,593,400		 376,406,600 680,000,000 None

Note 1: Capital amount of FRG: NT$6.8 billion in 680 million shares at face value of NT$10. Note 2: They are shares of a public company.

General Information About the Reporting System: None.

(II) Shareholder Structure:

April 9,2024 April 9,2024 April 9,2024 April 9,2024 April 9,2024
Shareholder
Structure
Count
 Governmen
t Agencies		 Financial
Institutions		 Other
Corporations		 Individual Foreign
Institutions
and Foreigners
Total
Number
of
people		 0
8
224
46,230
97
46,559
Number
of
shareholding		 0
194,664		 101,306,878
181,223,883
20,867,975
303,593,400
Proportion
of
Shareholding (%)		 0.00%
0.06%
33.37%
59.69%
6.88%
100.00%

Note: All companies listing for the first time on TWSE/TPEx are required to disclose Chinese investors' holding interests. A Chinese investor refers to an individual, corporation, organization, or institution of Mainland origin, or any company owned by the above party in a foreign location, as defined in Article 3 of the "Regulation Governing Mainland Residents' Investment in Taiwan"

(III) Diversity of Ownership:

(III) Diversity of Ownership:
Par value of NT$10per share,Unit: share,April 9,2024
Shareholdings grading Number of
shareholders		 Number of
shareholdings		 Shareholding Ratio
1 to 999 29,732 6,583,277 2.17 %
1,000 to 5,000 11,662 27,319,140 9.00 %
5,001 to 10,000 2,724 20,061,522 6.61 %
10,001 to 15,000 804 10,145,282 3.34 %
15,001 to 20,000 473 8,384,101 2.76 %
20,001 to 30,000 400 9,827,467 3.24 %
30,001 to 40,000 195 6,887,881 2.27 %
40,001 to 50,000 131 5,912,821 1.95 %
50,001 to 100,000 234 16,359,065 5.39 %
100,001 to 200,000 98 13,241,991 4.36 %
200,001 to 400,000 49 13,759,132 4.53 %
400,001 to 600,000 20 9,465,263 3.12 %
600,001 to 800,000 3 2,054,656 0.68 %
800,001 to 1,000,000 3 2,713,482 0.88 %
1,000,001 to 999,999,999 31 150,878,320 49.70 %
Above NT$1,000,000,000 0 0 0.00 %
Total 46,559 303,593,400
100.00 %

Preferred Stock: None.

  • 109 -

(IV) Major Shareholders:

Shareholders holding 5% or more of the shares or names, numbers of shareholding and ratio of the top 10 shareholders:

Unit: Share; April 9, 2024.

Names of Major Shareholders/Shares Number of
shareholding		 Shareholding
Ratio
Ruifu Construction Co.,Ltd. 30,663,678
10.10%
Ascend Gear International Inc. 15,931,342
5.25%
Hohe Construction Co.,Ltd. 15,774,553
5.20%
Chengxi Investment Co.,Ltd. 15,146,990
4.99%
Hsu Mei-Lun 8,637,048
2.84%
QuanxinfengCo.,Ltd. 8,049,069
2.65%
Ren-Yu Investment Limited 5,490,000
1.81%
Hsu Zhen-Tsai 4,690,917
1.55%
Xu Zhengqun 3,458,394
1.14%
Chen Hui-Jin 3,362,170
1.11%

(V) Market Price, Net Worth, Earnings, Dividends per Share and Other Relevant Information for the Most Recent 2 Years:

Item Year Year
2022		 2023 Current year as of
March 31, 2024
(Note 8)
Market
Price per
Share
(Note 1)		 Highest 23.10 25.10 24.75
Lowest 19.55 20.35 23.45
Average 21.52 22.32 23.98
Net Worth
per Share
(Note 2)
Before Distribution		 35.17 40.85 42.70
After Distribution 33.97 39.55 (Note 9) -
Earnings
Per Share		 Weighted average shares 340,126,333 323,270,750 303,593,400
Earnings Per Share (Note
3)
2.09		 1.61 0.35
Dividends
per Share		 Cash dividends 1.2(Note 9) 1.3(Note 9) -
Bonus
shares		 Retained Shares
Distribution		 0 0 -
Stock Dividends
from Capital
Surplus		 0 0 -
Cumulative Undistributed
Dividends(Note 4)
0		 0 -
Return on
Investment
Analysis		 P/E ratio(Note 5) 10.29 13.86 -

Price / Dividend Ratio
(Note 6)		 17.93 17.17 -
Cash Dividend Yield (Note
7)
5.58%		 5.82% -

*If there is a surplus or capital reserve to increase capitalization for distributing shares, the market price and cash dividend information adjusted retrospectively based on the number of shares to be issued shall be disclosed.

Note 1: Source: website of TWSE.

Note 2: Please refer to the number of issued shares at the end of the year and fill in the information according to the resolution of the board of directors or the shareholders' meeting of the following year.

Note 3: If there is a retroactive adjustment from distribution of bonus shares, the pre-adjustment and adjusted surplus per share shall be listed.

Note 4: Dividends that have not been issued in the current year are accrued to the issuer of the annual surplus; the accumulated undistributed dividends of the current year should be disclosed separately.

Note 5: Price/Earnings Ratio = Average Closing Price for the Year / Earnings per Share Note 6: Price/Dividend Ratio = Average Closing Price for the Year / Cash Dividends per Share Note 7: Cash Dividend Yield = Cash Dividends per Share / Average Closing Price for the Year

Note 6: Price/Dividend Ratio = Average Closing Price for the Year / Cash Dividends per Share

Note 8: The data of net worth per share and earnings per share shall be based on the most recent quarter numbers audited by CPAs as of the printed date of the annual report; the remaining columns shall fill in the current year's data as of the publication date of the annual report.

Note 9: The distribution of net income in 2023 shall subject to resolution by regular shareholders’ meeting 2024.

  • 110 -

  • (VI) The Company’s Dividend Policy and Implementation Status:

  • Dividend Policy:

If there is a profit within the Company in the year, no less than 1% of the profit shall be set aside for employees’ remuneration and no less than 2% of the profit shall be set as remuneration for directors and supervisors. Where there is an accumulated loss, the profit shall be reserved to make up for the loss.

The employee remuneration may be determined by shares or cash and its receiving parties must include its serving employees in accordance with the requirements established by the Board of Directors. The remuneration of directors and supervisors of the preceding paragraph is determined by cash.

The preceding 2 paragraphs are enforced after the Board of Directors’ resolution, and the shareholders must be reported to.

From the profit earned by the Company as shown through the final account, if any, the sum should first be used to pay taxes and make up for previous loss, the remaining should be distributed as follows:

  • (I) 10% should be set aside as legal reserve, except for when the legal reserve has reached the total capital;

  • (II) If necessary, it can be set aside according to the laws and regulations or for reversal of special reserve.

  • (III) The remaining earnings as well as the accumulated undistributed earnings from the previous year, when the Board of Directors proposes the motion of earnings distribution, the appropriation of shareholder dividends shall not be less than 5% of the accumulated distributable earnings, and motion shall be submitted to the shareholder meeting for a resolution.

The life cycle of the Company is currently classified as the “mature period”. The Company strives to the pursuit of cooperate sustainable operation and corresponds with the future market needs. We take into consideration of the Company’s future capital expenditure budget and the need to maintain dividend distribution, among which, cash dividends may not be less than 10% of the aggregate amount of shareholders’ dividends. Whereas there are capital demands including significant investment, significant operation change, capacity expansion during the year, and other significant capital expenditures, the Board of Directors must propose a motion to change its cash dividends to all shares. The motion may be proceeded after an approval is gained by the shareholders meeting.

Pursuant to the amended Articles of Incorporation on June 8, 2022, where the Company distribute the bonus, or legal reserves or capital reserve, all or in part, if in the form of cash, it is authorized to do so by the approval of the majority of attending directors in a board meeting attended by more than one-third directors, and reported to the shareholders’ meeting.

  1. Dividend Distribution Proposed for the Shareholders Meeting:

  2. 111 -

Formosan Rubber Group Inc. Earnings Distribution Table 2023

Formosan Rubber Group Inc.
Earnings Distribution Table
2023		 Formosan Rubber Group Inc.
Earnings Distribution Table
2023
Unit: NTD＄
Item Amount
Undistributed earnings at the beginningof theperiod 5,257,293,034
Add: Current net income 518,877,440
Add: disposal of equity investment instruments measured at
fair value through other comprehensive income		 97,555,323
Add: Other comprehensive income (actuarial gains and
losses of defined benefitplans)		 272,923
The net profit after tax of the period, plus items other
than the net profit after tax of the period, accounted into
the undistributed earnings of the year		 616,705,686
Undistributed earnings after adjustment 5,873,998,720
Less:10% provision for legal reserve (61,670,569)
Subtotal (61,670,569)
Distributable netprofit 5,812,328,151
1. Shareholder dividends (303,593,400 shares × cash
dividends of NT$1.3)		 (394,671,420)
**Subtotal ** (394,671,420)
Accumulated undistributed earnings at the end of the
period		 5,417,656,731

Note 1: The amount of this surplus earnings distribution has preference on net income after tax 2023. Note 2: After that, if the shares outstanding are affected due to the Company’s capital decrease with treasury shares or other reasons which result in a change in shareholder’s dividend rate, it is to authorize the Chairperson to fully handle the matter.

Chairperson: Hsu Zhen-Tsai Chief accounting officer: Shi Ming-De

President: Hsu Zhen-Ji

  • 112 -

  • (VII) The effects of stock grants drafted by this shareholders’ meeting on The Company’s operating performance and earnings per share: There was no non-distributable shares, it is therefore not applicable.

  • (VIII) Employees’ compensation and remuneration of directors and supervisors

  • Information Relating to Remuneration of Employees and Directors in the Company's Articles of Incorporation: Please refer to Chapter I, Item VI of this Article - “Dividend Policy”.

  • The accounting of the difference between the estimates of remuneration to employees and directors, the basis for the calculation of outstanding shares for dividend payment and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure:

    • According to the charter, the Company’s remuneration to employees is recognized as expenses and not distribution of earnings. It is recognized during the accounting period when employees provide labor services according to the charter. If the estimated amount differs from the actual distribution amount passed by the shareholders meeting, it is treated according to the changes in accounting estimates which is adjusted into account on the shareholders meeting the following year.

  • Information on the proposed remuneration to employees passed by the Board of Directors:

Approved by the board of directors on March 12, 2024

  • (1) The amount of proposed distribution to employees in cash and remuneration to director: Cash remuneration of NT$6,014,305 to employees and NT$6,014,305 to directors.

  • (2)i. Proposed remuneration to employees in shares: NT$0.

    • ii. Amount of stock distributed as employee remuneration and as a percentage to net income of parent company only or individual financial statements and aggregate remuneration to employees: None.

  • (3) The estimated earnings per share less than the proposed allotment of employee remuneration and director remuneration is NT$1.61.

  • (4) The proposed allotment of employee remuneration and director remuneration approved by the board of directors is consistent with the estimates in the 2023 financial statements.

  • The actual allotment of employee remuneration and director remuneration in the previous year (including the number of shares allotted, amount and share price), differ from the estimated employee remuneration and the remuneration of directors and supervisors, note the amount, reasons, and measures taken: The Board of Directors' approval and actual distribution on March 15, 2023:

  • (1) The actual distribution of cash remuneration for employees is NT$8,456,000, and the remuneration for directors is NT$8,456,000.

  • (2) i. (Proposed remuneration to employees in shares: NT$0.

  • 113 -

  • ii. Amount of stock distributed as employee remuneration and as a percentage to net income of parent company only or individual financial statements and aggregate remuneration to employees: None.

  • (3) The estimated earnings per share, after deducting employee and director remuneration, amount to NT$2.09.

  • (4) In 2022, the distribution of cash remuneration to employees and directors matched the estimated amount without any discrepancies.

(IX) Repurchase of FRG shares: none.

II. The Company's Handling of Corporate Bonds: None.

III. The Company's Preferred Stocks: None.

  • IV. Global Depository Receipts: None.

  • V. Employee Stock Options: None.

  • VI. New Restricted Employee Shares: None.

VII. New Shares Issued for Merger or Acquisition: None.

VIII. Progress on Planned Use of Capital: None.

  • 114 -

Five. Operational Highlights

  • I. Business Activities

  • (I) Scope of Business

  • (II) Industry Overview

  • (III) Technology and R&D Status and the Progress of Future Plans and Estimated Investment Expenses

  • (IV) Long-Term and Short-Term Business Development Plans

  • II. Market and Production and Sales Overview

  • (I) Market Analysis

  • (II) Important Uses and Production Process of Major Products

  • (III) Supply Situation for Major Raw Materials

  • (IV) The Major Customers that Accounted for more than 10% of the Total Procurement (sales) of Goods in any of the Past 2 Years and the Amount and Proportion of the Goods Sold

  • (V) Production Volume and Value in the Last 2 Years

  • (VI) Sales Volume in the Last 2 Years

  • III. The Number of Employees Employed for the 2 Most Recent Years, and during the Current Year as of the Date of Publication of the Annual Report

  • IV. Expenditure for Environmental Protection

  • V. Labor Relations and Employee Rights

  • VI. Important Contracts

  • 115 -

Five. Operational Highlights

I. Business Activities

  • (I) Scope of Business:

  • The main business contents:

    • (1) Manufacturing and selling products including: plastic raincoat material, plastic clip fabric, polyvinyl chloride rubber, plastic air bed, automotive parts, rubber boat material, rubber tape, rubber foam bag fabric, rubber air bed, rubber space bag, Polyurethane inflatable bed, and polyurethane inflatable boat fabric.

    • (2) In terms of diversified operation, the Company has added the following to its business items:

      1. Manufacturing and selling products including: plastic space bags, plastic oil canvas, polyurethane high-performance fabrics, polyurethane highinflatable fabrics, and rubber foam women's bags

      2. Purchasing and selling of related machinery mentioned above and trading of existing raw materials.

      3. Operation of general import and export trade and providing agency services (excluding licensing business).

      4. Operation of cinemas, department stores and supermarkets.

      5. Manufacturing and trading of environmental protection equipment.

      6. Manufacturing and selling of rubber and plastic products for aircraft fuel tanks and inflatable rescue ladders.

      7. Manufacturing and trading of electronic (IC) products.

      8. Operation of leisure and sports facilities (bowling, tennis, table tennis, badminton, billiards and swimming pool).

      9. Commission construction companies to build public housing, commercial buildings and general industrial plant, and warehouse rental and sales.

      10. Lease and sale of the remaining plant buildings and office buildings.

      11. Manufacturing and selling of silicone rubber, silicone resin, silicone oil, silicone sealant, resin materials for electronics, protective film for electronic wafers, and printed circuit boards.

      12. Manufacturing and selling of various industrial synthetic resins, resin pellets and adhesives.

      13. Manufacturing and selling of color inkjet photo paper and polyolefin films.

      14. D101050 Cogeneration, Combined Heat and Power

      15. G801010 Warehousing

      16. All business activities that are not prohibited or restricted by law, except those that are subject to special approval.

    • Business ratios:

    • (1) Business ratios for various products

Unit: thousand
%
14.15%
36.63%
14.96%
11.21%
21.12%
1.93%
100%
Item 2023 %
Construction 192,350 14.15%
Rubber Sheet 498,076 36.63%
Plastic 203,432 14.96%
Eco-FriendlySynthetic Leather 152,456 11.21%
Warehouse 287,202 21.12%
Others 26,202 1.93%
Total 1,359,718 100%

  • 116 -

  • (2) Business ratios for various regions:

Unit: thousand

Unit: thousand
Region\year 2023 %

34%

38%

17%

11%

0%

66%

100%
Domestic sales 300,939
Overseas sales Asia 335,953
Europe 146,174
North America 94,783
Other regions 2,317
Total of overseas sales 579,227
Total 880,166

Note: Construction and warehouse revenue are not included in domestic sales.

  1. Statistics on Key Performance Indicator (KPI) of Formosan Rubber Group Inc.

Explanation: The KPI of Formosan Rubber Group Inc. is the product recovery rate = Grade A ÷ input

Uit Tt Vl Diii Total of the Total of the Al Ttl
n arge aue vson First Half Second Half nnua oa
Rubber
Sheet		 90.0% Input 838,727
864,606
1,703,333
Grade A 780,235
806,663
1,586,898
Recovery
Rate		 93.0%
93.3%
93.2%
Synthetic
Leather		 99.0% Input 2,355,828
1,682,292
4,038,120
Grade A 2,355,015
1,664,875
4,019,890
Recovery
Rate		 99.9%
99.0%
99.5%
Eco-
Friendly
Synthetic
Leather		 94.0% Input 1,562,876
1,185,713
2,748,589
Grade A 1,528,475
1,160,449		 2,688,924
Recovery
Rate		 97.8%
97.9%
97.8%

(II) Industry Overview:

  1. Secondary Processing Industries:

Years of statistics in Germany suggest that the total global demand for rubber and plastics remain growing slowing; the segments of life-saving, medication, and environment protection are outperforming the remaining ones; FRG is leading in the first two with better technology. Since 2023, the cumulative effects of significant interest rate hikes, underperformance in China's post-pandemic economy, and weak global economic demand have resulted in a global slowdown in manufacturing activity. Looking ahead to 2024, international forecast institutions anticipate a continued slowdown in the global economy, with expectations for a gradual recovery in global commodity trade. Major economies, such as Europe, are expected to show signs of recovery, while emerging markets and developing economies should experience stable growth. In spite of all these

  • 117 -

unfavorable forces, FRG is targeting to outsell the 8,735 thousand yards of rubber, plastic, and synthetic leather (2023) in 2024.

  1. Nankang's lease service industry actively seeks new clients and collaborates with well-known domestic and foreign logistic operators to provide tax and logistics management services to foreign businesses, with a focus on one-stop services and the use of technological management integration processes and systematized service models. This in turn improves service efficiency. The warehouses in Longtan Smart Park Zone A, Taoyuan, were completed in the fourth quarter of this year. They are FRG's primary targets for investment this year. As the Lungtan Smart Park's warehouse momentum grows, so will revenue from related warehouse rentals and goods handling fees. Revenue from warehousing rent and logistics may go over NT$250 million in 2024.

  2. Land Development Status of the Company:

  3. (1) The sales of the reserved apartments for “ World Garden - Bridge Upto Zenith ” , and “ Modesty Home ” Reserved units apartments at “ Qiao-Feng ” and “ Qian-Yue ” . By judging the real estate market, we entrusted the sales of the residential apartments and took steps gradually, allowing steady sales, and we have now sold out all the residential apartments.

  4. (2) Xindian “ Legend River ”

The MRT Circular Line commenced the operation, and the development of the Yangbei Replanning Area, the market has gradually recovered and the selling rate has stabilized.

  • (3) “ 55Timeless ” Project in Taipei City

With the building of high specifications and the public facilities of an art gallery, it has become one of the international-grade landmarks for luxury residential apartments. Sales of units of large size and higher prices are soaring due to the following factors: preference of high end customers attracted by good construction quality and word of mouth; funds back to Taiwan to get away from Sino-US conflicts are prominent. With the Company ’ s flexible use of strategies, the apartments continued selling.

  • (4) “ La Bella Vita ” Project in Taichung City The real estate market of the 7th Phase, Taichung City is very active, and thus the selling prices are stabilized. The major selling point of “ La Bella Vita ” is planned to be the real model house designed for “ La Bella Vita ” specifically by the architecture Antonio Citterio and renowned cabinet brand, to increase the sales synergy with cross-industry alliance.

  • (5) FRG Bridge Upto Zenith Business Plaza

  • 118 -

FRG Qiao Feng Business Plaza is located on the first and second floors of No. 168-180, Section 1, Zhongshan Road, Banqiao, covering an area of 1,882 pings (6221 square meters). The first floor of the business plaza has been leased to E.SUN Commercial Bank; the second floor has been leased to Nan Shan Life Insurance Co., Ltd. and SinoPac Securities Corporation; the second floor of the business plaza at building B has been leased to the infant care center, Bell ’ s HOUSE. The occupancy rate is 100%. FRG Qiao Feng Business Plaza has become an exquisite business center of Banqiao.

  • (6) San Francisco and Hotel Development Project

The subsidiary (FRG US Corp.) in the United States was established in 2017.Participated in construction investment, with investment in this project accounting for approximately 11.23%. Residential sales were limited due to the significant increase in US mortgage interest rates, whereas hotel operations gradually improved, aided by sustained brand visibility.

  • (7) Kaohsiung Ambassador Hotel Development Project

The construction plan for the unsafe and old buildings has been completed, and the land registration transfer was completed in December 2022. Architectural design, environmental impact assessment, and urban design review are all currently underway.

  • 119 -

  • (III) Technology and R&D Status and the Progress of Future Plans and Estimated Investment Expenses:

  • (1) The technical level and research development of the business:

    • As a means to lead the transformation of the technology industry, the Company established the R&D center in the early 1990s and recruited researches with a master’s degree. The Company worked vigorously to research and develop products for new uses, new materials and new process and has become a successful example in the transformation of traditional industries by establishing advanced technology research and develop capabilities. We are the only company in Taiwan to have won the National Quality Award for 5 consecutive years (1991-1995) presented by the Industrial Development Bureau. Aside maintaining the same production quality for the current products, we constant work on the further development on aspects including defense, medical, industrial, safety maintenance, special environmental airtightness, green energy environmental protection, electrical protection, and nuclear protection.

  • (2) R&D Personnel and Their Education and Experiences:

The Company has a total of 11 R&D personnel, among these sic people hold a master degree, four people hold a bachelor degree and one person is an undergraduate.

  • (3) R&D expenses in the last five years (2019-2023):
Unit: thousand
2023
9,270
2019 2020 2021 2022 2023
13,097 9,917 10,467 9,634 9,270

(4) Material Results:

Patents: five patents were obtained in 2023.

[1] Protective clothing fabric and its manufacturing method [2] Waterproof and soundproof material and its manufacturing method [3] Rubber inflatable fabric and its manufacturing method [4] Rubber film surface printing structure and its printing method [5] Fuel tank leather manufacturing method

There are currently eight R.O.C. patent applications pending.

  • 120 -

(5) The process of the future R&D plans and estimated R&D investment expenses for Formosan Rubber Group Inc.

Recent annual
plans		 Current process R&D
expenses
that should
be further
invested		 Time to
complete mass
production
Major factors for the future
R&D to succeed
Product
development
of rubber
soundproofing
pad products		 1. The rubber soundproofing pad
products have passed relevant
building regulations and have
been awarded the“green
building material label
certificate.”
2. The production equipment has
been completed, with
production in a small quantity,
to be delivered to customers
for trial.		 USD $ 10,000 June 2024 1. The actual operation of
equipment production is
consistent with
production requirements
and can improve
production efficiency.
2. Improve production
efficiency, shorten
product curing time.
Life raft cold-
resistant
formula (-70
°C) project		 1. Actual-size samples were
produced and delivered to
customers for physical testing
in an outdoor environment.
2. Competitors have already had
corresponding products to the
customer which pose a price
advantage.		 USD $ 5,000 June 2024 1. A customer reported that
the major goods are
unstable for the wear-
resistance, and the
technology is improving.
2. The time for the
customer to make
confirmation has
effected the number of
the current orders.
Product
development
project for
rubber and
TPU drop-
stitch
inflatable air
cushion		 1. Various drop-Stitch rubber and
TPU inflatable air cushions
have been completed and
delivered to aircraft jack
customers for trial use.
2. Drop-Stitch is a kind of fabric
for EU markets; source for 2nd
supplier and plan inventory
level to deal with long lead
time issues.

USD $ 5,000		 June 2024 1. Shipment was changed
to folded packaging in
response to customers'
reports of abnormal
creases on product rolls.
2. Technology is
continuously being
developed and new
equipment added; the
Company is trying to
simplify the production
process and improve
yield.
National-level
- national
vehicles
manufactured
in Taiwan plan		 1. Flexible rubber duct.
2. The high-wear-resistant and
low-smoke carriage rubber
floor material for trains meets
the EN standards.
It has been delivered to use at the
MRT Circular Line and will be
continually followed-up.		 USD $ 5,000 December,
2024		 1. Replacement of special
rubber floor materials for
high-speed rail, MRT
and railway carriages.
2. Close partnership with
customers to increase the
technology level to
increase orders for
rubber floor used in
carriages.
Development
project for
diversified		 1. Stable orders have been
received by customers, and
keepingon followingup.		 USD $ 5,000 December,
2024		 1. Customers use joint
materials with corners,
and extended the
  • 121 -
Recent annual
plans		 Current process R&D
expenses
that should
be further
invested		 Time to
complete mass
production
Major factors for the future
R&D to succeed
products such
as joint seam
materials used
in carriages.		 2. The molding machine area has
been established, pending
operator training to familiarize
with the machine in order to
improve the yield.		 development on the
existing core expertise.
2. The corner forming and
vulcanization
accommodate each
other.
Project for
developing
high-
performance
TPU product;
featuring light,
thin, and soft-
touch		 1. Actual size samples (based on
special TPU materials) are in
production now; pending for
durability test by customer.
2. Make sure the reliable supply
of TPU materials.		 USD $ 5,000 December,
2024		 1. Adjust the processability
of TPU materials to
adapt to existing
production equipment.
2. To ensure the quality of
the customer’s demand.
Project for
developing EN
& BS
specification
compliant and
highly
transmitting
materials for
joint seam of
carriages.
1. The major products have been
produced, and sample cards
have been made for
promotion.
2. Competitors in Europe and the
US already have joint seam
materials used in carriages that
comply with EN & BS
standards.
USD $ 5,000		 December,
2024		 1. Make sure the EN & BS
specification compliant
and highly transmitting
materials for joint seam
of carriages meet
customer requirements.
2. Close partnership with
customers to increase the
technology level to
increase orders for joint
seam materials used in
carriages.
PCB & CCL
mold-pressed
laminated
buffer		 1. The actual size samples were
outsourced for testing by
manufacturers.
2. Assess production equipment
to fit production process.		 USD $ 10,000 December,
2024		 1. First the existing
production equipment in
the plant is applied to
accommodate the
development.
2. Decided the order of
product development by
integrating the demands
of users.

  • 122 -

  • (IV) Long-Term and Short-Term Business Development Plans:

The business developments of the Company are divided into 3 sections:

  • I. Secondary Processing Industries:

  • (1) Short-term development plans:

    • A. By signing annual sales contracts with major customers - ensuring stable performance of 60% or more.

    • B. Improve quality and continue to engage in EOM/ODM collaboration with major global manufacturers to ensure turnover.

    • C. Make good use of equipment and develop multi-colored and multispecification productions to ensure customers ’ brand loyalty.

    • D. Continue to collaborate with factories in Europe, the United States, and Japan to develop new products and introduce the theme to new markets.

    • E. Add new product lines and develop related products and one-stop services to better meet the needs of our customers.

    • F. By investing with precision - principles of full production, order delivery and gradually adjust the inventory.

  • (2) Long-term development plans:

    • A. Develop new products with the performance of new products

      • accounting for 30% of all manufacturing performance as the goal, with the intention of attaining steady turnover growth.

    • B. Add rubber products required by green energy-related industries and process supply chains and continue to develop products that are more in line with green energy demand.

    • C. Continue to optimize environmentally friendly products to secure longterm orders from customers in advanced European countries and the United States.

    • D. Promote and expand FRG dragons (the best-selling FRG products). Furthermore, strengthen promotion and provide customers with certifications and reports to help them recognize FRG's products.

    • E. Offer customers a one-stop shopping experience (including rubber, plastics, green plastics, PU coating, PU lamination, silicone and other departments). Provide most customers with a variety of product options and facilitate horizontal integration development across departments.

    • F. The products have a wide range of applications, including healthcare, apparel, industrial safety, navigation, inflatables, shoe materials, box packaging materials, electronic consumables and others. The manufacturing department can share its R&D feedback and horizontally link and develop unique products. The new products and best-selling products complement one another.

  • II. Nankan Warehouse Logistics and Rental and Leasing Business:

  • (1) Short-term business development plans:

    • Building a new logistics warehouse in Longtan that is intended to be a smart green building. At the same time, request a permit for the Logistics Center's Warehouse III to serve South Taoyuan manufacturers. The company will continue to improve and optimize its services with the goal of attracting international customers as tenants.

  • (2) Long-term business development plans: Completed the entire Smart Park in Lungtan and continue to build logistic factories that meet current trends, with the goal of attracting bonded customers as tenants. Increase the operational planning of various

  • 123 -

industries, thereby improving the park's overall development strength and opening up opportunities for diverse collaboration.

III. Real Estate Development

  • (1) Short-term development plans:

  • In a bid to continue the real estate development experience and creating the long-term stable profit for the Company, not only do we have our own real estate assets, we also focus on other suitable land or individual projects. In addition to residential properties, investments in commercial real estate will not be ruled out.

  • (2) Long-term development plans:

  • Due to the need of long-term development, other than the existing development projects, the Company will actively look for projects meeting the Company's conditions.

  • 124 -

II. Market and Production and Sales Overview:

(I) Market Analysis:

1. Market supply and demand status and growth:

  • (1) Main product sales areas:
Unit: thousand
Region\year 2022 % 2023 %
Domestic sales 408,198 41.39% 300,939 34.19%
Overseas
sales		 Asia 351,637 35.65% 335,953 38.17%
Europe 146,252 14.83% 146,174 16.61%

North
America		 71,581 7.25% 94,783 10.77%
Other
regions		 8,671 0.88% 2,317 0.26%
Subtotal 578,141 58.61% 579,227 65.81%
Total 986,339 100.00% 880,166 100.00%

Note: Construction and warehouse revenue are not included in domestic sales.

  • (2) The supply and demand and growth potential of the market in the future:

In retrospect, the year 2023 marked the official end of the COVID-19 pandemic worldwide. There was optimism for a robust post-pandemic economic recovery after three years of a global public health crisis. However, economic performance was hampered by the Federal Reserve's series of hawkish interest rate hikes, lingering inflation risks, uncertainties in the economic outlooks of the United States and Mainland China, as well as ongoing geopolitical conflicts such as the RussiaUkraine war and escalating Middle Eastern tensions. These crises slowed the expected pace of recovery. With the implementation of the EU's carbon border tariffs and associated policies, an unstoppable trend of using economic policies to address environmental issues has begun. How growing supply-side costs are reflected in the consumer market and the effects they have is another crucial issue that should not be disregarded. There are still many unknowns in the environment as a whole. Seizing opportunities when the economy recovers requires constant monitoring of the political and economic landscape on a global scale, as well as timely adjustments based on business cycle phases. Therefore, by continuously developing new products, improving quality and strictly controlling costs based on the market orientation, the sustainable development of the Company may be ensured

(3) Competitive niche:

Due to high barriers to entry in terms of production scales, technology patents, and quality assurance, currently there are only European, American and Japanese advanced manufacturers (such as the Company) who are able to produce the 3 big

  • 125 -

growing fields mentioned above; there are very limited competitors. Blessed by over US$100 million capital, 71 years of technology and patents, ISO-14001 and five national quality awards, FRG will invest in the above three growth markets to widen the difference with competitors, lead the rubber, plastic industry in Taiwan, and crown the eco-friendly synthetic leather manufacturing industry.

