OPC - Annual Report 2023 | FinancialReports.eu

Soock Code:1321 http://mops.twse.com.tw/ http://www.opc.com.tw/

OCEAN PLASTICS CO., LTD.

==> picture [112 x 75] intentionally omitted <==

2022

Annual Report

==> picture [43 x 47] intentionally omitted <==

Printed on May 19, 2023

(I) Spokesperson and Deputy Spokeperson

Spokesperson Deputy Spokesperson Name: WANG, YI-HO Name: CHIU, CHUN-FU Title: Manager Title: Deputy Manager Tel: (02) 2306-2131 Tel: (02)2306-2131 (02) 2308-1188 (02)2308-1188 E-mail: [email protected] E-mail: [email protected]

(II) Headquarters, Branches and Plant:

Name	Address	Tel
Headquarters	5F & 6F, No. 310, Juguang Rd., Taipei City	(02)2306-2131 (02)2308-1188
Plastic Processing Unit	No. 38-1, Xiapuding, Neghborhood 3, Xiapu Vil., Xinwu Dist., Taoyuan City	(03)486-1281
Building materials Unit	No. 539, Longxing Rd., Chungli Dist., Taoyuan City	(03)438-4626~7
PVC raw material Unit	No. 375, Haihu East Rd., Haihu Vil., Luzhu Dist., Taoyuan City	(03)354-1626
PU Unit	No. 375, Haihu East Rd., Haihu Vil., Luzhu Dist., Taoyuan City	(03)354-3080
Tainan Contact Office	No. 131, Jianping 14th St., Tainan City	(06)297-4511~2

(III) Stock Transfer Agent:

Name : Stock Transfer Agency Department, KGI Securities Co., Ltd.

Address : 5F, No. 2, Sec. 1, Chongqing S. Rd., Taipei City

Tel : (02)2389-2999

Website : https://www.kgi.com.tw/zh-tw/institutional-services/stock-agent

(IV) Nnames of the certified public accountants who duly audited the annual financial report for the most recent fiscal year, and the name, address and telephone number of the accounting firm to which they belong

Names: CPA YU, SHENG-HO

CPA HUANG, YUNG-HUA

Name of Accountig Firm: KPMG Taiwan

Address : 68F, No. 7, Sec. 5, Xinyi Rd., Taipei City 11049

Tel : (02)8101-6666 Fax : (02)8101-6667

Website : http://www.kpmg.com.tw/

(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: No.
(VI)Corporate Website: http://www.opc.com.tw

==> picture [32 x 41] intentionally omitted <==

	Table of Contents Contents
		page
I.	Letter to Shareholders	1
II.	Company Profile	4
	1. Date of Incorporation	4
	2. Company History	4
III.	Corporate Governance Report	6
	1. Organization	6
	2. Directors, Supervisors, General Manager, Deputy General Manager, Assistant Managers and Heads of Departments and Branch Organizations	8
	3. Remuneration of Directors, Supervisors, General Manager and Deputy General Manager in the Most Recent Year	17
	4. Implementation of CorporateGovernance	20
	5. Information Regarding the Company’s Audit Fee	59
	6. Replacement of CPA	60
	7. Where the company's chairperson, General Manager, or any managerial officer in
	chargeof finance or accounting matters has in the most recent year held a position at the accounting firm of its CPAs or at an affiliated enterprise of such	60
	accountingfirm
	8. Any transfer of equity interests and pledge and change in equity interests by a
	director, supervisor, managerial officer, or shareholder with a stake of more than	60
	10 percent
	9. Relationship information, if among the company's 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another	61
	10. The total number of shares and total equity stake held in any single enterprise
	bythe company, its directors and supervisors, managerial officers, and any	62
	companies controlled either directly or indirectly by thecompany
IV.	Capital Overview	64
	1. Capital andShares	64
	2. Corporate Bonds	69
	3. PreferredShares	69
	4. Global DepositoryReceipts	69
	5. Employee StockOptions	69
	6. Issuance of New Restricted EmployeeShares	69
	7. Status of New Shares Issuance in Connection with Mergers andAcquisitions	69
	8. Financing Plans andImplementation	69
V.	Operational Highlights	70
	1. Business Activities	70
	2. Market and Sales Overview	73
	3. Human Resources	77
	4. The information of employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report	78
	5. LaborRelations	80
	6. Cyber Security Operations	83
	7. Important Contracts	86
VI.	Financial Information	87
	1. Five-Year Financial Summary	64
	2. Five-Year Financial Analysis	67

	page
3. Audit Committee’s Report for the Most RecentYear	70
4. Financial Statements for the Most RecentYear	70
5. Parent company only financial statements audited by CPAs for the most recentyear	70
6. If the Company and its associates have experienced financial difficulties in
themost recent year and by the print date of the annual report, the impact on the	70
financial position of the Company shall bespecified
VII. Review of Financial Conditions, Operating Results, and Risk Management	71
1. FinancialConditions	71
2. FinancialPerformance	72
3. Analysis of CashFlows	73
4. Major Capital ExpenditureItems	73
5. Investment Policy in Last Year, Main Causes for Profits or Losses, ImprovementPlans and the Investment Plans for the ComingYear	73
6. Analysis and Assessment ofRisks	73
7. Other importantmatters	74
VIII. Special Disclosure	75
1. Summary of Affiliated Companies	75
2. Private Placement Securities in the Most RecentYears	80
3. The Shares in the Company Held or Disposed of by Subsidiaries in the MostRecent Years	80
4. Other Necessary Items to Be Supplemented	80
5. Any event that had a material impact on the rights of sharholders or the pricesof
securities provided in Subparagraph 2, Paragraph 2, Article 36 of the Securities	80
and Exchange Actoccurred
Appendix 1: Financial Statements in the Most Recent Year	81
Appendix 2: Parent company only financial statements audited by CPAs for the most recent	149
year

I. Letter to Shareholders

Dear shareholders:

In 2022, the global economy is still affected by the Sino-US trade war, the covid-19 pneumonia, and the Ukraine-Russia war. Taiwan's economic situation is also affected by the above factors, and the market sentiment tends to tighten. Compared with 2021, there is little change in revenue for the whole plastic industry, but due to the price fluctuations of upstream petrochemical raw materials, the price difference between VCM raw materials and PVC powder products is smaller in 2022. In terms of export, although the export freight rate has gradually returned to normal levels in the second half of the year, it is still not enough to make the company profitable. Therefore, the profit in 2022 as a whole registered a sharp decline as compared with 2021.

1. Business performance in previous year:

(1) 2022 Implementation achievements of business plan:
- A. The company’s turnover in 2022 consolidated financial statement was NT$6,506,136,000, an increase of NT$15,803,000 (0.24%), compared with NT$6,490,333,000 in 2021; the operating cost rate in 2022 was 94.31%, an increase of 1.78% compared with the operating cost rate in 2021 was 92.53%. The operating gross profit in 2022 was NT$370,138,000, a decrease of NT$114,479,000 from NT$484,617,000 in 2021, and the gross profit margin dropped from 7.47% to 5.69%. The operating expenses in 2022 was NT$561,388,000, an increase of NT$44,370,000, compared with the 2021 operating expenses of NT$517,018,000.
- B. The net operating loss in 2022 was NT$191,250,000, increase of NT$158,849,000 from the net operating loss of NT$32,401,000 in 2021. The non-operating net profit was NT$183,453,000 due to recognize the share of related enterprises and joint venture profits and losses, etc. under the equity method in 2022. The annual pre-tax net loss was NT$7,797,000, a decrease of NT$360,005,000 compared with the 2021 pre-tax net profit of NT$352,208,000, and deducted the income tax expense NT$34,860,000, making this year’s current net loss NT$42,657,000. Other comprehensive gains and losses for the current period were -NT$515,601,000, and the total comprehensive profit and loss for the current period was -NT$558,258,000.
(2) Budget implementation situation

The Company is not required to prepare a 2022 financial forecast, according to the provisions set forth in “Regulations Governing the Publication of Financial Forecasts of Public Companies”.

(3) Financial income and expenditure and profitability analysis

				Unit: NT$1,000
Item	FY2022	FY2021	Increase or decrease	Increase or decrease rate
Net Operating Revenue	5,649,875	5,730,874	-80,999	-1.41%
Net Income	-42,657	319,368	-362,025	-113.36%

Return on Assets:-0.31%, Return On Equity: -0.68%, Net Profit Margin: -0.76%, and Earnings Per Share: NT$-0.19.

The reason for the decrease in profit: In 2022, the price difference between VCM (raw material) and PVC powder narrowed, and due to the impact of the epidemic, the closure of cities in various countries at the beginning of the year, the subsequent high freight rates and and the clogged ports in the United States, the company's operating revenue grew, but still could not resist the pressure of cost increase, resulting in profit reduction compared with the previous year.

(4) R&D Status:

Successful development of soft hollow ball 400nm particle size specification formulation Redox polymerization technology.

Successful development of TPE wood-like inorganic flame-resistant formulation technology: passed UL94V0 flame-resistance test.

NonP plasticizer type PVC high soft medical pellets: product A05-S73R is developed.

PVC styrofoam particles: product PCE121-10 is developed.

Eco water-based PU+ Bio-sourced Materials.

2. Summary of the current year's business plan

(1) Management policy:

Looking at 2023, the covid-19 pandemic will slow down slightly, but the political and economic situation in various countries around the world is still turbulent, and the problems caused by the Ukrainian-Russian war have not been completely resolved, affecting normal global political and economic operations. We will carefully observe the changes in the overall plastics industry.

A. As the government continues to promote the economic revitalization plan, it will drive the overall domestic economic to prosperity.
B. To improve the revenue and profit of reinvested subsidiaries is still the direction of our efforts. And to activate idle assets to increase profits is always our established goal.
C. In the new year, in addition to increasing production capacity, reducing costs and improving quality, we will strengthen the research and development of new product in line with market demand. We will develop towards high value-added products, and fully control the source of raw material to ensure that there is no shortage of supply to achieve various production goals
(2) Expected sales volume and its basis:

In terms of sales, we should develop new customers and markets to increase revenue, especially to grasp international financial and economic information, keep an eye on price trends, increase market share, strengthen after-sales service, and cooperate with government regulations to fulfill our corporate responsibility of integrity, and steadily pursue substanbiable growth.

(3) Important Production and Marketing Policy:
A. Short-term Development:
- a. In 2023, the world is still affected by the pandemic. It is more difficult to promote reenproducts in Europe and the United States. The Company changed to video and internet marketing in response to the epidemic, cooperating with domestic manufacturers for mutual benefit and win-win situation and to reverse the unfavorable situation caused by the epidemic.
- b. In the past, it has been difficult to recruit talent, and in this period of pandemic, the company's solid image and future vision are attracting quality employees to appl
- c. We will use our existing products to meet the market demand and actively seek orders through the Internet, publicity and exhibitions to increase our market awareness and share.
- d. In order to compete with our competitors, we need to effectively reduce our manufacturing and marketing costs.
B. Long-term Development:
- a. New product development staff, together with sales staff, actively engage in technical service work to establish a good interactive relationship with customers.
- b. We continue to develop high value-added and profitable products, and constantly pursue more

environmentally friendly materials and more efficient manufacturing processes, with the goal of sustainable management with zero pollution, recyclable and biomass materials.

c. Effective management planning for the existing idle land assets, with the opening of the ring road to initiate the development of the residential and commercial area of the Zhonghe plant.
d. We work closely with our distributors to develop the market and continue to pursue new construction and public works projects to increase sales volume and profitability.
e. To avoid tariff barriers in international markets, to establish a shorter supply chain with customers, and to seek to establish a production base close to customers.

3. Future company development strategy

(1) Continuously invest to improve the process and production capacity.
(2) Pursue stable return on investment.
(3) Maintain a good trust relationship with customers and manufacturers.
(4) Improve product competitiveness.
(5) Revitalize assets to create benefits.
Subject to the external competitive environment, the regulatory environment and the overall business environment

The Sustainable Development Section of Ocean Plastics Co., Ltd. was officially launched in November 2021. With the goal of fulfilling social responsibilities, it will continue to promote corporate governance, environmental protection and social care and other issues, and make contributions to the sustainable development of the society as a whole while creating profits for the company and safeguarding shareholders' rights and interests.

The company had issued the first Sustainability Report in June 2022 and the results was reported to the Board of Directors yearly in accordance with the content of the "Sustainable Development Roadmap" issued by the Financial Supervisory Commission R.O.C. (Taiwan) on March 9, 2022.

With the rise of the world's environmental protection awareness, energy saving and carbon reduction is already the trend of future development.

The greenhouse gas inventory operation was started in September 2022, and the greenhouse gas inventory and verification schedule was formulated in accordance with the regulations issued by Taiwan Stock Exchange Corporation, the greenhouse gas inventory and report were completed on schedule in 2022.

The company holds the concept of "people-oriented, stable and innovative" to continue to keep pace with the international trend, actively improve the production efficiency, enhance the competitiveness of our products, cooperate with government laws and regulations, and integrate the company's overall planning to obtain the maximum benefit space.We hope that our shareholders will continue to provide assistance and support in the future, and we believe that with the hard work of all our employees, we will be able to overcome all obstacles and achieve our operational goals in order to meet the trust of ourshareholders.

Sincerely

Chairperson TAN, KIN-MEN

II. Company Profile

1. Date of Incorporation: June 7, 1965

2. Company history:

April 1965: Ocean Plastics Co was founded by Yee Fong Chemical & Industrial Co. and several entrepreneurs, including Chen Fang-chu, with a factory set up in Zhonghe City, Taipei County to initially produce PVC rigid plastic pipes and primary plastic processed products such as PVC plastic cloth, film and rubber.
1967: Increased production of secondary plastic processed products such as printed tape and wallpaper, and high-frequency processed products.
1970: Technical cooperation with Akimi Protective Film Co, Japan, to develop and produce high quality ru leather and PU synthetic leather.
Sep. 1976: In view of the trend of capital concentration in the petrochemical industry in the future, the Company merged its associate, Yee Fong Chemical & Industrial Co, in response to the government's policy of encouraging consolidation of small and medium-sized enterprises, while taking into consideration its future development by setting up a separate plant in Luzhu Township, Taoyuan County.
1977: Technical cooperation with Kaneka Corporation, Japan. Expansion of the Taoyuan plant to produce PVC molding powder.
1978: Due to the need for centralised production and management, the PVC powder production facilities at the Yee Fong factory were moved to the Taoyuan factory for expansion, and the Yee Fong factory was changed to specialise in the manufacture of PVC rigid pipes due to its proximity to the market, and a research institute was set up at the Ocean Plastics factory to step up production and research and development.
Jan. 1985: Increased production of PVC rigid plastic cloth.
1986: To cater for the operational needs of the Company, a factory was set up in Chungli City, Taoyuan County.
Oct. 1987: The Chungli plant officially commenced operation and the PVC rigid plastics pipes, which had been produced at the Ocean Plastics plant, was relocated to the Chungli plant, and a supplementary public offering of shares was approved by the Securities and Futures Commission of the Ministry of Finance.
Nov. 1987: Increase in paid-up capital to NT$543,717,330.
Jul. 1988: Increase in paid-up capital to NT$652,460,800.
Sep. 1989: Increase in paid-up capital to NT$796,002,180.
Mar. 1990: Increased production of PVC rigid plastic sheets and PVC foamed plastic sheets.
May. 1990: The head office was relocated to new premises on the 5th and 6th floors of No. 310 Juguang Road, Taipei City to meet the needs of business development.
Jul. 1991: To enhance organizational management, the Kaohsiung liaison office was closed and merged into the Tainan liaison office.
Sep. 1991: Increase in paid-in capital to NT$995,002,730.
Sep. 1992: Increase in paid-up capital to NT$1,094,503,020.
Jul. 1993: Readjusted the organization of the Company in line with the promotion of the responsibility center system.

Sep. 1993: Increase in paid-up capital to NT$1,236,788,430.

Dec. 1994: Ocean Plastics factory received DNV ISO 9002 quality assurance certification. Sep. 1995: Increase in paid-in capital to NT$1,360,467,280.

Jun. 1996: Chungli factory obtained ISO 9002 quality assurance certification from the Bureau of Standards, Metrology and Inspection.

Oct. 1996: Increase in paid-up capital to NT$1,623,060,660.

Jan. 1997: Ocean Plastics factory was awarded ISO 9002 quality assurance certification from the Bureau of Standards, Metrology and Inspection.

Oct. 1997: Taoyuan plant received RW-TUV ISO 9002 quality assurance certification. Jul. 1998: Increase in paid-in capital to NT$1,981,757,070.

Jan. 1999: The Company's shares are listed on the Taiwan Stock Exchange or the Taipei Exchange. Jan. 1999: Chungli factory passed SGS ISO14001 environmental management system certification. Aug. 2000: Increase in paid-in capital to NT$2,080,844,940.

Aug. 2000: The operating organization was reorganized to form the Processing Division (formerly Ocean Plastics Plant), the Raw Materials Division (formerly Taoyuan Plant) and the Building Materials Division (formerly Chungli Plant).

Dec. 2000: Hunan Ocean Wide Plastics Ltd was established to produce rigid plastic pipes and entered the Chinese building materials market.

Aug. 2003: Ocean Plastics, Taoyuan and Chungli plants passed the 2000 version of ISO 9001 quality assurance certification.

Aug. 2005: Increase in paid-in capital to NT$2,184,887,190.

Sep. 2005: Dongguan DayangChuangxin Leather Products Co was established, mainly producing PU synthetic leather.

Aug. 2006: Increase in paid-in capital to NT$2,272,282,680.

Oct. 2006: Taoyuan plant received TUV NORD 14001 environmental management system certification. Dec. 2007: Ocean Plastics (Huizhou) Co was established to produce soft plastic cloth. Jan. 2011: Restructured the operating organization to form the PU Unit. Jan. 2016: Relocated Zhonghe factory to Sinwu in Taoyuan.

Nov. 2019: Shareholding in Hunan Ocean Wide Plastics Ltd was for sale.

Mar. 2020: The Investment Commission of the Ministry of Economic Affairs approved the cancellation of the investment in Hunan Ocean Wide plant.

July 2020: Xinwu factory passed SGS ISO14001 environmental management system certification and Occupational Safety and Health Management System Certification. June 2022: Publish the first ESG Corporate Sustainability Reports volunteerly.

At present, our Company is primarily engaged in the manufacture of PVC raw materials and processing and PU synthetic leather. Depending on the nature of the products, we have set up business divisions for processing, building materials, raw materials and synthetic leather, etc. Our factories are located inSinwu, Luchu and Chungli in Taoyuan, and we have also opened a liaison office in Tainan to facilitate business expansion, making us one of the well-known listed plastics companies in Taiwan. In addition to its own operations, the Company also invests in domestic industries and indirectly in China. In response to the needs of urban development, the Ocean Plastics plant was relocated to the Sinwu plant in 2016, and the Company has rethought its future development by focusing the new compound on the green process and green products, and introducing reusable TPE CELLwood, while the Zhonghe plant is developing residential land in line with the urban plan, which is believed to be beneficial to the Company going forward.

III. Corporate Governance Report

Organization:
(1) Organizational Chart:

==> picture [732 x 433] intentionally omitted <==

(2) Major Corporate Functions:

Audit Committee: assists the Board in overseeing the fair presentation of the Company's financial statements and the effective implementation of internal controls.

Remuneration Committee: assists the Board in the administration and evaluation of the overall remuneration and benefits of the Company and the remuneration of directors and managers.

General Manager Office: carries out all the business of the Company by resolution of the Board.

Internal Auditing Office: performs internal auditing and keeps track of improvements to deficiencies identified in audits.

Planning Dept.: develops and analyzes business objectives and plans.

Shareholder Dept.: deals with matters relating to the shareholder services.

Labor Safety and Health Dept.: handles safety, health and environmental safety related matters.

Management Dept.: deals with matters relating to personnel, general affairs, materials and contracting.

Financial Dept.: deals with matters relating to financial scheduling, budgeting, accounts, costs,cashier, taxation, etc.

MIS Dept.: deals with the establishment of computer operation systems and the planning and design of software andhardware.

R&D Dept.: deals with R&D on production methods, technologies, raw materials, products,etc.

Raw Materials, Building Materials, PU and Plastic Processing Units: handle matters relating to the

production, domestic and export sales, sales management, profitmanagementand future development of each unit.

Directors, Supervisors,General Manager, Deputy General Manager, Assistant Managers and Heads of Departments and Branch Organizations:
(1) Directors and Supervisors:

Information of Directors and Supervisors (1)

(1) Directors and Supervisors:	(1) Directors and Supervisors:	(1) Directors and Supervisors:	(1) Directors and Supervisors:	(1) Directors and Supervisors:	(1) Directors and Supervisors:		Information of Directors and Supervisors (1)	Information of Directors and Supervisors (1)	Information of Directors and Supervisors (1)	Information of Directors and Supervisors (1)	Information of Directors and Supervisors (1)	Information of Directors and Supervisors (1)	Information of Directors and Supervisors (1)	Information of Directors and Supervisors (1)	Information of Directors and Supervisors (1)	Information of Directors and Supervisors (1)
																	April 21,2023
Title	Nationalit y or Place of corporatio	Name	Gender/ Age	Date Elected	Term (years)	Date First Elected	Shareholding when Elected		Current Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience (Education)	Other Position	Executive, Directors or Supervisions who arespouses or withinTwo Degrees of Kinship			Note
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation- ship
Chairman	Taiwan (R.O.C.)	TAN, KIN-MEN	M 71~80	7/27/2021	3	6/3/1988	4,695,202	2.07	4,695,202	2.07	-	-	-	-	MA in Economics Meiji University	Note 2	None	None	None
Director (Note 1)	Taiwan (R.O.C.)	Hsuan Yang Investment Co.,Ltd.	F 51~60	7/27/2021	3	6/30/2003	1,440,247	0.63	1,440,247	0.63	-	-	-	-	Department of Accounting, Soochow University	Manager of Finance Dept., Yee Fong Chemical & Industrial Co., Ltd.	enoN	enoN	enoN
		Representative Wang Hai-Lun				6/30/2018
roDNernD (Note 1) (Note 3)	Taiwan (R.O.C.)	Want Want Co., Ltd.	M 51~60	7/27/2021	3	5/14/1996	2,976,669	1.31	2,976,669	1.31	-	-	-	-	Master, Graduate Institute of Finance, National Chung Cheng University	Senior Director, Manager of Investment Department, Want Want Group	enoN	None	None
		Representative Hung, Yung-Tsung				1/1/2023
roDNernD (Note 1)	Taiwan (R.O.C.)	Li Hsiang Industrial Co.,Ltd	M 61~70	7/27/2021	3	6/30/2015	310,000	0.14	310,000	0.14	-	-	-	-	M.S. in Chemistry, University of Washington (Seattle), USA M.B.A., University of Massachusetts, USA	enoN	None	None	None
		Representative Chu Tsung-Pin				6/30/2012
roDNernD	Taiwan (R.O.C.)	Peter Chen	M 61~70	7/27/2021	3	6/3/1985	3,943,860	1.74	3,943,860	1.74	-	-	-	-	Department of International Trade, University of California, USA	None	None	None	enoN
roDNernD	Taiwan (R.O.C.)	Hsieh Tzu-Yun	M 71~80	7/27/2021	3	6/30/2000	10,000	0.004	10,000	0.004	-	-	-	-	Chien Kuo Senior High School	Consulant, Hsin Tai	enoN	None	None
																Travel & Tours

Title	Nationalit y or Place of corporatio	Name	Gender/ Age	Date Elected	Term (years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education)	Other Position	Executive, Directors or Supervisions who arespouses or withinTwo Degrees of Kinship	Executive, Directors or Supervisions who arespouses or withinTwo Degrees of Kinship	Executive, Directors or Supervisions who arespouses or withinTwo Degrees of Kinship
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation- ship
Independent Director	Taiwan (R.O.C.)	Chang Yi-Yun	F 61~70	7/27/2021	3	6/30/2015	-	-	-	-	-	-	-	-	University of Munich, Germany PhD	Deputy General Manager of Fu Jen Catholic University	None	enoN	enoN
Independent Director	Taiwan (R.O.C.)	Hou Ming-Li	M 51~60	7/27/2021	3	6/30/2015	-	-	-	-	-	-	-	-	Department of Accounting, National Cheng KungUniversity	Partner accountant of Sun Rise CPAS’ Firm DFK Inernaitonal	enoN	enoN	enoN
Independent Director	Taiwan (R.O.C.)	Chen Wei-Lung	M 61~70	7/27/2021	3	7/27/2021	-	-	-	-	-	-	-	-	Business Management Master of Business, National Taiwan University	Independent Directorof IBF Financial Holdings Co.,Ltd., AGV Products Corp., Janfusun Fancyworld Corp.	enoN	enoN	enoN
Independent Director	Taiwan (R.O.C.)	Chien Hsueh-Li	M 61~70`歲`	7/27/2021	3	7/27/2021	-	-	-	-	-	-	-	-	Master of Business, Master of Industrial Engineering and Operational Studies, Cornell University,USA	General Manager of Fu-Chu General Contractor Co., Ltd.	enoN	None	None

Note 1: The major shareholders of corporate shareholders are listed in the attached table.

Note 2: A. Chairman of Ocean Plastics Co., Ltd.B. Director of Ocean Plastics (Huizhou) Co., Ltd. (Legal person representative of SAGE HOLDINGS) Note 3: The Representative of Want Want Co., Ltd. Changed into Hung, Yung-Tsung from Hsieh, Yu-Chin from Januar 1, 2023.

Table 1: Major Shareholders of the institutional Shareholders

			April 21,2023
Name of Institutional	Major Shareholders
Shareholders	Name		%

	April 21,2023	April 21,2023
Name of Institutional Shareholders	Major Shareholders
	Name	%
Li HsiangIndustrial Co.,Ltd.	ShihChin-Yun	97%
Hsuan Yang Investment Co., Ltd.	ChenChin-Wen	20%
	ChenChin-Hsin	20%
	ChenChin-Sheng	20%
	Chen Ling-Mei	10 %
	Chen Hui-Mei	10 %
	ChenJung-Jung	10 %
	ChenChou Tsai-Yu	10 %
Want Want Co., Ltd.	Tsai Yen-Ming	70.37%
	PengYu-Man	16.22%
	TsaiShao-Chung	6.82%
	TsaiWang-Chia	6.59%

Information of Directors and Supervisors (2)

1. Disclosure of directors’ professional qualifications and independence of the independent directors:

Criteri Name	Professional Qualification and Experience (Note1)	Independence Criteria (Note 2)	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
Chairman Chen Chin-Ming	Qualified with the requirement of at least 5 years work experience, currently serving as the Chairman and General Manager of the company, and not been a person of any conditions defined in Article 30 ofthe CompanyAct	Not applicable	None
Director Wang Hai-Lun	Qualified with the requirement of at least 5 years work experience, used to be the deputy manager of the financial department ofYee Fong Chemical & Industrial Co; currently is the manager of the financial department ofYee Fong Chemical & Industrial Co., and not been a person of any conditions defined in Article 30 oftheCompanyAct.	Not applicable	None
Director Hsieh Yu-Chin (note 3)	Qualified with the requirement of at least 5 years work experience, used to be the Deputy General Manager of Investment Dept. of Union Insurance Company, and not been a person of any conditions defined in Article 30 of the Company Act.	Not applicable	None
Director Hung, Yung-Tsung (Note 3)	Qualified with the requirement of at least 5 years work experience, used to be Senior Vice General Manager of Mercuries Life Insurance Co., Ltd., Senior Director, Manager of Investment Department, Want Want Group and not been a person of any conditions defined in Article 30 of the CompanyAct.	Not applicalbe	None
Director Chu Tsung-Pin	Qualified with the requirement of at least 5 years work experience, used to be the speicall assistant of chairman of MiTAC Incorporated, manager of Planning Dept., Ocean Plastics Co., Ltd., Project Manager of Mainland China, Optimax Technology Corporation, and is currently the director of this company, and not been a person of any conditions defined in Article 30 of the Company Act.	Not applicable	None
Director Chen Chin-Hsiung	Qualified with the requirement of at least 5 years work experience, used to be the special assistant of this company, and is currently the director of this company, and not been a person of any conditions defined in Article 30 of the Company Act.	Not applicable	None
Director Hsieh	Qualified with the requirement of at least 5 years work experience, used to be the chairmanof Xintai Travel	Not applicable	None

Tzu-Yun	Agency Co., Ltd., and is currently the consultant of Hsin Tai Travel & Tours, and not been a person of any conditions defined in Article 30 of the Company Act.
Independent Director Chang Yi-Yu	n Qualified with the requirement of at least 5 years work experience, used to be dean , School of Law, Fu Jen Catholic University, and is currently the Deputy General Manager of Fu Jen Catholic University, director of Great Eastern Resins Industrial Co., Ltd., independent director of Advanced Lithium Electrochemistry (Cayman) Co.,Ltd., and independent director of YFY Inc., and not been a person of any conditions defined in Article 30 of the CompanyAct.	(1) Not an employee of the company or any of its affiliates. (2) Nota director or supervisor of the company or any of its affiliates. (3) Not 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 one percent or more of the total number of issued shares of the company or ranking in the top 10 in holdings. (4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph 1 or any of the persons in the preceding (2) and (3). (5) Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent 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. (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:nota director, supervisor, or employee of that other company. (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:nota director (or governor), supervisor, or employee of that other company or institution. (8) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company. (9) Not a professional individual who, or an owner, partner, director, supervisor, or officer 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 compensation 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. (10)Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company. (11)Not a governmental, juridical person or its representative as defined in Article 27 of the CompanyAct.	2
Independent Director Hou Ming-Li	Qualified with the requirement of at least 5 years work experience, used to be Deputy Manager of the Audit Department ofDeloitte Touche Tohmatsu Limited, and is currently partner accountant of Sun Rise CPAS’ Firm DFK Inernaitonal, and not been a person of any conditions defined in Article 30 of the Company Act.		None
Independent Director Chen Wei-Lung	Qualified with the requirement of at least 5 years work experience, used to be director of Taiwan Futures Exchange, chairman of SinoPac Securities, deputy director of Securities and Futures Bureau, and is currently independent director of IBF Financial Holdings Co.,Ltd., AGV Products Corp., JanfusunFancyworld Corp., and not been a person of any conditions defined in Article 30 of theCompany Act.		3
Independent Director Chien Hsueh-Li	Qualified with the requirement of at least 5 years work experience, used to be General Manager of Picvue Electronics, Ltd., and is currently director of Eastern Electronics Co., Ltd., and General Manager of Fu-Chu General Contractor Co., Ltd., and not been a person of any conditions defined in Article 30 of the Company Act.		None

Note 1: Professional qualifications and experiences: specify the professional qualifications and experiences of individual directors and supervisors;for these Audit Committee members with accounting or finance expertise, their accounting and finance background with work experiencesshall be specified, and explain

if any of the conditions indicated under Article 30 of the Company Act applies to them.

Note 2: For the independent directors, their conformity of independence shall be specified, including but not limited to: themselves, spouses,relatives within the second degree of kinship, are employees, directors or supervisors of the Company or any of its affiliates; the shares of the Company and the shareholding weights held by themselves, spouses, relatives within the second degree of kinship (or under others’ names); if they are employees, directors or supervisors of the companies having certain relationships with the Company (please refer to Subparagraph 5-8, Paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies); and in the past 2 years, the compensation amount received by providing commercial, legal, financial, accounting or related services to the Company or any affiliate of the Company.
Note 3: The Representative of Want Want Co., Ltd. Changed into Hung, Yung-Tsung from Hsieh, Yu-Chin from Januar 1, 2023.
Diversity and Independence of the Board of Directors:
(1) Diversity of the Board:
Based on the diversification policy, strengthening corporate governance, and promoting the development of the composition and structure of the Board of Directors, the nomination of Director candidates is based on a candidate nomination system in accordance with the Company's Articles of Incorporation. The candidates' academic (experience) qualifications, professional background, integrity or related professional qualifications are evaluated and approved by the Board of Directors before being submitted to the shareholders' meeting for election. Other than the directors concurrently serving as the Company’s managers not exceeding one third of the total directors, the composition of the board of directors shall be determined by taking diversity into consideration and formulating an appropriate policy on diversity based on the company's business operations, operation type, and development needs,which includes, but is not limited to the following:
i. Basic requirements and values: nationality, gender and age.
ii. Industry and professional experience.
iii.Professional knowledge and skills: ability to make operational judgments, ability to perform accounting and financial analysis, ability to conduct management administration, ability to conduct crisis management, knowledge of the industry, an international market perspective, ability to lead, and aility to make policy decisions

The Implementation of the Board’s diversity:

Diversified core Name			Basic composition	Basic composition	Basic composition	Basic composition	Basic composition		Professional background	Professional background	Professional background	Professional background	Professional	Professional	knowledge and skills	knowledge and skills	knowledge and skills
	Nationality	Gemder	An employee of the Compan	Age	Term of Office of the independent director			Accounting & finance	law	ability to make operational judgments	ability to perform accounting and financial analysis	ability to conduct management administration	ability to conduct crisis management	knowledge of the industry	an international market perspective	ability to lead, and to make policy decisions	Accounting & finance
					0-3	3-6	6-9
Chairman TAN, KIN-MEN	Taiwan (R.O.C.)	M	V	71-80				V					V	V	V	V	V
Director Wang Hai-Lun		F		51-60					V				V	V	V	V	V
Director Hsieh, Yu-Chin (Note 1)		M		61-70				V					V	V	V	V	V
Director Hung, Yung-Tsung (Note 1)		M		51-60				V					V	V	V	V	V
Director Chu Tsung-Pin		M		61-70				V					V	V	V	V	V
Director Peter Chen		M		61-70				V					V	V	V	V	V
Director Hsieh Tzu-Yun		M		71-80				V					V	V	V	V	V
Independent Director Chang Yi-Yun		F		61-70			V			V			V	V	V	V	V
Independent Director Hou Ming-Li		M		51-60			V		V				V	V	V	V	V
Independent Director Chen Wei-Lung		M		61-70	V						V		V	V	V	V	V
Independent Director Chien Hsueh-Li		M		61-70	V							V	V	V	V	V	V

(Note 1): The Representative of Want Want Co., Ltd. Changed into Hung, Yung-Tsung from Hsieh, Yu-Chin from Januar 1, 2023.

The current Board of Directors of the Company consists of 10 Directors, and the specific management objectives of the Board of Directors' diversity policy and the achievement of these objectives are as follows:

ollows:
Management objectives	Achievement
Independent Director seats more than one-third of the Director seats	Achived
The directors concurrently serving as the Company’s managers not exceedingone third of the total directors	Achived
Not having a marital relationship, or a relative within the second degree of kinshipto anyother director of theCompany	Achived
All director continues to develop professional knowledge and skills	Achived

(2) Board of Directors Independence :

The company currently has 10 members of the Board of Directors, including 4 Independent Directors (accounting for 40% of all Directors). As of the end of 2022, all Independent Directors have complied with the Securities and Futures Bureau, Financial Supervisory Commission's regulations on Independent Directors, and there are no Paragrasphs 3 and 4 stipulated in Article 26-3 of the Securities Exchange Act between each Director and Independent Director. The Board of Directors of the company is independent (please refer to page 10 of this annual report - Disclosure of Directors’ Professional Qualifications and Independence of the Independent Directors), each Director's education, gender and work experience (please refer to pages 7 to 8 of this annual report – Director’s information).

(2) Information on the Management Team:

Information on the Management Team

													April 21,2023	April 21,2023	April 21,2023	April 21,2023
Title	Nationality	Name	Gender	Date Effective	Shareholding		Spouse & Minor Shareholdin		Shareholding by Nominee Arrangement		Experience (Education)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship			Remark
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
General Manager	Taiwan (R.O.C.)	TAN, KIN-MEN	M	06.30.1997	4,695,202	2.07	-	-	-	-	MA in Economics, Meiji University	Note 1	None	None	None	Note 4
Assistant Manager	Taiwan (R.O.C.)	Shen Shao-Pin	M	11.01.2015	1,019	0.0004	-	-	-	-	Department of Chemistry, National Chung HsingUniversit	Note 2	None	None	None
Financial Executive	Taiwan (R.O.C.)	Wang Yi-Ho	M	01.01.2002	88,938	0.04	3,439	0.002	-	-	Master of Business, Soochow University	Note 3	None	None	None

Note 1: See Note 2 in Schedule I on P8.

Note 2: A.OCEAN GROUPExecutive director of (Juristic person representative of Ocean Plastics Co., Ltd.)
B.Chairman of Ocean Plastics (Huizhou) Co., Ltd. (Juristic person representative of SAGE HOLDINGS)
Note 3: A. Supervisor of Chang-Hsin-Hsin-Yeh Co., Ltd.(Juristic person representative of Ocean Plastics Co., Ltd.)
B. Chairmanof UNIVERSE ENTERPRISES (Juristic person representative of Ocean Plastics Co., Ltd.)
C. Chairman of FERMAT ENTERPRISES (Juristic person representative of Ocean Plastics Co., Ltd.)
D.Executive director of SAGE HOLDINGS (Juristic person representative of Ocean Group)
E. Executive director ofRISE FUTURE INT’L LTD (Juristic person representative of Ocean Group)
F. OPC HOLDINGSChairman (Juristic person representative of Ocean Group)
G. Supervisor of Dongguan Ocean Innovative Leather Products Co., Ltd.(Juristic person representative of RISE FUTURE INT’L LTD)
Note 4: If the general manager or equivalent (top manager) and the chairman of the board are the same person, or are related to each other as spouses or first cousins, the reasons, reasonableness, necessity and response measures should be disclosed:
A. The amendment to the articles of association to set up four Independent Directors was approved by the Board of Directors on March 26, 2021 and completed by the shareholders' meeting election on July 27, 2021.
B. The four existing independent directors are specialized in the fields of finance, accounting and law respectively, and can effectively perform their supervisory functions.
C. Arranging for directors to attend professional director courses of external organizations such as the Securities and Futures Commission to enhance the operational effectiveness of the Board of Directors.
D. No more than half of the current directors are also employees or managers.

3.Remuneration of Directors, Supervisors, General Manager, and Deputy General Manager:

(1-1) Remuneration of Directors (by way of disclosure of names at individual grade levels)

													Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None	Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None	Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None	Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None	Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None	Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None	Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None	Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None	Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None	Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None	Unit: NT$1,000 Relevant Remuneration Received by Directors Who are Also Employees Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%) Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary Salary, Bonuses, and Allowances (E) Severance Pay (F) Profit Sharing- Employee Bonus (G) Thecompa ny All companies in the consolidated financial statements Thecompa ny All companies in the consolidated financial statements The company All companies in the consolidated financial statements Thecompan y All companies in the consolidated financial statements cash stock cash stock 4,121 4,121 0 0 0 0 0 0 4,290 -10.06% 4,290 -10.06% None 0 0 0 0 0 0 0 0 164 -0.38% 164 -0.38% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 - - None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 97 0.03% 97 0.03% None 0 0 0 0 0 0 0 0 169 -0.40% 169 -0.40% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None 0 0 0 0 0 0 0 0 449 -1.05% 449 -1.05% None
Title	Name				Remuneration						Ratio of Total Remuneration (A+B+C+D) to Net Income (%)		Relevant Remuneration Received by Directors Who are Also Employees								Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%)		Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary
			Base Compensation(A)		Severance Pay (B)		Bonus to Directors(C)		Allowances (D)				Salary, Bonuses, and Allowances (E)		Severance Pay (F)		Profit Sharing- Employee Bonus (G)
			Thecomp any	All companies in the consolidate d financial statements	Thecomp any	All companies in the consolidate d financial statements	Thecompan y	All companies in the consolidate d financial statements	Thecomp any	All companies in the consolidated financial statements	Thecompan y	All companies in the consolidated financial statements	Thecompa ny	All companies in the consolidated financial statements	Thecompa ny	All companies in the consolidated financial statements	The company		All companies in the consolidated financial statements		Thecompan y	All companies in the consolidated financial statements
																	cash	stock	cash	stock
Director	TAN, KIN-MEN		144	144	0	0	0	0	25	25	169 -0.40%	169 -0.40%	4,121	4,121	0	0	0	0	0	0	4,290 -10.06%	4,290 -10.06%	None
	Hsuan Yang Investment Co., Ltd.	Rep. Wang Hai-Lun	144	144	0	0	0	0	20	20	164 -0.38%	164 -0.38%	0	0	0	0	0	0	0	0	164 -0.38%	164 -0.38%	None
	Want Want Co., Ltd.	Rep. Hsieh Yu-Chin	144	144	0	0	0	0	25	25	169 -0.40%	169 -0.40%	0	0	0	0	0	0	0	0	169 -0.40%	169 -0.40%	None
		Rep. Hung, Yung-Tsung	0	0	0	0	0	0	0	0	-	-	0	0	0	0	0	0	0	0	-	-	None
	Li Hsiang Industrial Co., Ltd.	Rep. Chu Tsung-Pin	144	144	0	0	0	0	25	25	169 -0.40%	169 -0.40%	0	0	0	0	0	0	0	0	169 -0.40%	169 -0.40%	None
	Peter Chen		144	144	0	0	0	0	25	25	169 -0.40%	169 -0.40%	0	0	0	0	0	0	0	0	169 -0.40%	169 -0.40%	None
	Wang Ju-Keng		82	82	0	0	0	0	15	15	97 0.03%	97 0.03%	0	0	0	0	0	0	0	0	97 0.03%	97 0.03%	None
	Hsieh Tzu-Yun		144	144	0	0	0	0	25	25	169 -0.40%	169 -0.40%	0	0	0	0	0	0	0	0	169 -0.40%	169 -0.40%	None
ndependent Director	Chang Yi-Yun		424	424	0	0	0	0	25	25	449 -1.05%	449 -1.05%	0	0	0	0	0	0	0	0	449 -1.05%	449 -1.05%	None
	Hou Ming-Li		424	424	0	0	0	0	25	25	449 -1.05%	449 -1.05%	0	0	0	0	0	0	0	0	449 -1.05%	449 -1.05%	None
	Chen Wei-Lung		424	424	0	0	0	0	25	25	449 -1.05%	449 -1.05%	0	0	0	0	0	0	0	0	449 -1.05%	449 -1.05%	None
	Chien Hsueh-Li		424	424	0	0	0	0	25	25	449 -1.05%	449 -1.05%	0	0	0	0	0	0	0	0	449 -1.05%	449 -1.05%	None

Note 1: The Representative of Want Want Co., Ltd. Changed into Hung, Yung-Tsung from Hsieh, Yu-Chin from Januar 1, 2023.

(2-1) Remuneration of supervisors: Not applicable

(3-1)Remuneration of thegeneral manager and deputy general manager (names and remuneration disclosed separately)

Unit: NT$1,000

Title	Name	Salary (A)	Salary (A)	Severance Pay (B)	Severance Pay (B)	Bonuses, and Allowances (C)	Bonuses, and Allowances (C)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Ratio of total compensation (A+B+C+D) to net income (%)	Ratio of total compensation (A+B+C+D) to net income (%)
		The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company		All companies in the consolidated financial statements		The company	All companies in the consolidated financial statements
								cash	stock	cash	stock
President	TAN, KIN-MEN	3,549	3,549	0	0	572	572	0	0	0	0	4,121 -9.66%	4,121 -9.66%

(4-1)Remuneration of the top five highest paid executives of listed companies (names and remuneration disclosed separately)

Unit: NT$1,000

Title	Name	Salary (A)	Salary (A)	Severance Pay (B)	Severance Pay (B)	Bonuses, and Allowances (C)	Bonuses, and Allowances (C)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Ratio of total compensation (A+B+C+D) to net income (%))	Ratio of total compensation (A+B+C+D) to net income (%))	Compensation paid to the General Manager and Deputy Genera Manager from an Invested Company Other Than the Company’s Subsidiary
		The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company		All companies in the consolidated financial statements		The company	All companies in the consolidated financial statements
								cash	stock	cash	stock
President	TAN, KIN-MEN	3,549	3,549	-	-	572	572	-	-	-	-	4,121 -9.67%	4,121 -9.67%	None
Assistant Manager	Shen Shao-Pin	1,906	1,906	-	-	344	344		-		-	2,250 -5.27%	2,250 -5.27%	None
Senior Manager	Chen Yi-Hsiung	1,501	1,501	-	-	256	256		-		-	1,757 -4.12%	1,757 -4.12%	None
Manager	Chang Yu-Hui	1,435	1,435	-	-	222	222		-		-	1,657 -3.88%	1,657 -3.88%	None
Senior Manager	Peng, Hung-Chang	1,481	1,481	-	-	173	173		-		-	1,654 -3.88%	1,654 -3.88%	None

Name of the managers who distributes employee compensation and how it is distributed



	Title	Name	Stock	Cash	Total	Total to net income after tax (%)
raoanND	President	TAN, KIN-MEN	-	-	-	-
	Assistant Manager	Shen Shao-Pin
	Financial Executive	Wang Yi-Ho

(4)Separate comparison and explanationof Remuneration for Directors, Supervisors, General Manager and Deputy General Manager in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, General Manager and Deputy General Manager:

Title	2022 ratio of total remuneration paid to directors, supervisors, general manager and deputy general manager to net income(%)	2022 ratio of total remuneration paid to directors, supervisors, general manager and deputy general manager to net income(%)	2021 ratio of total remuneration paid to directors, supervisors, general manager and deputy general manager to net income(%)	2021 ratio of total remuneration paid to directors, supervisors, general manager and deputy general manager to net income(%)
	The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements
Directors	-16.24	-16.24	3.64	3.64
Presidents and Vice Presidents

(1) The ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the two most recent fiscal years to directors, supervisors, General Managers and Deputy General Managers of the Company, to the net income:

Total compensation as a percentage of net income after tax of -16.24% in 2022 decreased by 19.88% from 3.64% for 2021. In 2022, the selling price of some products of the company increases, but the price of raw material VCM is higher due to the rising international freight, which greatly reduces the gross profit margin, resulting in a net operating loss in 2022. The non-operating income is also not as good as expected, resulting in a net loss after tax in 2022, so there is a sharp decline.

(2) The policies, standards, and portfolios for the payment of remuneration, the procedures for determining remuneration, and the correlation with business performance:

The remuneration of the Company's directors includes remuneration, director compensation, and business execution expenses, which is set forth in Article 17 of the Company’s Articles of Incorporation. Directors may be remunerated in accordance with the usual industry practice, and the board of directors is authorized to set such remuneration. Independent directors may receive fixed remuneration without participating in the distribution of directors' compensation. The directors shall be paid carriage fees as determined by the board of directors' meeting and shall be paid regardless of the Company's profit or loss. In accordance with Article 22 of the Company's Articles of Incorporation, not less than 1% of the Company's annual profit shall be allocated to employee compensation and not more than 2% to director compensation.

When an independent director serves as a member of the Audit Committee or the Compensation Committee, he or she shall receive remuneration for attending the meetings in person.

Remuneration of the general manager and deputy general manager includes salary, bonus, and profit sharing- employee bonus etc.; the salary and bonus are determined based on the degree of participation in the company's operations and the value of contributions. The profit sharing-

employee bonus is determined by the Board of Directors in accordance with the Company's Articles of Incorporation and reported to the shareholders' meeting. profit sharing- employee bonus is paid in accordance with the "Employee Bonus Payment Method" and is not paid to the Director who is also a manager. The distribution method is based on the ranking, performance appraisal and seniority.

The company pays directors and managers remuneration, in addition to considering the company's future operational development and operational risks, it has also comprehensively considered the payment method of the salary and compensation and the company's future risk matters, and at the same time evaluates the positive correlation with its operating performance, in order to seeka balance between sustainable operation and risk control.

