FCFC — AGM Information 2020

Aug 19, 2020

FORMOSA CHEMICALS & FIBRE CORPORATION

2020 ANNUAL SHAREHOLDERS’ MEETING

MEETING HANDBOOK (Summary)

(This English translation is prepared in accordance with the Chinese version and is for reference purposes only. If there are any inconsistency between the Chinese original and this translation, the Chinese version shall prevail.)

JUNE 5, 2020

Table of Contents

Meeting Procedure …………………………………………... page 1 Meeting Agenda……………………………..……………….. page 2 Report Items………………………………………………….. page 3 Ratification Items……………………………………………. page 14 Discussion Items …………………………………………..... page 16 Appendices………………………………………………...… page 39 1. Independent Auditor’s Report

1. Information regarding the Proposed Employees and Directors’ Compensation approved by the Board of Directors of the Company

2. Effect upon Business Performance and Earnings per Share of the Company by the Stock Dividend Distribution Proposed at the 2020 Annual Shareholders’ Meeting

3. Articles of Incorporation of the Company

4. Rules of Procedure for Shareholders’ Meeting of the Company

5. Current Shareholdings of Directors of the Company

FORMOSA CHEMICALS & FIBRE CORPORATION

2020 ANNUAL SHAREHOLDERS’ MEETING PROCEDURE

1. Call Meeting to Order

2. Chairman’s Address

3. Report Items

4. Ratification Items

5. Discussion Items

6. Extraordinary Motions

7. Meeting Adjourned

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FORMOSA CHEMICALS & FIBRE CORPORATION 2020 ANNUAL SHAREHOLDERS’ MEETING AGENDA

Time: 10:00 a.m., Friday, June 5, 2020

Venue: 2F, International Ballroom at Sunworld Dynasty Hotel (No. 100 Dun Hua North Road, Taipei, Taiwan)

1. Report Items

• (1) 2019 Business Report

• (2) Audit Committee’ Review Report on the 2019 Financial Statements

• (3) Distribution of 2019 Employees Compensation

• (4) The Issuance of 2019 Domestic Unsecured Ordinary Corporate Bond

• Ratification Items

• (1) Please approve the 2019 Business Report and Financial Statements as required by the Company Act.

• (2) Please approve the Proposal for Distribution of 2019 Profits as required by the Company Act.

3. Discussion Items

• (1) Amendment to the Company’s “Rules of Procedure for

Shareholders’ Meeting”. Please discuss and resolve.

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~~Re ort Items p~~

1. About the Company’s results of operation for fiscal year 2019, please refer to Business Report for further details (on page 5 of the Handbook,) which is hereby reported for record.

2. The Company’s Audit Committee members reviewed the 2019 Business Report and Financial Statements and issued their Review Report according to the applicable laws. Please refer to Audit Committee’s Review Report (on page 13 of the Handbook.)

3. The company has issued the report on compensation distributed to its employees for 2019.

The pre-tax profit prior to deducting employees’ compensation distributable for 2019 is NT$31,930,468,140. The company has no accumulated losses. Adopted by the Board Meeting on March 13, 2020, 0.1% of the profit is allocated as employees’ compensation in accordance with Article 31 of the Articles of Incorporation. The total allocated amount is NT$31,930,468 ,which shall be distributed in cash. The above is hereby reported for record.

1. Status Report of NT$7 Billion Domestic Unsecured Straight Corporate Bonds Issuance by the Company in 2019.

2. To raise long-term funds to pay off debts, the Board of Directors approved the issuance of NT$7 billion domestic unsecured ordinary corporate bonds at the March 15, 2019 meeting. The above-mentioned corporate bonds were successfully issued on May 13, 2019 and were divided into Tranche A, Tranche B and Tranche C with different terms and conditions.

3. (1)Terms and conditions of Tranche A are as follows: Amount of Issuance: NT$3.3 billion

Interest Rate: Fixed interest rate at 0.75% per annum

Tenor: 5 years

Interest Payment: Once a year (simple interest)

Principal Repayment: 50% at the end of the fourth year and 50%

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at the end of the fifth year.

• (2)Terms and conditions of Tranche B are as follows:

Amount of Issuance: NT$3 billion

Interest Rate: Fixed interest rate at 0.83% per annum

Tenor: 7 years

Interest Payment: Once a year (simple interest)

Principal Repayment: 50% at the end of the sixth year and 50% at the end of the seventh year.

• (3)Terms and conditions of Tranche C are as follows:

Amount of Issuance: NT$0.7 billion

Interest Rate: Fixed interest rate at 0.93% per annum

Tenor: 10 years

Interest Payment: Once a year (simple interest)

Principal Repayment: 50% at the end of the ninth year and 50% at the end of the tenth year.