(4) Advantages of the development prospect:

Product
Lines		 Market
Type		 Staple
Merchandise
Market		 Electronic
Materials Market		 Medical Materials
Market		 Automotive
Materials Market		 Environmental
Materials Market
Rubber
Sheet		 Future
Favorable
Factors		 Rubber sheet used
in the staple
merchandise
market - the
Company is the
only manufacturer
in Taiwan with
such technology		 Rubber sheet used
in the electronic
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Rubber sheet used
in the medical
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Rubber sheet used
in the automotive
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Rubber sheet used
in the
environmental
materials market -
the Company is
the only
manufacturer in
Taiwan with such
technology
Synthetic
Leather		 Future
Favorable
Factors		 Synthetic leather
used in the staple
merchandise
market - the
Company has the
largest
manufacturing
scales among
Taiwanese
manufacturers		 Synthetic leather
used in the
electronic
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Synthetic leather
used in the medical
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Synthetic leather
used in the
automotive
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Synthetic leather
used in the
environmental
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers
Eco-
Friendly
Synthetic
Leather		 Future
Favorable
Factors		 Eco-friendly
synthetic leather
used in the staple
merchandise
market - the
Company has the
largest
manufacturing
scales among
Taiwanese
manufacturers		 Eco-friendly
synthetic leather
used in the
electronic
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Eco-friendly
synthetic leather
used in the medical
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Eco-friendly
synthetic leather
used in the
automotive
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Eco-friendly
synthetic leather
used in the
environmental
materials market -
the Company has
the largest
manufacturing
scales among
Taiwanese
manufacturers
  • 126 -

(5) Disadvantages of development prospects:

Product
Lines		 Market
Type		 Staple
Merchandise
Market		 Electronic
Materials Market		 Medical Materials
Market		 Automotive
Materials Market		 Environmental
Materials Market
Rubber
Sheet		 Future
Unfavorable
Factors
Due to the
conservative
market, needs for
rubber sheet used
in the staple
merchandise
market slow down		 Due to the
conservative
market, it is not
easy to expand
business for rubber
sheet used in the
electronic
materials market		 Due to the
conservative
market, it is not
easy to expand
business for rubber
sheet used in the
medical materials
market		 Due to the
conservative
market, it is not
easy to expand
business for
rubber sheet used
in the automotive
materials market		 Due to the
conservative
market, it is not
easy to expand
business for
rubber sheet used
in the
environmental
materials market
Synthetic
Leather		 Future
Unfavorable
Factors
Due to the
conservative
market, the
competitiveness
decreases in
synthetic leather
used in the staple
merchandise
market		 Due to the
conservative
market, it is not
easy to expand
business for
synthetic leather
used in the
electronic
materials market		 Due to the
conservative
market, it is not
easy to expand
business for
synthetic leather
used in the medical
materials market		 Due to the
conservative
market, it is not
easy to expand
business for
synthetic leather
used in the
automotive
materials market		 Due to the
conservative
market, it is not
easy to expand
business for
synthetic leather
used in the
environmental
materials market
Green
plastics		 Future
Unfavorable
Factors
Due to the
conservative
market, the
competitiveness
decreases in eco-
friendly synthetic
leather used in the
staple
merchandise
market		 Due to the
conservative
market, it is not
easy to expand
business for eco-
friendly synthetic
leather used in the
electronic
materials market		 Due to the
conservative
market, it is not
easy to expand
business for eco-
friendly synthetic
leather used in the
medical materials
market		 Due to the
conservative
market, it is not
easy to expand
business for eco-
friendly synthetic
leather used in the
automotive
materials market		 Due to the
conservative
market, it is not
easy to expand
business for eco-
friendly synthetic
leather used in the
environmental
materials market
  • 127 -

(7) Countermeasures with regard to development prospects:

Product
Lines		 Market Type Staple
Merchandise
Market		 Electronic
Materials Market		 Medical Materials
Market		 Automotive
Materials Market		 Environmental
Materials Market
Rubber
Sheet		 Future
countermeasures
All innovative
products will
gain patents and
be produced
exclusively, to
create high
profits and high
barriers to entry.		 All innovative
products will
gain patents and
be produced
exclusively, to
create high
profits and high
barriers to entry.		 All innovative
products will gain
patents and be
produced
exclusively, to
create high profits
and high barriers
to entry.		 All innovative
products will
gain patents and
be produced
exclusively, to
create high
profits and high
barriers to entry.		 All innovative
products will
gain patents and
be produced
exclusively, to
create high
profits and high
barriers to entry.
Synthetic
Leather		 Future
countermeasures
Sign annual
supply contract
with long-term
quality
customers,
ensuring monthly
basic shipments.		 Sign annual
supply contract
with long-term
quality
customers,
ensuring monthly
basic shipments.		 Sign annual supply
contract with long-
term quality
customers,
ensuring monthly
basic shipments.
Sign annual
supply contract
with long-term
quality
customers,
ensuring monthly
basic shipments.		 Sign annual
supply contract
with long-term
quality
customers,
ensuring monthly
basic shipments.
Green
plastics		 Future
countermeasures
Establish
international
business line in
Europe, America,
Japan and
Greater China,
increasing the
proportion of
overseas sales.
Establish
international
business line in
Europe, America,
Japan and
Greater China,
increasing the
proportion of
overseas sales.
Establish
international
business line in
Europe, America,
Japan and Greater
China, increasing
the proportion of
overseas sales.		 Establish
international
business line in
Europe, America,
Japan and
Greater China,
increasing the
proportion of
overseas sales.
Establish
international
business line in
Europe, America,
Japan and
Greater China,
increasing the
proportion of
overseas sales.
  1. Analysis of the Overall Economic Environment of the Formosan and the Trends of its Industry

(1) Current Status and Development of the Industry

Industry
Trends		 Product
Lines		 Item Staple
Merchandise
Market		 Electronic
Materials Market		 Medical
Materials Market		 Transportation
Materials Market
Environmental
Materials Market
(1) Current
Status and
Developm
ent of the
Industry		 Rubber
Sheet		 Current
Status of
the
Industry		 Rubber sheet
used in the staple
merchandise
market - the
Company is
currently the
only
manufacturer in
Taiwan with
such technology		 Rubber sheet
used in the
electronic
materials market
- the Company
currently has the
largest
manufacturing
scales among
Taiwanese
manufacturers		 Rubber sheet
used in the
medical materials
market - the
Company
currently has the
largest
manufacturing
scales among
Taiwanese
manufacturers
Rubber sheet
used in the
transportation
materials market
- the Company
currently has the
largest
manufacturing
scales among
Taiwanese
manufacturers		 Rubber sheet
used in the
environmental
materials market
- the Company
currently is the
only
manufacturer in
Taiwan with
such technology
Develop
ment of
the
Industry		 Current annual
growth rate is
approximately
2%		 Current annual
growth rate is
approximately
3%		 Current annual
growth rate is
approximately
3%		 Current annual
growth rate is
approximately
3%		 Current annual
growth rate is
approximately
2%
Synthetic
Leather		 Current
Status of
the
Industry		 Synthetic leather
used in the staple
merchandise
market - the
Company
currently has the
largest
manufacturing		 Synthetic leather
used in the
electronic
materials market
- the Company
currently has the
largest
manufacturing		 Synthetic leather
used in the
medical materials
market - the
Company
currently has the
largest
manufacturing
Synthetic leather
used in the
transportation
materials market
- the Company
currently has the
largest
manufacturing		 Synthetic leather
used in the
environmental
materials market
- the Company
currently has the
largest
manufacturing
  • 128 -
Industry
Trends		 Product
Lines		 Item Staple
Merchandise
Market		 Electronic
Materials Market		 Medical
Materials Market		 Transportation
Materials Market		 Environmental
Materials Market
scales among
Taiwanese
manufacturers		 scales among
Taiwanese
manufacturers		 scales among
Taiwanese
manufacturers		 scales among
Taiwanese
manufacturers		 scales among
Taiwanese
manufacturers
Develop
ment of
the
Industry		 Current annual
growth rate is
approximately
2%		 Current annual
growth rate is
approximately
1%		 Current annual
growth rate is
approximately
5%		 Current annual
growth rate is
approximately
2%		 Current annual
growth rate is
approximately
2%
Green
plastics		 Current
Status of
the
Industry		 Eco-friendly
synthetic
leatherused in the
staple
merchandise
market - the
Company
currently has the
largest
manufacturing
scales among
Taiwanese
manufacturers
Eco-friendly
synthetic
leatherused in the
electronic
materials market
- the Company
currently has the
largest
manufacturing
scales among
Taiwanese
manufacturers
Eco-friendly
synthetic
leatherused in the
medical materials
market - the
Company
currently has the
largest
manufacturing
scales among
Taiwanese
manufacturers

Eco-friendly
synthetic leather
used in the
transportation
materials market
- the Company
currently has the
largest
manufacturing
scales among
Taiwanese
manufacturers		 Eco-friendly
synthetic leather
used in the
environmental
materials market
- the Company
currently has the
largest
manufacturing
scales among
Taiwanese
manufacturers
Develop
ment of
the
Industry		 Current annual
growth rate is
approximately
1%		 Current annual
growth rate is
approximately
2%		 Current annual
growth rate is
approximately
5%		 Current annual
growth rate is
approximately
1%		 Current annual
growth rate is
approximately
2%
  • 129 -

(2) Industry relevance of upstream, midstream and downstream companies

Industry Trends Product
Lines		 Item Staple
Merchandise
Market		 Electronic
Materials
Market		 Medical
Materials
Market		 Transportation
Materials
Market		 Environmental
Materials
Market
(1) Industry
relevance of
upstream,
midstream
and
downstream
companies.		 Rubber
Sheet		 Upstream
Companies		 Manufacturer
for rubber raw
materials
(example:
Denka,Tosoh)		 Manufacturer
for rubber raw
materials
(example:
Denka,Tosoh)		 Manufacturer
for rubber raw
materials
(example:
Denka,Tosoh)		 Manufacturer
for rubber raw
materials
(example:
Denka,Tosoh)		 Manufacturer
for rubber raw
materials
(example:
Denka,Tosoh)
Midstream
Companies		 Manufacturer
for synthetic
rubber
(example: the
Company)		 Manufacturer
for synthetic
rubber
(example: the
Company)		 Manufacturer
for synthetic
rubber
(example: the
Company)		 Manufacturer
for synthetic
rubber
(example: the
Company)		 Manufacturer
for synthetic
rubber
(example: the
Company)
Downstream
Companies		 Process plant of
rubber staple
merchandise		 Process plant of
rubber electronic
materials
Process plant
of rubber
medical
materials		 Process plant of
rubber
transportation
materials		 Process plant
of rubber
environmental
materials
Synthetic
Leather		 Upstream
Companies		 Manufacturer
for plastic raw
materials
(example:
Formosa Plastics
Group)
Manufacturer
for plastic raw
materials
(example:
Formosa
Plastics Group)		 Manufacturer
for plastic raw
materials
(example:
Formosa
Plastics
Group)		 Manufacturer
for plastic raw
materials
(example:
Formosa Plastics
Group)
Manufacturer
for plastic raw
materials
(example:
Formosa
Plastics
Group)
Midstream
Companies		 Manufacturer
for PU synthetic
leather
(example: the
Company)		 Manufacturer
for PU synthetic
leather
(example: the
Company)		 Manufacturer
for PU
synthetic
leather
(example: the
Company)		 Manufacturer
for PU synthetic
leather
(example: the
Company)		 Manufacturer
for PU
synthetic
leather
(example: the
Company)
Downstream
Companies		 Process plant of
plastic staple
merchandise		 Process plant of
plastic electronic
materials
Process plant
of plastic
medical
materials		 Process plant of
plastic
transportation
materials		 Process plant
of plastic
environmental
materials
Green
plastics		 Upstream
Companies		 Manufacturer
for eco-friendly
synthetic leather
raw materials
(example:
Merquins)		 Manufacturer
for eco-friendly
synthetic leather
raw materials
(example:
Merquins)		 Manufacturer
for eco-
friendly
synthetic
leather raw
materials
(example:
Merquins)		 Manufacturer
for eco-friendly
synthetic leather
raw materials
(example:
Merquins)		 Manufacturer
for eco-
friendly
synthetic
leather raw
materials
(example:
Merquins)
Midstream
Companies		 Manufacturer
for eco-friendly
synthetic leather
(example: the
Company)		 Manufacturer
for eco-friendly
synthetic leather
(example: the
Company)		 Manufacturer
for eco-
friendly
synthetic
leather
(example: the
Company)		 Manufacturer
for eco-friendly
synthetic leather
(example: the
Company)		 Manufacturer
for eco-
friendly
synthetic
leather
(example: the
Company)
Downstream
Companies		 Process plant of
eco-friendly
synthetic
leatherstaple
merchandise		 Process plant of
eco-friendly
synthetic
leatherelectronic
materials		 Process plant
of eco-friendly
synthetic
leathermedical
materials		 Process plant of
eco-friendly
synthetic
leathertransporta
tion materials		 Process plant
of eco-friendly
synthetic
leatherenviron
mental
materials
  • 130 -

(3) Various Product Development Trends and Competitiveness Status

Industry Trends Product
Lines		 Item Staple
Merchandise
Market		 Electronic
Materials
Market		 Medical
Materials
Market		 Transportation
Materials
Market
Environmental
Materials
Market
(3) Various Product
Development
Trends and
Competitiveness
Status		 Rubber
Sheet		 Future
Favorable
Factors
and
Developm
ent Trends		 Rubber sheet
used in the
staple
merchandise
market - the
Company will
be the only
manufacturer in
Taiwan with
such
technology
Rubber sheet
used in the
electronic
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers

Rubber sheet
used in the
medical
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers

Rubber sheet
used in the
transportation
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers
Rubber sheet
used in the
environmental
materials
market - the
Company will
be the only
manufacturer
in Taiwan
with such
technology
Future
Unfavorab
le Factors
and
Competiti
veness
Status		 Due to the
conservative
market, needs
for rubber sheet
used in the
staple
merchandise
market
decreases.
Also, the
capital
expenditure of
this product is
large, making it
more difficult
for newcomers.
Due to the
conservative
market, it is
not easy to
expand
business for
rubber sheet
used in the
electronic
materials
market. Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.
Due to the
conservative
market, it is
not easy to
expand
business for
rubber sheet
used in the
medical
materials
market. Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.
Due to the
conservative
market, it is
not easy to
expand
business for
rubber sheet
used in the
transportation
materials
market. Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.
Due to the
environmental
new materials,
it is not easy
to expand
business for
rubber sheet
used in the
environmental
materials
market Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.
Future
counterme
asures		 All innovative products will gain patents and be produced exclusively, to
create high profits and high barriers to entry.
Synthetic
Leather		 Future
Favorable
Factors
and
Developm
ent Trends		 Synthetic
leather used in
the staple
merchandise
market - the
Company
currently has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Synthetic
leather used in
the electronic
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers


Synthetic
leather used in
the medical
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers


Synthetic
leather used in
the
transportation
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers

Synthetic
leather used in
the
environmental
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers
Future
Unfavorab
le Factors
and
Competiti
veness
Status		 Due to the
conservative
market, the
competitiveness
decreases in
synthetic
leather used in
the staple
merchandise
Due to the
conservative
market, it is
not easy to
expand
business for
synthetic
leather used in
the electronic
Due to the
conservative
market, it is
not easy to
expand
business for
synthetic
leather used in
the medical
Due to the
conservative
market, it is
not easy to
expand
business for
synthetic
leather used in
the
Due to the
environmental
new materials,
it is not easy
for the
Company to
expand
business for
synthetic
  • 131 -
Industry Trends Product
Lines		 Item Staple
Merchandise
Market		 Electronic
Materials
Market		 Medical
Materials
Market		 Transportation
Materials
Market
Environmental
Materials
Market
market. Also,
the capital
expenditure of
this product is
large, making it
more difficult
for newcomers.		 materials
market. Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.
materials
market. Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.
transportation
materials
market. Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.		 leather used in
the
environmental
materials
market Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.
Future
counterme
asures		 Sign annual supply contract with long-term quality customers, ensuring
monthly basic shipments.
Green
plastics		 Future
Favorable
Factors
and
Developm
ent Trends		 Eco-friendly
synthetic
leather used in
the staple
merchandise
market - the
Company
currently has
the largest
manufacturing
scales among
Taiwanese
manufacturers		 Eco-friendly
synthetic
leatherused in
the electronic
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers
Eco-friendly
synthetic
leatherused in
the medical
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers
Eco-friendly
synthetic
leatherused in
the
transportation
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers
Eco-friendly
synthetic
leatherused in
the
environmental
materials
market - the
Company will
have the
largest
manufacturing
scales among
Taiwanese
manufacturers
Future
Unfavorab
le Factors
and
Competiti
veness
Status		 Due to the
conservative
market, the
competitiveness
decreases in
eco-friendly
synthetic
leather used in
the staple
merchandise
market. Also,
the capital
expenditure of
this product is
large, making it
more difficult
for newcomers.
Due to the
conservative
market, it is
not easy to
expand
business for
eco-friendly
synthetic
leather used in
the electronic
materials
market. Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.

Due to the
conservative
market, it is
not easy to
expand
business for
eco-friendly
synthetic
leather used in
the medical
materials
market. Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.

Due to the
conservative
market, it is
not easy to
expand
business for
eco-friendly
synthetic
leather used in
the
transportation
materials
market. Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.
Due to the
environmental
new materials,
it is not easy
for the
Company to
expand
business for
eco-friendly
synthetic
leatherused in
the
environmental
materials
market Also,
the capital
expenditure of
this product is
large, making
it more
difficult for
newcomers.
Future
counterme
asures		 Establish international business line in Europe, America, Japan and Greater
China, increasing the proportion of overseas sales.

  • 132 -

  • (II) Important Uses and Production Process of Major Products:

  • Important Uses:

  • (1) Uses for Plastics and Latex:

    • These can be made into raincoats, windbreakers, leather bags, suitcases, furniture, wallpapers, tents, air beds, sofas, car seat cushions, canvas, readyto-wear, life jackets, school bags, safety seats, medical materials, automotive materials, etc.

  • (2) Uses for Rubber Sheet:

    • It can be made into raincoats, windbreakers, snow coats, footwear, waterproof engineering, air beds, boats, pontoons, aircraft tanks, water tanks, conveyor belts, ready-to-wear, life jackets, medical materials, automotive materials, dry diving suits, etc.

  • (3) Uses for Eco-Friendly Synthetic Leather:

These can be made into high-end ready-to-wear, raincoat, windbreaker, ski wear, medical materials, automotive materials, etc.

  1. Manufacturing Process:

  2. (1) Synthetic Leather:

Basic
sheet
Checking
Checking
Laminating
Cooling
Rolling
Pasting
Finished
product
Basic
sheet
Checking
Pasting
Laminating
Dusting
Vulcanizing
Checking
Finished
product
bber Sheet:		 Basic
sheet		 Checking Pasting Laminating

(2) Rubber Sheet:

(3) Eco-Friendly Synthetic Leather:

Basic
sheet
Checking
Checking
Coating
Cooling
Rolling
Pasting
Finished
product		 Basic
sheet		 Checking Pasting Coating
Cooling Rolling Checking Finished
product

  • (III) Supply Situation for Major Raw Materials:

    1. Main raw materials:

      • A. Rubber raw materials: synthetic rubber, natural rubber, nylon.

  • B. Plastic raw materials: PVC dust, DPHP, nylon.

  • C. Eco-friendly synthetic leatherraw materials: PC paste, nylon.

    1. Main source of supply:

      • A. Synthetic rubber: Domestic: USI Corp and NANTEX.

Overseas: Japan and the United States.

  • B. Natural rubber: Southeast Asia.

C.DPHP: Domestic: UPC Group and C&Yung Ltd.

Overseas: Germany, Italy and Korea.

  • D.PVC dust: Domestic: Formosa Plastics Group, Ocean Plastics Overseas: the US and Japan.

  • 133 -

E. PU paste: Overseas: the UK and Japan.

F. Nylon: FORMOSA TAFFETA and Far Eastern New Century.

  • 134 -

  • (IV) The Names and Purchases (Sales) and Proportion of the Customers that Accounted for more than 10% of the Total Procurement (sales) of Goods in any of the Past 2 Years and the Amount and Proportion of the Goods Sold:

  • The Names of Manufacturers that Accounted for more than 10% of the Total Procurement of Goods in any of the Past Two Years and the Amount and Proportion of the Goods Sold:Unit: thousand

2022 2022 2022 2022 2023 2023 2023 2023 Year 2024 ended thepreviousquarter(Note 2) Year 2024 ended thepreviousquarter(Note 2) Year 2024 ended thepreviousquarter(Note 2) Year 2024 ended thepreviousquarter(Note 2)
Item Name Amount Ratio to net
annual
purchase
(%)		 Relatio
n to the
issuer		 Name Amount Ratio to net
annual
purchase
(%)
Relation
to the
issuer		 Name Amount Ratio to net
purchase in
current year to
the end of the
previous quarter
(%)		 Relation
to the
issuer
1 Supplier A 111,961
20.07		 None Supplier A 50,636
11.15		 None Supplier A 10,798
9.31		 None
2 Supplier B 63,468
11.38		 None Supplier B 38,065
8.39		 None Supplier B 9,986
8.61		 None
Others 382,341
68.55		 Others 365,226
80.46		 Others 95,236
82.08
Net purchase 557,770
100		 Net purchase 453,927
100		 Net
purchase		 116,020
100

  • Note 1: A list of any suppliers and clients accounting for 10% or more of the company's total procurement amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement accounted for by each, or where a trading counterpart is an individual person who is not a related party, it may use a code in place of the actual name

  • Note 2: The financial information for Q1 2024 has been reviewed by CPAs before the publication date of the annual report.

Reasons for the increase or decrease: The same two companies contributed more than 10% of the total sales in last two years were the same two companies, they look to remain so.

  • 135 -

  • The Names of Customers that Accounted for more than 10% of the Total Sales of Goods in any of the Past Two Years and the Amount and Proportion of the Goods Sold: Unit: thousand

2022 2022 2022 2022 2023 2023 2023 2023 Year 2024 ended the previous quarter (Note 2) Year 2024 ended the previous quarter (Note 2) Year 2024 ended the previous quarter (Note 2) Year 2024 ended the previous quarter (Note 2)
Item Name Amount Ratio to
net annual
sales (%)
Relation
to the
issuer		 Name Amount Ratio to
net annual
sales (%)
Relation
to the
issuer		 Name Amount Ratio to net sales
in current year to
the end of the
previous quarter
(%)

Relation
to the
issuer
1 Customer
A		 203,154
20.60		 None Customer
A		 139,775
15.88		 None Customer
A		 40,550
20.42		 None
2 Customer
B		 92,496
9.38		 None Customer
B		 105,175
11.95		 None Customer
B		 20,427
10.29		 None
Others 690,689
70.02		 Others 635,216
72.17		 Others 137,609
69.29
Net sales 986,339
100		 Net sales 880,166
100		 Net sales 198,586
100

Note 1: A list of any suppliers and clients accounting for 10% or more of the company's total procurement amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement accounted for by each, or where a trading counterpart is an individual person who is not a related party, it may use a code in place of the actual name.

Note 2: The financial information for Q1 2024 has been reviewed by CPAs before the publication date of the annual report.

Reasons for the increase or decrease: The same two companies contributed more than 10% of the total sales for the two years, without material deviation.

  • 136 -

(V) Table of Production Volume and Value in the Last 2 Years:

Unit: thousand yards; amount: thousand

Year
Production
Major Products
(or bySegment)		 2022 2023
Production
Capacity		 Production
Volume		 Production
Value		 Production
Capacity		 Production
Volume		 Production
Value
Synthetic Leather 9,240
5,032
193,221
9,240
3,970
161,194
Rubber Sheet 4,488
1,817
368,451
4,488
1,758
375,067
Greenplastics 15,998
3,769
145,203
15,998
2,653
110,823
Others － 345
44,551
－		 179
23,832
Total 29,726 10,963
751,426
29,726		 8,560
670,916

Note 1: Product capacity refers to the capacity that the Company produces under normal operation using existing production equipment after considering the factors for suspension of work or holidays. Note 2: For any production equipment that has a replacement, the calculation for the capacity may be combined with an explanation provided.

(VI) Table of Sales Volume in the Last 2 Years

Unit: thousand yards; amount: thousand

Year
Sales volume
/value
Major Products
(or bySegment)
2022
2022
2022
2022		 2023 2023 2023 2023
Domestic sales Overseas sales Domestic sales Overseas sales
Volume
Value		 Volume
Value		 Volume Value Volume Value
Synthetic Leather 4,100
180,024
1,207
68,058
2,786		 134,566
1,132
68,866
Rubber Sheet 537
79,652
1,410
403,652
461
62,959
1,443
435,117
Greenplastics 3,365
136,495
622
67,187
2,230
95,833
493
56,623
Sales of raw materials 317
1,861
5
73
－		 － 3
221
Others 107
10,166
255
39,171
70
7,581
117
18,400
Total 8,426
408,198
3,499
578,141
5,547		 300,939
3,188
579,227

Note: 1. The amounts above have been expressed by net revenue.

  1. Note: Construction and warehouse revenue are not included in domestic sales.

  2. 137 -

III. Employees:

Employees: Employees:
Year 2022 2023 Current year as of March 31, 2024
Number of
Employees		 Managers 27 30 30
Indirect
personnel		 79 75 74
Direct
personnel		 89 95 95
Total 195 200 199
Average age 51.43 51.17 51.51
Average years of service 10.43 10.86 11.13
Education level
distribution ratio
(%)		 PhD. 0.00% 0.00% 0.00%
MBA 5.64% 4.64% 4.66%

Bachelor’s
degree		 30.77% 28.35% 28.50%
Senior high
school		 45.64% 49.48% 49.22%
Below senior
high school		 17.95% 17.53% 17.62%

Note: The Company has adopted the retirement plan in the end of 2007; re-hired employees are entitled to adopt the new system.

  • 138 -

IV. Information on environmental protection expenditure:

As of the end of the publication of the annual report, the losses and the total amount compensation paid due to a violation that resulted in a penalty, and future

countermeasures and possible expenditure:

  • (I) Environmental Protection:

  • Total fine for the violation of the law and regulations: NT$100,000.

  • Countermeasures: In accordance with air pollution control regulations, any unauthorized changes to the emission pipeline will require a completed application for modification.

  • Costs (est.): NT$2 million

  • (II) Fire Prevention:

  • Total fine for the violation of the law and regulations: None.

  • Countermeasure: In response to amendments to the Fire Services Act, some unprotected areas of the factory will have automatic smoke detectors installed. 。

  • Possible expenditure in the future: within NT$1 million

  • (III) Work Safety

  • Total fine for the violation of the law and regulations: NT$60,000.

  • Countermeasures: Comply with provisions in the Occupational Safety and Health Act.Strengthen industrial safety advocacy to prevent occupational hazards.

  • Possible expenditure in the future:within NT$500,000.

V. Labor Relations and Employee Rights:

  • (I) Various aspects of employee welfare measures, continuing education, job training, retirement system and its implementation, as well as labor agreements, labor rights and employment protection measures:

  • Employee welfare measures:

    • (1) The Company has established the employee welfare committee to implement benefit measures. The charter is as follows:

    • Article 1: The Charter has been established as required in the provisions stipulated in the Organization Regulations on Employee Welfare Committee.

    • Article 2: The Company is called Employee Welfare Committee of Formosan Rubber Group Inc. (the Committee).

    • Article 3: The Committee is located in the Formosan Rubber Group Inc. (8th Floor, No. 82, Section 1, Hankou Street, Taipei).

    • Article 4: There are 15 members in the Committee and is composed of union

  • 139 -

representatives and company representatives. Among these, there are 10 union representatives and 5 company representatives. However, members selected by the union members may not be less than two-thirds of the total number of members (the number of alternatives may not exceed one-third of the number of members). A reelection may be held before the end of the term.

  • Article 5: The Committee has one chairperson who is selected by the members. Committee members serve a term of 3 years and is unpaid. Reelected members shall be no more than two-thirds of the total number of members, however, and the term of executive member is not limited. The Committed shall be notified of any resignation of the chairperson or members. Those who fail to attend the Committee meeting for three consecutive times without reason are deemed to have resigned. Members of the Committee shall not be recalled if their term of office is less than one year.

  • Article 6: The Committee shall have one director-general, one cashier general manager, and one accounting officer. The chairperson shall nominate among the employees of the Company shall be appointed after an approval of the majority of the Committee (dismissal of chiefs shall be approved by half of the Committee).

  • Article 7: The Committee has research teams including business and general affairs which conduct researches and improvements. The business team of the Committee submits proposals to the chairperson or members for discussion. The business team has been divided into 2 sections: business and recreation; general affairs team: education and finance; there are 7 members in these research teams, respectively.

  • Article 8: The employee welfare committee shall hold a meeting every three months, and an ad hoc meeting shall be called when necessary. The committee meetings are called by the chairperson. When the chairperson cannot perform his or her duties for specific reason(s), a personal shall be selected among the director-general or members. The resolutions of the Committee shall be attended by the majority of the members, and approved by the majority of the attendance. However, the resolution of the following shall be approved upon by more than the majority of the attendance.

  • The formulation and amendments of the Charter.

  • The disposal of the employee welfare fund.

  • 140 -

  • Other material matters in relation to member rights and

obligations.

Article 9: Tasks of an employee welfare committee are as follow:

Reviewing, promoting, and supervising employee welfare business. Planning, keeping, and utilizing the employee welfare fund.

Allocating, auditing and reporting revenues and expenses of employee welfare business expenditures.

Other matters related to employee welfare.

  • Article 10: Employee welfare fund is allocated according to the left:

 At the time of establishment, 1 5% of the paid-in capital was allocated.

  • 0.11% of the total monthly operating revenue is allocated.

  • 0.5% of the monthly wages of employees is deducted. 20% of the reject product is allocated.

  • Article 11: Employee welfare fund is allocated as required by the law shall be deposited in the bank by the Committee and shall be not used unless approved by the Committee.

  • Article 12: After the dissolution of the Committee, the remaining property of the employee benefits shall be handled in accordance with the following:

  • In case of dissolution and the business has been eliminated, both the employer and employees shall appoint representatives and propose measures with the employee welfare committee for the remaining property of the welfare fund and shall be distributed to their original employees. A report shall be compiled and submitted to the competent authority for reference.

  • If the employee benefit committee is registered as a nonprofit corporation, in case of dissolution, the remaining property of the profit deposit shall be handled in accordance with Article 44 of Civil Code.

  • Article 13: The Committee shall set up a plan and budget for the following year within one month before the end of a year and submit it to the competent authority for record and review after they are approved by the committee meeting. Within three months following the end of each year, the Committee shall submit a report on the execution of the plan and budget as well as the financial statement to the competent authority for record and

  • 141 -

review, and also send a copy to the business entity.

Article 14: The meeting rules and enforcement rues are separately stipulated.

Article 15: Matters not covered in the Committee’s charter shall be approved

by the Committee before making amendments. 

  - Article 16: The Charter has been enforced after the review of the competent authority.

  - (2) Education scholarships for the children of employees and incentive for the further education of employees.

  1. Retirement System:

    • (1) To accommodate the new allocation system for labor’s retirement funds, the employees who choose to apply for the pension as stipulated in the Labor Standards Act (old system), the Company has established a Labor Pension Fund Supervisory Committee and 2% of the monthly wages will allocated as the retirement fund. The pension funds, which are administered by the Labor Pension Fund Supervisory Committee and deposited in the Committee’s name in the Bank of Taiwan. The Company will make up for the insufficient amount. Employee retirement conditions shall be handled in accordance with the Labor Standards Act.

    • (2) To accommodate the new allocation system of labor retirement fund, for those who choose the carrying account (new system), 6% of the monthly wages will be allocated to their personal account opened by the Bureau of Labor Insurance, Ministry of Labor.

  2. Agreement and various employee rights protection measures between laborers and the management:

    • As required by the Labor Unit Act, the Company’s Taoyuan plant has established the Professional Union and a regular communication is engaged with the Company (employee) in the written or verbal form.

  3. (II) List any loss sustained as a result of labor disputes in the most recent fiscal year, and during the current fiscal year up to the date of publication of the annual report, disclose an estimate of losses incurred to date or likely to be incurred in the future, and indicate mitigation measures being or to be taken:

  4. In the most recent fiscal year, and during the current fiscal year up to the date of publication of the annual report, there was no labor disputes. The Company will continue to enhance the communication between the laborers and management as to reach the goal of prospect together.

  5. (III) Education and Training System for Employees and its Implementation

  6. (1) Operational Procedures for Education and Training System for Employees of Formosan Rubber Group Inc.:

  7. 142 -

  8. 1 ． Purpose:

These Operational Procedures are promulgated as a means to effectively improve the quality of personnel, implement correct quality concepts and professional skills, and carry out suitable training on employees who may produce significant impact to the environment so that they are relatively aware in order to achieve the effectiveness of the management and the goal of productive business management, ensuring that the quality management system and environmental management system are being enforced and promoted adequately.

  • 2 ． Application Scope:

These Procedures are applicable for the courses, seminars, talks, practical training, visits and inspections, and planning and implementation of competence held by relevant institutions internally or externally for all of the Company’s employees.

  • 3 ． Reference: None.

  • 4 ． Definition:

  • 4 ． 1 Internal training:

Training courses organized by the Company internally.

  • 4 ． 2 External training:

Training outside of the Company; refers to outside training, observation or overseas training assigned by the Company.

  • ．

  • 5 Operational procedures:

  • ．

  • 5 1 Application for training requirements:

    • 5 ． 1 ． 1 Internal training:

      • Training plans should be proposed by the unit requesting (organizing) with contents including course items, course hours, participants, lecturers, and other matters that should be included, and submit such proposal to the president for approval.

    • 5 ． 1 ． 2 External training:

Any employee participating in external training should complete the “External Training Application (Tracking) Form” with an introduction of the course and relevant information included and have it submitted to the manager then approved by the president.

  • ．

  • 5 2 Training implementation:

  • 5 ． 2 ． 1 Internal training:

    • (1) A notification should be sent out to the personnel participating 3 days prior to the course date by the handling personnel.

    • (2) The handling personnel should be responsible of all things regarding training, such as venue arrangement, teaching material distribution and coordination of lecturers.

  • 143 -

    • (3) The lecturer should send the original handouts and teaching materials to the handling personnel for printing one week prior to the course date if any and they shall be given to the participants before lesson.

    • (4) When the internal training ends, a test should be carried out according to needs and the handling personnel or lecturer should monitor the test. Tests should be sent to the handling unit prior to the class by the lecturer.

    • (5) The handling personnel should compile roster when various trainings carry out and each participant should sign the “Education and Training Sign-in Form for Employees” as a certificate for the class.

    • (6) Unexcused absences are not permitted during the training period; those unable to attend for any reason must request a leave of absence prior to class. Unexcused absences will be considered absenteeism.

    • (7) The consequence and seriousness caused by violating the Operational Procedures when carrying out employee training.

  • 5 ． 2 ． 2 External training:

    • (1) Temporary loan for the expenses needed for the course must be applied from the accountant after the “External Training Application (Tracking) Form” has been approved by the manager of the employees who participate in external training and the registration procedures for the course may begin.

    • (2) After the personnel participating in the external training completes the registration procedures, a form for taking a leave must be filled out, along with the course notification and the “External Training Application (Tracking) Form”; they should be submitted to the HR for subsequent tracking purpose.

    • (3) Suppliers that have a significant impact on the company must request relevant training or be assisted by the Company.

  • ．

  • 5 3 Report of training results:

  • ． ．

  • 5 3 1 Internal training:

    • (1) The training results are archived by the HR and is treated as important reference basis for promotion or appointment.

    • (2) Those who are absent, late, or leave early for no cause must be noted down in the column of the sign-in form.

  • ． ．

  • 5 3 2 External training:

    • (1) Those who participate in an external seminar or should write a training report whereas needed for the manager to review then it shall be sent to the HR to archive.

  • 144 -

    • (2) Employees receiving external training should hand in a copy of their course completion certificate or relevant certificate to the HR to archive.

    • (3) The HR may ask the personnel who participate in external training to compile a report of what they have learned if needed which can be passed down as teaching materials for relevant personnel.