4.Implementation of Corporate Governance:

(1) Board of Directors:

(1) Board of Directors

The most recent annual meeting of the Board of Directors was held five times (A) and the attendance of directors was as follows:

directors was	as follows:
Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%) (B/A)	Remarks
Director	TAN,KIN-MEN	5	0	100%	None
Director	Hsuan Yang Investment Co., Ltd.(representative:Wang Hai-Lun)	4	1	80%	None
Director	Want Want Co., Ltd.(representative:Hsieh Yu-Chin)	5	0	100%	None
Director	Li Hsiang Industrial Co., Ltd.(representative: Chu Tsung-Pin)	5	0	100%	None
Independent Director	Peter Chen	5	0	100%	None
Independent Director	Wang Ju-Keng	5	0	100%	None
Independent Director	Hsieh Tzu-Yun	5	0	100%	None
Independent Director	Chang Yi-Yun	5	0	100%	None
Director	Chen Wei-Lung	5	0	100%	None
Director	Chien Hsueh-Li	5	0	100%	None
Other mentionable items: 1. The Board of Directors shall state the date and time of the meeting, the content of the motion, the opinions of all independent directors and the Company's handling of the opinions of the independent directors if any of the following circumstances apply to the operation of the Board of Directors: (1) Matters set forth in Article 14-3 of the Securities and Exchange Act: The Company's Audit Committee is established by four independent directors, and the provisions of Article 14-3 are not applicable. The matters listed in Article 14-5 of the Securities and Exchange Act are referred to the Audit Committee for discussion, please refer to "(2) Operation of the Audit Committee". (2) Other than the foregoing,there were no other resolutions of the Board of Directors that were

opposed or qualified by the independent directors and were recorded or stated in writing: None.
If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: None.
Listed companies shall disclose information on the periodicity and duration, scope, manner and content of the evaluation of the self- (or peer) evaluation by the board of directors:

Board of Directors' Evaluation of Implementation

Evaluation Periodicity (Note 1)	Evaluation duration (Note 2)	Evaluation Scope (Note 3)	Evaluation manner (Note 4)	Evaluation Content (Note 5)
Performed once per year	01/012022 ~ 12/31/2022	Performance Evaluation of Board of Directors	Internal self-evaluation ofBoard of Directors	1. The degree of participation in the company's operation 2. Quality of Board of Directors' decisions 3. Composition and Structure of the Board of Directors 4. Election of Directors and Continuing Education 5. Internal control
		Performance evaluation of Individual Board Members	Director Self- evaluation	1. Mastery of company goals and tasks 2. Directors' Responsibilities Awareness 3. The degree of participation in the company's operation 4. Internal relationship management and communication 5. Professional and Continuing Education of Directors 6. Internal control
		Performance evaluation of Functional Committee	Audit Committee Self- evaluation	1. The degree of participation in the company's operation 2. Functional committee responsibility recognition 3. Functional committee decision quality 4. Functional Committee Composition and Selection of Members 5. Internal control
			Remuneration Committee’s Member Self- evaluation	1. The degree of participation in the company's operation 2. Functional committee responsibility recognition 3. Functional committee decision quality 4. Functional Committee Composition and Selection of Members 5. Internal control

Evaluation grades: 1 Very poor, 2 Poor, 3 Average, 4 Good, 5 Very good. Note 1: This refers to the implementation cycle of Board of Directors evaluation, for example, once a year.

Note 2: This refers to the period covered by Board of Directors evaluation, for example, the performance evaluation of Board of Directors from January 1, 2019 to December 31, 2019. Note 3: Evaluation Scope includes the performance evaluation of Board of Directors, of individual

board members, and of functional committee respectively.

Note 4: Evaluation Method includes internal self-evaluation of Board of Directors, peer evaluation, appointment of external professional organizations, experts or other appropriate means to conduct performance evaluation, peer evaluation, appointment of external professional organizations, experts or other appropriate means to conduct performance evaluation.

Note 5: The Evaluation Content includes at least the following items according to the Evaluation Scope:

 - (1) Performance evaluation of Board of Directors: includes at leastthe degree of participation in the company's operation, quality of board of directors' decisions, composition and structure of the board of directors, election of directors and continuing education, and internal control, etc.

 - (2) Performance evaluation of Individual Board Members: includes at leastmastery of company goals and tasks, directors' responsibilities awareness, the degree of participation in the company's operation, internal relationship management and communication, professional and continuing education of directors, and internal control, etc.

 - (3) Performance evaluation of Functional Committee: the degree of participation in the company's operation, functional committee responsibility recognition, functional committee decision quality, functional committee composition and selection of members, and internal control, etc.

An evaluation of targets for strengthening the functions of the board of directors during the current and immediately preceding fiscal years (e.g. the establishment of an audit committee, the promotion of information transparency, etc.), and measures taken toward achievement thereof:
(1) To build up a good board governance system, improve the supervisory function and strengthen the management function of the Company, and in accordance with the provisions set forth in Taiwan Stock Exchange Corporation’s “Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers”, if chairman and general manager are the same person, the number of independent directors should not be less than 4. Four independent directors were elected at the general meeting held on 27 July 2021.
(2) Establishmen of Audit Committee and Remuneration Committee: On July 27, 2021, the shareholders' meeting was re-elected and the 3rd Audit Committee was formed by 4 independent directors to exercise the duties and responsibilities stipulated by the Securities and Exchange Act, the Company Act, and other laws and regulations. At the same time, four independent directors formed the 5th Remuneration Committee to evaluate the remuneration policies and systems of the directors and managers of the Company, and to strengthen the Board of Directors' execution.
(3) In line with the amendment of the regulations: On March 26, 2021 the board amended the Company’s "Procedure for Board of Directors Meetings," "Procedures for Election of Directors", and "Remuneration Committee Charter," and implemented them in accordance with the revised regulations in an effort to enhance the transparency of information, with good implementation.
(4) Strengthening corporate governance: On August 11, 2022, the Board of Directors set up a corporate governance officer to take charge of corporate governance affairs and assist the directors to perform business to play a supervisory role. On December 21, 2022, “Corporate Governance Best-practice Principles” have been revised and approved by the Board of Directors.
(5) Conduct annual performance evaluations for the board, board members and functional committees to strengthen the board's functions.
(6) The Company announces important resolutions of each board meeting on the Company's website and takes out liability insurance for directors and managers to enhance the transparency of the Company's operational information and to protect the interests of shareholders.
Note 1: If the director or supervisor is a legal entity, the name of the legal shareholder and the name ofthe representative should be disclosed.
Note 2: (1) The actual attendance rate (%) is calculated based on the number of meetings of the Board of Directors and the actual number of meetings attended during the term of office of the director.
- (2) If a director or supervisor is re-elected before the end of the year, both the new and old director or supervisor should be listed and the date of re-election should be indicated in the Remarks

column.The actual attendance rate (%) is calculated based on the number of meetings of the Board of Directors and the actual number of attendance during the term of office.

(2) Audit Committee:

Total of 4 (A) Audit Committee meetings were held in 2022. The attendance of the independent directors was as follows:

directors	was as follows:
Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) (B/A) (Note)	Remarks
Independent Director	Hou Ming-Li	4	0	100%	None
Independent Director	Chang Yi-Yun	4	0	100%	None
Independent Director	ChenWei-Lung	4	0	100%	None
Independent Director	Chien Hsueh-Li	4	0	100%	None
The Audit Committee exercises the duties and responsibilities stipulated by the Securities and Exchange Act, the Company Act, and other laws and regulations, and takes the responsibility for carrying out the fair representation of the Company's financial statements, appointment or dismissal of attesting CPAs and evaluation of CPAs’ independence and performance, effective implementation of the Company’s internal control, the Company's compliance with relevant laws and regulations, control and management of existing or latent risks, etc. Other mentionable items: 1. If the Audit Committee operates under any of the following circumstances, it shall state the date and period of the Audit Committee meeting, the content of the motion, the content of the objections, reservations or significant recommendations of the independent directors, the results of the Audit Committee resolution and the Company's handling of the Audit Committee's opinion. (1) The matters listed in Article 14-5 of the Securities and Exchange Act.: Please refer to Note 1. (2) Other than the foregoing, any item not passed by the Audit Committee but approved by at least two-thirds of all the directors: There were no matters under (2) above in FY2022. 2. If there are independent directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: None. 3. Communications between the independent directors, the Company's chief internal auditor and CPAs (e.g. the items, methods and results of audits of corporate finance or operations, etc.): (1) The audit supervisor of the company shall deliver the audit report and follow-up report to each audit committee member after the verification of the audit report and follow-up report, and report to the audit committee meeting. Both parties have smooth communication. The audit supervisor and accountants of the company also maintain smooth communication channels, and according to the regulations of the competent authority, the implementation of the auditplan of the nextyear and the implementation

of the audit plan of the previous year, as well as the improvement of the internal control deficiency and abnormal matters, and complete the report.

  - (2) The Company invites accountants to sit on the Audit Committee to report and communicate to the independent directors the results of the review or examination of the quarterly and annual financial statements, key audit matters, amendments to the IFRSs bulletin, sources and uses of special surplus reserves, or other statutory issues affecting the Company.

Note: * If an independent director vacates his or her position before the end of the year, the date of departure should be indicated in the Remarks column. The actual attendance rate (%) is calculated based on the number of Audit Committee meetings and the actual attendance during their employment.
If there is a re-election of independent directors before the year-end, both new and existing independent directors should be listed, and the date of re-election should be indicated in the Remarks column. The actual attendance rate (%) is calculated based on the number of meetings of the Audit Committee and the actual attendance of the Audit Committee during the term of employment.
Note 1: The Audit Committee held four meetings in 2022 to consider, among other things, the matters set forth in Article 14-5 of the Securities and Exchange Act.:
Adoption or amendment of an internal control system pursuant to Article 14-1.
Assessment of the effectiveness of the internal control system.
Adoption or amendment, pursuant to Article 36-1, of handling procedures for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, or endorsements or guarantees for others.
A matter bearing on the personal interest of a director.
A material asset or derivatives transaction.
A material monetary loan, endorsement, or provision of guarantee.
The offering, issuance, or private placement of any equity-type securities.
The hiring or dismissal of an attesting CPA, or the compensation given thereto.
The appointment or discharge of a financial, accounting, or internal auditing officer.
Annual financial reports and second quarter financial reports that must be audited and attested by a CPA, which are signed or sealed by the chairperson, managerial officer, and accounting officer.
Any other material matter so required by the company or the Competent Authority.

The implementation in 2022:

The date and period of the Audit Committee meeting	The content of the motion	The content of the objections, reservations or significant recommendations of the independent directors	The results of the Audit Committee resolution	The Company's handling of the Audit Committee's opinion
The 4~~th~~ meeting of 3nd Committee on March 23, 2022	1. Amendments to the Company's Procedures for acquiring or disposing of assets for review and approval 2. The Company's "Statement of Internal Control” in compliance with the “Regulations Governing Establishment of Internal Control Systems by Public Companies” issued by the Financial Supervisory Commission for review and approval. 3. For preparation of 2021 financial report and consolidated financial report for determination.	None	After the chairman consulted all the members present, the motion was passed	Submitted to the 5th meeting of 21st Board of Directors for deliberation and approved by all directors present

	4. The Company's 2021 earnings distribution proposal and 2021 business report for determination. 5. In response to the restructuring of the CPA Firm's internal administrative practices, the Company’s CPA is proposed to change from KPMG Taiwan’s CPA Chen Chen-Chien, and CPA Huang Yung-Hua to KPMG Taiwan’s CPA Yu Sheng-Ho and CPA Huang Yung-Huain the first quarter of 2022, and the CPA independence evaluation for review and approval.
The 5~~th~~ meeting of 3rd Committee on May 11, 2022	1. The Company's 1~~st~~Quarter Report on Consolidated Financial Statements for Fiscal Year 2022 for determination.	Submitted to the 6th meeting of 21st Board of Directors for deliberation and approved by all directors present
The 6~~th~~ meeting of 3rd Committee on Aug. 11, 2022	1. The Company's 2~~nd~~Quarter Report on Consolidated Financial Statements for Fiscal Year 2022 for determination. 2.The former manager of the audit office, Lu, Chien-An will be transferred to the management department. It is proposed that the special assistant of the audit office Wu, Shang-Pang be transferred to be the manager of internal audit for determination.	Submitted to the 7th meeting of 21st Board of Directors for deliberation and approved by all directors present
The 7~~th~~ meeting of 3rd Committee on Nov. 3, 2022	1.The Company's 3~~rd~~Quarter Report on Consolidated Financial Statements for Fiscal Year 2022 for determination.	Submitted to the 8th meeting of 21st Board of Directors for deliberation and approved by all directors present

(3) Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”:

	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No		Abstract Illustration
1. Does the company establish and disclose theCorporate Governance Best-Practice Principlesbased on “Corporate Governance Best-PracticePrinciples for TWSE/TPEx ListedCompanies”?	V		The Company has established the "Corporate Governance Best-Practice Principles", which was approved by the Board of Directors on December 21, 2021, and in accordance with the "Corporate Governance Best-Practice Principles", the Company has strengthened its internal control system and enhanced information transparency in order to protect the interests of shareholders and stakeholders.		None
2. Shareholding structure & shareholders’ rights
(1) Does the company establish an internaloperating procedure to deal with shareholders’suggestions, doubts, disputes and litigations,and implement based on the procedure?	V		(1) The Company has a spokesperson and a deputy spokesperson to deal with issues such as shareholder proposals or disputes; Investors can ask questions or make suggestions from the email address provided on the company's website.		None
(2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares?	V		(2) The Company's stock agency provides a register of shareholders,keeps up to date with a list of substantial shareholders and ultimatecontrollers of substantial shareholders and interacts well with the substantial shareholders.		None
(3) Does the company establish and execute the risk management and firewall system within its conglomerate structure?	V		(3) “The Subsidiary Management Regulations” have been established to implement a mechanism for the supervision of subsidiaries.		None
(4) Does the company establish internal rules against insiders trading with undisclosed information?	V		(4) The Company has in place the “Procedures for Handling Material Inside Information,” and the“Procedures for Ethical Management and Guidelines for Conduct”,whichprohibit insiders from trading		None

	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No		Abstract Illustration
			in securities using informationnot publicly available in the market.When new directors and managers assume office, the Company also provides information on the relevant regulations and reminds them of the precautions to be taken when insider trading is involved.
3. Composition and Responsibilities of the Board of Directors
(1) Does the Board develop and implement adiversified policy for the composition of itsmembers?	V		(1) In the nomination and selection of board members, the academicqualifications and experience of each member have been assessedand the "Procedures for Election of Directors and Supervisors" andthe "Corporate Governance Best Practice Principles" have beencomplied with to ensure that pluralism, independence andstakeholder views are taken into consideration. The current directors have professional backgrounds, skills and industry experience. Among the board members, there are 4 independent directors, including 2 female directors, whose professional fields include law, finance, corporate governance and construction, etc. They provide advice on the operation and future development of the Company. Please refer to pages 11-12 for details of the diversityof the Board of Directors.		None
(2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee?	V		(2) The Company has set up a remuneration committee and an auditcommittee as required by law and Other functional committees will be established in the future depending on actual operational needs.		None

	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No		Abstract Illustration

(3) Does the company establish a standard to measure the performance of the Board, and implement it annually? The results of the performance evaluation will be reported to the board of directors and used as reference for individual director's salary compensation and nomination for reappointment?	V		(3) The "Self-Evaluation or Peer Evaluation of the Board of Directors" was approved by the Board of Directors on December 22, 2020 and will be carried out regularly every year. The result of Self-Evaluation or Peer Evaluation of 2022 will be sumitted to Board of Directors on March 14, 2023.		None
(4) Does the company regularly evaluate the independence of CPAs?	V		(4) The Company evaluates the independence and competence of the CPA every year, in addition to requiring the certified accountant to provide the "Total Independence Statement", the evaluation will be made according to the standard of Note 2. Focusing on the number of years of audit services, fees, nature of non-audit services, legal proceedings, and whether there are any functional, relational or business interests with the management of the Company, which founds they are not interested parties. The results of the evaluation for the last two years were approved by the board meeting on March 23,2022 and March 14,2023 respectively.		None

	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No		Abstract Illustration
4. Does the listed company have a suitable and appropriate number of corporate governance personnel and designate a corporate governance officer to be responsible for corporate governance-related matters (including but not limited to providing directors and supervisors with information necessary for the execution of their business, assisting directors and supervisors in complying with laws and regulations, conducting board and shareholders' meeting related matters in accordance with the law, and preparing minutes of board andshareholders'meetings,etc.)?	V		On August 11, 2022, the Board of Directors approved to change of the corporate governance officer into General Manager Office Mr. Chiu, Chun-Fu, General Manager Office. The main responsibilities of the corporate governance officer are to handle the board of directors and the shareholders meeting in accordance with the law, prepare the board of directors and the shareholders meeting minutes, assist the directors in the appointment and continuous education, provide the directors with the information required for the execution of the business, assist the directors to comply with laws and regulations, etc. The corporate governance officer’s qualification is based on the requirement, and completed the professional education/training in 2022. (see page 27)		None
5. Does the company establish a communication channel and build a designated section on its website for stakeholders, as well as handle all the issues they care for in terms of corporate social responsibilities?	V		A stakeholder section has been set up on the website. Stakeholders may contact the relevant departments and units of the Company at any time when necessary, and the Company will assign dedicated staff to handle the matter as appropriate.		None
6. Does the company appoint a professional shareholder service agency to deal with shareholder affairs?	V		The Company has appointed KGI Securities Co to act for it in relation to shareholder affairs.		None
7. Information Disclosure
(1) Does the company have a corporate website to disclose both financial standings and the status	V		(1) A website has been set up and company information is regularly disclosed.		None

	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No		Abstract Illustration
of corporate governance?			https://www.opc.com.tw/
(2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)?	V		(2) The Company has a spokesperson and a deputy spokesperson in place and discloses relevant information on the Market Observation Post System on a regular and occasional basis.		None
(3) Does the Company announce and report its annual financial statements within two months after the end of the fiscal year, and announce and report its first, second and third quarterly financial statements and its operations for each month well in advance of the prescribed deadline?		V	(3) The Company's financial reports for the first, second and third quarters, as well as the announcement and reporting of operations for each month, were made within the deadlines set by thecompetent authorities, except for the announcement and reportingof annual financial reports within two months after the year-end.		Communicate with certified public accountants with the goal of early announcement and reporting of financial reports.
8. Is there any other important information to facilitate a better understanding of the company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures,the implementation of customer	V		(1) Employee rights, employee care: The Company is committed toproviding a healthy and safe working environment in accordancewith the law, and has followed the internal management rules onappointment, promotion, rewards and punishments, benefits, salaries,training and retirement to ensure fair opportunities and conductguidelines. In addition to the establishment of the Employee WelfareCommittee, the Sexual Harassment Complaint Handling Committee,the Award and PenaltyCommittee,and the Labor PensionCommittee,the		None

	Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Implementation Status	(Note 1)	Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” and Reasons
		Yes	No		Abstract Illustration
relations policies, and purchasing insurance for directors and supervisors)?				Company also holds labor-management meetings toprotect the rights of employees, prevent accidents and injuries, andseek the welfare of employees. (2) Investor relations: The Company has set up a spokesperson system to provide a point of contact with shareholders and corporate investment institutions. (3) Supplier relations: The Company maintains equal and good relations with its suppliers. (4) Stakeholder rights:The company maintains smooth ommunication channels with stakeholders, including correspondent banks, other creditors, shareholders, employees, customers, consumers, supplier communities, etc. (5) Directors' and independent directors' continuing education: Please refer to page 26 of the annual report (Schedule 1). (6) Implementation of risk management policies and risk measurement standards: Major operating policies, investment proposals, endorsement and guarantees, and capital loans are evaluated by the responsible departments and implemented in accordance with the resolutions of the board of directors, while the audit office prepares annual audit plans and conducts audits based on the results of the risk assessment. (7) Implementation of customer policy: Through the ISO management system, we ensure product quality and reduce energy consumption. In case of customer complaint about quality, we follow the customer complaint handling process to address the

	Implementation Status	Implementation Status	Implementation Status	Implementation Status
	Yes	No		Abstract Illustration
			complaints for review and improvement. (8) The articles of incorporation provide for the taking out of liability insurance for directors and essential officers and the Company has (9) purchased directors' and managers' liability insurance, and the relevant renewal information has been reported to the Board of Directors on December 21,2022.
9. Please describe the improvements that have been made to the results of the latest annual corporate governance assessment issued by the Corporate Governance Center of the Taiwan Stock Exchange Corporation, and indicate the priorities and measures for improvement where improvements have not yet been made. (Not required for companies not included in the assessment) Improvement completed: (1) to disclose the professional qualifications and experience of the members of the audit committee, annual work priorities and operational status in annual report. (2) The interim financial statement has been approved by the audit committee and submitted to the board of directors for discussion and resolution. (3) to disclose the scope of authority and training of the corporate governance supervisor in the website and annual report. (4) to stablish an information communication security risk management framework, and formulates information communication security policies and specific management plans at the company’s website. (5) to publish major news in English simultaneously. (6) to disclose information related to finance, business and corporate governance at the company’s website. Improvement priority: (1) to formulate the standards for the company's insiders to buy and sell the company's stocks. (2)to strengthen independent communication between independent directors,internal audit supervisors and accountants.

Note 2: Standards for evaluating the CPA’s independence

No.	Evaluation indicators	Evaluation Results	Passed Independence Evaluation
1	The CPA has been in office for less than 7years	Yes	Yes
2	The CPA and audit team members have never held the position as director, managerial officer, or any position materiallycritical to the audited case in the most recent 2years.	Yes	Yes
3	The CPA and members of the audit team have no familial relationships with directors, managers, or people in positions that have major impact on Corporation audits at the Company.	Yes	Yes
4	No direct or indirect substantial financial interest between the CPA and the Company.	Yes	Yes
5	Accounting firm of CPA is not overly reliant on funds from any single client,includingthe Company.	Yes	Yes
6	No substantially close business relationship between the CPA and the Company.	Yes	Yes
7	No potential employment relationship exists when the CPA audits the Company’s report.	Yes	Yes
8	Non-audit services provided by the CPA to the Company have no direct impact on the major items of audit servicesprovided.	Yes	Yes
9	The CPA is not representing the Company in litigation of a third party or other disputes.The CPA does not represent the Company in defending legal cases or other disputes with third parties.	Yes	Yes
10	The CPA does not promote or broker stocks or other securities issued bythe Company.	Yes	Yes

(Schedule I)

Education/training for the Company's directors and independent directors in 2022: The term of office of the current directors started on July 27, 2021 and will end on July 26, 2024.

Title	Name	Date	Organizer	Course Name	hours	Whether or not the education/ training meets the requirements
Director	TAN, KIN-MEN	10/21/2022	Taiwan Corporate Governance Association	The Best Practices for Enterprise Innovation	3	Yes
		11/25/2022	Taiwan Corporate Governance Association	Global Trends and Business Opportunities of Low Carbon Economy and Enterprise Low Carbon Innovation	3	Yes
Director	Peter Chen	10/21/2022	Taiwan Corporate Governance Association	The Best Practices for Enterprise Innovation	3	Yes
		11/25/2022	Taiwan Corporate Governance Association	Global Trends and Business Opportunities of Low Carbon Economy and Enterprise Low Carbon Innovation	3	Yes
Director	Hsieh Tzu-Yun	10/12/2022	Securities & Futures Institute	2022 Equity trading legal compliance promotion meeting for insider	3	Yes
		11/25/2022	Taiwan Corporate Governance Association	Global Trends and Business Opportunities of Low Carbon Economy and Enterprise Low Carbon Innovation	3	Yes
Director	Chu Tsung-Pin	10/12/2022	Securities & Futures Institute	2022 Equity trading legal compliance promotion meeting for insider	3	Yes
		11/25/2022	Taiwan Corporate Governance Association	Global Trends and Business Opportunities of Low Carbon Economy and Enterprise Low Carbon Innovation	3	Yes
Director	,oNis uY - nioo	10/11/2022	Taiwan Stock Exchange	Release of reference guidelines for independent directors and audit committees to exercise their powers and directors and supervisors promotion meeting	3	Yes
		10/21/2022	Taiwan Corporate Governance Association	The Best Practices for Enterprise Innovation	3	Yes
Director	Wang Hai-Lun	10/21/2022	Taiwan Corporate Governance Association	The Best Practices for Enterprise Innovation	3	Yes

		11/25/2022	Taiwan Corporate Governance Association	Global Trends and Business Opportunities of Low Carbon Economy and Enterprise Low Carbon Innovation	3	Yes
Independent Director	Hou Ming-Li	11/29/2022	National Federation of CPA Associations of the R.O.C.	eenYoroon raoanNmNornM Sustainable Carbin	3	Yes
		12/15/2022	National Federation of CPA Associations of the R.O.C.	Financial report fraud and forensic practice sharing	3	Yes
Independent Director	Chang Yi-Yun	04/26/2022	Taiwan Corporate Governance Association	Prevention of Labor Dispute and Corporate Governance	3	Yes
		06/28/2022	Taiwan Corporate Governance Association	Quickly interpret and prepare for ESG disclosure of corporate governance 3.0	3	Yes
Independent Director	Chen Wei-Lung	07/14/2022	Securities & Futures Institute	Net Zero Trends: Practical Observations on Board ESG Decision-Making	3	Yes
		09/29/2022	Taiwan Stock Exchange	Release of reference guidelines for independent directors and audit committees to exercise their powers and directors and supervisors promotion meeting	3	Yes
Independent Director	Chien Hsueh-Li	10/21/2022	Taiwan Corporate Governance Association	The Best Practices for Enterprise Innovation	3	Yes
		11/25/2022	Taiwan Corporate Governance Association	Global Trends and Business Opportunities of Low Carbon Economy and Enterprise Low Carbon Innovation	3	Yes

Education/training for the Company's corporate governance officer in 2022:

Name	Date	Organizer	Course Name	hours	Total hous
nioY niYo - uY	10/05/2022	Securities & Futures Institute	2022 Equity trading legal compliance promotion meetingfor insider	3	9
	10/21/2022	Taiwan Corporate Governance Association	The Best Practices for Enterprise Innovation	3
	12/06/2022	Taiwan Corporate Governance Association	Global Trends and Business Opportunities of Low Carbon Economy and Enterprise Low Carbon Innovation	3

(4) Composition, Responsibilities and Operations of the Remuneration Committee:

(1) Professional Qualifications and Independence Analysis of Remuneration Committee Members:

Title (Note 1)	Criteria Name	Professional Qualification and Expereices (Note 2)	Independence Situation (Note 3)	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Remuneration Committee Member
Convener	Chen Wei-Lung	Refer to page 11, Information of Directors and Supervisors (2): 1. Disclosure of directors’ professional qualifications and independence of the independent directors	Refer to page 11,Information of Directors and Supervisors (2): 1. Disclosure of directors’ professional qualifications and independence of the independent directors	3
Independent Director	Hou Ming-Li			0
Independent Director	Chang Yi-Yun			2
Independent Director	Chien Hsueh-Li			0

Note1: In the form, please specify the relevant work, seniority, professional qualifications and experience of members of the Remuneration Committee, as well as Independence situation; for Independent Director, please remark referring to Appendix 1 Directors and Supervisors (1) on page 8. As for tile, please enter Independent Director or other (please add a note for convener).
Note2: Professional Qualification and Expereices: Sepcify the professional qualifications and experiences of individual remuneration committee members.
Note 3: Independence situation: Specify that the members of the Remuneration Committee meet the Independence situation, including but not limited to whether relatives within the second degree of kinship of the persion’s spouse act as directors, supervisors or employees of the company or its affiliated companies; the number and proportion of the company's shares held by relatives within the second degree of kinship (or in the name of others) of the persons’s spouse; Whether to act as a Director, supervisor or employee of a company (referring to the provisions set forth in Subparagraphs 5 to 8, Paragraph 1, Article 6 of 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) that has a specific relationship with the company; the amount of compensation received for providing services such as business, legal, financial accounting and other services to the company or its affiliates in the last two years.
(2) The implementation of Remuneration Committee:
A. The company's Remuneration Committee has 4 members, consisting of 4 Independent Directors. The Remuneration Committee members elected Mr. Chen Wei-Lung as the convener.
B. The 5th term of members: From July 27, 2021 to July 26, 2024. The Remuneration Committee held 4 meetings (A) in the most recent year. The qualifications and attendance of the members are as follows:

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) (B/A) (Note)
Convener	Chen Wei-Lung	3	0	100%
Committee Member	Hou Ming-Li	3	0	100%
Committee Member	Chang Yi-Yun	3	0	100%
Committee Member	Chien Hsueh-Li	3	0	100%
Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution bythe board of directors, and the Company’s response to the remuneration committee’s opinion (eg.,the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): No such case. 2. Resolutions of the remuneration committee objected to by members or subject to a qualifiedopinion and recorded or declared in writing, the date of the meeting, session, content of the motion,all members’ opinions and the response to members’ opinion should be specified: No such case.

Schedule 1

Schedule 1
The date and period of the Remuneration Committee meeting	The content of the motion	The content of the objections, reservations or significant recommendations of the Remuneration Committee	The results of the Remuneration Committee resolution	The Company's handling of the Remuneration Committee's opinion
The 3~~rd~~ meeting of 5th Committee on March 23, 2022	1. For determination of the Company's 2021 employee compensation and director compensation. 2. The distribution of 2021 the Company’s director remuneration, and the the distributed amount of managerial officers among the employee’s remuneration for determination.	None	All the members present, the motion was passed without objection.	Submitted to the 5th meeting of 21th Board of Directors for deliberation and approved by all directors present.
The 4th meeting of 5th Committee on Aug. 11, 2022	1.The former manager of the audit office, Lu, Chien-An will be transferred to the management department. It is proposed that the special assistant of the audit office Wu, Shang-Pang be transferred to be the manager of internal audit for determination.		All the members present, the motion was passed without objection.	Submitted to the 7th meeting of 21th Board of Directors for deliberation and approved by all directors present.

	2. The Director of corporate governance was originally held by the Manager of Financial Department Wang, Yi-Ho, and it is planned to be replaced by Senior Commissioner in the audit office Chiu, Chun-Fu for determination.
The 5th meeting of 5th Committee on Dec. 21. 2022	1. Issueance of 2022 year-end bonus for manager and employees.		All the members present, the motion was passed without objection.`。`	Reported to the 9~~th~~ meeting of 21th Board of Director.

Note : (1)If a member of Remuneration Committee vacates his or her position before the end of the year,

the date of departure should be indicated in the Remarks column. The actual attendance rate (%) is calculated based on the number of Audit Committee meetings and the actual attendance during their employment.
(2)If there is a re-election of Remuneration Committee before the year-end, both new and existing independent members should be listed, and the date of re-election should be indicated in the Remarks column. The actual attendance rate (%) is calculated based on the number of meetings of the Remuneration Committee and the actual attendance of the RemuneraitonCommittee during the term of employment.

Remuneration Committee’s duties:

The Committee shall exercise the care of a good administrator to faithfully perform the following duties and present its recommendations to the board of directors for discussion.

Establishing and periodically reviewing the performance evaluation, and the policies, systems, standards, and structure for the compensation of the directors, supervisors, and managerial officers.
Periodically evaluating and setting the director’s and managerial officer’s salary and compensation.

(5) Fulfilment of Sustainable Development and Deviations from the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies":

Promoting items	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
1. Has the company established a governance structure to promote sustainable development and set up a dedicated (part-time) unit to promote sustainable development, with the Board of Directors authorizing senior management to handle the matter, and the Board of Directors supervising the situation?	V		The company's Sustainability Report was officially launched in November 2021. With the goal of fulfilling social responsibilities, it will continue to promote corporate governance, environmental protection and social care and other issues, and make contributions to the sustainable development of the society as a whole while creating profits for the company and safeguarding shareholders' rights and interests.In order to take up the role of sustainable management, the Company has established an ESG promotion team with the Chairman as the chief convener and the Assistant Manager as the deputy chief convener. Each plant manager is the convener, and there is an executive secretary. The team is divided into management, supply chain, labor rights, social participation, and sustainable development groups according to their functions to implement corporate social responsibility and report the results to the Board of Directors annually. On November 3, 2022, when the company reported the Compilation Schedule of Sustainability Report to the Board of Directors that major themes had been specified in the questionnaire returned by Stakeholders. At present, management objectives have been formulated for major themes. According to the assessment results of risks and opportunities, each department will develop specific and feasible work objectives for implementation and start writing. It is expected that the second Sustainability Report will be issued in 2023 and the results will be reported to the Board of Directors.	None
2. Does the Company conduct risk assessment onenvironmental, social and corporate governanceissues related to its operations in accordance withthe principle of materiality and establish relevantrisk management policies or strategies? (note 2)	V		The first Sustainability Report is expected to be issued in 2023, covering the business data from January 1, 2022 to December 31, 2022. The scope of information is the company's factories and operations in Taiwan, but does not include subsidiaries. The "Sustainable Development Materiality Questionnaire" is provided to external stakeholders and internal senior executives to assess the major ESG issues and to set related managementstrategiesand specific implementation targets to reduce the impact of related risks.The management strategies and implementationgoals formulated bythe	None

		Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)
uN,	en	Abstract Illustration
		company based on environmental, social and governance issues related to operations: Major Issues Evaluation content Management Strategy and Implementation Objectives Economic Environmental Social Legal compliance Management policy: compliance, hazard prevention, communication and consultation, continuous improvement. Implementation objectives: 1. Improve the operatingenvironment to avoid unsafe and illegal operations. 2. Establish operating standards according to internal control system. 3. Implement the audit work. 4.External expert assistance. Economic Environmental Social Grievance Mechanism Management policy: Provide a smooth and unobstructed grievance channel, through the platform to put forward policy statements and specific actions. Implementation objectives: Build a simple and diverse grievance channel for stakeholders to participate in policy discussions and decisions. Economic Economic Performance Management policy: Integrity, pragmatism, stability and innovation.Implementation objectives: 1. Toward sustainable development of enterprises to protect the environment and reduce carbon emissions. 2. Improve the AI automation process to promote the transformation of enterprises. 3. Revitalize corporate assets to
		Major Issues	Evaluation content	Management Strategy and Implementation Objectives
		Economic Environmental Social	Legal compliance	Management policy: compliance, hazard prevention, communication and consultation, continuous improvement. Implementation objectives: 1. Improve the operatingenvironment to avoid unsafe and illegal operations. 2. Establish operating standards according to internal control system. 3. Implement the audit work. 4.External expert assistance.
		Economic Environmental Social	Grievance Mechanism	Management policy: Provide a smooth and unobstructed grievance channel, through the platform to put forward policy statements and specific actions. Implementation objectives: Build a simple and diverse grievance channel for stakeholders to participate in policy discussions and decisions.
		Economic	Economic Performance	Management policy: Integrity, pragmatism, stability and innovation.Implementation objectives: 1. Toward sustainable development of enterprises to protect the environment and reduce carbon emissions. 2. Improve the AI automation process to promote the transformation of enterprises. 3. Revitalize corporate assets to

			Implementation Status(Note 1)	Implementation Status(Note 1)
uN,	en		Abstract Illustration
				improve efficiency. 4. Increase high value-added products to create profits and give back to shareholders and employees.
		Economic	Corporate Governance	Management policy: Protect the legitimate rights and interests of shareholders and take into account the interests of other related-parties. Implementation objectives: Provide an effective supervision mechanism to encourage enterprises to make good use of resources, improve efficiency, and enhance competitiveness.
		lneoaS	Occupational Safety and Health	Management policy: Avoid hazardous accidents, ensure the health of personnel, implement site safety, and promote harmony and common prosperity among workers and stakeholders. Implementation objectives: 1. Improve the operating environment and avoid unsafe and illegal operations. 2. Effective implementation of internal control system 3. Meet the requirements of environmental emission standards. 4. Zero violation, zero fine, zero pollution, zero disaster, and zero grievance.
		Environmental	Chemical materials and	Management policy: Comply with the law and prioritize the environment. Implementation objectives: In

			Implementation Status(Note 1)	Implementation Status(Note 1)
uN,	en		Abstract Illustration
			factory safety	compliance with chemical control laws and regulations, regular drills are held to ensure zero leakage and zero pollution.
		Environmental	Green Investment and Transformation	Management policy: Continue to develop energy-saving, environmental protection, green, non-toxic, low-carbon materials and industries. Implementation objectives: 1. Increase sales of existing green products. 2. Accelerate the development of other green materials. 3. Increase the business layout in green and low-carbon fields.
		Environmental	Water Resources Management	Management policy: Cherish water resources, enhance the recycling of groundwater, tap water reduction, and reclaimed water recovery. Implementation objectives: 1.The goal is to reduce the consumption per unit of production in 2019 by 1% and decrease year by year. 2.Xinwu Plant implements various monitoring of water resources and complies with regulations and EIA standards. 3.Taoyuan Plant must comply with discharge standards for water discharge. 4.Each plant ensures compliance with the relevant laws and regulations of the Water Pollution Control Act.

Promoting items				Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en		Abstract Illustration
					5. Chungli Plant replaces old equipment year by year, improves water efficiency, implements water resource management to meet laws and regulations.
3. Environmental issues
(1) Whether the company has established appropriate environmental management system accordingto its industrial characteristics?	V		Among our plants in Taiwan, Xinwu Plant, Taoyuan Plant, and Chungli Plant have all obtained ISO 14001 certification, and are audited by an objective third party to achieve continuous improvement, to avoid pollutingthe environment and the earth's ecology.			None
(2) Does the company advise to endeavor to utilize energy more efficiently and use renewable materials which have a low impact on the environment to improve sustainability of natural resources.	V		The Company is actively implementing the concept of remainder reuse, recycling and energy saving, industrial waste reduction, refuse sorting, paper reduction and paper reuse, and encouraging the use of eco-friendly chopsticks, cups and internal network operations to alleviate the impact on the environment. Each plant is gradually replacing its equipment and using low energy consumption equipment, such as the Taoyuan plant replacing its motors with IE3 high efficiency motors and Automatic Frequency air compressors; the Chungli plant replacing high efficiency inverter air compressor; and the Xinwu plant using LED energy-saving light bulbs throughout theplant.			None
(3) Does the company assess the impact of climate change on its current and future operations? What are the potential risks and opportunities, and what are the measures to address climate related issues?	V		The company identified the possible transformation of operations and the risks associated with the entity by referring to the TCFD model and method, and also identified potential opportunities in the changing climate. Risk Items: 1. Water, electricity and work stoppages caused by storms and rainstorms. 2. Continued increase in raw materials. 3. Carbon emission taxation problems. 4. Energy shortage and disconnection of supply. 5. Industry being stigmatized. 6. Acute infectious diseases are rampant. Opportunity Projects: 1. low water consumption and low energy consumption technology. 2. participation in green energy development. 3. development of new green products. 4. energy diversification. 5. upgradingequipment automation and intelligence.			None

Promoting items	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
			Response Measures :In line with the government's green energy policy, solar power generation systems with a total capacity of 2,110 kilowatts were built at Xinwu Plant and Taoyuan 3rd Plant. 2. CELLwood medical tape was developed at Xinwu Plant. 3. PE flexible pipes and plastic wood for green building materials were produced at Chungli Plant. 4. Water-based PU synthetic leather was produced at Taoyuan 3rd Plant. Solar power system and power generation situation of Xinwu Plant, Taoyuan Plant and Taoyuan3rdplant: Year Power generation (kwh) Carbon reduction (mt) Equivalent afforestation area (ha) 2021 2,757 2,784 187 2022 2,709 2,736 184 R&D situation ofgreen buildingmaterials—Cellwood: Year Production Capacity (mt) Sales Volume (MT) 2021 96.21 37.29 2022 151.04 47.53
(4) Does the company calculate GHG emissions, water consumption and total waste weight, and formulate policies for energy conservation, carbon reduction, GHG reduction, water reduction or other waste management for the past two years?	V		In GHG emissions management: Greenhouse gas emissions for the last two years (covering all plants in Taiwan Unit:(mtCO2e/mt) Year Area 1 Area 2 Area 3 Total Emissions per unit product (mtCO2e/mt) 2021 4,313 41,425 0 45,738 0.3222 2022 3,491 40,180 1,506 45,177 0.3102 Management policy and results: 1. Each plant gradually replaced its equipment and used low energy consumption equipment. 2. In line with the " Sustainable Development Roadmap",the companycompleted the	None

Promoting items	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
			greenhouse gas inventory and verification schedule, and report to the board of directors on November 3, 2022. 3. Establish a greenhouse gas inventory team and appoint a consulting company to guide and conduct a comprehensive inventory. In water resources management: Water consumption in the last twoyears(coveringallplants in Taiwan) Year water intake (million liters) Discharge (million liters) water consumption (million liters) water consumption per unit of product (L/MT) 2021 418.56 321.71 96.84 0.6834 2022 414.45 317.33 97.12 0.6595 Management policy and results:The Company continues to improve its technology and invest in equipment to recycle 391.66 million liters of water in 2021 and 425.66 million liters of water in 2022.And the temperature controller is used to reduce the starting times of the cooling fan in the cooling tower. The water saving in 2021 and 2022 is 21.392 metric tons and 18.926 metric tons respectively. In waste management: The amount of hazardous waste and non-hazardous waste in the last twoyears(coveringallplants in Taiwan) Year Hazardous Industrial Waste (mt) Non-hazardous Industrial Waste (mt) Amount of waste per unit of product (mt/mt) 2021 11.95 655.36 0.00468 2022 11.32 633.93 0.00438 Management policyand results: 1.Adhering to the business attitude ofgreen environmentalprotection,the waste is divided intogeneral

Promoting items	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
			industrial waste and hazardous industrial waste, and according to the "Methods and Facilities Standards for the Storage, Clearance and Disposal of Industrial Waste", this Company entrusted to legal operators to deal with it. 2. Comply with environmental regulations, implement waste reduction at the source, properly classify waste, and implement recycling with high resource reuse rate. 3. Promote waste reduction, and separate some recyclable items such as waste PE film, PE packaging bags, transparent plastic bags, PP plastic ropes,PP woven bags,and PPpackingtapes fromgarbage.
4. Social Responsibilities
(1) Does the Company formulate appropriatemanagement policies andprocedures in accordance with relevant regulations and international human rights conventions?	V		Abiding by laws and regulations, the Company does not discriminate or pay differently on the basis ofrace, class, language, thought, religion, political party, place of origin, place of birth, gender, gender orientation, age, marital status, appearance, facial features, disability, horoscope, blood type, or past membership in any labor union;the same applies to the employment of disabled and foreign staff.	None
(2) Does the company formulate and implement reasonable employeebenefits (including compensation, vacation, and other benefits), and appropriately reflect operating performance or results in employee compensation?	V		The Company follows the minimum standards set out in the labor laws and regulations and, depending on the operating conditions, establishes measures for performance and employee bonuses, such as business bonuses, management target bonuses, performance bonuses, etc., providing various subsidies, such as education subsidies for employees' children, scholarships for employees' children, employees' on-the-job training subsidies, community subsidies, marriage subsidies, funeral subsidies for family members, maternity subsidies, retirement condolences, medical subsidies for employees and their families, and emergency subsidies. It also has leave regulations in place to achieve a balance between work and family, and a balance between mind and body. In addition,the articles of association also stipulates that if there is	None

Promoting items	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
			profit in the annual final account, no less than 1% shall be appropriated for employee compensation
(3) Does the Company provide a safe and healthyworking environment, and provide training onsafety and health for its employees on a regular basis?	V		In accordance with "Occupational Safety and Health Act," "Labor Health Protection Rules", the company handles health management, occupational disease prevention, and health promotion and other on-site services. At the same time, after the health report is sent to colleagues, doctors will also be arranged to hold health lectures and personal report consultation in the factory. In addition, if the workplace and machinery and equipment may cause health concerns, the unit is required to make appropriate improvements and disposals in accordance with laws and regulations. Among the Company’s factories in Taiwan, Xinwu Plant has obtained ISO 45001 certification, and is audited by an objective third party to achieve continuous improvement in the protection of labor safetyand health.	None
(4) Does the Company establish effective career development programs forits employees?	V		The Company's personnel department has created a substitute staff mechanism through ranking and duties, and has established a system for the classification, promotion and transfer of staff, combined with staff education and training to provide effective career development opportunities for employees. To encourage middle and senior executives and employees to pursue on-the-job training, a subsidy of up to $200,000 is provided to obtain a master's degree.	None
(5) With respect to customer health and safety ofproducts and services, customer privacy, marketing, and labeling,does the Company complywith relevant regulations and internationalstandards, and formulate related consumerprotectionpolicies and appeal	V		The company is committed to providing customers with the best products and services, and continues to invest in the development of green products that comply with EU RoHS, REACH and other environmental regulations and meet the green building materials standards. Some products have obtained the green building label. Each plant has passed the ISO 9001 management system to ensure the quality of products with good production control and service	None

Promoting items	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
procedures?			quality, hoping to improve customer loyalty and establish long-term cooperation with customers. In 2022, there was no complaint on violation of customer privacy or loss of customer information, and no product and service related violations were fined.
(6) Does the Company havea supplier managementpolicy that requiressuppliers to comply withand implement relevantregulations on issues such as environmentalprotection, occupational safety and health, or labor rights?	V		The Company has drawn up a "Contractor Evaluation Guideline," whereby the compliance of suppliers with occupational safety and health regulations is considered an important evaluation criterion. Specific implementation situation: 1. Fully understand the other party's business integrity, human rights and environmental sustainability before consulting, negotiating and signing contracts. 2. For suppliers entering the plant to carry out high-risk work, the contractor shall be informed of occupational safety and health precautions before the start of work.During the operation, the safety issues of the plant are publicized daily, and the work permit of the work area is signed daily. The Industrial Safety Division and the on-site unit shall check the contractor's use of tools and protective equipment for construction methods and safety environment on a daily basis. 3. For suppliers who have been working in high risk for a long time, in addition to the above-mentioned routine matters, meeting with the contractor every six months to make agreements and provide a notification manual for various operating environment hazards. In addition, a contract on industrial safety and environmental protection is signed every two years. In 2022, no special or major deficiencies were found during inspections of suppliersperforminghigh-risk work.	None
5. Does the companyrefer to internationally	V		The first SustainabilityReport,which is expected to be issued in	None

Promoting items	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)
	uN,	en	Abstract Illustration
acceptedreporting standards or guidelines for compilingreportson non-financial information, such as ESGreports? Did the previous release reports obtaina confirmation or assuranceopinion from a third party verifier?			2023, is based on the GRI Sustainability Reporting Standards 2021 Edition (Universal Standards: 2016) issued by the Global Reporting Initiative; and also complies with the "Taiwan Stock Exchange Corporation Rules Governing" the Preparation and Filing of Sustainability Reports by TWSE Listed Companies”. This report will be verified by GRI Certification (AA 1000: ASv3 Type 1 medium warrantybased on theprinciple of accountability).
6. If the Company has established the sustainable development principles based on "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies", please describe any discrepancy between the Principles and their implementation:The Company will establish the "Sustainable Development Best Practice Principles" in accordance with the actual implementation situation in the future.
7. Other important information to facilitate better understanding of the Company's sustainable development practices: (1) In accordance with the provisions of the "Sustainable Development Roadmap for Listed Companies" issued by the Financial Regulatory Commission on March 9, 2022, the company will complete the greenhouse gas inventory and verification schedule in 2022, and establish a greenhouse gas inventory team and appoint a consulting company to guide and conduct a comprehensive inspection to meet the time schedule stipulated by the competent authority. (2) The Company is dedicated to the promotion of social welfare, which is why it founded the Yee Fong Charitable Foundation in 1973 in conjunction with affiliates such as Yee Fong Chemical & Industrial Co and Chin Yi Ho Hang Ltd. The purpose of the foundation is to organize or donate to social welfare and charitable causes, including medical aid, emergency relief,disaster relief and educational subsidies, and actively participate in social assistance for the underprivileged, sponsor community association activities and encourage the participation of employees in order to give back to the community. In 2022, expenditure of N$19.28 million was allocated to 58 organizations to create a multiplier effect through the benevolence of each organization: A. Medical subsidies: disease prevention education, elderly and dementia care, visual impairment care, hospice care, in-home bathing, diningtogether among seniors, etc. B. Emergencyassistance: medical treatment for thepoor,emergencyrelief,medical care,etc.