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FORMOSA CHEMICALS & FIBRE CORPORATION 2019 Annual Report

1. 2019 Business Report:

The consolidated revenue in 2019 was NT$315.5 billion, a decline of NT$83.5 billion or 20.9% from NT$399 billion in 2018. A primary reason for the reduced revenue, the sales reduced by NT$33.5 billion, is the relatively more annual repairs taking place in production facilities and the accident at the third aromatic hydrocarbon plant. The selling price variance took a slide with NT$50 billion short resulted from the impacts by the trade friction between China and the US on the market for petrochemical raw materials and the additional production lines for petrochemicals got into production in China as well as the increasingly conservative competition on the market. In terms of profit, the consolidated profit before tax was NT$37.1 billion in 2019, a decline of NT$24.9 billion or 40.1% from NT$62 billion in 2018. Besides the abnormality encountered in the third aromatic hydrocarbon plant, the impacts were not only mainly from the trade friction between China and the US as mentioned above and the commissioning of the new production lines but also markets were thickly on the lookout, and prices of petrochemical products dropped significantly into the margin was far greater than that with the oil price and it led to the reduction in business profits.

The international economic situation was unpredictable in 2019. Geopolitical conflicts followed one another in the Middle East and the incessant disputes between China and the US in trade, among other factors, have undermined the growths in global economy and trade. In the first half of the year, the demand on the market for petrochemical products continued with the growing streak from 2018 and was growing steadily. In addition, the Company is known for its one-stop production system that covers the upstream, midstream, and downstream, with the competitive advantage of low cost, and we continue to promote product transformation and optimization of production and distribution towards market segmentation and product differentiation. Sales of petrochemical and plastic products went well. Petrochemical product prices were scaled up that benefited by the rise

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in the price of crude oil, thus the revenue and profits of the Company in the first half of the year were both stable.

In the second half of the year, however, trade protectionism took prominence in the US. Tariff protective measures against products imported from Mainland China were imposed in different phases. In response, Mainland China introduced protective means on the market, too. The trade friction between Mainland China and the US gradually spread to impact the global economy and seriously undermine the globalization inter-dependent production and manufacturing system to significantly impact the foreign trade-oriented economy in Taiwan, particularly the petrochemical industry that targets mainly the market in Mainland China. Meanwhile, under the slow growth of the global economy, therefore, the internal demand in Mainland China also appeared to be sluggish, the prices of petrochemical products plummeted as oil price slid quickly, and downstream customers were waiting and seeing and appeared to be conservative. The Company's margin profit also started to slide as selling prices of products continued to fall in the third quarter. In the fourth quarter, the supply and demand was imbalanced in terms of production and distribution on the market, due to the new built petrochemical production lines were commissioned in Mainland China, thereafter, the downstream companies purchased tenably volume to operate on low inventories, and there were sales on the market prices were not pretty. The Company was under the stress of pass-through of production costs that resulted in profitability turned weak, and the Company had to deal with major challenges in its operation. Although the Company continued to live up to its belief in circular economy by investing in research and development of innovative low-emission production technique-oriented energy-saving operation to try to reduce the cost and enhancing product sales service, the revenue and profitability remained quite harsh.

As for the consolidated revenue in 2019, the parent company's net revenue was NT$151.6 billion, accounting for 48% of the consolidated revenue. Subsidiaries that contributed to the revenue included Formosa Industries Corporation in Ningbo, Formosa Industries Corporation in

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Vietnam, and Formosa Taffeta Co., Ltd., totaling NT$163.9 billion, accounting for 52% of the consolidated revenue. It was the first time that these invested companies since their establishment had combined revenue greater than that of the parent company. Main contributors to the parent company's revenue are petrochemical and plastic products. Both combined had a net worth of NT$137.9 billion, accounting for 91% of the parent company's revenue. Among them, petrochemical products totaled NT$85.3 billion or 56.3% and plastic products NT$52.6 billion or 34.7% respectively.

Respective major products were operated in 2019 primarily to ensure total throughput and production under the premise of production safety and water and energy conservation as well as reduced consumption and emissions, among other improvements in circular economy, continued to be promoted. Meanwhile, AI smart production based on big data was greatly promoted to hopefully further realize steady production and reduce the cost.

For aromatic hydrocarbon, SM, and phenol, the first aromatic hydrocarbon plant, the SM plant in Haifong site, and the synthetic phenol plant completed multiple water and energy conservation improvements taking advantage of the annual inspection to effectively reduce energy consumption and enhance production efficiency. The abnormal equipment in the third aromatic hydrocarbon plant has been repaired and multiple energy saving and carbon reduction equipment improvements were completed at the same time to significantly bring down the consumption of steam. In 2020, after that the new built petrochemical production lines are commissioned in Hengli Group and Zhejiang Petrochemical Co., Ltd. in Mainland China, the increase in the supply will further exacerbate the competition. Faced with challenges brought about by the new situation, the Company's petrochemical plant will continue to optimize the process and promote application of big data in AI process management to accordingly enhance production performance in response to the drastic changes on the market.