  • ． ．

  • 5 3 3 A record of the training procedures may be kept in forms of photographs or videos if needed. Whereas there is a fire drill, a photograph record should be kept.

  • ． ．

  • 5 3 4 The personnel participating in the external training should provide the finance department a payment document to write off expenses within one week after the training ends.

  • ． ．

  • 5 3 5 The HR archives and safeguards training applications and relevant information.

  • ．

  • 5 4 Training assessment:

  • 5 ． 4 ． 1 The HR should summarize the training results every 6 months and fill in the “Education and Training Analysis Form” for the president to check the effectiveness of the outcome. The form will also be provided to each departmental manager as a reference basis for promotion.

  • ．

  • 5 5 Requirements for environmental management education and training

  • ． ．

  • 5 5 1 The representative for environmental management should identify suitable training on employees of the plant who may produce significant impact to the environment so that they have necessary skills and sufficient environmental awareness.

  • ． ．

  • 5 5 2 According to the outcome of the identification of environmental training requirements, the environmental management representative should make plans to promote environmental policies and procedures in relation to the environment as well as an explanation of various requirements, contents of training and drills in terms of emergency response plans, and training of the outcome after handling an emergency.

  • ． ．

  • 5 5 3 The environmental management representative should be responsible for or appoint the arrangement and enforcement of the training course on the approved objects for the training plan. An on-site enforcement should be performed by the internal manager acting as the training lecturer or an external professional should be hired to do so. Personnel may be appointed to receive professional training courses in relation to environmental issues when necessary outside of the Company.

  • ． ．

  • 5 5 4 Whereas there is a request regarding improvement technique of possible environmental impact arising from the material environmental

  • 145 -

considerations, the “External Training Application (Tracking) Form” should be submitted to the president. An external training may be assigned after an approval.

  • ． ．

  • 5 5 5 Requirements for the competence of environmental management personnel:

  • (1) Relevant personnel of fire response organization:

    • The personnel in the fire emergency response plan should be equipped with various skills. Suitable training should be provided, and the environmental promotion chairperson should especially appoint at least one member from the plant to take part in the fire fighting training organized by the fire fighting unit and a qualified certification shall be held.

  • (2) Environmental audit personnel:

    • It should be appointed to personnel who is qualified from receiving the internal audit training of the Company’s environmental management system and who has also received training courses of environmental procedures and explanation of material requirements.

  • (3) Material environmental impact personnel:

    • It should be appointed to personnel who have a degree of above junior high school and have work experience in related filed for more than a year, and should have received the Company’s training courses of relevant procedures of material environmental impact and explanation of material requirements.

  • 146 -

  • ．

  • 6 Relevant forms:

  • ．

  • 6 1 External Training Application (Tracking) Form.

  • ．

  • 6 2 Education and Training Sign-in Form for Employees.

． 6 3 Education and Training Analysis Form.

(2) FRG personnel training log (2023)

Item
number		 Item Unit: thousand Relevant
license		 Total hours
(hours)		 amount (NT$)
1 Re-training class of
forklift		 Logistic Center (3 people), PPD
line (3 people), C03 line (1
person), CPU line (1 person),
Chaining line (2 people),
Vulcanizing line (1 person),
Rubber line (3 people),
Warehousing Section (6 people),
Inspection Team (1 person),
Engineering unit (2 people),
Completion and Promotion
Center (1 person), General
Affairs Section(1person)
■Yes□No		 75 15,000
2 Re-training class of
fork-lift truck
operator		 Logistic Center (1 person) ■Yes□No 18 6,164
3 Re-training class of
crane		 Production line R (1 person),
PPD production line (1 person),
Finished Product Inspection
Section (2 people), Warehousing
Section (1 person), Inspection
Team (1 person), Production line
(1person)

■Yes□No		 21 4,200
4 Security Supervisor
Course		 Production Section (2 people) ■Yes□No 16 5,400
5 Accounting
supervisor advance
trainingcourses		 Accounting Section (1 person) ■Yes□No 12 8,000
6 Grade C occupational
safety supervisory
class		 Logistic Center (1 person), Legal
Affairs Office (1 person)
■Yes□No		 42 10,000
7 Internal Audit Course
Audit Office (3 people)		 ■Yes□No 30 16,700
8 Course of Bonded
Warehouse for
Dedicated Personnel		 Logistic Center (1 person) ■Yes□No 24 5,000
9 Self-compiled ESG
sustainability and
financial report-
related policy
development and
internal control
management course		 Accounting Section (2 people) ■Yes□No 12 7,000
10 Investment and
financial management
intensive class
Management Department (1
person)		 □Yes■No 24 14,500
11 Re-training class of
high-pressure gas
equipment		 Production line U (1 person) ■Yes□No 3 500
12 Grade B
Re-training class of
boiler		 Engineering unit (1 person) ■Yes□No 3 500
13 First Aid Training
Course		 Logistic Center (1 person) ■Yes□No 12 4,500
14 Retraining class of
safety and health
management		 Engineering unit (1 person) ■Yes□No 12 2,400
  • 147 -

(IV) Code of Conduct or Ethics for Employees

Code of Conduct for Employees of Formosan Rubber Group Inc. 

  - Established in August 2008

  • I. I abide by the three precepts of Formosan Rubber Group Inc.: no corruption, no gambling, and filial piety.

  • II. I respect personal sacred privacy and I do not discuss issues including politics, regions and races in the work place; unless approved by the manager, I do not discuss issues in relation to salary.

  • III. I abide by the employees’ industrial safety rules of Formosan Rubber Group Inc.:

  • Operators working on site must wear safety shoes and work clothes.

  • Work clothes must be tugged into the trousers to prevent them from being caught in the machine.

  • Prior to operating the machine and equipment, the emergency braking device must be checked whether it is operating normally.

  • A qualified certificate must be provided to operate on the stationary crane; prior to use, the rope must be checked whether it is complete and when the crane is in use, people walking underneath the load is strictly prohibited.

  • A qualified certificate must be provided to drive a forklift, and be aware of personnel’s safety when driving.

  • Fire extinguishers in the work place should be checked whether they have expired and or if the pressure is enough.

  • Dust masks must be worn when working in dusty places.

  • Activated carbon masks must be worn when working in organic solvent places, and air circulation must be maintained.

  • Heat-resistant gloves and arm bands must be worn in high-temperature places to prevent buns.

  • 10.Protective covers must be installed for transmission belts and chains of machinery and equipment.

  • 11.When using electrical equipment, plugs, socket must be carefully checked whether they are fixed, and whether the wire is broken to prevent leakage, short circuit, and electric shock.

  • 12.Protective gloves and goggles must be worn when using electric welding machines.

  • 13.Goggles must be worn when using grinders.

  • 14.When using a mobile ladder, it must be fixed to prevent falling

  • 15.Follow the smoking rules (smoking at the required time and location)

  • 16.Compliance of other safety rules later formulated by all managers

  • 148 -

  • (V) Workplace and employees’ safety protection measures:

  • Workplace and safety and health enforcement status of Formosan Rubber Group Inc.

  • (1) As required by the Ministry of Labor, an industrial safety and labor safety and health management committee has been set up. Chairperson: the director of the plant Hsiao Zheng-Zhong and all units have a responsible member.

  • (2) A safety and health month events are organized each year in March and September. Various workplace, safety and heath checks and education and training will be implemented strictly and participation is compulsory for all members.

  • (3) In July every year, the audit units of ISO-9001 and ISO-14001 come to the Company to check various workplace, safety and health operations and the enforcement of education and training.

  • (4) Employees are insured with occupational accidents and group insurances; if an accident of safety and health occurs, he/she is entitled the insurance protection.

  • Safety and Health Work Rues of Formosan Rubber Group Inc.

  • (1) 10 Industrial Safety and Health Rules of Formosan Rubber Group Inc.

  • I. Safety first, health first.

  • II. Follow laws and regulations in terms of safety and health.

  • III. Enhance safety and health equipment.

  • IV. Improve safety and health organizations.

  • V. Strengthen safety and health education.

  • VI. Have safety and health habits.

  • VII. Build safety honor concepts.

  • VIII.Increase the awareness for prevention of disasters.

  • IX. Implement industrial automatic checks.

  • X. Work together to ensure safety.

  • (2) Responsibilities of Managers

    1. Managers (including commanding several workers, such as shift leader, team leader, and section chief) should e responsible for preventing accidents.

    2. 2.Be an example in following safety and health rules.

    3. 3.Guide and supervise the department to follow safety and health rules.

    4. Maintain the sound environment and equipment of the management area; if poor safety and health situation is discovered, it must be corrected at any time.

    5. 5.Managers should remain in contact and cooperation with the safety and health management personnel to prevent accidents together.

    6. When an accident occurs, immediately contact the Safety and Health Management Department and Safety and Health Committee to jointly seek improvement.

    7. All managers must be aware of the safe working methods of the work they are supervising, and supervise their subordinates to follow, and they should be an

  • 149 -

example to their subordinates.

  1. All managers must be familiar with the safety fence deices and protection equipment of human safety of the work they are in charge of and the application of maintenance.

  2. Assignment of work should be appropriate. If there are no more than 2 foremen being in charge, one of them should be appointed as the person in charge for commanding.

  3. 10.The purpose of plant management is to maintain a working environment that is neat, clean and comfortable.

  4. (3) Personal conduct

  5. Follow the rules in terms of safety and health.

  6. Work must be conducted according to the standard working method or manager instructions; they may not be changed without consent.

  7. Machines may not be operated on without authorization by other personnel aside from the responsible personnel (unless authorized by the manager).

  8. Lingering or wandering in the work area of others for no reason at any time is prohibited.

  9. Ensure that materials being used at work that are placed on the scaffold, tower or other high places do not trip others or hurt others from falling.

  10. If objects must be thrown from the high place, the ground should be fenced up and warning should be displayed to prohibit others from entering.

  11. When moving equipment or scaffold, unfixed objects placed on top should be removed.

  12. Do not run, shout, play, pull pranks or other behaviors that obstruct order in the plant.

  13. Do not use compressed air to blow dust off a body and use the compressed tube to point at others.

  14. 10.Do not take shortcuts and enter production operation area when walking.

11.It is prohibited to sit on the conveyor belt or walk on the frame.

12.It is strictly prohibited for people to walk on the roof of asbestos tiles.

  • 13.Do not walk underneath an overhead crane or hanging heavy objects during work.

  • If an area with oil leakage, air leakage, broken and damaged ladder, platform, railing or other unsafe places are discovered, please report to the manager or safety and health management personnel at any time.

  • 15.Do not use tools with poor performance or malfunctioning machinery.

  • 16.It is prohibited to place sharp knives into the pocket and throw objects in the workshop.

  • It is prohibited to smoke inside the workplace or when walking; cleanness must be

  • 150 -

maintained and fruit skin and garbage must not be discarded inside the plant.

18.Do not push the door too hard when entering and exiting to prevent hitting people at the other side.

19.Take extra care when walking up and down stairs or anywhere that is slippery.

20.Injuries occur when moving objects, please take extra care.

21.Remember all entries and exits and emergency exit of the workplace by heart. Orders must be complied with and guidance must be followed when there is an emergency.

22.Each employee should be responsible for preventing accidents and encourage one another regarding following the safety rules.

23.If any unsafe situation is discovered, the manager or safety and health management committee must be reported to immediately to seek a solution for improvement.

(All enforcement rules are published in the chapters in the “Safety and Health Work Rues of Formosan Rubber Group Inc.”)

VI. Information security management:

(I) Describe the information security and risk management framework, information security policies, specific management plans, and resources used in information security management.

The Company created a comprehensive information security management system. However, the new information security policy and information security promotion organization will be revised before the end of 2023 to address the new challenges posed to information security by constantly evolving ways to breach information security while minimizing any impact on the company. IT information security supervisors and personnel will be tasked with collaborating on information security concepts and technical training, as well as staying current on information security systems and control measures, in order to establish and sustain continuous business operations.

(II) List any losses suffered by the company in the most recent fiscal year and up to the annual report publication date due to significant information security incidents, the possible impacts therefrom, and measures being or to be taken. If a reasonable estimate cannot be made, an explanation of the facts of why it cannot be made shall be provided. In the most recent year, and the current fiscal year as of the publication date of the annual report, there was no labor disputes.

  • 151 -

VII. Important contracts:

Nature of contract Party Contract Duration Details Restric
tive
terms
Sales contract Japan Ajinomoto January 26, 2005 Co-produced additives for
electronic chemistry		 None
Real Estate
Development
Contract		 CONTINENTAL
DEVELOPMENT CORP.
Heng Bang Construction Co.,
Ltd.
HengJu Construction Co.,Ltd.
May 16, 2012		 The B7 land development in Xinyi
Section
None
CONTINENTAL
DEVELOPMENT CORP.		 October 17, 2014 The land development in Huiguo
Section of Taichung
None
The Ambassador Hotel Co., Ltd.
CONTINENTAL
DEVELOPMENT CORP.		 November 15,
2021		 Land in Houjin Section, Qianjin
District, Kaohsiung City, and the
current building development case.		 None
  • 152 -

Six. An Overview of the Company's Financial Status

  • I. Condensed balance sheets and statements of comprehensive income for the past 5 fiscal years

  • II. Finance analysis for the past 5 fiscal years

  • III. Audit committee review report of the most recent annual financial report

  • IV. Financial report for the most recent fiscal year

  • V. A parent company only financial statement for the most recent fiscal year, certified by a CPA

  • VI. If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation

  • 153 -

Six. An Overview of the Company's Financial Status

I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years:

(I) The International Financial Reporting Standards have been adopted

1. Consolidated Condensed Balance Sheet

Unit: NT$thousand
Finance analysis for the past 5 fiscal years (Note 1)
Financial
information for the
current year as of
March 31,
2024(Note 1)
2019
2020
2021
2022
2023
8,575,654
7,948,387
8,863,248
9,589,846
9,557,927
10,275,285
891,585
848,439
809,079
793,418
747,845
744,089
0
0
0
0
0
0
3,512,195
3,460,289
3,443,075
3,375,941
3,979,062
4,101,458
12,979,434
12,257,115
13,115,402
13,759,205
14,284,834
15,120,832

1,919,580
818,341
930,236
1,647,518
1,639,735
1,764,910

2,199,580
1,331,830
1,341,027
2,052,309
2,034,406
-
254,232
256,515
247,340
249,102
242,827
393,790

2,173,812
1,074,856
1,177,576
1,896,620
1,882,562
2,158,700

2,453,812
1,588,345
1,588,367
2,301,411
2,277,233
-
10,806,639
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132
3,500,000
3,423,260
3,423,260
3,373,260
3,035,934
3,035,934
466,463
456,341
456,341
449,745
449,745
449,745

6,672,834
7,245,305
7,513,391
7,771,270
7,983,184
7,951,751

6,392,834
6,731,816
7,102,600
7,366,479
7,588,513
-
167,342
57,353
544,834
268,310
933,409
1,524,702
0
0
0
0
0
0
(1,017)
0
0
0
0
0

10,805,622
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132

10,525,622
10,668,770
11,527,035
11,457,794
12,007601
-		 Unit: NT$thousand
Finance analysis for the past 5 fiscal years (Note 1)
Financial
information for the
current year as of
March 31,
2024(Note 1)
2019
2020
2021
2022
2023
8,575,654
7,948,387
8,863,248
9,589,846
9,557,927
10,275,285
891,585
848,439
809,079
793,418
747,845
744,089
0
0
0
0
0
0
3,512,195
3,460,289
3,443,075
3,375,941
3,979,062
4,101,458
12,979,434
12,257,115
13,115,402
13,759,205
14,284,834
15,120,832

1,919,580
818,341
930,236
1,647,518
1,639,735
1,764,910

2,199,580
1,331,830
1,341,027
2,052,309
2,034,406
-
254,232
256,515
247,340
249,102
242,827
393,790

2,173,812
1,074,856
1,177,576
1,896,620
1,882,562
2,158,700

2,453,812
1,588,345
1,588,367
2,301,411
2,277,233
-
10,806,639
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132
3,500,000
3,423,260
3,423,260
3,373,260
3,035,934
3,035,934
466,463
456,341
456,341
449,745
449,745
449,745

6,672,834
7,245,305
7,513,391
7,771,270
7,983,184
7,951,751

6,392,834
6,731,816
7,102,600
7,366,479
7,588,513
-
167,342
57,353
544,834
268,310
933,409
1,524,702
0
0
0
0
0
0
(1,017)
0
0
0
0
0

10,805,622
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132

10,525,622
10,668,770
11,527,035
11,457,794
12,007601
-		 Unit: NT$thousand
Finance analysis for the past 5 fiscal years (Note 1)
Financial
information for the
current year as of
March 31,
2024(Note 1)
2019
2020
2021
2022
2023
8,575,654
7,948,387
8,863,248
9,589,846
9,557,927
10,275,285
891,585
848,439
809,079
793,418
747,845
744,089
0
0
0
0
0
0
3,512,195
3,460,289
3,443,075
3,375,941
3,979,062
4,101,458
12,979,434
12,257,115
13,115,402
13,759,205
14,284,834
15,120,832

1,919,580
818,341
930,236
1,647,518
1,639,735
1,764,910

2,199,580
1,331,830
1,341,027
2,052,309
2,034,406
-
254,232
256,515
247,340
249,102
242,827
393,790

2,173,812
1,074,856
1,177,576
1,896,620
1,882,562
2,158,700

2,453,812
1,588,345
1,588,367
2,301,411
2,277,233
-
10,806,639
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132
3,500,000
3,423,260
3,423,260
3,373,260
3,035,934
3,035,934
466,463
456,341
456,341
449,745
449,745
449,745

6,672,834
7,245,305
7,513,391
7,771,270
7,983,184
7,951,751

6,392,834
6,731,816
7,102,600
7,366,479
7,588,513
-
167,342
57,353
544,834
268,310
933,409
1,524,702
0
0
0
0
0
0
(1,017)
0
0
0
0
0

10,805,622
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132

10,525,622
10,668,770
11,527,035
11,457,794
12,007601
-		 Unit: NT$thousand
Finance analysis for the past 5 fiscal years (Note 1)
Financial
information for the
current year as of
March 31,
2024(Note 1)
2019
2020
2021
2022
2023
8,575,654
7,948,387
8,863,248
9,589,846
9,557,927
10,275,285
891,585
848,439
809,079
793,418
747,845
744,089
0
0
0
0
0
0
3,512,195
3,460,289
3,443,075
3,375,941
3,979,062
4,101,458
12,979,434
12,257,115
13,115,402
13,759,205
14,284,834
15,120,832

1,919,580
818,341
930,236
1,647,518
1,639,735
1,764,910

2,199,580
1,331,830
1,341,027
2,052,309
2,034,406
-
254,232
256,515
247,340
249,102
242,827
393,790

2,173,812
1,074,856
1,177,576
1,896,620
1,882,562
2,158,700

2,453,812
1,588,345
1,588,367
2,301,411
2,277,233
-
10,806,639
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132
3,500,000
3,423,260
3,423,260
3,373,260
3,035,934
3,035,934
466,463
456,341
456,341
449,745
449,745
449,745

6,672,834
7,245,305
7,513,391
7,771,270
7,983,184
7,951,751

6,392,834
6,731,816
7,102,600
7,366,479
7,588,513
-
167,342
57,353
544,834
268,310
933,409
1,524,702
0
0
0
0
0
0
(1,017)
0
0
0
0
0

10,805,622
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132

10,525,622
10,668,770
11,527,035
11,457,794
12,007601
-		 Unit: NT$thousand
Finance analysis for the past 5 fiscal years (Note 1)
Financial
information for the
current year as of
March 31,
2024(Note 1)
2019
2020
2021
2022
2023
8,575,654
7,948,387
8,863,248
9,589,846
9,557,927
10,275,285
891,585
848,439
809,079
793,418
747,845
744,089
0
0
0
0
0
0
3,512,195
3,460,289
3,443,075
3,375,941
3,979,062
4,101,458
12,979,434
12,257,115
13,115,402
13,759,205
14,284,834
15,120,832

1,919,580
818,341
930,236
1,647,518
1,639,735
1,764,910

2,199,580
1,331,830
1,341,027
2,052,309
2,034,406
-
254,232
256,515
247,340
249,102
242,827
393,790

2,173,812
1,074,856
1,177,576
1,896,620
1,882,562
2,158,700

2,453,812
1,588,345
1,588,367
2,301,411
2,277,233
-
10,806,639
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132
3,500,000
3,423,260
3,423,260
3,373,260
3,035,934
3,035,934
466,463
456,341
456,341
449,745
449,745
449,745

6,672,834
7,245,305
7,513,391
7,771,270
7,983,184
7,951,751

6,392,834
6,731,816
7,102,600
7,366,479
7,588,513
-
167,342
57,353
544,834
268,310
933,409
1,524,702
0
0
0
0
0
0
(1,017)
0
0
0
0
0

10,805,622
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132

10,525,622
10,668,770
11,527,035
11,457,794
12,007601
-		 Unit: NT$thousand
Finance analysis for the past 5 fiscal years (Note 1)
Financial
information for the
current year as of
March 31,
2024(Note 1)
2019
2020
2021
2022
2023
8,575,654
7,948,387
8,863,248
9,589,846
9,557,927
10,275,285
891,585
848,439
809,079
793,418
747,845
744,089
0
0
0
0
0
0
3,512,195
3,460,289
3,443,075
3,375,941
3,979,062
4,101,458
12,979,434
12,257,115
13,115,402
13,759,205
14,284,834
15,120,832

1,919,580
818,341
930,236
1,647,518
1,639,735
1,764,910

2,199,580
1,331,830
1,341,027
2,052,309
2,034,406
-
254,232
256,515
247,340
249,102
242,827
393,790

2,173,812
1,074,856
1,177,576
1,896,620
1,882,562
2,158,700

2,453,812
1,588,345
1,588,367
2,301,411
2,277,233
-
10,806,639
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132
3,500,000
3,423,260
3,423,260
3,373,260
3,035,934
3,035,934
466,463
456,341
456,341
449,745
449,745
449,745

6,672,834
7,245,305
7,513,391
7,771,270
7,983,184
7,951,751

6,392,834
6,731,816
7,102,600
7,366,479
7,588,513
-
167,342
57,353
544,834
268,310
933,409
1,524,702
0
0
0
0
0
0
(1,017)
0
0
0
0
0

10,805,622
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132

10,525,622
10,668,770
11,527,035
11,457,794
12,007601
-
Year
Item		 Finance analysis for the past 5 fiscal years (Note 1) Financial
information for the
current year as of
March 31,
2024(Note 1)
2019
2020
2021
2022
2023
Current Assets 8,575,654
7,948,387
8,863,248
9,589,846
9,557,927
10,275,285
Property, Plant and
Equipment		 891,585
848,439
809,079
793,418
747,845		 744,089
Intangible Assets 0
0
0
0
0
0
Other Assets 3,512,195
3,460,289
3,443,075
3,375,941
3,979,062
4,101,458
Total Assets 12,979,434
12,257,115
13,115,402
13,759,205
14,284,834
15,120,832
Current
Liabilities		 Before
Distribution
1,919,580
818,341
930,236
1,647,518
1,639,735
1,764,910
After
Distribution
2,199,580
1,331,830
1,341,027
2,052,309
2,034,406
-
None Current Liabilities 254,232
256,515
247,340
249,102
242,827
393,790
Total
Liabilities		 Before
Distribution
2,173,812
1,074,856
1,177,576
1,896,620
1,882,562
2,158,700
After
Distribution
2,453,812
1,588,345
1,588,367
2,301,411
2,277,233
-
Equity Attributable to
Parent Company
Shareholders		 10,806,639
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132
Shares 3,500,000
3,423,260
3,423,260
3,373,260
3,035,934
3,035,934
Capital reserve 466,463
456,341
456,341
449,745
449,745
449,745
Retained
Earnings		 Before
Distribution
6,672,834
7,245,305
7,513,391
7,771,270
7,983,184
7,951,751
After
Distribution
6,392,834
6,731,816
7,102,600
7,366,479
7,588,513
-
Other Equity 167,342
57,353
544,834
268,310
933,409
1,524,702
TreasuryStock 0
0
0
0
0
0
Non-ControllingInterest (1,017) 0
0
0
0
0
Total Equity Before
Distribution
10,805,622
11,182,259
11,937,826
11,862,585
12,402,272
12,962,132
After
Distribution
10,525,622
10,668,770
11,527,035
11,457,794
12,007601
-

Note 1: The financial data of year has been audited by CPA; data of Q1 2024 has been reviewed by CPA before publication date of the annual report.

Note 2: Calculate the amount of distribution based on the amount resolved by the board of directors or resolved in the next year's shareholders meeting. 

- 154 -

2. A Parent Company Only Condensed Balance Sheet

Unit: NT$ thousand

Finance analysis for the past 5 fiscal years (Note 1)

Finance analysis for the past 5 fiscal years (Note 1) Finance analysis for the past 5 fiscal years (Note 1) Finance analysis for the past 5 fiscal years (Note 1) Finance analysis for the past 5 fiscal years (Note 1) Finance analysis for the past 5 fiscal years (Note 1)
Year
Item		 2019
2020
2021
2022
2023
Current Assets 7,927,109
7,325,060
8,005,000
8,679,643
8,448,248
Property, Plant and
Equipment		 891,585
848,439
808,863
793,239
747,716
Intangible Assets 0
0
0
0
0
Other Assets 4,158,796
4,083,175
4,298,212
4,279,916
5,080,189
Total Assets 12,977,490
12,256,674
13,112,075
13,752,798
14,276,153
Current
Liabilities		 Before
Distribution
1,912,550
817,900
926,909
1,641,219
1,631,189
After
Distribution
2,192,550
1,331,389
1,337,700
2,046,010
2,025,860
None Current
Liabilities		 258,301
256,515
247,340
248,994
242,692
Total
Liabilities		 Before
Distribution
2,170,851
1,074,415
1,174,249
1,890,213
1,873,881
After
Distribution
2,450,851
1,587,904
1,585,040
2,295,004
2,268,552
Equity Attributable to
Parent Company
Shareholders		 10,806,639
11,182,259
11,937,826
11,862,585
12,402,272
Shares 3,500,000
3,423,260
3,423,260
3,373,260
3,035,934
Capital reserve 466,463
456,341
456,341
449,745
449,745
Retained
Earnings		 Before
Distribution
6,672,834
7,245,305
7,513,391
7,771,270
7,983,184
After
Distribution
6,392,834
6,731,816
7,102,600
7,366,479
7,588,513
Other Equity 167,342
57,353
544,834
268,310
933,409
TreasuryStock 0
0
0
0
0
Non-Controlling
Interest		 0
0
0
0
0
Total
Equity		 Before
Distribution
10,806,639
11,182,259
11,937,826
11,862,585
12,402,272
After
Distribution
10,526,639
10,668,770
11,527,035
11,457,794
12,007,601

Note 1: The annual financial information above has been audited by the CPA

Note 2: Calculate the amount of distribution based on the amount resolved by the board of directors or resolved in the next year's shareholders meeting. 

- 155 -

3. Comprehensive Income Statements

3. Comprehensive Income Statements 3. Comprehensive Income Statements 3. Comprehensive Income Statements 3. Comprehensive Income Statements 3. Comprehensive Income Statements 3. Comprehensive Income Statements 3. Comprehensive Income Statements
Unit: NT$ thousand
Earnings /(Loss) per share unit: NT$ Year
Item
Finance analysis for the past 5 fiscal years (Note 1)
Financial information
for the current year as
of March 31, 2024
(Note 1)
2019
2020
2021
2022
2023
Operatingincome
2,701,777
3,282,255
2,794,884
1,937,243
1,359,718
271,355
Operatingmargin
661,688
1,062,287
883,664
625,209
420,611
85,283
Net Operating
Income
423,813
810,562
627,242
370,870
199,606
37,959
Non-Operating
Income and Expenses
128,874
119,572
196,109
459,427
392,594
74,590
Pre-Tax Income
552,687
930,134
823,351
830,297
592,200
112,549
Continuing
Operation
Net Income
538,950
901,716
777,956
711,684
518,877
107,684
Loss of Discontinued
Operation
0
0
0
0
0
0
Net Income(Loss)
538,950
901,716
777,956
711,684
518,877
107,684
Other comprehensive
income recognized
for the period
(Net amount after
tax)
184,067
(116,478)
491,100
(270,318)
762,927
452,176
Total Comprehensive
Income
723,017
785,238
1,269,056
441,366
1,281,804
559,860
Profit Attributable to
the Equity Holders
of the Parent
Company
538,957
901,716
777,956
711,684
518,877
107,684
Net Profit
Attributable to Non
ControllingInterests
(7)
0
0
0
0
0
Comprehensive
Income Attributable
to the Equity Holders
of the Parent
Company
723,024
785,238
1,269,056
441,366
1,281,804
559,860
Comprehensive
Income Attributable
to Non Controlling
Interests
(7)
0
0
0
0
0
Earnings Per Share
1.54
2.62
2.27
2.09
1.61
0.35
Year
Item
Finance analysis for the past 5 fiscal years (Note 1)		 Financial information
for the current year as
of March 31, 2024
(Note 1)
2019
2020
2021
2022
2023
Operatingincome 2,701,777
3,282,255
2,794,884
1,937,243
1,359,718
271,355
Operatingmargin 661,688
1,062,287
883,664
625,209
420,611
85,283
Net Operating
Income		 423,813
810,562
627,242
370,870
199,606
37,959
Non-Operating
Income and Expenses		 128,874
119,572
196,109
459,427
392,594
74,590
Pre-Tax Income 552,687
930,134
823,351
830,297
592,200
112,549
Continuing
Operation
Net Income		 538,950
901,716
777,956
711,684
518,877
107,684
Loss of Discontinued
Operation		 0
0
0
0
0
0
Net Income(Loss) 538,950
901,716
777,956
711,684
518,877
107,684
Other comprehensive
income recognized
for the period
(Net amount after
tax)		 184,067
(116,478)
491,100
(270,318)
762,927
452,176
Total Comprehensive
Income		 723,017
785,238
1,269,056
441,366
1,281,804
559,860
Profit Attributable to
the Equity Holders
of the Parent
Company		 538,957
901,716
777,956
711,684
518,877
107,684
Net Profit
Attributable to Non
ControllingInterests		 (7)
0
0
0
0
0
Comprehensive
Income Attributable
to the Equity Holders
of the Parent
Company		 723,024
785,238
1,269,056
441,366
1,281,804
559,860
Comprehensive
Income Attributable
to Non Controlling
Interests		 (7)
0
0
0
0
0
Earnings Per Share 1.54
2.62
2.27
2.09
1.61
0.35

Note 1: The financial data of year has been audited by CPA; data of Q1 2024 has been reviewed by CPA before publication date of the annual report. 