If the Company has established the sustainable development principles based on "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies", please describe any discrepancy between the Principles and their implementation:The Company will establish the "Sustainable Development Best Practice Principles" in accordance with the actual implementation situation in the future.
(1) In accordance with the provisions of the "Sustainable Development Roadmap for Listed Companies" issued by the Financial Regulatory Commission on March 9, 2022, the company will complete the greenhouse gas inventory and verification schedule in 2022, and establish a greenhouse gas inventory team and appoint a consulting company to guide and conduct a comprehensive inspection to meet the time schedule stipulated by the competent authority.
(2) The Company is dedicated to the promotion of social welfare, which is why it founded the Yee Fong Charitable Foundation in 1973 in conjunction with affiliates such as Yee Fong Chemical & Industrial Co and Chin Yi Ho Hang Ltd. The purpose of the foundation is to organize or donate to social welfare and charitable causes, including medical aid, emergency relief,disaster relief and educational subsidies, and actively participate in social assistance for the underprivileged, sponsor community association activities and encourage the participation of employees in order to give back to the community.
A. Medical subsidies: disease prevention education, elderly and dementia care, visual impairment care, hospice care, in-home bathing, diningtogether among seniors, etc.

Promoting items	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
C. Disaster relief: to purchase disaster prevention equipment, repair disaster repair and education publicity. D. Educational subsidies: after-school tutoring for schoolchildren in rural areas, children's homes, education and nursing institutes, children'ssafety education,etc.

Note 1: If "Yes" is selected for operation, please explain the important policies, strategies and measures adopted and their implementation; if "No" isselected for implementation, please explain the deviations and reasons in the column “Deviations from the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies”, and indicate the relevant plan of policies, strategies and measures to be adopted in the future.
Note 2: Materiality refers to the environmental, social and corporate governance issues that have a significant impact on the Company's investors and other Stakeholders.
Note 3: Please refer to the best practice reference examples on the website of the Corporate Governance Center of the Taiwan Stock Exchange for disclosure methods.
(6) Fulfillment of Ethical Corporate Governance, the Deviations from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and Reasons:

Companies,and Reasons:
Evaluation Item	Implementation Status(Note)			Deviations from`“` the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
1. Establishment of ethical corporate management policies andprograms
(1)Has the company established the ethical corporate management policies approved by the Board of Directors and specified in its rules and external documents the ethical corporate	V		(1)In order to strengthen the corporate culture of ethical corporate management, the Company has established "the Corporate Governance Best-Practice Principles" which were approved by the Board of Directorsto regulate thepolicies andpractices of	None

Evaluation Item	Implementation Status(Note)	Implementation Status(Note)	Implementation Status(Note)	Deviations from`“` the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
management policies and practices and the commitment of the board of directors and senior management to rigorous and thorough implementation of suchpolicies?			honest management, and regularly conducts education and training for Directors, managers and other related personnel in order to fulfill the commitment to the ethical corporate managementpolicies.
(2)Has the company established a risk assessment mechanism against unethical conduct, analyze and assess on a regular basis business activities within its business scope which are at a higher risk of being involved in unethical conduct, and establish prevention programs accordingly, which shall at least include the preventive measures specified in Paragraph 2, Article 7 of the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"?	V		(2)The Company take “the Corporate Governance Best-Practice Principles” as a risk assessment mechanism against unethical conduct,and analyze business activities which are at a higher risk of being involved in unethical conduct,and establish prevention programs accordingly, which shall include the preventive measures specified in Paragraph 2, Article 7 of the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies".	None
(3)Has the company specified in its prevention programs the operating procedures, guidelines, punishments for violations, and a grievance system and implemented them and review the preventionprograms on a regular basis?	V		(3)The company has established the "Procedures for Ethical Management and Guidelines for Conduct", and the violation punishment and grievance system for unethical conduct are handled in accordance with theguidelines.	None
2. Implementingethical corporate management
(1)Does the company evaluate business partners’ethical records and include ethics-related clausesin business contracts?	V		(1) The legitimacy of dealings with suppliers and customers isconsidered before transactions are made and any record ofdishonest behaviour is taken into account,and the company's	None

Evaluation Item	Implementation Status(Note)	Implementation Status(Note)	Implementation Status(Note)	Deviations from`“` the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
			ethical corporate management policies and relevant regulations will timelybe explained to the transaction object.
(2)Has the company set up a dedicated (concurrent serving) unit under the Board of Directors to promote ethical corporate management and regularly (at least once every year) report to the Board of Directors the implementation of the ethical corporate management policies and preventionprograms against unethical conduct?	V		(2) The Company's management department is responsible for the formulation of ethical management policies and preventive programs, and oversees the implementation thereof, and reports regularly to the board of directors for the purpose of sound ethical management.	None
(3)Does the company establish policies to preventconflicts of interest and provide appropriatecommunication channels, and implement it?	V		(3)The Company provides appropriate channels for employees to make complaints through a suggestion box or to the plant administration, plant affairs and management departments. Directors, supervisors or managers should recuse themselves from anymatter in which theyhave an interest.	None
(4)Has the company establishedeffective accounting systems and internal control systems to implement ethical corporate management and had its internal audit unit, based on the results of assessment of the risk of involvement in unethical conduct, devise relevant audit plans and audit the compliance with the prevention programs accordingly or entrusted a CPA to conduct the audit?	V		(4)The audit department regularly audits the internal operations of the Company and reports the results to the board of directors.	None

Evaluation Item	Implementation Status(Note)	Implementation Status(Note)	Implementation Status(Note)	Deviations from`“` the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	uN,	en	Abstract Illustration
(5)Does the company regularly hold internal andexternal educational trainings on ethical management?	V		(5)The Company promotes and teaches the concept of ethical management at internal meetings and in-service training sessions.	None
3. Operations of the whistleblowingchannel
(1)Does the company establish a specific whistleblowing and reward system, set up convenient whistleblowing channels and designated appropriate personnel?	V		(1)The Company has set up a suggestion box to facilitate reporting,and has established the "Employee Work Rules" and an awardand penalty committee. If an employee reports a whistleblowingor is inbreach of the rules, he/she will be sent to the committee forappropriate rewards or penalties, depending on the seriousness ofthe case.	None
(2)Has the company established the standard operating procedures for investigating reported misconduct, follow-up measures to be adopted after the investigation, and related confidentiality mechanisms?	V		(2)The company's management regulations have relevant operating procedures for the investigation follow-up measures and confidentiality mechanisms of reported matters.	None
(3)Does the company adopt proper measures to prevent a whistleblower from retaliation for his/her filinga complaint?	V		(3)The Company protects the identity of the whistleblower fromimproper treatment and threats as a result of the whistleblowing.	None
4. Strengtheninginformation disclosure
(1)Does the company discloseits ethical corporate management policies and the results of its implementation on the company’s website and the Market Observation Post System(MOPS)?	V		(1)The company announces the company's Ethical Corporate Management Best Practice Principles on the company's website and the MOPS, and sets up a stakeholder area to provide complaint and communication channels	None

Evaluation Item	Implementation Status(Note)	Implementation Status(Note)	Implementation Status(Note)
	uN,	en	Abstract Illustration
5. If the company has established corporate governance policies based on "Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies", please describe any discrepancy between the policies and their implementation: The Company has established "Procedures for Ethical Management and Guidelines for Conduct," and no material deviation is found between actual implementations and the Procedures.
6. Other important information that facilitate the understanding of the implementation of ethical corporate management: The company upholds the spirit of ethical management, complies with the Company Act, the Securities and Exchange Act and other laws and regulations, and promotes the implementation of the policy of ethical management by its vendors, directors, managers and employees, so that the company can develop towards the concept of sustainable management.

If the company has established corporate governance policies based on "Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies", please describe any discrepancy between the policies and their implementation: The Company has established "Procedures for Ethical Management and Guidelines for Conduct," and no material deviation is found between actual implementations and the Procedures.
Other important information that facilitate the understanding of the implementation of ethical corporate management: The company upholds the spirit of ethical management, complies with the Company Act, the Securities and Exchange Act and other laws and regulations, and promotes the implementation of the policy of ethical management by its vendors, directors, managers and employees, so that the company can develop towards the concept of sustainable management.

Note: Regardless of whether the evaluation item is achieved or not, the company shall state an appropriate explanation in the column of Abstract Illustration.

(7) Corporate Governance Guidelines and Regulations:
The Company has laid down the following rules and regulations, which can be found on the Company's website and the Market Observation Post System.
A. Important rules approved at the shareholders' meeting:
a. Articles of Incorporation
- b. Rules of Procedure for Shareholders Meetings
- c. Procedures for Election of Directors
- d. Procedures for the Acquisition and Disposal of Assets
- e. Procedures for Loaning of Funds and Making of Endorsements/Guarantees 序
B. Important rules approved at the board meeting:
- a. Corporate Governance Best Practice Principles
- b. Rules of Procedure for Board of Directors Meetings
- c. Rules Governing the Scope of Powers of Independent Directors
- d. Remuneration Committee Charter
- e. Audit Committee Charter
- f. Self-Evaluation or Peer Evaluation of the Board of Directors
- g. Procedures for Handling Material Inside Information
- h. Codes of Ethical Conduct
- i. Ethical Corporate Management Best Practice Principles
- j. Procedures for Ethical Management and Guidelines for Conduct
- k. Operational procedure for preparation and validation of the sustainability report
(8) Other Important Information Regarding Corporate Governance:

In accordance with the regulations of the competent authority, the company revised the "Procedures for Handling Inside Information" on December 27, 2022, to add new material information evaluation and approval procedures, document record content and retention period, stock control measures for insider trading companies, etc. and it will be implemented after the approval of the board of directors on March 14, 2023. In addition, in order to implement sustainable development, the company formulated the " Operational procedure for preparation and validation of the sustainability report " as the basis for the preparation of the sustainability report.

(9) Internal Control Systems:

A. Statement of internal control

Ocean Plastics Co., Ltd. Statement of Internal Control

Date: March 14, 2023

Based on the results of the self-inspection of the internal control system of the Company for the year ended December 31, 2022, we hereby declare that:

The Company recognizes that it is the responsibility of the Board of Directors and the managers toestablish, implement and maintain a system of internal control, and the Company has established such asystem. The purpose of this system is to provide reasonable assurance regarding the effectiveness andefficiency of operations (including profitability, performance and safeguarding of assets), the reliabilityof financial reporting and compliance with relevant laws and regulations.
An effective internal control system, no matter how well designed, can only provide reasonableassurance that the above three objectives are achieved; moreover, the effectiveness of the internalcontrol system may change as circumstances and conditions change. However, the Company's internalcontrol system has a self-monitoring mechanism and once deficiencies are identified, the Company willtake corrective action.
The Company determines the effectiveness of the design and implementation of the internal controlsystem in accordance with the judgment items of the effectiveness of the internal control systemstipulated in the "Guidelines Governing the Establishment of Internal Control Systems by PublicCompanies" (the"Guidelines"). The judgment items of the internal control system adopted in the"Guidelines" are divided into five components based on the management control process: 1. Controlenvironment, 2. risk assessment, 3. control operations, 4. information and communication, and 5.supervision. Each component includes a number of items. Please refer to the "Guidelines for Handling"for the aforementioned items.
The Company has adopted the judgment items in the above-mentioned internal control system toexamine the effectiveness of the design and implementation of the internal control system.
Based on the results of the preceding examination, the Company concluded that its internal controlsystem (including the supervision and management of subsidiaries) as of December 31, 2022, includingthe design and implementation of the internal control system relating to the knowledge of the extent towhich operational effectiveness and efficiency objectives are achieved, the reliability of financialreporting and compliance with relevant laws and regulations, is effective and can reasonably ensure theachievement of the above objectives.
This statement will become the main content of the Company's annual report and public statement andill be made public. If any of the above-mentioned contents is disclosed in a false or concealed manner,the Company will be subject to legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.
This statement was approved by the board of directors at the board meeting held on March 14, 2023 of the 10 directors present, 0 held opposing views and all agreed to the contents of this statement.

Ocean Plastics Co., Ltd.

Chairperson: TAN, KIN-MEN President: TAN, KIN-MEN

B. Accountant's review report on the internal control system of the project entrusted to the accountant:None
(10) For the most recent year and up to the date of printing of the annual report, the Company and itsinternal personnel have been punished according to the law, or the Company has punished its internal personnel for violating the provisions of the internal control system, and the result of the punishmentmay have a significant impact on the shareholders' equity or the price of securities, the content of thepunishment, the main deficiencies and the improvement situation should be listed: None
(11) Major Resolutions of Shareholders’ Meeting and Board Meetings for the most recent year and up to the date of printing of the annual report:
A. The content and implementation of the important resolutions of the 2022: Annual General Meeting of Shareholder on June 22, 2022:
- a. To approve the Company's 2021 Annual Report on Operations and Final Accounts.
- b. To approve the Company’s earnings distribution proposal for 2021.
- Enforcement: Sept. 1, 2022 is set as the dividend record date, and the distribution has been completed on Sept. 15, 2022 according to the resolution of the shareholders' meeting (a cash dividend of NT$0.7 per share will be distributed).
- c. Approved the revision of some provisions of the company's "Procedures for Acquisition or Disposal of Assets".

Enforcement: It has been published in the shareholders' meeting minutes and uploaded to the public information observation station.

B. 2. Summary of the Board of Directors meeting:

Date

Summary of the meeting contents

03/23/2022

1. The Company's loans of funds as of Feb. 2022 for recognition.
2. In accordance with the Economic Substance Act of Overseas Companies, it is proposed to
terminate the operation of UNIVERSE ENTERPRISES LTD for liquidation for review and
approval.
3. Amemdments to the Company’s “Procedures for the Acquisition and Disposal of Assets”
for review and approval.
4. The Company's "Statement of Internal Control” in compliance with the “Regulations
Governing Establishment of Internal Control Systems by Public Companies” issued by
theFinancial Supervisory Commission for review and approval.
5. 2021 financial report and consolidated financial report for determination.
6. The Company's 2021 employee remuneration and directors' remuneration for
determination.
7. The distribution of 2021 the Company’s director remuneration, and the the distributed
amount of managerial officers among the employee’s remuneration for determination.
8. The Company's 2021 earnings distribution proposal and 2020 business report for
determination.
9. The time and venue of this year's (2022) regular shareholders’ meeting and the agenda
thereof for determination
10. In response to the restructuring of the CPA Firm's internal administrative practices, the
Company’s CPA is proposed to change from KPMG Taiwan’s CPA Chen Chen-Chien, and
CPA Huang Yung-Hua to KPMG Taiwan’s CPA Yu Sheng-Ho and CPA Huang Yung-Huain
the firstquarter of 2022, and the CPA independence evaluation for review and approval.

Date	Summary of the meeting contents
05/11/2022	1. The Company's loans of funds as of April 2022 for recognition. 2. The Company's Q1 Report on Consolidated Financial Statements for Fiscal Year 2022 for determination. 3. Continuing to apply for a comprehensive line of credit to the First Bank for determination. 4. In order to obtain and manage the patent rights of CELLwood, the company intends to form a joint venture with Forward Materials Corporation Ltd. to establish a closed company for determination. 5. Continuing from the previous case, the joint venture intends to authorize the chairman to subscribe for 40% of the company's non-voting special shares within a limit of NT$40 million in order to obtain the funds required for the patent rights of CELLwood for determination.
08/11/2022	1. The Company's loans of funds as of June 2022 for recognition. 2. The Company's Q2 Report on Consolidated Financial Statements for Fiscal Year 2022 for determination. 3. Continuing to apply for a comprehensive line of credit to the Hua Nan Commercial Bank Ltd.for determination. 4. 2021 shareholder cash dividend distribution for determination. 5. The former manager of the audit office, Lu, Chien-An will be transferred to the management department. It is proposed that the special assistant of the audit office Wu, Shang-Pang be transferred to be the manager of internal audit for determination. 6. The Director of corporate governance was originally held by the Manager of Financial Department Wang, Yi-Ho, and it is planned to be replaced by Senior Commissioner in the audit office Chiu,Chun-Fu for determination.
11/03/2022	1. The Company's loans of funds as of September 2022 for recognition. 2. The Company's Q3 Report on Consolidated Financial Statements for Fiscal Year 2022 for determination. 3. Continuingto financing quota to ChangHua Bank financingfor determination.
12/21/2022	1. The Company's loans of funds as of November 2022 for recognition. 2. The Company's 2023 capital expenditure budget and profit and loss budget for review and approval. 3. The Company’s 2023audit plan for review and approval. 4. The Company's 2022 year-end bonus to be distributed by the chairman as delegated based on the Company’s performance and industry standards for review and approval. 5. Amend the Company’s "Corporate Governance Best-Practice Principles" for review and approval. 6. Assign a dedicated information security supervisor and dedicated personnel to the company for review and approval.
02/13/2023	1. For the adjustment of the content of the original joint construction contract between the company and its 100%-owned subsidiaries Changhsin Hsinye Co., Ltd. And Kindom Development Co., Ltd. for review and approval.
112/03/14	1. The Company's loans of funds as of Feburary 2023 for recognition. 2. 2022 financial report and consolidated financial report for review and approval. 3. The Company's 2022 loss off-setting proposal and 20202business report for review and approval.

Date Summary of the meeting contents 4. The Company's "Statement of Internal Control” in compliance with the “Regulations Governing Establishment of Internal Control Systems by Public Companies” issued by theFinancial Supervisory Commission for review and approval.
1. In order to implement sustainable development, strengthen the performance of communication with the related-parties, and ensure that the compilation and verification of the sustainability report is completed on schedule, the "Sustainability Report Preparation and Verification Procedures" was prepared for review and approval.
2. Amendation of “Operating Procedures for Internal major information processing” for review and approval.
3. The company intends to appoint " KPMG Taiwan’s CPA Yu, Sheng-Ho and Huang, Yung-Hua as the company’s 2023 and 2024 financial report and tax declaration certification accountants for review and approval.
4. The time and venue of 2023 regular shareholders’ meeting and the agenda thereof for review and approval.
(12) Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting to Important Resolutions Passed by the Board of Directors: None
(13) Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, CEO, and Heads

of Accounting, Finance, Internal Audit and R&D:

Jobtitle	Name	rarNnMno dnaDb	rarNnM bo,mo,,aS	Na,noMnDDN,onoarononD bo,mo,,aS
Internal auditingofficer	Lu, Chien-An	10/01/1999	08/11/2022	Job adjustment
Internal auditingofficer	Wu, Shang-Pang	08/11/2022	-	Job adjustment
Corporate governance officer	Wang, Yi-Ho	06/29/2021	08/11/2022	Job adjustment
Coporate governance officer	Chiu, Chun-Fu	08/11/2022	-	Job adjustment

5. Information Regarding the Company’s Audit Fee:

Unit: NT$1,000

						Unit: NT$1,00
Accounting Firm	Name of CPA	Period Covered by CPA’s Audit	Audit Fee	Non-audit Fee (Note )	Total	Remark
KPMG Taiwan	Yu, Sheng-Ho	01.01.2022~ 12.31.2022	2,255	90	23455	The service fee for KPMGacting to apply for BVI company (OHL) in 2022
	Huang Yung-Hua

Please specify the non-audit services (such as Tax Compliance Audit or other financial consulting services).

Note: If the Company changes its accountant or accounting firm during the year, please list the audit period and the reasons for the change in the Remarks column, and disclose the audit and non-audit fees paid in order. The non-audit fees should be accompanied by a description of the services provided.
(1) If you change your accounting firm and the audit fee paid in the year of change is less than the audit fee paid in the year before the change, you should disclose the amount of the audit fee before and after the change and the reasons for the change: None.
(2) If the audit fee is reduced by 10% or more from the previous year, the amount, percentage and reason for the reduction of audit fee shall be disclosed: None
Replacement of CPA: The company's 2022 CPA are changed from Chen, Chen-Chien and Huang, Yung-Hua to Yu, Sheng-Ho and Huang, Yung-Hua in order to cooperate with the rotation of accountants in their firm.
Where the company's chairperson, General Manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its CPAs or at an affiliated enterprise of such accounting firm: None
Any transfer of equity interests and pledge and change in equity interests by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent:
(1) Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

Title	Name	2022	2022	As of March 31, 2023	As of March 31, 2023
		Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Chairman	TAN, KIN-MEN	-	-	-	-
Director	Peter Chen	-	-	-	-
Director(Note 2)	Hsieh Tzu-Yun		-	-	-
Director	Wang Hai-Lun (Juristicperson representative of Hsuan-Yang Investment)	-	-	-	-
Director	Hsieh Yu-Chin (Juristicperson representative of Want-Want)	-	-	-	-
Director(Note 1)	Hung, Yung-Tsung (Juristicperson representative of Want-Want)	-	-	50,000	-
Director	Chu Tsung-Pin (Juristic person representative of Li-Hsiang)	-	-	-	-
Independent Director	Hou Ming-Li	-	-	-	-
Independent	ChangYi-Yun	-	-	-	-

Director
Independent Director	Chen Wei-Lung	-	-	-	-
Independent Director	Chien Hsueh-Li	-	-	-	-
Assistant Manager	Shen, Chao-Pin	-	-	-	-
Financial Executive	WangYi-Ho	-	-	-	-
Corporate Goverance Officer(Note 2)	Chiu, Chun-Fu

Note 1: The Representative of Want Want Co., Ltd. Changed into Hung, Yung-Tsung from Hsieh, Yu-Chin from Januar 1, 2023.

Note 2: The Corporate Governance Officer Wang, Yi-Ho changed into Chiu, Chun-Fu from August 11, 2022.

(2)Shares Trading with Related Parties: None.
(3)Shares Pledge with Related Parties: None.
Relationship information, if among the company's 10 largest shareholders any one is a related party or a relative within the second degree of kinship of another

Relationship among the Top Ten Shareholders

4.21.2023

									4.21.2023
emaN	Current Shareholding		Spouse’s/minor’s Shareholding		Shareholding by Nominee Arrangement		Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degree		Remarks
	Shares	%	Shares	%	Shares	%	Name	Relation- ship
Yee Fong Chemical & Industrial Co.,Ltd	12,425,769	5.47	-	-	-	-	-	-	-
(Juristic person representative of Yee Fong Chemical & Industrial Co., Ltd.) Chen Chin-Wen	2,050,788	0.90	304,897	0.13	-	-	-	-	-
Pei Hsun Enterprise Industrial Co.,Ltd.	6,796,973	2.99	-	-	-	-	-	-	-
(Juristic person representative of Pei Hsun Enterprise Co., Ltd.) Yeh,Wen-Hung	-	-	-	-	-	-	-	-	-
Mercuries Life Insurance Co., Ltd.	6,749,000	2.97	-	-	-	-	-	-	-
Chen Chi-Yuan	5,669,128	2.49	412,000	0.18	-	-	Chen Yen-Hung Chen	brothers	-

							Chin-Ming
							Chen Yu-Mei	Siblings
Heng-Chih Investment Co.,Ltd. Trust Account	5,447,771	2.40	-	-	-	-	-	-	-
(Juristic person representative of Heng-Chih Investment Co., Ltd.) Chen Yu-Mei	277,677	0.12	-	-	-	-	Chen Yen-Hung Chen Chin-Ming Chen Chi-Yuan	Siblings	-
Chen Yen-Hung	4,816,762	2.12	-	-	-	-	Chen Chin-Ming Chen Chi-Yuan	brothers	-
							Chen Yu-Mei	Siblings
Chen Fang-Fu	4,767,384	2.10	-	-	-	-	-	-	-
TAN, KIN-MEN	4,695,202	2.07	-	-	-	-	Chen Yen-Hung Chen Chi-Yuan	brothers	-
							Chen Yu-Mei	Siblings
Chen Chin-Chuan	4,359,243	1.92	-	-	-	-	Chen Chin-Hsiung	brothers	-
Peter Chen	3,943,860	1.74	-	-	-	-	Chen Chin-Chuan	brothers	-

The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the company:

Ownership of Shares in Affiliated Enterprises

As of March 31, 2023 Unit: thousand shares; %

			As of March 31,	As of March 31,	2023 Unit: thousand shares;%	2023 Unit: thousand shares;%
Affiliated Enterprises （Note）	Ownership by the Company		Direct or Indirect Ownership by Directors, Supervisors, Managers		Total Ownership
	Shares	(%)	Shares	(%)	Shares	(%)
Chun Pin Enterprise Co., Ltd.	29,000	44.62	-	-	29,000	44.62
Chang-Hsin-Hsin-Yeh Co., Ltd.	290,086	100.00	-	-	290,086	100.00
Hung-Ta Investment Co., Ltd.	19,000	100.00	-	-	19,000	100.00

FERMAT ENTERPRISES,LTD.	450	100.00	-	-	450	100.00
UNIVERSE ENTERPRISES,LTD.	-	-	-	-	-	-
OCEAN GROUP,LTD.	32,900	100.00	-	-	32,900	100.00
Fine Environment Technologies Co., Ltd.	1,003	60.76	647	39.24	1,650	100.00
Foremost-Oceans NueTeq, Ltd.	605	40.07			605	40.07

Note: Investments made by the Company and accounted for using equity method.

IV. Capital Overview

1. Capital and Shares:

(1) Source of Capital: May 19, 2022 Unit: Shares; NT$1


Month/ Year	Par Value (NT$)	Authorized Capital		Paid-in Capital		Remark
		Shares	Amount	Shares	Amount	Sources of Capital	Capital Increased by Assets Other than Cash	Other
6/1965	100	300,000	30,000,000	300,000	30,000,000	Cash investment of NT$30,000,000	enoN
3/1972	100	450,000	45,000,000	450,000	45,000,000	Transfer of surplus to capital of NT$15,000,000	〞
4/1973	100	600,000	60,000,000	600,000	60,000,000	Transfer of surplus to capital of NT$15,000,000	〞
101974	100	900,000	90,000,000	900,000	90,000,000	Transfer of surplus to capital of NT$30,000,000	〞
2/1975	100	1,100,000	110,000,000	1,100,000	110,000,000	Transfer of surplus to capital of NT$20,000,000	〞
6/1976	100	1,375,000	137,500,000	1,375,000	137,500,000	Transfer of surplus to capital of NT$27,500,000	〞
8/1796	100	2,138,000	213,800,000	2,138,000	213,800,000	Merger of Yee Fong Plastics Co., Ltd. NT$76,300,000	〞
5/1977	100	2,779,400	277,940,000	2,779,400	277,940,000	Transfer of surplus to capital of NT$21,380,000 Capital reserve to increase capital byNT$42,760,000	〞
8/1978	100	3,168,516	316,851,600	3,168,516	316,851,600	Transfer of surplus to capital of NT$38,911,600	〞
6/1979	100	3,802,219	380,221,900	3,802,219	380,221,900	Transfer of surplus to capital of NT$63,370,300	〞
7/1980	100	4,182,441	418,244,100	4,182,441	418,244,100	Transfer of surplus to capital of NT$38,022,200	〞
11/1987	10	54,371,733	543,717,330	54,371,733	543,717,330	Change of denomination and capitalization of surplus by$125,473,230	〞
7/1988	10	65,246,080	652,460,800	65,246,080	652,460,800	Transfer of surplus to capital of $108,743,470	〞
9/1989	10	79,600,218	796,002,180	79,600,218	796,002,180	Transfer of surplus to capital of $134,406,930 Capital reserve transferred to capital of$9,134,450	〞
9/1991	10	99,500,273	995,002,730	99,500,273	995,002,730	Transfer of surplus to capital of $127,360,350 Capital reserve transferred to capital of$71,640,200	〞
9/1992	10	109,450,302	1,094,503,020	109,450,302	1,094,503,020	Transfer of surplus to capital of $69,650,200 Capital reserve transferred to capital of$29,850,090	〞

Month/ Year	Par Value (NT$)	Authorized Capital	Authorized Capital	Paid-in Capital	Paid-in Capital	Remark	Remark
		Shares	Amount	Shares	Amount	Sources of Capital	Capital Increased by Assets Other than Cash	Other
9/1993	10	123,678,843	1,236,788,430	123,678,843	1,236,788,430	Transfer of surplus to capital of $131,340,370 Capital reserve transferred to capital of$10,945,040	〞
9/1995	10	136,046,728	1,360,467,280	136,046,728	1,360,467,280	Transfer of surplus to capital of $115,021,330 Capital reserve transferred to capital of$8,657,520	〞	enrN 1
8/1996	10	157,406,066	1,574,060,660	157,406,066	1,574,060,660	Transfer of surplus to capital of $204,070,100 Capital reserve transferred to capital of$9,523,280	〞	enrN 2
10/1996	10	162,306,066	1,623,060,660	162,306,066	1,623,060,660	Cash capital increase of $49,000,000	〞	enrN 3
7/1998	10	198,175,707	1,981,757,070	198,175,707	1,981,757,070	Capital reserve transferred to capital of $358,696,410	〞	enrN 4
8/2000	10	208,084,494	2,080,844,940	208,084,494	2,080,844,940	Transfer of surplus to capital of $79,270,290 Capital reserve transferred to capital of$19,817,580	〞	enrN 5
8/2005	10	218,488,719	2,184,887,190	218,488,719	2,184,887,190	Transfer of surplus to capital of $104,042,250	〞	enrN 6
8/2006	10	227,228,268	2,272,282,680	227,228,268	2,272,282,680	Transfer of surplus to capital of $87,395,490	〞	e nrN 7

Note:

1 Approved by the Securities Commission of the Ministry of Finance (82.7.9), Taiwan Financial Services Commission (1) Letter No. 29506
2 Approved by the Securities Commission of the Ministry of Finance (84.6.30), Taiwan Financial Securities (I) No. 38156
3 Approved by the Securities Commission of the Ministry of Finance (85.7.3), Taiwan Financial Services Commission (1) Letter No. 41690
4 Approved by the Securities and Futures Commission, Ministry of Finance (87.6.26), Taiwan Financial Securities (I) No. 55942
5 Approved by the Securities and Futures Commission of the Ministry of Finance (89.7.7), Taiwan Financial Securities (I) No. 58829
6 Approved by the Financial Supervisory Commission, Executive Yuan (94.7.12), Financial Supervisory Commission No. 0940128031
7 Approved by the Financial Supervisory Commission, Executive Yuan (95.6.29), Financial Supervisory Commission No. 0950127211

Unit: Shares

				Unit: Shares
Share Type	AuthorizedCapital			Remarks
	Issued Shares	Un-issued Shares	Total Shares
Ordinary shares	227,228,268	172,771,732	400,000,000	Listed Company Stocks

Information about the master reporting system: None

(2)Status of Shareholders

04/21/2023

Status Item	Government Agencies	Financial Institutions	Domestic Trust	Other Juridical Persons	Domestic Natural Persons	Foreign Institutions & Natural Persons	Total
Number of Shareholders	-	1	2	41	4,003	51	4,098
Shareholding (shares)	-	6,749,000	5,458,771	49,951,396	154,421,098	10,648,003	227,228,268
Percentage	-	2.97	2.40	21.98	67.97	4.68	100

(3) ShareholdingDistribution Status(face value of $10per share)04/21/2023	(3) ShareholdingDistribution Status(face value of $10per share)04/21/2023	(3) ShareholdingDistribution Status(face value of $10per share)04/21/2023	(3) ShareholdingDistribution Status(face value of $10per share)04/21/2023
Class of Shareholding (Unit: Share)	Number of Shareholders	Shareholding (Shares)	Percentage`﹪`
1 ~ 999	1,308	131,223	0.06
1,000 ~ 5,000	1,416	3,197,215	1.41
5,001~ 10,000	307	2,563,677	1.13
10,001~ 15,000	120	1,573,370	0.69
15,001~ 20,000	90	1,682,439	0.74
20,001 ~ 30,000	102	2,635,332	1.16
30,001~40,000	69	2,446,816	1.08
40,001~ 50,000	50	2,329,610	1.03
50,001~ 100,000	140	10,330,312	4.55
100,001~ 200,000	116	16,998,133	7.48
200,001~ 400,000	54	15,437,687	6.79
400,001~ 600,000	29	14,247,166	6.27
600,001~ 800,000	17	11,716,596	5.16
800,001~1,000,000	11	9,721,679	4.28
1,000,001or over	46	132,217,013	58.17
Total	3,875	227,228,268	100.00

Preferred Shares: None

(4) List of Major Shareholders

04/21/2023

		04/21/2023
Shares Shareholder's Name	Shareholding	Percentage %
Yee Fong Chemical & Industrial Co., Ltd. Pei-Hsun Enterprise Co., Ltd. Mercuries Life Insurance Inc. Chen Chi-Yuan Henchi Investment Trust Account Chen Yen-Hung Chen Fang-Fu TAN, KIN-MEN Chen Chin-Chuan Peter Chen	12,425,769 6,796,973 6,749,000 5,669,128 5,447,771 4,816,762 4,767,384 4,695,202 4,359,243 3,943,860	5.47 2.99 2.97 2.49 2.40 2.12 2.10 2.07 1.92 1.74

(5) Market Price, Net Worth, Earnings, and Dividends per Share

Unit: NT$

(5) Market	Price, Net Worth, Earnings	Price, Net Worth, Earnings	, and Dividends p	er Share	Unit: NT$
mrNm	uu		2021	2022	As of March 31, 2023 (Note 8)
Market Price per Share (Note 1)	Highest Market Price		42.70	38.90	37.50
	Lowest Market Price		31.85	30.90	32.70
	Average Market Price		35.26	33.80	35.22
Net Worth per Share (Note 2)	Before Distribution		29.16	26.03	25.15
	After Distribution		28.46	26.03	25.15
Earnings per Share (Note 3)	Weighted Average Shares		220,685,552	220,685,552	220,685,552
	Earnings Per Share		1.45	-0.19	0.59
Dividends per Share	Cash Dividends		0.70	-	-
	stock grants	Dividends from Retained Earnings	-	-	-
		Dividends from Capital Surplus	-	-	-
	Accumulated Undistributed Dividends(Note 4)		-	-	-
Return on Investment	Price / Earnings Ratio(Note 5)		24.32	-177.89	-
	Price / Dividend Ratio (Note 6)		50.37	-	-
	Cash Dividend Yield Rate (Note 7)		0.02	-	-

Note 1: The highest and lowest market prices of common stock for each year are shown, and the average market price for each year is calculated based on the value and volume of transactions for each year. Note 2: Please use the number of shares issued at the end of the year as the basis for the distribution resolved at the following year's Board of Directors or shareholders' meeting.

Note 3: If retroactive adjustments are required due to the no-compensation stock allotment, etc., the earnings per share before and after the adjustments should be presented.

Note 4: If the conditions of issuance of equity securities provide that dividends not paid in the current year

may be accumulated and paid in the year of earnings, they should be paid separately.Disclosure of accumulated unpaid dividends for the year then ended.

Note 5: Price / Earnings Ratio = Average Market Price / Earnings per Share

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

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

Note 8: The net value per share and earnings per share should be presented as of the latest quarterly period audited (reviewed) by the accountants as of the date of printing of the annual report.

(6) Dividend Policy and Implementation Status

A. Dividend Policy:

The Company adopts a stable dividend payment policy based on the principle of profitsharing with shareholders, and the dividend policy set forth in the Company's Articles ofIncorporation is as follows.

The Company's annual financial statements shall first make up for prior years' deficits ifthere is any after-tax profit, and then set aside 10% of the remaining balance as legal reserve. Inaddition, as required by law, after setting aside or reversing the special reserve, the accumulatedundistributed earnings shall be added to the available-for-distribution earnings, and the Board ofDirectors shall, in accordance with the Company's dividend policy, prepare a proposal fordistribution of earnings to the shareholders for resolution.

The former dividend policy is to distribute cash dividends, capitalization of earnings, andcapitalization of capital reserves in three ways, depending on the profitability of the year, withno less than 20% of the dividends to be distributed. If the Company has investment plans orneeds to improve its financial structure, cash dividends may be paid by transferring capital fromearnings or capital surplus, provided that the minimum cash payout ratio shall not be less than10% of the total dividends allotted.

B. Proposed Distribution of Dividend: The proposed no distribution at the shareholders' meeting.
(7) Effect of the proposed gratis allotment of shares at the shareholders' meeting on theCompany'soperating results and earnings per share: Not applicable
(8) Employee Bonus and Directors' and Supervisors' Remuneration:
A. Information Relating to Employee Bonus and Directors’ and Supervisors’ Remuneration in theArticles of Incorporation:
- If the Company makes a profit in its annual accounts, it shall set aside not less than 1% foremployees' remuneration and not more than 2% for directors' remuneration, but shall reservethe amount to cover any accumulated losses in advance.
- The foregoing is defined as incomebefore income taxes before the distribution of employee compensation and director'sremuneration.
- The Company may distribute employee remuneration to employees who meetcertain criteria.
B. The Estimated Basis for Calculating the Employee Bonus and Directors’ and Supervisors’Remuneration, the basis for calculating the number of shares for employee remuneration distributed by stock, and accounting for differences between the actual distribution amount and the estimated amount in this period:
- a. The estimated basis in this period
- Based on the current pre-tax net income, the remuneration to employees is approximately 1.7% and the remuneration to directors and supervisors is approximately, net loss before tax for the 。
- current period, so it is not applicable
- b. The calculation based on the number of shares of employee remuneration distributed from stock There is no stock distribution of employee remunerationthis time, so it is not applicable.
- c. If the actual amount of appropriation differs from the amount of distribution approved by the board of directors, it is recorded as profit or loss in the following year in accordance with the accounting change.
C. Distribution of for this year approved in Board of Directors Meeting:
- a. Distributed amount of remunerations of employee and director in cash or stock: None
- b. The amount of employee remuneration distributed by stock and its proportion to net income after tax and total employee remuneration in the non-consolidated or individual financial report of the current period: Not applicable.
D.Information of Earnings Set Aside for Employee Bonus and Directors’ and Supervisors’Remuneration for Last Year:
- a. Actual distributions: Directors' remuneration $6,108,000 in cash and no employees' remuneration $4,671,00 0in cash.

b. Differences in remuneration to employees, directors and supervisors, causes and treatment: No differences.
(9) Buyback of Treasury Stock: None.
Corporate Bonds: None.
Special share: None.
Global Depository Receipts: None.
Employee Stock Options: None.
Issuance of New Restricted Employee Shares: None.
Status of New Shares Issuance in Connection with Mergers and Acquisitions: None.
Financing Plans and Implementation: None

V. Operational Highlights

1. Business Activities:

(1) Business Scope:

A. Main areas of business operations:

Manufacture and sale of plastic materials.

Manufacture and sale of plastic products.

Manufacture and sale of raw materials incidental to the plastic industry.

C801020 Manufacture of Petrochemical Materials

C801040 Synthetic Resin Manufacturing

C801990 Other chemical materials manufacturing (plastic alloys of mixed pellets, plastic steel of mixedpellets, concentrated materials)

H701010 Residential and building development for lease and sale.

H701020 Industrial plant development for lease and sale.

H703010 Factory for rent.

H703030 Office building for lease.
F401010 International Trade.
F301010 Department store business.

F301020 Super market industry.

F301030 General department store.

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

B. Revenue distribution:

operating weight of each business is as follows

FY tmud rP niaM	2021	2022
Plastic Cloth	14.08%	18.09%
Synthetic leather	2.18%	2.86%
Plastic Building Materials	14.08%	14.09%
Plastic Materials	69.66%	64.96%
Total	100.00%	100.00%

C. Current products and new products planned to be developed:

Processing Dept.: Cellwood, transparent tape, general tape, rigid tape, printing tape, laminating tape and printing tape, etc. We also develop products for tent, ship windows and industrial curtain, and various printing and laminating materials for building materials and various ink-jet printing materials.

Synthetic Leather Dept.: produces DMF-Free eco-friendly PU products,which are divided into two major categories as follows:

Water-based PU resin & synthetic leather.
Solvent-free pre-polymerized PPU resin & synthetic leather. The resin is widely used in textile functional coating, laminating and synthetic leather processing, etc. Synthetic leather is used in furniture, various ball skins, wrapping materials, gloves, etc.
Building Materials Dept.: PVC rigid plastic pipes, impact resistant pipes, PVC-DWV foam pipes, CD flexible pipes, connectors, general boards, impact resistant boards, foam pellets, bottle blowing pellets, injection pellets, line groove (press strip) pellets, WPC plastic wood composite materials, hanging tile strips, water leakage strips, PE foam park chair materials, PVC foam corner materials, etc.
Raw Materials Dept.: Plastic powder, plastic pellets, environmental pellets, medical pelletsand large thick transparent tube pellets, etc.

(2) Industry Overview:

Since President Biden was elected, he has been actively restoring links with countries in the Western world and promoting the stable development of the U.S. economy; the ongoing trade war between the U.S. and China and the impact of the U.K.'s exit from the European Union have instantly changed the global economy from free trade to protectionism. In addition, the recent Russian invasion of Ukraine has provoked direct confrontation between Western democracies and communist totalitarian states, and the Asian region is in an international political tug-of-war atmosphere and the cross-strait situation is unclear, affecting the domestic economic situation.In addition to considering the southward investment to reduce the impact of trade tariff, the Company has been making flexible policies in the procurement of raw materials to adjust the production capacity to meet the market demand, speeding up the development of structural products, making efforts to change the cost, and making step-by-step efforts to integrate the manpower, material and resources to make the most effective use so that the Company can improve its operation.

Synthetic Leather Dept. has been dedicated to the production of environmentally friendly PU resins and synthetic leather for many years, which has replaced the traditional solvent-based PU, the new crown epidemic affects the border control of various countries, but even more for the professional production technology breakthroughs developed a number of unique products:1) Super soft and breathable foam 2) Ryan Suede and other functional materials, and actively promotes to the global market with the application end; the resin combines with various fields of application, such as leather, textile and other processing. The existing customers of synthetic leather will also turn to conservative orders and urgent orders at the beginning of 2023 due to the impact of a large amount of global inventory pressure. Potential new customers at domestic and abroad have also begun to cooperate with the development due to the requirements of green environmental protection. After the border was reopened in March, they began to visit each other one after another. It should become normal in May.

In terms of pipe materials, this year’s prosperity is generally bearish, mainly due to weak end market demand in Europe and the United States, interest rates continue to rise, and prices of commodities and raw materials are still high. The kinetic energy of the project still exists, social housing, improvement of electronic network, power plant and military barracks construction projects have started one after another, so the kinetic energy of the construction market is still active, but the price of building materials and labor continues to rise, resulting in a slowdown in the economy.

In addition to the existing products, the Xinwu Plant is developing products such as transparent adhesive sheeting for medical facilities and pool cloths, and we are introducing the planning and production of environmentally friendly products, with special emphasis on green manufacturing processes and green factories to save energy and reduce carbon, and we are also introducing our own environmentally friendly products in the planning of green areas in our factories, with the hope that we can become a "plastic" tourist factory in the future.

As for our mainland business, we have adopted a downsizing approach to the risky building materials industry, and our two innovative plants in Huizhou and Dongguan, Guangdong, can expand the export market in all aspects due to their proximity to our customers and strategic alliances. We pay close attention to the impact of the trade war between the United States and China to adjust the production capacity of the product lines on both sides of the Taiwan Strait, and provide the best combination ofproducts to meet the needs of customers to create profit efficiency.

The company's main product raw material division, PVC powder, is vulnerable to the supply anddemand situation of upstream raw materials and affects profits. The Company will improve the qualityand efficiency of its production to maintain normal operations and to develop new products and marketsto maintain optimal profitability. The focus of development is to meet the future needs of the market,while taking into account the environmental protection and the inherent characteristics.

(3) Research and Development:
A. Recent Annual Expenses:
- NT$10,288,818,000 for 2022.
B. Technology or products successfully developed in 2022:
- Successful development of soft hollow ball 400nm particle size specification formulation Redox polymerization technology.

Successful development of TPE wood-like inorganic flame-resistant formulation technology: passed UL94V0 flame-resistance test.

NonP plasticizer type PVC high soft medical pellets: product A05-S73R is developed.

PVC styrofoam particles: product PCE121-10 is developed.

(4) Long-term and Short-term Development:
A. Short-term Development:
- a. In 2022, the world is still affected by the pandemic. It is more difficult to promotereenproducts inEurope and the United States. The Company changed to video and internet marketing in response tothe epidemic, cooperating with domestic manufacturers for mutual benefit and win-win situation andto reverse the unfavorable situation caused by the epidemic.
- b. In the past, it has been difficult to recruit talent, and in this period of pandemic, the company's solidimage and future vision are attracting quality employees to apply.
- c. We will use our existing products to meet the market demand and actively seek orders through theInternet, publicity and exhibitions to increase our market awareness and share.
- d. In order to compete with our competitors, we need to effectively reduce our manufacturing andmarketing costs.
B. Long-term Development:
- a. New product development staff, together with sales staff, actively engage in technical service workto establish a good interactive relationship with customers.

  - b. We continue to develop high value-added and profitable products, and constantly pursue moreenvironmentally friendly materials and more efficient manufacturing processes, with the goal ofsustainable management with zero pollution, recyclable and biomass materials.

  - c. Effective management planning for the existing idle land assets, with the opening of the ring road toinitiate the development of the residential and commercial area of the Zhonghe plant.

  - d. We work closely with our distributors to develop the market and continue to pursue newconstruction and public works projects to increase sales volume and profitability.

  - e. To avoid tariff barriers in international markets, to establish a shorter supply chain with customers,and to seek to establish a production base close to customers.

Market and Sales Overviwe:
(1) Market Analysis:
A. Sales (Service) Region:

Plastic cloth: Domestic sales 29.492%; export sales 70.51%, mainly in North America and the Middle East, etc.

Plastic Building Materials: 100% domestic sales.

Synthetic leather: Domestic sales 46.81%; export sales 53.19%, mainly in China and European countries ect.

Plastic Materials: Domestic sales 24.22%; export sales 69.4`%, mainly in South Asia and Japan ect.

B. Market Share (%):

Product Name	Plastic cloth	Syntheticleather	Plastic Building Materials	Plastic Materials
Market Share	7.39%	8.26%	7.23%	5.98%

C. The future supply and demand situation and growth of the market, competitive niche anddevelopment prospect, favorable and unfavorable factors and countermeasures:
- The Company is a manufacturer of plastic secondary processing products, the main products areplastic cloth, plastic pipe, PU synthetic leather and plastic powder. Due to the lack of labor, high landcost, downstream manufacturers moving out of the country, and mainland China joining the productionranks, it is necessary to make a market segmentation with high value-added products, which aredescribed below for each product:

Plastic cloth: Due to the high plasticity and low price of PVC products, they are used everywhere indaily

 - life. Taiyo's products are of stable quality and have a complete line of soft and hardproducts, providing customers with a full range of supply services. In view of the trade warbetween the US and China, the Company and Huizhou factory have been adjusting theirproduction lines to meet the needs of customers and to serve customers and createmaximum benefits. The Xinwu factory has also been working hard to grasp thedevelopment timeline and to strive for change orders under the US-China trade war and thepandamic.