In terms of PTA and PIA, as production lines are added and commissioned in Mainland China, the supply has increased and selling prices of products took a slide. Despite the construction of new production lines to

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be commissioned continued for downstream polyester in 2019, the stress brought about by supply surplus on the market could not be covered; profitability bore the brunt. The PTA plant of the Company in Ningbo, with its optimal quality and steady lead time, has been trusted by customers. In addition, the processing cost has been significantly reduced following process transformation in 2018. The operating stress appeared to be not as intense as that in Taiwan facilities. In 2020, the PTA and PIA plants in Taiwan will first satisfy the needs on the domestic market. For exports, besides Formosa Industries Corporation in Vietnam, more markets outside Mainland China will be explored. The utilization rate will be adjusted reflective of changing market intelligence in order to improve the sales. Meanwhile, processes in Taiwan facilities will continue to be optimized to bring down the processing cost.

As far as plastic products are concerned, the globe economic growth slowed down and oil prices fell in 2019; raw materials and plastic pellets had undesirable outlooks. Downstream customers were mainly rigid demandoriented. Demand on the market was sluggish. The Company took advantage of the low inventories kept by downstream customers and phased inventory replenishments with orders placed by making efforts to expand sales. As a result, the sales of plastic pellets in 2019 grew by 1.5% compared to those in 2018. Looking into 2020, faced with the speedy expansion of plastic product throughput in Mainland China, the Company will increase the development of high-value and differentiated products by creating market segmentation and exploring areas outside Mainland China in response. The ratio of sales of PS special grade pellets in 2019 already reached 43.8% and will further rise to 45.6% in 2020. In terms of ABS products, the ratio of sales of ABS special grade pellets from Taiwan facilities throughout 2019 was 31.5% and the goal is to enhance it to 32.2% in 2020 where high-value special products will be prioritized. The sales of special grade pellets from the PABS plant in Ningbo, Mainland China accounted for 26.5% in 2019. As business operation staff and technicians continue to promote application of the products, the sales will be smooth and are likely to continue with the growing streak. The goal is

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to enhance the ratio of sales to 28.1%.

In reference to PP products, the ratio of sales of special products in 2019 already reached 51.5%. To further maximize the market share, the goal is to have the product sales to grow by 10%. High-quality and high unit-price medical device materials and development towards high liquidity and light weight will continue to be promoted in order to enhance the value added of the products. As far as the PC products are concerned, the sales of special products accounted for 24% in 2019 and the profitability accounted for 68%; profitability was optimal. In 2020, the Company will continue with the highvalue strategy for the PC sector to proactively diversify the market, to extend the optimal reputation of the Company on the market, and to proactively go with the customers demand for production and distribution. The goal is to have a growth of 30% in the sales of special products.

As far as textiles and fiber products are concerned, impacted by undesirable factors, such as the price cut competition in the exportation of textile products from Mainland China and the imbalance between supply and demand, among others, Taiwan facilities and the overseas re-investment Formosa Industries Corporation in Vietnam saw reduced sales of yarn and rayon fibers. In order to enhance profitability, the production ratio of green textile and fiber products will be increased. The niche market for recycled environmentally friendly filament and color filament, among other differentiated products, will be developed. Combining the brand channel along with the production demand of customers in the downstream and the fashionable trend on the market, the production and distribution plan and production model are adequately adjusted to form a marketing system where the upstream, midstream, and downstream are integrated.

In terms of sustainable operation, the Company has been emphasizing co-existence and co-prosperity between environmental protection and social development. Besides the continued adoption of the best available control technology (BACT) that is improving each year in terms of pollution prevention equipment, the Company was the first in the country to realize clean emissions and elimination of white smoke generated by its co-

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generation units. The emission quality is already comparable to that of a natural gas unit. Meanwhile, there is the real-time bulletin board set up outside each plant to facilitate supervision by residents in the neighborhood. In addition, in honor of the belief in circular economy, energy conservation and emission reduction were promoted to reduce carbon emissions and to make utilization of water resource sustainable, fulfilling the Company's corporate social responsibilities. In 2019, the AI technology was introduced to enhance energy conservation improvement efficiency. By 2019, the Company had invested accumulatively up to NT$12.2 billion in the promotion of energy conservation and emission reduction; 4,914 projects on improvements were completed, saving a total of 94,200 tons per day of water in total and steam of 1,006 tons per hour, electricity of 117 MWH; the benefits combined totaled NT$10.5 billion. In 2019, the PTA plant in Longde site received the Gold Medal of the ‘Energy-saving Signature Award’ from the Bureau of Energy, Ministry of Economic Affairs. The SM facility in Haifong site was awarded by the ‘Water Resources Agency’, Ministry of Economic Affairs for outstanding water conservation performance in the industrial division.