- 156 -

4. A Parent Company Only Comprehensive Income Statements

Unit: NT$ thousand Earnings / (Loss) per share unit: NT$

4. A Parent Company Only Comprehensive Income Statements
Unit: NT$ thousand
Earnings /(Loss) per share unit: NT$		 Only Comprehensive Income Statements
Unit: NT$ thousand
Earnings /(Loss) per share unit: NT$		 Only Comprehensive Income Statements
Unit: NT$ thousand
Earnings /(Loss) per share unit: NT$		 Only Comprehensive Income Statements
Unit: NT$ thousand
Earnings /(Loss) per share unit: NT$		 Only Comprehensive Income Statements
Unit: NT$ thousand
Earnings /(Loss) per share unit: NT$
Year
Item
Finance analysis for the past 5 fiscal years (Note 1)
2019
2020
2021
2022
2023
Operatingincome 2,701,837
3,282,315
2,794,944
1,936,730
1,357,421
Operatingmargin 661,748
1,062,347
883,724
625,365
421,774
Net OperatingIncome 426,917
812,584
634,915
384,606
213,403
Non-Operating Income
and Expenses		 123,093
117,501
188,396
444,071
375,998
Pre-Tax Income 550,010
930,085
823,311
828,677
589,401
Continuing Operation
Net Income		 538,957
901,716
777,956
711,684
518,877
Loss of Discontinued
Operation		 0 0 0 0 0
Net Income(Loss) 538,957
901,716
777,956
711,684
518,877
Other comprehensive
income recognized for the
period
(Net amount after tax)		 184,067
(116,478)
491,100
(270,318)
762,927
Total Comprehensive
Income		 723,024
785,238
1,269,056
441,366
1,281,804
Profit Attributable to the
Equity Holders
of the Parent Company		 538,957
901,716
777,956
711,684
518,877
Net Profit Attributable to
Non ControllingInterests		 0 0 0 0 0
Comprehensive Income
Attributable to the Equity
Holders of the Parent
Company		 723,024
785,238
1,269,056
441,366
1,281,804
Comprehensive Income
Attributable to Non
ControllingInterests		 0 0 0 0 0
Earnings Per Share 1.54
2.62
2.27
2.09
1.61

Note 1: The annual financial information above has been audited by the CPA

(II) The names of appointed certified accountants and their audit opinions in the last 5 years

Year CPA Account audit comments
2019 Zhou Yin-Lai and Wu Xin-Liang An Unqualified Opinion
2019 Zhou Yin-Lai and Wu Xin-Liang An Unqualified Opinion
2021 Zhou Yin-Lai and Lai,Yung-Chi
An Unqualified Opinion
2022 Zhou Yin-Lai and Lai,Yung-Chi
An Unqualified Opinion
2023 Lai Chia-Yu and Lai Yung-Chi An Unqualified Opinion 
- 157 -

II. Finance analysis for the past 5 fiscal years

(I) The International Financial Reporting Standards have been adopted 1. Consolidated Financial Analysis

Analysis Year
Finance analysis for thepast5fiscalyears(Note 1)
Finance analysis for thepast5fiscalyears(Note 1)
Finance analysis for thepast5fiscalyears(Note 1)
Finance analysis for thepast5fiscalyears(Note 1)
Finance analysis for thepast5fiscalyears(Note 1)		 Current yearas
of March 31,
2024(Note 1)
2019 2020 2021 2022 2023
Financial
Structure(%)		 Debt to Assets Ratio 16.75
8.77
8.98
13.78
13.18
14.28
Long Term Funds to Property,
Plant and Equipment Ratio		 1,240.47
1,348.21
1,506.05
1,526.52
1,690.87
1,794.94
Liquidity % Current Ratio 446.75
971.28
952.80
582.08
582.89
582.20
Quick Ratio 207.18
578.74
697.59
389.52
399.47
408.06
Times Interest Earned 29.16
114.06
205.76
95.47
23.49
22.21
Operating
Performance		 Average Collection Turnover
(times)		 17.43
17.87
14.54
12.88
9.21
7.25
Average Number of Days 20.94
20.42
25.10
28.33
39.63
50.35
InventoryTurnover(times) 0.40
0.58
0.70
0.48
0.31
0.25
Average Payment Turnover
(times)		 14.75
22.21
17.33
10.30
7.77
6.61
Average Sales Days 912.50
629.31
521.43
760.41
1,177.41
1,460.00
Property, Plant and Equipment
Turnover(times)		 2.95
3.77
3.37
2.42
1.76
1.46
Total Assets Turnover(times) 0.20
0.26
0.22
0.14
0.10
0.07
Profitability Return on Total Assets(%) 4.09
7.20
6.16
5.35
3.85
3.05
Return on Equity (%) 5.09
8.20
6.73
5.98
4.28
3.40
Pre-Tax to Ratio of the Paid-In
Capital(%)		 15.79
27.17
24.05
24.61
19.51
14.83
Net Margin(%) 19.95
27.47
27.84
36.74
38.16
39.68
Earnings Per Share(NT$) 1.54
2.62
2.27
2.09
1.61
0.35
Cash Flow Cash Flow Ratio(%) 92.89
253.39
185.49
(1.30)		 41.63
1.09
Cash Flow AdequacyRatio(%) 63.93
296.82
371.31
221.93
206.53
153.97
Cash Flow Reinvestment Ratio
(%)		 12.38
14.32
9.09
(3.24)
2.00
0.13
Leverage OperatingLeverage 1.86
1.43
1.56
1.67
2.72
3.16
Financial Leverage 1.05
1.01
1.01
1.02
1.15
1.16
Please explain the reason for ratio changes for financial information in the past 2 years (Analysis may be exempted if the
increase or decrease change does not reach 20%).
1. Times interest earned: mainly due to the increased expenditure on payable short-term securities in the current period
compared to the previous period.
2. Average collection turnover, average collection days, inventory turnover, average payment turnover, average days of
sale, property, plant, and equipment turnover ratio and total assets turnover ratio: mainly due to decreased construction
project sales in the current period, resulting in a decrease in operating income and related operating costs compared to
the previous period.
3. Return on assets, return on equity, income before tax of paid-in capital, earnings per share: mainly due to decreased
construction project sales, resulting in a decrease in income before tax and after tax in the current period compared to
the previous period.
4. Cash flow ratio andcash flow reinvestment ratio: The increased net cash inflow from operating activities in the current
period is mainly due to the late installment payments of Kaohsiung Ambassador Hotel development project in the
previous period.
5. Operatingleverage: mainlydue to a decrease in operating profit in the currentperiod.
  • Note 1: The financial data of year has been audited by CPA; data of Q1 2024 has been reviewed by CPA before publication date of the annual report. 
- 158 -

2. Parent Company Only Financial Analysis

Analysis Year
Finance analysis for the past5fiscal years (Note 1)
Finance analysis for the past5fiscal years (Note 1)
Finance analysis for the past5fiscal years (Note 1)
Finance analysis for the past5fiscal years (Note 1)
Finance analysis for the past5fiscal years (Note 1)
2019
2020
2021
2022
2023
Financial
Structure(%)		 Debt to Assets Ratio 16.73
8.77
8.96
13.74
13.13
Long Term Funds to
Property, Plant and
Equipment Ratio		 1,241.04
1,348.21
1,506.46
1,526.85
1691.15
Liquidity % Current Ratio 414.48
895.59
863.62
528.85
517.92
Quick Ratio 174.03
502.85
615.37
335.56
333.54
Times Interest Earned 28.35
114.05
205.75
95.29
23.39
Operating
Performance		 Average Collection
Turnover(times)		 17.43
17.87
14.54
12.9
9.22
Average Number of
Days		 20.94
20.42
25.10
28.29
39.58
Inventory Turnover
(times)		 0.40
0.58
0.71
0.49
0.31
Average Payment
Turnover(times)		 14.75
22.21
17.33
10.30
7.74
Average Sales Days 912.50
629.31
514.08
744.89
1,177.41
Property, Plant and
Equipment Turnover
Ratio(times)		 2.95
3.77
3.37
2.42
1.76
Total Assets Turnover
(times)		 0.20
0.26
0.22
0.14
0.10
Profitability Return on Total Assets
(%)		 4.09
7.20
6.16
5.35
3.85
Return on Equity (%) 5.09
8.20
6.73
5.98
4.28
Pre-Tax to Ratio of the
Paid-In Capital(%)		 15.71
27.17
24.05
24.57
19.41
Net Margin(%) 19.95
27.47
27.83
36.75
38.23
Earnings Per Share
(NT$)		 1.54
2.62
2.27
2.09
1.61
Cash Flow Cash Flow Ratio (%) 91.79
249.14
190.21
1.82
40.61
Cash Flow Adequacy
Ratio(%)		 61.05
290.71
368.23
222.19
223.99
Cash Flow
Reinvestment Ratio
(%)		 12.11
13.98
9.35
(2.86)
1.85
Leverage Operating Leverage 1.85
1.43
1.54
1.62
2.56
Financial Leverage 1.05
1.01
1.01
1.02
1.14		 
- 159 -

Please explain the reason for ratio changes for financial information in the past 2 years (Analysis may be exempted if the increase or decrease change does not reach 20%).

  1. Times interest earned: mainly due to the increased expenditure on payable short-term securities in the current period compared to the previous period.

  2. Average collection turnover, average collection days, inventory turnover, average payment turnover, average days of sale, property, plant, and equipment turnover ratio and total assets turnover ratio: mainly due to decreased construction project sales in the current period, resulting in a decrease in operating income and related operating costs compared to the previous period.

  3. Return on assets, return on equity, income before tax of paid-in capital, earnings per share: mainly due to decreased construction project sales, resulting in a decrease in income before tax and after tax in the current period compared to the previous period.

  4. Cash flow ratio andcash flow reinvestment ratio: The increased net cash inflow from operating activities in the current period is mainly due to the late installment payments of Kaohsiung Ambassador Hotel development project in the previous period.

  5. Operating leverage: mainly due to a decrease in operating profit in the current period.

Note 1: The annual financial information above has been audited by the CPA

Note 2: The calculation method for the financial analysis is as follows:

  1. Capital Structure Analysis

  2. (1) Debt to Assets Ratio = Total Liabilities / Total Assets.

  3. (2) Long-term Fund to Fixed Assets Ratio = (Shareholders’ Equity + Long-term Liabilities) / Net Fixed Assets.

  4. Liquidity Analysis

  5. (1) Current Ratio = Current Assets / Current Liabilities.

  6. (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities.

  7. (3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses.

  8. Operating Performance Analysis

  9. (1) Average Collection Turnover (including accounts receivable and notes receivable resulted from business operation) = Net Sales / Average Trade Receivables (including accounts receivable and notes receivable resulted from business operation).

  10. (2) Days Sales Outstanding = 365 / Average Collection Turnover.

  11. (3) Average Inventory Turnover = Cost of Sales / Average Inventory.

  12. (4) Average Payment Turnover (including accounts payables and notes payables resulted from business operation) = Cost of Sales / Average Trade Payables (including accounts payables and notes payables resulted from business operation).

  13. (5) Average Sales Days = 365 / Average Inventory Turnover.

  14. (6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment.

  15. (7) Total Assets Turnover = Net Sales / Average Total Assets.

  16. Profitability Analysis

  17. (1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets.

  18. (2) Return on Equity = Net Income / Average Total Equity.

  19. (3) Net Margin = Net Income / Net Sales.

  20. (4) Earnings Per Share = (Net Income - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding (Note 4).

  21. Cash Flow

  22. (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities.

  23. (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend.

  24. (3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Property, Plant and Equipment + Long-term Investments + Other Assets + Working Capital). (Note 5)

  25. Leverage:

  26. (1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations (Note 6)

  27. (2) Financial Leverage = Operating Profit / (Operating Profit - Interest Expenses)

  28. Note 3: The calculation of the earnings per share of the preceding paragraph shall pay special attention to the following:

  29. Based on the weighted average number of ordinary shares, rather than the number of shares issued at 

- 160 -

the end of the year.

  1. Where there is a cash replenishment or treasury stock trading, the weighted average number of shares shall be calculated during the peri od of circulation.

  2. Where there is a surplus to capital increase or capital surplus to capital increase, the calculation of the earnings per share for the previous year and half year should be adjusted by the proportion of capital increase, rather than the period the capital increase is issued.

  3. If the preferred shares are non convertible accumulative shares, its annual dividend (whether or not it is issued) shall be deductible from the net income or increased to net loss after tax. If the preferred shares are non cumulative, then in the case of having a net profit after tax, the preferred dividend should be deducted from the net profit after tax; in the case of net loss after tax, no adjustments are required.

  4. Note 4: The following should be taken more consideration into when analyzing cash flows:

  5. Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.

  6. Capital expenditure refers to the annual cash outflow of capital flows.

  7. The increase in inventories shall only be credited when the balance at the end of the period is greater than them balance at the beginning of the period. If the inventory is reduced at the end of the year, then the inventory amount should be accounted at zero.

  8. Cash dividends include cash dividends for common stock and special shares.

  9. Fixed assets means the total amount of Property, plant and equipment before deducting accumulated depreciation.

  10. Note 5: The issuer shall distinguish between the operating costs and operating expenses being fixed or variables. When involved in the estimation or subjective judgments, one should pay attention to its rationality and consistency.

  11. Note 6: If the Company's shares are no par or not in the denomination of NT$10, the calculation of the ratio of the paid in capital shall be calculated based on the equity ratio of the balance sheet attributable to the owners of the parent company. 

- 161 -

III. Audit Committee’s Review Report

The board of directors has prepared the business report, financial statements (including parent company only financial report and consolidated financial statements), and profit distribution proposals of year 2023; the financial statements have been audited by CPA Lai Chia-Yu and Lai Yung-Chi of the Baker Tilly Clock and Co.; the latter issued audit report as well.

The business report, financial statements and the motion for earnings distribution stated above have been reviewed by the Audit Committee and no discrepancy has been found. We have presented you the reports based on the provisions stipulated in Article 14-4 in Securities and Exchange Act and Article 219 in the Company Act.

Please review.

Annual Shareholders’ Meeting of FRG, 2024

Formosan Rubber Group Inc.

Convener of Audit Committee: Lorraine Yao

March 12,2024 

- 162 -

IV. Financial report for the most recent fiscal year

Formosan Rubber Group Inc.

and Subsidiaries

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

Address: 8F, No. 82, Sec. 1, Hankou St., Zhongzheng District, Taipei City

Tel No.: (02) 2370-0988

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

163

any difference in the interpretation of the English and Chinese language auditors’ report and consolidated financial statements, the Chinese version shall prevail. 

164

REPRESENTATION LETTER

The Companies required to be included in the combined financial statements of Formosan

Rubber Group Inc. as of and for the year ended December 31, 2023, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial

Reporting Standards No. 10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the consolidated financial statements is included in the consolidated financial statements. Consequently, Formosan Rubber Group Inc. and Subsidiaries do not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

Formosan Rubber Group Inc.

By

HSU, ZHEN-TSAI

Chairperson

March 12, 2024 

165

NO.00111120ECA

INDEPENDENT AUDITORS’REPORT

The Board of Directors and Shareholders

Formosan Rubber Group Inc.

Opinion

We have audited the accompanying consolidated financial statements of Formosan Rubber Group Inc. and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2023 and 2022, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Formosan Rubber Group Inc. and its subsidiaries as of December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of Formosan Rubber Group Inc. and its subsidiaries 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 consolidated financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 

166

Key audit matters for Formosan Rubber Group Inc. and its subsidiaries’ consolidated financial statements for the year ended December 31, 2023 are stated as follows:

Valuation of Net Realizable Value of Real Estate For Sale

Summary of key issues for auditing

As of December 31, 2023, the value of real estate for sale on the consolidated balance sheet was NT$ 2,771,492 thousand primarily reflective of the cost with completed properties and land held for sale. These items accounted for approximately 19% of the consolidated total assets. Please refer to Notes 4, 5 and 10 of the consolidated 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:

  1. Acquisition of the data concerning the company’s assessment of lower of the costs and net realizable value;

  2. Random inspection of the ownership documents for the properties held for sale, in order to validate the integrity of the assessment;

  3. 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, 2023, the value of property investments on the consolidated balance sheet was NT$ 2,847,586 thousand accounting for approximately 20% of the consolidated total assets. Please refer to Notes 4, 5 and 15 of the consolidated 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:

  1. Acquisition of the data concerning the company’s assessment of asset impairments according to cash generating units; 
167
  1. 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.

Other Matter

We have also audited the parent company only financial statements of Formosan Rubber Group Inc. as of and for the years ended December 31, 2023 and 2022 on which we have issued an unmodified opinion.

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

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

In preparing the consolidated financial statements, management is responsible for assessing Formosan Rubber Group Inc. and its subsidiaries’ 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. and its subsidiaries 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. and its subsidiaries’ financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

168

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:

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

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

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

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

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

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

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

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

169

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2023 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 12, 2024

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated 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 such consolidated financial statements are those generally applied in the Republic of China. The auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and consolidated financial statements, the Chinese version shall prevail. 

170

Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Balance Sheet

Dec. 31, 2023 and 2022

Unit: In Thousands of NTD

Assets Note Dec. 31, 2023 Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2022
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
Inventories-Construction Industry
Prepayments
Other financial assets-current
Other current assets-other
Total current assets
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
Prepayments for equipment
Refundable deposits
Other financial assets - non-current
Other non-current assets, others
Total non-current assets		 6
7

8
9
9
10
10
11
8
12
13
14
15
26
11		 $ 648,132
64,635
4,934,692
38,804
100,762
50,961
181,618
2,771,492
54,562
711,296
973		 5
1
35
－
1
－
1
19
－
5
－		 $ 1,819,185
16,963
4,385,379
74,739
80,946
39,176
210,674
2,909,351
52,346
－
1,087		 13
－
32
1
1
－
2
21
－
－
－
9,557,927 67 9,589,846 70
821,967
127,642
747,845
30,989
2,847,586
55,178
18,017
57,050
20,000
633		 6
1
6
－
20
－
－
－
－
－		 482,225
103,371
793,418
32,569
2,663,226
32,869
－
40,376
20,000
1,305		 4
1
6
－
19
－
－
－
－
－
4,726,907 33 4,169,359 30
Total assets $ 14,284,834 100 $ 13,759,205 100

(The attached notes constitute a part of the consolidated financial statements.) 

171

Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Balance Sheet (Continued)

Dec. 31, 2023 and 2022

Unit: In Thousands of NTD

Liabilities & equity Note Dec. 31, 2023 Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2022
Accounting item Amount ％ Amount ％
Current liabilities
Short-term borrowings
Short-term notes and bills payable
Notes payable
Accounts payable
Other payables
Current tax liabilities
Lease liabilities-current
Other current liabilities
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Non-current lease liabilities
Net defined benefit liability
Guarantee deposits received
Total non-current liabilities
Total liabilities
Equity attributable to owners of parent
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		 16
17
14
26
14
18
19		 $ 1,140,000
189,881
81,599
34,185
133,006
35,261
7,648
18,155		 7
2
1
－
1
－
－
－		 $ 1,240,000
39,894
92,132
33,910
140,995
76,359
5,775
18,453		 9
－
1
－
1
1
－
－
1,639,735 11 1,647,518 12
170,946
24,065
2,131
45,685		 2
－
－
－		 170,413
27,473
2,575
48,641		 2
－
－
－
242,827 2 249,102 2
1,882,562 13 1,896,620 14
3,035,934
449,745
1,812,711
296,475
5,873,998
4,539
928,870		 21
3
13
2
41
－
7		 3,373,260
449,745
1,745,695
296,475
5,729,100
(1,037)
269,347		 25
3
13
2
41

－
2
12,402,272 87 11,862,585 86
Total liabilities & equity $ 14,284,834 100 $ 13,759,205 100

(The attached notes constitute a part of the consolidated financial statements.) 

172

Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Comprehensive Income Statement

From Jan. 1 to Dec. 31, 2023 and 2022

Unit: In Thousands of NTD

Accounting item Note 2023 2022
Amount ％ Amount ％
Operating revenue
Operating costs
Gross profit
Operating expenses
Selling expenses
General and administrative expenses
Research and development expenses
Total operating expense
Operating profit
Non-operating income and expenses
Interest income
Other income
Other gains and losses
Finance costs
Expected credit impairment (loss) gain
Shares of (loss) profit of associate
Total non-operating income and
expenses
Income before income tax
Income tax expense
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 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
Other comprehensive income (loss)
Total comprehensive income for the year
Net income attributable to:
Shareholders of the parent
Total comprehensive income attributable to:
Shareholders of the parent
Earnings per share (NT dollars)
Basic earnings per share
Diluted earnings per share		 20
21
22
23
24
26
18
26
26

27		 $ 1,359,718
(939,107)		 100
(69)		 $ 1,937,243
(1,312,034)		 100
(68)
420,611 31 625,209 32
(47,577)
(164,158)
(9,270)		 (3)
(12)
(1)		 (65,313)
(179,392)
(9,634)		 (3)
(9)
(1)
(221,005) (16) (254,339) (13)
199,606 15 370,870 19
53,710
318,279
26,992
(26,326)
284
19,655		 4
23
2
(2)
－
2		 25,417
303,549
133,023
(8,789)
751
5,476		 1
16
7
－
－
－
392,594 29 459,427 24
592,200
(73,323)		 44
(6)		 830,297
(118,613)		 43
(6)
518,877 38 711,684 37
341
735,027
4,616
18,799
6,970
(1,793)
(1,033)		 －
54
－
1
1
－
－		 60
(309,924)
(4,680)
9,887
44,168
(1,192)
(8,637)		 －
(16)
－
－
2
－
－
762,927 56 (270,318) (14)
$ 1,281,804 94 $ 441,366 23
$ 518,877 38 $ 711,684 37
$ 1,281,804 94 $ 441,366 23
1.61
(NT dollars)
1.60
(NT dollars)		 2.09
(NT dollars)
2.09
(NT dollars)

(The attached notes constitute a part of the consolidated financial statements.) 

173

Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Statement of Changes in Equity

From Jan. 1 to Dec. 31, 2023 and 2022

From Jan. 1 to Dec. 31, 2023 and 2022 From Jan. 1 to Dec. 31, 2023 and 2022 From Jan. 1 to Dec. 31, 2023 and 2022
Unit: In Thousands of NTD
Item Equity attributable to owners of the parent Treasury stocks Total equity
Share capital Capital surplus Retained earnings Other equity interest
Legal reserve Special reserve Unappropriated
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 ofJan.1,2022 $ 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
711,684
48		 －
－
－
－
35,334		 －
－
－
－
(305,700)		 －
－
－
－
－		 －
(410,791)
－
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
Legal reserve appropriated
Cash dividend
Net income in 2023
Other comprehensive income for
2023, net of income tax
Total comprehensive income (loss) in
2023
Capital Reduction
Disposal of financial assets at fair
value through other comprehensive
income-equity instruments		 －
－
－

－		 －
－
－
－		 67,016
－
－
－		 －
－
－
－		 (67,016)
(404,791)
518,877
273		 －
－
－
5,576		 －
－
－
757,078		 －
－
－
－		 －
(404,791)
518,877
762,927

－		 － － － 519,150 5,576 757,078 － 1,281,804
(337,326)


－		 －
－		 －
－		 －
－		 －
97,555		 －
－		 －
(97,555)		 －
－		 (337,326)
－
Balance of Dec. 31,2023 $ 3,035,934 $ 449,745 $ 1,812,711 $ 296,475 $ 5,873,998 $ 4,539 $ 928,870 $ － $12,402,272

(The attached notes constitute a part of the consolidated financial statements.) 

174

Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Statement of Cash Flows

From Jan. 1 to Dec. 31, 2023 and 2022

Unit: In Thousands of NTD
2023
2022
Amount
Amount
$ 592,200
$ 830,297
102,855
104,363
(284)
(751)

(24,649)
1,990
26,326
8,789
(53,710)
(25,417)
(312,827)
(297,907)
(19,655)
(5,476)
－
(57)
－
18,845
(98)
(1,454)
36,298
(45,306)
(19,924)
35,254
(12,366)
(2,057)
29,056
631
137,859
(865,710)
(2,216)
(6,203)
114
(279)
－
(50,221)
(10,533)
(1,152)
275
(1,415)
(7,989)
5,132
(298)
(836)
(103)
(139)
460,331
(299,079)		 Unit: In Thousands of NTD
2023
2022
Amount
Amount
$ 592,200
$ 830,297
102,855
104,363
(284)
(751)

(24,649)
1,990
26,326
8,789
(53,710)
(25,417)
(312,827)
(297,907)
(19,655)
(5,476)
－
(57)
－
18,845
(98)
(1,454)
36,298
(45,306)
(19,924)
35,254
(12,366)
(2,057)
29,056
631
137,859
(865,710)
(2,216)
(6,203)
114
(279)
－
(50,221)
(10,533)
(1,152)
275
(1,415)
(7,989)
5,132
(298)
(836)
(103)
(139)
460,331
(299,079)
Item 2023 2022
Amount Amount
Cash flows from operating activities:
Income before income tax
Adjustments for:
Depreciation expense
Expected credit impairment gain
Net loss (gain) on financial assets at fair value through loss
(profit)
Finance costs
Interest income
Dividend income
Share of profit of associates
gain on disposal of property, plant and equipment
Impairment loss on non-financial assets
Unrealized foreign exchange gain
Changes in operating assets and liabilities
Notes receivable
Accounts receivable
Other receivables
Inventories
Inventories-Construction Industry
Prepayments
Other current assets
Contract liabilities
Notes payable
Accounts payable
Other payables
Other current liabilities
Net defined benefit liability
Cash generated from (used in) operations		 $ 592,200
102,855
(284)

(24,649)
26,326
(53,710)
(312,827)
(19,655)
－
－
(98)
36,298
(19,924)
(12,366)
29,056
137,859
(2,216)
114
－
(10,533)
275
(7,989)
(298)
(103)		 $ 830,297
104,363
(751)
1,990
8,789
(25,417)
(297,907)
(5,476)
(57)
18,845
(1,454)
(45,306)
35,254
(2,057)
631
(865,710)
(6,203)
(279)
(50,221)
(1,152)
(1,415)
5,132
(836)
(139)
460,331 (299,079) 
175

Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Statement of Cash Flows (Continued)

From Jan. 1 to Dec. 31, 2023 and 2022

Unit: In Thousands of NTD

Item 2023 2022
Amount Amount
Interest received
Dividends received
Interest paid
Income tax paid
Net cash generated from (used in) 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 financial assets at fair value through profit or
loss
Proceeds from acquisition of financial assets at fair value
through profit or loss
Acquisition of property, plant and equipment
Disposal of property, plant and equipment
Increase in refundable deposits
Acquisition of Investment property
(Increase) decrease in other financial assets
Decrease in other non-current assets
Increase prepayments for equipment
Net cash used in investing activities
Cash flows from financing activities:
(Decrease) increase in short-term borrowings
Increase (decrease) in short-term notes and bills payable
(Decrease) increase in guarantee deposits received
Payments of lease liabilities
Cash dividends paid
Capital Reduction
Payments to acquire treasury shares
Net cash (used in) generated from financing activities
Effect of exchange rate changes on cash and cash equivalents
Net Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end ofyear		 54,297
312,821
(26,326)
(118,431)		 23,152
297,907
(8,789)
(34,602)

682,692		 (21,411)

(989,541)

805,909

4,000

(38,042)

38,957
(19,207)
－
(16,674)
(215,354)
(711,296)
672
(18,017)		 (482,646)
83,212
2,000
－
－
(27,218)
57
(750)
－
27,620
2,949
－
(1,158,593) (394,776)
(100,000)
149,987
(2,956)
(6,992)
(404,791)
(337,326)
－		 825,000
(119,990)
4,118
(5,391)
(410,791)
－
(105,816)
(702,078) 187,130
6,926 35,875
(1,171,053)
1,819,185		 (193,182)
2,012,367
$ 648,132 $ 1,819,185

(The attached notes constitute a part of the consolidated financial statements.) 

176

Formosan Rubber Group Inc. and Its Subsidiaries

Notes to Consolidated Financial Statements

From Jan. 1 to Dec. 31, 2023 and 2022

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

1. Company profile

Formosan Rubber Group Inc. (hereafter referred to as the “FRG”) 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, FRG started in September 1995 the property development business and the leasing, sale and management operations for its own properties and land. FRG became a listed company on the Taiwan Stock Exchange in March 1992.

The consolidated financial statements consist of FRG and its subsidiaries (collectively the “Company”).

2. Date and procedure approving financial statements

The consolidated financial statements were approved and published by the board of directors on March 12, 2024.

3. Application of new standards, amendments and interpretations

  • (1) Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRS Accounting Standards”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

The initial application of the amendments to the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have material impact on the Group’s accounting policies.

  • (2) The IFRS Accounting Standards endorsed by the FSC for application starting from 2024
Effective Date
Announced by IASB
New Standards, Interpretations and Amendments (Note 1)
Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback” January 1, 2024 (Note 2)
Amendments to IAS 1 “Classification of Liabilities as Current January 1, 2024
orNon-current”
Amendments to IAS 1 “Non-current Liabilities with Covenants” January 1, 2024
Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements” January 1, 2024 (Note 3)
Note 1: Unless stated otherwise, the above IFRSs will be effective for annual reporting periods
beginning on or after their respective effective dates.

  • Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

  • Note 3: The amendments provide some transition relief regarding disclosure requirements.

As of the date the consolidated financial statements were authorized for issue, the Group has assessed that the application of above standards and interpretations will not have a material impart on the Group’s financial position and financial performance. 

177
  • (3) New IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the

FSC

FSC
New Standards,Interpretations and Amendments Effective Date
Announced by IASB
(Note 1)
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture”
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 21 “Lack of Exchangeability”		 To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2025 (Note 2)

  • Note 1: Unless stated otherwise, the above IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

  • Note 2: An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments, the entity recognizes any effect as an adjustment to the opening balance of retained earnings. When the entity uses a presentation currency other than its functional currency, it shall, at the date of initial application, recognize any effect as an adjustment to the cumulative amount of translation differences in equity.

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of above standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. Summary of significant accounting policies

  • (1) Compliance statement

This is the Company’s first set of consolidated financial statements prepared according to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS) and IFRIC as well as interpretation announcements approved by the FSC.

  • (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 consolidated financial statements are based on historical costs, usually the fair value paid for the acquisition of assets.

  • (3) Consolidated bases

The consolidated financial statements include the financials of FRG and the entities (subsidies) it controls.

The consolidated comprehensive income statement has incorporated the operating incomes or losses of the acquired or disposed subsidiaries as of the dates of acquisition or disposal. Other comprehensive incomes of the subsidiaries are contributions to the FRG’s owner’s equity and non-controlling interests. In other words, the non-controlling interests are the loss balance. 

178

The financial reporting of subsidiaries has been appropriately adjusted so that their accounting policies are consistent with the Company.

All the major transactions, balances, gains and losses between the Company and consolidated entities have been completely eliminated upon consolidation.

In case of any change in the ownership’ equity of subsidies without causing the Company to use the control over the subsidies, such changes are treated as equity transactions. In order to reflect the corresponding change to the Company’s shareholders’ equity and noncontrolling interests, the book values shall be adjusted. The delta between the adjustment in non-controlling interests and the fair value paid or received shall be recognized as part of the Company’s owners’ equity.

Upon the loss of the control over a subsidiary, the gain or loss from the disposal is the delta between the following: (1) the sum of the fair values charged for the assets and the fair value for the residual investment into the former subsidiary as of the date of control loss; (2) the sum of the book values for the assets (including goodwill), liabilities and noncontrolling interests of the former subsidiary as of the date of control loss. All the values recognized for the subsidiary concerned in other comprehensive incomes and the accounting treatment for the disposal of the relevant assets or liabilities must comply with the same basis.

The residual investment in the former subsidiary is based on the fair value on the date of control loss.

  • A. The detailed information of subsidiaries included in the consolidated financial statements, as follows:
Investing company Subsidiary Percentage of shares held bythis Company Percentage of shares held bythis Company
Dec. 31, 2023 Dec. 31, 2022
FRG
FRG		 Ban Chien Development
Co., Ltd. (Taiwan)
FRG US Corp. (San
Francisco)		 100％
100％		 100％
100％

  • a. Ban Chien Development Co., Ltd. is engaged in the development of residential and commercial buildings for renting and selling. The construction of such buildings is outsourced.

  • b. In order to jointly invest 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, As of December 31, 2023, with an investment limit of USD 32,000 thousand. Its main businesses are real estate investment, development and rental and sales of premises. 

179

As of December 31, 2023 and 2022, FRG has remitted Investment funds are NT$938,955 thousand (USD30,802 thousand) and NT$560,933 thousand (USD18,252 thousand).

  • c. The financial statements of the consolidated subsidiaries are based on their audited financial statements during the same period.

  • B. Subsidiaries not included in the consolidated financial statements:

The major business site of the Company’s subsidiary Kingshale Industrial Limited is in Hong Kong and the Company has held 99.99% of the subsidiary’s voting shares and ownership. The subsidiary is an intermediary company entrusted by the Company to transfer its investment in mainland China. For the current period, Kingshale Industrial Limited did not have any material transactions with the Company, and it did not have any material assets and liabilities left at the end of the period either. Hence, it was not included in the consolidated financial statement as an entity.

  • C. Subsidiaries that have non-controlling interests that are material to the Company: none

  • (4) Foreign Currency

The individual financial statements for the consolidated 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 FRG’s consolidated financial statements is NT Dollars. All the financial performances and statuses are converted into the NT dollars for the preparation of the consolidated 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 consolidated 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 consolidated 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. 

180

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.

  • (5) 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.

  • (6) Cash equivalents

Cash equivalents can be converted into a fixed amount of cash at any time. They are shortterm, 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.

  • (7) 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.

  • (8) Investments accounted for under equity method

Investments in associates are reported according to the equity method.

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

181

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 consolidated financial statements.

(9) 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. 

182

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.

(10) 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.

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.

(11) Lease

A. The Group 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. 

183

When a lease includes both land and building elements, the Group 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 Group. 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 Group as lessee

The Group 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 consolidated 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 Group 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 consolidated balance sheets. 

184
  • (12) Impairment of non-financial assets

The Group 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 Group 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.

(13) 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. 

185

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.

  • (14) Financial Instrument

Financial assets and financial liabilities shall be recognized when the Group 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.

(15) 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. 

186
  • 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. 

187
  • 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. 

188

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.

(16) 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.

(17) 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.

(18) 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 consolidated 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 

189

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 payoff 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. 

190

(19) 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 Group 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. 

191

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 independent 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

6.Cash and cash equivalents
Dec. 31, 2023
Cash and petty cash
$ 445
Cash in bank
337,838
Cash equivalent
Commercial paper
309,849
Time deposits with maturity
－
Total
$ 648,132
7.Financial assets at fair value through profit or loss-current
Dec. 31, 2023
Current financial assets at fair value through
profit or loss, designated as upon initial
recognition
Fund
$ 64,635
8.Financial assets at fair value through other comprehensive income
Dec. 31, 2023
Equity instruments
Stock of domestic listed (OTC) companies
$ 4,829,994
Stock of foreign listed (OTC) companies
46,346
Stock not classified to listed (OTC) and
emerging companies
117,356
Stock of foreign companies
704,611
Debt instruments
Financial bond
58,352
Total
$ 5,756,659
Current
$ 4,934,692
Non-current
$ 821,967		 Dec. 31, 2022
$ 519
410,010
195,906
1,212,750
$ 1,819,185
Dec. 31, 2022
$ 16,963
Dec. 31, 2022
$ 4,369,693
1,743
67,342
414,883
13,943
$ 4,867,604
$ 4,385,379
$ 482,225 
192

(1)The Company signed a securities lending agreement with SinoPac Securities Corporation on April 10, 2020. 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, 2023 and 2022, the book value of stock lending were NT$83,722 thousand and NT$0 thousand respectively.