Plastic Tubes: We mainly supply pipes for public utilities, construction, sewerage, fishery, wire andcable distribution, and water supply, and we have been able to maintain our growth overthe years because of its wide coverage and its relationship with people's livelihood. Inorder to increase sales and improve production capacity, the company has made efforts toimprove

the manufacturing process towards automatic equipment, and has developedspecial impact and vibration resistant pipes, core layer foam pipes to reduce noise, and CD flexible pipe and long radius bend for electric wire to facilitate construction.

Synthetic leather: The market for traditional high pollution solvent-based PU products is

shrinkingrapidly, while the cost of water-based PU and solvent-free PU synthetic leather is highand post-processing is not mature, but the cost of solvent-based PU is increasing yearby year and the difference is getting closer, so we are inquiring about the degree ofenvironmental PU and promoting samples in the market. Our company is in fullcontrol from resin synthesis to synthetic leather processing. The resin is used in textilecoating and synthetic leather in various fields such as ball, furniture, shoes and bags,and apparel, etc. It has excellent physical and chemical properties and has beenquantified in the market, and continues to expand market acceptance and usage.

Plastic powder: In view of the oversupply of PVC powder, the Company will continue to focus onquality and production efficiency improvement, strengthen export business to diversifythe market, and invest in warehousing companies to reduce overall costs in order tofacilitate future market competition.

Plastic Pellet: We plan to increase production lines in key markets to reduce transportation costs and tariff barriers, and develop customized plastic pellets to pave the wayfor future growth.

In the new year, the parent company in Taiwan will still focus on domestic sales, and will export a moderate amount depending on the supply and demand of the overall market. In terms of products, we will move towards high value-added and high-tech product projects, and continue to invest resources in the transformation of the industry. The parent company in Taiwan will focus on green products and green processes. Our mainland plants will be flexible to meet the market demand and provide customers with the most rapid and best product combination options

(2) Production Procedures of Main Products:

Plastic Fabric: Mainly used for medical equipment use, making file folder, stationery related supplies, ink jet use, double back use, advertising and trademark use, suit cover, wrapping cloth, packing cloth, leather case lining, umbrella cloth, raincoat, curtain cloth, tablecloth, shower curtain, blow-up toys, hovercraft, flocked bed, building materials, pool, industrial use fabrics and ships, tent transparent plastic cloth window use. The production of plastic fabric of our company is fully automatic, which is made by mixing PVC powder and other sub-materials with a weighing system, and then embossing and rolling them with a mixing machine, a banbury mixer, and a laminating machine.

Synthetic leather: Water-based PU synthetic leather has been successfully used in ball, glove, shoe material, furniture, etc. Solvent-free pre-polymerized PPU synthetic leather is successfully used in mirror leather, shoe materials, electronic products, etc., and also with hand feeling agents to increase the added value of products such asapparel, bags, etc. The production process is to make various types of ecofriendlyPU synthetic leather by coating the eco-friendly PU resin on the

releasepaper, drying it, and then transferring it to various types of cloths.

Plastic Building Materials: It is mainly used in electrical piping, water supply piping, drainagepiping,

construction and civil engineering, waterworks, sanitarysewerage, well drilling, traffic signs, chemical storage tanks,electroplating, dust shields, signboards, plastic injection, indoor andoutdoor landscape applications. The production process is automated,using mixing systems, extruders, injection machines, and cold watertanks to form the finished products.

Plastic Materials: PVC powder is mainly used as raw material for plastic cloth, plastic skin, plasticpipe, plastic film, electrical insulation material, blown bottle, floor tile, shapedextrusion, paint, ink, etc. Our PVC powder is produced by automatic processsystem, through polymerization tank, dewatering machine and other equipment,and finally dried into finished products.

Plastic pellets are mainly used for extrusion, blowing, film blowing, and medicalgrade plastic pellets; non-halogenated environmental pellets are also used for IC packaging tubes, and newly developed PVC extrusion pellets for large thicktransparent tubes are used for electronics companies’ corrosive and toxic material outer protection tubes.

(3) Supply Status of Main Materials:

medicalgrade plastic pellets; non-halogenated environmental pellets are for IC packaging tubes, and newly developed PVC extrusion pellets thicktransparent tubes are used for electronics companies’ corrosive material outer protection tubes. (3)SupplyStatus of Main Materials:	medicalgrade plastic pellets; non-halogenated environmental pellets are for IC packaging tubes, and newly developed PVC extrusion pellets thicktransparent tubes are used for electronics companies’ corrosive material outer protection tubes. (3)SupplyStatus of Main Materials:	medicalgrade plastic pellets; non-halogenated environmental pellets are for IC packaging tubes, and newly developed PVC extrusion pellets thicktransparent tubes are used for electronics companies’ corrosive material outer protection tubes. (3)SupplyStatus of Main Materials:

	Main raw materials
Name	Source of Supply	Supply Situation
PVCpowder	Self made	Long-term cooperation,good
Vinyl chloridemonomer	Foreign import and domestic manufacturers	Long-term cooperation
Plasticizer	Foreign import and domestic manufacturers	Long-term cooperation
Adhesive	Domestic manufacturers	Long-term cooperation
Modifier	Foreign import	Long-term cooperation

(4) List of any suppliers and clients accounting for 10 percent or more of the company's total procurement (sales) amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement (sales) accounted for by each
A. Major Suppliers in the Last Two Calendar Years (Note 1)

									Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000
	2021				2022				2023 (As of March31) (Note 2)
Item	Company Name	Amount	Ratio of annual net purchases (%)	Relation with Issuer	Company Name	Amount	Ratio of annual net purchases (%)	Relation with Issuer	Company Name	Amount	Ratio to net purchases for the current year as of the previous quarter(%)	Relation with Issuer
1	A Company	2,938,718	64.8	business dealings	A Company	1,921,384	47.97	business dealings	A Company	490,335	50.62	business dealings
2	B Company	1,065,470	12.4	"	B Company	956,453	23.88	"	B Company	152,308	15.72	"
3	Others	570,564	22.8	"	Others	1,127,567	28.15	"	Others	326,097	33.66	"
	net purchase amount	4,574,752	100.00		net purchase amount	4,005,405	100.00		net purchase amount	968,740	100.00

Note 1: The names of suppliers who have purchased more than 10% of the total amount of goods in the last two years and the amounts and percentages of their purchases are listed, provided that the names of suppliers or the parties to whom the transactions are made are not disclosed due toontractualprovisions.If the supplier's name is not a related party, the name may be used as the code.
Note 2: As of the printing date of the annual report, financial information of companies whose shares are listed or traded on the stock exchange should be disclosed if they have been audited or reviewed by a certified public accountant most recently.

B. Major Clients in the Last Two Calendar Years: No customer with more than 10% of total sales.

(5) Production in the Last Two Years:

FY Output Major products	FY Output Major products		2021			2022
		Capacity	Production volume	output value ($1,000)	Capacity	Production volume	output value ($1,000)
Plastic(ton)		21,500	13,785	964,436	21,500	12,130	834,251
PE foam(ton)		0	0	0	0	0	0
Synthetic leather (thousandyards)		3,500	722	158,400	5,000	992	200,275
Plastic building materials(ton)		15,000	15,917	752,257	16,000	15,801	708,397
Plastic materials (ton)		125,000	119,232	4,528,627	125,000	118,991	4,157,659
lnraS	(ton)	161,500	148,934	6,245,320	162,500	146,922	5,700,307
	(1000 yards)	3,500	722	158,400	5,000	992	200,275

(6) Sales for the last two years: Amount: NT$1,000

(6) Sales for the	(6) Sales for the	last two years:	last two years:	last two years:	last two years:	Amount: NT$1,000	Amount: NT$1,000	Amount: NT$1,000	Amount: NT$1,000
FY Sales Main Products		2021				2022
		DomesticSales		Export		DomesticSales		Export
		Qty	Value	Qty	Value	Qty	Value	Qty	Value
Plastic(ton)		3,809	248,164	8,229	520,028	3,402	236,995	8,583	714,007
PE foam(ton)		244	35,890	172	24,158	221	33,133	216	38,996
Synthetic leather (thousandyards)		0	0	0	0	0	0	0	0
Plastic building materials(ton)		375	78,106	329	50,329	328	77,449	588	84,346
Plastic materials (ton)		15,190	827,857	0	0	15,012	797,237	0	0
Plastic(ton)		34,907	1,409,118	64,406	2,694,419	26,615	971,628	74,439	2,707,065
ll	(ton)	53,906	2599135	72,635	3288934	45,029	2116442	83,022	3,544,414
nra	(1000 yards)	619	,,	501	,,	549	,,	804

The information of employees employed for the 2 most recent fiscal years, and during the current fiscal year up to the date of publication of the annual report

March 31, 2023

					March 31,2023
c	uu		2021	2022	Current year ending March 31, 2023
	smeSnlNN,	Management Staff	62	63	64
		Direct labor	141	142	140
		Indirect Labor	250	249	247
		Total	453	454	451
	Average age		44.77	45.09	45.17
	Average seniority		14.46	14.35	14.27
	a	-	-	-	-

MA	8.38%	8.81%	8.65%
BA	47.46%	45.38%	45.90%
High School	32.24%	33.48%	33.48%
Below high school	11.92%	12.33%	11.97%

4. Environmental Protection Expenditure:

(1) Losses and penalties suffered by the Company as a result of environmental pollution in the most recent year and up to the printing date of the annual report:

A. 2022

nt year and up A. 2022	to the printing date of the annual report:
Date	5.27.2022
Order No.	20-111-050036
Violation	Paragraph 2,Article 24 of Air Pollution Prevention Act
Description	The pipeline at the inlet of the fluidized bed dryer(pollution source, E070) connected to the storage bin(pollution source, E094) was broken, causing the granular matter to float into the atmosphere.
Penalties	Fine of NT$100,000 Environment lecture 2 hours

Date	11.25.2022
Order No.	34-111-110005
Violation	Paragraph 3, Article 39 of Toxic and Concerned Chemical Substances Control Act and Paragraph 4, Article 6 of Management Regulations for the Response Equipment and Detection and Alarm Equipment of Toxic Chemical Substances
Description	The Environmental Protection Bureau found that the emergency equipment and detection and alarm equipment plans of the company were reported in January 2019, and it has not been reviewed for more than 2 years, which has violated regulations.
Penalties	Fine of NT$100,000 Environment lecture 2 hours

Date	12.28.2022
Order No.	34-111-120009
Violation	Paragraph 5, Article 8, Paragraph 5 of Toxic and Concerned Chemical Substances Control Act, and be sanctioned in accordance with Paragraph 1,Article 59 of Toxic and Concerned Chemical Substances Control Act
Description	The approval document of Taoyuan No. 2 factory was valid until April 6, 2022, and the company sent a letter to Taoyuan City Government for applying an extension of the approval document on April 25, 2022, and received the approval document on July7,2022,but the companydid not

submit an application for extension within three to six months before the expiration of the approval document, which resulted in the Taoyuan City Government being unable to make a decision on approval before the expiration of the approval document. And in this period, the company continued operation (use) of toxic chemical substances (triethylamine) hat has violated the provisions of Paragraph 4, Article 8 of Toxic and Concerned Chemical Substances Control Act that was provided in Paragraph 5, Article 8 of Toxic and Concerned Chemical Substances Control Act. Penalties  Fine of NT$60,000  Environment lecture 2 hours

B. As of March 31, 2023:

. As of March	31, 2023:
Date	3.06.2023
Order No.	20-112-020015
Violation	Paragraph 2,Article 23 of Air Pollution Control Act
Description	1. Taoyuan factory of the company has a stationary pollution source certificate issued by the Taoyuan City Government (PVC Chemical Manufacturing Procedure - Polyvinyl Chloride PVC Plastic Manufacturing Procedure M01), Certificate No. H6010-01. 2. The Environmental Protection Bureau went to the factory site for inspection on January 9, 2023, the pollution source is operating, they found that the wastewater collection system, the wastewater liquid in the conveying channel and the storage unit equipment V540 in the process area were in contact with the atmosphere, which violated Paragraph 2, Article 23 of the Air Pollution Control Act and Article 10 of Air Pollution Control and Emissions Standards for the Vinyl Chloride Monomer and Polyvinyl Chloride Manufacturing Industry, therefore, the company was punished according to Air Pollution Control Act.
Penalties	Fine of NT$450,000 Environment lecture 2 hours

(2) Estimated amount and countermeasures that may occur in the future: It is impossible to estimate, because the company strictly complies with the laws and regulations, and has no intention to deliberately exceed the laws and regulations.The plant has drawn up an improvement plan to include the downstream piping and receiving equipment in the permit documents and has obtained a permit from the Environmental Protection Bureau to set up the plant. The Company has completed the cleanup of polluted water bodies and the installation of overflow prevention dikes for storage tanks, and has added patrol sign-up sheets at wastewater treatment sites. We have commissioned a testing company to perform the sampling, and the testing results are all in accordance with the regulatory standards, and we are working towards a pollution-free workplace.

5. Labor Relations:

Since our company was founded, we have attached great importance to labor relations, and basedon the management philosophy of "one employer, one employee" and "humane management". Wehave established a mechanism for consultation between employers and employees by participating inlabor union meetings, management and supervisory meetings, and holding regular labor-managementmeetings; established a grievance system to smooth communication channels; and established variousrules and regulations to establish the rights and obligations of both parties. The harmony betweenemployers and employees can be maintained through mutual trust and understanding betweenmanagement and employees.

(1) Employee benefit system.

We provide universal health insurance, labor insurance, annual festival bonus, living allowance inremote areas, scholarships for employees' outstanding children, and employee dividends fromcompany surplus and Labor’s Day recognition activities. In addition, the Company has an employeewelfare committee to coordinate the use of employee welfare funds and conduct various welfareactivities, such as wedding and funeral subsidies, child education subsidies, medical subsidies foremployees and their dependents, club activities, travel, and celebration activities are all included in thescope of welfare. In order to take care of both personal and family needs, and to enhance the physicaland mental health of employees. In addition, the annual budget for each employee is approximately$10,000 to $11,000, and we also provide free health checkups for our employees. The companyprovides equal maternity and paternity leave and other leave entitlements for both men and women,which makes it easier for the organization to recruit and retain talented employees.

In 2021, according to the General Accounting Office of the Executive Yuan, there is a 15.8% differencebetween men's and women's salaries, but in our company, the ratio of men's to women's salaries is 1:1.In accordance with the Company's personnel management regulations, employees are selected andhired according to the initial appointment requirements for each grade, and are paid according to thestandards set by the employee salary scale. The concept of gender workplace equality is trulyimplemented.

(2) Staff Development and Training:

A. Professional on-the-job training

Every year, the Company cooperates with the Plastic Industry Technology DevelopmentCenter and the Industrial Association to systematically enhance the professional knowledge andskills of employees through various professional practical courses, and also adopts digitallearning courses to provide a more flexible and convenient learning environment so that eachemployee can quickly perform his or her duties.

B. Management Training

In order to help employees reserve their strengths for future career development and totrain management personnel, the Company has established the rules for the classification,promotion and transfer of employees, and holds training courses and purchases digital trainingseries every year in accordance with these rules to systematically assist supervisors and futuresupervisors to improve their management abilities in order to achieve the best managementperformance.

C. Encourage self-study

The Company encourages employees to study on the job to supplement the trainingprovided by the Company. The Company has also established a program for in-serviceemployees to further their studies by subsidizing the costs of their studies in colleges anduniversities and research classes. In addition, the Company has established a new incentiveprogram for certified personnel to encourage employees to obtain relevant licenses, or toprovide fees for the application of plastic materials for the certification of engineers held by thePlastic Industry Technology Development Center, in order to enhance their self-worth.

D. Training Quality Standards

In 2011, 2014, 2016 and 2019, and 2020 our company passed the Training Quality Standard (TTQS)assessment by the Vocational Training Bureau of the Council of Labor Affairs, Executive Yuan,and the assessment result was Bronze.
E. In 2021, education and training courses related to ethical management, prevention of insider trading, ISO management, ESG guidance, production operations, and industrial safety and environmental protection were organized:

	Internal training	Internal training			External training	External training
Courses	People	People hours		Courses	People	People hours
206	1,587	5,069		130	266	1532.5

(3) Code of conduct or ethics for employees:

Integrity, pragmatism, innovation and people-oriented are the management philosophy that we have insisted on since the beginning of our company, and it is also the highest standard that we expect all Taiyo employees to carry out their work tasks. In accordance with this management philosophy and relevant laws and regulations such as the Labor Standards Law, the Company has established work rules and various management systems to maintain employee discipline and order.

A. The "Work Rules for Employees" are established to regulate the hiring, firing, working hours, vacation, leave, rewards and punishments, performance appraisal, retirement, and benefits of mployees.
B. Pre-employment training for new recruits includes basic education on ethics, environmentalprotection, occupational safety and health management.
C. We have signed a "Professional and Confidential Agreement", which stipulates that employeesare obligated to maintain confidentiality of tangible and intangible business propertyinformation and prohibits them from infringing on the Company's interests.
(4) Work environment and employee safety protection measures
A. Regularly perform labor safety education training and health checksThe company conducts labor safety education and training for all new employees. Inaccordance with the relevant domestic laws and regulations, we regularly implement healthchecks and operating environment inspections for general employees, as well as annualeducation and training for special operators and health checks for special operators, in order tograsp the health status of special operators and ensure the safety and health of employees.
B. Regular fire training and emergency response trainingIn addition, the Company implements

self-defense and fire-fighting team training,notification, evacuation drills, first aid training, fire safety training and fire-fighting trainingevery year in accordance with the law to implement disaster prevention and ensure employeesafety.

(5) Retirement System

There are two types of retirement for the Company's employees: voluntarily retirement and ordered retirement.

A. An employee of the Company may voluntarily retire under one of the following circumstances:
1.1. 15 years of service or aged 55 or older
1.2. 25 years of service
1.3. Aged 60
B. The Company may order the retirement of any employee of the Company under any of thefollowing circumstances:
2.1. Aged 65
2.2. Mentally or physically incapacitated for work

The age specified in the first paragraph of the preceding paragraph may be adjusted by theCompany for workers with special characteristics such as danger and physical strength, but notless than fifty-five years of age, upon request to the central competent authority.

In addition, in order to ensure the retirement life of our employees, the Company has established aretirement plan in full compliance with the Labor Standards Law and the Labor Pension Act. If the LaborStandards Law's pension plan is applicable, the Company will make monthly contributions at a rate of 2%of the total salary and deposit them in a special account at the Central Trust Bureau. The Company shallpay 6% of each employee's monthly salary to the individual pension account set up by the Labor InsuranceBureau, and the voluntary contribution rate shall be deducted from the employee's monthly salary to theindividual pension account set up by the Labor Insurance Bureau, so that all eligible employees can receivetheir pensions in accordance with the law. The Company shall pay the employees' pensions within 30 daysfrom the date of retirement.

Since the establishment of the Company in June 1965, 553 employees have retired under theEmployees' Retirement Plan as of the end of 2022. As of December 31, 2022, the Company had depositeda total of NT$270,097,104 in the "Labor Retirement Fund" with the Bank of Taiwan.

(6) The Company's personnel involved in the transparency of financial information have obtained therelevant licenses specified by the competent authorities:

Dept.	Name	Organizer	Course	Hours
uooaoeN	gaon uo - n	ARDF	Tax practice and case analysis for “Cross Border E-Commerce”	3
		ARDF	Analysis of the latest securities and financial tax laws and professional standards	3
		ARDF	Analysis of Competent Authorities Reviewing Financial Statements and Significant Information	3
		ARDF	Case Analysis for "Insider Trading" and Legal Responsibilities Discussion	3

Dept.	Name	Organizer	Course	Hours
Accounting	Cheng, Kuo-Nan	ARDF	Seminar of the latest annual profit-making business income declaration	3
			Self-compiled Issues and Response Practices of the lastest “Corporate Governance 3.0 - sustainable development roadmap”	3
			Analysis of the latest securities and financial tax laws and professional standards	3
			Self-compiled Issues and Response Practices: Accounting estimate and impairment of assets	3
YborOMMoeN	nioY niYo - uY	Internal Audit Association	Practice of Self-Evaluation	6
			Auditing Collection and Payment Cycles	6
	gY liaon - gaon	Internal Audit Association	Practice of Self-Evaluation	6
			Pre-employment Training Seminar of 1st-time Internal auditors	18
			How Auditors Detect Financial Statement Fraud	6

Audit Office: 1 international internal auditor; 1 share officer designated by Securities and Futures Market Development Foundation.

Finance Department: 1 senior salesperson, 1 investment advisor, and 1 futures dealer salesperson of the Securities and Futures Market Development Foundation; 1 salesperson of a securities dealer

(7) For the most recent year and up to the date of the annual report, the Company suffered losses due to labor disputes:
No. lao-jian-zi 11100225861~3 dated February 10, 2022; for violating the Paragraph 3, Article 32, Paragraph 2, Article 38, and Paragarph 1 Article 79 of Labor Standards Act; reason: Salary delay, etc., NT$90,000 was fined.

Estimated amount and countermeasures that may occur in the future: It is impossible to estimate, because the company strictly complies with the laws and regulations, and has no intention to deliberately exceed the laws and regulations.

Cyber Security Management:
(1) Cyber security risk management framework, cyber security policies, concrete management programs, and investments in resources for cyber security management:

A. 1) Cyber Security Risk Management Framework:

There are Information Security Section and Information Management Section established in the

Information Department of the company. The Director of Information Department coordinates the formulation, implementation, and risk management of information security and protection related policies etc. the appropriate personnel will be allocated in these two sections according to business needs and relevant laws and regulations; besides the management specialist of information security, the Information Security Section will be allocated one director and speciatlist for information security of the company.

The information department of the company is the dedicated execution unit of cyber

security risk management, The Director of Information Security Section regularly reports to the board of directors on the effectiveness of information security management, issues and directions related to information security. In order to ensure that internal operations that comply with information security-related standards, procedures, and regulations, the internal audit unit regularly conducts inspections in accordance with relevant regulations, reviews and recommends improvements to information security and information protection guidelines and policies, and implements the effectiveness of information security management measures.

The information department carries out specific management plans such as information security prevention and crisis management, and implements corresponding protection measures, from the construction of external firewalls and installs professional anti-virus systems on the internal personal computers and server hosts. Moreover, it keeps communication with the original factory, regularly update the virus code, update the system correction that the original factory will also use the email to remind the current events. In addition, it will continue to improve the internal anomaly detection and protection methods, in order to reduce cyber security risk.

In the current information system architecture of the company,the hardware part is built with stable Windows and Unix servers, whilein the software part, the information system, software and system parameters and data are periodically backed up through disks, external hard drives and optical disks. It includes annual backup, quarterly backup, monthly backup and daily backup, and the remote storage mechanism will be used in the data after backup to strengthen the integrity and security. To prevent and reduce the disruption of information services caused by unwarned natural disasters and human negligence and shorten the time of system recovery, we will conduct regular exercises on post-disaster recovery measures.We also regularly rehearse post-disaster recovery measures to prevent and reduce the interruption of information services and shorten system recovery time caused by unpredictable natural disasters and human errors.

In order to restore the business operation of the information system smoothly and reduce losses in the event of damage, in addition to regularly rehearsing post-disaster recovery measures, we are evaluating the planning, design and implementation of hardware virtualization and software cloud-based services for information systems to improve the resource efficiency of software and hardware devices, and to build a higher-level security protection mechanism to reduce the risk of system damage.

According to recent analysis of security threats, the main source of security threats is external hacker attacks, followed by internal staff negligence and lack of security awareness.The root cause of these incidents is that the user does not pay attention to the content of the email, clicks the malicious phishing link and runs the unknown malicious program.Therefore, the protection of cyber security needs the comprehensive consensus of the company and the participation of all staff. Only by gradually developing employees' risk awareness and security cyber protection ability from the working habits and company culture can we truly strengthen the defense ability of cyber security.

B. Cyber Security Policies

In order to comply with Article 18 of the Cyber Security Management Act and the Cyber

Security Guidelines for TWSE/TPEx-Listed Companies, the Company established a mechanism on the notification and response of cyber security incidents to be informed of and handle incidents promptly and effectively,it adds regulations Chapter 9 System Recovery Management Operationsny and Chapter 10 Cyber Security Operation on Reguations on the Information Operation Management. The outline is divided into responsibility attribution, incident notification window and emergency response team, notification procedure, response procedure, damage control mechanism, improvement mechanism after a cyber security incident, and information security protection and control measures.The most important purpose of adding the above clause is to have a standard procedure to follow when encountering a cyber security incident, and to restore normal business operations and reduce losses in the shortest possible time, and how to prevent the recurrence of incidents in the future.

C. Concrete Management Programs and Investments In Resources For Cyber Security Management; this company’s cyber security protection and control measures are as follows: a. Firewall server
- In order to maintain the normal operation of internal and external network communication operations and to prevent hackers from invading the internal system, we set up network firewalls, independent logical domains (e.g. DMZ, internal or external network, etc.) for control, and use strict parameter settings to prevent external attacks to ensure that the company's internal system can be safely served and used.
b. Antivirus system

The company has signed a maintenance contract with the anti-virus manufacturer. All the computers in company are equipped with anti-virus software to prevent computer from getting virus and virus spreading. In case of sudden situation, the original factory will provide timely assistance to solve the problem.

c. Mail server

Through the server settings, limit the size of the mail and filter additional files, such as execution files, batch files, video files. This can reduce the hackers using the email attached files to allow users to click on attachments when exposed to subsequent attacks.

d. Spam server

At present, the company has installed a spam control mechanism to filter and block malicious or advertising letters and their attachments. All the letters are processed before being sent to the back-end users to ensure the safety of the mail.

e. Backup mechanism

The company’s important server data are backed up regularly through storage media such as tape, CD-ROM and external hard disk, and the backup data is stored in a safe place in different places for special personnel to keep. In addition, we carry out a disaster recovery plan every year to restore the backup data to the test host to ensure the integrity of the data.

f. Regular propaganda

The company often uses emails, internal website, periodicals and bulletin boards educate all employees the importance of information security,how to deal with hackers when they

encounter attack. We also continue to remind them to regularly back up their important files to prevent to ransomware attacks and how to resume normal work in the shortest possible time to reduce losses.

(2) For the most recent year and up to the date of the annual report, the Company suffered losses, potential impact and response measures due to major cycber security incdients, if it cannot be reasonably estimated, the fact that it cannot be reasonably estimated shall be stated.
In 2021, the Company has not experienced any major cyber attacks that would affect the Company's operations.
Important contracts:None

VI. Financial Information

1. Five-Year Financial Summary:

(1) Condensed Balance Sheet and Condensed Consolidated Income Statement

Condensed Balance Sheet - Consolidated Financial Statements

Unit: NT$1,000

FY ITEM	FY ITEM	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the year ended March 31, 2023 (Note 1)
		2018	2019	2020	2021	2022
Current Assets		1,825,538	1,857,147	2,006,284	2,656,901	1,984,152	2,223,786
Property, plantand equipment		3,822,843	3,595,365	3,522,618	3,450,776	3,378,266	3,375,007
Intangible assets		-	-	-	-	-	-
Other Assets		5,998,554	6,122,994	6,646,260	6,872,506	6,423,775	6,553,366
Total assets		11,646,935	11,575,506	12,175,162	12,980,183	11,786,193	12,152,159
Current liabilities	Before Distribu- tion	1,096,126	1,068,829	1,004,885	1,474,042	1,080,139	1,201,043
	Before Distribu- tion	1,096,126	1,068,829	1,232,113	1,633,102	1,080,139	-
Non-Current liabilities		5,203,710	5,179,211	4,566,160	4,879,544	4,792,194	5,235,954
Total liabilities	Before Distribu- tion	6,299,836	6,248,040	5,571,045	6,194,526	5,872,333	6,436,997
	Before Distribu- tion	6,299,836	6,248,040	5,798,273	6,353,586	5,872,333	-
Equity attributable to owners of the parent company		5,347,099	5,327,466	6,604,117	6,626,597	5,913,860	5,715,162
Share capital		2,272,283	2,272,283	2,272,283	2,272,283	2,272,283	2,272,283
Capital surplus		7,792	7,792	7,792	14,335	18,915	18,915
Retained Surplus	Before Distribu- tion	2,688,839	2,805,902	3,507,899	3,603,417	3,412,027	3,097,216
	Before Distribu- tion	2,688,839	2,805,902	3,280,671	3,444,357	3,412,027	-
Other Equity		414,374	277,678	852,332	772,751	246,824	362,937
Treasurystock		(36,189)	(36,189)	(36,189)	(36,189)	(36,189)	(36,189)
Non-controlling interests		-	-	-	-	-	-

Before Distribu- tion	5,347,099	5,327,466	6,604,117	6,626,597	5,913,860	5,715,162
Before Distribu- tion	5,347,099	5,327,466	6,376,889	6,467,537	5,913,860	-

Note 1: The accompanying consolidated financial information for the years ended December 31, 2023 has

been audited and cleared by our auditors.

Note 2: The 2023 Annual General Meeting of Shareholders has not yet been held and the distribution of earnings has not yet been determined.

Condensed Consolidated Statements of Income - Consolidated Financial Statements

Unit: NT$1,000

FY ITEM	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the year ended March 31, 2023 (Note 1)
	2018	2019	2020	2021	2022
Operating Income	4,776,323	4,656,690	4,980,018	6,490,333	6,506,136	1,331,591
Gross profit	185,738	209,701	600,125	484,617	370,138	162,912
Operating Profit and Loss	(141,807)	(112,859)	232,694	(32,401)	(191,250)	66,894
Non-operating income and expenses	137,385	248,322	169,019	384,609	183,453	80,421
Pre-tax profit	(4,422)	135,463	401,713	352,208	(7,797)	147,315
Net income (loss) for the period from continuing operations	(26,411)	117,676	374,097	319,368	(42,657)	130,848
Loss from discontinued operations	(45,383)	(589)	341,055	0	0	0
Net income (loss) for theperiod	(71,794)	117,087	715,152	319,368	(42,657)	130,848
Other omprehensive income (net of tax) for theperiod	12,935	(136,720)	561,499	(76,203)	(515,601)	116,113
Total comprehensive income for the period	(58,859)	(19,633)	1,276,651	243,165	(558,258)	246,961
Net income attributable to	(71,794)	117,087	715,152	319,368	(42,657)	130,848

owners of parent company
Net income attributable to noncontrolling interests	0	0	0	0	0	0
Total omprehensive income attributable to owners of the parent company	(58,859)	(19,633)	1,276,651	243,165	(558,258)	246,961
Total omprehensive income and loss attributable to noncontrolling interests	0	0	0	0	0	0
Earnings per share	(0.33)	0.53	3.24	1.45	(0.19)	0.59

Note 1: The accompanying consolidated financial information for the years ended December 31, 2023 hasbeen audited and cleared by our auditors.

Condensed Balance Sheet – Non- consolidated Financial Reports

Unit: NT$1,000

FY ITEM	FY ITEM	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)
		2018	2019	2020	2021	2022
Current Assets		1,401,081	1,328,403	1,341,590	1,885,899	1,306,433
Property, plant and equipment		3,645,994	3,458,318	3,367,983	3,304,874	3,241,123
Intangible assets		0	0	0	0	0
Other Assets		3,749,318	3,760,328	4,461,111	4,509,055	3,886,952
Total Assets		8,796,393	8,547,049	9,170,684	9,699,828	8,434,508
Current liabilities	Before Distribu- tion	1,020,905	993,074	939,739	1,345,351	976,543
	Before Distribu- tion	1,020,905	993,074	1,166,967	1,504,411	976,543
Non-Current liabilities		2,428,389	2,226,509	1,626,828	1,727,880	1,544,105
Total liabilities	Before Distribu- tion	3,449,294	3,219,583	2,566,567	3,073,231	2,520,648

	Before Distribu- tion	3,449,294	3,219,583	2,793,795	3,232,291	2,520,648
Equity attributable to owners of the parent company		5,347,099	5,327,466	6,604,117	6,626,597	5,913,860
Share capital		2,272,283	2,272,283	2,272,283	2,272,283	2,272,283
Capital surplus		7,792	7,792	7,792	14,335	18,915
Retention Surplus	Before Distribu- tion	2,688,839	2,805,902	3,507,899	3,603,417	3,412,027
	Before Distribu- tion	2,688,839	2,805,902	3,280,671	3,444,357	3,412,027
Other Equity		414,374	277,678	852,332	772,751	246,824
Treasury stock		(36,189)	(36,189)	(36,189)	(36,189)	(36,189)
Non-controlling interests		0	0	0	0	0
Total	Before Distribu- tion	5,347,099	5,327,466	6,604,117	6,626,597	5,913,860
equity	Before Distribu- tion	5,347,099	5,327,466	6,376,889	6,467,537	5,913,860

Note 1: The financial information of the Company for the preceding year has been audited by CPA.

Condensed Consolidated Income Statement - Non- consolidated Financial Reports

Unit: NT$1,000

	Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000
FY ITEM	Financial information for the last five years (Note 1)
	2018	2019	2020	2021	2022
Operating revenue	4,365,960	4,456,187	4,408,155	5,730,874	5,649,875
Gross profit from operations	135,265	129,257	461,363	409,665	219,302
Operating profit or loss	(127,370)	(142,967)	151,313	(30,147)	(244,428)
Non-operating income and expenses	77,542	277,778	578,807	375,305	214,585
Pre-tax profit	(49,828)	134,811	730,120	345,158	(29,843)
Net income (loss) for the period from continuing operations	(71,794)	117,087	715,152	319,368	(42,657)
Loss from discontinued operations	0	0	0	0	0

Net income (loss) for theperiod	(71,794)	117,087	715,152	319,368	(42,657)
Other omprehensive income (net of tax) for theperiod	12,935	(136,720)	561,499	(76,203)	(515,601)
Total comprehensive income for the period	(58,859)	(19,633)	1,276,651	243,165	(558,258)
Net income attributable to owners of parent company	(71,794)	117,087	715,152	319,368	(42,657)
Net income attributable to noncontrolling interests	0	0	0	0	0
Total omprehensive income attributable to owners of the parent company	(58,859)	(19,633)	1,276,651	243,165	(558,258)
Total omprehensive income and loss attributable to noncontrolling interests	0	0	0	0	0
Earnings per share	(0.33)	0.53	3.24	1.45	(0.19)

Note 1: The financial information of the Company for the preceding year has been audited by CPA.

(3) Name of CPA and audit opinion for the last five years:

Year	The CPA Name	Opinion
2018	Yu Sheng-Ho Lee Tsu-Hui	Unqualified opinion and description of other matters
2019	Chen Chen-Chien Huang Yung-Hua	Unqualified opinion and description of other matters
2020	Chen Chen-Chien Huang Yung-Hua	Unqualified opinion and description of other matters
2021	Chen Chen-Chien Huang Yung-Hua	Unqualified opinion and description of other matters
2022	Yu Sheng-Ho Huang, Yung-Hua	Unqualified opinion and description of other matters

Five-Year Financial Analysis:

Financial Analysis - Consolidated Financial Reporting

FY(Note 1) ITEM	FY(Note 1) ITEM	Financial analysis for the last fiveyears	Financial analysis for the last fiveyears	Financial analysis for the last fiveyears	Financial analysis for the last fiveyears	Financial analysis for the last fiveyears	Current year ended March 31, 2023	Remark
		2018	2019	2020	2021	2022
Financial Structure`％`	Debt to assets ratio	54.09	53.98	45.76	48.95	49.75	52.97
	Long-term capital to property, plant and equipment	275.99	292.23	317.10	333.44	316.43	324.48
Solvency `％`	Current Ratio	166.54	173.76	199.65	180.25	183.69	185.15
	Quick Ratio	108.30	115.99	133.80	106.67	122.57	128.05
	Interest coverage multiple	(0.76)	5.91	21.28	23.87	0.57	26.57
Operating Capabilities	Receivables turnover rate (times)	6.87	7.06	7.93	8.91	9.27	7.81
	Average collection days	53.12	51.69	46.02	40.96	39.37	46.75
	Inventory turnover rate (times)	7.42	7.35	7.38	7.33	7.32	7.35
	Average sales days	49.19	49.65	49.45	49.79	49.86	49.63
	Turnover rate of accounts payable(times)	9.49	8.15	8.62	8.20	8.36	8.77
	Property, plant and equipment turnover rate (times)	1.25	1.30	1.41	1.88	1.93	1.58	Note 1
	Total assets turnover rate (times)	0.41	0.40	0.41	0.50	0.55	0.44
Profitability	Return on Assets(%)	(0.43)	1.21	6.16	2.64	(0.22)	1.13	Note 2
	Return on equity (%)	(1.42)	2.19	11.99	4.83	(0.68)	2.25	Note 2
	Net income before income tax topaid-in capital(%)	(2.19)	5.96	17.68	15.50	(0.34)	6.5	Note 2
	Net Income Ratio(%)	(1.50)	2.51	14.36	4.92	(0.66)	9.83	Note 2
	Earningsper share(NT$)	(0.33)	0.53	3.24	1.45	(0.19)	0.59	Note 2
Cash Flow	Cash flow ratio(%)	19.83	34.15	43.34	25.16	5.22	(36.32)	Note 3
	Cash Flow Allowance Ratio(%)	8.95	33.14	106.47	116.59	106.82	60.19	Note 3
	Cash reinvestment ratio(%)	1.69	2.81	3.28	2.68	(0.72)	(3.18)	Note 3
leverage	Operating leverage	(4.08)	(6.41)	4.28	(18.96)	(5.17)	1.47	Note 4
	Financial leverage	0.85	0.80	1.09	0.68	0.91	1.09	Note 5

Reasons for changes in financial ratios for the last two years. (The analysis is exempted if the change is less than 20%)

Note 1: The Consolidated Company's sales income for the current year increased compared the same in 2022, so the Property, plant and equipment turnover rate discreased.
Note 2: The Consolidated Company's net income for FY2022 was after-tax and decreasdsignificantly compared withthat of FY2021, so the positive ratio decreased.
Note 3: Cash inflow from operating activities increased in 2022 compared to 2021, so the positive ratio decreased.
Note 4: The Consolidated Company's cash flow from operating activities decreasedin 2022 compared to 2021, and net operating loss, so negative ratio is shown.
Note 5: he consolidated company will generate net loss before tax in 2022, and net profit before tax in 2021, so there will be an increase in leverage.
Note 1: The Company's consolidated financial information for the preceding year and the first quarter of
2023 is based on information that was audited or reviewed by the accountants.

Financial Analysis – Non-consolidated Financial Reports

FY ITEM	FY ITEM	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Remarks
		2018	2019	2020	2021	2022
Financial Structure`％`	Debt to assets ratio	39.21	37.67	27.99	31.68	29.88
	Long-term capital to property, plant and equipment	213.26	218.43	244.39	252.79	230.41
Solvency `％`	Current Ratio	137.24	133.77	142.76	140.18	133.78
	Quick Ratio	89.24	87.76	96.06	79.35	85.64
	Interest coverage multiple	(0.79)	5.94	38.31	24.24	(0.71)	Note 1
Operating Capabilities	Receivables turnover rate (times)	6.45	6.89	7.34	8.10	8.12
	Average collection days	56.55	52.97	49.72	45.06	44.95
	Inventory turnover rate (times)	8.81	9.32	9.08	8.95	9.03
	Average sales days	9.54	8.12	8.05	7.84	7.97
	Turnover rate of accounts payable(times)	41.44	39.16	40.19	40.78	40.42
	Property, plant and equipment turnover rate (times)	1.20	1.29	1.31	1.73	1.74
	Total assets turnover rate (times)	0.50	0.52	0.48	0.59	0.67
ability	Return on Assets(%)	(0.58)	1.61	8.26	3.52	(0.31)	Note 2
	Return on equity (%)	(1.42)	2.19	11.99	4.83	(0.68)	Note 2
Profit	Net income before income tax topaid-in capital(%)	(2.19)	5.93	32.13	15.19	(1.31)	Note 1

	Net Income Ratio(%)	(1.64)	2.63	16.22	5.57	(0.76)	Note 2
	Earningsper share(NT$)	(0.33)	0.53	3.24	1.45	(0.19)	Note 2
Cash Flow	Cash flow ratio (%)	18.59	31.39	42.77	25.85	26.82
	Cash Flow Allowance Ratio(%)	0.58	15.61	75.00	114.90	124.58
	Cash reinvestment ratio (%)	1.98	3.23	4.05	1.18	1.04
leverage	Operating leverage	(5.27)	(6.86)	6.14	(22.45)	(3.20)	`註`3
	Financial leverage	0.82	0.84	1.15	0.67	0.93	`註`3
Reasons for changes in financial ratios for the last two years. (The analysis is exempted if the change is less than 20%) Note 1: The income of the company this year is a net loss before tax and is significantly lower than the net profit before tax in 2021, so the ratio is lower. Note 2: The income of the company this year is a net loss after tax and is significantly lower than the net profit before tax in 2021, so the ratio is lower. Note 3: Although the operating income minus variable costs in 2022 is less than that in 2021, it is a net operating loss, so the ratio is lower.

Note 1: The calculation of the Company's financial information for the preceding year is based on information audited and certified by the accountants.

The formula for calculating the financial analysis items is as follows.

Financial Structure
(1) Debt to asset ratio = Total liabilities / Total assets.
(2) Long-term capital to property, plant and equipment = (total equity + non-current liabilities) / net property, plant and equipment.
Solvency
(1) Current ratio = Current assets / Current liabilities.
(2) Quick ratio = (current assets - inventories - prepaid expenses) / current liabilities.
(3) Interest coverage = Net income before income tax and interest expense / Interest expense for the period.
Management capability
(1) Turnover rate of accounts receivable (including accounts receivable and notes receivable arising from operations) = Net sales / Average balance of accounts receivable (including accounts receivable and notes receivable arising from operations) for each period.
(2) Average collection days = 365/receivable turnover rate.
(3) Inventory turnover rate = Cost of goods sold / average inventory amount.
(4) Accounts payable (including accounts payable and bills payable arising from operations)turnover rate = Cost of goods sold / average accounts payable for each period The balance of payments (including accounts payable and bills payable arising from operations).
(5) Average sales days = 365 / Inventory turnover rate.
(6) Turnover rate of property, plant and equipment = Net sales / Average net property, plant andequipment.
(7) Total Asset Turnover = Net Sales / Average Total Assets.
Profitability

(1) Return on assets = [Profit and loss after tax + interest expense × (1 - tax rate)] / Average totalassets.
(2) Return on equity = Profit or loss after tax / average total equity.
(3) Net profit margin = profit or loss after tax / net sales.
(4) Earnings per share = (Profit or loss attributable to owners of the parent company – preferredstock dividends) / weighted-average number of shares outstanding.
Cash flow
(1) Cash flow ratio = Net cash flow from operating activities / Current liabilities.
(2) Net cash flow fair ratio = Net cash flow from operating activities for the last five years / (capitalexpenditures + increase in inventories + cash dividends) for the last five years.
(3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends) / (grossproperty, plant and equipment + long-term investments + other noncurrent assets + workingcapital).
Leverage.
(1) Operating leverage = (net operating revenues - variable operating costs and expenses) /operating income.

Financial leverage = Operating income / (Operating income - interest expense).

3. Audit Committee’s Report in the Most Recent Year:

To: The company’s 2023 General Shareholder Meeting

Ocean Plastics Co., Ltd. Audit Committee’s Review Report

We hereby accept the 2022 annual business report, the earnings distribution statement submitted by the board of directors of the company, and the 2022 individual financial report and consolidated financial report that have been checked and certified by KGMP, Taiwan, and the audit committee has completed the audit, it is believed that there is no inconsistency, and according to the provisions of Article 14-4 of the Securities and Exchange Act, and Article 219 of the Company Act, it is reported to be reviewed.

Hou, Ming-Li Convener of Audit Committee

March 14, 2023

Financial Statements in the Most Recent Year: Please refer to annex 1.
Parent company only financial statements audited by CPAs for the most recent year: Please referto annex 2.
The effect on the financial position of the Company and its affiliates in the most recent year andas of the date of printing of the annual report, if there were any financial turnover difficulties: None

VII. Review of Financial Conditions, Operating Results, and Risk Management

1. Analysis of Financial Status:

Comparative Analysis of Financial Position

Unit: NT$1,000

			Unit: NT$1,000	Unit: NT$1,000
FY ITEM	2022	2021	Differences
			Amount	Amount
Current assets	1,984,152	2,656,901	(672,749)	(25.32)
Property, plant and equipment	3,378,266	3,450,776	(72,510)	(2.1)
Intangible assets	0	0	0	0
Other Assets	6,407,544	6,872,506	(464,962)	(6.77)
Total Assets	11,769,962	12,980,183	(1,210,221)	(9.32)
Current liabilities	1,080,139	1,474,042	(393,903)	(26.72)
Non-current liabilities	4,775,963	4,879,544	(103,581)	(2.12)
Total liabilities	5,856,102	6,353,586	(497,484)	(7.83)
Share Capital	2,272,283	2,272,283	0	0
Capital Fund	18,915	14,335	4,580	31.95
Retention Surplus	3,412,027	3,603,417	(191,390)	(5.31)
Other adjustments to shareholders' equity	210,635	736,562	(525,927)	(71.4)
Total shareholders' equity	5,913,860	6,626,597	(712,737)	(10.76)

The main reasons for the significant changes in assets, liabilities and equity in the last two years and their effects:

Retained earnings: The significant decrease in net income in 2022 compared to 2021.
Other adjustments to stockholders' equity: As a result of the recognition of the fair value valuation gain on equity in 2022 致。

2. Analysis of Operation Results:

(1) Comparative Analysis of Operating Results Unit: NT$1,000

FY ITEM	2022	2021	Increase (decrease)	Variation %
Net Operating Income Operating Costs Gross Profit Operating Expenses Net operating income (loss) Non-operating income and expenses Pre-tax net income (loss) Income tax expense Gain or loss on discontinued operations Net income (loss) for the period Other comprehensive income (net of tax) Total comprehensive income for theperiod	6,506,136 6,135,998 370,138 561,388 (191,250) 183,453 (7,797) 34,860 0 (42,657) (515,601) (558,258)	6,490,333 6,005,716 484,617 517,018 (32,401) 384,609 352,208 32,840 0 319,368 (76,203) 243,165	15,803 130,282 (114,479) 44,370 (158,849) (201,156) (360,005) 2,020 0 (362,025 (439,398) (801,423)	0.24 2.17 (23.62) 8.58 (490.26) (52.3) (102.21) 6.15 0 (113.36) (576.62) (329.58)

The main reasons for the significant changes in operating income, net operating income and net

incomebefore income tax for the last two years:

Reasons for changes of 20% or more:
Increase in net operating revenues and operating costs: The main reason is that the cost of raw materials has increased significantly, resulting in a lower-than-expected gross profit, and inflation has also caused an increase in operating expenses, resulting in a substantial increase in net operating loss.
Increase in non-operating income and expenses: The main reason is that the recognized financial asset evaluation loss and dividend income in 2022 were not as expected, resulting in a net loss before tax and a net loss for the period.
Discrease in other comprehensive income or loss: Due to the loss in the fair value evaluation of the recognized equity in 2022.
The expected sales volume and its basis, the possible impact on the company's future financialoperations, and the plan to deal with it:

The expected sales volume is evaluated based on the actual sales performance in recent years, theindustry environment and market changes. Expected revenue to decrease slightly in 2022, but globaleconomy affected by unstabilized pneumonia outbreak and the Russo-Ukraine war is not over. With the government's continued promotion ofeconomic revitalization programs, the overall economic prosperity of the country has been boosted.