In light of the fact that the abnormalities having occurred at the third aromatic hydrocarbon plant in April 2019 were caused by undesirable equipment maintenance performance. Therefore, in August, the Company established its Sustainable Safety Mechanism Group to not only take charge of promoting environmental protection but also explore at depth blind spots in industry safety management and eliminate potential industrial safety risks. The improvement projects involving staff, equipment, and environmental safety as promoted in 2019 will be continued in 2020 to further fulfill the goal of safe production. In order to enhance reliability of equipment, the Company also collaborated with NACE anti-corrosion experts in creating the corrosion prevention mechanism. Meanwhile, releasing best examples of periodic PHA, JSA/SOP, MOC, and false alarm accidents and consolidating educational training for contractors and employees, among others, were the highlights.

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For sustainable corporate operation, besides sound production equipment and safe production planning as well as optimal operational performance, the most important is to continue expanding investments. The new 200-thousand-ton PIA and the expansion of the existing phenol plant from an annual production of 300 thousand tons to 400 thousand tons were started in Ningbo, China in 2019. In addition, the plastics department expanded three composite plants across the Taiwan Strait increases the annual production to 132 thousand tons. All of these new investments will be completed in 2020. Meanwhile, in 2020, the investment in the ABS plant in Ningbo, China to add 250 thousand tons of production and the PTA plant to add 1.5 million tons of products will be started at the same time in 2020. All the equipment upon establishment features the latest and further refined production technologies that are currently available. The hope is that the newly built PTA, PIA, Phenol, and ABS plants are unparalleled in the industry in terms of production performance, quality, and production safety. The petrochemical plant in Louisiana, USA, a joint venture with Formosa Petrochemical Corporation, was already approved during environmental impact assessment in the beginning of 2020 and construction will be initiated in full force. Hopefully, they can further strengthen the Company's operation once completed.

2. Operating Status:

The consolidated operating revenue was NT$315.49 billion in 2019, a decrease of NT$83.58 billion than NT$399.07 billion in 2018. Deducted operating costs NT$283.44 billion and selling expenses and administrative expenses NT$15.56 billion, the operating income was NT$16.49 billion in 2019 with an 5.2% of operating margin which declined NT$20.29 billion compared with NT$36.78 billion in 2018. Added up non-operating income and expenses NT$ 20.62 billion, the pre-tax income of 2019 was NT$37.11 billion, which declined NT$24.86 billion with a decrease of 40.1% compared with NT$61.97 billion in 2018.

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3. 2020 Business Performance Target and Outlook:

Looking into 2020, the Company still needs to deal with the operation dilemma. Besides the gradually and steadily commissioned new petrochemical production lines in Mainland China to result in comprehensively more supply than demand, the spread of the novel COVID19 in January seriously impacted the market order in the first half of the year. In addition, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership that will be signed this year will add to the unfair treatment Taiwan faces in more international free trade tariffs; Taiwan's industries will be in an inferior position while competing with its counterparts. The China-US trade conflicts yet to remit, the unpromising short-term prospects of the global macroeconomics, the slowing economic growths in major countries in Europe and America, and the persistent harsh challenges facing the plastics and chemical industries, on the other hand, have given the Company no choice but cope with the changes on the market seriously. The Company will continue to live up to its belief in circular economy by reducing the production cost and increasing investments in developing high-value, differentiated, and green products on the niche market. Under the premise of safe production, quality of products made better, processes more stable and production efficiency higher. The sales service quality is reinforced and so are the quality and quantity of high-value products in order to decentralize the market and to avoid price competition on the market. Meanwhile, the Company proactively promotes AI smart production and maximizes the application of artificial intelligence in process improvement and equipment safety forecast and diagnosis. Efforts are continued in the development of new AI applications and enhancing process integration and process management efficiency.

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FORMOSA CHEMICALS & FIBRE CORPORATION Audit Committee’ Review Report

The Board of Directors has prepared the Company’s 2019 Business Report, Financial Statements, including Consolidated and Individual Financial Statements, and Proposal for Profits Distribution. The CPA firm of PWC was retained to audit Formosa Chemicals & Fibre Corporation’s Financial Statements and has issued an audit report relating to Financial Statements. The Business Report, Financial Statements, and Proposal for Profits Distribution have been reviewed and determined to be correct and accurate by the Audit Committee members of Formosa Chemicals & Fibre Corporation. According to the Securities and Exchange Act and the Company Act, we hereby submit this report. Please be advised accordingly.

Formosa Chemicals & Fibre Corporation Chairman of the Audit Committee:

Ruey-Long Chen

March 13, 2020

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Ratification Items Proposal 1

Proposal: For approval of the 2019 Business Report and Financial Statements as required by the Company Act.

Proposed by the Board of Directors

Explanation:

1. The preparation of the Company’s 2019 Consolidated and Individual Financial Statements were completed. The aforementioned Financial Statements were reviewed by the Audit Committee and approved by the Board Meeting on March 13, 2020 and audited by independent auditors, Mr. Han-Chi, Wu and Mr. Chien-Hung Chou , of PWC. The aforesaid Financial Statements together with the Business Report were reviewed by the Audit Committee, which the Audit Committee’ Review Report is presented.