  • (2) Credit risk management for investments in debt instruments

Investments in debt instruments were classified as at FVTOCI ：

Gross carrying amount
Adjustment to fair value
Total		 Dec. 31, 2023
$ 60,885
(2,533)
$ 58,352		 Dec. 31, 2022
$ 14,712
(769)
$ 13,943

The Company only invests in debt instruments that have low credit risk for the purpose of impairmentassessment.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, 2023

Credit Rating
Performing		 Expected credit loss rate
0.02％
Dec. 31, 2022		 Through other comprehensive
income measured at fair value
of book amount
$ 60,885
Credit Rating
Performing		 Expected credit loss rate
0.30％		 Through other comprehensive
income measured at fair value
of book amount
$ 14,712 
193

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

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
Net amount		 For the Year Ended
December 31, 2023
$ 41
－
－
(29)
$ 12
Dec. 31, 2023
$ 39,196
(392)
$ 38,804
Dec. 31, 2023
$ 102,620
(1,858)
$ 100,762		 For the Year Ended
December 31, 2022
$ 209
－
－
(168)
$ 41
Dec. 31, 2022
$ 75,494
(755)
$ 74,739
Dec. 31, 2022
$ 82,696
(1,750)
$ 80,946

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:

Non past due
Past due less than 90 days
Past due 91-180 days
Past due 181-365 days
More than 366 days past due		 Dec. 31, 2023
Carrying amount
of accounts
receivable		 Expected credit
loss rate		 Loss allowance for
lifetime expected
credit losses
$ 139,599
2,151
－
－
66		 1～2％
2～5％
10～20％
50％
100％		 $ 2,100
84
－
－
66
$ 141,816 $ 2,250 
194
Non past due
Past due less than 90 days
Past due 91-180 days
Past due 181-365 days
More than 366 days past due		 Dec. 31, 2022
Carrying amount
of accounts
receivable		 Expected credit
loss rate		 Loss allowance for
lifetime expected
credit losses
$ 155,246
2,091
787
－
66		 1～2％
2～5％
10～20％
50％
100％		 $ 2,352
87
－
－
66
$ 150,190 $ 2,505

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

Balance, beginning of year
Expected credit impairment gain
Balance, end of year		 2023
$ 2,505
(255)
$ 2,250		 2022
$ 3,088
(583)
$ 2,505

10. Inventories

  • (1) Inventories - Manufacturing

A.The inventory details related to the rubber department is as follows:

Dec. 31, 2023
Raw materials
$ 67,456
Work-in-process
10,204
Finished goods
103,958
Total
$ 181,618
he cost of sales related to the rubber department is as follows:
2023
Cost of inventories sold
$ 675,866
Provision for (Reversal of) loss on
inventories
666
Unamortized fixed manufacturing costs
10,692
Total
$ 687,224		 Dec. 31, 2022
$ 78,208
19,426
113,040
$ 210,674
2022
$ 773,309
(15,088)
9,963
$ 768,184

B.The cost of sales related to the rubber department is as follows:

For the year ended December 31, 2022, the reversal of loss on inventories is due to the removal part of the inventory that has been listed for decline in price.

  • (2) Inventories-Construction Industry

A.The inventory details and contract liabilities related to the construction department is as follows: 

195
Bridge Upto Zenith Project at
Banqiao
Modesty Home Project at
Banqiao
Legend River Project at
Xindian
Treasure Garden Project in
Taichung City
55 TIMELESS Project in
Taipei City
La Bella Vita Project in
Taichung City
Ambassador Hotel Project in
Kaohsiung City-Real estate
under construction		 Real estate for sale and
prepayment for landpurchases		 Real estate for sale and
prepayment for landpurchases		 Contract liabilities Contract liabilities Contract liabilities
Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
Jan. 1, 2022
$ 34,016
14,923
92,728
236,653
262,289
690,521
1,440,362		 $ 34,016

14,923

92,728

236,653

350,489

740,180

1,440,362		 $ －
－
－
－
－
－
－		 $ －
－
－
－
－
－
－		 $ －
－
－
－
34,552
15,669
－
$ 2,771,492 $ 2,909,351 $ － $ － $ 50,221
  • a.The Ambassador Hotel Co., Ltd. and Continental Engineering Corporation signed the Ambassador Hotel Project in Kaohsiung City, a collaborative development agreement in November 2021. The reconstruction plan is set out by the Statute for Expediting Reconstruction of Urban Unsafe and Old Buildings and related regulations and requesting demolition and rebuild to the Authority which the new building would be developed, constructed, and sold tripartite mutually. The completion date of the reconstruction building is expected to be 1,600 work days after the approval date of the layout inspection.

b.The situation of pledge & guarantee in detail is shown in Note 31.

B.The cost of sales related to the construction department is as follows:

11. Cost of inventories sold
Other financial assets
Pledged time deposits
Time deposits with maturity over three
months
Total
Current
Non-current
Interest rate range %		 2023
$ 141,753
Dec. 31, 2023
$ 20,000
711,296
$ 731,296
$ 711,296
$ 20,000
0.715~5.6		 2022
$ 438,332
Dec. 31, 2022
$ 20,000
－
$ 20,000
$ －
$ 20,000
0.595～1.45

The pledged time deposit serves as guaranty for logistics business and it is shown in Note 31. 

196

12. Investments accounted for using equity method

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, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
Unlisted (OTC) companies
Formosan Construction Corp.
(Taiwan)
Fenghe Development Co., Ltd.
(Taiwan)
Rueifu Development Co., Ltd.
(Taiwan)
Total		 $ 77,897
40,433
9,312		 $ 63,226
31,741
8,404		 26.20
39.90
48.26		 26.20
39.90
48.26
$ 127,642 $ 103,371

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)		 2023
$ 19,655
4,616
$ 24,271		 2022
$ 5,476
(4,680)
$ 796

The investment gains and losses and other comprehensive income for the associates under the

equity method have been recognized according to their audited financials.

13. Property, plant and equipment

Item For the Year Ended December 31, 2023 For the Year Ended December 31, 2023 For the Year Ended December 31, 2023
Balance,
Beginning of
Year		 Additions Disposals Reclassification Balance, End
of Year
$ 444,026
599,700
798,819
11,849
158,422
372		 $ －

3,159

3,165

930

11,953

－		 $ －
－
－
－
－
－		 $ (24,049)
－
－
－
－
(372)		 $ 419,977
602,859
801,984
12,779
170,375
－
2,013,188
19,207		 － (24,421) 2,007,974

14,642

18,031

180

7,506		 －
－
－
－		 －
－
－
－		 401,651
714,029
11,586
132,863

Building
Machinery equipment
Transportation equipment
Other equipment
Total
Net
1,219,770 $ 40,359 $ － $ － 1,260,129
$ 793,418 $ 747,845 
197

For the Year Ended December 31, 2022

Item Balance,
Beginning of
Year		 Additions Disposals Reclassification Balance, End
of Year
$ 444,026
580,509
795,359
14,039
154,227
－		 $ －

19,191

3,460

－

4,195
372		 $ －
－
－
(2,190)
－
－		 $ －
－
－

－
－
－		 $ 444,026
599,700
798,819
11,849
158,422
372
1,988,160
27,218		 (2,190) － 2,013,188

13,535

18,545

159

10,640		 －
－
(2,190)
－		 －
－

－
－		 387,009
695,998
11,406
125,357

Building
Machinery equipment
Transportation equipment
Other equipment
Total
Net
1,179,081 $ 42,879 $ (2,190) $ － 1,219,770
$ 809,079 $ 793,418

  • (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) Reclassification is transferred to Investment property.

  • (3) The situation of pledge & guarantee in detail is shown in Note 31.

14. Lease

  • (1) Right-of-use assets
Right-of-use assets
Cost
Building

Transportation equipment
Total
Accumulated depreciation &
impairment
Building
Transportation equipment
Total
Net
 For the Year Ended December 31,2023
Balance,
Beginning
of Year		 Additions Disposals Balance,
End of Year
$ 51,552
1,965		 $ －
5,457		 $ －

－		 $ 51,552
7,422
53,517 5,457 － 58,974
20,620
328		 5,155
1,882		 －
－		 25,775
2,210
20,948 $ 7,037 $ － 27,985
$ 32,569 $ 30,989 
198
Cost
Building

Transportation equipment
Total
Accumulated depreciation &
impairment
Building
Transportation equipment
Total
Net
 For the Year Ended December 31, 2022 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 $ 32,569

(2) Lease liabilities

Lease liabilities
Less 1 year

Over 1 years
Total
 For the Year Ended December 31, 2023
Future minimum
lease payments		 Interest Present value of
minimum lease
payments
$ 7,980

24,555		 $ 332

490		 $ 7,648
24,065
$ 32,535
 $ 822
 $ 31,713

Range of discount rate for lease liabilities were as 1.09 ％～ 2.07 ％ .

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 ％ .

(3) Other lease information

Other lease information
2023 2022
Expenses relating to short-term leases $ 57 $ －
Total cash (outflow) for all lease
agreements		 $ (7,446) $ (5,774)

(4) Please see note 30 for the status of transactions with related parties. 

199

15. Investment property, net

Item For For the Year Ended the Year Ended December 31, 2023 December 31, 2023 December 31, 2023 December 31, 2023
Balance,
Beginning
of Year		 Additions Impairment Reclassification Effect of
exchange rate
changes		 Balance,
End of Year
$ 1,126,728
2,706,340
－		 $ －
－
215,354		 $ －
－
－		 $ 24,049
－
372		 $ 9
17
－		 $ 1,150,786

2,706,357
215,726
3,833,068 215,354 － 24,421 26
4,072,869
－ －
－		 2
(20)
237,060

988,223

Land
Building
Total
Net

Fair value

Item
237,058
932,784
1,169,842 $ 55,459 $ － $ － $ (18)
1,225,283
$ 2,663,226 For the Year Ended $ 2,847,586
$ 4,306,918 $ 4,825,150
Balance,
Beginning
of Year		 Additions Disposals Impairment Effect of
exchange rate
changes		 Balance,
End of Year
$ 1,098,862
2,653,319		 $ 25,111
47,780		 $ －
－		 $ －
－		 $ 2,755
5,241		 $ 1,126,728

2,706,340
3,752,181 72,891 － － 7,996
3,833,068
－
－		 8,206
10,639		 －
(296)		 237,058

932,784

228,852
866,440
1,095,292 $ 56,001 $ － $ 18,845 $ (296)
1,169,842
$ 2,656,889
Dec. 31,		 $ 2,663,226
$ 4,451,589 $ 4,306,918
2022
Ping Cost Ping Cost
16,691
230,253
14,696
140
53
－
 $ 66,692

473,971

265,779

311,775

4,694
27,875
14,447

230,253

14,696

140

53

－
 $ 42,643

473,971

265,779

311,775

4,694
27,866
$ 1,150,786 $ 1,126,728 
200
  • (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:

properties as of was as follows:
Year 1
Year 2
Year 3
Year 4
Year 5
Over 5 years
Total		 Dec. 31, 2023
$ 162,053
83,787
25,713
18,106
3,177
－
$ 292,836		 Dec. 31, 2022
$ 140,099
90,903
24,372
11,166
11,166
1,695
$ 279,401

  • (3) As of December 31, 2023 and December 31, 2022, the book value of the investment properties let out stood at NT$2,269,093 thousand and NT$2,363,379 thousand , respectively. The rent incomes during 2023 and 2022 totaled NT$220,411 thousand and NT$213,571 thousand, respectively.

  • (4) The Unfinished Construction is the company entrusting Engtown Construction Corp with Longtan Intelligent Park - Area A. Please see note 30 for the status of transactions with related parties. In 2023, The capitalized interest is NT$1,404 thousand. The range of interest rates was 1.297 ％～ 2.258 ％ .

  • (5) 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.

  • (6) As of December 31, 2023 and 2022, the land at Dahu Section of Miaoli accumulated losses of reduction were both NT$231,549 thousand.

  • (7) Details of the farm land lots registered in others’ names due to legal restrictions:

Oiashui Section, Longtan
Dahu Section, Miaoli
Shuiwei Section, Luzhu
Total		 Dec. 31, 2023
$ 35,100
94,241
17,631
$ 146,972		 Dec. 31, 2022
$ 35,100
94,241
17,631
$ 146,972 
201

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 30 (2) D for the status of transactions with related parties.

  • (8) The situation of already providing to serve as loan guarantees from financial industries in detail is shown in Note 31.

16. Short-term borrowings

Short-term borrowings
Bank unsecured borrowings
Bank guaranteed loan
Total
Interest rate range %
Short-term notes and bills payable
Commercial paper payable
Less: Unamortized discount
Net amount
Interest rate range %		 Dec. 31, 2023
$ 1,140,000
－
$ 1,140,000
1.69～2.46
Dec. 31, 2023
$ 190,000
(119)
$ 189,881
1.4～1.75		 Dec. 31, 2022
$ 740,000
500,000
$ 1,240,000
1.48～2.19
Dec. 31, 2022
$ 40,000
(106)
$ 39,894
1.5～2.39

17. Short-term notes and bills payable

The situation of pledge & guarantee in detail is shown in Note 31.

18. 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 consolidated comprehensive income statement in 2023 and January 1 to December 31, 2022 are respectively NT$6,372 thousand and NT$6,232 thousand. 

202

(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 consolidated comprehensive income statement listed

to expense related to defined benefit plan is as 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		 2023
$ 10
33
$ 43
24
(3)
(25)

345
$ 341		 2022
$ －
19
$ 19
218
(3)
358
(513)
$ 60

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

Operating costs
Operating expenses
Total		 2023
$ 26
17		 2022
$ 19
－
$ 43 $ 19 
203

The amount listed in the consolidated balance sheet for the obligation occurring from the defined benefit plan is as follows

the defined benefit plan is as follows
Dec. 31, 2023 Dec. 31, 2022
Defined benefit obligation present
value		 $ 5,005 $ 5,387
Plan asset fair value (2,874) (2,812)
Net defined benefit liability (assets) $ 2,131 $ 2,575
The changed of defined benefit obligation present value of this Company is as follows:
2023 2022
Beginning defined benefit obligation $ 5,387 $ 5,632
Interest expense 70 39
Benefits paid from plan assets － (442)
Re-measurements
Actuarial (profit) loss- Change of
the demographic assumption		 3 3
Actuarial (profit) loss- Change of
the financial assumption		 25 (358)
Actuarial (profit) loss- Adjustment
with experience		 (345) 513
Planned repayments (135) －
Ending defined benefit obligation $ 5,005 $ 5,387
The changed of plan asset fair value of this Company is as follows:
2023 2022
Beginning plan asset fair value $ 2,812 $ 2,858
Interest income 38 19
Re-measurements
Plan assets returns (excl. amount
that covered in net interest 24 218
income)
Contribution by employer 146 159
Benefits paid from plan assets － (442)
Redemption or curtailments payment (146) －
Ending plan asset fair value $ 2,874 $ 2,812 
204

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

2023 2022
Cash and cash equivalents $ 2,874 $ 2,812
he main assumptions of the Company’s actuarial valuation are as follows:
Dec. 31, 2023 Dec. 31, 2022
Discount rate 1.25％ 1.30％
Expected increase in future salaries 2.00％ 2.00％
  • B. The main assumptions of the Company’s actuarial valuation are as follows:

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 2023 and 2022.

salaries) and management estimates in 2023 and 2022. 2023 and 2022.
Dec. 31, 2023

Discount rate
Expected increase in future salaries
Dec. 31, 2022

Discount rate
Expected increase in future salaries		 Effect on present value of
defined benefit obligation
Actuarial assumption
increased 0.25％
Actuarial assumption
decreased 0.25％
$ (123) $ 127
$ 126
$ (122)
Effect on present value of
defined benefit obligation		 Actuarial assumption
decreased 0.25％
$ 127
$ (122)
Actuarial assumption
increased 0.25％

$ (141)
$ 144
 Actuarial assumption
decreased 0.25％
$ 146
$ (140) 
205

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 consolidated balance sheet.

  • b. The Company expects to contribute the amount of NT$124 thousand to the defined benefit plans within one year after December 31, 2023; the weighted average duration of defined benefits obligations is 10 years.

19. Equity

  • (1) Share capital - common stock
hare capital - common stock
Authorized capital
Issued capital		 Dec. 31, 2023
$ 6,800,000
$ 3,035,934		 Dec. 31, 2022
$ 6,800,000
$ 3,373,260

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

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

  • In June 9, 2023, the Corporation’s Board of Stockholders resolved to reduce cash capital to $ 337,326 thousand with the elimination of 33,733 thousand shares and a 10% capital reduction for increasing equity and EPS, which was approved by the Authority on August 8, 2023.

  • (2) Capital surplus

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, 2023
$ 716
444,133
1,238
3,658
$ 449,745		 Dec. 31, 2022
$ 716
444,133
1,238
3,658
$ 449,745 
206

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 FRG’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 FRG 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. 

207

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

Special reserve
The number of appropriation arising
from the first adoption of IFRSs
Decrease in other equity items
Total		 Dec. 31, 2023
$ 296,475
－
$ 296,475		 Dec. 31, 2022
$ 296,475
－
$ 296,475

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. FRG’s earnings distributions for 2022 and 2021 were approved by the annual general

meetings on June 9, 2023 and June 8, 2022, respectively, as proposed by the board.

Legal reserve
Cash dividend
Total		 2022 2021
Amount Dividend
per share
(TWD)		 Amount Dividend
per share
(TWD)
$ 67,016
404,791
$ 1.2
 $ 78,839
410,791		 $ 1.2
$ 471,807 $ 489,630
  • E. The status for the board of the Company proposed to approve the 2023 earnings allocation proposal on March 12, 2024 is as follows:
allocation proposal on March 12, 2024 is as follows: is as follows:
Legal reserve
Cash dividend
Total		 2023
Amount
$ 61,671
394,671
$ 456,342		 Dividend per share
(TWD)
$ 1.3

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

208

(4) Other equity interest

Other equity interest
Balance on Jan. 1, 2023
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, 2023
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
$ (1,037)

5,576

－

－
－		 $ 269,347
－
752,462
4,616
(97,555)		 $ 268,310
5,576
752,462
4,616
(97,555)
$ 4,539 $ 928,870 $ 933,409
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
－
(301,020)
(4,680)
(6,158)		 $ 544,834
35,334
(301,020)
(4,680)
(6,158)
$ (1,037) $ 269,347 $ 268,310 
209

(5) Treasury stocks

Balance on Jan. 1, 2022
Acquired in this period
Cancellation in this period
Balance of Dec. 31, 2022		 Number of shares
(thousand shares)
－
5,000
(5,000)
－		 Amount
$ －
105,816
(105,816)
－

  • A. FRG 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 FRG 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.

20. Operating revenue

Operating revenue
Net sales revenue
Construction revenue
Rental and logistics revenue
Total		 2023
$ 880,166
192,350
287,202
$ 1,359,718		 2022
$ 986,339
668,816
282,088
$ 1,937,243

The amount of revenue recognized at the beginning from the contractual liabilities for the period from January 1 to December 31, 2023 and 2022 are respectively NT$0 thousand and NT$50,221 thousand.

21. Operating costs

Operating costs
Cost of sales
Cost of construction sales
Cost of rental and logistics
Total		 2023
$ 687,224
141,753
110,130
$ 939,107		 2022
$ 768,184
438,332
105,518
$ 1,312,034 
210

22. Other income

22. Other income
23.
24.		 Dividend income
Other
Total
Other gains and losses
Gains on disposals of investments
gain on disposal of property, plant and
equipment
Foreign currency exchange gain
Net (gain) loss on financial assets and
liabilities at fair value through profit or
loss
Miscellaneous expense
Impairment loss
Total
Finance costs
Interest of bank loan
Interest of lease liabilities
Capitalized interest
Total		 2023
$ 312,827
5,452
$ 318,279
2023
$ 107
－
3,566
24,649
(1,330)
－
$ 26,992
2023
$ 27,333
397
(1,404)
$ 26,326		 2022
$ 297,907
5,642
$ 303,549
2022
$ －
57
154,578
(1,990)
(777)
(18,845)
$ 133,023
2022
$ 8,406
383
－
$ 8,789
  1. Extra information on the items with the expense characteristics

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

below:
2023 2022
Operating
costs
 Operating
expense		 Total
 Operating
costs
 Operating
expense		 Total
$ 92,977
7,559
4,131
1,737		 $ 92,806

5,132

2,284

908		 $ 185,783

12,691

6,415

2,645		 $ 96,250

7,196

4,086

2,112		 $ 52,170

5,013

2,165

1,147		 $ 148,420

12,209

6,251

3,259
$ 106,404 $ 101,130 $ 207,534 $ 109,644 $ 60,495 $ 170,139 
211

The compensations to employees and the remunerations to directors determined by the board on March 12, 2024 for the year 2023 and March 15, 2023 for the year 2022 are as follows:

Compensations to employees
Remunerations to directors		 2023 2023 2022 2022
Amount Estimated
proportion		 Amount Estimated
proportion
$ 6,014
6,014
1％


1％		 $ 8,456
8,456
1％

1％

FRG 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 consolidated 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 2022, the recognized amount on the consolidated financial statements for 2021 and 2022. 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.

26. Income tax

(1) Income tax recognized in profit & loss

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

2023
Income tax current period:
Occurred in current year
$ (60,320)
Additionally imposed undistributed
earnings
(13,795)
Adjustments for prior year
(33)
Paid for land value increment tax
(3,185)
(77,333)
Deferred income tax:
Occurred in current year
4,010
Income tax expense listed as profit & loss $ (73,323)		 2022
$ (68,327)
(16,414)
－
(9,925)
(94,666)
(23,947)
$ (118,613) 
212

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

The accounting benefit and income tax expense of current period are adjusted as follows:
2023
Income tax calculated according to the
regulated tax rate of before-tax net
income
$ 123,524
The effect of tax in reconciliation items
of income tax:
When determining taxable income,
adjustments should be made to
increase (decrease)
21,766
Tax-exempt income
(81,812)
Additionally imposed undistributed
earnings
13,795
Adjustments for prior year
33
Paid for land value increment tax
3,185
Other
(3,158)
Income tax expense (gain) current period $ 77,333
(2) Income tax expense recognized in other comprehensive income
2023
Remeasurement of defined benefit plans
$ (68)
Unrealized loss on valuation of
investments in equity instruments
measured at fair value through other
comprehensive income
18,867
Exchange differences on translation of
foreign financial statements
(1,394)
Unrealized loss on valuation of
investments in debt instruments
measured at fair value through other
comprehensive income
361
Income tax related to other
comprehensive income
$ 17,766		 2022
$ 172,393
(14,573)
(94,165)
(16,414)
－
(9,925)
4,672
$ 68,327
2022
$ (12)
9,899
(8,834)
197
$ 1,250 
213

(3) Deferred tax assets and liabilities

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

2023

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
Deferred income tax assets
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 exchange gain
Other
Land value increment tax
Deferred income tax (liabilities)
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)		 Balance,
beginning of
year		 Recognized in
profit (loss)		 Recognized in
other
comprehensive
income		 Balance,
end of year
$ 515
11,388
259
146
4,857
15,704		 $ (21)
－
－

－
3,464
(298)		 $ (68)
19,130
(259)
361

－
－		 $ 426
30,518
－
507
8,321
15,406
$ 32,869
$ 3,145		 $ 19,164 $ 55,178
$ －
－
(499)
(3,557)
(166,357)		 $ －
－

499

366
－		 $ (263)
(1,135)

－

－
－		 $ (263)

(1,135)
－
(3,191)
(166,357)
$ (170,413) $ 865
$ (1,398)		 $ (170,946)
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) 
214
  • (4)The Company’s and its subsidiaries Ban Chien Development Co., Ltd.’s income tax

settlement application case approved by the competent authority is approved to 2021.

27. EPS

  • (1) Basic earnings per share
(1) 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)
(2) 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)		 2023
$ 518,877
323,271
$ 1.61
2023
$ 518,877
323,271
322
323,593
$ 1.60		 2022
$ 711,684
340,126
$ 2.09
2022
$ 711,684
340,126
485
340,611
$ 2.09

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.

28. 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. 

215

29. Financial instruments

(1) The types of financial 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
Lease liabilities
Total		 Dec. 31, 2023
$ 64,635
5,756,659
648,132
190,527
731,296
57,050
$ 7,448,299
$ 1,140,000
189,881
248,790
45,685
31,713
$ 1,656,069		 Dec. 31, 2022
$ 16,963
4,867,604
1,819,185
194,861
20,000
40,376
$ 6,958,989
$ 1,240,000
39,894
267,037
48,641
33,248
$ 1,628,820

  • (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). 
216

  • 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:

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 not classified to
listed (OTC) and
emerging companies
Financial bond
Stock of foreign
companies
Total

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 not classified to
listed (OTC) and
emerging companies
Financial bond
Stock of foreign
companies
Total
 Dec. 31,2023 Dec. 31,2023
Level 1 Level 2 Level 3 Total
$ 64,635 $ － $ － $ 64,635
$ 4,876,340
－
58,352
－		 $ －
－

－
－		 $ －
117,356
－
704,611		 $ 4,876,340
117,356
58,352
704,611
$ 4,934,692 $ － $ 821,967 $ 5,756,659
Level 1 Level 2 Level 3 Total
$ 16,963 $ － $ － $ 16,963
$ 4,371,436
－
13,943
－		 $ －
－

－
－		 $ －
67,342
－
414,883		 $ 4,371,436
67,342
13,943
414,883
$ 4,385,379 $ － $ 482,225 $ 4,867,604

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

none 

217
  • D. The first-level fair value measurement item applies a market offer as the fair value input

value, with breakdown as follows:

value, with breakdown as follows:
Item
Stock of Listed (OTC) companies
Fund and Financial bond		 Market quoted
Close price
The net assets
  • E. There was no change between Level 1 and Level 2 fair value measurements in 2023.

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.

  • F. 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		 2023
$ 482,225
438,177

(4,000)
(94,435)
－
$ 821,967		 2022
$ 515,160
－
(2,000)
3,153
(34,088)
$ 482,225

G. 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, nonobservable 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. 

218

(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:

Financial assets
Monetary items
USD
HKD
JPY
RMB
Non-monetary items
USD
JPY
Financial liabilities
Monetary items
USD
HKD
JPY
RMB		 Dec. 31, 2023 Dec. 31, 2022
foreign
currency		 Exchange
rate		 Amount foreign
currency		 Exchange
rate		 Amount
55,883
1,179
132,520
7,120
357
206,108
50
2
55
－		 30.66
3.904
0.2154
4.304
30.66
0.2154
30.76
3.964
0.2195
4.354		 1,713,376
4,603
28,545
30,653
10,931
44,396
1,531
8
12
1		 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

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, 2023 and 2022 would separately increase/decrease by NT$17,756 thousand and NT$14,449 thousand, respectively.

B. Interest rate risk 

219

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, 2023 and 2022 would separately increase/ decrease by NT$13,299 thousand and NT$12,799thousand, 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, 2023 and 2022 would separately increase/decrease by NT$56,983 thousand and NT$48,537thousand, 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, 2023 and December 31, 2022, the accounts receivable balances of the top 10 major customers account for the accounts receivable balances of the Company both as 54%; the risk concentration risks of the rest accounts receivable are relatively not major. 

220

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

Non-derivative
financial liabilities
Short-term
borrowing
Short-term notes
and bills payable
Trade payables
Lease liabilities
Guarantee deposits
received
Total
Non-derivative
financial liabilities
Short-term
borrowing
Short-term notes
and bills payable
Trade payables
Lease liabilities
Guarantee deposits
received
Total		 Dec. 31, 2023
Less than 1
year		 2～3 years 4～5 years Over 5 years
Total
$ 1,146,004
190,000
248,790
7,980
25,781		 $ －

－

－

13,676

16,822		 $ －
－
－
10,879
3,082		 $ －
－
－

－

－		 $ 1,146,004
190,000
248,790
32,535
45,685
$ 1,618,555 $ 30,498 $ 13,961 $ － $ 1,663,014
Dec. 31, 2022
Less than 1
year		 2～3 years 4～5 years Over 5 years
Total
$ 1,245,094
40,000
267,037
6,108
20,094		 $ －

－

－

11,882

26,592		 $ －
－
－
10,879
1,680		 $ －
－
－

5,440

274		 $ 1,245,094
40,000
267,037
34,309
48,640
$ 1,578,333 $ 38,474 $ 12,559 $ 5,714 $ 1,635,080 
221

B. Loan commitments

Dec. 31, 2023

Dec. 31, 2022

oan commitments Dec. 31, 2023 Dec. 31, 2022
Unsecured bank overdraft limit
-Amount used
-Amount unused
Unsecured bank loan limit
-Amount used
-Amount unused
Secured bank loan limit
-Amount used
-Amount unused		 $ －
60,000
$ 60,000		 $ －
90,000
$ 90,000
Dec. 31, 2023
$ 1,300,000
2,710,000
$ 4,010,000
$ －
170,000
$ 170,000		 Dec. 31, 2022
$ 780,000
2,165,000
$ 2,945,000
$ 500,000
810,000
$ 1,310,000

30. Related party transaction

  • (1)Name and relation ship with related parties

Name of related parties

Relationship with the Company

Formosan Construction Corp. (Formosan Construction)

[Investee company accounted for using the ] equity method

Eurogear Corporation(Eurogear)

[The president is the representative of the ] Company’s legal person director

Chen Hsi Investment CO, LTD (Chen His Investment)

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

Hung He Development CO, LTD (Hung He Development)

[The president is the spouse (1st degree of ] kinship) of the Company’s president

Fenghe International Co., Ltd. (Fenghe International)

[The president is the general manager of the ] Company

Engtown Construction Corp (Engtown Construction)

[The president is the representative of the ] Company’s legal person director

FRG Charity Foundation (FRG Foundation)

[Its president is the same as president of the ] Company

HSU, ZHEN-TSAI

President of Company

KHL Architects & Planners (KHL)

[The representative is the representative of the ] Company’s legal person director 

222
  • (2) Major transaction with related parties

A. Operating revenue -Rental

perating revenue -Rental
Other
Guarantee deposits received		 2023
$ 1,127
Dec. 31, 2023
$ 274		 2022
$ 1,125
Dec. 31, 2022
$ 274

The related enterprise leases 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, Eurogear, Chen Hsi Investment and Hung He Development 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.

ayment.
lease liabilities Dec. 31, 2023 Dec. 31, 2022
Formosan Construction $ 5,257 $ 6,275
Eurogear 5,042 6,017
Chen Hsi Investment 10,705 12,777
Hung He Development 5,476 6,536
Total $ 26,480 $ 31,605
Dec. 31, 2023 Dec. 31, 2022
Refundable deposits $ 1,167 $ 1,167
2023 2022
Interest expense $ 315 $ 383
Depreciation expense $ 5,155 $ 5,483
abor remuneration and expenses
2023 2022
KHL $ 2,576 $ 6,010
  • C. Labor remuneration and expenses

D. As of December 31, 2023 and 2022, the farmland of investment property held in the 

223

name of the major management of FRG amount to NT$109,204 thousand. Its ownership certificate is under custody of FRG, and its pledge is set to FRG for security purpose.

E.Sale of real estate

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. Investment property,

nvestment property,
Engtown Construction Corp 2023
$ 204,286		 2022
$ －

The Company commissioned Engtown in 2022 to work on the new construction project in Longtan Intelligent Park - Area A on the self-owned land with a total contract amount of NT$ 770,000 thousand (tax inclusive). The project is expected to be completed within 16 months from the official written notification of the start of construction after the construction permit is obtained. The construction license was obtained on May 15, 2023, and construction started in June. As of December 31, 2023, the first to third phases of the project payments had been paid in the amount of NT$ 214,500 thousand (tax inclusive).

  • G. Donation expense
Donation expense
FRG Charity Foundation 2023
$ －		 2022
$ 7,500

(3) Reward to major management

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

hall be as follows:
Short-term benefits
Retirement benefit
Total		 2023
$ 69,486
707
$ 70,193		 2022
$ 63,192
547
$ 63,739

31. 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:

Dec. 31, 2023 Dec. 31, 2022 

224
Other financial assets
Land under construction
Property, plant and equipment
Investment property - house and land
Total		 $ 20,000
1,440,362
281,673
186,297
$ 1,928,332		 $ 20,000
1,440,362
287,640
182,383
$ 1,930,385

  1. Material contingent liabilities and unrecognized contract promise

  2. (1) The total price of the construction contract signed by the Company on December 15, 2022 for the new construction project was NT$770,000 thousand, In December 31, 2023 for which the payment had been paid NT$ 214,500 thousand (tax inclusive).

  3. (2) The notes payable used as security issued by the Company on December 31, 2023 and December 31, 2022 due to the guarantee of the credit extension contract were NT$3,175,000 thousand and NT$3,205,000 thousand, respectively.

  4. (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, 2023) 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. The Company appealed and expressed dissatisfaction in July 2022 which is in the hearing by the Supreme Administrative Court.