In the future, we will strengthen the development of new products and research to develop highvalue-added products, and fully grasp the source of raw material supply to ensure that there is noshortage of sources in order to achieve the production goals. In terms of sales, we will develop newcustomers and markets to increase revenue, and in particular, we will keep abreast of internationalfinancial and economic information, keep an eye on price trends, increase our market share, andstrengthen our after-sales services. In addition to revenue, it is the Company's goal to improve itsoperations and profits, to comply with government regulations, and to fulfill its corporate social responsibility.

3. Analysis of Cash Flow

(1) Liquidity analysis for the last two years

3. Analysis of Cash Flow (1) Liquidity analysis for	the last two years
FY ITEM	2022	2021	Increase (decrease) rate%
Cash Flow Ratio	5.22	25.16	(79.25)%(note 1)
Cash Flow Fair Ratio	106.82	116.59	(8.38)%
Cash Reinvestment Ratio	(0.72)	2.68	(126.87)%(note 2)
Analysis of changes in the percentage of increase or decrease: Note 1: The consolidated cash inflow from operating activities of the company in 2022 will be significantly lower than in 2021, so the positive ratio is decreased. Note 2: In 2022, the company operated difficultly , and it will not be able to create operating profits. The net loss after tax in the currentperiod,so the ratio will begreatlyreduced.

(2) Cash flow analysis for the coming year Unit: NT$1,000

Beginning of the period Cash Balance	Year-round selfservice Net cash flow from activities	Annual Cash Inflow	Cash surplus (Deficiency) Amount	Remedies for cash shortage	Remedies for cash shortage
				Investment Plan	Investment Plan
472,820	1,079,913	207,459	1,760,192	-	-

Annual cash flow sex analysis:

The net cash outflow of $1,079,913 thousand from operating activities in the coming year is basedon the estimated profitability of the Consolidated Company in 2023 and In addition, the recognition of investment income, etc., will result in a cash inflow of $207,459 thousand, and the remaining cash at the end of the period is $1,760,192 thousand. If the situation is optimistic, the bank loan of 1,200,000 thousand yuan will be paid off, and the rest was used as working capital of the company.

4. Major Capital Expenditure Items: None.

Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year:

Last year, under the impact of the covid-19 epidemic, many Taiwanese companies thought of dispersing their production plants in China and the uncertainty of the entire upstream and downstreamsupply chain of raw materials, In addition to the political and economic instability in Europe since the beginning of this year, the Russian invasion of Ukraine at the end of February triggered a global political and economic turmoil, and the global inflation trend confirmed the international financial turmoil. There was no truce until March, and it is estimated that the recovery will slowly resume in the second half of this year as the trend stabilizes. However, Raw Materials Dept. is making good profit under the balance of VCM raw material procurement and sales, and Building Materials Dept. is also making stable profit under the domestic inflationary pressure of the real estate boom, except for the out-of-control environment of the epidemic situation in Europe and the U.S., which has not yet improved. However, we have adopted a conservative and prudent investment policy, with the industries related to the Company's core business as the main investment consideration, resulting in stable profits last year.

The Company will invest in the storage industry, investment companies and manufacturing industry, etc. The Company will invest in the future depending on the development status of the industry, and will hold the reinvestment business related to the industry for a long period of time, In addition, the company is currently actively developing environmentally friendly wood building material products, combining these products with European and American environmentally friendly materials, and through investing in new material companies, and leveraging our company's more than 50 years of manufacturing experience, we believe that these projects can bring considerable benefits to the company. growing up,and idle land assets will be adjusted and developed in a timely manner depending on the general environment, in order to enrich the capital requirements for the future 。 development and transformation of the Company's industry

6. Analysis of Risk Management:

(1) The impact of interest rate, exchange rate and inflation on the Company's profit or loss and future measures:
A. Interest rates: Due to the deterioration of global inflation, countries began to tighten money supply and raise interest rates. It is expected that the Central bank of Taiwan will follow suit this year, therefore, the company will monitor interest rate changes, control borrowing costs, and formulate countermeasures to deal with the impact of rising

interest rates and will adjust financing tools depending on the interest rate level in ， the future., and actively develop more flexible financing channels.

B. Exchange rate: The company's business involves international trade, so exchange rate changes will have a major impact on the company's profit and loss. When a country's currency depreciates, it leads to higher import costs and lower export earnings. Conversely, when the domestic currency appreciates, import costs fall and export earnings increase. Therefore, the company will evaluate the exchange rate risk and plan the risk-avoidance measures in time.The Company has a small shortage of U.S. dollars, so it is less affected by changes in the exchange rate and currently uses natural hedging and forward foreign exchange locking when the exchange rate is more volatile.
C. Inflation: Inflation will lead to higher prices, which in turn affects a company's cost structure and profit margins. When prices rise, raw material costs, labor costs, and transportation costs all rise, which in turn negatively impacts corporate profits. Therefore, the company will carefully select suppliers and purchase raw materials, adjust product prices in a timely manner, and adopt effective inventory management strategies to deal with the risk of inflation.The Company has not experienced any significant impact on the Company's profit or loss due to inflation.
(2) The policy of engaging in high-risk, highly leveraged investments, lending of funds to others, endorsement of guarantees and derivative transactions, the main reasons for profit or loss and future measures:
A. The Company does not engage in high-risk, highly leveraged investments.
B. The Company does not engage in hedging derivatives.
C. The Company's loan of funds to others and endorsement of guarantees are handled in accordance with the "Procedures for Handling Loan of Funds and Endorsement of Guarantees" established bythe Company.
(3) Future research and development plans and estimated research and development costs:
A. Future R&D plan:
- Development of PVC medical granules(NonP plasticizer PVC): A05-S73R testing by customer and quality cost improvement.
- TPE fire-resistant Wood-Plastic: Foam processing test and foam sheet flame retardant test.
- Application and development of soft hollow ball shielding and heat insulation functional products
- Development of PU solvent-free water-based PUA resin product.
B. The company estimated that we will invest about 11.6 millionthe to research and development expenses invested in 2023.
(4) Impact of significant domestic and foreign policy and legal changes on the Company's
financialoperations and measures taken in response: None
(5) Impact of technological changes and industry changes on the Company's financial operations andmeasures to address them: None
(6) Impact of corporate image change on corporate crisis management and response measures: None

100

(7) Expected benefits, possible risks and contingencies of the merger and acquisition: None
(8) Expected benefits, possible risks and contingency measures for plant expansion: None
(9) Risks associated with concentrations of imports or sales and measures to address them: None
(10) The impact, risk and response measures of a significant transfer or change in shareholding ofdirectors, supervisors or substantial shareholders holding more than 10% of the shares of theCompany: None
(11) Impact of the change in operating right on the Company, risks and response measures: None
(12) For litigation or non-litigation events, the Company and its directors, supervisors, general manager,persons in charge, substantial shareholders holding more than 10% of the shares, and affiliatedcompanies should disclose the facts of the dispute, the amount of the subject matter, the date ofcommencement of the litigation, the principal parties involved in the litigation, and the price of thesecurities if the outcome of the litigation, non-litigation or administrative dispute is likely to have asignificant impact on shareholders' equity or the price of the securities. Disposition as of the date ofthe annual report: None
(13) Other significant risks and responses: None

7. Other important matters: None

101

VIII. Special Disclosure

1. Summary of Affiliated Companies:

(1) Report on Consolidated Operations of Affiliated Companies:
A. Affiliate Organization Chart

==> picture [418 x 585] intentionally omitted <==

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

OPC
100% 100%
HongDa Investment
UNIVERSE
Corp.
100% 60.76%
FINE
ChanghsinHsinye ENVIRONMENT
Co., Ltd. TECHNOLOGIES
CO., LTD.
100% 100%
Shengyang
FERMAT
Development Co.,
EnterPrises
Ltd
100%
OCEAN
GROUP
100% 100% 100%
OPC SAGE RISE FUTURE
HOLDINGS HOLDINGS INT’L LTD.
Ocean Plastics Co., Dongguan Ocean
Ltd. (Huizhou) Innovative Leather
Co., Ltd. Products Co., Ltd.
100% 100%
----- End of picture text -----

102

B. Basic information of affiliated companies March 31, 2023

Name	Established on	Address	Paid-in Capital	Business Scope
ChanghsinHsinye Co., Ltd.	12.24.1998	5F, No. 310, Juguang Road, Taipei, Taiwan	290,086	Investment
HongDa Investment Corp.	12.14.1998	5F, No. 310, Juguang Road, Taipei, Taiwan	1.9 million	Investment
FERMAT ENTERPRISES	6.27.2000	P.O. BOX3321 Road Town, Trotola, British Virgin Islands	US$ 45	Investment
UNIVERSE ENTERPRISES	4.2.2001	P.O. BOX3152 Road Town, Trotola, British Virgin Islands	US$ 300	Trade
OCEAN GROUP	3.8.2004	Portcullis Chambers P.Q.Box1225 Apia Samoa	US$3,290	Investment
SAGE HOLDINGS	3.17.2004	Portcullis Chambers P.Q.Box1225 Apia Samoa	US$ 2,500	Investment
RISE FUTURE INT’L LTD.	12.16.2004	NO.4, Franky Building Providence IndustrialEstate, Mahe, Seychelles	US$ 745	Investment
OPC HOLDINGS	8.25.2000	P.O. BOX3152 Road Town, Trotola, British Virgin Islands	US$ 45	Investment
Ocean Plastics Co., Ltd. (Huizhou) Co., Ltd.	11.8.2004	Fulong Industrial Zone, Shatian Town, Huiyang District, Huizhou City, Guangdong Province	US$ 2,500	Manufacturing
OCEAN PLASTICS (Dongguan)CO., LTD.	9.12.2005	Weiya Industrial Zone, Lamma Village, Daojiao Town, Dongguan City, Guangdong Province	US$ 745	Manufacturing
Shengyang Development Co., Ltd.	1.5.2015	5F, No. 310, Juguang Road, Wanhua District, Taipei, Taiwan	100	Land Development
FINE ENVIRONMENT TECHNOLOGIES CO.,LTD.	5.7.2003	6F, No. 310, Juguang Road, Taipei, Taiwan	1,650	Sales

C. Information on the same shareholders who are presumed to be in a controlling and subordinate relationship: None

103

D. The business of the affiliated companies and their relationship with each other

Industry	Name	Relationship
Investment Co.	ChanghsinHsinyeh Co.	無
	HongDa Investment Corp.	〞
	FERMAT ENTERPRISES	〞
	OCEAN GROUP	〞
	SAGE HOLDINGS	〞
	RISE FUTURE INT’L LTD.	〞
	OPC HOLDINGS	〞
Trading	UNIVERSE ENTERPRISES	〞
Manufacturing	Ocean Plastics(Huizhou)Co.,Ltd.	〞
	Dongguan Ocean Innovative Leather Products Co.,Ltd.	〞
Land Development	ShengyangDevelopment Co., Ltd.	〞
Sales	FINE ENVIRONMENT TECHNOLOGIES CO.,LTD.	〞

E. Information on Directors, Supervisors and General Managers of affiliated companiesMarch 31, 2023

Name	Title	Name or representative	Shareholding	Shareholding
			Shares	Holding ratio
ChanghsinHsinye Co., Ltd.	Chairman	Ocean Plastics Co., Ltd.Juristic person representative: ChengYu-Feng	290,086,000	100.00%
	Director	Ocean Plastics Co., Ltd.Juristic person representative: ChengFan-Yao
	Director	Ocean Plastics Co., Ltd.Juristic person representative: Lin Chin-Hua
	supervisor	Ocean Plastics Co., Ltd.Juristic person representative :WangYi-Ho
HongDa Investment Corp.	Chairman	Ocean Plastics Co., Ltd.Juristic person representative: Chiu Chun-Fu	19,000,000	100.00%
	Director	Ocean Plastics Co., Ltd.Juristic person representative: Chen Fang-Ching
	supervisor	Ocean Plastics Co., Ltd.Juristic person representative: Lee Shang-Hsun
OCEAN GROUP	Managing Director	Ocean Plastics Co., Ltd.Juristic person representative: Shen Shao-Pin	32,900,000	100.00%
UNIVERSE ENTERPRISES	Chairman	Ocean Plastics Co., Ltd.Juristic person representative: Wang Yi-Ho	3,000,000	100.00%

104

Name	Title	Name or representative	Shareholding	Shareholding
			Shares	Holding ratio
	Director	Ocean Plastics Co., Ltd.Juristic person representative: Lu Chien-An
FERMAT ENTERPRISES	Chairman	Ocean Plastics Co., Ltd.Juristic person representative: WangYi-Ho	450,000	100.00%
	Director	Ocean Plastics Co., Ltd.Juristic person representative :Lu Chien-An
SAGE HOLDINGS	Managing Director	OCEAN GROUPJuristic person representative: Wang Yi-Ho	25,000,000	100.00%
RISE FUTURE INT’L LTD.	Managing Director	OCEAN GROUPJuristic person representative: WangYi-Ho	7,450,000	100.00%
OPC HOLDINGS	Chairman	OCEAN GROUPJuristic person representative: Wang Yi-Ho	450,000	100.00%
	Director	OCEAN GROUPJuristic person representative :Lu Chien-An
Dongguan Ocean Innovative Leather Products Co., Ltd.	Managing Director	RISE FUTURE INT’L LTD. Juristic person representative: Peng Hung-Chang	7,450,000	100.00%
	supervisor	RISE FUTURE INT’L LTD. Juristic person representative: Wang Yi-Ho
Ocean Plastics Co., Ltd. (Huizhou) Co., Ltd.	Chairman	SAGE HOLDINGSJuristic person representative: Shen Shao-Pin	25,000,000	100.00%
	Director	SAGE HOLDINGSJuristic person representative: Chen Chin-Ming
	Director	SAGE HOLDINGSJuristic person representative: Chen Chin-Ho
Shengyang Development Co., Ltd.	Chairman	Chang-Hsin-Hsin-Yeh Co., Ltd.Juristic person representative: Chen Yu-Feng	100,000	100.00%
	Director	Chang-Hsin-Hsin-Yeh Co., Ltd.Juristic person representative: Chen Chien-Ta
	Director	Chang-Hsin-Hsin-Yeh Co., Ltd.Juristic person representative: Lee Shang-Hsun
	supervisor	Chang-Hsin-Hsin-Yeh Co., Ltd.Juristic person representative: ChangYu-Hui
FINE ENVIRONMENT TECHNOLOGIES CO., LTD.	Chairman	Ocean Plastics Co., Ltd.Juristic person representative: Hsu Ming-Lien	1,002,533	60.76%
	Director	Hung-Ta Investment Co., Ltd.Juristic person representative: ChiangJui-Hsiang	647,467	39.24%
	supervisor	Lu Chien-An	-	-

Note: UNIVERSE ENTERPRISE has been liquidated in January 2022.

105

F. Business Overview of Affiliates

December 31, 2022 Unit: NT$1,000

Company Name	Capitali- zation	Assets Total Value	Liabilities Total amount	Net value	Business Revenue	Business Interests	Profit or loss for the period (after tax)	Earnings per share (after tax)/(NT$)
Changhsin Hsinye Co.,Ltd.	2,900,860	6,061,433	3,182,596	2,878,837	3,027	(15,570)	(15,569)	(0.05)
HongDa Investment Corp.	190,000	316,891	4,597	312,294	17,181	(59,498)	(64,163)	(3.38)
FERMAT ENTERPRISE	13,886	21,170	294	20,876	0	0	(1,068)	(2.37)
UNIVERSE ENTERPRISE	93,032	0	0	0	0	58	58	0.02
OCEAN GROUP	1,069,438	806,360	271,325	535,035	913,692	72,553	70,074	2.13
SAGE HOLDINGS	812,643	554,490	0	554,490	0	0	75,131	3.01
RISE FUTURE INT’L LTD.	242,168	(69,106)	0	(69,106)	0	0	(9,097)	(1.22)
OPC HOLDINGS	14,628	49,592	0	49,592	0	(13)	4,035	9.00
Ocean Plastics (Huizhou) Co., Ltd.	812,643	634,667	80,180	554,487	826,303	71,527	75,130	3.01
OCEAN PLASTICS(Dong guan)CO.,LTD	242,168	122,036	191,144	(69,108)	87,389	1,039	(9,098)	(1.22)
FINE ENVIRONMENT TECHNOLOGIE S CO.,LTD.	16,500	13,400	179	13,221	2,937	(10)	(24)	(0.01)
Shengyang Development Co., Ltd.	1,000	535	0	535	0	0	847	0

Note: UNIVERSE ENTERPRISE has been liquidated in January 2022

(2) Consolidated financial statements of affiliated companies: None

(3) Sstatements of affiliated companies: None .

106

2 . Private Placement Securities in the Most Recent Years: None

The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Year

Unit: TWD$1000 dolars/Share/%

Subsidiaries	Received Capitalization	Funding Source	Our Company Sharehold ing ratio	Obtain or Disposition Date	Number of shares acquired and amount	Number of shares disposed of and amount	Investm ent Profit and Loss	Number and amount of shares held as of the date of printing of the annual report	Set the pledge situation	Our company is Subsidiary Endorsement Guaranteed Amount	Amount loaned by the Company to subsidiaries
Changhsin Hsinye Co., Ltd.	2,900,860	OCEAN PLASTICS CO., LTD.	100`﹪`	-	-	-	-	2,939,062shares 69,362thousand	None	1,220,150	None
HongDa Investment Corp.	190,000	`〃`	100`﹪`	-	-	-	-	3,603,654shares 85,046thousand	`〃`	`〃`	`〃`

4.Other necessary supplementary items: None

5.For the most recent year and as of the printing date of the annual report, events that have a significant impact on shareholders' equity or the price of securities as defined in Article 36, Paragraph 2 Subparagraph 2 of the Securities and Exchange Act: None

107

Stock Code:1321

Ocean Plastics Co., Ltd and Subsidiaries

Consolidated Financial Statements

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

Address: 5、6F., No. 310, Juguang Rd., Wanhua Dist., Taipei City 108, Taiwan (R.O.C.) Telephone: (02)2306-2131

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

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

Page

1
2
3
4
5
6
7
8
9
9
9～11
11～26
26～27
27～60
60～62
62
62～63
63
63
63
64～66
66～67
67
67
68～70

Representation Letter

The entities that are required to be included in the combined financial statements of 2022 as of and for the year ended December 31, 2022 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10, "Consolidated Financial Statements." endorsed by the Financial Supervisory Commission of the Republic of China. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Ocean Plastics Co., Ltd and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Ocean Plastics Co., Ltd Chairman: Date: March 14, 2023

==> picture [76 x 31] intentionally omitted <==

==> picture [169 x 19] intentionally omitted <==

KPMG

��110615��5�7�68�(��101��) �� Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, �� Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) �� Web kpmg.com/tw

Independent Auditors’ Report

To the Board of Directors of Ocean Plastics Co., Ltd:

Opinion

We have audited the consolidated financial statements of Ocean Plastics Co., Ltd and its subsidiaries (“ the Group”), which comprise the consolidated balance sheets as of December 31, 2022 and 2021, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of other auditors (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2022 and 2021, 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 with the International Financial Reporting Standards (“ IFRSs” ), International Accounting Standards (“ IASs” ), Interpretations developed by the International Financial Reporting Interpretations Committee (“ IFRIC” ) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Account of Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Other Matter

We did not audit the financial statements of certain subsidiaries and Investments accounted for using equity method of the Group. Those financial statements were audited by other auditors. Therefore, our opinion, insofar as it relates to the Group, the financial statements of these subsidiaries reflect the total assets constituting 7% of the consolidated total assets at December 31, 2022 and 2021, and the total revenues constituting 14% and 13% of the consolidated total revenues for the years ended December 31, 2022 and 2021, respectively. The recognized investment in investee, using the equity method, constituted 4% and 3% of the total consolidated assets, respectively, as of December 31, 2022 and 2021, and the recognized share of profit or loss of associates and joint ventures accounted for using equity method constituted (1,232)% and 22% of profit before tax, respectively, for the years ended December 31, 2022 and 2021.

Ocean Plastics Co., Ltd has prepared its parent-company-only financial statements as of and for the years ended December 31, 2022 and 2021, on which we have issued an unmodified opinion with an Other Matter paragraph.

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

4-1

Key Audit Matters

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

1. Inventory evaluation

Please refer to note 4(h) for the accounting policy on Inventory” and note 6(f) for components of inventories and expenses.

Description of key audit matter:

The Group’ s inventories are mainly midstream and downstream products of petrochemicals (PVC) and related products. The measurement of the net realizable value and obsolescence of inventories is uncertain because of involvement of management’s subjective judgement. Therefore, we have considered inventory valuation to be a key audit matter.

How the matter was addressed in our audit:

Our principal audit procedures in this area included, among others: understanding inventory valuation policies to ensure that the process of inventory valuation was in conformity with the accounting policies, which included sampling inventories to test the accuracy of the aging report, reviewing the estimate of allowance for inventory loss in prior periods, and comparing it with the method and assumption used in estimating allowance for inventory loss for the current period, so as to assess the reasonableness, inspecting the sales after the balance sheet date in order to ensure that inventory valuation was appropriate.

2.Revenue recognition

Please refer to note 4(o) for the accounting policy on Revenue recognition” and note 6(u) for information about revenue recognition.

Description of key audit matter:

The Group engages in manufacturing and selling plastics materials and downstream plastic products (plastic construction tubing, plastic cloth, plasticized synthetic leather, etc.). Considering the high trade volume and decentral customers of the Group, the control of products transfers at different time points might impact the time of revenue recognition. Therefore, revenue recognition has been identified as a key matter in our audit.

How the matter was addressed in our audit:

Our principal audit procedures in this area included, among others: evaluating the reasonableness of revenue recognition, understanding and testing the internal control of sales and collection cycles to ascertain if the implement was operative, checking individual sales transactions, customer orders, shipping certificates, invoices and other documents, delving into periods before and after the balance sheet date in order to evaluate if the period of revenue recognition tallied with the trade condition and shipping documents.

4-2

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

4-3

Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our 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.

The engagement partners on the audit resulting in this independent auditors’ report are Sheng-Ho Yu and YungHua Huang.

KPMG

Taipei, Taiwan (Republic of China) March 15, 2023

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) OCEAN PLASTICS CO., LTD AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1170 Notes and trade receivables, net (note 6(e)) 1180 Accounts receivable due from related parties, net (notes 6(e) and 7) 130X Inventories (note 6(f)) 1470 Other current assets (note 6(k)) Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1535 Non-current financial assets at amortised cost, net (note 6(d)) 1550 Investments accounted for using equity method (note 6(g)) 1600 Property, plant and equipment (note 6(h)) 1755 Right-of-use assets (notes 6(i) and 7) 1760 Investments property, net (notes 6(j) and 8) 1900 Other non-current assets (notes 6(k) and 8) Total assets	December 31, 2022 Amount % $ 471,820 4 289,833 2 623,846 5 1,867 - 532,006 5 64,780 1 1,984,152 17 11,827 - 637,472 5 44,110 - 448,493 4 3,378,266 29 161,564 1 5,037,904 43 66,174 1 9,785,810 83 $ 11,769,962 100	December 31, 2021 Amount % 414,256 3 436,198 3 751,866 6 - - 968,087 7 86,494 1 2,656,901 20 9,326 - 1,169,824 9 21,715 - 417,247 3 3,450,776 28 192,346 1 4,995,629 38 66,419 1 10,323,282 80 12,980,183 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (notes 6(m) and 8) 2170 Notes and trade payables 2200 Other payables 2220 Other payables to related parties (note 7) 2300 Other current liabilities (notes 6(l), (o), (u) and 7) 2320 Long-term liabilities, current portion (notes 6(n) and 8) Non-Current liabilities: 2540 Long-term borrowings (notes 6(n) and 8) 2570 Deferred tax liabilities (note 6(r)) 2640 Net defined benefit liability, non-current (note 6(q)) 2670 Other non-current liabilities, others (notes 6(o) and 7) Total liabilities Equity attributable to owners of parent(note 6(s)): 3100 Capital stock 3200 Capital surplus 3300 Retained earnings 3400 Other equity 3500 Treasury shares Total equity Total liabilities and equity	December 31, 2022		December 31, 2021
			Amount %		Amount %
			$ 250,000 2 499,968 4 230,005 2 3,098 - 54,012 1 43,056 - 1,080,139 9 3,421,481 29 1,101,198 9 92,261 1 161,023 2 4,775,963 41 5,856,102 50 2,272,283 19 18,915 - 3,412,027 29 246,824 2 (36,189) - 5,913,860 50 $ 11,769,962 100		150,000 1 963,972 7 251,360 2 3,083 - 51,460 - 54,167 - 1,474,042 10 3,145,798 24 1,439,652 12 105,337 1 188,757 1 4,879,544 38 6,353,586 48 2,272,283 18 14,335 - 3,603,417 28 772,751 6 (36,189) - 6,626,597 52 12,980,183 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) OCEAN PLASTICS CO., LTD AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2022 and 2021

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

4100 Operating revenues, net (note 6(u)) 5000 Operating costs (notes 6(f) and 7) 5900 Gross profit from operation 6000 Operating expenses(notes 6(e), (h), (i), (j), (q), (v) and 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment gain and reversal of impairment loss determined in accordance with IFRS 9 6000 Total operating expenses 6900 Net operating loss 7000 Non-operating income and expenses : 7100 Interest income (note 6(w)) 7010 Other income (note 6(w)) 7020 Other gains and losses, net (note 6(w)) 7050 Finance costs (note 6(w)) 7060 Share of profit of associates accounted for using equity method (note 6(g)) Total non-operating income and expenses Profit (loss) before income tax 7950 Less: Income tax expenses (note 6(r)) Profit (loss) 8300 Other comprehensive income: 8310 Items that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income Total comprehensive income Earnings per share (NT dollars)(note 6(t)) 9750 Basic (loss) earnings per share 9850 Diluted (loss) earnings per share	2022 Amount % $ 6,506,136 100 6,135,998 94 370,138 6 395,760 6 148,889 2 15,451 - 1,288 - 561,388 8 (191,250) (2) 7,901 - 185,321 3 (87,664) (1) (18,148) - 96,043 1 183,453 3 (7,797) 1 34,860 1 (42,657) - 10,326 - (532,352) (8) - - (522,026) (8) 6,425 - - - 6,425 - (515,601) (8) $ (558,258) (8) $ (0.19) $ (0.19)	2021 Amount % 6,490,333 100 6,005,716 93 484,617 7 371,412 6 133,676 2 11,496 - 434 - 517,018 8 (32,401) (1) 4,344 - 165,860 3 151,077 2 (15,400) - 78,728 1 384,609 6 352,208 5 32,840 1 319,368 4 3,378 - (82,133) (1) - - (78,755) (1) 2,552 - - - 2,552 - (76,203) (1) 243,165 3 1.45 1.45

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) OCEAN PLASTICS CO., LTD AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the years ended December 31, 2022 and 2021 (Expressed in Thousands of New Taiwan Dollars)

			Equity attributable to owne	Equity attributable to owne	Equity attributable to owne	s of parent	s of parent		Treasury shares	Total equity
Share capital	Capital surplus		Retained earnings			Total 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 other equity interest
Ordinary shares		Legal reserve	Special reserve	Unappropriated retained earnings	Total retained earnings
$ 2,272,283 - - - - - - - 2,272,283 - - - - - - - $ 2,272,283	7,792	-	2,978,245	529,654	3,507,899	(39,407) - - - - 2,552 2,552 - (36,855) - - - - 6,425 6,425 - (30,430)	891,739	852,332	(36,189) - - - - - - - (36,189) - - - - - - - (36,189)	6,604,117
	- -	52,965 -	- -				- -	- -		- (227,228)
	-	52,965	-				-	-		(227,228)
	- -	- -	- -							319,368 (76,203)
	-	-	-							243,165
	6,543	-	-							6,543
	14,335 - -	52,965 32,275 -	2,978,245 - -							6,626,597 - (159,059)
	-	32,275	-							(159,059)
	- -	- -	- -							(42,657) (515,601)
	-	-	-							(558,258)
	4,580	-	-							4,580
	18,915	85,240	2,978,245							5,913,860

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) OCEAN PLASTICS CO., LTD AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit (loss) before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Expected credit loss Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of associates and joint ventures accounted for using equity method Loss (gain) on disposal of property, plan and equipment Property, plan and equipment transferred to expenses Loss (gain) on disposal of investment properties Loss (gain) on disposal of investments Profit from lease moditication Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Accounts receivable Inventories Other current assets Operating assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Notes payable Accounts payable Other payable Other payable to related parties Provisions Other current liabilities Net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments	2022 $ (7,797) 213,596 1,288 154,553 54,102 (7,901) (140,420) (96,043) (1,120) 335 - - (1,348) 177,042 19,477 105,363 436,156 17,458 1,174 579,628 4,107 (99,418) (364,586) (30,030) 15 847 (141) (3,176) (492,382) 87,246 264,288	2021 352,208 206,568 434 (121,883) 42,828 (4,344) (97,957) (78,728) - 441 (18,689) (1,385) - (72,715) (11,570) (77,565) (457,870) 33,586 (19,914) (533,333) 19,613 169,110 304,731 13,185 (121) 1,081 94 (2,924) 504,769 (28,564) (101,279)

See accompanying notes to consolidated financial statements.

8-1

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) OCEAN PLASTICS CO., LTD AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2022 and 2021 (Expressed in Thousands of New Taiwan Dollars)

Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income taxes paid
Net cash flows from operating activities
Cash flows from (used in) investing activities:
Proceeds from disposal of financial assets at amortised cost
Acquisition of financial assets at fair value through profit or loss
Proceeds from disposal of financial assets at fair value through profit or loss
Acquisition of investments accounted for using equity method
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of investment properties
Proceeds from disposal of investment properties
Net cash flows used in investing activities
Cash flows from (used in) financing activities:
Increase (decrease) in short-term loans
Proceeds from long-term debt
Repayments of long-term debt
Increase in deposits received
Payment of lease liabilities
Cash dividends paid
Net cash flows from (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) OCEAN PLASTICS CO., LTD AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2022 and 2021

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

(1) Company history

OCEAN PLASTICS CO., LTD (the “Company”) was incorporated in June 1965 as a company limited by shares under the Company Act of the Republic of China (R.O.C.), and merged Yee Fong Chemical & Industrial Co., Ltd. The Company was registered in 5F & 6F., No. 310, Juguang Rd., Wanhua Dist., Taipei City. The consolidated financial statements of the Company as of the year ended December 31, 2022 comprise the Company and subsidiaries (together referred to as the “Group” and individually as “Group entities”). Please refer to note 14 for related information of the Group entities’ main business activities.

The major business activities of the Company are the manufacture and sale of plastics.

The Company’s common shares were listed on the Taiwan Stock Exchange (TWSE) on January 1999.

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

These consolidated financial statements were authorized for issue by the Board of Directors on March 14, 2023.

(3) New standards, amendments and interpretations adopted

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

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2022:

－
●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018–2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2023, would not have a significant impact on its consolidated financial statements:

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

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Standards or
Interpretations
Amendments to IAS 1
“Classification of Liabilities
as Current or Non-current”
Amendments to IAS 1 “Non-
current Liabilities with
Covenants”

Content of amendment
Effective date per
IASB
Under
existing
IAS
1
requirements,
companies classify a liability as current
when they do not have an unconditional
right to defer settlement for at least 12
months after the reporting date. The
amendments has removed the requirement
for a right to be unconditional and instead
now requires that a right to defer settlement
must exist at the reporting date and have
substance.
The amendments clarify how a company
classifies a liability that can be settled in its
own shares – e.g. convertible debt.
January 1, 2024
After reconsidering certain aspects of the
2020
amendments1,
new
IAS
1
amendments clarify that only covenants
with which a company must comply on or
before the reporting date affect the
classification of a liability as current or
non-current.
Covenants with which the company must
comply after the reporting date (i.e. future
covenants) do not affect a liability’ s
classification at that date. However, when
non-current liabilities are subject to future
covenants, companies will now need to
disclose
information
to
help
users
understand the risk that those liabilities
could become repayable within 12 months
after the reporting date.
January 1, 2024

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

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

●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” and amendments to IFRS 17 “ Insurance Contracts”

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

●Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information “
●IFRS16 “Requirements for Sale and Leaseback Transactions”

(4) Summary of significant accounting policies:

The significant accounting policies presented in the consolidated financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

(a) Statement of compliance

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

(b) Basis of preparation

(i) Basis of measurement

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

1) Financial instruments at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value;
3) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in note 4(p).
(ii) Functional and presentation currency

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

(c) Basis of consolidation

(i) Principles of preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

(ii) List of subsidiaries in the consolidated financial statements

Name of investor	Name of Subsidiary	Principal activity	Shareholding December 31, 2022 December 31, 2021 Note	Shareholding December 31, 2022 December 31, 2021 Note
			December 31, 2022
The Company The Company The Company The Company The Company The Company Ocean Group Ltd Ocean Group Ltd Ocean Group Ltd Sage Holdings Ltd Rise Future International Ltd Chang Xin Co., Ltd	Hong Da Investment Co., Ltd. Chang Xin Co., Ltd Fine Environment Technologies Co., Ltd Universe Enterprises Ltd Fermat Enterprises Ltd Ocean Group Ltd Sage Holdings Ltd OPC Holdings Ltd Rise Future International Ltd Ocean Plastics (Hui Zhou) Co., Ocean Plastics (Dong Guan) Co., Ltd Shen Yang Development Co., Ltd.	General investing General investing Wholesale of Plastic Products Trading Company Investment holding Investment holding Investment holding Investment holding Investment holding Plastic Products Manufacturing Plastic Products Manufacturing Real Estate Development Activities	% 100 % 100 % 100 % - % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100	% 100 % 100 % 100 (Note 1) % 100 (Note 2) % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100

Note 1: Holds 100% of Fine Environment Technologies Co., Ltd shares with Hong Da Investment Co., Ltd..
Note 2: Universe enterprises Ltd. was liquidated on April 1, 2022, the liquidation base day and the liquidation has been completed.The Group has ceased to recognize investment profit since the date of liquidation and has recovered the share payment after liquidation without generating significant gain or loss on liquidation.

(iii) Subsidiaries excluded from the consolidated financial statements: None.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Foreign currencies

(i) Foreign currency transactions

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

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

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

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

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

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

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

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

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non current.

An entity shall classify a liability as current when:

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

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(g) Financial Instruments

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

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Financial assets

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

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

1) Financial assets measured at amortized cost

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

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

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

2) Fair value through other comprehensive income (FVOCI )

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

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

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

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

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

3) Fair value through profit or loss (FVTPL)

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

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

Impairment of financial assets

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

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

‧ debt securities that are determined to have low credit risk at the reporting date; and
‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

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

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment as well as forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group considers a financial asset to be in default when the financial asset is more than 180 days past due or the debtor is unlikely to pay its credit obligations to the Group in full.

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’.

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

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

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

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

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

‧ significant financial difficulty of the borrower or issuer;

‧ a breach of contract such as a default or being more than 180 days past due;
‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧ it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧ the disappearance of an active market for a security because of financial difficulties.

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

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

5) Derecognition of financial assets

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

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

(ii) Financial liabilities and equity instruments

1) Classification of debt or equity

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

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital suplus is not sufficient to be written down).

4) Financial liabilities

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

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

5) Derecognition of financial liabilities

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

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

6) Offsetting of financial assets and liabilities

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

(h) Inventories

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

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

(i) Investment in associates

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

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

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

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

(j) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

(k) Property, plant and equipment

(i) Recognition and measurement

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

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

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

(ii) Subsequent expenditure

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

(iii) Depreciation

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

Land is not depreciated.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

1) buildings 5~50 years 2) machinery equipment 3~20 years 3) other facility 2~20 years

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

(iv) Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner occupied to investment property.

(l) Leases

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

(i) As a leasee

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

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

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

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

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

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

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

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

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

(ii) As a leasor

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

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

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

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Impairment of non-financial assets

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

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

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

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

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

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

(n) Revenue from contracts with customers

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

(i) Sale of goods

The Group manufactures and sells electronic components to computer manufacturers. The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

(ii) Financing components

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

(o) Employee benefits

(i) Defined contribution plans

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

(ii) Defined benefit plans

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

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

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

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

(iii) Other long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in which they arise.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Short-term employee benefits

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

(p) Income taxes

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

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

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

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

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

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

(i) the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

(q) Earnings per share

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

(r) Operating segments

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

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

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

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

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

Judgment of whether the Group has substantive control over its investees

The Group holds 44.62% of the outstanding voting shares of Chun Pin Enterprise Co., Limited. and is not the single largest shareholder of the investee. The Group cannot obtain more than half of the total number of Chun Pin Enterprise company’s directors, and it also cannot obtain more than half of the voting rights at a shareholders’ meeting. Therefore, it is determined that the Group has significant influence on Chun Pin Enterprise company.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group holds 40% of preferred stock and 50% of common stock of Foremost-Oceans NueTeq, Limited. and is not the single largest shareholder of the investee. The Group cannot obtain more than half of the total number of Foremost-Oceans NueTeq, Ltd.’s directors, and it also cannot obtain more than half of the voting rights at a shareholders’ meeting. Therefore, it is determined that the Group has significant influence on Foremost-Oceans NueTeq, Limited.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows:

Valuation of inventory

Inventories are stated at the lower of cost or net realizable value. The Group estimates the net realizable value of inventory for normal waste, obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is determined mainly based on the assumptions of future demand within a specific time horizon. For the estimation of the valuation of inventory, please refer to note 6(f).

The Group’s accounting policies include measuring financial and non financial assets and liabilities at fair value through profit or loss.

The Group’s financial instrument valuation group conducts independent verification on fair value by using data sources that are independent, reliable, and representative of exercise prices. This financial instrument valuation group also periodically adjusts valuation models, conducts back testing, renews input data for valuation models, and makes all other necessary fair value adjustments to assure the rationality of fair value.

(a) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
(b) Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
(c) Level 3: inputs for the assets or liability that are not based on observable market data.

(6) Explanation of significant accounts

(a) Cash and cash equivalents

Cash and cash equivalents
Revolving funds and cash in hand Demand deposits and check deposits Time deposits Cash and cash equivalents in the consolidated statement of cash flows	December 31, 2022 $ 850 440,250 30,720 $ 471,820	December 31, 2021
		788 413,468 -
		414,256

Please refer to note 6(x) for the exchange rate risk, interest rate risk, and sensitivity analysis of the financial assets and liabilities of the Group.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The cash and cash equivalents on December 31, 2022 and 2021, including deposits held by subsidiaries in China, were $263,220 thousand, and $142,833 thousand, respectively. It must be processed in accordance with the procedures prescribed by the foreign exchange control laws and regulations, and the deposit can only be remitted.

(b) Financial assets at fair value through profit or loss

December 31, 2022 Current financial assets designated at fair value through profit or loss: Stocks listed on domestic markets $ 262,709 Fund investment 27,124 Subtotal 289,833 Non-current financial assets designated at fair value through profit or loss Stocks listed on domestic markets 6,894 Fund investment 4,933 Subtotal 11,827 Total $ 301,660 Financial assets at fair value through other comprehensive income December 31, 2022 Equity investments at fair value through other comprehensive income: Stock unlisted on domestic markets－Taiwan VCM Corporation $ 547,480 Stock unlisted on domestic markets－Others 83,102 Stock unlisted on foreign markets 6,890 Total $ 637,472	December 31, 2021
	411,528 24,670
	436,198
	9,326 -
	9,326
	445,524
	December 31, 2021
	1,016,326 146,608 6,890
	1,169,824

(i) For credit risk and market risk, please refer to note 6(y).

(ii) The financial assets at fair value through other comprehensive income of the Group were not pledged as collateral as of December 31, 2022 and 2021.
(d) Financial assets measured at amortized cost

Domestic and foreign time deposit-non-current	December 31, 2022 $ 44,110	December 31, 2021
		21,715

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group has assessed that these financial assets are held-to-maturity to collect contractual cash flows, which consist solely of payments of principal and interest on principal amount outstanding. Therefore, these investments were classified as financial assets measured at amortized cost.

(i) During the years ended December 31, 2022 and 2021, the Group held domestic and foreign time deposits, with the weighted average interest rates of 3.00% and 3.30%, which mature from September to November 2025 and on November 2022, respectively.
(ii) The discoure instruments were not pledged as collateral as of December 31, 2022 and 2021.
(e) Note Receivables and trade receiivable (including related parties)

Notes receivable from operating activities Trade receivables (including related parties) Less: Loss allowance	December 31, 2022 $ 39,870 595,139 (9,296) $ 625,713	December 31, 2021 59,347 700,502 (7,983) 751,866

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

December 31, 2022	December 31, 2022
Gross carrying amount Weighted- average loss rate $ 556,074 - 75,740 5%~10% 3,195 100% $ 635,009 December 31, 2021		Loss allowance provision
		- 6,101 3,195
		9,296

	Weighted- average loss rate - 7% 100%	Loss allowance provision
		- 4,139 3,844
		7,983

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The movement in the allowance for notes and trade receivables were as follows:

Balance at January 1 Impairment losses recognized Impairment losses reversed Foreign exchange gains/(losses) Balance at December 31	2022 $ 7,983 2,184 (896) 25 $ 9,296	2021 7,540 1,708 (1,274) 9
		7,983

The aforementioned notes and trade receivables of the Group were not pledged as collateral as of December 31, 2022 and 2021.

(f) Inventories

Manufacturing: Raw materials Work in progress Finished goods Construction industry: Construction in progress Total	December 31, 2022 $ 252,767 27,180 251,984 531,931 75 $ 532,006	December 31, 2021
		425,987 36,662 505,438
		968,087
		-
		968,087

The Group’ s relevant inventory details recognized in operating costs in 2022 and 2021 are as follows:

Inventory that has been sold Write-down of inventories Disposal of inventory Idle capacity Revenue from sale of scraps and others	2022 $ 6,046,631 12,824 - 122,875 (46,332) $ 6,135,998	2021
		5,890,176 1,234 1,602 111,542 1,162
		6,005,716

As of December 31, 2022 and 2021, the Group did not provide any inventories as collateral for its loans.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Investments accounted for using equity method

A summary of the Group’ s financial information for investments accounted for using the equity method at the reporting date is as follows:

Associates

December 31, 2022 $ 448,493	December 31, 2021
	417,247

(i) Associates

Associates which are material to the Group consisted of the followings:

Name of Associates Chun Pin Enterprise Co., Limited. Foremost-Oceans NueTeq, Ltd.	Nature of Relationship with the Group Wholesale of chemical feedstock and products Wholesale of petrochemical materials manufacturing	Main operating location/ Registered country of the Company Taiwan Taiwan	Proportion of shareholding and voting rights
			December 31, 2022 December 31, 2021 % 44.62 % 44.62 40.07%、 50.00% % -

The following consolidated financial information of significant associates has been adjusted according to individually prepared IFRS financial statements of these associate.

1) Chun Pin Enterprise Co., Limited.

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Operating revenue Profit from continuing operations Other comprehensive income Total comprehensive income	December 31, 2022 $ 826,441 271,851 (88,420) (18,113) $ 991,759 2022 $ 467,562 215,346 - $ 215,346	December 31, 2021 862,322 238,527 (133,582) (32,059) 935,208 2021 436,102 176,458 - 176,458

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Share of net assets of associates as of January 1 Comprehensive income attributable to the Group Dividends received from associates Share of net assets of associates as of December 31 2) Foremost-Oceans NueTeq, Ltd.	2022 $ 417,247 96,077 (70,847) $ 442,477	2021 407,945 78,728 (69,426) 417,247

Current assets Non current assets Current liabilities Net assets Operating revenue Loss from continuing operations Other comprehensive income Total comprehensive income Share of net assets of associates as of January 1 Increase in current period Comprehensive income attributable to the Group Share of net assets of associates as of December 31	December 31, 2022 $ 3,878 13,010 (1,873) $ 15,015 2022 $ - (87) - $ (87) 2022 $ - 6,050 (34) $ 6,016	December 31, 2021
		- - -
		-
		2021
		- - -
		-
		2021
		- - -
		-

(ii) Guarantee

As of December 31, 2022 and 2021, the Group did not provide any investment accounted for using equity method as collaterals for its loans.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2022 and 2021, were as follows:

Cost or deemed cost: Balance on January 1, 2022 Additions Transfer from construction in progress and testing equip Disposal Transfer to expense Effect of movement in exchange rates Balance on December 31, 2022 Balance on January 1, 2021 Additions Transfer from construction in progress and testing equip Disposal Transfer to expense Effect of movement in exchange rates Balance on December 31, 2021 Depreciation and impairments losses: Balance on January 1, 2022 Depreciation and impairment loss for the year Disposal Effect of movement in exchange rates Balance on December 31, 2022 Balance on January 1, 2021 Depreciation and impairment loss for the year Disposal Effect of movement in exchange rates Balance on December 31, 2021 Carrying amount: Balance on December 31, 2022 Balance on January 1, 2021 Balance on December 31, 2021	Lands $ 1,483,366 - - - - - $ 1,483,366 $ 1,483,366 - - - - - $ 1,483,366 $ - - - - $ - $ - - - - $ - $ 1,483,366 $ 1,483,366 $ 1,483,366	Buildings and constructions 1,415,155 - 5,761 (1,140) - 3,876 1,423,652 1,408,825 947 4,604 (231) - 1,010 1,415,155 438,818 32,999 (817) 1,629 472,629 405,663 32,617 - 538 438,818 951,023 1,003,162 976,337	Machinery and equipments 2,458,481 - 65,062 (129,740) - 7,407 2,401,210 2,437,215 - 53,131 (34,338) - 2,473 2,458,481 1,895,355 72,298 (129,049) 5,746 1,844,350 1,857,412 69,847 (34,107) 2,203 1,895,355 556,860 579,803 563,126	Other facilities 1,517,499 1,099 81,137 (24,587) - 913 1,576,061 1,514,118 68 21,253 (18,259) - 319 1,517,499 1,176,204 74,567 (24,557) 807 1,227,021 1,122,882 71,272 (18,258) 308 1,176,204 349,040 391,236 341,295	Construction in progress 86,652 103,644 (151,960) - (335) (24) 37,977 65,051 100,836 (78,988) - (441) 194 86,652 - - - - - - - - - - 37,977 65,051 86,652	Total 6,961,153 104,743 - (155,467) (335) 12,172
						6,922,266
						6,908,575 101,851 - (52,828) (441) 3,996
						6,961,153
						3,510,377 179,864 (154,423) 8,182
						3,544,000
						3,385,957 173,736 (52,365) 3,049
						3,510,377
						3,378,266
						3,522,618
						3,450,776

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Part of the land held by the Group is part of the land used for urban rezoning or agricultural land, which cannot be transferred in the name of the Group yet, so it is temporarily registered in other and mortgaged to the Group. The Group expects to use part of the agricultural land for lease; therefore, it is reclassified as investment real estate. As of December 31, 2022 and 2021, the book value (including investment real estate) were both $84,803 thousand and $106,823 thousand. The Group is actively applying to the relevant authorities for the change of the land head and will transfer the ownership to the Group after the city rezoning or the land head change is completed.

As of December 31, 2022 and 2021, the property, plant and equipment of the Group had been pledged as collateral for long-term borrowings and credit lines; please refer to note 8.

