Greetings to all our partners who have supported us throughout in the development of FPCand cared for its growth.

In 2023, major central banks in the US and Europe implemented continuous interest rate hikes and monetary tightening policies to curb high inflation. The US-China tech trade war, China's slow economic recovery after lifting lockdowns, and factors such as geopolitical tensions and supply chain restructuring led to a decline in global demand and a slowdown in economic growth momentum. Furthermore, international peers continuously expanded capacity, leading to a severe oversupply in the market and an intense price war. The petrochemical industry experienced an unprecedented downturn with decreased product demand, falling prices and spreads, significantly reducing the Company's annual operational performance compared to 2022. Fortunately, thanks to the courage and determination of all our colleagues, we have successfully overcome numerous challenges and managed to remain profitable even during an economic downturn.

In response to uncertainties in the international political and economic landscape, such as inflation, interest rate hikes, and geopolitical risks, as well as the impact of the sustainability wave and the downturn in the petrochemical industry, the Company is aligning with global supply chain shift trends. We are committed to diversifying our sales markets to India, Southeast Asia, New Zealand and Australia, Turkey, Africa, and South America, reducing dependence on a single market. Additionally, we are continuously deepening our AI and digital transition efforts, moving towards development in the technology and healthcare industries. Meanwhile, we have formed strategic alliances with both upstream and downstream supply chains to collaborate on developing new products and expanding into new application areas, enhancing the value of our products and fostering innovative comfortable living with fruitful achievements. Among them, the "Formosa anti-bacterial oyster shell powder" was awarded the Taiwan Circular Economy Outstanding Enterprises Award - Silver by the Ministry of Environment in 2023. Additionally, in collaboration with the Taiwan Textile Research Institute, we developed the world's first "Formosa Functional PP Fiber." This fiber is combined with eight PP material components, including breathable membranes, sewing threads, buttons, and zippers, to create a single-material PP Fully Recyclable Functional Jacket. This jacket won the 2024 iF Design Award in Germany and was showcased at the Frankfurt Textile Exhibition in April 2024. This not only seize business opportunities in high-performance functional clothing materials, it is also a major breakthrough in the realization of the clothing recycling cycle. We hope to showcase Taiwan's petrochemical industry's sustainability to the world.

The Company has long been committed to incorporating the United Nations SDGs into our core philosophy. We actively promote various sustainability initiatives, with a pledge to create a sustainable and better future for the planet. As of 2023, an accumulated investment of over NT$30 billion has been made in pollution prevention and control, energy conservation and waste reduction, greenhouse gas reduction, and improvement of industrial safety and fire protection. As a result, the treatment and emission of various pollutants were better than national regulatory standards. Regarding greenhouse gas inventory and reduction efforts, as of 2023, we have completed carbon footprint assessments for 76 major products. Greenhouse gas emissions (Scope 1 and Scope 2) for 2023, verified by an independent third party, totaled 8.005 million tons CO2e/year. This represents an absolute reduction of 630,000 tons CO2e compared to the baseline year of 2020, a decrease of 7.3%. The emission intensity is 5,324.22 tons CO2e/NT$ 100 million, which is also lower than the baseline year's 6,205.40 tons CO2e/NT$ 100 million, a decrease of 14.2%. Furthermore, according to the CDP, an international environmental assessment indicator, the Company achieved the highest rating of A in climate change, water security, and supply chain evaluation in the 2023. These three achievements not only demonstrate improvement compared to 2022 but also position us among the leading chemical companies worldwide. It is clear that our efforts in addressing climate change and promoting a circular economy have produced favorable outcomes.

After 70 years of establishment, FPC has not only strived for excellence in its business operations but has also consistently prioritized the well-being and care of its employees. In addition to annual salary adjustments and various welfare measures, we are dedicated to creating a work environment that promotes employee happiness and provides comprehensive support for their families. Due to our high regard for workplace safety and health, we utilize image recognition technology for continuous monitoring to assist in occupational safety management. We also promote chemical risk assessment and classification management, ensuring compliance with regulations for the storage of hazardous materials, and preventing occupational accidents. These efforts are aimed at establishing a healthy and friendly workplace environment. In 2023, FPC Haifeng Plant, Mailiao EVA Plant, and Mailiao C4 Plant were recognized and commended by several government agencies for their outstanding performance in occupational safety and health in Yunlin County. Among them, FPC Haifeng Plant received the prestigious Five-Star Award for three consecutive years. FPC has consistently been recognized as a Happy Enterprise for its commitment to improving salary and benefits, work-life balance, creating a healthy workplace, and promoting career development, all of which have earned accolades from numerous employees.

Looking ahead to the new year, to overcome the challenges posed by the economic downturn, all colleagues will continue the long-standing tradition of perseverance and hard work that has been upheld for 70 years. We will courageously embrace change and strive to facilitate the transition, with the primary objective of establishing a robust business foundation for future operations. In addition to focusing on the petrochemical industry, expanding our investment in domestic and overseas operating bases, and actively developing differentiated, high-value-added products, we are also drawing on the business strategies and thinking of major overseas petrochemical companies to determine our future business direction, promote forward-looking technology and product research and development, and restructure and launch new businesses and products in anticipation of becoming a key driving force in our sustained growth. We will deepen our investment in the comfort living innovation industry through strategic alliances with upstream and downstream industries, developing diversified applications to meet the needs of daily life and add value to our products. we will also implement market diversification and increase the proportion of sales of differentiated products to grasp the business opportunities at the time of the restructuring of the global industrial supply chain according to the changes in market conditions and the competitive situation of supply and demand in each region.

The Company will implement strict controls on capital expenditures, reduce the inventory of raw materials and finished products, continue to promote process safety measures such as general inspections at each plant, implement process inspections and hazard identification, and improve construction safety management to eliminate workplace safety hazards. This will ensure stable production with zero accidents in the plant. We will deepen AI development and digital transition, optimize the entire plant process and digitize operation management, move toward the goal of a smart factory, and apply ChatGPT to assist in operation management and enhance operational efficiency.

Furthermore, we aim to integrate the principles of sustainability into our business strategies. This includes promoting energy transition, circular economy, energy conservation, and carbon reduction. We are also committed to strengthening our risk management of climate change. We are also committed to research and development of environmentally friendly and medical-grade products, such as fully recycled plastics, anti-adhesive composite rubber particles, biodegradable and green plastics, working with our partners towards the goal of 2050 Carbon Neutrality. We hope to strengthen FPC's sustainable competitiveness through various sustainable and innovative business strategies, in order to seek opportunities to reverse the downturn in the business environment, and to contribute to the "Care for the Earth, Environmental Sustainability".