  5. Important disaster loss: None

  6. Important subsequent events: None

  7. Others: None 

225

36. Additional disclosed items

  • (1) Information regarding the material transaction items

  • A. The status of lending capital to others:None

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 $ 1,860,341 $ 146,992
(USD 4,717)		 $ 145,082
(USD 4,717)		 $ 32,756
(USD 1,065)		 － 1.17％ $ 3,720,682 － － －
0 The
Company		 950
Property
LLC and
950 Retail
Property
LLC		 Note 2 1,860,341 678,681
(USD21,449)		 659,780
(USD 21,449)		 341,980
(USD 11,118)
－		 5.32% 3,720,682 － － －

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$1 ＝ NT$ 30.76 

226

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
KGI Taiwan Premium Selection
High Dividend 30 ETF
United Taiwan High Dividend
Recovery 30 ETF
Capital tip customized taiwan select
high dividend exchange traded
fund
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.
Jsl construction & development co.,
ltd.		 Financial assets at fair value
through profit or loss - current
〃
〃
〃
〃
Financial assets at fair value
through other comprehensive
income - current
〃
〃
〃
〃
〃
〃
〃
〃
〃		 997,009
202
230,000
230,000
400,000
1,363,911
1,658,000
3,847,900
2,502,170
4,101,761
1,640,000
295,000
233,000
1,005,000
147,048		 $ 8,824
8,980
5,170
5,081
8,904
47,532
131,314
255,885
155,885
127,975
44,280
174,935
114,054
225,623
12,690		 －
－
－
－
－
0.02
0.03
0.05
0.04
0.08
0.01
－
0.03
0.03
0.04		 $ 8,824
8,980
5,170
5,081
8,904
47,532
131,314
255,885
155,885
127,975
44,280
174,935
114,054
225,623
12,690		 Note
Note
Note		 
227
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 Huaku Development Co., Ltd.
Evergreen Marine Corporation
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
Nichidenbo corporation
WPG Holdings
Continental Holdings Corp.
Far Eas Tone Telecommunications
Co., Ltd.
Pegatron Corporation
Brightek Optoelectronic Co., Ltd.
Leo systems, inc.
Farglory Land Development Co.,
Ltd.
Chong Hong Construction Co., Ltd.
Grand Fortune Securities Co., Ltd.
Formosa Petrochemical Corp.
Nan ya pcb co., ltd.
Shine More Technology Materials
Corporation., Ltd.		 Financial assets at fair value
through other comprehensive
income - current
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃		 3,552,000
443,000
150,134
1,400,000
666,000
37,097,366
5,656,447
346,000
1,916,600
4,669,000
2,210,000
1,347,000
267,241
279,000
4,044,000
2,593,000
1,105,830
1,678,000
100,000
579,125		 $ 342,058
63,571
3,873
12,390
19,081
730,818
139,996
20,103
156,395
131,666
176,358
117,592
10,970
9,598
229,699
203,032
14,265
135,415
25,150
3,620		 1.28
0.02
－
0.01
0.22
0.30
0.40
0.16
0.11
0.57
0.07
0.05
0.39
0.31
0.52
0.89
0.28
0.02
0.02
1.22		 $ 342,058
63,571
3,873
12,390
19,081
730,818
139,996
20,103
156,395
131,666
176,358
117,592
10,970
9,598
229,699
203,032
14,265
135,415
25,150
3,620
Note
Note
Note
Note		 
228
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 TOYOTA MOTOR CORP
NEXT FUNDS TOPIX Exchange
Traded Fun
Mitsubishi Heavy Ind
Citigroup Inc.
Ford Motor Company
Formosan Chemical Industrial Co.
Formosan Glass & Chemical
Industrial Co.
Tai Yang Co., Ltd.
Eslite Corporation
Yu Chi Venture Investment Co.,
Ltd.
Tashee Golf & Country Club -
preferred stock
Mercuries F&B Co., Ltd.
Corporate Bond
Lockheed Martin Corporation
Apple Inc.
Dialine International Airport
Limited		 Financial assets at fair value
through other comprehensive
income - current
〃
〃
〃
〃
Financial assets at fair value
through other comprehensive
income – non-current
〃
〃
〃
〃
〃
〃
Financial assets at fair value
through other comprehensive
income - current
〃
〃		 35,000
30,000
5,000
1,000
1,000
22,516
2,510
111,395
895,300
750,000
1
555,000
500,000
1,000,000
480,000		 $19,530
15,990
8,876
1,576
374
12,506
2,259
8,264
6,054
17,526
17,600
53,147
14,940
30,055
13,357		 －
－
－
－
－
2.25
5.02
1.24
1.65
10.00
－
0.48
－
－
－		 $19,530
15,990
8,876
1,576
374
12,506
2,259
8,264
6,054
17,526
17,600
53,147
14,940
30,055
13,357		 
229
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
Ban Chien
Development
Co., Ltd.
 Stock
Yuanta Taiwan Dividend Plus ETF
SinoPac Financial Holdings
Company Limited
Chong Hong Construction Co., Ltd.
Taiwan Cement Corporation
Farglory Land Development Co.,
Ltd.
Yuanta Financial Holding Co., Ltd.
Qisda Corporation
Radiant opto-electronics corp.		 Financial assets at fair value
through profit or loss - current
Financial assets at fair value
through other comprehensive
income - current
〃
〃
〃
〃
〃
〃		 740,000
43,424,515
904,000
791,954
380,000
217,453
210,000
20,000		 $27,676
855,463
70,782
27,600
21,584
6,002
10,080
2,660		 －
0.35
0.31
0.01
0.05
－
－
－		 $27,676
855,463
70,782
27,600
21,584
6,002
10,080
2,660
FRG US
Corp.		 Stock
TRIMOSA HOLDINGS LLC		 Financial assets at fair value
through other comprehensive
income - non-current		 － 704,611 14.67 704,611

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

230

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:

Company
Name		 Type and
Name of
Marketable
Securities
(Note 1)		 Financial
Statement
Account		 Counterparty
Relationship
(Note 2)		 Relation
ship
(Note 2)		 Beginning Balance Beginning Balance Acquisition (Note 3) Acquisition (Note 3) Disposal (Note 3) Ending Balance (Note 5) Ending Balance (Note 5)

Number of
Shares
Amount		 Number of
Shares		 Amount Number of
Shares		 Amount Carrying
Amount		 Gain (Loss)
on Disposal		 Number of
Shares		 Amount
FRG US
Corp.		 TRIMOSA
HOLDING
S LLC		 Financial assets
at fair value
through other
comprehensive
income - non-
current		 － － － $ 471,241 － $ 385,968 － － － － － $ 857,209

Note1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note2: Fill in the columns two clolumns if securities are accounted for under the equity method; otherwise leaves the columns blank.

Note3 ： The same securities in which the accumulated amount of buying or selling reached NT$300 million or 20% of paid-in capital or more

Note4: The paid-in capital refers to the paid-in capital of the parent company. If the par value per share is not $10 or $0, it shall be calculated by the 10% of the owner’s equity of the parent company’s balance sheets.

Note5: It is the original purchase cost that excluded the valuation adjustment of financial assets measured at fair value.

  • E. The amount acquiring real estate which reached NT$300 million or was over 20% of the paid-up capital: 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

  • J. Business relationships and important transactions between parent and subsidiary companies: None 
231

(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
938,955
34
75,979
59,850
483		 $ 560,000
560,933
34
75,979
59,850
483		 56,000,000
15,401,000
9,999
7,597,927
3,990,000
48,260		 100.00
100.00
99.99
26.20
39.90
48.26		 $ 1,100,100
768,558
－
77,897
40,433
9,312		 $ 25,324
(1,832)
－
37,396
21,785
1,868		 $ 25,324
(1,832)
－
10,062
8,692
901		 Subsidiary
Subsidiary
Subsidiary

(3) Information of the investment in China: None 

232

(4) Information on major shareholders

Shareholding
Name of major
shareholder		 Number of shares Percentage of
ownership
Ruifu Construction Co.,
Ltd.		 30,663,678 10.10％
Chen Hsi Investment CO,
LTD		 15,811,342 5.00％
Ascend Gear International
Inc.		 15,614,553 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.

  • 253 -

37. Department information

  • (1) Operating department

  • A. The operation departments required to be reported include Rubber, Construction and Warehousing Departments; Rubber Department engages in manufacture & sale of such products as rubber sheets, plastic sheets, plastic foam sheets and PVC resin sheets, etc.; Construction Department engages in constructing residential & commercial buildings for lease & sale; Warehousing Department engages in management of logistics storage.

  • B. The department profit and loss refer to the profit earned by each department, excluding director/supervisor remuneration and investment profit & loss recognized by equity method. These measurement amounts shall be provided to the major operation decision makers, to be sued to distribute resources to departments and evaluate their performance. Besides, there is no major discrepancy between the accounting policies used by Operation Department and the summary description of important accounting policies described in Note 4.

(2) Departments income and operating result

2023

Revenue from external
customers
Revenue from inter-
departments
Profit (loss) of
departments
Unclassified profit (loss)
Non-operating income
and expenses
Profit before income tax
Income tax
(expense)profit		 Rubber
 Construction Warehousing
Other		 Adjustment
and write-off		 Total
$ 882,666 $ 192,350 $ 260,346 $ 24,356 $ － $ 1,359,718
$ － $ － $ 60 $ － $ (60) $ －
$ 123,034 $ 50,597 $ 130,790 $ 59,343 $ － $ 363,764

(164,158)
392,594
$ 592,200
$ (73,323)
  • 254 -

2022

Revenue from external
customers
Revenue from inter-
departments
Profit (loss) of
departments
Unclassified profit (loss)
Non-operating income
and expenses
Profit before income tax
Income tax
(expense)profit		 Rubber
 Construction Warehousing
Other		 Adjustment
and write-off		 Total
$ 989,116 $ 668,816 $ 264,496 $ 14,815 $ － $ 1,937,243
$ － $ － $ 60 $ － $ (60) $ －
$ 169,728 $ 203,870 $ 163,460 $ 13,204 $ － $ 550,262

(179,392)
459,427
$ 830,297
$ (118,613)

(3) Regional information:

ional information:
Region Revenue from external
customers		 Non-current assets
2023 2022 2023 2022
Asia

Europe
United States- Canada
Other region
Total
 $ 1,114,087
145,247

97,140
3,244		 $ 1,710,739
146,252
71,581
8,671		 $ 3,709,792
－
62,920
－		 $ 3,593,889
－
－
－
$ 1,359,718 $ 1,937,243 $ 3,772,712 $ 3,593,889

The above non-current assets shall not include financial products and deferred income tax

assets

(4) Products information

ducts information
Products
Rubber
Real property
Other
Total		 2023
$ 880,166
192,350
287,202
$ 1,359,718		 2022
$ 986,339
668,816
282,088
$ 1,937,243

  • 255 -

  • (5) Important customer information: The customers whose net incomes accounting for more than

10% of the income in the Rubber Department of 2023 and 2022 are as follows:

of the income in the Rubber Department of 2023 and 2022 are as follows: of the income in the Rubber Department of 2023 and 2022 are as follows: of the income in the Rubber Department of 2023 and 2022 are as follows: of the income in the Rubber Department of 2023 and 2022 are as follows: of the income in the Rubber Department of 2023 and 2022 are as follows: of the income in the Rubber Department of 2023 and 2022 are as follows:
Rubber Enterprise Dept.
2023 2022
Customer Amount Proportion to
operating
income		 Customer Amount Proportion to
operating
income
Customer A $ 139,775 16％ Customer A $ 203,154 21％
Customer B 105,175 12％ Customer B 92,496 9％

  • 256 -

  • V. A parent company only financial statement for the most recent fiscal year, certified by a CPA

Formosan Rubber Group Inc.

Parent Company Only Financial Statements For the Years Ended December 31,2023 and 2022

With Independent Auditor’s Report

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. 

257

NO.00111120EA

INDEPENDENT AUDITORS’ REPORT

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, 2023 and 2022, 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 31,2023 and 2022, 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 31,2023. 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. 

258

Key audit matters for Formosan Rubber Group Inc.’ parent company only financial statements for the year ended December 31, 2023 are stated as follows:

Valuation of Net Realizable Value of Real Estate For Sale

Summary of key issues for auditing

As of December 31, 2023, the value of real estate for sale on the parent company only balance sheet was NT$2,771,492 thousand primarily reflective of the completed properties and land held for sale. These items accounted for approximately 20% of the parent company only total assets. Please refer to Notes 4, 5 and 10 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:

  1. Acquisition of the data concerning the company’s assessment of lower of the costs and net realizable value;

  2. Random inspection of the ownership documents for the properties held for sale, in order to validate the integrity of the assessment;

  3. 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, 2023, the value of property investments on the parent company only balance sheet was NT$2,784,666 thousand accounting for approximately 20% of the parent company only total assets. Please refer to Notes 4, 5 and 15 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. 

259

Audit procedures

The audit procedures were carried out by CPAs as follows:

  1. Acquisition of the data concerning the company’s assessment of asset impairments according to cash generating units;

  2. 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. 

260

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:

  1. 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.

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

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

  4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on 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.

  5. 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.

  6. 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. 

261

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, 2023 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 12, 2024

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.

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. 

262

Formosan Rubber Group Inc.

Parent Company Only Balance Sheet

Dec. 31, 2023 and 2022

Unit: In Thousands of NTD

Assets Note Dec. 31, 2023 Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2022
Accountingitem 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
Inventories-Construction Industry
Prepayments
Other financial assets-current
Other current assets-other
Total current assets
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
Prepayments for equipment
Refundable deposits
Other financial assets - non-current
Other non-current assets, others
Total non-current assets		 6

7

8
9
9
10
10
11

8

12
13
14
15
26
11		 $ 563,696
36,959
3,940,521
38,804
100,376
47,969
181,618
2,771,492
54,544
711,296
973		 4
－
28
－
1
－
1
20
－
5
－		 $ 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
－
－
－
8,448,248 59 8,679,643 63
117,356
1,996,300
747,716
30,989
2,784,666
55,178
18,017
57,050
20,000
633		 1
14
5
－
20
－
－
1
－
－		 67,342
1,486,595
793,239
32,569
2,598,861
32,869
－
40,376
20,000
1,304		 1
11
6
－
19
－
－
－
－
－
5,827,905 41 5,073,155 37
Total assets $ 14,276,153 100 $ 13,752,798 100

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

263

Formosan Rubber Group Inc.

Parent Company Only Balance Sheet (Continued)

Dec. 31, 2023 and 2022

Unit: In Thousands of NTD

Liabilities & equity Note Dec. 31, 2023 Dec. 31, 2023 Dec. 31, 2022 Dec. 31, 2022
Accountingitem Amount ％ Amount ％
Current liabilities
Short-term borrowings
Short-term notes and bills payable
Notes payable
Accounts payable
Other payables
Current tax liabilities
Lease liabilities-current
Other current liabilities
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Non-current lease liabilities
Net defined benefit liability
Guarantee deposits received
Total non-current liabilities
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		 16
17
14
26
14
18
19
19
19
19


 $ 1,140,000
189,881
81,599
34,185
127,396
32,407
7,648
18,073		 8
2
1
－
1
－
－
－		 $ 1,240,000
39,894
92,132
33,910
136,345
74,783
5,775
18,380		 9
－
1
－
1
1
－
－
1,631,189 12 1,641,219 12
170,946
24,065
2,131
45,550		 1
－
－
－		 170,413
27,473
2,575
48,533		 1
－
－
1
242,692 1 248,994 2
1,873,881 13 1,890,213 14
3,035,934
449,745
1,812,711
296,475
5,873,998
4,539
928,870		 21
3
13
2
41
－
7		 3,373,260
449,745
1,745,695
296,475
5,729,100
(1,037)
269,347		 25
3
13
2
41
－
2
12,402,272 87 11,862,585 86
Total liabilities & equity $ 14,276,153 100 $ 13,752,798 100

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

264

Formosan Rubber Group Inc.

Parent Company Only Comprehensive Income Statement

From Jan. 1 to Dec. 31, 2023 and 2022

Unit: In Thousands of NTD

Accounting item Note 2023 2022
Amount ％ Amount ％
Operating revenue
Operating costs
Gross profit
Operating expenses
Selling expenses
General and administrative expenses
Research and development expenses
Total operating expense
Operating profit
Non-operating income and expenses
Interest income
Other income
Other gains and losses
Finance costs
Expected credit impairment gain
Shares of profit (loss) of subsidiaries and
associates
Total non-operating income and expenses
Income before income tax
Income tax expense
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
Other comprehensive income (loss)
Total comprehensive income for the year
Earnings per share (NT dollars)
Basic earnings per share
Diluted earnings per share		 20
21
22
23
24

26

18




26





26
27		 $ 1,357,421
(935,647)		 100
(69)		 $ 1,936,730
(1,311,365)		 100
(68)
421,774 31 625,365 32
(47,577)
(151,524)
(9,270)		 (3)
(11)
(1)		 (65,313)
(165,812)
(9,634)		 (3)
(9)
－
(208,371) (15) (240,759) (12)
213,403 16 384,606 20
53,560
282,461
22,872
(26,326)
284
43,147		 4
21
2
(2)
－
3		 25,638
259,566
149,170
(8,789)
751
17,735		 1
13
8
－
－
1
375,998 28 444,071 23
589,401
(70,524)		 44
(6)		 828,677
(116,993)		 43
(6)
518,877 38 711,684 37
341
658,077
81,566
18,799
6,970
(1,793)
(1,033)		 －
48
6
1
1
－
－		 60
(276,052)
(38,552)
9,887
44,168
(1,192)
(8,637)		 －
(14)
(2)
－
2
－
－
762,927 56 (270,318) (14)
$ 1,281,804 94 $ 441,366 23
1.61
(NT dollars)
1.60
(NT dollars)		 2.09
(NT dollars)
2.09
(NT dollars)

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

265

Formosan Rubber Group Inc.

Parent Company Only Statement of Changes in Equity

From Jan. 1 to Dec. 31, 2023 and 2022

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. 1,2022 $ 3,423,260 $ 456,341 $ 1,666,856 $ 297,9551 $ 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
711,684
48		 －
－
－
－
35,334		 －
－
－
－
(305,700)		 －
－
－
－
－		 －
(410,791)
－
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
Legal reserve appropriated
Cash dividend
Net income in 2023
Other comprehensive income for
2023, net of income tax
Total comprehensive income (loss)
in 2023
Capital Reduction
Disposal of financial assets at fair
value through other comprehensive
income - equityinstruments		 －
－
－

－		 －
－
－
－		 67,016
－
－
－		 －
－
－
－		 (67,016)
(404,791)
518,877
273		 －
－
－
5,576		 －
－
－
757,078		 －
－
－
－		 －
(404,791)
518,877
762,927

－		 － － － 519,150 5,576 757,078 － 1,281,804
(337,326)


－		 －
－		 －
－		 －
－		 －
97,555		 －
－		 －
(97,555)		 － (337,326)
－
Balance of Dec. 31,2023 $ 3,035,934 $ 449,745 $ 1,812,711 $ 296,475 $ 5,873,998 $ 4,539 $ 928,870 $ － $ 12,402,272

Note: For the years ended December 31, 2023 and 2022, the Company recognized the employees compensation of $6,014 thousand and $8,456 thousand rsepectively, and the directors remuneration of $6,014 thousand and $8,456 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.) 

266

Formosan Rubber Group Inc.

Parent Company Only Statement of Cash Flows

From Jan. 1 to Dec. 31, 2023 and 2022

Unit: In Thousands of NTD
2023
2022
Amount
Amount
$ 589,401
$ 828,677
101,316
103,656
(284)
(751)
(20,635)
1,990
26,326
8,789
(53,560)
(25,638)
(277,070)
(253,963)
(43,147)
(17,735)
－
(57)
－
2,697
(98)
(1,454)
36,298
(45,306)
(19,999)
35,714
(9,374)
80,998
29,056
631
137,859
(865,709)
(2,212)
(6,203)
114
(279)
－
(50,221)
(10,533)
(1,152)
275
(1,415)
(8,949)
3,705
(307)
(844)
(103)
(139)
474,374
(204,009)		 Unit: In Thousands of NTD
2023
2022
Amount
Amount
$ 589,401
$ 828,677
101,316
103,656
(284)
(751)
(20,635)
1,990
26,326
8,789
(53,560)
(25,638)
(277,070)
(253,963)
(43,147)
(17,735)
－
(57)
－
2,697
(98)
(1,454)
36,298
(45,306)
(19,999)
35,714
(9,374)
80,998
29,056
631
137,859
(865,709)
(2,212)
(6,203)
114
(279)
－
(50,221)
(10,533)
(1,152)
275
(1,415)
(8,949)
3,705
(307)
(844)
(103)
(139)
474,374
(204,009)
Item 2023 2022
Amount Amount
Cash flows from operating activities:
Income before income tax
Adjustments for:
Depreciation expense
Expected credit impairment gain
Net loss (gain) on financial assets at fair value through
profit or loss
Interest expense
Interest income
Dividend income
Share of profit of subsidiaries and associates
gain on disposal of property, plant and equipment
Impairment loss on non-financial assets
Unrealized foreign exchange gain
Changes in operating assets and liabilities
Notes receivable
Accounts receivable
Other receivables
Inventories
Inventories-Construction Industry
Prepayments
Other current assets
Contract liabilities
Notes payable
Accounts payable
Other payables
Other current liabilities
Net defined benefit liability
Cash generated by (used in) operations		 $ 589,401
101,316
(284)
(20,635)
26,326
(53,560)
(277,070)
(43,147)
－
－
(98)
36,298
(19,999)
(9,374)
29,056
137,859
(2,212)
114
－
(10,533)
275
(8,949)
(307)
(103)		 $ 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)
474,374 (204,009)

(Continued) 

267

Formosan Rubber Group Inc.

Parent Company Only Statement of Cash Flows (Continued)

From Jan. 1 to Dec. 31, 2023 and 2022

Unit: In Thousands of NTD

Item 2023 2022
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
Acquisition of Investment property
(Increase) decrease in other financial assets
Decrease in other non-current assets
Increase prepayments for equipment
Net cash (used in) investing activities
Cash flows from financing activities:
(Decrease) increase in short-term borrowings
Increase (decrease) in short-term notes and bills payable
(Decrease) increase in guarantee deposits received
Payments of lease liabilities
Cash dividends paid
Capital Reduction
Payments to acquire treasury shares
Net cash (used in) generated by financing activities
Net Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end ofyear		 54,147
277,064
(26,326)
(116,910)		 23,186
253,963
(8,789)
(34,524)
662,349 29,827

(567,769)

749,077

4,000

(38,042)

38,681

(378,022)
(19,207)
－
(16,674)
(215,354)
(711,296)
671
(18,017)		 (410,103)
76,042
2,000
－
－
(99,584)
(27,218)
57
(750)
－
27,620
2,950
(1,171,952) (428,986)
(100,000)
149,987
(2,983)
(6,992)
(404,791)
(337,326)
－		 825,000
(119,990)
4,010
(5,391)
(410,791)
(105,816)
(702,105) 187,022
(1,211,708)
1,775,404		 (212,137)
1,987,541
$ 563,696 $ 1,775,404

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

268

Formosan Rubber Group Inc.

Notes to Parent Company Only Financial Statements

From Jan. 1 to Dec. 31, 2023 and 2022

(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 12, 2024.

3. Application of new standards, amendments and interpretations

  • (1) Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRS Accounting Standards”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

The initial application of the amendments to the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies.

  • (2) The IFRS Accounting Standards endorsed by the FSC for application starting from 2024
New Standards, Interpretations and Amendments Effective Date
Announced byIASB(Note 1)
Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback”
Amendments to IAS 1 “Classification of Liabilities as Current
orNon-current”
Amendments to IAS 1 “Non-current Liabilities with Covenants”
Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”
January 1, 2024 (Note 2)
January 1, 2024
January 1, 2024

January 1, 2024 (Note 3)

  • Note 1: Unless stated otherwise, the above IFRSs will be effective for annual reporting periods beginning on or after their respective effective dates.

  • Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16. 

269

Note 3: The amendments provide some transition relief regarding disclosure requirements. As of the date the parent company only financial statements were authorized for issue, the Company has assessed that the application of above standards and interpretations will not have a material impart on the Company’s financial position and financial performance.

  • (3) New IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the

FSC

FSC
New Standards, Interpretations and Amendments Effective Date
Announced by IASB(Note 1)
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture”
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 21 “Lack of Exchangeability”		 To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2025 (Note 2)

  • Note 1: Unless stated otherwise, the above IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

  • Note 2: An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments, the entity recognizes any effect as an adjustment to the opening balance of retained earnings. When the entity uses a presentation currency other than its functional currency, it shall, at the date of initial application, recognize any effect as an adjustment to the cumulative amount of translation differences in equity.

As of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of above standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

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. 

270

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-theperiod 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. 

271

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 shortterm, 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. 

272

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. 

273

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. 

274

(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.

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.

(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 

275

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 

276

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 

277

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 

278

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 

279

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 

280

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 

281

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 payoff 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. 

282

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. 

283
  • (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

7.
8.		 Dec. 31, 2023
Cash and petty cash
$ 445
Cash in bank
253,402
Cash equivalent
Commercial paper
309,849
Time deposits with maturity
－
Total
$ 563,696
Financial assets at fair value through profit or loss-current
Dec. 31, 2023
Current financial assets at fair value through
profit or loss, designated as upon initial
recognition
Fund
$ 36,959
Financial assets at fair value through other comprehensive income
Dec. 31, 2023
Equity instruments
Stock of domestic listed (OTC) companies
$ 3,835,823
Stock of foreign listed (OTC) companies
46,346
Stock not classified to listed (OTC) and
emerging companies
117,356
Debt instruments
Financial bond
58,352
Total
$ 4,057,877
Current
$ 3,940,521
Non-current
$ 117,356		 Dec. 31, 2022
$ 519
366,229
195,906
1,212,750
$ 1,775,404
Dec. 31, 2022
$ 16,963
Dec. 31, 2022

Equity instruments
Stock of domestic listed (OTC) companies
Stock of foreign listed (OTC) companies
Stock not classified to listed (OTC) and
emerging companies
Debt instruments
Financial bond
Total
Current
Non-current
$ 3,503,746
1,743
67,342
13,943
$ 3,586,774
$ 3,519,432
$ 67,342

(1) 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, 2023 and 2022, the book value of stock lending were NT$83,722 thousand and NT$0 thousand respectively. 

284
  • (2) Credit risk management for investments in debt instruments

Investments in debt instruments were classified as at FVTOCI ：

Gross carrying amount
Adjustment to fair value
Total		 Dec. 31, 2023
$ 60,885
(2,533)
$ 58,352		 Dec. 31, 2022
$ 14,712
(728)
$ 13,943

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, 2023

Credit Rating
Performing		 Expected credit loss rate
0.02％
Dec. 31, 2022		 Through other comprehensive
income measured at fair value of
book amount
$ 60,885
Credit Rating
Performing		 Expected credit loss rate
0.30％		 Through other comprehensive
income measured at fair value of
book amount
$ 14,712

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

follows:
Balance, beginning of year
New purchase in this period
Derecognise in this period
Changes in risk parameters
Balance, end of year		 For the Year Ended
December 31, 2023
$ 41
－
－
(29)
$ 12		 For the Year Ended
December 31, 2022
$ 209
－
－
(168)
$ 41 
285

9. Notes and accounts receivable,net

Notes and accounts receivable,net
Notes receivable
Allowance for doubtful accounts
Net amount
Accounts receivable
Allowance for doubtful accounts
Net amount		 Dec. 31, 2023
$ 39,196
(392)
$ 38,804
Dec. 31, 2023
$ 102,234
(1,858)
$ 100,376		 Dec. 31, 2022
$ 75,494
(755)
$ 74,739
Dec. 31, 2022
$ 84,123
(1,750)
$ 80,485

(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:

Non past due
Past due less than 90 days
Past due 91-180 days
Past due 181-365 days
More than 366 days past due
Non past due
Past due less than 90 days
Past due 91-180 days
Past due 181-365 days
More than 366 days past due		 Dec. 31, 2023
Carrying amount of
accounts receivable		 Expected credit
loss rate		 Loss allowance for
lifetime expected
credit losses
$ 139,213
2,151
－
－
66		 1～2％
2～5％
10～20％
50％
100％
Dec. 31, 2022		 $ 2,100
84
－
－
66
$ 141,430 $ 2,250
Carrying amount of
accounts receivable		 Expected credit
loss rate		 Loss allowance for
lifetime expected
credit losses
$ 154,785
2,091
787
－
66		 1～2％
2～5％
10～20％
50％
100％		 $ 2,352
87
－
－
66
$ 157,729 $ 2,505 
286

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

Balance, beginning of year
Expected credit impairment loss (gain)
Balance, end of year		 2023
$ 2,505
(255)
$ 2,250		 2022
$ 3,088
(583)
$ 2,505

10. Inventories

  • (1) Inventories - Manufacturing

  • A. The inventory details related to the rubber department is as follows:

Dec. 31, 2023
Raw materials
$ 67,456
Work-in-process
10,204
Finished goods
103,958
Total
$ 181,618
The cost of sales related to the rubber department is as follows:
2023
Cost of inventories sold
$ 675,866
Provision for (Reversal of) loss on
inventories
666
Unamortized fixed manufacturing costs
10,692
Total
$ 687,224		 Dec. 31, 2022
$ 78,208
19,426
113,040
$ 210,674
2022
$ 773,309
(15,088)
9,963
$ 768,184
  • B. The cost of sales related to the rubber department is as follows:

For the year ended December 31, 2022, the reversal of loss on inventories is due to the removal part of the inventory that has been listed for decline in price.

  • (2) Inventories-Construction Industry

A. The inventory details and contract liabilities related to the construction department is as

follows:

follows:
Real estate for sale and
prepayment for landpurchases
Dec. 31,2023 Dec. 31,2022
Bridge Upto Zenith Project at
Banqiao
$ 34,016 $ 34,016
Modesty Home Project at
Banqiao
14,923
14,923
Legend River Project at
Xindian
92,728
92,728
Treasure Garden Project in
Taichung City
236,653
236,653
55 TIMELESS Project in
Taipei City
262,289
350,489
La Bella Vita Project in
Taichung City
690,521
740,180
Ambassador Hotel Project in
Kaohsiung City-Real estate
under construction
1,440,362
1,440,362
$ 2,771,492 $ 2,909,351		 Real estate for sale and
prepayment for landpurchases		 Contract liabilities
Dec. 31,2023 Dec. 31,2022 Dec. 31,2023 Dec. 31,2022
Jan. 1,2022
$ 34,016

14,923

92,728

236,653

350,489

740,180

1,440,362		 $ －
－
－
－
－
－
－		 $ －
－
－
－
－
－
－		 $ －
－
－
－
34,552
15,669
－
$ 2,771,492 $ 2,909,351 $ － $ － $ 50,221 
287

  • a. The Ambassador Hotel Co., Ltd. and Continental Engineering Corporation signed the Ambassador Hotel Project in Kaohsiung City, a collaborative development agreement in November 2021. The reconstruction plan is set out by the Statute for Expediting Reconstruction of Urban Unsafe and Old Buildings and related regulations and requesting demolition and rebuild to the Authority which the new building would be developed, constructed, and sold tripartite mutually. The completion date of the reconstruction building is expected to be 1,600 work days after the approval date of the layout inspection.

  • b. The situation of pledge & guarantee in detail is shown in Note 31.

  • B. The cost of sales related to the construction department is as follows:

11. Cost of inventories sold
Other financial assets
Pledged time deposits
Time deposits with maturity over three
months
Total
Current
Non-current
Interest rate range %		 2023
$ 141,753
Dec. 31, 2023
$ 20,000
711,296
$ 731,296
$ 711,296
$ 20,000
0.715～5.6		 2022
$ 438,332
Dec. 31, 2022
$ 20,000
－
$ 20,000
$ －
$ 20,000
0.595～1.45

The pledged time deposit serves as guaranty for logistics business and it is shown in Note 31.

12. Investments accounted for using equity method

Investments in subsidiaries
Investments in associates
Total		 Dec. 31, 2023
$ 1,868,658
127,642
$ 1,996,300		 Dec. 31, 2022
$ 1,383,224
103,371
$ 1,486,595
  • (1) The investment of subsidiaries is listed as follows:
Name of Investee Book value The percentage of ownership
interest and voting right directly
held bythe Company		 The percentage of ownership
interest and voting right directly
held bythe Company
Dec. 31,2023 Dec. 31,2022 Dec. 31,2023 Dec. 31,2022
Unlisted (OTC) companies
Ban Chien Development Co.,
Ltd. (Taiwan)
FRG US Corp. (San
Francisco)
KINGSHALE
INDUSTRIAL LIMITED
(Hong Kong)
Total		 $ 1,100,100
768,558
－		 $ 901,586
481,638
－		 100.00
100.00
99.99		 100.00
100.00
99.99
$1,868,658 $1,383,224 
288

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, 2023 and 2022, FRG has remitted Investment funds are NT$ 938,955 thousand (USD 30,802 thousand) and NT$ 560,933 thousand (USD 18,252 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, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022
Unlisted (OTC) companies
Formosan Construction
Corp. (Taiwan)
Fenghe Development Co.,
Ltd. (Taiwan)
Rueifu Development Co.,
Ltd. (Taiwan)
Total		 $ 77,897
40,433
9,312		 $ 63,226
31,741
8,404		 26.20
39.90
48.26		 26.20
39.90
48.26
$ 127,642 $ 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)		 2023
$ 19,655
4,616
$ 24,271		 2022
$ 5,476
(4,680)
$ 796

(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. 

289

13. Property, plant and equipment

Item For the Year Ended December 31,2023 For the Year Ended December 31,2023 For the Year Ended December 31,2023
Balance,
Beginning of
Year		 Additions Disposals Reclassification Balance, End
of Year
$ 444,026
599,700
798,819
9,801
158,422
372		 $ －

3,159

3,165

930

11,953

－		 $ －
－
－
－
－
－		 $ (24,049)
－
－
－
－
(372)		 $ 419,977
602,859
801,984
10,731
170,375
－
2,011,140
19,207		 － (24,421) 2,005,926

14,642

18,031

130

7,506		 －
－
－
－		 －
－
－
－		 401,651
714,029
9,667
132,863

Building
Machinery equipment
Transportation equipment
Other equipment
Total
Net

Item
1,217,901 $ 40,309 $ － $ － 1,258,210
$ 793,239 $ 747,716
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
1,177,249 $ 42,842 $ (2,190) $ － 1,217,901
$ 808,863 $ 793,239

(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 31. 

290

14. Lease

(1) Right-of-use assets

Right-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 31,2023
Balance,
Beginning
of Year		 Additions Disposals Balance,
End of Year
$ 51,552
1,965		 $ －
5,457		 $ －

－		 $ 51,552
7,422
53,517 5,457 － 58,974
20,620
328		 5,155
1,882		 －
－		 25,775
2,210
20,948 $ 7,037 $ － 27,985
$ 32,569 For the Year Ended $ 30,989
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 $ 32,569

(2) Lease liabilities

Lease liabilities
Less 1 year

Over 1 years
Total

Range of discount rate
Less 1 year

Over 1 years
Total
 For the Year Ended December 31, 2023
Future minimum
lease payments		 Interest Present value of
minimum lease
payments
$ 7,980

24,555		 $ 332

490		 $ 7,648
24,065
$ 32,535
 $ 822
 $ 31,713
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 ％～ 2.07 ％ .