(i)

Right-of-use-assets

The Group leases many assets including land and buildings and vehicles. Information about leases for which the Group as a lessee was presented below:

Cost: Balance at January 1, 2022 Additions Decrease Effect of movement in exchange rates Balance at December 31, 2022 Balance at January 1, 2021 Additions Decrease Effect of movement in exchange rates Balance at December 31, 2021 Accumulated depreciation: Balance at January 1, 2022 Depreciation for the year Decrease Effect of movement in exchange rates Balance at December 31, 2022 Balance at January 1, 2021 Depreciation for the year Decrease Effect of movement in exchage rates Balance at December 31, 2021	Lands $ 32,064 - - 350 $ 32,414 $ 31,702 - - 362 $ 32,064 $ 7,663 2,564 - 29 $ 10,256 $ 4,873 2,555 - 235 $ 7,663	Buildings and constructions 117,996 - (15,433) 1,437 104,000 41,298 76,726 - (28) 117,996 35,758 13,204 (15,433) 309 33,838 22,971 12,723 - 64 35,758	Other facilities 99,319 257 (3,658) - 95,918 34,429 95,660 30,770 - 160,859 13,612 16,720 (3,658) - 26,674 28,072 16,309 30,770 1 75,152	Total 249,379 257 (19,091) 1,787 232,332 107,429 172,386 30,770 334 310,919 57,033 32,488 (19,091) 338 70,768 55,916 31,587 30,770 300 118,573

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Carrying amount: Balance at December 31, 2022 Balance atJanuary 1, 2021 Balance at December 31, 2021	Lands $ 22,158 $ 26,829 $ 24,401	Buildings and constructions 70,162 18,327 82,238	Other facilities 69,244 6,357 85,707	Total
				161,564
				51,513
				192,346

(j) Investment property

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2022 and 2021, were as follows:

Cost : Blance at January 1, 2022 Purchases Reclassification to inventory Blance at December 31, 2022 Blance at January 1, 2021 Purchases Disposal Blance at December 31, 2021 Accumulated depreciation and impairment losses: Blance at January 1, 2022 Depreciation for the year Blance at December 31, 2022 Blance at January 1, 2021 Depreciation for the year Blance at December 31, 2021 Carrying amount: Blance at December 31, 2022 Blance at January 1, 2021 Blance at December 31, 2021 Fair value Blance at December 31, 2022 Blance at December 31, 2021	Land $ 4,980,195 43,594 (75) $ 5,023,714 $ 4,833,619 187,391 (40,815) $ 4,980,195 $ - - $ - $ - - $ - $ 5,023,714 $ 4,833,619 $ 4,980,195	Buildings Total 18,390 4,998,585 - 43,594 - (75) 18,390 5,042,104 18,390 4,852,009 - 187,391 - (40,815) 18,390 4,998,585 2,956 2,956 1,244 1,244 4,200 4,200 1,711 1,711 1,245 1,245 2,956 2,956 14,190 5,037,904 16,679 4,850,298 15,434 4,995,629 $ 18,313,096 $ 18,456,508

Part of the land held by the Group is agricultural land, which cannot be transferred in the name of the Group and is temporarily registered in the name of other. The Group also sets a mortgage on the Group, moreover, The Group has also set a mortgage on the Group, and the Group is actively applying to the relevant authorities for the change of the land title, and will transfer the account to the Group after the land title change is completed. Please refer to Note 6 (h) for the detailed amount.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

As of December 31, 2022 and 2021, the fair value of the Group’s investment property was evaluated based on the appraisal report of the property from external and the recent market price recorded in the Actual Price Registration of Real Estate Transaction.

As of December 31, 2022 and 2021, the capitalized borrowing costs related to the acquisition of investment real estate were $35,954 and $27,428 thousand, and the capitalization interest rates were 1.66% and 1.41%.

As of December 31, 2022 and 2021, investment property of the Group had been pledged as collateral for long-term borrowings and credit lines, please refer to note 8.

(k) Other current assets and other non current assets

The other current assets others and other non current assets of the Group were as follows:

Other current assets Other receivables Current tax assets Prepayments Others Other non-current assets Other receivables Deferred tax assets Other non-current financial assets Others	December 31, 2022 $ 8,559 223 52,623 3,375 $ 64,780 $ 4,129 13,326 34,414 14,305 $ 66,174	December 31, 2021
		15,005 197 68,874 2,418
		86,494
		3,922 12,397 32,674 17,426
		66,419

As of December 31, 2022 and 2021, the Group did not provide any other current assets and other non-current assets as collateral for its loans.

(l) Other current liabilities

The other current liabilities of the Group were as follows:

Lease liabilities-current Unearned sales revenue Others	December 31, 2022 $ 31,394 20,469 2,149 $ 54,012	December 31, 2021
		31,148 18,022 2,290
		51,460

Other current liabilities are expected to be settled within one year.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Short-term borrowings

The short-term borrowings of the Group were summarized as follows:

Unsecured bank loans Secured bank loans Total Unused short-term credit line Range of interest rates	December 31, 2022 $ - 250,000 $ 250,000 $ 946,781 1.45%~1.58%	December 31, 2021
		150,000 -
		150,000
		398,156
		1.10%~1.11%

For the collateral for long-term borrowings, please refer to note 8.

(n) Long-term borrowings

Secured bank loans Less: current portion Total Unused long-term credit lines Secured bank loans Less: current portion Total Unused long-term credit lines		December 31, 2022 Rate Maturity year Amount 1.50%~2.06% 113.03~120.06 $ 3,464,537 (43,056) $ 3,421,481 $ 1,993,937 December 31, 2021 Rate Maturity year Amount 0.89%~1.41% 110.03~120.06 $ 3,199,965 (54,167) $ 3,145,798 $ 2,864,099
	Currency	Rate
	NTD
	Currency	Rate
	NTD	0.89%~1.41%

For the collateral for short-term borrowings, please refer to note 8.

(o) Leases Liabilities

The lease liabilities of the Group’s were as follows:

Current Non-current For maturity analysis, please refer to note 6 (y).	December 31, 2022 $ 31,394 $ 111,117	December 31, 2021
		31,148
		141,332

The amounts recognized in profit or loss was as follows:

Interest on lease liabilities $	2022 1,701	2021 1,521

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The amounts recognized in the statement of cash flows for the Group was as follows:

Total cash outflow for leases	2022 $ 31,711	2021
		32,058

The Group leases land, houses and buildings, and raw material storage tanks. The leases run for four to five years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

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

(p) Operating lease

(i) Leases as lessor

The Group leases out its investment property and other facilities. The Group has classified these leases as operating leases.

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

Less than one year One and two years Two and three years Three and four years Four and five years More than five years Total undiscounted lease payment	December 31, 2022 $ 9,444 9,560 9,727 9,846 10,076 69,478 $ 118,131	December 31, 2021 9,281 9,444 9,560 9,727 9,846 79,554 127,412

Rental income from investment properties was $11,473 thousand and $11,689 thousand in 2022 and 2021, respectively.

(q) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of the defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2022 $ 362,358 (270,097) $ 92,261	December 31, 2021 381,586 (276,249)
		105,337

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group’s employee benefit liabilities were as follows:

Long-term vacation liability Cash-settled share-based payment liability Total employee benefit liabilities	December 31, 2022 $ 14,453 - $ 14,453	December 31, 2021
		14,633 -
		14,633

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

1) Composition of plan assets

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

The Group’ s Bank of Taiwan labor pension reserve account balance amounted to $270,097 thousand as of December 31, 2022. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in present value of difined benefit obligations for the Group were as follows:

Defined benefit obligation at January 1 Current service costs and interest cost (income) Remeasurements loss(gain): －Experience adjustment －Demographic assumptions －Financial assumptions Benefits paid Defined benefit obligations at December 31	2022 $ 381,586 3,975 25,003 - (12,656) (35,550) $ 362,358	2021 396,840 3,810 (1,241) 9,162 (3,389) (23,596) 381,586

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Group were as follows:

Fair value of plan assets at January 1 Interest cost (income) Remeasurements of defined benefit liabilities (assets): －Return on plan assets excluding interest income Contribution paid by employer Benefits paid Fair value of plan assets at December 31	2022 $ (276,249) (1,367) (22,247) (5,784) 35,550 $ (270,097)	2021 (288,733) (1,052) (4,379) (5,681) 23,596 (276,249)

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Group were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations Operating cost Selling expenses Administration expenses Research and development expenses	2022 $ 2,095 513 $ 2,608 2022 $ 1,957 31 615 5 $ 2,608	2021 2,363 395 2,758 2021 2,179 23 553 3 2,758

5) Remeasurement of net defined benefit liability (asset) recognized in other comprehensive income

The Group’ s remeasurement of the net defined benefit liability (asset) recognized in other comprehensive income for the years ended December 31, 2022 and 2021, was as follows:

Accumulated amount at January 1 Recognized during the period Accumulated amount at December 31	2022 $ 122,725 (10,326) $ 112,399	2021 126,105 (3,378) 122,727

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	2022 2021 % 1.250 % 0.500 % 2.25 % 2.00

The expected allocation payment to be made by the Group to the defined benefit plans for the one-year period after the reporting date is $5,789 thousand.

The weighted average lifetime of the defined benefits plans is 6.7 years.

7) Sensitivity analysis

When calculating and determining the present value of welfare obligations, the Group must use judgments and estimates to determine relevant actuarial assumptions on the balance sheet date, including discount rates, employee turnover rates, and future salary changes. Any change in actuarial assumptions may materially affect the amount of the company's determined welfare obligations.

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation in the years 2022 and 2021 shall be as follows:

December 31, 2022 Discount rate Future salary increasing rate December 31, 2021 Discount rate Future salary increasing rate	Impact on defined benefit obligation Increased 0.25% Decreased 0.25% (5,977) 6,145 5,975 (5,841) (6,792) 6,994 6,769 (6,609)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2022 and 2021.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

The Company and consolidated entities set up Taiwan allocates 6% of each employee’ s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. The consolidated entities set up Mainland China contributes and deposits insurance money to its employee’ s endowment insurance account in accordance with the regulations of their respective countries. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $15,715 thousand and $14,805 thousand for the years ended December 31, 2022 and 2021, respectively.

(r) Income tax

The components of income tax in the years 2022 and 2021 were as follows:

(i) Income tax expense

The components of income tax in the years 2022 and 2021 were as follows:

Current tax expense Current period Adjustments for prior periods Subtotal Deferred tax expense Origination and reversal of temporary differences Subtotal Tax expense	2022 $ 373,603 640 374,243 (339,383) (339,383) $ 34,860	2021
		17,725 548
		18,273
		14,567
		14,567
		32,840

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Reconciliation of income tax and profit before tax for 2022 and 2021 is as follows:

Profit excluding income tax Income tax using the Company’s domestic tax rate Tax-exempt income Non-deductible expenses Recognition of previously unrecognized tax losses Current-year losses for which no deferred tax asset was recognized Changes in unrecognized temporary differences Change in provision in prior periods Additional tax on undistributed earning tax Others Income tax expense	2022 $ (7,797) (130) (1,211) 72 (5,707) 51,899 (14,298) 640 9,789 (6,194) $ 34,860	2021 352,208 85,460 (82,220) (27) (5) 9,913 1,293 6,869 11,557 - 32,840

(ii) Deferred tax assets and liabilities

1) Unrecognized deferred tax assets

Deferred tax assets have not been recognized is respect of the following items:

Tax effect of deductible Temporary Differences The carryforward of unused tax losses Total	December 31, 2022 $ 392,912 47,220 $ 440,132	December 31, 2021
		407,210 51,709
		458,919

The deductible temporary differences are mainly the share of overseas investment losses and deferred benefits recognized by the equity method.

The R.O.C. Income Tax Act and P.R.C. Enterprise Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years and five years for local tax reporting purposes, respectively. Deferred tax assets have not been recognized in respect of these items because it is less than more likely that future taxable profit will be available against which the Group can utilize the benefits therefrom.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

As of December 31, 2022, the company and domestic subsidiaries unused tax losses for have not recognized deferred tax assets. The deduction deadline are as follows:

Consolidated entities	Year of loss	Unused tax loss Expiry date $ 760 2025 351 2026 468 2027 856 2028 52,882 2028 99,314 2029 41 2029 16 2030 28 2031 21 2032 33,408 2032 $ 188,145
Fine Environment Technologies Co., Ltd. Fine Environment Technologies Co., Ltd. Fine Environment Technologies Co., Ltd. Fine Environment Technologies Co., Ltd. Ocean Plastics Co., Ltd. Ocean Plastics Co., Ltd. Fine Environment Technologies Co., Ltd. Fine Environment Technologies Co., Ltd. Fine Environment Technologies Co., Ltd. Fine Environment Technologies Co., Ltd. Ocean Plastics Co., Ltd. Total	2015 (Assessment amount) 2016 (Assessment amount) 2017 (Assessment amount) 2018 (Assessment amount) 2018 (Assessment amount) 2019 (Assessment amount) 2019 (Assessment amount) 2020 (Assessment amount) 2021 (Reported amount) 2022 (Estimated amount) 2022 (Estimated amount)

As of December 31, 2022, the deduction period of the subsidiaries in Mainland China unused tax losses for which no deferred tax assets were recognized are as follows:

Year of loss	Unused tax loss Expiry date $ 15,056 2023 5,524 2024 4,653 2025 4,040 2026 9,092 2027 $ 38,365
2018 2019 2020 2021 2022 Total

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Recognized deferred tax assets and liabilities

Deferred tax assets:

Unrealized loss on valuation of inventories Balance at January 1, 2022 $ 10,758 Recognized in profit or loss 2,565 Balance at December 31, 2022 $ 13,323 Balance at January 1, 2021 $ 10,511 Recognized in profit or loss 247 Balance at December 31, 2021 $ 10,758	Other 1,639 (1,636) 3 2,106 (467) 1,639	Total 12,397 929 13,326 12,617 (220) 12,397

Deferred tax liabilities:

Balance at January 1, 2022 Recognized in profit or loss Balance at December 31, 2022 Balance at January 1, 2021 Recognized in profit or loss Cash compensation for land sale Balance at December 31, 2021	Reserve for land revaluation increment tax $ 1,347,196 (352,434) $ 994,762 $ 1,350,538 - (3,342) $ 1,347,196	Difference of property plant and equipment in depreciation life 92,456 13,980 106,436 78,109 14,347 - 92,456	Total 1,439,652 (338,454) 1,101,198 1,428,647 14,347 (3,342) 1,439,652

The tax returns for the company and domestic subsidiariest were assessed by the Taipei National Tax Administration for the years through 2020.

The tax returns for the subsidiaries in China were declared to local tax authority for the years through 2021.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(s) Capital and other equity

As of December 31, 2022 and 2021, the number of authorized ordinary shares were 4,000,000 thousand shares with par value of $10 per share, and $227,228 thousand of ordinary shares were issued. All issued shares were paid up upon issuance.

(i) Capital surplus

The balances of capital surplus were as follows:

The balances of capital surplus were as follows:
Share premium Treasury share transactions Adjustment of capital surplus for Company’s cash dividends received by subsidiaries Total	December 31, 2022 $ 680 7,112 11,123 $ 18,915	December 31, 2021
		680 7,112 6,543
		14,335

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

(ii) Retained earnings

The Company's article of incorporation stipulate that Company's annual net profit should first pay taxes, offset the prior years' deficits, and then allocate 10% thereof as legal reserve. However where such legal reserve amounts reach to the total authorized capital, this provision shall not apply. In consideration of the operation needs and laws and regulations, the Company shall allocate special reserve. If there are remaining profits, the profits shall be add with any accumulated unappropriated earnings from priors years, and the Board of Directors shall propose earning distribution plan for the resolution of the general meeting of stockholders.

The company’ s dividend policy depends on the current year’ s profit and the amount of dividends that can be paid is distributed in three ways: cash dividends, surplus capital increase and capital surplus capital increase. The distributable surplus for the current year is deducted from the statutory surplus reserve and special surplus reserve. The distribution shall not be less than 20%. However, if the company has a major investment plan or the need to improve its financial structure, the cash dividends may be changed to capital increase from surplus or capital reserve to increase capital. However, the minimum cash distribution ratio shall not be less than 10% of the total dividends allotted.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

1) Legal reserve

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

2) Special reserve

The Company applied the exemptions at first-time adoption of IFRSs, and increased its retained earnings by $2,992,372 thousand, which resulted from unrealized revaluation increments, exchange differences on translation of foreign financial statements, and the fair value of investment property being used as the cost on initial recognitions at the transition date.

In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions. As of December 31, 2022 and 2021, the balance of special earnings reserve were $2,978,245 thousand.

3) Earnings distribution

Earnings distribution for 2021 and 2020 was decided by the resolution adopted, at the general meeting of shareholders held on June 21 2022 and July 27 2021, respectively. The relevant dividend distributions to shareholders were as follows:

Dividends distributed to ordinary shareholders: Cash	2021 Amount per share Amount $ 0.70 159,059	2020	2020
	Amount per share $ 0.70	Amount per share 1.00	Amount
			227,228

(iii) Treasury shares

As of December 31, 2022, and 2021. the company's treasury stock balance is $36,189 thousand.

Before the amendment of the company law on November, 2001, the company’s subsidiaries, Chang Xin Co., Ltd. and Hong Da Investment Co., Ltd., acquired 2,939 thousand and 3,604 thousand of the Company’s shares respectively.

In accordance with the requirements of Securities and Exchange Act, treasury shares held by the Company should not be pledged, and do not hold any shareholder rights before their transfer.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(t) Earnings per share

(i) Basic earnings per share

The details on the calculation of basic earnings per share and diluted earnings per share of the Company as follows:

Basic earnings per share Profit (loss) attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (thousand share) Basic earnings per share (NT dollars) Diluted earnings per share Profit (loss) attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (thousand share) Effects of dilutive poterntial ordinary shares (in thousands of shars) Weighted average number of ordinary shares (diluted) (thousand share) Diluted earnings per share (NT dollars)	2022 $ (42,657) 220,686 $ (0.19) $ (42,657) 220,686 40 220,726 $ (0.19)	2021
		319,368
		220,686
		1.45
		319,368
		220,686 235
		220,921
		1.45

(u) Revenue from contracts with customers

(i) Details of revenue

	2022
Taiwan $ 2,177,497 1,685,671 732,028 478,942 37,886 480,421 $ 5,592,445 $ 3,442,249 2,149,976 220 $ 5,592,445	China 33,519 - - 609,570 230,852 39,750 913,691 - 913,691 - 913,691	Total
		2,211,016 1,685,671 732,028 1,088,512 268,738 520,171
		6,506,136
		3,442,249 3,063,667 220
		6,506,136

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Primary geographical markets: Taiwan India Japan United States China Other Major products/services lines: Plastic materials Plastic products Other (ii) Contract balances Notes and trade receivables Less: allowance for impairment Total Contract liabilities		2021

For details on trade receivables and allowance for impairment, please refer to note 6(e).

Contract liabilities are mainly due to advance receipt of loans from customers and advance receipt of payments for real estate. The Group will report revenue when the product is delivered to the customer or the house is completed and delivered.

The amount of revenue recognized for the years ended December 31 2022 and 2021 that was included in the contract liability balance at the beginning of the period were $17,091 thousand and $12,604 thousand, respectively.

(v) Employee compensation and directors' and supervisors' remuneration

In accordance with the articles of incorporation the Company should contribute no less than 1% of the profit as employee compensation and more than 2% as directors' and supervisors' remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The persons who are entitled to receive cash or shares as stuff remuneration stipulated in the preceding paragrrraph include the employees of the Company's affiliated companies who meet certain conditions.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The estimated amount of compensation for employees of the Group in 2021 is $6,108 thousand, and the estimated amount of compensation for directors and supervisors is $4,671 thousand. The estimation is based on the pre-tax net profit of the company for each period before deducting the remuneration of employees, directors and supervisors multiplied by the amount of staff remuneration and the distribution of directors and supervisors as stipulated in the company's articles of association. It is also reported as operating costs or operating expenses for 2021. Because the company had accumulated deficits in 2022, there was no need to estimate the remuneration of employees, directors and supervisors. The actual amounts appropriated and the estimated amounts in the financial statements were the same in 2021.

(w) Non-operating income and expenses

(i) Interest income

For the years ended December 31, 2022 and 2021, the details of other income were as follows:

2022 Interest income from bank deposits $ 7,901	2021
	4,344

(ii) Other income

For the years ended December 31, 2022 and 2021, the details of other income were as follows:

Rent income Dividend income Other income, Others	2022 $ 11,473 140,420 33,428 $ 185,321	2021
		11,689 97,957 56,214
		165,860

(iii) Other gains and losses

For the years ended December 31, 2022 and 2021, the details of other gains and losses were as follows:

Gain (loss) on disposal of property, plant and equipment Gains on disposal of investment property Gains (losses) on disposal of investments Foreign exchange gains Gains on financial assets at fair value through profit or loss Other	2022 $ 1,120 - - 66,046 (154,553) (277) $ (87,664)	2021
		- 18,689 1,385 9,637 121,883 (517
		151,077

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Financial costs

For the years ended December 31, 2022 and 2021, the details of finance costs were as follows:

Interest expense Less：Interest capitalization	2022 $ 54,102 (35,954) $ 18,148	2021 42,828 (27,428) 15,400

(x) Financial instruments

(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets except for cash and cash equivalents, represents the maximum amount exposed to credit risk. As of December 31, 2022 and 2021, the maximum amount exposed to credit risk were $925,506 thousand and $1,197,390 thousand, respectively.

The sales target of the Group is not significantly concentrated in a few customers,as of December 31, 2022 and 2021, the balance of accounts receivable resulted from the top ten customers were 39% and 35%.

(ii) Liquidity risk

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

Carrying amount December 31, 2022 Non-derivative financial liabilities Secured bank loans $ 3,714,537 Notes payables 108,932 Trade payables 391,036 Other payables (including related parties) 149,305 Lease liabilities 142,511 $ 4,506,321	Contractual cash flows 3,922,151 108,932 391,036 149,305 148,071 4,719,495	Within 6 months 306,775 108,932 391,036 149,305 16,237 972,285	6-12 months 57,359 - - - 16,237 73,596	1-2 years 798,945 - - - 41,920 840,865	2-5 years 2,625,077 - - - 59,684 2,684,761	Over 5 years
						133,995 - - - 13,993
						147,988

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Carrying amount December 31, 2021 Non-derivative financial liabilities Secured bank loans $ 3,199,965 Unsecured bank loans 150,000 Notes payables 208,350 Trade payables 755,622 Other payables (including related parties) 162,233 Lease liabilities 172,480 $ 4,648,650	Contractual cash flows 3,372,360 150,284 208,350 755,622 162,233 179,677 4,828,526	Within 6 months 47,231 150,284 208,350 755,622 162,233 16,707 1,340,427	6-12 months 47,565 - - - - 16,128 63,693	1-2 years 94,796 - - - - 40,984 135,780	2-5 years 2,911,719 - - - - 82,356 2,994,075	Over 5 years
						271,049 - - - - 23,502
						294,551

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

(iii) Currency risk

1) Exposure to foeign currency risk

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

December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2021 Local currency Exchange rate TWD 25,134 27.69 695,835 430 3.55 1,526 20,913 27.69 578,989
Local currency $ 21,360 503 10,198	Exchange rate 30.72 3.94 30.72	TWD	Exchange rate TWD 27.69 695,835 3.55 1,526 27.69 578,989
		656,179 1,982 313,275

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade and other receivables, financial assets at fair value through other comprehensive income, loans and borrowings; and trade and other payables that are denominated in foreign currency.

A strengthening (weakening) of 1% of the NTD against the JPY, USD, and HKD as of December 31, 2022 and 2021, would have increased (decreased) the net profit after tax by $2,759 thousand and $947 thousand, respectively. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the reporting date. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases.The analysis is performed on the same basis for 2022 and 2021 .

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Foreign exchange gain and loss on monetary items

Since the Group has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For years 2022 and 2021, foreign exchange gain (loss) (including realized and unrealized portions) amounted to $66,046 thousand and $9,637 thousand, respectively.

(iv) Interest rate analysis

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

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Group management's assessment of the reasonably possible interest rate change.

If the interest rate had increased / decreased by 0.25%, the Group’s net income would have increased / decreased by $6,929 thousand and $6,400 thousand for the year ended December 31, 2022 and 2021 with all other variable factors remaining constant, respectively.

(v) Other market price risk

For the years ended December 31, 2022 and 2021, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

Price of securities at the reporting date Increasing 1% Decreasing 1%	2022			2021 Other comprehensive income after tax Net income 11,698 4,455 (11,698) (4,455)
	Other comprehensive income after tax $ 6,375 $ (6,375)	Net income		Other comprehensive income after tax 11,698 (11,698)
		3,017

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

The carrying amount and fair value of the Group’ s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2022	December 31, 2022	December 31, 2022
Book Value $ 289,833 11,827 301,660 637,472 $ 939,132		Fainr Value
	Level 1 Level 2 Level 3 289,833 - - 11,827 - - 301,660 - - - - 637,472 301,660 - 637,472 December 31, 2021			Total
				289,833 11,827
				301,660
				637,472
				939,132

Book Value $ 436,198 9,326 445,524 1,169,824 $ 1,615,348		Fainr Value
	Level 1 436,198 9,326 445,524 - 445,524	Level 2 - - - - -	Level 3 - - - 1,169,824 1,169,824	Total
				436,198 9,326
				445,524
				1,169,824
				1,615,348

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

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. Whether transactions are taking place ‘regularly’ is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Measurements of fair value of financial instruments without an active market are based on a valuation technique or quoted price from a competitor. Fair value measured by a valuation technique can be extrapolated from similar financial instruments, the discounted cash flow method, or other valuation technique including a model using observable market data at the reporting date.

3) Reconciliation of Level 3 fair values

		Fair value through
		other
		comprehensive
		income
		Unquoted equity
		instruments
Opening balance, January 1, 2022	$	1,169,824
Total gains and losses recognized:
In other comprehensive income		(532,352)
Ending Balance, December 31, 2022		637,472
Opening balance, January 1, 2021		1,251,957
Total gains and losses recognized
In other comprehensive income		(82,133)
Ending Balance, December 31, 2021		1,169,824

For the years ended December 31, 2022 and 2021, total gains and losses that were included in “ other gains and losses” and “ unrealized gains and losses from financial assets at fair value through other comprehensive income” were as follows:

Total gains and losses recognized In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”	2022 2021 (532,352) (82,133)

4) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

Most of the fair value of the Group classified as level 3 is an equity instrument in no active market which has multiple significant unobservable inputs. Because the inputs are mutual independent, there is no relevance.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income equity investments without an active market	Valuation technique Comparable company analysis	Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measuremnt ‧ P/E ratio (7.67~9.06 and 7.94~15.91 on December 31, 2022 and 2021, respectively) ‧ Lack-of-Marketability Discount (13.55%~22.63% and 17.69%~25.04% on December 31, 2022 and 2021, respectively） ‧ P/B ratio (1.13~2.02 and 1.42~2.78 on December 31, 2022 and 2021, respectively) The estimated fair value would increase (decrease) if: ‧ The P/E ratio and control premium were higher (lower); ‧ Lack-of-Marketability Discount were lower (higher); ‧ The P/B ratio and control premium were higher (lower).

5) Fair value measurements in Level 3-sensitivity analysis of reasonably possible alternative assumptions

The method to derive at the fair value of financial instruments is reasonable but could yield different outcomes when using different multipliers. For fair value measurements in Level 3, changing one or more of the assumptions to reflect reasonably possibilities of alternative assumptions would have the following effects:

December 31, 2022 Financial assets at fair value through other comprehensive income Equity investments without an active market December 31, 2021 Financial assets at fair value through other comprehensive income Equity investments without an active market	Inputs P/E ratio Discount rate P/B ratio P/E ratio Discount rate P/B ratio	Variation 1% 1% 1% 1% 1% 1%	Pofit	or loss Unfarourable - - - - - -	Other comprehensive income Favourable Unfarourable 448 (448) 1,009 (1,009) 6,603 (6,603) 14,120 (14,120) 3,909 (3,909) 9,040 (9,040)
			Favourable - - - - - -

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

(y) Financial risk management
(i) Overview

The Group have exposures to the following risks from its financial instruments:

1) credit risk
2) liquidity risk
3) market risk

This note expresses the risk exposure information of the above-mentioned risk of the Group, and the Group’s objectives, policies and processes for measuring and managing the risks. For more disclosures about the quantitative effects, please refer to the respective notes in the consolidated financial statements.

(ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

(iii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investments in debt securities.

1) Trade and other receivable

The Group’s credit risk exposure is mainly affected by the individual conditions of each customer. However, the management also considers the statistical data of the Group’s customer base, including the default risk of the customer's industry and country, as these factors may affect credit risk.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The accounting Department has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Group’ s standard payment and delivery terms and conditions are offered. The Group’ s review includes external ratings, when available, and, in some cases, bank references. Purchase limits are established for each customer and represent the maximum open amount without requiring approval from the Risk Management Committee; these limits are reviewed quarterly. Customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group on a prepayment basis or providing collateral.

The company has set up allowances for bad debt accounts to reflect estimates of losses incurred in accounts receivable and other receivables and investments. The main components of the allowance account include specific loss components related to individual major risk insurance and combined loss components established for similar asset groups that have occurred but have not been identified. The combined loss allowance account is determined based on historical payment statistics of similar financial assets.

2) Investments

The exposure to credit risk for the bank deposits and other financial instruments is measured and monitored by the Group’s finance department. The Group only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Group does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

3) Endorsements and guarantees

The Group’s policy is to provide financial guarantees only to wholly owned subsidiaries. As of December 31, 2022 and 2021, endorsement guarantee provided by the Group were both $1,200,000 and $1,240,150 thousand, respectively.

(iv) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’ s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

Generally, the Group ensures that it has sufficient cash to support expected operating expenditure in a short term, including financial liabilities, but excludes potential impact which can not be predicted reasonably such as nature disasters. Moreover, as of December 31, 2022 and 2021, the Group’ s unused credit line were amounted to $2,940,718 thousand and $3,262,255 thousand, respectively.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Market risk

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

1) Currency risk

The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Group’s entities. The functional currency of group is mainly NTD,and the currencies used in these transactions are the NTD, HKD ,JPY and USD.

2) Interest rate risk

The Group’ s interest risk arose from short term and long term borrowings. Since the short term borrowings are at floating rate, the fluctuation in interest rates will lead to movements in future cash flows.

3) Other market price risk

The Group is exposed to equity price risk due to the investments in stocks listed on domestic markets and fund investment on domestic and foreign markets. This is a strategic investment and is not held for trading. The Group does not actively trade in these investments as the management of the Group manage the risk by holding different investment portfolios. The Group assigned a specific team to supervise the equity price risk so as to avoid or minimize the risk from the hedging position.

(z) Capital management

The policy of the board of directors is to maintain a sound capital base to maintain the confidence of investors, creditors and the market, and to support the development of future operations. Capital includes the share capital, capital reserve, retained earnings and non-controlling interests of the combined company. The board of directors controls the return on capital and at the same time controls the level of ordinary stock dividends.

As of December 31, 2022 and 2021, the Group’s debt-to-equity ratio at the end of the reporting period, were as follows:

Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-equity ratio at 31 December	December 31, 2022 $ 5,856,102 (471,820) $ 5,384,282 $ 5,913,860 % 91.05	December 31, 2021 6,353,586 (414,256) 5,939,330 6,626,597 % 89.63

The method of capital management of the consolidated company on December 31, 2022 and 2021 has not changed.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(aa) Investing and financing activities not affecting current cash flow

The Group’s investing and financing activities which did not affect the current cash flow in the years ended December 31, 2022 and 2021, were as follows:

(i) For right-of-use asset under lease, please refer to notes 6(j).
(ii) Reconciliation of liabilities arising from financing activities were as follows:

Non-cash changes	Non-cash changes	December 31, 2022 3,464,537 250,000 142,511
Acquisition Foreign exchange movement - - - - 257 1,132 257 1,132 Non-cash changes
		3,857,048
		December 31, 2021 3,199,965 150,000 172,480
Acquisition - - 172,386 172,386	Foreign exchange movement - - (92) (92)
		3,522,445

(7) Related-party transactions

(a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements:

Name of relatedparty	Relationship with the Group
Chun Pin Enterprise Co., Ltd.	An associate
Foremost-Oceans NueTeq, Ltd.	An associate
Chin Yi Ho Hang, Ltd.	Same chairman with the Group

Yee Fong Chemical and Industrial Co., Ltd.

Ocean Plastics Urban Land Redevloping Council

The director of this company is the president of the Group

The member of the council is the chairman of the Company

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Significant transactions wiht related parties
(i) Operating revenues

Relationship	2022 $ 1,778	2021
Associate		-

There were no significant difference in the collection periods between the related parties and other customers. The credit terms ranged from 30 to 180 days. Amounts receivable from related parties were uncollateralized, and no expected credit loss were required after the assessment by the management.

(ii) Account receivable with related parties

Account	Relationship	December 31, 2022 $ 1,867	December 31, 2021
Account Receivable	Associate		-

(iii) Other transactions with related parties

Account Cost of goods sold	Relationship		2022 21,693	2021
	Associate			23,939

The Group commissioned its associate to operate oil storage tanks. The outstanding balances of management expenses on December 31, 2022 and 2021 were $3,098 thousand and $3,083 thousand, which are presented as “other payables to related parties”

(iv) Leases

In January 2019, the Group leased an high-pressure spherical tank from its associate. A sixyear lease contract was entered into, and the rent was determined based on the rental rates in the vicinity. The total value of the contract was $52,800 thousand. , the Group entered into a lease agreement with the associate to continue leasing spherical tanks that amounted to $148,102 thousand. For the years ended December 31, 2022 and 2021, the Group recognized the amount of $866 thousand and $686 thousand as interest expense. As of December 31, 2022 and 2021, the lease liabilities had amounted to $69,589 thousand and $85,179 thousand.

In May 2017, the Group leased from other related parties an office building as its headquarter on Juguang Road, Taipei City, and the land in Zhongli Dist., Taoyuan City. A five year lease contract was signed, and the rent was determined based on land rental rates in the vicinity. The total value of the contract was $37,000 thousand. For the years ended December 31, 2022 and 2021, the Group recognized the amount of $173 thousand and $271 thousand as interest expense. As of December 31, 2022 and 2021, the lease liabilities had amounted to $7,325 thousand and $14,552 thousand.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Providing administrative services to related party

The Group had signed a contract concerning an urban land redeveloping project with the landlords, which was implemented by Chang Xin Co., Ltd. in November 2014. The Group provided administrative services to a related party foe land development procedures and received an income of $24,095 thousand (recognized as Other income ) for the years ended December 31, 2021. As of December 31, 2021, there is no outstanding balance.

(vi) Transaction of properties

In October 2021, the Group sold the land at Jiankang Segment, Zhonghe District, New Taipei City, to the Ocean Plastics Urban Lan Redeveloping Council and received cash compensation. The total land area is 874.92, with a total price of $49,489 thousand. As of December 31,2021, the transfer procedures had been completed, and there is no outstanding balance. Please refer to note 6(j) for the investment property details.

Key management personnel compensation
Short-term employee benefits	2022 $ 5,845	2021
		5,847

(8) Pledged assets

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2022 $ 2,277,075 3,588,115 34,414 $ 5,899,604	December 31, 2021
Property, plant and equipment Investment property Other financial assets	Long-term and short-term loans Long-term and short-term loans Trust account		2,295,851 3,637,062 32,674
			5,965,587

(9) Commitments and contingencies

(a) Significant Commitments and Contingencies were as follows:

(i) The Group’s unrecognized contractual commitments are as follows:

December 31, 2022 Acquisition of property, plant and equipment $ 32,669 (ii) The Group’s outstanding standby letter of credit are as follows: December 31, 2022 Outstanding standby letter of credit $ 3,219	December 31, 2021
	66,266
	December 31, 2021 1,844

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) The joint construction contract signed by the company for the sale of the built real estate is as follows:

follows:
Joint construction method	Project name
Co-built sub-housing	Wenshan District Xinglong Section, Zhonghe District
	Health Section

(iv) Due to borrowing and business needs,the endorsement guarantee amount that the Group provided for the subsidiary were follows:

	December 31,	December 31,
	2022	2021
$	1,200,000	1,240,150

(b) Major contingent liabilities: none.

(10) Losses Due to Major Disasters:None

(11) Subsequent Events:None

(12) Other

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

By funtion By item		2022	2022	2021	2021	2021
	Cost of Sale	Operating Expense	Total	Cost of Sale	Operating Expense	Total
Employee benefits
Salary	290,852	99,607	390,459	299,081	89,671	388,752
Labor and health insurance	29,596	10,582	40,178	29,507	8,436	37,943
Pension	13,591	4,732	18,323	13,131	4,432	17,563
Director’s remuneration	-	5,561	5,561	-	10,153	10,153
Others	18,066	5,827	23,893	19,988	5,924	25,912
Depreciation	193,336	20,260	213,596	187,122	19,446	206,568
Amortization	-	-	-	-	-	-

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(13) Other disclosures

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group:

(i) Loans to other parties:

(In Thousands of New Taiwan Dollars)

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period (note 4)	Ending balance (note 4)	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower (Note 2)	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing (Note 3
													Item	Value
0	The Company	Ocean Plastics (Dong Guan) Co., Ltd.	Other receivables and long- term receivables	Yes	104,998	92,567	92,567	-	1	46,650	Operation Capital	-		-	1,182,772	2,365,544

Note 1: The numbering is as follows:

1.“0” represents the parent company.
2.Subsidiaries are sequentially numbered from 1 by company.

Note 2: The method of filling out the capital loan and nature is as follows:

Fill in 1 if you have business contacts.
Fill in 2 if necessary for short-term financing.

Note 3: The total amount of funds and loans of the company must not exceed 40% of the net value of the Company, and the amount of funds and loans for a individual target shall not exceed 20% of the net value of the Company. and the limit of funds loaned to a single object is not more than 20% of the company's net value. The net value is based on the latest financial statements.

Note 4: The cumulative maximum balance of funds loaned to others from the current year to the reporting month includes the amount transferred from the accounts receivable beyond the normal credit period.

Note 5: The highest amounts were approved by the board of directors.

Note 6: The above transactions was written off when preparing the consolidated financial report.

(ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Name of guarantor	Counter guaran endor	-party of tee and sement	Limitation on amount of guarantees and endorsements for a specific enterprise (Note 3)	Highest balance for guarantees and endorsements during the period (ote 4)	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	atio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements (Note 3)	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company (Note 2)
0	The Company	Chang Xin Co., Ltd.	2	2,956,930	1,220,150	1,200,000 (Note 5)	382,510	-	% 20.29	4,731,088	Y	N	N

Note 1: The numbering is as follows:

1.“0” represents the parent company.
2.Subsidiaries are sequentially numbered from 1 by company.

Note 2: There are following 7 types of relationship between the guarantee and the guarantor are as follows:

1.Transactions between the companies.
2.The Company directly or indirectly holds more than 50% voting right.
3.When other companies directly or indirectly hold more than 50% voting rights of the Company.
4.The Company directly or indirectly holds more than 90% voting right.
5.A company that is mutually protected under contractual requirements based on the needs of the contractor.
6.A company that is endorsed by all the contributing shareholders in accordance with their shareholding ratio due to joint investment relationship.
7.Under the Consumer Protection Act, performance guarantees for pre-sale contracts for companies in the same industry.

Note 3: The company and Fine environment Technology Co., Ltd. shall not exceed 50% of the net worth of the endorsement guarantee company for a single enterprise; the total shall not exceed 80% of the net worth of the endorsement guarantee company; Changxin Xinye Co., Ltd. shall not exceed 80% of the net worth of the endorsement guarantee company for a single enterprise; the total shall not exceed 100% of the net worth of the endorsement guarantee company; Hongda Investment Co., Ltd. limits a single company’s endorsement guarantee limit not to exceed 20% of the endorsement guarantee company’s net worth; The total amount shall not exceed 50% of the company’s net worth under the endorsement guarantee.The total amount of guarantee for external endorsement shall not exceed 200% of the net value of the company.

The guarantee amount for a single enterprise endorsement shall not exceed 100% of the current net value of the company.

Note 4: The highest balance of the endorsement guarantee for others in the current year.

Note 5: The company and its 100% directly or indirectly holding subsidiaries provide jointly held land pledges as guarantees.

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Highest Percentage of ownership (%)
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Taiwan VCM Corporation	-	Equity instruments at fair value through other comprehensive income	37,062	547,480	% 12.46	547,480	% 12.46
〃	E'dale Technology Co., Ltd.	-	〃	630	23,777	% 3.38	23,777	% 3.38
〃	PAN OCEAN INC.	-	〃	152	6,890	% 15.07	6,890	% 15.07
〃	Ultra-Pak Industries Co., Ltd	-	〃	2,567	13,865	% 7.00	13,865	% 7.00
〃	Microcell Composite Company	-	〃	237	-	% 4.32	-	% 4.32
〃	Fuzetec Technology Co., Ltd.	-	Financial assets designated at fair value through profit or loss- current (stock)	2,945	131,774	% 7.87	131,774	% 7.87
Chang Xin Co., Ltd.	Ultra-Pak Industries Co., Ltd	-	Equity instruments at fair value through other comprehensive income	1,487	8,032	% 4.06	8,032	% 4.06
〃	Cosmactive Broadband Networks Co., Ltd.	-	〃	1	-	% 0.12	-	% 0.12
Hong Da Investment Co., Ltd.	Acer Incorporated	-	Financial assets designated at fair value through profit or loss-non current (stock)	119	2,796	% -	2,796	% -
〃	United Microelectronics Corporation	-	〃	29	1,178	% -	1,178	% -
〃	Capital SZSE SME Price Index Exchange Traded Fund-TWD	-	〃	200	2,920	% -	2,920	% -
〃	Cathy US Premium Bond Fund A	-	Financial assets designated at fair value through profit or loss-non current (fund)	500	4,933	% -	4,933	% -
〃	Ultra-Pak Industries Co., Ltd	-	Equity instruments at fair value through other comprehensive income	1,265	6,830	% 3.45	6,830	% 3.45
〃	E'dale Technology Co., Ltd.	-	〃	580	21,894	% 3.11	21,894	% 3.11
〃	Fuzetec Technology Co., Ltd.	-	Financial assets designated at fair value through profit or loss- current (stock)	2,926	130,935	% 7.82	130,935	% 7.82
Fine Environment Technologies Co., Ltd.	Minima Technology Co., Ltd.	-	Equity instruments at fair value through other comprehensive income	413	8,704	% 1.05	8,704	% 1.06
〃	Microcell Composite Company	-	〃	237	-	% 4.32	-	% 4.32
FERMAT ENTERPRISES, LTD.	AB FCP I-Global High Yield Portfolio Class AT USD	-	Financial assets at fair value through profit or loss- current (funds)	111	10,189	% -	10,189	% -
〃	AB FCP I-Global High Yield Portfolio Class EA USD	-	〃	24	7,178	% -	7,178	% -

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Highest Percentage of ownership (%)
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
OPC HOLDING LTD.	AB FCP I-Global High Yield Portfolio Class EA USD	- F f p c	inancial assets at air value through rofit or loss- urrent (funds)	24	7,072	% -	7,072	% -
〃	AB FCP I-Global High Yield Portfolio Class EA USD	-	〃	11	2,685	% -	2,685	% -

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$300 million or 20% of the capital stock: None.
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.
(ix) Trading in derivative instruments: None.
(x) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

				(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No. (Note 1)	Name of company	Name of counter-party	Nature of relationship (Note 2)	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0	The Company	Foremost-Oceans NueTeq, Ltd.	1	Trade receivables	1,867	Comparable to general company	0.02%
0	The Company	Foremost-Oceans NueTeq, Ltd.	1	Operating revenue	1,778	Comparable to general company	0.03%
0	The Company	Chang Xin Co., Ltd.	1	Investment Property	20,150	Sold to the company at cost	0.17%
0	The Company	Fine Environment Technologies Co.,Ltd.	1	Trade receivables	108	Comparable to general company	-%
0	The Company	Fine Environment Technologies Co.,Ltd.	1	Operating revenue	2,840	Comparable to general company	0.04%
0	The Company	Ocean Plastics (Dong Guan)Co.,Ltd.	1	Trade receivables	30,863	Comparable to general company	0.26%
0	The Company	Ocean Plastics (Dong Guan) Co., Ltd	1	Other receivables	16,871	Consider the collection situation and accept the payment	0.14%
0	The Company	Ocean Plastics (Dong Guan) Co., Ltd	1	Long-term receivables	75,696	Consider the collection situation and accept the payment	0.64%
0	The Company	Ocean Plastics (Dong Guan)Co.,Ltd	1	Operating revenue	46,650	Comparable to general company	0.72%
0	The Company	Ocean Plastics (Hui Zhou)Co.,Ltd.	1	Operating revenue	11,098	Comparable to general company	0.17%

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2022 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2022	Balance as of December 31, 2022	Balance as of December 31, 2022	Highest Percentage of wnership	Net income (losses) of investee	Share of profits/losses of investee (Note 1)	Note
				December 31, 2022	December 31, 2021	Shares (thousands)	Percentage of wnership	Carrying value
The Company	Chun Pin Enterprise Co., Ltd.	Taiwan	Warehousing industry	290,000	290,000	29,000	% 44.62	442,477	% 44.62	215,346	96,077	associate
The Company	Fine Environment Technologies Co., Ltd.	Taiwan	Wholesale of plastics product	44,792	44,792	1,003	% 60.76	8,033	% 60.76	(21	) (13)	Subsidiary
The Company	Chang Xin Co., Ltd.	Taiwan	General investing	2,900,860	2,900,860	290,086	% 100.00	1,433,794	% 100.00	(15,569	) (17,627)	Subsidiary
The Company	Hong Da Investment Co., Ltd.	Taiwan	General investing	190,000	190,000	19,000	% 100.00	195,450	% 100.00	(64,163	) (66,685)	Subsidiary
						(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2022	Balance as of December 31, 2022	Balance as of December 31, 2022	Highest Percentage of wnership	Net income (losses) of investee	Share of profits/losses of investee (Note 1)	Note
				December 31, 2022	December 31, 2021	Shares (thousands)	Percentage of wnership	Carrying value
The Company	FERMAT ENTERPRISES, LTD.	British Virgin Islands	Investment holding	13,887	13,887	450	% 100.00	20,876	% 100.00	(1,067)	(1,067)	Subsidiary
The Company	UNIVERSE ENTERPRISES LTD.	British Virgin Islands	Investment holding	-	93,032	-	% -	-	% 100.00	58	58	Subsidiary
The Company	OCEAN GROUP LTD.	Samoa	Investment holding	1,069,438	1,069,438	32,900	% 100.00	535,035	% 100.00	70,074	70,074	Subsidiary
The Company	Foremost- Oceans NueTeq, Ltd.	Taiwan	Wholesale of plastics product	6,050	-	605	% 40.07	6,016	% 40.07	(87)	(34)	Associate
Hong Da Investment Co., Ltd.	Fine Environment Technologies Co., Ltd.	Taiwan	Wholesale of plastics product	6,294	6,294	647	% 39.24	5,188	% 39.24	(21)	(8)	Subsidiary
Chang Xin Co., Ltd.	Shen Yang Development Co., Ltd.	Taiwan	Real estate development	535	535	1,000	% 100.00	536	% 100.00	1	1	Subsidiary
OCEAN GROUP LTD.	OPC HOLDINGS, LTD.	British Virgin Islands	Investment holding	27,850	27,850	450	% 100.00	49,592	% 100.00	4,035	4,035	Subsidiary
OCEAN GROUP LTD.	SAGE HOLDINGS LTD.	Samoa	Investment holding	800,217	800,217	25,000	% 100.00	554,490	% 100.00	75,130	75,130	Subsidiary
OCEAN GROUP LTD.	RISE FUTURE INTERNATION AL LTD.	Seychelles	Investment holding	241,371	241,371	7,450	% 100.00	(69,106)	% 100.00	(9,098)	(9,098)	Subsidiary

Note 1: Transaction within the Group were eliminated in the consolidated financial statements except for Chunpin Industrial Co., Ltd..