2. For the aforementioned Business Report, please refer to page 5 through page 12 of the Meeting Handbook. As for the Financial Statements, please refer to page 24 through page 37 of the Handbook. Please approve the Business Report and the Financial Statements.

Resolution:

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Ratification Items Proposal 2

Proposal: For Approval of the Proposal for Distribution of 2019 Profits as required by the Company Act.

Proposed by the Board of Directors

Explanation:

Please refer to page 38 of the Handbook for the Statement of Profits Distribution, which has been reviewed by the Audit Committee members of Formosa Chemicals & Fibre Corporation and approved by the Board of Directors on March 13, 2020. Please approve the Statement of Profits Distribution.

Resolution:

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Discussion Items Proposal 1

Proposal: Amendment to the Rules of Procedure for Shareholdes’ Meetings of the company submitted for discussion

Proposed by the Board of Directors

Explanation:

To refer to the sample template announced in the order Tai-Cheng-Chih-LiZi No. 1080024221 dated January 2, 2020 by the Taiwan Stock Exchange Corporation, certain articles of the Rules of Procedure for Shareholders’ Meetings provided by the company have been amended. The comparison table for articles before and after amendment is hereby attached. Please determine whether the amendments are reasonable.

Article	Article before Amendment	Article after Amendment	Reason for Amendment
Article 3	(above 4 paragraph omitted) Election or dismissal of directors, amendments to the Articles of Incorporation, the dissolution, merger, or demerger of the corporation, or any matter under paragraph 1 of Article 185 of the Company Act or Articles 26-1 and 43-6 of the Securities and Exchange Act, Articles 56-1 and 60-2 of Regulations Governingthe Offering	(above 4 paragraph omitted) Election or dismissal of Directors, amendments to the Articles of Incorporation, capital reduction, application to be delisted from public offering, lifting of non- competition restriction of	Amended in line with Directive Letter No. 1080024221 announced by the Taiwan Stock Exchange Corporation (TWSE) on January 2, 2020.
		Directors, capital increase by retained earnings, capital increase by capital reserve, dissolution, merger, or demerger of the corporation,or any

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	and Issuance of Securities by Securities Issuers shall be set out in the notice of the causes to convene the shareholders’ meeting. None of the above matters may be raised by an extraordinary motion. A shareholder holding 1 percent or more of the total number of issued shares may submit to the Company a written proposal for discussion at an annual shareholders’ meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the Meeting Agenda. In addition, when the circumstances of any subparagraph of paragraph 4 of Article 172-1 of the Company Act apply to a proposal put forward by a shareholder, the Board of Directors may exclude it from the Agenda. Prior to the book closure	matter under Paragraph 1 of Article 185 of the Company Act shall be set out in the notice of the reasons for convening the shareholders' meeting. None of the above matters may be raised by an extraordinary motion. The content of such matters shall be uploaded
		to a website designated by the competent authority or the Company, and the website shall be specified
		on the meeting notice. Where the meeting agenda has specified general re-elections of the Directors and the terms of the Directors' office, the terms of office
		of the Directors shall not be altered by raising an extraordinary motion or any other method upon the completion of the general elections at the Shareholders'Meeting. A shareholder holding 1 percent or more of the

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	date before an annual shareholders’ meeting is held, the Company shall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days. (below omitted)	total number of issued shares may submit to the Company a written proposal for discussion at an annual general shareholders' meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the Meeting Agenda. However, when a shareholder's proposal contains suggestions or recommendations for the Company to enhance the public interest or facilitate the Company to
		fulfill its corporate social responsibility, the Board of Directors may include such proposal into the agenda. In addition, when the circumstances of any subparagraph of paragraph 4 of Article 172-1 of the Company Act apply to a proposal put forward by a shareholder, the Board of Directors may exclude it from the Agenda.

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		Prior to the book closure date before an annual shareholders' meeting is held, the Company shall publicly announce that it will receive shareholder proposals,the method of receiving such proposals (whether written or in electronic form),and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days. (below omitted)
Article 7	(above 2 paragraph omitted) It is advisable that shareholders’ meetings convened by the Board of Directors be chaired by the Chairman, that a majority of the Directors attend in person, and that at least one member of each functional committee attend as representative. Attendance details should be recorded in the Shareholders Meeting	(above 2 paragraph omitted) It is advisable that shareholders’ meetings convened by the Board of Directors be chaired by the Chairman, and the Chairman who chairs the way can appoint the Vice	Amended to conform with company’s practical operating situation
		Chairman, Managing Director or Director of familiar company’s business to direct the proceeding agenda of shareholders'meeting, that a majorityof the