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

291

(3) Other lease information

Other lease information
Expenses relating to short-term leases
Total cash (outflow) for all lease
agreements		 2023
$ 57
$ (7,446)		 2022
$ －
$ (5,774)

(4) Please see note 30 for the status of transactions with related parties.

15. Investment property, net

Item For the Year Ended December 31, 2023 December 31, 2023
Balance,
Beginning
of Year		 Additions Disposals Impairment Reclassification
Balance,
End of Year
$ 1,098,862
2,653,319
－		 $ －
－
215,354		 $ －
－

－		 $ －
－
－		 $ 24,049
－
372		 $ 1,122,911
2,653,319

215,726
3,752,181 215,354 － － 24,421
3,991,956
－
－		 －
－		 －
－		 231,549
975,741

Land
Building
Total
Net

Fair value

Item
231,549
921,771
1,153,320 $ 53,970 $ － $ － $ － 1,207,290
$ 2,598,861 For the Year Ended $ 2,784,666
$ 4,242,553 $ 4,758,557
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 
292

(1) Details of land:

Details of land:
Oiashui Section, Longtan
Dahu Section, Miaoli
Shuiwei Section, Luzhu
Xinban Section, Banqiao
Zhuangjing Section,
Xindian
Total		 Dec. 31, 2023 Dec. 31, 2022
Ping Cost Ping Cost
16,691
230,253
14,696
140
53
 $ 66,692

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
$ 1,122,911 $ 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:

properties as of was as follows:
Year 1
Year 2
Year 3
Year 4
Year 5
Over 5 years
Total		 Dec. 31, 2023
$ 163,133
84,867
26,793
19,186
4,257
－
$ 298,236		 Dec. 31, 2022
$ 139,586
90,963
24,433
11,226
11,226
1,755
$ 279,189

  • (3) As of December 31, 2023 and December 31, 2022, the book value of the investment properties let out stood at NT$2,269,093 thousand and NT$2,299,014 thousand, respectively. The rent incomes during 2023 and 2022 totaled NT$218,055 thousand and NT$212,998 thousand, respectively.

  • (4) The Unfinished Construction is the company entrusting Engtown Construction Corp with Longtan Intelligent Park - Area A. Please see note 30 for the status of transactions with related parties. In 2023, The capitalized interest is NT$1,404 thousand. The range of interest rates was 1.297 ％～ 2.258 ％ .

  • (5) 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. 

293

  • (6) As of December 31, 2023 and 2022, the land at Dahu Section of Miaoli accumulated losses of reduction were both NT$231,549 thousand.

  • (7) Details of the farm land lots registered in others’ names due to legal restrictions:

Oiashui Section, Longtan
Dahu Section, Miaoli
Shuiwei Section, Luzhu
Total		 Dec. 31, 2023
$ 35,100
94,241
17,631
$ 146,972		 Dec. 31, 2022
$ 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 30 (2) D for the status of transactions with related parties.

  • (8) The situation of already providing to serve as loan guarantees from financial industries in detail is shown in Note 31.

16. Short-term borrowings

Short-term borrowings
Bank unsecured borrowings
Bank guaranteed loan
Total
Interest rate range %
Short-term notes and bills payable
Commercial paper payable
Less: Unamortized discount
Net amount
Interest rate range%		 Dec. 31, 2023
$ 1,140,000
－
$ 1,140,000
1.69～2.46
Dec. 31, 2023
$ 190,000
(119)
$ 189,881
1.4～1.75		 Dec. 31, 2022
$ 740,000
500,000
$ 1,240,000
1.48～2.19
Dec. 31, 2022
$ 40,000
(106)
$ 39,894
1.5～2.39

17. Short-term notes and bills payable

The situation of pledge & guarantee in detail is shown in Note 31.

18. 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 2023 and January 1 to December 31, 2022 are respectively NT$6,242 thousand and NT$6,112 thousand. 

294

(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:

2023
Service cost
$ 10
Net interest cost (income)
33
List to (profit) loss
$ 43
Re-measurements
Plan assets returns (excl. amount
that covered in net interest
income)
24
Actuarial profit (loss)-Change of the
demographic assumption
(3)
Actuarial profit (loss)-Change of the
financial assumption
(25)
Actuarial profit (loss)- Adjustment
with experience
345
Listed to other comprehensive income
$ 341		 2022
$ －
19
$ 19
218
(3)
358
(513)
$ 60

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

Operating costs
Operating expenses
Total		 2023
$ 26
17		 2022
$ 19
－
$ 43 $ 19 
295

The amount listed in the parent company only balance sheet for the obligation occurring from the defined benefit plan is as follows:

Dec. 31, 2023 Dec. 31, 2022
Defined benefit obligation present
value		 $
5,005		 $ 5,387
Plan asset fair value (2,874) (2,812)
Net defined benefit liability (assets) $
2,131		 $ 2,575
The changed of defined benefit obligation present value of this Company is as follows:
2023 2022
Beginning defined benefit obligation $
5,387		 $ 5,632
Interest expense 70 39
Benefits paid from plan assets － (442)
Re-measurements
Actuarial (profit) loss- Change of the
demographic assumption		 3 3
Actuarial (profit) loss- Change of the
financial assumption		 25 (358)
Actuarial (profit) loss- Adjustment
with experience		 (345) 513
Planned repayments (135) －
Ending defined benefit obligation $
5,005		 $ 5,387
The changed of plan asset fair value of this Company is as follows:
2023 2022
Beginning plan asset fair value $
2,812		 $ 2,858
Interest income 38 19
Re-measurements
Plan assets returns (excl. amount that
covered in net interest income)		 24 218
Contribution by employer 146 159
Benefits paid from plan assets － (442)
Redemption or curtailments payment (146) －
Ending plan asset fair value $
2,874		 $ 2,812

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. 

296

Classification of Fair Values for Planned Assets

Dec. 31, 2023 Dec. 31, 2022
Cash and cash equivalents $ 2,874 $ 2,812
The main assumptions of the Company’s actuarial valuation are as follows:
Dec. 31, 2023 Dec. 31, 2022
Discount rate 1.25％ 1.30％
Expected increase in future salaries 2.00％ 2.00％
  • B. The main assumptions of the Company’s actuarial valuation are as follows:

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 2023 and 2022.

Dec. 31, 2023

Discount rate
Expected increase in future salaries
Dec. 31, 2022

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％
Actuarial assumption
decreased 0.25％
$ (123) $ 127
$ 126
$ (122)
Effect on present value of
defined benefit obligation		 Actuarial assumption
decreased 0.25％
$ 127
$ (122)
Actuarial assumption
increased 0.25％

$ (141)
$ 144
 Actuarial assumption
decreased 0.25％
$ 146
$ (140)

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$124 thousand to the defined benefit plans within one year after December 31, 2023; the weighted average duration of defined benefits obligations is 10 years. 

297

19. Equity

(1) Share capital - common stock

hare capital - common stock
Authorized capital
Issued capital		 Dec. 31, 2023
$ 6,800,000
$ 3,035,934		 Dec. 31, 2022
$ 6,800,000
$ 3,373,260

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

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

C.In June 9, 2023, the Corporation’s Board of Stockholders resolved to reduce cash capital to $ 337,326 thousand with the elimination of 33,733 thousand shares and a 10% capital reduction for increasing equity and EPS, which was approved by the Authority on August 8, 2023.

  • (2) Capital surplus
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, 2023
$ 716
444,133
1,238
3,658
$ 449,745		 Dec. 31, 2022
$ 716
444,133
1,238
3,658
$ 449,745

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: 

298

  • 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
Special reserve
The number of appropriation arising
from the first adoption of IFRSs
Decrease in other equity items
Total		 Dec. 31, 2023
$ 296,475
－
$ 296,475		 Dec. 31, 2022
$ 296,475
－
$ 296,475 
299

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 2022 and 2021 were approved by the annual general meetings on June 9, 2023 and June 8, 2022, respectively, as proposed by the board.
board.
2022
2021
Amount
Dividend per
share(TWD)
Amount
Dividend per
share(TWD)
Legal reserve
$ 67,016
$ 78,839
Cash dividend
404,791
1.2
410,791
1.2
Total
$ 471,807
$ 489,630
The status for the board of the Company proposed to approve the 2023 earnings
allocation proposal on March 12, 2024 is as follows:
2023
Amount
Dividend per share
(TWD)
Legal reserve
$ 61,671
Cash dividend
394,671
$ 1.3
Total
$ 456,342		 2022 2021
Amount Dividend per
share(TWD)		 Amount Dividend per
share(TWD)
$ 67,016
404,791		 $ 78,839
410,791
$ 471,807 $ 489,630
Amount
$ 61,671
394,671
$ 456,342		 Dividend per share
(TWD)
$ 1.3
  • E. The status for the board of the Company proposed to approve the 2023 earnings allocation proposal on March 12, 2024 is as follows:

The Company’s earnings distribution for 2023 is still pending for the approval from the

annual general meeting in 2024.

  • (4) Other equity interest
Other equity interest
Balance on Jan. 1, 2023
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, 2023		 Exchange
differences on
translation of
foreign financial
statements		 Unrealized gains
(losses) from
financial assets
measured at fair
value through other
comprehensive
income		 Total
$ (1,037)
5,576

－

－
－		 $ 269,347
－
675,512
81,566
(97,555)		 $ 268,310
5,576
675,512
81,566
(97,555)
$ 4,539 $ 928,870 $ 933,409 
300
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
  • (5) Treasury stocks
Treasury stocks
Balance on Jan. 1, 2022
Acquired in 2022
Cancellation in 2022
Balance of Dec. 31, 2022		 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. 

301

20. Operating revenue

Operating revenue
Net sales revenue
Construction revenue
Rental and logistics revenue
Total		 2023
$ 880,166
192,350
284,905
$ 1,357,421		 2022
$ 986,339
668,816
281,575
$ 1,936,730

The amount of revenue recognized at the beginning from the contractual liabilities for the period from January 1 to December 31, 2023 and 2022 are respectively NT$0 thousand and NT$50,221 thousand.

21. Operating costs

21. Operating costs
22.
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
gain on disposal of property, plant and
equipment
Foreign currency exchange gain
Net loss (gain) on financial assets and
liabilities at fair value through profit or
loss
Miscellaneous expense
Impairment loss
Total
Finance costs
Interest of bank loan
Interest of lease liabilities
Capitalized interest
Total		 2023
$ 687,224
141,753
106,670
$ 935,647
2023
$ 277,070
5,391
$ 282,461
2023
$ －
3,567
20,635
(1,330)
－
$ 22,872
2023
$ 27,333
397
(1,404)
$ 26,326		 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
2022
$ 8,406
383
－
$ 8,789 
302

25. Extra information on the items with the expense characteristics

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

period are summarized below:
Salary expense
Labor and health
insurance expenses
Pension expense
Board compensation
Other Personnel
expense
Personnel expense
Depreciation expense		 2023 2022
Operating
costs
 Operating
expense		 Total Operating
costs
 Operating
expense		 Total
$ 92,977
7,559
4,131
－
1,737		 $ 71,480

4,945

2,154
12,463

827		 $ 164,457

12,504

6,285

12,463

2,564		 $ 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
$ 106,404 $ 91,869 $ 198,273 $ 109,644 $ 84,861 $ 194,505
$ 82,414 $ 18,902 $ 101,316 $ 87,780 $ 15,876 $ 103,656

As of December 31, 2023 and 2022, the Company had 200 and 195 employees, respectively. There were 6 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, 2023 and 2022 were NT$958 thousand, NT$848 thousand, NT$895 thousand, NT$782 thousand, respectively.

The Company’s average salary expense adjustment for the year ended December 31, 2023 increased by 8.44%.

The Company did not have a supervisor in 2023 and 2022; 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 

303

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 12, 2024 for the year 2023 and on March 15, 2023 for the year 2022 are as follows:

Compensations to employees
Remunerations to directors		 2023 2023 2022 2022
Amount Estimated
proportion		 Amount Estimated
proportion
$ 6,014
6,014
1％


1％		 $ 8,456
8,456
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 2022 and 2021, the recognized amount on the parent company only financial statements for 2022 and 2021. 

304

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.

26. Income tax

(1) Income tax recognized in profit & loss

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

2023
Income tax current period:
Occurred in current year
$ (58,844)
Additionally imposed
undistributed earnings
(12,378)
Adjustments for prior year
(127)
Paid for land value increment tax
(3,185)
(74,534)
Deferred income tax:
Occurred in current year
4,010
Income tax expense listed as profit & loss $ (70,524)		 2022
$ (68,183)
(14,938)
－
(9,925)
(93,046)
(23,947)
$ (116,993)

The accounting benefit and income tax expense of current period are adjusted 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)
Tax-exempt income
Additionally imposed
undistributed earnings
Adjustments for prior year
Paid for land value increment tax
Other
Income tax expense (gain) current period		 2023
$ 117,880
15,872
(70,332)
12,378
127
3,185
(4,576)
$ 74,534		 2022
$ 165,735
(14,573)
(87,518)
14,938
－
9,925
4,539
$ 68,183 
305
  • (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		 2023
$ (68)
18,867
(1,394)
361
$ 17,766		 2022
$ (12)
9,899
(8,834)
197
$ 1,250
  • (3) Deferred tax assets and liabilities

The analysis on deferred income tax assets and liabilities in balance sheet is as 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
Deferred income tax assets
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 exchange gain
Other
Land value increment tax
Deferred income tax (liabilities)		 2023 2023
Balance,
beginning of
year		 Recognized in
profit (loss)		 Recognized in
other
comprehensive
income		 Balance,
end of year
$ 515
11,388
259
146
4,857
15,704		 $ (21)
－
－

－
3,464
(298)		 $ (68)
19,130
(259)
361

－

－		 $ 426
30,518
－
507
8,321
15,406
$ 32,869
$ 3,145		 $ 19,164 $ 55,178
$ －
－
(499)
(3,557)
(166,357)		 $ －
－

499

366
－		 $ (263)
(1,135)

－

－
－		 $ (263)

(1,135)
－
(3,191)
(166,357)
$ (170,413)
$ 865
$ (1,398)		 $ (170,946) 
306
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 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)

(4) The Company’s income tax settlement application case approved by the competent authority is approved to 2021.

27. EPS

(1) Basic earnings per share

(1) 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)
(2) 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)		 2023
$ 518,877
323,271
$ 1.61
2023
$ 518,877
323,271
322
323,593
$ 1.60		 2022
$ 711,684
340,126
$ 2.09
2022
$ 711,684
340,126
485
340,611
$ 2.09 
307

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.

28. 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.

29. Financial instruments

(1) The types of financial 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
Lease liabilities
Total		 Dec. 31, 2023
$ 36,959
3,940,521
563,696
187,149
731,296
57,050
$ 5,516,671
$ 1,140,000
189,881
243,180
45,550
31,713
$ 1,650,324		 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
33,248
$ 1,624,062 
308

  • (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:

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 not classified to
listed (OTC) and
emerging companies
Financial bond
Total
 Dec. 31, 2023 Dec. 31, 2023
Level 1 Level 2 Level 3 Total
$ 36,959 $ － $ － $ 36,959
$ 3,882,169
－
58,352		 $ －
－

－		 $ －
117,356
－		 $ 3,882,169
117,356
58,352
$ 3,940,521 $ － $ 117,356 $ 4,057,877 
309
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 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

  • 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:

value, with breakdown as follows:
Item
Stock of Listed (OTC) companies

Fund and Financial bond
 Market quoted
Close price
The net assets
  • E. There was no change between Level 1 and Level 2 fair value measurements in 2023.

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.

  • F. 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		 2023
$ 67,342
52,208
(4,000)
1,806
－
$ 117,356		 2022
$ 109,212
－
(2,000)
(5,782)
(34,088)
$ 67,342 
310
  • G. 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, nonobservable 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: 

311
Financial assets
Monetary items
USD
HKD
JPY
RMB
Non-monetary items
USD
JPY
Financial liabilities
Monetary items
USD
HKD
JPY
RMB		 Dec. 31, 2023 Dec. 31, 2022
foreign
currency		 Exchange
rate		 Amount foreign
currency		 Exchange
rate		 Amount
55,883
1,179
132,520
7,120
357
206,108
50
2
55
－
30.66

3.904

0.2154

4.304

30.66

0.2154

30.76

3.964

0.2195
4.354		 1,713,376
4,603
28,545
30,653
10,931
44,396
1,531
8
12
1
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

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, 2023 and 2022 would separately increase/decrease by NT$17,756 thousand and NT$14,449 thousand, respectively.

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, 2023 and 2022 would separately increase/ decrease by NT$13,299 thousand and NT$12,799 thousand, respectively. 

312

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, 2023 and 2022 would separately increase/decrease by NT$39,995 thousand and NT$35,728 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, 2023 and December 31, 2022, the accounts receivable balances of the top 10 major customers account for the accounts receivable balances of the Company both as 54% 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. 

313

(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, 2023

Less than 1
year
Non-derivative
financial liabilities
Short-term
borrowing
$ 1,146,004
Short-term
notesand bills
payable
190,000
Trade payables
243,180
Lease liabilities
7,980
Guarantee deposits
received
25,646
Total
$ 1,612,810
Less than 1
year
Non-derivative
financial liabilities
Short-term
borrowing
$ 1,245,094
Short-term
notesand
bills
payable
40,000
Trade payables
262,387
Lease liabilities
6,108
Guarantee deposits
received
19,987
Total
$ 1,573,576		 Less than 1
year		 2～3 years 4～5 years Over 5 years
Total
$ 1,146,004
190,000
243,180
7,980

25,646		 $ －

－

－

13,676

16,822		 $ －
－
－
10,879
3,082		 $ －
－
－

－

－		 $ 1,146,004
190,000
243,180
32,535
45,550
$ 1,612,810 $ 30,498 $ 13,961 $ － $ 1,657,269
Dec. 31, 2022
Less than 1
year		 2～3 years 4～5 years Over 5 years
Total
$ －

－

－

11,882

26,592		 $ －
－
－
10,879
1,680		 $ －
－
－

5,440

274		 $ 1,245,094
40,000
262,387
34,309
48,533
$ 1,573,576 $ 38,474 $ 12,559 $ 5,714 $ 1,630,323 
314

B. Loan commitments

Dec. 31, 2023

Dec. 31, 2022

Loan commitments Dec. 31, 2023 Dec. 31, 2022
Unsecured bank overdraft limit
-Amount used
-Amount unused
Unsecured bank loan limit
-Amount used
-Amount unused
Secured bank loan limit
-Amount used
-Amount unused		 $ －
60,000
$ 60,000		 $ －
90,000
$ 90,000
Dec. 31, 2023
$ 1,300,000
2,710,000
$ 4,010,000
$ －
170,000
$ 170,000		 Dec. 31, 2022
$ 780,000
2,165,000
$ 2,945,000
$ 500,000
810,000
$ 1,310,000

30. Related party transaction

(1) Name and relation ship with related parties

Name of related parties

Relationship with the Company

Ban Chien Development Co., Ltd. (Ban Chien Development) FRG US Corp. (FRG US)

The Company’s subsidiaries

The Company’s subsidiaries

Formosan Construction Corp. (Formosan Construction)

  • [Investee company accounted for using the ] equity method

  • [The president is the representative of the ] Company’s legal person director

Eurogear Corporation (Eurogear)

Chen Hsi Investment CO, LTD (Chen His Investment)

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

Hung He Development CO, LTD (Hung He Development)

  • [The president is the spouse (1st degree of ] kinship) of the Company’s president

Fenghe International Co., Ltd. (Fenghe International)

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

Engtown Construction Corp (Engtown Construction)

  • [The president is the representative of the ] Company’s legal person director

FRG Charity Foundation (FRG Foundation)

  • [Its president is the same as president of the ] Company

President of Company

HSU, ZHEN-TSAI

  • [The representative is the representative of the ] Company’s legal person director

KHL Architects & Planners (KHL) 

315
  • (2) Major transaction with related parties

A. Operating revenue -Rental

Operating revenue -Rental
Other
Guarantee deposits received		 2023
$ 1,187
Dec. 31, 2023
$ 274		 2022
$ 1,185
Dec. 31, 2022
$ 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, Eurogear, Chen His Investment and Hung He Development 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.
C. lease liabilities Dec. 31, 2023
$ 5,257
5,042
10,705
5,476
$ 26,480
Dec. 31, 2023
$ 1,167
2023
$ 315
$ 5,155
2023
$ 2,576		 Dec. 31, 2022
Formosan Construction
Eurogear
Chen Hsi Investment
Hung He Development
Total
Refundable deposits
Interest expense
Depreciation expense
Labor remuneration and expenses
KHL		 $ 6,275
6,017
12,777
6,536
$ 31,605
Dec. 31, 2022
$ 1,167
2022
$ 383
$ 5,483
2022
$ 6,010 
316

  • D. As of December 31, 2023 and 2022, 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

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 with the total sales price of NT$ 6,350 thousand and the gain on disposal in the amount of NT$ 5,118 thousand.

  • F. Investment property,
nvestment property,
Engtown Construction 2023
$ 204,286		 2022
$ －

The Company commissioned Engtown in 2022 to work on the new construction project in Longtan Intelligent Park - Area A on the self-owned land with a total contract amount of NT$ 770,000 thousand (tax inclusive). The project is expected to be completed within 16 months from the official written notification of the start of construction after the construction permit is obtained. The construction license was obtained on May 15, 2023, and construction started in June. As of December 31, 2023, the first to third phases of the project payments had been paid in the amount of NT$ 214,500 thousand (tax inclusive).

  • G. Donation expense
Donation expense
FRG Foundation 2023
$ －		 2022
$ 7,500

  • H. The Company lent capital to FRG US 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:

hall be as follows:
Short-term benefits
Retirement benefit
Total		 2023
$ 62,805
707
$ 63,513		 2022
$ 56,724
547
$ 57,271 
317

31. 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:

Other financial assets
Land under construction
Property, plant and equipment
Investment property - house and land
Total		 Dec. 31, 2023
$ 20,000
1,440,362
281,673
186,297
$ 1,928,332		 Dec. 31, 2022
$ 20,000
1,440,362
287,640
182,383
$ 1,930,385

32. Material contingent liabilities and unrecognized contract promise

  • (1) The total price of the construction contract signed by the Company in 2022 for the new construction project was NT$770,000 thousand, In December 31, 2023 for which the payment had been paid NT$ 214,500 thousand (tax inclusive).

  • (2) The notes payable used as security issued by the Company on December 31, 2023 and December 31, 2022 due to the guarantee of the credit extension contract were NT$3,175,000 thousand andNT$3,205,000 thousand, respectively.

  • (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, 2023) 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. The Company appealed and expressed dissatisfaction in July 2022 which is in the hearing by the Supreme Administrative Court.

  • Important disaster loss: None

34. Important subsequent events: None

  1. Others: None 
318

36. Additional disclosed items

  • (1) Information regarding the material transaction items

A. The status of lending capital to others:None

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 $ 1,860,341 $ 146,992
(USD 4,717)		 $ 145,082
(USD 4,717)		 $ 32,756
(USD 1,065)		 － 1.17％ $ 3,720,682 － － －
0 The
Company		 950
Property
LLC
and
950
Retail
Property
LLC

Note 2		 1,860,341 678,681
(USD21,449)		 659,780
(USD 21,449)		 341,980
(USD 11,118)
－		 5.32% 3,720,682 － － －

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$1 ＝ NT$ 30.76 

319

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
KGI Taiwan Premium Selection
High Dividend 30 ETF
United Taiwan High Dividend
Recovery 30 ETF
Capital tip customized taiwan select
high dividend exchange traded
fund
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.
Jsl construction & development co.,
ltd.		 Financial assets at fair value
through profit or loss - current
〃
〃
〃
〃
Financial assets at fair value
through other comprehensive
income - current
〃
〃
〃
〃
〃
〃
〃
〃
〃		 997,009
202
230,000
230,000
400,000
1,363,911
1,658,000
3,847,900
2,502,170
4,101,761
1,640,000
295,000
233,000
1,005,000
147,048		 $ 8,824
8,980
5,170
5,081
8,904
47,532
131,314
255,885
155,885
127,975
44,280
174,935
114,054
225,623
12,690		 －
－
－
－
－
0.02
0.03
0.05
0.04
0.08
0.01
－
0.03
0.03
0.04		 $ 8,824
8,980
5,170
5,081
8,904
47,532
131,314
255,885
155,885
127,975
44,280
174,935
114,054
225,623
12,690		 Note
Note
Note		 
320
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 Huaku Development Co., Ltd.
Evergreen Marine Corporation
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
Nichidenbo corporation
WPG Holdings
Continental Holdings Corp.
Far Eas Tone Telecommunications
Co., Ltd.
Pegatron Corporation
Brightek Optoelectronic Co., Ltd.
Leo systems, inc.
Farglory Land Development Co.,
Ltd.
Chong Hong Construction Co., Ltd.
Grand Fortune Securities Co., Ltd.
Formosa Petrochemical Corp.
Nan ya pcb co., ltd.
Shine More Technology Materials
Corporation., Ltd.		 Financial assets at fair value
through other comprehensive
income - current
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃		 3,552,000
443,000
150,134
1,400,000
666,000
37,097,366
5,656,447
346,000
1,916,600
4,669,000
2,210,000
1,347,000
267,241
279,000
4,044,000
2,593,000
1,105,830
1,678,000
100,000
579,125		 $ 342,058
63,571
3,873
12,390
19,081
730,818
139,996
20,103
156,395
131,666
176,358
117,592
10,970
9,598
229,699
203,032
14,265
135,415
25,150
3,620		 1.28
0.02
－
0.01
0.22
0.30
0.40
0.16
0.11
0.57
0.07
0.05
0.39
0.31
0.52
0.89
0.28
0.02
0.02
1.22		 $ 342,058
63,571
3,873
12,390
19,081
730,818
139,996
20,103
156,395
131,666
176,358
117,592
10,970
9,598
229,699
203,032
14,265
135,415
25,150
3,620
Note
Note
Note
Note		 
321
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 TOYOTA MOTOR CORP
NEXT FUNDS TOPIX Exchange
Traded Fun
Mitsubishi Heavy Ind
Citigroup Inc.
Ford Motor Company
Formosan Chemical Industrial Co.
Formosan Glass & Chemical
Industrial Co.
Tai Yang Co., Ltd.
Eslite Corporation
Yu Chi Venture Investment Co.,
Ltd.
Tashee Golf & Country Club -
preferred stock
Mercuries F&B Co., Ltd.
Corporate Bond
Lockheed Martin Corporation
Apple Inc.
Dialine International Airport
Limited		 Financial assets at fair value
through other comprehensive
income - current
〃
〃
〃
〃
Financial assets at fair value
through other comprehensive
income – non-current
〃
〃
〃
〃
〃
〃
Financial assets at fair value
through other comprehensive
income - current
〃
〃		 35,000
30,000
5,000
1,000
1,000
22,516
2,510
111,395
895,300
750,000
1
555,000
500,000
1,000,000
480,000		 $19,530
15,990
8,876
1,576
374
12,506
2,259
8,264
6,054
17,526
17,600
53,147
14,940
30,055
13,357		 －
－
－
－
－
2.25
5.02
1.24
1.65
10.00
－
0.48
－
－
－		 $19,530
15,990
8,876
1,576
374
12,506
2,259
8,264
6,054
17,526
17,600
53,147
14,940
30,055
13,357		 
322
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
Ban Chien
Development
Co., Ltd.
 Stock
Yuanta Taiwan Dividend Plus ETF
SinoPac Financial Holdings
Company Limited
Chong Hong Construction Co., Ltd.
Taiwan Cement Corporation
Farglory Land Development Co.,
Ltd.
Yuanta Financial Holding Co., Ltd.
Qisda Corporation
Radiant opto-electronics corp.		 Financial assets at fair value
through profit or loss - current
Financial assets at fair value
through other comprehensive
income - current
〃
〃
〃
〃
〃
〃		 740,000
43,424,515
904,000
791,954
380,000
217,453
210,000
20,000		 $27,676
855,463
70,782
27,600
21,584
6,002
10,080
2,660		 －
0.35
0.31
0.01
0.05
－
－
－		 $27,676
855,463
70,782
27,600
21,584
6,002
10,080
2,660
FRG US
Corp.		 Stock
TRIMOSA HOLDINGS LLC		 Financial assets at fair value
through other comprehensive
income - non-current		 － 704,611 14.67 704,611

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

323

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:

Company
Name		 Type and
Name of
Marketable
Securities
(Note 1)		 Financial
Statement
Account		 Counterparty
Relationship
(Note 2)		 Relation
ship
(Note 2)		 Beginning Balance Beginning Balance Acquisition (Note 3) Acquisition (Note 3) Disposal (Note 3) Ending Balance (Note 5) Ending Balance (Note 5)

Number of
Shares
Amount		 Number of
Shares		 Amount Number of
Shares		 Amount Carrying
Amount		 Gain (Loss)
on Disposal		 Number of
Shares		 Amount
FRG
US
Corp.
TRIMOSA
HOLDING
S LLC		 Financial assets
at fair value
through
other
comprehensive
income - non-
current

－		 － － $ 471,241 － $ 385,968 － － － － － $ 857,209

Note1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note2: Fill in the columns two clolumns if securities are accounted for under the equity method; otherwise leaves the columns blank.

Note3 ： The same securities in which the accumulated amount of buying or selling reached NT$300 million or 20% of paid-in capital or more

Note4: The paid-in capital refers to the paid-in capital of the parent company. If the par value per share is not $10 or $0, it shall be calculated by the 10% of the owner’s equity of the parent company’s balance sheets.

Note5: It is the original purchase cost that excluded the valuation adjustment of financial assets measured at fair value.

E. The amount acquiring real estate which reached NT$300 million or was over 20% of the paid-up capital: 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

  • J. Business relationships and important transactions between parent and subsidiary companies: None 
324

(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


938,955
34




75,979



59,850




483		 $ 560,000
461,349
34
75,979
59,850
483		 56,000,000
15,401,000
9,999
7,597,927
3,990,000
48,260		 100.00
100.00
99.99
26.20
39.90
48.26		 $ 1,100,100
768,558
－
77,897
40,433
9,312		 $ 25,324
(1,832)
－
37,396
21,785
1,868		 $ 25,324
(1,832)
－
10,062
8,692
901		 Subsidiary
Subsidiary
Subsidiary

(3) Information of the investment in China: None 

325

(4) Information on major shareholders

Information on major shareholders
Shareholding
Name of major
shareholder		 Number of shares Percentage of
ownership
Ruifu Construction Co., Ltd. 30,663,678 10.10%
Chen Hsi Investment CO, LTD 15,811,342 5.20%
Ascend Gear International Inc. 15,614,553 5.14%

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. 

326

37. Department information

The Company has provided the operating segments disclosure in the consolidated financial

statements. 