(c) Information on investment in mainland China:
(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital (Note 3)	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2021 (Note 3)	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31, 2022 (Note 3)	Net income (losses) of the investee	Percentage of ownership	Highest percentage of ownership	Investment income (losses) (Note 2)	Book value	Accumu-late remittance o earnings in current perio
					Outflow	Inflow
Ocean Plastics(Hui Zhou)Co.,Ltd	Operating general soft tape, foamed latex leather and rubber leather production and sales business	812,643 (USD25,000)	( 3 )	812,643 (USD25,000)	-	-	812,643 (USD25,000))	75,130	100.00%	100.00%	75,130	554,487	-
Ocean Plastics (Dong Guan) Co., Ltd.	Production and sales of PU synthetic leather, foamed latex leather and rubber leather	242,168 (USD7,450)	( 3 )	242,168 (USD7,450)	-	-	242,168 (USD7,450)	(9,098)	100.00%	100.00%	(9,098)	(69,108)	-

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of December 31, 2022 (Note 3)	Investment Amounts Authorized by Investment Commission, MOEA (Note 3)	Upper Limit on Investment (Note 4)
1,069,438 (USD32,900)	1,069,438 (USD32,900)	3,548,316

Note 1: Re-investment company in mainland China established through investments of a third district.

Note 2: The investment income (loss) were based on financial statements audited by the auditor of the Company.

Note 3: The amount of accumulated outflow of investment from Taiwan were translated into New Taiwan dollars at the reporting date.

Note 4: The upper limit on Envestment was calculated in accordance with regulations of the Investment Commission of the Ministry of Economic Affairs for 60% of the net equity or consolidated net equity.

Note 5: In the first quarter of 2020, the Group sold the equity of Hunan Kunyuan Plastic Chemical Co., Ltd., OPC Holding Inc. and Ocean Group Ltd., and reduced the capital to return the share price of RMB 296,500 thousand.

Note 6: Transactions within the Group were elminated in the consolidated financial statements.

(iii) Significant transactions:

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

(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Yee Fong Chemical And Industrial Co.,Ltd.	12,425,769	% 5.46

(Continued)

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Segment information

(a) General information

The Group’ s reportable departments are the Taiwan region and the mainland region. They are mainly engaged in the manufacturing, sales and research and development of related products such as plastic cloth, plastic pipe, plastic leather, and plastic powder and pellets; The real estate development department is engaged in the Group’s real estate development business. The Group’s strategic business units are managed separately due to different technologies and marketing strategies required. The Group’s main operating decision makers review the internal management reports of each strategic operating unit at least quarterly. The group has other operating departments that have not reached the quantitative threshold, mainly engaged in the sales of plastic products and other businesses.

(b) The information should report that the department’ s profit and loss, assets, liabilities and their measurement and reconciliations

The Group uses the internal management report that the chief operating decision maker reviews as the basis to determine resource allocation and make a performance evaluation. The internal management report includes profit before taxation, but not including any extraordinary activity and foreign exchange gain or losses because taxation, extraordinary activity, and foreign exchange gain or losses are managed on a group basis, and hence they are not able to be allocated to each reportable segment. In addition, not all reportable segments include depreciation and amortization of significant non-cash items. The reportable amount is similar to that in the report used by the chief operating decision maker.

The operating segment accounting policies are similar to those described in note 4 “ significant accounting policies” except for the recognition and measurement of pension cost, which is on a cash basis.

The Group treated intersegment sales and transfers as other transactions. They are measured at market price.

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

		2022
Taiwan Business Division $ 5,592,445 60,588 674 $ 5,653,707 $ 17,493 192,204 80,776 $ (89,414) $ 2,646,868 120,093 $ 8,765,335 $ 2,525,425	China Business Departmen 913,691 - 5,762 919,453 655 21,392 - 87,508 - - 806,360 271,325	Real Estate Development Department - - - - - - - (15,569) 536 28,619 6,061,433 3,182,596 2021	Other - - 1,465 1,465 - - - (1,068) - - 21,170 294	Reconciliation and elimination - (60,588) - (60,588) - - 15,267 10,746 (2,198,911) - (3,884,336) (123,538)	Total 6,506,136 - 7,901
					6,514,037
					18,148 213,596 96,043
					(7,797
					448,493 148,712 11,769,962
					5,856,102

	China Business Departmen 866,252 - 2,650 868,902 546 19,753 - (4,501) - 2,436 761,196 302,660	Real Estate Development Department - - - - - - - 5,280 535 180,716 6,014,124 3,103,375	Other - 91,929 1,519 93,448 - - - 4,093 - - 85,999 444	Reconciliation and elimination - (212,578) - (212,578) - - (73,120) (79,663) (2,299,778) - (4,002,724) (127,317)	Total 6,490,333 - 4,344
					6,494,677
					15,400 206,568 78,728
					352,208
					417,247 283,914 12,980,183
					6,353,586

The material reconciling items of the above reportable segment are as below:

Total reportable segment revenue after deducting the intersegment revenue was $60,588 thousand and $212,578 thousand in 2022 and 2021, respectively.

OCEAN PLASTICS CO., LTD AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Product and service information

Revenue from the external customers of the Group was as follows:

Products Plastic materials Plastic products Others Total	2022 $ 3,442,249 3,063,667 220 $ 6,506,136	2021
		3,596,453 2,883,705 10,175
		6,490,333

(d) Geographical

In presenting information on the basis of geography, segment revenue is based on the geographical location of customers and segment assets are based on the geographical location of the assets.

Geographical Information Revenue from external customers: Taiwan United States India China Japan Other countries Total Geographical information Non-current assets: Taiwan China Total	2022 $ 2,211,016 1,088,512 1,685,671 268,738 732,028 520,171 $ 6,506,136 December 31, 2022 $ 8,330,101 138,917 $ 8,469,018	2021
		2,630,712 950,792 1,962,638 239,605 375,623 330,963
		6,490,333
		December 31, 2021
		8,352,779 147,648
		8,500,427

Non-current assets include property, plant and equipment, investment property and other assets, not including financial instruments, deferred tax assets, assets of post-employment benefits, and noncurrent assets of rights arising from an insurance contract.

(e) Information on revenue from major customers

No individual clients constituting over 10% of total revenue in 2022 and 2021.

Stock Code:1321

Ocean Plastics Co., Ltd.

Parent Company Only Financial Statements

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

Address: 5、6F., No. 310, Juguang Rd., Wanhua Dist., Taipei City 108, Taiwan (R.O.C.) Telephone: (02)2308-2131

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

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

Page

1
2
3
4
5
6
7
8
8
8～10
10～24
24～25
26～55
56～58
59
59
59
59
60
61～63
63
64
64
64
65～75

==> picture [76 x 32] intentionally omitted <==

==> picture [168 x 19] intentionally omitted <==

KPMG

Independent Auditors’ Report

To the Board of Directors of Ocean Plastics Co., Ltd.:

Opinion

We have audited the financial statements of Ocean Plastics Co., Ltd.(“the Company”), which comprise the balance sheets as of December 31, 2022 and 2021, the statements of comprehensive income, changes in equity and cash flows for the years then ended and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to Other Matter paragraph), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and its financial performance and its 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 Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Account of Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirement. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Other Matter

We did not audit the financial statements of Ocean Group Ltd., Fermat Enterprises Ltd., Universe Enterprises Ltd. and Chun Pin Enterprise Co., Ltd., which represented investment in another entity accounted for using the equity method. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for Ocean Group Ltd., Fermat Enterprises Ltd., Universe Enterprises Ltd., and Chun Pin Enterprise Co., Ltd., is based solely on the reports of other auditors. The investment in Ocean Group Ltd., Fermat Enterprises Ltd. and Universe Enterprises Ltd. and Chun Pin Enterprise Co., Ltd. accounted for using the equity method constituting 12% and 10% of total assets at both December 31, 2022 and 2021, and the related share of profit of associates and joint ventures accounted for using the equity method constituting (553)% and 21% of total profit before tax for the years then ended, respectively.

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

3-1

Key Audit Matters

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

1. Inventory valuation

Please refer to note 4(g) for the accounting policy on “ Inventory” and note 6(e) for components of inventories and expenses.

Description of key audit matter:

The Company's inventories are mainly midstream and downstream products of petrochemicals (PVC) and related products. The measurement of the net realizable value and obsolescence of inventories is uncertain because of involvement of management's subjective judgement. Therefore, we have considered inventory valuation to be a key audit matter.

How the matter was addressed in our audit:

Our principal audit procedures in this area included, among others: understanding inventory valuation policies to ensure that the process of inventory valuation was in conformity with the accounting policies, which included sampling the sources of the market prices adopted in inventory valuation to ascertain the appropriateness, and sampling inventories to test the accuracy of the aging report, reviewing the estimate of allowance for inventory loss in prior periods, and comparing it with the method and assumption used in estimating allowance for inventory loss for the current period, so as to assess the reasonableness, inspecting the sales after the balance sheet date in order to ensure that inventory valuation was appropriate.

2.Revenue recognition

Please refer to note 4(n) for the accounting policy on “Revenue recognition” and note 6(s) for information about revenue recognition.

Description of key audit matter:

The Company engages in manufacturing and selling plastics materials and downstream plastic products (plastic construction tubing, plastic cloth, plasticized synthetic leather, etc.). Considering the high trade volume and decentral customers of the Company, the control of products transfers at different time points might impact the time of revenue recognition. Therefore, revenue recognition has been identified as a key matter in our audit.

How the matter was addressed in our audit:

Our principal audit procedures in this area included, among others: evaluating the reasonableness of revenue recognition, understanding and testing the internal control of sales and collection cycles to ascertain if the implement was operative, checking individual sales transactions, customer orders, shipping certificates, invoices and other documents, delving into the periods before and after the balance sheet date in order to evaluate if the period of revenue recognition tallied with the trade condition and shipping documents.

3-2

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed 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 financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

3-3

Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period 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.

The engagement partners on the audit resulting in this independent auditors’ report are Sheng-Ho Yu and YungHua Huang.

KPMG

Taipei, Taiwan (Republic of China) March 15, 2023

Notes to Readers

The accompanying parent company only financial statements are intended only to present the statement of 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 parent company only financial statements are those generally accepted and 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.

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) Ocean Plastics Co., Ltd.

Balance Sheets

December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1170 Notes and trade receivables, net (note 6(d)(s) and 7) 130X Inventories (note 6(e)) 1470 Other current assets (note 7) Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1550 Investments accounted for using equity method (note 6(f)) 1600 Property, plant and equipment (note 6(g) and 8) 1755 Right-of-use assets (note 6(h)) 1760 Investments property, net (note 6(i) and 8) 1840 Deferred tax assets (note 6(p)) 1900 Other non-current assets (note 8) 1942 Long-term accounts receivables due from related parties (note 7) Total assets	December 31, 2022 Amount % $ 134,045 2 131,774 2 613,720 7 368,207 4 58,687 1 1,306,433 16 592,012 7 2,641,681 31 3,241,123 38 76,423 1 436,740 5 13,326 - 51,074 1 75,696 1 7,128,075 84 $ 8,434,508 100	December 31, 2021 Amount % 145,788 1 206,422 2 755,741 8 714,678 7 63,270 1 1,885,899 19 1,091,906 11 2,710,818 28 3,304,874 34 100,066 1 458,209 5 12,397 - 52,277 1 83,382 1 7,813,929 81 9,699,828 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(k) and 8) 2171 Notes and trade payables 2200 Other payables 2300 Other current liabilities (note 6(j)(m) and 8) 2230 Current tax liabilities (note 6(p)) 2320 Long-term liabilities, current portion (note 6(l) and 8) Non-Current liabilities: 2540 Long-term borrowings (note 6(l) and 8) 2570 Deferred tax liabilities (note 6(p)) 2640 Net defined benefit liability, non-current (note 6(o)) 2670 Other non-current liabilities, others (note 6(m)(o)) Total liabilities Equity attributable to owners of parent (note 6(q)): 3100 Capital stock 3200 Capital surplus 3300 Retained earnings 3400 Other equity 3500 Treasury shares Total equity Total liabilities and equity	December 31, 2022		December 31, 2021
			Amount %		Amount %
			$ 250,000 3 467,424 6 178,602 2 32,140 - 5,321 - 43,056 1 976,543 12 922,917 11 425,452 5 92,261 1 103,475 1 1,544,105 18 2,520,648 30 2,272,283 27 18,915 - 3,412,027 40 246,824 3 (36,189) - 5,913,860 70 $ 8,434,508 100		150,000 2 892,100 9 201,009 2 36,852 - 11,223 - 54,167 1 1,345,351 14 1,080,417 11 417,666 5 105,337 1 124,460 1 1,727,880 18 3,073,231 32 2,272,283 23 14,335 - 3,603,417 37 772,751 8 (36,189) - 6,626,597 68 9,699,828 100

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

Ocean Plastics Co., Ltd.

Statements of Comprehensive Income

For the years ended December 31, 2022 and 2021

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

4100 Operating revenues, net (note 6(s) and 7) 5000 Operating costs (note 6(e)(g)(o) and 7) 5900 Gross profit from operation 6000 Operating expenses (note 6(d)(g)(h)(i)(n)(o)): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment gain and reversal of impairment loss determined in accordance with IFRS 9 Total operating expenses 6900 Net operating loss 7000 Non-operating income and expenses: 7100 Interest income (note 6(u)) 7010 Other income (note 6(u)) 7020 Other gains and losses, net (note 6(u)) 7050 Finance costs 7070 Share of profit (loss) of associates and joint ventures accounted for using equity method, net (note6(f)) Total non-operating income and expenses Profit (loss) before income tax 7950 Less: Income tax expenses (note 6(p)) Profit (loss) 8300 Other comprehensive income: 8310 Items that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that will be reclassified to profit or loss 8361 Exchange differences on translation 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income Total comprehensive income Earnings per share (NT dollars) (note 6(r)) 9750 Basic (loss) earnings per share Diluted (loss) earnings per share	2022 Amount % $ 5,649,875 100 5,430,573 96 219,302 4 363,769 6 88,407 2 10,266 - 1,288 - 463,730 8 (244,428) (4) 626 - 168,246 3 (17,577) - (17,493) - 80,783 1 214,585 4 (29,843) - 12,814 - (42,657) - 10,326 - (499,894) (9) (32,458) (1) - - (522,026) (10) 6,425 - - - 6,425 - (515,601) (10) $ (558,258) (10) $ (0.19) $ (0.19)	2021 Amount % 5,730,874 100 5,321,209 93 409,665 7 338,874 6 90,578 2 9,926 - 434 - 439,812 8 (30,147) (1) 79 - 155,138 3 83,170 1 (14,854) - 151,772 3 375,305 7 345,158 6 25,790 - 319,368 6 3,378 - (97,103) (2) 14,970 - - - (78,755) (2) 2,552 - - - 2,552 - (76,203) (2) 243,165 4 1.45 1.45

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Ocean Plastics Co., Ltd.

Statements of Changes in Equity

For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Share capital	Capital surplus		Retained earnings	Retained earnings		Total other equity interest	Total other equity interest		Treasury shares	Total equity
						Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Total other equity interest
Ordinary shares		Legal reserve	Special reserve	Unappropriated retained earnings	Total retained earnings
	7,792	-	2,978,245	529,654	3,507,899	(39,407) - 2,552 2,552 - - - (36,855) - 6,425 6,425 - - - (30,430)	891,739	852,332	(36,189) - - - - - - (36,189) - - - - - - (36,189)	6,604,117
	- -	- -	- -	319,368 3,378	319,368 3,378					319,368 (76,203)
	-	-	-	322,746	322,746					243,165
	- - 6,543	52,965 - -	- - -							- (227,228) 6,543
	14,335 - -	52,965 - -	2,978,245 - -							6,626,597 (42,657) (515,601)
	-	-	-							(558,258)
	- - 4,580	32,275 - -	- - -							- (159,059) 4,580
	18,915	85,240	2,978,245							5,913,860

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Ocean Plastics Co., Ltd.

Statements of Cash Flows

For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit (loss) before tax Adjustments: Adjustments to reconcile loss: Depreciation expense Expected credit loss Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of subsidiaries,associates and joint ventures accounted for using equity method Property, plant and equipment transferred to expenses Gain on disposal of investment properties Gain on disposal of investments Other Total adjustments to reconcile loss Changes in operating assets and liabilities: Changes in operating assets: Notes and trade receivables Inventories Other current assets Other financial assets Other operating assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Notes and trade payables Other payable Provisions Other current liabilities Net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments	2022 $ (29,843) 192,204 1,288 74,648 17,493 (626) (125,717) (80,783) 335 - - (1,348) 77,494 140,733 346,546 13,482 (1,740) (205) 498,816 (2,749) (424,677) (22,511) 847 (99) (3,176) (452,365) 46,451 123,945	2021 345,158 186,816 434 (61,233) 14,854 (79) (91,832) (151,772) 441 (8,269) (1,385) - (112,025) (134,897) (346,194) (788) (17,843) (3,922) (503,644) 11,874 437,376 (4,008) 1,081 99 (2,924) 443,498 (60,146) (172,171)

See accompanying notes to parent company only financial statements.

7-1

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Ocean Plastics Co., Ltd.

Statements of Cash Flows

For the years ended December 31, 2022 and 2021

(Expressed in Thousands of New Taiwan Dollars)

Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income taxes (paid) refund
Net cash flows from operating activities
Cash flows from (used in) investing activities:
Acquisition of financial assets at fair value through profit or loss
Proceeds from disposal of financial assets at fair value through profit or loss
Acquisition of investments accounted for using equity method
Proceeds from disposal of investments accounted for using equity method
Acquisition of property, plant and equipment
Decrease in refundable deposits
Increase in other receivables due from related parties
Proceeds from disposal of investment properties
Net cash flows used in investing activities
Cash flows from (used in) financing activities:
Increase in short-term loans
Proceeds from long-term debt
Repayments of long-term debt
Payment of lease liabilities
Cash dividends paid
Net cash flows used in financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

Ocean Plastics Co., Ltd.

Notes to the Financial Statements

For the years ended December 31, 2022 and 2021

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

(1) Company history

OCEAN PLASTICS CO., LTD.(hereinafter referred to as the “Company”) was incorporated in June 1965, as a company limited by shares under the Company Act of the Republic of China (R.O.C.), and merged with Yee Fong Chemical & Industrial Co., Ltd.. The Company was registered in 5F & 6F., No. 310, Juguang Rd., Wanhua Dist., Taipei City. Please refer to note 14 for related information on the Group entities’ main business activities.

The major business activities of the Company are the manufacture and sale of plastics.

The Company’s common shares were listed on the Taiwan Stock Exchange (TWSE) in January 1999.

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

These financial statements were authorized for issue by the Board of Directors on March 14, 2023.

(3) New standards, amendments and interpretations adopted:

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

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2022:

－
●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018–2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2023, would not have a significant impact on its financial statements:

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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

Standards or
Interpretations
Amendments to IAS 1
“Classification of Liabilities
as Current or Non-current”
Amendments to IAS 1 “Non-
current Liabilities with
Covenants”

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

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

●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” and amendments to IFRS 17 “ Insurance Contracts”
●Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information “
●IFRS16 “Requirements for Sale and Leaseback Transactions”

(4) Summary of significant accounting policies:

The significant accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

This individual financial statement has been prepared accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(b) Basis of preparation
(i) Basis of measurement
- 1) Financial instruments at fair value through profit or loss are measured at fair value;
- 2) Financial assets at fair value through other comprehensive income are measured at fair value;
- 3) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in note 4(p).
(ii) Functional and presentation currency

The functional currency of each Company entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollar (TWD), which is the Company’ s functional currency. All financial information presented in TWD has been rounded to the nearest thousand.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(c) Foreign currencies

(i) Foreign currency transactions

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

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

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

(ii) Foreign operations

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

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

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

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

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non current.

An entity shall classify a liability as current when: (i) It is expected to be settled in the normal operating cycle;

(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.
(e) Cash and cash equivalents

(f) Financial Instruments

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(i) Financial assets

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

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

1) Financial assets measured at amortized cost

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

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

2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

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

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

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

3) Fair value through profit or loss (FVTPL)

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

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

Impairment of financial assets

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

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

‧ debt securities that are determined to have low credit risk at the reporting date; and
‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

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

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’ s historical experience and informed credit assessment as well as forwardlooking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

The Company considers a financial asset to be in default when the financial asset is more than 180 days past due or the debtor is unlikely to pay its credit obligations to the Company in full.

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘ investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’.

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

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

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

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

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

‧ significant financial difficulty of the borrower or issuer;
‧ a breach of contract such as a default or being more than 180 days past due;
‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧ it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧ the disappearance of an active market for a security because of financial difficulties.

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

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

5) Derecognition of financial assets

The Company applied the exemptions at the first-time adoption of IFRSs, and increased its retained earnings by $2,992,372 thousand, which resulted from unrealized revaluation increments, exchange differences on translation of foreign financial statements, and the fair value of investment property being used as the cost on initial recognitions at the transition date.

(ii) Financial liabilities and equity instruments

1) Classification of debt or equity

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

2) Equity instrument

3) Treasury shares

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

4) Financial liabilities

5) Derecognition of financial liabilities

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

6) Offsetting of financial assets and liabilities

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

(g) Inventories

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

(h) Investment in associates

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

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

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

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

(i) Investments in Subsidiaries

On preparing individual financial reports, the Company adopts the equity method to evaluate investees who are under control. In equity method, current incomes and other comprehensive incomes in individual financial report are same with the ones attribute to the parent company in consolidated financial reports. Also, the equity in individual financial report is same with the one attribute to the parent company in consolidated financial reports.

If the Company has change on the ownership equity of the subsidiary that does not result in the loss of control, it can be as the equity transaction between them.

(j) Investment property

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

(k) Property, plant and equipment

(i) Recognition and measurement

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

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

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

(ii) Subsequent expenditure

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

(iii) Depreciation

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

Land is not depreciated.

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

1)	buildings	5~50 years
2)	machinery equipment	3~20 years
3)	other facility	2~20 years

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

(iv) Reclassification to investment property

When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified accordingly.

(l) Leases

(i) As a lessee

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

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

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

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

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

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

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

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(ii) As a lessor

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

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

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

(m) Impairment of non-financial assets

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

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

For other non-financial assets, an impairment loss is reversed only to the extent that the asset’ s carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the assets in prior years.

(n) Revenue from contracts with customers

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(i) Sale of goods

The Company manufactures and sells plastic materials and products. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied. A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

(ii) Financing components

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

(o) Employee benefits

(i) Defined contribution plans

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

(ii) Defined benefit plans

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

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

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

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

(iii) Other long-term employee benefits

The Company’ s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in which they arise.

(iv) Short-term employee benefits

(p) Income taxes

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

(iii) taxable temporary differences arising on the initial recognition of goodwill.

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

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

(i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(q) Earnings per share

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

(r) Operating segments

Segment information was disclosed in consolidated financial statement; therefore, it was not disclosed in the parent company only financial statement.

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

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

(a) Judgment of whether the Company has substantive control over a subsidiary; please refer to the consolidated financial statements for the year ended December 31, 2022.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(b) Judgment of whether the Company has substantive control over its investees

Holding 44.62% of the outstanding voting shares in Chun Pin Enterprise Co., Limited., the Company was not the largest shareholder. The Company obtained neither more than half of Chun Pin Enterprise’ s Board seats, nor more than half of the voting rights at a shareholders’ meeting. Therefore, it was determined that the Company only had significant influence on Chun Pin Enterprise.

Holding 40% of preferred stock and 50% of common stock in Foremost-Oceans NueTeq, Ltd., the Company was not the largest shareholder. The Company obtained neither more than half of Foremost-Oceans NueTeq, Ltd.’ s Board seats, nor more than half of the voting rights at a shareholders’ meeting. Therefore, it was determined that the Company only had significant influence on Foremost-Oceans NueTeq, Ltd.

Information about assumptions and estimation uncertainties that has a significant risk of resulting in a material adjustment within the next financial year is as follows:

(a) Inventory valuation

Inventories are measured at the lower of cost or net realizable value. The Company assesses value of inventories that are worn, obsolete, and unmarketable at the reporting date, and writes down the cost of inventories to their net realizable value. Inventory valuation is based on expected market demand in a period of foreseeable future which may fluctuate by rapid change in industry. For the estimation of inventory valuation, please refer to note 6(e) for details.

The Company’s accounting policies include measuring financial and non financial assets and liabilities at fair value through profit or loss.

The Company’s financial instrument valuation group conducts independent verification on fair value by using data sources that are independent, reliable, and representative of exercise prices. This financial instrument valuation group also periodically adjusts valuation models, conducts back testing, renews input data for valuation models, and makes all other necessary fair value adjustments to assure the rationality of fair value. The Company strives to use market observable inputs when measuring assets and liabilities. Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

(a) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
(b) Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
(c) Level 3: inputs for the assets or liability that are not based on observable market data.

Please refer to Note 6(v) for assumptions used in measuring fair value.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Revolving funds and cash on hand Demand deposits and check deposits Time deposits Cash and cash equivalents in the consolidated statement of cash flows	December 31, 2022 $ 500 102,825 30,720 $ 134,045	December 31, 2021
		500 145,288 -
		145,788

Please refer to note 6(v) for the exchange rate risk, interest rate risk, and sensitivity analysis of the financial assets and liabilities of the Company.

(b) Financial assets at fair value through profit or loss

December 31, 2022 Current financial assets designated at fair value through profit or loss: Listed domestic stock $ 131,774 Financial assets at fair value through other comprehensive income December 31, 2022 Equity investments at fair value through other comprehensive income: Unlisted domestic stock－Taiwan VCM Corporation $ 547,480 Unlisted domestic stock－Others 44,532 Total $ 592,012	December 31, 2021
	206,422
	December 31, 2021
	1,016,326 75,580
	1,091,906

(i) Fair value through other comprehensive income financial assets

The Company holds this equity investment as long-term strategic investment without any trade purpose, so it is assigned to use fair value through other comprehensive income to evaluate. Hence, the Company recognized dividend revenues $115,116 thousand and $87,178 thousand in 2022 and 2021.

The Company did not dispose strategic investment in 2022 and 2021. The accumulated income and loss in the period did not transfer in equity.

(ii) Credit risk and market risk information refers to note 6(w).
(iii) On December 31, 2022 and 2021, the financial assets which held by the Company did not offer any pledge and assurance.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(d) Notes and trade receivables

Notes receivable from operating activities Trade receivables Less: Loss allowance	December 31, 2022 $ 37,737 583,694 (7,711) $ 613,720	December 31, 2021 57,640 704,524 (6,423) 755,741

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information, including macroeconomic and relevant industry information. The loss allowance provisions were determined as follows:

Current 1 to 180 days past due More than 180 days past due Current 1 to 180 days past due More than 180 days past due	December 31, 2022	December 31, 2022
	Gross carrying amount Weighted- average loss rate $ 573,770 - 44,466 10% 3,195 100% $ 621,431 December 31, 2021		Loss allowance provision - 4,516 3,195 7,711
		Weighted- average loss rate - 9% 100%	Loss allowance provision - 2,579 3,844 6,423

The movement in the allowance for notes and trade receivables were as follows:

Balance at January 1 Impairment losses recognized Impairment losses reversed Balance at December 31	2022 $ 6,423 2,184 (896) $ 7,711	2021 5,989 1,708 (1,274) 6,423

The aforementioned notes and trade receivables of the Company were not pledged as collateral as of December 31, 2022 and 2021.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(e) Inventories

Manufacturing: Raw materials Work in progress Finished goods Construction industry: Construction in progress	December 31, 2022 $ 157,243 17,840 193,049 368,132 75 $ 368,207	December 31, 2021
		292,220 29,370 393,088
		714,678
		-
		714,678

The Company’s relevant inventory details recognized in operating costs in 2022 and 2021 are as follows:

Cost of goods sold Write-down of inventories(Reversal of write-downs) Disposal of inventory Idle capacity Revenue from sale of scraps and others	2022 $ 5,356,863 12,824 - 109,025 (48,139) $ 5,430,573	2021
		5,215,283 1,234 1,602 101,289 1,801
		5,321,209

As of December 31, 2022 and 2021, the Company had not provided any inventories as collateral for its loans.

The impairement loss in inventory was reversed due to the increase in net realizable value which was caused by the scarcity of the inventory and the market price increased.

(f) Investments accounted for using equity method

A summary of the Company’s financial information for investments accounted for using the equity method at the reporting date is as follows:

Subsidiaries Associates	December 31, 2022 $ 2,193,188 448,493 $ 2,641,681	December 31, 2021
		2,293,571 417,247
		2,710,818

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(i) Subsidiary

Please refer to consolidated financial report of 2022.

(ii) Associates

Associates which are material to the Company consisted of the followings:

Name of Associates Chun Pin Enterprise Co., Ltd Foremost-Oceans NueTeq, Ltd.	Nature of Relationship with the Group Wholesale of chemical feedstock and products Wholesale of petrochemical materials manufacturing	Main operating location/ Registered country of the Company Taiwan Taiwan	Proportion of shareholding and voting rights December 31, 2022 December 31, 2021 % 44.62 % 44.62 40.07%、50.00% % -

The financial information of the Associate which has materiality on the Company is as follows. It already adjusted the amount in the Associate’s IFRSs individual financial report to reflect the adjustments for fair values and for accounting policy difference:

1) Chun Pin Enterprise Co., Ltd

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Operating revenue Profit from continuing operations Other comprehensive income Total comprehensive income Share of net assets of associates as of January 1 Comprehensive income attributable to the Group Dividends received from associates Share of net assets of associates as of December 31	December 31, 2022 $ 826,441 271,851 (88,420) (18,113) $ 991,759 2022 $ 467,562 215,346 - $ 215,346 2022 $ 417,247 96,077 (70,847) $ 442,477	December 31, 2021 862,322 238,527 (133,582) (32,059) 935,208 2021 436,102 176,458 - 176,458 2021 407,945 78,728 (69,426) 417,247

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

2) Foremost-Oceans NueTeq, Ltd.

Current assets Non-current assets Non-current liabilities Net assets Operating revenue Profit from continuing operations Other comprehensive income Total comprehensive income Share of net assets of associates as of January 1 Increase in current period Comprehensive income attributable to the Group Share of net assets of associates as of December 31	December 31, 2022 $ 3,878 13,010 (1,873) $ 15,015 2022 $ - (87) - $ (87) 2022 $ - 6,050 (34) $ 6,016	December 31, 2021
		- - -
		-
		2021
		-
		- -
		-
		2021
		- - -
		-

(iii) Guarantee

As of December 31, 2022 and 2021, the Company had not provided any investment accounted for using equity method as collaterals for its loans.

(g) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company for the years ended December 31, 2022 and 2021, were as follows:

Cost or deemed cost: Balance on January 1, 2022 Additions Transfer from construction in progress and testing equip Disposal Transfer to expense Balance on December 31, 2022	Lands $ 1,483,366 - - - - $ 1,483,366	Buildings and constructions 1,240,147 - 5,761 - - 1,245,908	Machinery and equipment 2,019,150 - 65,062 (115,915) -	Other facilities 1,463,643 - 81,137 (23,990) - 1,520,790	Construction in progress 86,301 103,644 (151,960) - (335) 37,650	Total 6,292,607 103,644 - (139,905) (335)
			1,968,297			6,256,011

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

Balance on January 1, 2021 Additions Transfer from construction in progress and testing equip Disposal Transfer to expense Balance on December 31, 2021 Depreciation and impairments losses: Balance on January 1, 2022 Depreciation and impairment loss for the year Disposal Balance on December 31, 2022 Balance on January 1, 2021 Depreciation and impairment loss for the year Disposal Balance on December 31, 2021 Carrying amount: Balance on December 31, 2022 Balance on January 1, 2021 Balance on December 31, 2021	Lands $ 1,483,366 - - - - $ 1,483,366 $ - - - $ - $ - - - $ - $ 1,483,366 $ 1,483,366 $ 1,483,366	Buildings and constructions 1,236,587 - 3,560 - - 1,240,147 334,442 24,551 - 358,993 310,105 24,337 - 334,442 886,915 926,482 905,705	Machinery and equipment 2,021,215 - 27,859 (29,924) - 2,019,150 1,528,781 68,370 (115,915) 1,481,236 1,491,920 66,787 (29,926) 1,528,781 487,061 529,295 490,369	Other facilities 1,460,922 - 20,981 (18,260) - 1,463,643 1,124,510 74,139 (23,990) 1,174,659 1,071,810 70,958 (18,258) 1,124,510 346,131 389,112 339,133	Construction in progress 39,728 99,414 (52,400) - (441) 86,301 - - - - - - - - 37,650 39,728 86,301	Total 6,241,818 99,414 - (48,184) (441)
						6,292,607
						2,987,733 167,060 (139,905)
						3,014,888
						2,873,835 162,082 (48,184)
						2,987,733
						3,241,123
						3,367,983
						3,304,874

Part of the lands subjected to urban land readjustment plan or were agricultural land, which were not allowed to be held by the Company were held temporarily by third party and registered as mortgage to the Company. As of December 31, 2022 and 2021, carrying amount of above mentioned lands (including investment property) were $84,803 thousands and $141,648 thousands, and the Company is applying for alternation of land use and will transfer their title to the Company once the process of urban land readjustment and alternation of land use complete.

In addition, to enhance the operating efficiency of the Company’ s assets and enhance its competitiveness, the Company resolved on November 10, 2021 by the Board of Directors to transfer 21.3% of the holding percentage of the rezoning land located at land No.1286, Jiankang section, Zhonghe District, New Taipei City on May 24, 2022 (acquisition date) to the investee (subsidiaries). The land title is transfer to the Company from third party and the subsidiary is in charge of planning. Investment property-land, costs that was transferred is amounting to NT$20,155 thousand.

As of December 31, 2022 and 2021, the collateral details of long-term borrowings and credit agreements, please refer to note 8.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(h) Right-of-use-assets

The Company leases many assets including land and buildings and vehicles. Information about leases for which the Company as a lessee was presented below:

Cost: Balance at January 1, 2022 Additions Decrease Balance at December 31, 2022 Balance at January 1, 2021 Additions Decrease Balance at December 31, 2021 Accumulated depreciation: Balance at January 1, 2022 Depreciation for the year Decrease Balance at December 31, 2022 Balance at January 1, 2021 Depreciation for the year Decrease Balance at December 31, 2021 Carrying amount: Balance at December 31, 2022 Balance at December 31, 2021 Balance at January 1, 2021	Lands $ 9,701 - - $ 9,701 $ 9,701 - - $ 9,701 $ 5,820 1,941 - $ 7,761 $ 3,880 1,940 - $ 5,820 $ 1,940 $ 3,881 $ 5,821	Buildings and constructions 26,194 - - 26,194 26,194 - - 26,194 15,717 5,238 - 20,955 10,478 5,239 - 15,717 5,239 10,477 15,716	Other facilities 99,318 257 (3,658) 95,917 34,429 95,660 (30,771) 99,318 13,610 16,721 (3,658) 26,673 28,071 16,310 (30,771) 13,610 69,244 85,708 6,358	Total 135,213 257 (3,658) 131,812 70,324 95,660 (30,771) 135,213 35,147 23,900 (3,658) 55,389 42,429 23,489 (30,771) 35,147 76,423 100,066 27,895

(i) Investment property

Cost : Balance at January 1, 2022 Disposal Reclassification to inventory Balance at December 31, 2022	Land $ 442,776 (20,150) (75) $ 422,551	Buildings 18,391 - - 18,391	Total 461,167 (20,150) (75) 440,942

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

Balance at January 1, 2021 Reclassification from construction in progress Balance at December 31, 2021 Accumulated depreciation and impairment losses: Balance at January 1, 2022 Depreciation for the year Balance at December 31, 2022 Balance at January 1, 2021 Depreciation for the year Balance at December 31, 2021 Carrying amount: Balance at December 31, 2022 Balance at January 1, 2021 Balance at December 31, 2021 Fair value Balance at December 31, 2022 Balance at December 31, 2021	Land $ 471,834 (29,058) $ 442,776 $ - - $ - $ - - $ - $ 422,551 $ 471,834 $ 442,776	Buildings Total 18,391 490,225 - (29,058) 18,391 461,167 2,958 2,958 1,244 1,244 4,202 4,202 1,713 1,713 1,245 1,245 2,958 2,958 14,189 436,740 16,678 488,512 15,433 458,209 $ 1,650,021 $ 1,857,130

Part of the lands were agricultural land, which's legal title were not allowed to be held by the Company were held temporarily by third party and registered as mortgage to the Company. The Company is applying for alternation of land use for above lands and their title will be transferred to the Company once the process of alternation of land use complete. Please refer to note 6(g) for further details.

In addition, to enhance the operating efficiency of the Company’ s assets and enhance its competitiveness, the Company resolved on November 10, 2021 by the Board of Directors to transfer 21.3% of the holding percentage of the rezoning land located at land No.1286, Jiankang section, Zhonghe District, New Taipei City on May 24, 2022 (acquisition date ) to the investee (subsidiaries). The land title is transfer to the Company from third party and the subsidiary is in charge of planning. Investment property-land, costs that was transferred is amounting to NT$20,155 thousand.

The fair value stated above was according to the latest transaction data announced on the website of Department of Land Administration Ministry of the Interior.

Investment property comprises a number of lands that are leased to third parties. Each of the leases contains a 3 to 15 years non-cancellable period. Subsequent renewals are negotiated with the lessee and no contingent rents are charged. For further information, please refer to note 6(n).

As of December 31, 2022 and 2021, investment property of the Group had been pledged as collateral for long-term borrowings and credit lines, please refer to note 8.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(j) Other current liabilities

The other current liabilities of the Company were as follows:

Lease liabilities-current Other payables-related parties Unearned Revenues Others	December 31, 2022 $ 23,236 3,098 3,961 1,845 $ 32,140	December 31, 2021
		23,453 3,083 8,370 1,946
		36,852

(k) Short-term borrowings

The short-term borrowings of the Company were summarized as follows:

Unsecured bank loans Secured bank loans Total Unused short-term credit line Range of interest rates	December 31, 2022 $ - 250,000 $ 250,000 $ 946,781 1.45%~1.58%	December 31, 2021
		150,000 -
		150,000
		398,156
		1.10%~1.11%

For the collateral for short-term borrowings, please refer to note 8.

(l) Long-term borrowings

The long-term borrowing details and terms of the Company are as follows:

	December 31, 2022	December 31, 2022	December 31, 2022
Currency	Rate
TWD
			Amount 1,134,584 (54,167) 1,080,417 2,180,000
Currency	Rate	Maturity year 2022.04.17~2031.06.29 $ $ $
TWD	0.89%~1.18%

For the collateral for long-term borrowings, please refer to note 8.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(m) Leases Liabilities

The lease liabilities of the Company’s were as follows:

Current Non-current	December 31, 2022 $ 23,236 $ 53,969	December 31, 2021 23,453 77,033

For maturity analysis, please refer to note 6 (v).

The amounts recognized in profit or loss was as follows:

		2022	2021
Interest on lease liabilities	$	1,046	974
The amounts recognized in the statement of cash flows for the Company was as follows:
		2022	2021
Total cash outflow for leases	$	23,236	24,171

The Company leases land and buildings, and raw material storage tanks. The leases run for four to five years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Some leases provide for additional rent payments that are based on changes in local price indices. Some also require the Company to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined annually.

(n) Operating lease

(i) Leases as lessor

The Company leases out its investment property and other facilities. The Company has classified these leases as operating leases, and please refer to Note 6(i) for the relevant information.

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

Less than one year One and two years Two and three years Three and four years Four and five years More than five years Total undiscounted lease payment	December 31, 2022 $ 9,444 9,560 9,727 9,846 10,076 69,478 $ 118,131	December 31, 2021 9,281 9,444 9,560 9,727 9,846 79,554 127,412

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

Rental income from investment properties was $11,473 thousand and $11,689 thousand in 2022 and 2021, respectively.

(o) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of the defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2022 $ 362,358 (270,097) $ 92,261	December 31, 2021 381,586 (276,249) 105,337

The Company’s employee benefit liabilities were as follows:

Long-term vacation liability Cash-settled share-based payment liability Total employee benefit liabilities	December 31, 2022 $ 14,453 - $ 14,453	December 31, 2021
		14,633 -
		14,633

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

1) Composition of plan assets

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

The Company’ s Bank of Taiwan labor pension reserve account balance amounted to $270,097 thousand as of December 31, 2022. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Company were as follows:

Defined benefit obligation at January 1 Current service costs and interest cost (income) Remeasurements loss(gain): －Experience adjustment －Demographic assumptions －Financial assumptions Benefits paid Defined benefit obligations at December 31	2022 $ 381,586 3,975 25,003 - (12,656) (35,550) $ 362,358	2021 396,840 3,810 (1,241) 9,162 (3,389) (23,596) 381,586

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company were as follows:

Fair value of plan assets at January 1 Interest cost (income) Remeasurements of defined benefit liabilities (assets): －Return on plan assets excluding interest income Contribution paid by employer Benefits paid Fair value of plan assets at December 31	2022 $ (276,249) (1,367) (22,247) (5,784) 35,550 $ (270,097)	2021 (288,733) (1,052) (4,379) (5,681) 23,596 (276,249)

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

The expenses recognized in profit or loss for the C	ompany were as foll	ows:
Current service costs Net interest of net liabilities for defined benefit obligations	2022 $ 2,095 513 $ 2,608	2021
		2,363 395
		2,758

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

Operating cost Selling expenses Administration expenses Research and development expenses	2022 $ 1,957 31 615 5 $ 2,608	2021 2,179 23 553 3 2,758

5) Remeasurement of net defined benefit liability (asset) recognized in other comprehensive income

The Company’s remeasurements of the net defined benefit liability (asset) recognized in other comprehensive income for the years ended December 31, 2022 and 2021, were as follows:

Accumulated amount at January 1 Recognized during the period Accumulated amount at December 31	2022 $ 122,725 (10,326) $ 112,399	2021 126,105 (3,378) 122,727

6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	2022 2021 % 1.250 % 0.500 % 2.25 % 2.00

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is $5,789 thousand.

The weighted average lifetime of the defined benefits plans is 6.7 years.

7) Sensitivity analysis

When calculating and determining the present value of defined benefit obligations, the Company must use judgments and estimates to determine relevant actuarial assumptions on the balance sheet date, including discount rates, employee turnover rates, and future salary adjustments. Any change in actuarial assumptions may materially affect the amounts of the Company’s defined benefit obligations.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation in the years 2022 and 2021 shall be as follows:

December 31, 2022 Discount rate Future salary increasing rate December 31, 2021 Discount rate Future salary increasing rate	Impact on defined benefit obligation Increased 0.25% Decreased 0.25% (5,977) 6,145 5,975 (5,841) (6,792) 6,994 6,769 (6,609)

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2022 and 2021.

(ii) Defined contribution plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $12,526 thousand and $12,148 thousand for the years ended December 31, 2022 and 2021, respectively.

(p) Income tax

The components of income tax in the years 2022 and 2021 were as follows:

(i) Income tax expense

The components of income tax in the years 2022 and 2021 were as follows:

Current period Deferred tax expense Tax expense	2022 $ 5,957 6,857 $ 12,814	2021
		11,221 14,569
		25,790

(Continued)

Ocean Plastics Co., Ltd.

Notes to the Financial Statements

Reconciliation of income tax and profit before tax for 2022 and 2021 is as follows:

Profit (loss) excluding income tax Income tax using the Company’s domestic tax rate Tax-exempt income Non-deductible expenses Current-year losses for which no deferred tax asset was recognized Changes in unrecognized temporary differences Change in provision in prior periods Additional tax on undistributed earnings Other Income tax expense	2022 $ (29,843) (5,968) (13,261) 584 45,994 (14,298) 636 5,321 (6,194) $ 12,814	2021 345,158 69,033 (65,385) 491 9,135 1,295 - 11,221 - 25,790

(ii) Deferred tax assets and liabilities
1) Unrecognized deferred tax assets

Deferred tax assets have not been recognized is respect of the following items:

Tax effect of deductible Temporary Differences The carryforward of unused tax losses Total	December 31, 2022 $ 392,323 37,121 $ 429,444	December 31, 2021
		406,621 39,129
		445,750

The deductible temporary differences are mainly the share of overseas investment losses and deferred benefits recognized by the equity method.

The R.O.C. Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes. Deferred tax assets have not been recognized in respect of these items because it is less than more likely that future taxable profit will be available against which the Company can utilize the benefits therefrom.

As of December 31, 2022, the deduction period of the subsidiaries in Mainland China unused tax losses for which no deferred tax assets were recognized are as follows:

Year of loss	Unused tax loss Expiry date $ 52,882 2028 99,314 2029 33,408 2032 $ 185,604
2018 (Assessed amount) 2019 (Assessed amount) 2022 (Estimated declared amount) Total

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

2) Recognized deferred tax assets and liabilities

Deferred tax assets:

Balance at January 1, 2022 Recognized in profit or loss Balance at December 31, 2022 Balance at January 1, 2021 Recognized in profit or loss Balance at December 31, 2021

Unrealized loss on inventory write-downs $ 10,758 2,565 $ 13,323 $ 10,511 247 $ 10,758	Others 1,639 (1,636) 3 2,106 (467) 1,639	Total 12,397 929 13,326 12,617 (220) 12,397

Deferred tax liabilities:

Balance at January 1, 2022 Recognized in profit or loss Balance at December 31, 2022 Balance at January 1, 2021 Recognized in profit or loss Cash compensation for land sale Balance at December 31, 2021	Reserve for land value increment tax $ 325,211 (6,194) $ 319,017 $ 328,553 - (3,342) $ 325,211	Difference in the useful life of property, plant, and equipment 92,455 13,980 106,435 78,108 14,347 - 92,455	Total 417,666 7,786 425,452 406,661 14,347 (3,342) 417,666

(iii) Assessment of tax:

The Company’s tax returns for the years through 2020 were assessed by the Taipei National Tax Administration.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(q) Capital and other equity

As of December 31, 2022 and 2021, the number of authorized ordinary shares were 4,000,000 thousand shares with par value of $10 per share, and 227,228 thousand ordinary shares were issued. All issued shares were paid up upon issuance.

(i) Capital surplus

The balances of capital surplus were as follows:

The balances of capital surplus were as follows:
Share premium Treasury share transactions Adjustments of capital surplus for company's cash dividends received by subsidiaries Total	December 31, 2022 $ 680 7,112 11,123 $ 18,915	December 31, 2021
		680 7,112 6,543
		14,335

(ii) Retained earnings

The Company's Articles of Incorporation stipulate that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, unless the amount of the legal reserve is already equal to or greater than the total paid-in capital. Additionally, the Company shall allocate special reserve taking into consideration the operating needs and statutory requirements. Any remaining profit, together with any prior-period undistributed retained earnings, shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

In accordance with the Company’ s dividend policy, if there is profitability for the year, dividends can be distributed in three forms—cash dividend, common stock dividend, or capital surplus transferred to common stock. Distribution shall not be less than 20 percent of the income after deducting legal reserve and special reserve, and only when the Company has significant investment plan or intends to improve financial structure can common stock dividends or capital surplus transferred to common stock substitute for cash dividend. However, cash dividends shall account for at least 10 percent of dividend distribution.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

1) Legal reserve

2) Special reserve

3) Earnings distribution

Dividends distributed to ordinary shareholders: Cash	2021 Amount per share Amount $ 0.70 159,059	2020	2020
	Amount per share $ 0.70	Amount per sharet 1.00	Amount
			227,228

(iii) Treasury shares

As of December 31, 2022. the company's treasury stock balance is $36,189 thousand.