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	minutes. If a shareholders’ meeting is convened by a party having the convening right but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves. (below omitted)	Directors attend in person, and that at least one member of each functional committee attend as representative. Attendance details should be recorded in the Shareholders Meeting minutes. If a shareholders’ meeting is convened by a party having the convening right but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves. (below omitted)
Article 10	If a shareholders’ meeting is convened by the Board of Directors, the meeting agenda shall be set by the Board of Directors. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders’	If a shareholders' meeting is convened by the Board of Director, the meeting agenda shall be set by the Board of Directors.The relevant proposals (including extraordinary motions and amendment to original proposals) shall be decided by voting on a case-by-case	Amended in line with Directive Letter No. 1080024221 announced by the Taiwan Stock Exchange Corporation

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	meeting. (paragraph 2~3 omitted) The Chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the Chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the Chair may announce the discussion closed and call for a vote.	basis.The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders’ meeting. (paragraph 2~3 omitted) The Chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the Chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the Chair may announce the discussion closed and shall also arrange ample time for a vote.	(TWSE) on January 2, 2020.
		time for a vote.
Article 13	(paragraph 1 omitted) When the Company holds a shareholders’ meeting, it may allow the shareholders to exercise votingrights in writingor	(paragraph 1 omitted) When the Company convenes a shareholders' meeting, shareholders shall exercise their voting	Amended in line with Directive Letter No. 1080024221 announced
		rights by electronic

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	by way of electronic transmission. When voting rights are exercised in writing or by way of electronic transmission, the method for exercising the voting rights shall be specified in the shareholders’ meeting notice. A shareholder exercising voting rights in writing or by way of electronic transmission will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting. (below omitted)	means and may exercise theirvoting rights in writing. When voting rights are exercised in writing or by way of electronic transmission, the method for exercising the voting rights shall be specified in the shareholders’ meeting notice. A shareholder exercising voting rights in writing or by way of electronic transmission will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting. (paragraph 3~6 omitted) In addition to the proposals on the meeting agenda, when a shareholder wishes to propose an extraordinary motion, the shareholder's voting rights shall represent at least 1% or more of the Company's	by the Taiwan Stock Exchange Corporation (TWSE) on January 2, 2020. Qualification for proposing an extraordinary motion has been specified pursuant to the Company's actual processing needs.

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		total issued shares. (below omitted)
Article 15	(paragraph 1~2 omitted) The meeting minutes shall accurately record the year, month, day, and place of the meeting, the Chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the duration of the existence of the Company.	(paragraph 1~2 omitted) The meeting minutes shall accurately record the year, month, day, and place of the meeting, the Chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results(including the weight of the votes), and the number of weighted votes each candidate received in case of a Directors'elections,and shall be retained for the duration of the existence of the Company.	Amended in line with Directive Letter No. 1080024221 announced by the Taiwan Stock Exchange Corporation (TWSE) on January 2, 2020.

Resolution:

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Items

For theyears ended December 31 2019 2018 Notes AMOUNT % AMOUNT % 6(19) and 7 $ 315,499,063 100 $ 399,074,240 100 6(5)(14)(23)(24) and 7 ( 283,442,024) ( 90 ) ( 347,236,195) ( 87 ) 32,057,039 10 51,838,045 13 6(14)(23)(24) and 7 ( 9,478,091) ( 3 ) ( 9,173,135) ( 2 ) ( 6,088,992) ( 2 ) ( 5,889,442) ( 2 ) ( 15,567,083) ( 5 ) ( 15,062,577) ( 4 ) 16,489,956 5 36,775,468 9 6(20) and 7 11,543,840 4 11,570,164 3 6(21) 1,694,104 1 881,934 - 6(7)(22) and 7 ( 1,834,684) ( 1 ) ( 2,299,698) - 6(6) 9,214,254 3 15,037,424 4 20,617,514 7 25,189,824 7 37,107,470 12 61,965,292 16 6(25) ( 3,861,643) ( 1 ) ( 7,944,567) ( 2 ) 33,245,827 11 54,020,725 14 6(9) 1,202,530 - 1,420,293 - $ 34,448,357 11 $ 55,441,018 14

4000 Operating revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8000 Profit for the year from continuing operations 8100 Profit from discontinued operations 8200 Profit for the year

(Continued)