327

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2023

STATEMENT 1
Amount
$ 200
245
65,194
188,208
309,849
$ 563,696
Item Description Amount
Cash on hand
Petty cash
Checking accounts
Savings accounts
Cash equivalent
Commercial paper		 Including RMB 20 thousand, exchange rate of $4.304
Including USD 24,995 thousand, exchange rate of
$30.66
RMB 5,590 thousand, exchange rate of $ 4.304
HKD 1,179 thousand, exchange rate of $ 3.904
JPY107,272 thousand, exchange rate of $ 0.2154
Expiration date 2023/12/04～2024/01/26
Interest rates at 1.2％～5.55％		 $ 200
245
65,194
188,208
309,849
Total $ 563,696 
328

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

DECEMBER 31, 2023

STATEMENT 2 STATEMENT 2 STATEMENT 2
Name of Securitie Description Units Par
value		 Total price Rates Acquisition Accumulated
impairment		 Fair value Remarks
Unit price Total price
Fund
Allianz Global Investors Preferred
Securities and Income Fund
KGI Taiwan Premium Selection
High Dividend 30 ETF
United Taiwan High Dividend
Recovery 30 ETF
Capital tip customized taiwan
select high dividend exchange
traded fund
NN(L) US Credit X Cap USD		 USD 997,009
230,000
230,000
400,000
202.45		 － $ －
－
－
－
－		 － $ 10,000
4,814
4,799
8,298
9,400		 $ －
－
－
－
－		 8.85
22.48
22.09
22.26
1,446.77		 $ 8,824
5,170
5,081
8,904
8,980		 Note
Total $ － － $37,311 $ － $ 36,959

Note ： US$1 ＝ NT$ 30.76 

329

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

DECEMBER 31, 2023

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.
Jsl construction & development co., ltd.
Huaku Development Co., Ltd.
Evergreen Marine Corporation
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
Nichidenbo corporation
WPG Holdings
Continental Holdings Corp. (CHC)		 1,363,911
1,658,000
3,847,900
2,502,170
4,101,761
1,640,000
295,000
233,000
1,005,000
147,048
3,552,000
443,000
150,134
1,400,000
666,000
37,097,366
5,656,447
346,000
1,916,600
4,669,000		 10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10		 $ 13,639
16,580
38,479
25,022
41,018
16,400
2,950
2,330
10,050
1,470
35,520
4,430
1,501
14,000
6,660
370,974
56,564
3,460
19,166
46,690		 －
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－		 $ 63,779
145,338
283,471
247,871
135,008
51,292
150,567
80,838
83,164
8,120
290,223
69,020
1,627
11,480
29,970
300,573
156,825
20,182
93,393
90,908		 $ －
－
－

－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－
－		 34.85
79.20
66.50
62.30
31.20
27.00
593.00
489.50
224.50
86.30
96.30
143.50
25.80
8.85
28.65
19.70
24.75
58.10
81.60
28.20		 $ 47,532
131,314
255,885
155,885
127,975
44,280
174,935
114,054
225,623
12,690
342,058
63,571
3,873
12,390
19,081
730,818
139,996
20,103
156,395
131,666


Note

Note













Note


 
330
Name of Securitie Description Share / unit numbers Par
value		 Total price Rates Acquisition Accumulated
impairment		 Fair value Fair value Remarks
Unit price Total price
Far Eas Tone Telecommunications Co., Ltd.
Pegatron Corporation
Brightek Optoelectronic Co., Ltd.
Leo systems, inc.
Farglory Land Development Co., Ltd.
Chong Hong Construction Co., Ltd.
Grand Fortune Securities Co., Ltd.
Formosa Petrochemical Corp.
Nan ya pcb co., ltd.
Shine More Technology Materials
Corporation., Ltd.
TOYOTA MOTOR CORP
NEXT FUNDS TOPIX Exchange Traded
Fun
Mitsubishi Heavy Ind
Citigroup Inc.
Ford Motor Company
Corporate Bond
Lockheed Martin Corporation
Apple Inc.
Dialine International Airport Limited
Expires before
2026
Expires before
2026
Expires before
2026		 2,210,000
1,347,000
267,241
279,000
4,044,000
2,593,000
1,105,830
1,678,000
100,000
579,125
35,000
30,000
5,000
1,000
1,000

500,000

1,000,000

480,000		 10
10
10
10
10
10
10
10
10
10		 $ 22,100
13,470
2,672
2,790
40,440
25,930
11,058
16,780
1,000
5,791		 －
－
－
－
－
－
－
－
－
－		 $ 144,792
83,641
7,860
9,844
213,045
210,960
12,799
174,618
26,732
9,795
18,699
15,750
8,251
1,889
440
15,341
30,735
13,639		 －
－
－
－
－
－
－
－
－
－
－
－
－
－
－		 79.80
87.30
41.05
34.40
56.80
78.30
12.90
80.70
251.50
6.25
2,590.50
2,474.50
8,241.00
51.44
12.19
0.97453
0.98028
0.90759		 $ 176,358
117,592
10,970
9,598
229,699
203,032
14,265
135,415
25,150
3,620
19,530
15,990
8,876
1,576
374
14,940
30,055
13,357

Note








Note 1
Note 1
Note 1
Note 2
Note 2
Note 2
Note 2
Note 2
Total $ 3,312,479 $ － $ 3,940,521

Note: The situation of being provided to financial loan business trust in detail is shown as in Note 8. Note1 ： YEN$1 ＝ NT$ 0.2154 Note2 ： US$1 ＝ NT$ 30.76 

331

STATEMENT OF NOTES RECEIVABLE, NET

DECEMBER 31, 2023

STATEMENT 4

STATEMENT 4
Client Name Description Amount Remarks
Non related parties：
Client A
Client B
Others
Total
Less: Loss allowance		 Payment for goods
〃
〃
 $ 29,187
2,198
7,811		 The amount of individual
client included in others does
not exceed 5% of the account
balance.
39,196
(392)
Net $ 38,804 
332

STATEMENT OF ACCOUNTS RECEIVABLE, NET

DECEMBER 31, 2023

STATEMENT 5

STATEMENT 5
Client Name Description Amount Remarks
Non related parties：
Client A
Client B
Client C
Client D
Client E
Others
Total
Less: Loss allowance		 Real property
Payment for goods
〃
〃
〃
Payment for goods
and real property
 $ 15,218
13,849
10,596
7,491
6,115
48,965		 USD 346 thousand
USD 244 thousand
USD 1,421 thousand
The amount of individual
client included in others does
not exceed 5% of the account
balance.
$ 102,234
(1,858)
Net $ 100,376 
333

STATEMENT OF INVENTORIES

DECEMBER 31, 2023

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.
 $ 113,112

10,204

126,354		 $ 67,456
10,204
103,958		 Net realizable value
is the
estimatedexcept
those 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.
249,670
(68,052)		 $ 181,618
Net $ 181,618 
334

STATEMENT OF OTHER FINANCIAL ASSETS-CURRENT

DECEMBER 31, 2023

STATEMENT 7

STATEMENT 7
Item Description Amount Remarks
Pledged
time
deposits
CTBC Bank－Chengde
(Interest rates at5.52％～5.6％)
(Period 2023.11.08～2024.11.25)
First Commercial Bank
(Interest rates at5.6％)
(Period 2023.11.06～2024.2.6)
Land Bank－BanQiao
(Interest rates at5.1％)
(Period 2023.12.20～2024.6.20)
BANK SINOPAC－Chengzhong
(Interest rates at5.45％～5.5％)
(Period 2023.11.13～2024.03.29)
E.SUN Bank
(Interest rates at5.4％)
(Period 2023.11.30～2024.12.7)
Mega Bank－BanQiao
(Interest rates at5.25％)
(Period 2023.12.14～2024.11.14)
Taiwan Cooperative Bank－BanQiao
(Interest rates at5.3％～5.5%)
(Period 2023.12.1～2024.12.12)
Kaohsiung－Poai
(Interest rates at5.4％～5.6%)
(期間2023.11.30～2024.3.5)
Hua nan commercial bank
(Interest rates at5.1％)
(期間2023.12.19～2024.6.19)		 $ 129,906
30,660
40,165
131,914
95,383
66,686
122,640
61,320
32,622		 USD4,237 thousand
USD1,000 thousand
USD1,310 thousand
USD4,302 thousand
USD3,111 thousand
USD2,175 thousand
USD4,000 thousand
USD2,000 thousand
USD1,064 thousand
Total $ 711,296 
335

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

FOR THE YEAR ENDED DECEMBER 31, 2023

STATEMENT 8

Name of Securities As of January 1, 2023 As of January 1, 2023 Additions Additions Decrease Decrease As of December 31, 2023 As of December 31, 2023 Accumulated
impairment
Collateral		 Remarks
Shares Amount Shares Amount Shares Amount Shares Fair value
Stock
Formosan Chemical Industrial Co.
Formosan Glass & Chemical
Industrial Co.
Tai Yang Co., Ltd.
Eslite Corporation
Yu Chi Venture Investment Co.,
Ltd.
Tashee Golf & Country Club -
preferred stock
Mercuries F&B Co., Ltd.		 22,516
7,283
111,395
895,300
1,150,000
1
－		 $ 16,652
826
7,444
8,540
17,480
16,400
－		 －
2,259
－
－
－
－
555,000		 $ －
2,259
820
－
4,046
1,200
53,147		 －
7,032
(Note 1)
－
－
400,000
(Note 2)
－
－		 $ 4,146

826
－
2,486

4,000
－
－		 22,516
2,510
111,395
895,300
750,000
1
555,000		 $ 12,506
2,259
8,264
6,054
17,526
17,600
53,147		 N/A
N/A
N/A
N/A
N/A
N/A
N/A
Total $ 67,342 $ 61,472 $ 11,458 $ 117,356

Note 1: Capital reduction to make up for accumulated losses.

Note 2: Capital return due to disinvestment 

336

STATEMENT OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2023

STATEMENT 9

Name 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 Remarks
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
9,126,000
9,999
7,597,927
3,990,000
48,260		 $ 901,586
481,638
－
63,226
31,741
8,404		 －
6,275,000
－
－
－
－		 $ 198,514
286,920
－
14,671
8,692
908		 －
－
－
－
－
－		 $ －
－
－
－
－
－		 56,000,000
15,401,000
9,999
7,597,927
3,990,000
48,260		 100.00
100.00
99.99
26.20
39.90
48.26		 $ 1,100,100
768,558
－
77,897
40,433
9,312		 － $ － None
None
None
None
None
None
Total $ 1,486,595 $ 509,705 $ － $1,996,300

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. 

337

TATEMENT OF OTHER FINANCIAL ASSETS-CURRENT

DECEMBER 31, 2023

STATEMENT 10

STATEMENT 10
Item Description Amount Remarks
Pledged time
deposits		 Cooperative bank－Bansin
(Interest rates at 0.715％～1.59％)
(Period 2023.11.02～2026.11.02)		 $ 20,000 Guarantee of logistics
business
Total $ 20,000 
338

STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2023

STATEMENT 11

Type Explanation Balance,
End of Year		 Contract Period Range of
Interest Rates (%)		 Loan Commitments
Collateral		 Remarks
Unsecured
borrowings		 Bank Sinopac
Mega Bank
E.SUN BANK
Bank of Kaohsiung
Land Bank of
Taiwan
Taiwan Cooperative
Bank
Chang Hua
Commercial Bank
Hua Nan
Commercial Bank
CTBC Bank
First Commercial
Bank
Bank of Taiwan		 $ 110,000
50,000
200,000
10,000
60,000

200,000
200,000
20,000
200,000
20,000
70,000		 2023.11.22～2024.1.22
2023.12.14～2024.6.11
2023.11.30～2024.2.27
2023.11.24～2024.1.23
2023.11.10～2024.1.19
2023.11.17～2024.11.15
2023.12.14～2024.3.14
2023.12.15～2024.1.12
2023.10.24～2024.1.24
2023.12.8～2024.1.5
2023.11.16～2024.3.28		 1.85
1.897
1.73
1.98
1.92
1.6867
1.73
1.925
1.82
2
1.8		 $ 180,000
120,000
200,000
180,000
150,000
200,000
200,000
300,000
300,000
100,000
130,000
Total $ 1,140,000 
339

STATEMENT OF SHORT-TERM NOTES AND BILLS PAYABLE

DECEMBER 31, 2023

STATEMENT 12

Item Guarantee/Acceptin
g Institution		 Contract Period Range of
Interest Rates
(%)		 Amount Remarks
Issue Amount Discount Amount Carrying Amount
Commercial
paper		 China Bills
MegaBills
International Bills
Ta Ching Bills		 2023.12.15～2024.1.12
2023.12.8～2024.1.5
2023.12.29～2024.1.26
2023.12.14～2024.1.12		 1.4％
1.75％
1.66％
1.64％		 $ 50,000
50,000
40,000
50,000		 $ 29
10
52
28		 $ 49,971
49,990
39,948
49,972
Total $ 190,000 $ 119 $ 189,881 
340

STATEMENT OF NOTES PAYABLE

DECEMBER 31, 2023

STATEMENT 13

STATEMENT 1
Vendor Name Description Amount Remarks
Vendor A
Vendor B
Vendor C
Vendor D
Others		 Payment for the purchase
〃
〃
〃
Payment for the purchase,
expenses, etc.		 $ 9,447
8,136
4,326
4,260

55,430		 The amount of individual client
included in others does not
exceed 5% of the account
balance.
Total $ 81,599

STATEMENT OF ACCOUNTS PAYABLE

DECEMBER 31, 2023

STATEMENT 14

STATEMENT 1
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.		 $ 6,571
4,875
2,310
2,288

18,141		 The amount of individual client
included in others does not
exceed 5% of the account
balance.
Total $ 34,185 
- 341 -

STATEMENT OF LEASE LIABILITIES

DECEMBER 31, 2023

STATEMENT 15
Balance End of
Year
Remarks
$ 26,480
5,233
(5,775)
$ 24,065		 STATEMENT 15
Balance End of
Year
Remarks
$ 26,480
5,233
(5,775)
$ 24,065
Item Description Lease Term Discount
Rate		 Balance End of
Year		 Remarks
Buildings
Transportation
equipment		 Offices
Rental car		 2018.12～2028.12
2022.07～2026.07		 1.09％
1.40~2.07％		 $ 26,480
5,233
(5,775)
Less: Current portion
$ 24,065 
- 342 -

STATEMENT OF OPERATING REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2023

STATEMENT 16

STATEMENT
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		 3,917 thousand yards
1,904 thousand yards
2,723 thousand yards
190 metric tons		 $ 205,056
498,107
152,873
26,201
(27)
(2,044)


The amount does not
exceed 10% of the total
revenue.
880,166
192,350
284,905
Total $ 1,357,421 
- 343 -

STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2023

STATEMENT 17

STATEMENT 1
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
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
Cost of sales return
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		 $ 127,041
449,300
113,112
182
822		 $ 462,225
－
57,568
137,992
－
2,273
2,273
19,462
6,110

10,204
131,557
2,354
3,065
14
126,354
7,801
290
657,785
673,153
675,698
168
666
10,692
687,224
141,753
106,670
Total operatingcosts $ 935,647 
- 344 -

STATEMENT OF SELLING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2023

STATEMENT 18

STATEMENT
Item Description Amount Remarks
Wages and salaries
Freight
Selling expenses of
construction
Entertainment
expense
Travelling expense
Other expenses		 $ 14,749
8,075
9,221
2,606
3,913
9,013




The amount of each item
in others does not exceed
5% of the account
balance.
Total $ 47,577

STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2023

STATEMENT 19

STATEMENT
Item Description Amount Remarks
Wages and salaries
Taxes
Depreciations
Entertainment
expense
Other expenses		 $ 63,574
12,697
18,085
8,550
47,390



The amount of each item
in others does not exceed
5% of the account balance.
Total $ 151,524 
- 345 -

STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2023

STATEMENT 20
Remarks


The amount of each item
in others does not exceed
5% of the account balance.
Item Description Amount Remarks
Wages and salaries
Contracted research
expense
Other expenses		 $ 5,620
1,431
2,219

The amount of each item
in others does not exceed
5% of the account balance.
Total $ 9,270 
- 346 -
  • VI. If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation: None. 
- 347 -

Seven. A Review and Analysis of the Company's Financial Status and Financial Performance, and a Listing of Risks

  • I. Financial Status

  • II. Financial Performance

  • III. Cash Flow

  • IV. Financial Impact of Major Capital Expenditures During the Most Recent Fiscal Year

  • V. Investment policy for the most recent fiscal year, the main reasons for the profits or losses, improvement plans, and investment plans for the coming year

  • VI. Risk Analysis

VII. Other Important Matters 

- 348 -

Seven. A Review and Analysis of the Company's Financial Status and Financial Performance, and a Listing of Risks

I. Financial Status Analysis:

Unit: NT$ thousand

Year
Item		 2022 2023 Difference Difference
Amount %
Current Assets 9,589,846
9,557,927
(31,919)		 -0.33%
Property, Plant and
Equipment		 793,418
747,845
(45,573)
-5.74%
Other Assets 3,375,941
3,979,062
603,121
17.87%
Total Assets 13,759,205
14,284,834
525,629		 3.82%
Current Liabilities 1,647,518
1,639,735
(7,783)		 -0.47%
None Current Liabilities 249,102
242,827
(6,275)		 -2.52%
Total Liabilities 1,896,620
1,882,562
(14,058)		 -0.74%
Shares 3,373,260
3,035,934
(337,326)		 -10%
Capital reserve 449,745
449,745
0
0.00%
Retained Earnings 7,771,270
7,983,184
211,914		 2.73%
Other Equity 268,310
933,409
665,099		 247.88%
TreasuryStock 0
0
0
0.00%
Non-ControllingInterest 0
0
0
0.00%
Total Equity 11,862,585
12,402,272
539,687		 4.55%
(I) Analysis of Changes:
1. Other equity: mainly due to the unrealized benefits of financial assets measured at fair
value through other comprehensive income in the current period.
(II) Future response plans:
As the continual sales of finished houses from each project bring the cash inflow, the
received house payment will be effectively utilized, invested, repaid bank borrowings and
liabilities,and solidifythe financialposition to safeguard the shareholders’ equity.		 
- 349 -

II. Financial statements:

(I) Comparison Analysis of Operation Results:

Unit: NT$ thousand

Year
Item
2022		 2023 Increase
(decrease)
Amount		 Change %
Operating income 1,937,243
1,359,718
(577,525)
-29.81%
Operation Cost 1,312,034
939,107
(372,927)
-28.42%
Operating margin 625,209
420,611
(204,598)
-32.72%
Operating Expenses 254,339
221,005
(33,334)		 -13.11%
Operating Profit 370,870
199,606
(171,264)
-46.18%
Non-Operating Income and
Expenses		 459,427
392,594
(66,833)		 -14.55%
Pre-Tax Income 830,297
592,200
(238,097)
-28.68%
Income Tax Expense 118,613
73,323
(45,290)		 -38.18%
Net Income for Continuing
Operation		 711,684
518,877
(192,807)
-27.09%

Analysis of Increase and Decrease Changes:

Due to decreased construction project sales in the current period.

  • (II) The possible impact and response plans regarding the expected sales volume and their basis:

The Company focuses on the adjustment of production structure and manufacturing process, allowing the Company’s existing production system meet the needs of the market; the Company is also dedicated to the control of the production quality while improving the efficiency of operation and decreasing production impairment, so that the efficiency of reducing production cost can be achieved and the impact of the price rise of global raw materials can be eliminated. We also constantly invest in developments of new products and technologies, expand international marketing channel bases and diversify the market and products to increase the added value of the products. With the diversified management of construction business and warehouse business, we hope that the operation of the Company will continue to grow.

III. Cash Flow:

  • (I) Analysis of cash liquidity in recent years:

Unit: NT$ thousand

Opening
cash
balance○1		 Net cash flow from
operating activities
for the entireyear○2
Net cash flow
for the entire
year○3
Cash remaining○1
＋○2＋○3		 Remedies for cash deficits Remedies for cash deficits
Investment
plans		 Financial
plans
1,819,185 682,692 (1,853,745) 648,132 - -

  1. Analysis of changes in cash flows this year:

  2. (1) Operating activities: The increased net cash inflow from business activities in the current period is mainly due tothe later installment payments of Kaohsiung Ambassador Hotel development project.

  3. (2) Investment activities: mainly due to increased term deposits in the current period.

  4. (3) Funding activities: mainly due to the increased short-term borrowing in the 

- 350 -

previous period to pay for the final payment of Kaohsiung Ambassador Hotel development project.

  1. Expected remedies for cash deficits and liquidity analysis: Not applicable.

  2. (II) Analysis of liquidity for the past 2 years:

Year
Item
December 31,
2022		 December 31,
2023		 Increase
(decrease)Ratio
Cash Flow Ratio (1.30) 41.63 3,302.3%
Cash Flow AdequacyRatio 221.93 206.53 -6.94%
Cash Flow Reinvestment Ratio (3.24) 2.00 -38.27%
Analysis of Increase and Decrease Changes:
Cash flow ratioand cash flow reinvestment ratio: the net cash inflow from operating
activities in the current period increased, mainly due to late installment payments of
KaohsiungAmbassador Hotel in thepreviousperiod.

(III) Cash liquidity analysis for the coming year

Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand
Opening
cash
balance○1		 Expected net cash
flow fromoperating
activities for the
entireyear○2
Expected net
cash flow for
the entire
year○3		 Expected cash
balance○1＋○2＋○3		 Expected remedies for cash
deficits
Investment
plans		 Financial
plans
648,132 915,804 (1,354,397) 209,539 - -

  1. Analysis of changes in cash flow in 2023:

  2. (1) Operating activities: Mainly due to payments for construction premises and land that enter the account book, as do income from dividends and gain of financial asset at fair value through profit or loss.

  3. (2) Investment and financing activities: mainly due to the increase investment in financial assets, cash capital decrease.

  4. Expected remedies for cash deficits and liquidity analysis: Not applicable.

IV. Financial impact of major capital expenditures during the most recent fiscal year:

  • (I) Application and source funds of major capital expenditures:
Unit: NT$ thousand Unit: NT$ thousand
Project Actual or expected
source of funding		 Total funds
required		 Actual or intended use of
funds
2022 2023
Entered in the
cooperative contract
for the development of
project in Houjin,
Qianjin District,
Kaohsiung City		 Own capital and bank
loans		 1,438,766
1,294,889
0
Construction of
Longtan Smart Park		 Own capital and bank
loans		 770,000
0
214,500		 
- 351 -

  • (II) Expected benefits

  • (1) There are two buildings with 45–48 stories above ground and a total of 772 units, according to the current project planning. FRG purchased 30% of the land and is expected to receive 11.1% of the equity.

(2) On its own property, the Company has contracted with third parties to build the Longtan Smart Park. The current plan is to construct a building with one basement level and four upper levels, with two units per level for a total of six units to be applied for. It intends to apply to Taipei Customs for the establishment of a logistics center, with the primary target for merchant recruitment being companies in Longtan and Hsinchu Science Park, as well as foreign companies requiring bonded warehouses for importation.

V. Investment policy for the most recent fiscal year, the main reasons for the profits or losses, improvement plans, and investment plans for the coming year:

Description
Item		 Amount Policy Main reason for profit or
loss		 Improvement
plan		 Other future
investment
plans
FRG US
CORP.		 Investment
cost of
NT$938,955
thousand		 Real estate
investment,
development
and rental		 Loss of NT$1,832 thousand
is recognized for the period.		 None None
Ban Chien
Development
Co., Ltd.		 Investment
cost of
NT$560,000
thousand		 Investment in
financial
products		 The gain of NT$25,324
thousand was recognized
for the period.		 None None

VI. Risk Analysis

  • (II) The impact of interest rate, exchange rate changes, and inflation on the Company's profit and loss and future corresponding measures:

  • Interest rate

    • (a) FRG is in the "mature period" of the industry ’ s life cycle characterized by fierce competition; land and property development projects. in accordance with the principles of stable and sustainable operations, the low debt ratio is maintained. Financial expenses in 2023 totaled NT$26,326 thousand, an increase from 2021.

    • (b) In the future, we will continue to upload the aim of business management of staying stable and sustainable management as well as maintaining a low debt ratio. However, in terms of interest trends, we will constantly keep a close eye and collect market information for reference.

  • Exchange rate:

    • (a) Exports (most of them in USD and RMB) by FRG account for 66% of total 
- 352 -

sales in 2023; imports of materials are paid in USD.

  • (b) The exchange gains and losses of FRG in the past two years: the exchange loss in 2022: NT$154,578 thousand, and gain of NT$3,566 thousand in 2023.

  • (c) In the future, we will continue to observe closely on the trends of exchange rates and collect domestic and overseas market information. Use timely foreign exchange and other hedging tools to focus on exchange rate in order to reduce the impact of exchange rate changes on the Company.

  • Inflation

The unstable financial market has resulted in global price fluctuations in raw materials. The Company’s main raw materials for rubber and plastic manufacturing (including PVC, DOP, natural rubber, raw fabrics, etc.) have also been affected by the price fluctuation and exchange rate. As a means to handle the manufacturing costs considering the market competitiveness, the selling price of the Company’s products will be adjusted accordingly in order to ease the impact of cost fluctuation for raw materials. In the future, we will persist on observing the price changes of raw materials and make adjustments to operation strategy any time in a bid to cope with the pressure of rising costs, ensuring a reasonable profit.

  • (III) Main reasons and future corresponding measures of policies for engaging in highly risky and highly leveraged investments, lending funds to others, endorsements and guarantees and derivatives transactions:

  • (1) Engagement in highly risky and highly leveraged investments The Company focuses on relevant investments on rubber and plastic manufacturing, construction and warehouses; therefore, is not involved in highly risky and highly leveraged investments.

  • (2) “Lending funds to others”, “endorsements/guarantees” and “derivatives transaction”:

  • (a) As required by relevant measures, the Company has established the “Operational Procedures for Lending Funds to Others” and “Handling Procedures of Enforcements/Guarantees” and a dedicated unit is in charge of the risk and control assessment. At the same time, the Company’s audit office conducts an assessment on a monthly basis and compiles a report in accordance with the “Regulations Governing Establishment of Internal Control Systems by Public Companies” issued by the Securities and Future Bureau.

  • (b) Procedures regarding derivatives transaction have been stipulated in the Company’s “Regulations Governing the Acquisition and Disposal of Assets”, and the Company’s audit office conducts an assessment on a monthly basis and compiles a report. 

- 353 -

  • (c) The Company’s “lending funds to others” in 2023 totaled NT$0; there were no derivatives transactions; the balance of “endorsements and guarantees” totaled NT$804,862 thousand.

  • (IV) The future R&D plans and estimated R&D investment expenses: Please refer to Chapter 5, Section 1 (3) “The process of the future R&D plans and estimated R&D investment expenses for Formosan Rubber Group Inc.”.

  • (V) Impact on the Company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response: None.

  • (VI) Technological changes (including information security management risks) and industrial change on the Company’s finance business: The Company continues to monitor market trends and technological advancements in plastic and rubber product development related to the Company's Production Business Department. This will reduce the effects of technological changes. At the same time, in conjunction with the national-level national vehicle manufacturing in Taiwan plan, eco-friendly green building materials, and greenhouse gas reduction policies, the Company actively engages in new product development, equipment updates, and process improvement, while focusing on cost control and cash management to maintain competitiveness and control impacts on its financial business. Technological changes (including information and communication security risks) and industrial changes in the most recent year, as of the publication date of the annual report, have had no material impact on the Company's financial operations.

  • (VII) Impact on the company's crisis management of changes in the company's corporate image, and corresponding measures to be taken in response: None.

  • (VIII) Expected benefits and possible risks associated with any merger and acquisitions, and corresponding measures being or to be taken: None.

  • (IX) Expected benefits and possible risks associated with any plant expansion, and corresponding measures being or to be taken: None.

  • (X) Risks associated with any consolidation of sales or purchasing operations, and corresponding measures being or to be taken: None.

  • (XI) Impact upon and risk to the company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10% stake in the company has been transferred or has otherwise changed hands, and corresponding measures being or to be taken: None.

  • (XII) Impact upon and risk to company associated with any change in governance personnel or top management, and corresponding measures being or to be taken: None.

  • (XIII) Litigious and non litigious matters; the directors, supervisors, general managers and substantial principals of the Company, the majority shareholders and affiliated companies with a shareholding ratio of more than 10% have been determined or are included in the lawsuit; non litigation or administrative litigation results may have a 

- 354 -

significant effect on the Company's shareholders' equity or securities price as of the publication of the annual report: None

  • I. Get back lands in Nankan and Longtan, Taoyuan City, registered under name of others (the Pseudo Name):

  • It was learnt during the previous inventory for the lands registered under others ’ names in Nankang and Longtan, Taoyuan, that some lands had be expropriated by the Taoyuan City Government, and such lands are now registered under the name of Taoyuan City Government. However, the who lent his name did not inform the Company the expropriation but received the compensations.

  • In order to recover the compensation for expropriation, the Company has filed for provisional disposition over the rest of the land registered under the nominee, and the provisional attachment for other lands of the nominee. Currently, the Company has commissioned attorneys to file the civil and criminal lawsuit at the Taiwan Taoyuan District Court, including “ civil demand for returning the lands registered under nominee, ”“ civil demand for returning the compensation for expropriation, ” and “ criminal suits for breach of trust and embezzlement. ”

  • The civil suit for returning the lands registered under nominee currently is being tried in Taiwan High Court as the second instance; through several mediation courts, both parties failed to settlement while not excluding the willingness of settlement. For the civil suit for returning the compensation for expropriation, Taoyuan District Court ruled in the first instance that the nominee shall return the compensation for expropriation of NT$28,778,113, but the judgement is not finalized. The Company provided the collateral based on this judgement, and applied for the provisional execution of the properties under the nominee ’ s name; for the criminal suits for breach of trust and embezzlement, Taiwan New Taipei District Prosecutors Office has accepted the case and been investigated.

  • (XIV) Other important risks and corresponding measures: Information security and risk control:

  • The Company has always been dedicated to enforcing information security and personal information protection control, and has established clear and strict internal control system to ensure that the information assets which belong to the Company are not illegally accessed or exposed, the information is not inappropriately altered or destroyed at any stage and that the user who is legally authorized can access the required information in a timely manner.

  • In order to strengthen information security management, aside from the strict information security requirements of network structure, the Company carries out continuous improvement or increase corresponding preventive measures on the constant changing internal or external potential and possible threats as corresponding measures.

The Company has a comprehensive backup mechanism for operation system and 

- 355 -

files and carries out regular necessary data, software backup and backup operations, to ensure that even if when an accident in relation to any information security occurs, normal operation can resume quickly to maintain the availability and completion of information and the system.

Through annual review and assessment its network safety regulations and procedures, the applicability and effectiveness can be ensured. Though the Company cannot guarantee that it will be spared by new risks and attacks in the constant changing network security threats. From the beginning of 2023 to the publication date of the annual report, FRG has not experienced any cyberattacks or incidents that may have a material adverse impact on its business and operations.

VII. Other Important Matters:

The evaluation basis and basis of the presentation method of assets and liabilities evaluation items:

1. Allowance for bad debts:

The main reason for the Company's allowance for bad debts is the evaluation on the possibility of the return of accounts receivable and overdue receivables. Based on the factors of the aging analysis and credit rating and economic condition in terms of customers’ accounts receivable and overdue receivables, the Company regularly evaluates the possibility of the return of collectables and overdue receivables. The Company’s basis for accounts receivable aging ratio is as following:

Days past due Accounts receivable ratio Accounts receivable ratio
Domestic sales Overseas sales
0 days 2% 2%
1-90 days 5% 2%
91-180 days 20% 10%
181-365 days 50% 50%
Above 365 days 100% 100%
Notes receivable ratio
0-365 days 1%

2. Allowance to reduce inventory to market

Inventories include raw materials, finished products and work-in-progress. These are evaluated based on the lower of cost and market price (net realizable value); excess materials are provided for offsetting price loss. When the comparative cost is lower than the market price (net realizable value), it is based on individual items except for inventories of the same category. The cost of inventory is calculated using the monthly weighted average method.

Market price basis: raw materials refer to replacement costs, and finished products and work-in-progress are net realizable values. 

- 356 -

Eight. Special Disclosures

  • I. Information relating to the Company's affiliates

  • II. Transaction about the company’s private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of the publication of the annual report

  • III. Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

  • IV. If any of the situations listed in Article 36, paragraph 3 subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

  • V. Other matters that require additional explanation 

- 357 -

Eight. Special Disclosures

I. Information relating to the Company's affiliates:

  • (I) Consolidated Business Reports of Affiliated Enterprises:

  • Organizational table of affiliates:

==> picture [464 x 166] intentionally omitted <==

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

Formosan Rubber Group
Inc.
KINGSHALE
Ban Chien Development
FRG US CORP. INDUSTRIAL
Co., Ltd.
100% LIMITED
100%
99.99%
----- End of picture text -----

2. Basic information of affiliates:

Unit: NT$thousand
Company
Name		 Date of
Establishment		 Address Paid-In
Capital		 Main business or Production
Ban Chien
Development
Co., Ltd.		 2003.11.07 7th Floor, No. 82,
Section 1, Hankou
Street, Taipei		 560,000 1. Department stores, retails,
wholesales, warehouses
2. Development of leases and
sales of residential or
business buildings
3. Building management
consulting
4. Residential and cleaning
management services
5. Agency Services
FRG US
CORP.		 2017.10.20 10750 Johnson Ave,
Cupertino, California
95014		 938,955 Real estate investment,
development and rental
KINGSHALE
INDUSTRIA
L LIMITED
1989.2.14		 14/F.,Kam Fung
Commercial Building,
Nos.2-4 Tin Lok Lane,
Wanchai, Hong Kong		 34 General investment

  1. Shareholders presumed to have control and subordinate relationship with the same information: None

  2. The overall relationship between business enterprises covered by the industry: The businesses of the Company and its affiliates include: manufacturing and

sales of rubber and synthetic leather, edge synthetic leather, special chemical products, warehouse and logistics, and construction. 

- 358 -

5. Information on directors, supervisors and presidents of affiliates:

Unit: NT$thousand;share; % Unit: NT$thousand;share; %
Company Name Title Name or Rep. Shareholding
Number of
Shares		 Shareholding
Ratio
Ban Chien
Development Co.,
Ltd.
Chairperson
/President
Director
Supervisor		 Formosan Rubber Group Inc.
Representative: Hsu Zhen-Tsai
Formosan Rubber Group Inc.
Representative: Jiang Rui-Tang
and Chen Hui-Jin
Formosan Rubber Group Inc.
Representative: Hsiao Zheng-
Zhong		 56,000,000
56,000,000
56,000,000


100%
100%
100%
FRG US CORP. Director
Director		 Formosan Rubber Group Inc.
Representative: Hsu Zhen-Ji
Formosan Rubber Group Inc.
Representative: Hsu Zhen-Xin		 15,401,000
15,401,000

100%
100%
KINGSHALE
INDUSTRIAL
LIMITED		 Director Formosan Rubber Group Inc.
Representative: Hsu Zhen-Tsai,
Hsu Zhen-Ji, Hsu Zhen-Xin		 9,999
99.99%

6. Operational overview of affiliates:

Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand Unit: NT$thousand
Company Name Capital Total
Assets		 Total
Liabilities		 Net income Operating
income		 Operating
Profit
(loss)		 Current
Profit and
Loss (after
tax)		 Earnings Per
Share (NT$)
(after tax)
Ban Chien
Development Co.,
Ltd.
560,000		 1,107,790
7,690
1,100,100
0
(11,967)
25,324
0.45
FRG US CORP. 938,955
769,549
991
768,558
2,356
(1,830)
(1,832)
(0.12)
KINGSHALE
INDUSTRIAL
LIMITED		 34
0
0
0
0
0
0
0.00

  • (II) Consolidated Financial Statements of Affiliated Enterprises: Please refer to Consolidated Financial Statements of the Parent and Subsidiaries for the most Recent Year Audited by the CPA” in the “V. An Overview of the Company’s Financial Status”.

  • (III) Consolidated Business Reports of Affiliated Enterprises: None.

  • II. Transaction about the company’s private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

  • III. Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

  • IV. If any of the situations listed in Article 36, paragraph 3 subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or 

- 359 -

the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None .

V. Other matters that require additional explanation: None.

- 360 -

Formosan Rubber Group Inc.

Chairperson: Hsu Zhen-Tsai 

- 361 -

More from FRG

Notice of Dividend Amount 2026
May 28
Regulatory Filings 2026
May 25
Regulatory Filings 2026
May 21
Annual Report 2026
May 21
Annual Report 2026
May 21
Interim / Quarterly Report 2026
May 14
Interim / Quarterly Report 2026
May 14
Board/Management Information 2026
May 12
Interim / Quarterly Report 2026
May 12
Interim / Quarterly Report 2026
May 12
View all filings →