Before the amendment to the R.O.C. Company Act on November 2001, the Company’ s subsidiaries, Chang Xin Co., Ltd. and Hong Da Investment Co., Ltd., acquired 2,939 thousand and 3,604 thousand of the Company’s shares, respectively.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

In accordance with the requirements of the Securities and Exchange Act, treasury shares held by the Company shall not be pledged, and no shareholder rights are granted before their transfer.

(r) Earnings per share

(i) Basic earnings per share

The details on the calculation of basic earnings per share and diluted earnings per share of the Company as follows:

Basic earnings per share Profit (loss) of the Company for the year Weighted average number of ordinary shares (thousand share) Basic earnings per share (NT dollars) Diluted earnings per share Profit (loss) of the Company for the year Weighted average number of ordinary shares (thousand share) Effects of dilutive potential ordinary shares Weighted average number of ordinary shares (diluted) (thousand share) Diluted earnings per share (NT dollars)	2022 $ (42,657) 220,686 $ (0.19) $ (42,657) 220,686 40 220,726 $ (0.19)	2021
		319,368
		220,686
		1.45
		319,368
		220,686 235
		220,921
		1.45

(s) Revenue from contracts with customers
(i) Details of revenue

2022 Primary geographical markets Taiwan $ 2,177,179 India 1,685,671 USA 478,942 China 95,633 Other country 1,212,450 $ 5,649,875 Main product/service line Plastic material $ 3,442,249 Plastic product 2,207,626 $ 5,649,875	2021
	2,600,066 1,962,638 313,942 169,740 684,488
	5,730,874
	3,596,453 2,134,421
	5,730,874

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(ii) Contract balances

Notes and trade receivables Less: allowance for impairment Total Contract liabilities	December 31, 2022 $ 621,431 (7,711) $ 613,720 $ 37,741	December 31, 2021 762,164 (6,423) 755,741 40,490

For details on trade receivables and allowance for impairment, please refer to note 6(d).

Contract liabilities mainly arose from advance receipt of loans from customers and payments for real estate. The Company will record revenue when the product is delivered to the customer or when the property is completed and the ownership is transferred.

The amount of revenue recognized for the years ended December 31 2022 and 2021 that was included in the contract liability balance at the beginning of the period were $7,439 thousand and $11,539 thousand, respectively.

(t) Employee compensation and directors' and supervisors' remuneration

Pursuant to the Company’s the Articles of Incorporation, it shall contribute no less than 1% of the profit as employee compensation and more than 2% as compensation to directors and supervisors when there is profit for the year. However, if the Company has accumulated deficits, the profit shall be reserved to offset the deficit. The persons who are entitled to receive cash or shares as employee stipulated in the preceding paragraph include the employees of the Companyy's affiliates who meet certain conditions.

For the years ended December 31, 2021, the Company estimated its employee remuneration amounting to $6,108 thousand, and directors' and supervisors' remuneration amounting to $4,671 thousand. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees, directors and supervisors of each period, multiplied by the percentage of remuneration to employees, directors and supervisors as specified in theCompany's articles. These remunerations were expensed under operating costs or operating expenses during 2021. Because the company had accumulated deficits in 2022, there was no need to estimate the remuneration of employees, directors and supervisors. The actual amounts appropriated and the estimated amounts in the financial statements were the same in 2021.

(u) Non-operating income and expenses

(i) Interest income

For the years ended December 31, 2022 and 2021, the details of other income were as follows:

2022 Interest income from bank deposits $ 626	2021
	79

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(ii) Other income

For the years ended December 31, 2022 and 2021, the details of other income were as follows:

Rent income Dividend income Other income, Others	2022 $ 11,473 125,717 31,056 $ 168,246	2021
		11,689 91,832 51,617
		155,138

(iii) Other gains and losses

For the years ended December 31, 2022 and 2021, the details of other gains and losses were as follows:

Gain on disposal of investment properties Gain on disposal of investments Foreign exchange gains (losses) Gains on financial assets at fair value through profit or loss	2022 $ - - 57,071 (74,648) $ (17,577)	2021
		8,269 1,385 12,283 61,233
		83,170

(v) Financial instruments
(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets except for cash and cash equivalents, represents the maximum amount exposed to credit risk. As of December 31, 2022 and 2021, the maximum amount exposed to credit risk were $745,494 thousand and $962,163 thousand, respectively.

2) Concentration of credit risk

The sales of the Company are not significantly concentrated within a few customers. As of December 31, 2022 and 2021, the balance of accounts receivable due from the 10 largest customers were 37% and 35%.

(ii) Liquidity risk

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

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

Carrying amount December 31, 2022 Non-derivative financial liabilities Secured bank loans $ 1,215,973 Notes and trade payables (including related parties) 467,424 Other payables (including related parties) 127,351 Lease liabilities 77,205 $ 1,887,953 December 31, 2021 Non-derivative financial liabilities Secured bank loans $ 1,134,584 Unsecured bank loans 150,000 Notes and trade payables (including related parties) 892,100 Other payables (including related parties) 131,373 Lease liabilities 100,486 $ 2,408,543	Contractual cash flows 1,300,571 467,424 127,351 79,003 1,974,349 1,207,396 150,284 892,100 131,373 103,335 2,484,488	Within 6 months 281,629 467,424 127,351 12,003 888,407 32,842 150,284 892,100 131,373 12,538 1,219,137	6-12 months 31,796 - - 12,003 43,799 32,937 - - - 11,959 44,896	1-2 years 658,312 - - 33,056 691,368 65,779 - - - 23,918 89,697	2-5 years 194,839 - - 21,941 216,780 804,789 - - - 54,920 859,709	Over 5 years
						133,995 - - -
						133,995
						271,049 - - - -
						271,049

The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Currency risk
1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk were as follows:

December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2021 Local currency Exchange rate TWD 25,673 27.69 710,757 15,833 27.69 438,337
Local currency $ 19,631 5,739	Exchange rate 30.72 30.72	TWD	Exchange rate TWD 27.69 710,757 27.69 438,337
		603,064 176,302

2) Sensitivity analysis

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade receivables, loans and borrowings; and trade and other payables that are denominated in foreign currency.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

A strengthening (weakening) of 1% of the TWD against the JPY and USD as of December 31, 2022 and 2021, would have increased (decreased) the net profit after tax by $3,414 thousand and $2,179 thousand, respectively. This analysis is based on foreign currency exchange rate variances that the Company considered to be reasonably possible at the reporting date. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases.The analysis is performed on the same basis for 2022 and 2021.

3) Foreign exchange gain and loss on monetary items

Since the Company has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For years 2022 and 2021, foreign exchange gain (loss) (including realized and unrealized portions) amounted to $57,071 thousand and $12,283 thousand, respectively.

(iv) Interest rate analysis

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

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Company management's assessment of the reasonably possible interest rate change.

If the interest rate had increased / decreased by 0.25%, the Company’s net income would have increased / decreased by $1,932 thousand and $2,269 thousand for the year ended December 31, 2022 and 2021 with all other variable factors remaining constant, respectively.

(v) Other market price risk

Price of securities at the reporting date Increasing 1% Decreasing 1%	2022			2021 Other comprehensive income after tax Net income 10,919 2,064 (10,919) (2,064)
	Other comprehensive income after tax $ 5,920 $ (5,920)	Net income		Other comprehensive income after tax 10,919 (10,919)
		1,318

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(vi) Fair value of financial instruments

1) Fair value hierarchy

The carrying amount and fair value of the Company’ s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

	December 31, 2022	December 31, 2022	December 31, 2022
Book Value $ 131,774 592,012 $ 723,786		Fair Value
	Level 1 Level 2 Level 3 131,774 - - - - 592,012 131,774 - 592,012 December 31, 2021			Total
				131,774
				592,012
				723,786

Book Value $ 206,422 1,091,906 $ 1,298,328		Fair Value
	Level 1 206,422 - 206,422	Level 2 - - -	Level 3 - 1,091,906 1,091,906	Total
				206,422
				1,091,906
				1,298,328

2) Valuation techniques for financial instruments measured at fair value

If quoted prices of financial instruments are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and the prices represent actual and regularly occurring market transactions on an arm’s length basis, then the financial instrument is regarded as quoted in an active market.

If the condition above is not met, the market is inactive. If the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

If the financial instruments held by the Company are in active market, its fair value hierarchy and nature are as follows:

The stock of listed companies and domestic open end funds are financial instruments in active market, and the fair value thereof is decided by the market.

If the financial instruments held by the Company are in no active market, its fair value category and nature are as follows:

Unquoted equity instruments: except acquiring the latest transaction price as fair value, others adopt market approach of comparable business. This method mainly assumes price-book of investees, enterprise value, income after tax, and the stock price of comparable listed company to calculate price-book ratio, enterprise value ratio, and earnings per share as a measure basis. This estimated fair value is already adjusted for the lack of liquidity.
3) Transfer between level 1 and level 3

There was no transfer between the fair value hierarchy levels for the years ended December 31, 2022 and 2021.

4) Reconciliation of Level 3 fair values

Reconciliation of Level 3 fair values
		Fair value
		through other
		comprehensive
		income
		Unquoted equity
		instruments
Opening balance, January 1, 2022	$	1,091,906
Total gains and losses recognized:
In other comprehensive income		(499,894)
Ending Balance, December 31, 2022	$	592,012
Opening balance, January 1, 2021	$	1,189,009
Total gains and losses recognized
In other comprehensive income		(97,103)
Ending Balance, December 31, 2021	$	1,091,906

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

Total gains and losses recognized In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”	2022 2021 (499,894) (97,103)

5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

Most of the fair value of the Company classified as level 3 is an equity instrument in no active market which has multiple significant unobservable inputs. Because the inputs are mutual independent, there is no relevance.

Item Financial assets at fair value through other comprehensive income equity investments without an active market	Valuation technique Comparable company analysis	Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement ‧ P/E ratio (7.67~9.06 and 7.94~15.91 on December 31, 2022 and 2021, respectively) The estimated fair value would increase (decrease) if: ‧ The P/E ratio and control premium were higher (lower); ‧ Lack-of-Marketability Discount (15.24%~22.63% and 23.10%~25.04% on December 31, 2022 and 2021, respectively) ‧ Lack-of-Marketability Discount were lower (higher); ‧ P/B ratio (1.13~2.02 and 1.44~2.78 on December 31, 2022 and 2021, respectively) ‧ The P/B ratio and control premium were higher (lower).

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

6) Fair value measurements in Level 3-sensitivity analysis of reasonably possible alternative assumptions.

December 31, 2022 Financial assets at fair value through other comprehensive income Equity investments without an active market December 31, 2021 Financial assets at fair value through other comprehensive income Equity investments without an active market	Inputs P/E ratio Discount rate P/B ratio P/E ratio Discount rate P/B ratio	Variation 1% 1% 1% 1% 1% 1%	Profit	or loss Unfarourable - - - - - -	Other comprehensive income Favourable Unfarourable 233 (233) 905 (905) 5,996 (5,996) 13,496 (13,496) 3,672 (3,672) 8,205 (8,205)
			Favourable - - - - - -

(w) Financial risk management

(i) Overview

The Company have exposures to the following risks from its financial instruments:

1) credit risk
2) liquidity risk
3) market risk

This note expresses the risk exposure information of the above-mentioned risk of the Company, and the Company’s objectives, policies and processes for measuring and managing the risks. For more disclosures about the quantitative effects, please refer to the respective notes in the consolidated financial statements.

(ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

The Company’ s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investments in debt securities.

1) Trade and other receivables

The Company’ scredit risk exposure is mainly affected by individual customer’ s conditions. However, management also takes into consideration the statistical data of the Company’s customer, including the default risk of the customer's industry and country, as these factors may affect credit risk.

The accounting Department has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, when available, and, in some cases, bank references. Purchase limits are established for each customer and represent the maximum open amount without requiring approval from the Risk Management Committee; these limits are reviewed quarterly. Customers that fail to meet the Company’ s benchmark creditworthiness may transact with the Company on a prepayment basis or by providing collateral.

The Company has set up allowances for bad debt accounts to reflect estimates of losses incurred in accounts receivable, other receivables and investments. The main components of the allowance account include specific loss components related to individual major risk insurance and combined loss components established for similar asset groups that have occurred but have not been identified. The combined loss allowance account is determined based on historical payment statistics of similar financial assets.

2) Investments

The exposure to credit risk for the bank deposits and other financial instruments is measured and monitored by the Company’s finance department. The Company only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Company does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

3) Endorsements and guarantees

The Company’s policy states that providing financial guarantees is only between parent company and subsidiaries. As of December 31, 2022 and 2021, endorsement guarantee provided by the Company were $1,200,000 thousand and $1,240,150 thousand, respectively.

(iv) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’ s reputation.

Generally, the Company ensures that it has sufficient cash to support expected operating expenditure in a short term, including financial liabilities, but excludes potential impact which can not be predicted reasonably such as nature disasters. Moreover, as of December 31, 2022 and 2021, the Company’ s unused credit line respectively were $2,343,562 thousand and $2,578,156 thousand.

(v) Market risk

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

1) Currency risk

The Company is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities. The functional currency of group is mainly TWD, and the currencies used in these transactions are the TWD, USD and JPY.

2) Interest rate risk

The Company’s interest risk arose from short term and long term borrowings. Since the short term borrowings are at floating rate, the fluctuation in interest rates will lead to movements in future cash flows.

3) Other market price risk

The Company is exposed to equity price risk due to the investments in stocks listed on domestic markets, and fund investment on domestic and foreign markets. The equity investment is a strategic investment and is not held for trading. The Company does not actively trade in these investments as the management of the Company manages the risk by holding different investment portfolios. The Company assigned a specific team to supervise the equity price risk, so as to avoid or minimize the risk from the hedging position.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(x) Capital management

The Board of Directors aims to keep a stable capital base to maintain the confidence of investors, creditors and the market, so as to support the development of future operations. Capital includes the share capital, capital reserve, retained earnings and non controlling interests of the Company. The Board of Directors controls the return on capital and at the same time controls the level of ordinary stock dividends.

As of December 31, 2022 and 2021, the Company’s debt-to-equity ratio at the end of the reporting period, were as follows:

Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-equity ratio at 31 December	December 31, 2022 $ 2,520,648 (134,045) $ 2,386,603 $ 5,913,860 % 40.36	December 31, 2021 3,073,231 (145,788) 2,927,443 6,626,597 % 44.18

Management believes that there were no changes in the Company’s approach to capital management for the years ended December 31, 2022 and 2021.

(y) Investing and financing activities not affecting current cash flow

The Company’s investing and financing activities which did not affect the current cash flow in the years ended December 31, 2022 and 2021, were as follows:

(i) For right-of-use asset under lease, please refer to notes 6(h).
(ii) Reconciliation of liabilities arising from financing activities were as follows:

Non-cash changes	Non-cash changes	December 31, 2022 965,973 250,000 77,205
Acquisition Foreign exchange movement - - - - 257 - 257 - Non-cash changes
		1,293,178
		December 31, 2021 1,134,584 150,000 100,486
Acquisition - - 95,660 95,660	Foreign exchange movement - - - -
		1,385,070

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(7) Related-party transactions:

(a) Names and relationship with related parties

Name of related party

Relationship with the Company

Fine Environment Technologies Co., Ltd The Company's subsidiar Chang Xin Co., Ltd The Company's subsidiar Hong Da Investment Co., Ltd. The Company's subsidiar Fermat Enterprises Ltd. The Company's subsidiar UNIVERSE ENTERPRISES, LTD. The Company's subsidiar Ocean Group Ltd. The Company's subsidiar Sage Holdings Ltd. The Company's subsidiar OPC Holdings Ltd. The Company's subsidiar Rise Future International Ltd. The Company's subsidiar Shen Yang Development Co., Ltd. The Company's subsidiar Ocean Plastics (Hui Zhou) Co., Ltd. The Company's subsidiar HUNAN OCEAN WIDE PLASTICS LTD. The Company's subsidiar Ocean Plastics (Dong Guan) Co., Ltd The Company's subsidiar Chun Pin Enterprise Co., Ltd. An associate Foremost-Oceans NueTeq, Ltd. An associate Chin Yi Ho Hang, Ltd. Same chairman with the Group Yee Fong Chemical & Industrial Co., Ltd. The director of this company is the president of the Group Ocean Plastics Urban Land Redeveloping The member of the council is the chairman of the Council Company

(b) Significant transactions with related parties
(i) Operating revenues

Subsidiaries Associates Total	2022 $ 60,588 1,778 $ 62,366	2021
		120,649 -
		120,649

Except for sales to the parent company, the prices charged approximated the market price. The credit terms ranged from 60 to 180 days. Amounts receivable from related parties was uncollateralized, and no expected credit loss were required after the assessment by the management.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(ii) Receivables from related parties

Account	Relationship	December 31, 2022 $ 30,971 1,867 - $ 32,838	December 31, 2021
Accounts payables Notes payables	Subsidiaries Associates Subsidiaries		34,903 - 273
			35,176

The trade receivables from related parties over the credit terms should be recorded under other receivable to related parties and long-term accounts receivables due from related parties.

(iii) Other transactions with related parties

Account Cost of goods sold	Relationship Associates	2022 $ 21,693	2021
			23,939

The Company commissioned its associate to operate oil storage tanks. The outstanding balances of management expenses on December 31, 2022 and 2021, were $3,098 thousand and $3,083 thousand, which are presented as “other payables to related parties”.

(iv) Loans to related parties

Ocean Plastics (Dong Guan) Co., Ltd.	December 31, 2022 $ 92,567	December 31, 2021
		91,378

The Company loans to Ocean Plastics (Dong Guan) Co., Ltd., because the trade receivable s from related parties are overdue, that it should be regarded as loans, and the amount was recorded under other receivable to related parties.

(v) Guarantees

As of December 31, 2022 and 2021, the Company had provided a guarantee for loans taken out by subsidiaries, the credit limit of the guarantee was $1,200,000 thousand and $1,240,150 thousand.

At December 31, 2022 and 2021, the Company and some of subsidiaries collectively provided lands as collaterals for its long-term and short-term loans, the credit limit of the guarantee was $5,750,000 thousand.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(vi) Leases

In January 2019, the Company leased an high-pressure spherical tank from its associate. A six year lease contract was entered into, and the rent was determined based on the rental rates in the vicinity. The total value of the contract was $52,800 thousand, the Company entered into a lease agreement with the associate to continue leasing spherical tanks that amounted to $148,102 thousand. For 2022 and 2021, the interest expenses were $866 thousand and $686 thousand. As of December 31, 2022 and 2021, the lease liabilities had amounted to $69,589 thousand and $85,179 thousand.

In May 2017, the Company leased from other related parties an office building as its headquarter on Juguang Road, Taipei City, and the land in Zhongli Dist., Taoyuan City. A five year lease contract was signed, and the rent was determined based on land rental rates in the vicinity. The total value of the contract was $37,000 thousand. For 2022 and 2021, interest expenses were $173 thousand and $271 thousand. As of December 31, 2022 and 2021, lease liabilities had amounted $7,325 thousand and $14,552 thousand.

(vii) Providing administrative services to related party

The Company had signed a contract concerning an urban land redeveloping project with the landlords, which was implemented by Chang Xin Co., Ltd. in November 2014. The Company provided administrative services to a related party for land development procedures and received an income of $24,095 thousand (recognized as Other income) for the years ended December 31, 2021. As of December 31, 2022, there is no outstanding balance.

(viii) Transaction of properties

1) Disposal of investment properties

In October 2021, the Company sold the land at Jiankang Segment, Zhonghe District, New Taipei City, to the Ocean Plastics Urban Lan Redeveloping Council and received cash compensation. The total land area is 515.91, with a total price of $27,312 thousand. As of December 31, 2021, the transfer procedures had been completed, and there is no outstanding balance. Please refer to note 6 (i) for the investment property details.

The Company disposed of the land No. 1286-0000 at a disposal price of $20,150 thousand in the Jiankang Section of Zhonghe District, New Taipei City, with a land area of 570.27 square meters, to its subsidiaries in May 2022 for planning.As of December 31, 2022, all transfer procedures had been completed, and there is no outstanding balance. Please refer to note 6 (i) for the investment property details.

(c) Key management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits	2022 $ 5,845	2021
		5,847

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2022 $ 2,277,075 404,896 34,414 $ 2,716,385	December 31, 2021
Property, plant and equipment Investment property Other financial assets Total	Long-term and short-term loans Long-term and short-term loans Trust account		2,295,851 425,046 32,674
			2,753,571

(9) Commitments and contingencies:

(a) Significant Commitments and Contingencies were as follows:

(i) The Company’s unrecognized contractual commitments are as follows:

December 31, 2022 Acquisition of property, plant and equipment $ 32,669 (ii) The Company’s outstanding standby letter of credit are as follows: December 31, 2022 Outstanding standby letter of credit $ 3,219	December 31, 2021
	66,266
	December 31, 2021
	1,844

(iii) The joint construction contract signed by the Company for the sale of the built real estate is as follows:

follows:
Joint construction method	Project name
Joint construction and allocation of	Xinglong Section, Wenshan District
housing units

(iv) The amounts of endorsement and guarantee provided by the Company for the borrowings and business of subsidiaries, please refer to note 7.

(b) Major contingent liabilities: None.

(10) Losses due to major disasters: None.

(11) Subsequent Events: None.

(Continued)

Ocean Plastics Co., Ltd. Notes to the Financial Statements

(12) Others:

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

follows:
By function By item		2022		2021
	Cost of Sale	Operating Expense	Total	Cost of Sale	Operating Expense	Total
Employee benefits
Salary	258,311	73,814	332,125	266,206	71,527	337,733
Labor and health insurance	27,613	7,295	34,908	27,644	7,597	35,241
Pension	11,257	3,877	15,134	11,195	3,711	14,906
Director’s remuneration	-	5,561	5,561	-	10,153	10,153
Others	16,016	4,293	20,309	16,064	4,260	20,324
Depreciation	183,192	9,012	192,204	177,320	9,496	186,816
Amortization	-	-	-	-	-	-

For the years ended December 31, 2022 and 2021, additional information of number of employee and employee benefit were as follows:

Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages Rate of change of the average salaries and wages Salaries of supervisor

The Company’s compensation policy (including directors, managers, and employees) is as follows:

Directors’ compensation include compensation, salaries and fees. The compensation policy in in Articles of Incorporation was determined based on operating condition. It was reported to the Compensation Committee, being approved in Board of Directors and being notified to shareholders. The fares for directors were determined in Board of Directors and should be paid regardless of its profit. The ones for the directors who double as employees would be determined in Board of Directors based on the peer industry standards.

In the compensation policy for the Company’s managers and employees, besides their education and experience, it should also consider the operating profit and prospects. The distribution standards depend on production achievement rate, yield rate and net operating profit of the month. Year- end bonus is based on the year profit and varies on each department which means the compensation system is related to the performance of the Company.

(Continued)

OCEAN PLASTICS CO., LTD. Notes to the Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company:

(i) Loans to other parties:

(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:	(i) Loans to other parties:
(In Thousands of New Taiwan Dollars)
Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period (Note 4)	Ending balance (Note 5)	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower (Note 2)	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral		Individual funding loan limits (Note 3)	Maximum limit of fund financing (Note 3
													Item	Value
0	The Company	OCEAN PLASTICS (DONG GUAN) CO., LTD.	Other Receivables and long- term Receivables	Yes	104,998	92,567	92,567	-	1	46,650	Operation Capital	-		-	1,182,772	2,365,544

Note 1: The numbering is as follows:

1.“0” represents the parent company.
2.Subsidiaries are sequentially numbered from 1.
Note 2: Financing purposes:
1 represents a trading counterparty.
2 indicates the necessity of short-term financing.

Note 3: The total loans to others shall not exceed 40% of the net value of the Company, and the loans to an individual party shall not exceed 20% of the net value of the Company. The net value is based on the amount disclosed the latest financial statements.

Note 4: The cumulative maximum balance of loans to others from the current year to the reporting month includes the amount transferred from overdue receivables. Note 5: The highest amounts were approved by the Board of Directors.

(ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Name of guarantor	Counter guaran endor	-party of tee and sement	Limitation on amount of guarantees and endorsements for a specific enterprise (Note 3)	Highest balance for guarantees and endorsements during the period (Note 4)	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements (Note 3)	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company (Note 2)
0	The Company	Chang Xin Co., Ltd.	2	2,956,930	1,220,150	1,200,000	382,510	-	% 20.29	4,731,088	Y	N	N

Note 1: The numbering is as follows:

1.“0” represents the parent company.
2.Subsidiaries are sequentially numbered from 1.

Note 2: There are the following 7 types of relationship between the guarantee and the guarantor:

Trading counterparty.
The Company holds more than 50% of the voting shares in the entity, directly and indirectly.
The entity holds more than 50% of voting shares in the Company, directly and indirectly.
The Company holds more than 90% of voting shares in the entity, directly and indirectly.
An entity in the construction industry mutually guaranteed pursuant to a project contract.
The stockholders of the Company provide guarantees or endorsements for the entity in proportion to percentage of ownership for joint investment.
Performance guarantees for presale contracts for entities in the same industry pursuant to the Consumer Protection Act.
Note 3: The endorsement and guarantee, provided by the Company and Fine environment Technology Co., Ltd. for a single entity, shall not exceed 50% of the guarantor’ s net worth, and the total shall not exceed 80% of the net worth of the guarantor. The endorsement and guarantee, provided by Changxin Xinye Co., Ltd. for a single party, shall not exceed 80% of the guarantor’s net worth, and the total shall not exceed 100% of the guarantor’s net worth. The endorsement and guarantee, provided by Hongda Investment Co., Ltd. for a single entity, shall not exceed 20% of the guarantor’s net worth, and the total amount shall not exceed 50% of the guarantor’s net worth.

Note 4: The highest balance of the endorsement guarantee for others in the current year.

Note 5: The company and its 100% direct or indirect subsidiaries pledged their jointly held land as collateral.

(Continued)

OCEAN PLASTICS CO., LTD. Notes to the Financial Statements

(iii) Securities held as of December 31, 2022 (excluding investment in subsidiaries, associates and joint ventures):

				(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Name of holder	Category and name of security	Relationship with company	Account title	Ending balance				Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Taiwan VCM Corporation	-	Fair value through other comprehensive income equity instrument	37,062	547,480	% 12.46	547,480
〃	E'DALE TECHNOLOGY CO., LTD.	-	〃	630	23,777	% 3.38	23,777
〃	PAN OCEAN INC.	-	〃	152	6,890	% 15.07	6,890
〃	ULTRA-PAK INDUSTRIES CO., LTD.	-	〃	2,567	13,865	% 7.00	13,865
〃	MICROCELL COMPOSITE COMPANY	-	〃	237	-	% 4.32	-
〃	FUZETEC TECHNOLOGY CO., LTD.	-	Designated at fair value through profit or loss- current (stock)	2,945	131,774	% 7.87	131,774
CHANG XIN CO., LTD.	ULTRA-PAK INDUSTRIES CO., LTD.	-	Fair value through other comprehensive income equity instrument	1,487	8,032	% 4.06	8,032
〃	COSMACTIVE BROADBAND NETWORKS CO., LTD.	-	〃	1	-	% 0.12	-
HONG DA INVESTMENT CO., LTD.	ACER INCORPORATED	-	Designated at fair value through profit or loss- non-current (stock)	119	2,796	% -	2,796
〃	UNITED MICROELECTRON ICS CORP.	-	〃	29	1,178	% -	1,178
〃	Capital SZSE SME Price Index Exchange Traded Fund-TWD	-	〃	200	2,920	% -	2,920
〃	Cathy US Premium Bond Fund A	-	Financial assets designated at fair value through profit of loss-non current (fund)	500	4,933	% -	4,933
〃	ULTRA-PAK INDUSTRIES CO., LTD.	-	Fair value through other comprehensive income equity instrument	1,265	6,830	% 3.45	6,830
〃	E'DALE TECHNOLOGY CO., LTD.	-	〃	580	21,894	% 3.11	21,894
〃	FUZETEC TECHNOLOGY CO., LTD.	-	Designated at fair value through profit or loss- current (stock)	2,926	130,935	% 7.82	130,935
FINE ENVIRONMENT TECHNOLOGIES CO., LTD.	MINIMA TECHNOLOGY CO., LTD.	-	Fair value through other comprehensive income equity instrument	413	8,704	% 1.05	8,704
〃	MICROCELL COMPOSITE COMPANY	-	〃	237	-	% 4.32	-
FERMAT ENTERPRISES, LTD.	FCP I-Global High Yield Portfolio Class AT USD.	-	Designated at fair value through profit or loss- non-current (fund)	111	10,189	% -	10,189
〃	AB FCP I-Global High Yield Portfolio Class EA USD.	-	〃	24	7,178	% -	7,178
OPC HOLDING LTD.	AB FCP I-Global High Yield Portfolio Class EA USD.		Designated at fair value through profit or loss- non-current (fund)	24	7,072	% -	7,072
〃	AB FCP I-Global High Yield Portfolio Class EA USD.		〃	11	2,685	% -	2,685

(Continued)

OCEAN PLASTICS CO., LTD. Notes to the Financial Statements

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.
(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.
(ix) Trading in derivative instruments: None.
(b) Information on investees:

The following is the information on investees for the years ended December 31, 2022 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2022	Balance as of December 31, 2022	Balance as of December 31, 2022	Net income (losses) of investee	Share of profits/losses of investee (Note 1)	Note
				December 31, 2022	December 31, 2021	Shares (thousands)	Percentage of ownership	Carrying value
The Company	CHUN PIN ENTERPRISE CO., LTD.	Taiwan	Storage business	290,000	290,000	29,000	% 44.62	442,477	215,346	96,077	Associate
The Company	FINE ENVIRONMENT TECHNOLOGIES CO., LTD.	Taiwan	Plastic product trade	44,792	44,792	1,003	% 60.76	8,033	(21)	(13)	Subsidiary
The Company	CHANG XIN CO., LTD.	Taiwan	Land development	2,900,860	2,900,860	290,086	% 100.00	1,433,794	(15,569)	(17,627)	Subsidiary
The Company	HONG DA INVESTMENT CO., LTD.	Taiwan	Normal investments	190,000	190,000	19,000	% 100.00	195,450	(64,163)	(66,685)	Subsidiary
The Company	FERMAT ENTERPRISES, LTD.	British Virgin Islands	Normal investments	13,887	13,887	450	% 100.00	20,876	(1,067)	(1,067)	Subsidiary
The Company	UNIVERSE ENTERPRISES LTD.	British Virgin Islands	Normal investments	-	93,032	-	% -	-	58	58	Subsidiary
The Company	OCEAN GROUP LTD.	Samoa	Normal investments	1,069,438	1,069,438	32,900	% 100.00	535,035	70,074	70,074	Subsidiary
The Company	Foremost-Oceans NueTeq, Ltd.	Taiwan	Plastic product trade	6,050	-	605	% 40.07	6,016	(87)	(34)	Associate
HONG DA INVESTMENT CO., LTD.	FINE ENVIRONMENT TECHNOLOGIES CO., LTD.	Taiwan	Plastic product trade	6,294	6,294	647	% 39.24	5,188	(21)	(9)	Subsidiary
CHANG XIN CO., LTD.	SHEN YANG DEVELOPMENT CO., LTD.	Taiwan	Land development	535	535	1,000	% 100.00	536	1	1	Subsidiary
OCEAN GROUP LTD.	OPC HOLDINGS, LTD.	British Virgin Islands	Normal investments	27,850	27,850	450	% 100.00	49,592	4,035	4,035	Subsidiary
OCEAN GROUP LTD.	SAGE HOLDINGS LTD.	Samoa	Normal investments	800,217	800,217	25,000	% 100.00	554,490	75,130	75,130	Subsidiary
OCEAN GROUP LTD.	RISE FUTURE INTERNATIONAL LTD.	Seychelles	Normal investments	241,371	241,371	7,450	% 100.00	(69,106)	(9,098)	(9,098)	Subsidiary

(Continued)

OCEAN PLASTICS CO., LTD. Notes to the Financial Statements

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

					(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)	(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)	(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)	(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)	(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)	(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)	(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)	(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)
Name of investee	Main businesses and products	Total amount of paid-in capital (Note 3)	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2021 (Note 3)	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2022 (Note 3)	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) (Note 2)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Ocean Plastics (Hui Zhou) Co.,Ltd	Production and sale of business general soft tape, foamed latex leather and rubber leather	812,643 (USD25,000)	( 3 )	812,643 (USD25,000)	-	-	812,643 (USD25,000))	75,130	100.00%	75,130	554,487	-
Ocean Plastics (Dong Guan) Co., Ltd.	Production and sales of PU synthetic leather, foamed latex leather and rubber leather	242,168 (USD7,450)	( 3 )	242,168 (USD7,450)	-	-	242,168 (USD7,450)	(9,098)	100.00%	(9,098)	(69,108)	-

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of December 31, 2022 (Note 3)	Investment Amounts Authorized by Investment Commission, MOEA (Note 3)	Upper Limit on Investment (Note 4)
1,069,438 (USD32,900 thousand)	1,069,438 (USD32,900 thousand)	3,548,316

Note 1: Indirect investment in Mainland China through entities registered in a third region.
Note 2: The investment income (loss) was based on the financial statements audited by the investee’s external accountant.
Note 3: The amount of accumulated outflow of investment from Taiwan was translated into New Taiwan dollars at the reporting date.
Note 4: The upper limit on investment, calculated based on the amendments to the Regulations Governing the Approval of Investment or Technical Cooperation in Mainland China, is 60% of the net equity or consolidated net equity.

(iii) Significant transactions:

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

(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Yee Fong Chemical & Industrial Co., Ltd.	12,425,769	% 5.46

(14) Segment information:

Please refer to the consolidated financial statements for the year ended December 31, 2022.

Ocean Plastics Co., Ltd.

Statement of cash and cash equivalents

December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Item Petty cash Cash in bank	Description Amount $ 500 Check deposits 5,666 Demand deposits 66,119 Foreign demand deposits (USD $1,010 thousand) 31,040 Foreign time deposits (USD $1,000 thousand) 30,720 Subtotal 133,545 $ 134,045

Statement of notes and trade receivables

Client name Non-related-parties Company A Company B Company C Others (individual amounts with less than 5% of the total amount) Less:Allowance for doubtful accounts Subtotal Related-party transactions Ocean Plastics (Dong Guan) Co., Ltd Fine Environment Technologies Co., Ltd Foremost-Oceans NueTeq, Ltd. Less: Allowance for doubtful accounts Subtotal Total	Description Amount Sales $ 43,795 〃 51,303 〃 68,721 〃 424,774 (7,711) 580,882 〃 30,863 〃 108 〃 1,867 - 32,838 $ 613,720

Ocean Plastics Co., Ltd.

Statement of inventories

December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Item Raw materials Work in progress Finished goods Construction in progress Subtotal Less: Allowance for inventory valuation and obsolescence losses Total	Amount	Amount
	Cost $ 182,206 34,739 217,801 75 434,821 (66,614) $ 368,207	Net Realizable Value
		157,243 17,840 193,049 75
		368,207

Statement of other current assets

Item Business tax refund receivable Other receivables–related parties Excess business tax paid Prepayment for purchases Prepaid expense Others (individual amounts with less than 5% of the total amount)	Description Amount Business tax refund $ 4,964 Loans to related parties 16,871 Overpaid sales tax 16,504 Prepayment of raw materials 3,719 Prepayment of building sales agency expenses 12,775 3,854 $ 58,687

Ocean Plastics Co., Ltd.

Statement of changes in investments accounted for using the equity method

For the year ended December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Name of investee Chun Pin Enterprises Co., Ltd. Fine Environment Technologies Co., Ltd Chang Xin Co., Ltd Hong Da Investment Co., Ltd. Fermat Enterprises Ltd Universe Enterprises Ltd Ocean Group Ltd Foremost-Oceans NueTeq, Ltd. Total	Beginning Balance Number of shares Amount 29,000 $ 417,247 1,003 8,784 290,086 1,459,533 19,000 281,162 450 21,944 3,000 63,612 32,900 458,536 - - $ 2,710,818	Incr	ease Amount - - - - - - - 6,050 6,050	Decr	ease Amount 70,847 (Note2) - - - - 63,670 (Note 3) - - 134,517	Investment income/(loss) recognized under equity method,net 96,077 (13) (15,568) (64,163) (1,068) 58 70,074 (34) 85,363	Exchange difference on translation - - - - - - 6,425 - 6,425	Unrealized gains (losses) on financial assets measured atfair value through other comprehensive. - (738) (10,171) (21,549) - - - - (32,458)	Ending Balanc	Ending Balanc	e Amount 442,477 8,033 1,433,794 195,450 20,876 - 535,035 6,016 2,641,681	Market Asse	Value or Net ts Value Total amount Collateral 442,477 None 8,033 〞 1,433,794 〞 195,450 〞 20,876 〞 - 〞 535,035 〞 6,016 〞 2,641,681
	Number of shares	Number of shares - - - - - - - 605		Number of shares - - - - - 3,000 - -					Number of shares 29,000 1,003 290,086 19,000 450 - 32,900 605	Percentage % 44.62 % 60.76 % 100 % 100 % 100 % - % 100 % 40.07		Unit Price 15.26 8.01 9.92 16.44 46.39 - 16.26 9.94
	29,000 1,003 290,086 19,000 450 3,000 32,900 -

Note1: There is no open market price for these investees, so expressed in net value per share. Note2: Distribute cash dividends.

Note3: The investee company went into liquidation on April 1, 2022, which is basis date for dissolution, has completed liquidation.

Ocean Plastics Co., Ltd.

Statement of financial assets measured at fair value through other

comprehensive income - non-current

For the year ended December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Client name Taiwan VCM Corporation E'dale Technology Co., Ltd. PAN OCEAN, INC Ultra Pak Industries Co., Ltd. Microcell Composite Company	Beginning Balance Shares or units Fair Value 37,062 $ 1,016,326 630 37,269 152 6,890 2,567 31,421 237 - $ 1,091,906	Increase Shares or units Amount - - - - - - - - - - -	Decrease Shares or units Amount - - - - - - - - - - -	Gain or loss on valuation (468,846) (13,492) - (17,556) - (499,894)		Ending Balance Percentage Fair Value % 12.46 547,480 % 3.38 23,777 % 15.07 6,890 % 7.00 13,865 % 4.32 - 592,012	Collateral Accumulated impairment None N/A None N/A None N/A None N/A None N/A
	Shares or units	Shares or units - - - - -	Shares or units - - - - -		Shares or units 37,062 630 152 2,567 237	Percentage % 12.46 % 3.38 % 15.07 % 7.00 % 4.32
	37,062 630 152 2,567 237

Ocean Plastics Co., Ltd.

Statement of other non-current assets

December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Item Refundable deposits Other financial assets Prepayments for equipment	Description Amount The refundable deposits of natural gas pipeline engineering $ 12,532 Trust account of presold house and real estate development 34,414 Prepayments of machinery and equipment 4,128 $ 51,074

Statement of other current liabilities

Item Lease liabilities-current Unearned sales revenue Other payables to related parties Others(individual amounts with less than 5% of the total amount)	Description Amount Lease obligations payable $ 23,236 Unearned sales revenue from clients 3,961 Oil groove operating expenses to related parties 3,098 1,845 $ 32,140

Ocean Plastics Co., Ltd.

Statement of short-term borrowings

December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Creditor	Type of loan Collateral borrowing	End balance $ 150,000 100,000 $ 250,000	Contract Period 111.12.9~112.1.9 111.12.30~112.1.30	Percentage 1.45% 1.58%	Loan 600,000 600,000 1,200,000	Collateral Note Land 〞
Hua Nan Commercial Bank, Ltd. Total

Statement of trade payables

Client name Notes payable Non-related-parties- operating activities Company D Company E Company F Others (individual amounts with less than 5% of the total amount) Subtotal Accounts payable Non-related-parties Company G Company D Others (individual amounts with less than 5% of the total amount) Subtotal Total	Description Amount Purchases $ 85,499 〞 5,955 〞 5,407 〞 12,071 108,932 Purchases 166,656 〞 78,596 〞 113,240 358,492 $ 467,424

Ocean Plastics Co., Ltd.

Statement of other payables

December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Item Non-related-parties Salaries payable Accrued import and export selling expenses Accrued repair and maintenance expense. Others(individual amounts with less than 5% of the total amount) Othe payable Total	Description Amount The employee benefits, year-end bonus and pension $ 54,348 Cost of shipping for sales of goods 93,751 Equipment maintenance expense 15,614 (Packing expense, insurance expense and professional service fees) 1,783 13,106 $ 178,602

Statement of long-term borrowings

Creditor Description Hua Nan Commercial Bank, Ltd. collateral borrowing Yuanta Commercial Bank Co., Ltd. collateral borrowing Subtotal Less: current portion Total	Borrowings amount $ 365,973 600,000 965,973 (43,056) $ 922,917	Contract Period 2016.06.29~2031.06.29, Monthly installments of interest and semiannually repayments of principal for a term of 24-month. 2019.04.17~2024.09.30, Monthly installments of interest and repayment of principal at maturity.	Collateral Note Land Land

Ocean Plastics Co., Ltd.

Statement of other non-current liabilities

December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Item Lease liabilities-non-current Advance real estate receipts Provisions for employee benefits- non- current Guarantee deposits received	Description Amount Lease obligations payable $ 53,969 Receipts of presold land 33,780 Long-term compensated absences liabilities 12,423 Deposit for commissioned for goods production and deposit for land lease 3,303 $ 103,475

Ocean Plastics Co., Ltd.

Statement of operating revenue

For the year ended December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Item Plastic raw materials Plastic products Less: Sales return and sales allowance Net sales revenue	Quantity Amount 97,828tona $ 3,451,055 30,071tona/1,868thousand yard 2,209,802 (10,982) $ 5,649,875

Ocean Plastics Co., Ltd.

Statement of operating costs

For the year ended December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Item Raw materials at the beginning of the year Add: Net purchases Less: Raw materials at the end of the year Cost of material sold and others Raw materials used Direct labor Manufacturing expenses Total Manufacturing costs Add: Work-in-process at the beginning of the year Less: Work-in-process at the end of the year Transferred to expenses and others Cost of finished goods Add: Finished goods at the beginning of the year Gain on finished goods Less: Finished goods at the end of the year Transferred to expenses and others Cost of finished goods sold Merchandise at the beginning of the year Net purchases Less: Merchandise at the end of the year Transferred to manufacturing expenses Cost of merchandise sold Add: Cost of material sold Adjustment:( idle capacity) Others Gain from price recovery of inventory Added of cost of goods sold Cost of goods sold	Amount	Amount	Total 4,128,369 93,038 817,204 5,038,611 45,171 (34,739) (4,559) 5,044,484 412,253 50,276 (217,154) (4,190) 5,285,669 68,479 76,425 5,430,573
	Subtotal $ 310,331 4,005,405 (182,206) (5,161) 713 68,415 (647) (2) 2,714 109,025 (48,138) 12,824 $

Ocean Plastics Co., Ltd.

Statement of administrative expenses

For the year ended December 31, 2022

(Expressed in thousands of New Taiwan Dollars)

Item Export charges Salaries expense Freight expense Miscellaneous expenses Insurance expense for employee Professional service fees Depreciation Taxes Others (individual amounts with less than 5% of the total amount) Total	Selling expenses $ 285,434 23,501 29,189 1,385 2,224 94 1,686 - 20,256 $ 363,769	Administrative expenses - 49,567 17 6,118 4,409 5,262 6,832 5,865 10,337 88,407		Research and development expenses - 6,306 - 781 662 - 494 - 2,023 10,266	Total
					285,434 79,374 29,206 8,284 7,295 5,356 9,012 5,865 32,616
					462,442

Statement of Changes in Property, Plant, and Equipment: Note (6(g))

Statement of Changes in Right-of-use-assets: Note (6(h)) Statement of Changes in Investment property : Note (6(i))

Chairman: TAN, KIN-MEN

Ocean Plastics Co., Ltd.

247

AI assistant

OPC — Annual Report 2023

51776_rns_2023-07-03_6e43f1e0-0ba4-4641-bdf6-434c2ab91e35.pdf

OCEAN PLASTICS CO., LTD.

2022

Annual Report

(I) Spokesperson and Deputy Spokeperson

(II) Headquarters, Branches and Plant:

(III) Stock Transfer Agent:

Table of Contents

Contents

I. Letter to Shareholders

1. Business performance in previous year:

(4) R&D Status:

2. Summary of the current year's business plan

3. Future company development strategy

II. Company Profile

1. Date of Incorporation: June 7, 1965

2. Company history:

III. Corporate Governance Report

Information of Directors and Supervisors (1)

Information of Directors and Supervisors (2)

1. Disclosure of directors’ professional qualifications and independence of the independent directors:

(2) Board of Directors Independence :

(2) Information on the Management Team:

Information on the Management Team

3.Remuneration of Directors, Supervisors, General Manager, and Deputy General Manager:

(1-1) Remuneration of Directors (by way of disclosure of names at individual grade levels)

(2-1) Remuneration of supervisors: Not applicable

(4-1)Remuneration of the top five highest paid executives of listed companies (names and remuneration disclosed separately)

Name of the managers who distributes employee compensation and how it is distributed

4.Implementation of Corporate Governance:

(1) Board of Directors

(2) Audit Committee:

The implementation in 2022:

(Schedule I)

(4) Composition, Responsibilities and Operations of the Remuneration Committee:

Schedule 1

Remuneration Committee’s duties:

(9) Internal Control Systems:

Ocean Plastics Co., Ltd. Statement of Internal Control

B. 2. Summary of the Board of Directors meeting:

5. Information Regarding the Company’s Audit Fee:

Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

Relationship among the Top Ten Shareholders

Ownership of Shares in Affiliated Enterprises

IV. Capital Overview

1. Capital and Shares:

(5) Market Price, Net Worth, Earnings, and Dividends per Share

(6) Dividend Policy and Implementation Status

A. Dividend Policy:

V. Operational Highlights

1. Business Activities:

(1) Business Scope:

B. Revenue distribution:

C. Current products and new products planned to be developed:

(2) Industry Overview:

4. Environmental Protection Expenditure:

A. 2022

B. As of March 31, 2023:

5. Labor Relations:

(1) Employee benefit system.

(2) Staff Development and Training:

D. Training Quality Standards

(3) Code of conduct or ethics for employees:

B. Cyber Security Policies

VI. Financial Information

1. Five-Year Financial Summary:

(1) Condensed Balance Sheet and Condensed Consolidated Income Statement

Condensed Balance Sheet - Consolidated Financial Statements

Condensed Consolidated Statements of Income - Consolidated Financial Statements

Condensed Balance Sheet – Non- consolidated Financial Reports

Condensed Consolidated Income Statement - Non- consolidated Financial Reports

Financial Analysis - Consolidated Financial Reporting

Financial Analysis – Non-consolidated Financial Reports

3. Audit Committee’s Report in the Most Recent Year:

Hou, Ming-Li Convener of Audit Committee

March 14, 2023

VII. Review of Financial Conditions, Operating Results, and Risk Management

1. Analysis of Financial Status:

OPC Annual Report 2023