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							For the	years	ended	ended	ended	December 31
						2019						2018
	Items	Notes			AMOUNT			%				AMOUNT			%
	Other comprehensive income (net)	6(18)(25)
	Components of other comprehensive
	income that will not be reclassified to
	profit or loss
8311	Actuarial losses on defined benefit
	plans		($			354,337 )			-	($			165,987)		-
8316	Unrealised loss (gain) on financial
	assets measured at fair value through
	other comprehensive income					327,244			-	(		10,354,331) (			2)
8320	Share of other comprehensive loss of
	associates and joint ventures
	accounted for using equity method
			(			7,884,276 )(			3)	(		6,405,415) (			2)
8310	Other comprehensive loss that
	will not be reclassified to profit
	or loss
			(			7,911,369 )(			3)	(		16,925,733) (			4)
	Components of other comprehensive
	income that will be reclassified to
	profit or loss
8361	Financial statements translation
	differences of foreign operations		(			3,068,798 ) (			1)	(			45,862)		-
8370	Share of other comprehensive (loss)
	income of associates and joint
	ventures accounted for under equity
	method		(			657,412 )			-				489,240		-
8399	Income tax relating to the
	components of other comprehensive
	income					542,926			-				116,104		-
8360	Other comprehensive (loss)
	income that will be reclassified
	to profit or loss
			(			3,183,284 )(			1)				559,482		-
8300	Total other comprehensive loss for
	the year		($		11,094,653 )(				4)	($		16,366,251) (			4)
8500	Total comprehensive income for the
	year			$	23,353,704				7		$	39,074,767			10
	Net income attributable to:
8610	Owners of the parent			$	29,702,242				9		$	48,769,317			12
8620	Non-controlling interest					4,746,115			2			6,671,701			2
				$	34,448,357			11			$	55,441,018			14
	Total comprehensive income
	attributable to:
8710	Owners of the parent			$	22,873,505				7		$	33,258,356			9
8720	Non-controlling interest					480,199			-			5,816,411			1
				$	23,353,704				7		$	39,074,767			10
				Before Tax			After Tax					Before Tax		After	Tax
	Basic earnings per share	6(26)
9710	Profit for the year from continuing
	operations		$		6.62	$		5.91			$	10.92	$		9.50
	Profit for the year from discontinued
	operations	(			0.26	) (		0.20	)	(		0.30	) (		0.24 )
9720	Non-controlling interest	(			1.15	) (		0.82	)	(		1.60	) (		1.14 )
9750	Profit attributable to common
	shareholders of the parent		$		5.21	$		4.89			$	9.02	$		8.12
	Assuming shares held by subsidiary	are not deemed as treasury			stock:
	Profit for the year from continuing
	operations		$		6.59	$		5.88			$	10.87	$		9.46
	Profit for the year from discontinued
	operations	(			0.26	)		0.21	)	(		0.30	) (		0.24 )
	Non-controlling interest	(			1.15	) (		0.81	)	(		1.60	) (		1.14)
	Profit attributable to common
	shareholders of the parent		$		5.18	$		4.86			$	8.97	$		8.08

25

FORMOSA CHEMICALS & FIBRE CORPORATION PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

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

					Forthe	years ended	years ended	years ended	December31
					2019					2018
	Items	Notes			AMOUNT	%			AMOUNT		%
4000	Operating revenue	6(17) and 7		$	198,210,058	100		$	273,592,139		100
5000	Operating costs	6(5)(21)(22) and 7	(		181,514,346) (	92)	(		241,080,029 ) (		88)
5900	Net operating margin				16,695,712	8			32,512,110		12
5910	Unrealised profit from sales		(		285,173)	-	(			539,952 )	-
5920	Realised profit from sales				539,952	-				295,568	-
5950	Net operating margin				16,950,491	8			32,267,726		12
	Operating expenses	6(12)(21)(22) and 7
6100	Selling expenses		(		4,834,267) (	2)	(		4,809,461 ) (		2)
6200	General and administrative expenses		(		3,908,145) (	2)	(		3,734,928 ) (		1)
6000	Total operating expenses		(		8,742,412) (	4)	(		8,544,389 ) (		3)
6900	Operating profit				8,208,079	4			23,723,337		9
	Non-operating income and expenses
7010	Other income	6(18) and 7			8,787,965	4			8,337,339		3
7020	Other gains and losses	6(19)			15,227	-				888,791	-
7050	Finance costs	6(7)(20) and 7	(		933,004)	-	(		1,023,172 )		-
7070	Share of profit of associates and joint	6(6)
	ventures accounted for under equity
	method				15,820,271	8			22,422,542		8
7000	Total non-operating income and
	expenses				23,690,459	12			30,625,500		11
7900	Profit before income tax				31,898,538	16			54,348,837		20
7950	Income tax expense	6(23)	(		2,196,296) (	1)	(		5,579,520 ) (		2)
8200	Profit for the year			$	29,702,242	15		$	48,769,317		18
	Other comprehensive income (net)
	Components of other comprehensive
	income that will not be reclassified to
	profit or loss
8311	Actuarial gains (losses) on defined	6(12)
	benefit plans		($		354,337)	-	(	$		165,987 )	-
8316	Unrealised gains (losses) from	6(3)(16)
	investments in equity instruments
	measured at fair value through other
	comprehensive income				4,140,707	2	(		9,154,617 ) (		4)
8330	Share of other comprehensive loss of
	associates and joint ventures accounted
	for using equity method		(		7,884,276) (	4)	(		6,405,416 ) (		2)
8310	Other comprehensive loss that will
	not be reclassified to profit or loss		(		4,097,906) (	2)	(		15,726,020 ) (		6)
	Components of other comprehensive
	income that will be reclassified to profit
	or loss
8361	Exchange differences on translation	6(16)	(		2,616,345) (	1)	(			390,286 )	-
8380	Share of other comprehensive (loss)
	income of associates and joint ventures
	accounted for using equity method		(		657,412)	-				489,240	-
8399	Income tax relating to the components of	6(16)(23)
	other comprehensive income				542,926	-				116,104	-
8360	Other comprehensive (loss) income
	that will be reclassified to profit or
	loss		(		2,730,831) (	1)				215,058	-
8300	Other comprehensive loss for the year		($		6,828,737) (	3)	(	$	15,510,962 ) (		6)
8500	Total comprehensive income for the year			$	22,873,505	12		$	33,258,355		12
	Basic earnings per share	6(23)
	(in dollars)				Before Tax After Tax				Before Tax	After	Tax
9750	Net income		$		5.47 $	5.09	$		9.32	$	8.36
	Assuming shares held by subsidiary are not deemed as treasury		stock:
	Basic earnings per share (in dollars)
	Net income		$		5.44 $	5.07	$		9.27	$	8.32

The accompanying notes are an integral part of these parent company only financial statements.

26

Assets	Notes 6(1) 6(2) 6(3) 6(19) 6(4) 6(4) and 7 6(4) 6(4) and 7 7 7 6(5) 7 6(3) 6(6) and 7 6(7) and 7 6(8) 6(25)	December 31, 2019 AMOUNT % $ 15,099,252 3 4,044,087 1 110,143,905 20 - - 6,898,955 1 6,395 - 16,050,769 3 5,137,355 1 7,781,218 1 12,798,836 2 41,269,264 8 6,952,598 1 226,182,634 41 67,540,577 12 118,395,626 22 124,671,052 23 1,645,199 - 1,288 - 2,447,969 - 9,664,672 2 324,366,383 59 $ 550,549,017 100	December 31, 2018	December 31, 2018
		AMOUNT $ 15,099,252 4,044,087 110,143,905 - 6,898,955 6,395 16,050,769 5,137,355 7,781,218 12,798,836 41,269,264 6,952,598 226,182,634 67,540,577 118,395,626 124,671,052 1,645,199 1,288 2,447,969 9,664,672 324,366,383 $ 550,549,017	AMOUNT $ 31,209,809 4,496,354 104,751,478 788,643 15,086,776 4,429 20,920,208 8,471,495 8,185,916 11,376,802 42,405,175 7,312,461 255,009,546 82,170,244 114,476,472 129,098,640 - 586 2,312,859 8,432,585 336,491,386 $ 591,500,932	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1120 Current financial assets at fair value through other comprehensive income 1140 Current contract assets 1150 Notes receivable, net 1160 Notes receivable - related parties 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventory 1470 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				5 1 18 - 3 - 4 1 1 2 7 1
				43
				14 19 22 - - - 2
				57
				100

(Continued)

27

Liabilities and Equity	December 31, 2019 December 31, 2018 Notes AMOUNT % AMOUNT % 6(10) $ 32,369,623 6 $ 31,948,041 5 6(10) 14,396,370 3 12,490,543 2 6(11) 80 - 774 - 225,514 - 255,580 - 6,363,844 1 5,916,930 1 7 11,377,993 2 15,898,101 3 7 9,603,144 2 12,264,130 2 1,156,151 - 5,014,075 1 158,053 - - - 6(12)(13) 6,687,482 1 16,555,497 3 4,794,415 1 5,891,945 1 87,132,669 16 106,235,616 18 6(12) 32,100,000 6 27,850,000 5 6(13) 14,114,083 3 16,751,958 3 6(25) 426,880 - 351,022 - 750,716 - - - 6(14) 6,733,706 1 6,989,837 1 54,125,385 10 51,942,817 9 141,258,054 26 158,178,433 27 6(15) 58,611,863 11 58,611,863 10 6(16) 9,138,869 2 9,084,142 1 6(17) 61,364,852 11 56,487,920 9 60,171,925 11 53,131,385 9 64,990,184 12 84,098,904 14 6(18) 102,560,930 18 108,933,674 19 6(15) ( 323,952) - ( 539,014) - 356,514,671 65 369,808,874 62 52,776,292 9 63,513,625 11 409,290,963 74 433,322,499 73 9 11 $ 550,549,017 100 $ 591,500,932 100	December 31, 2018	December 31, 2018
			%
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2120 Financial liabilities at fair value through profit or loss - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2530 Corporate bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of parent Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity			5 2 - - 1 3 2 1 - 3 1
			18
			5 3 - - 1
			9
			27
			10 1 9 9 14 19 -
			62
			11
			73
			100

28

FORMOSA CHEMICALS & FIBRE CORPORATION PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(4) and 7 6(4) 6(4) and 7 7 7 6(5) 7 6(3) 6(6) 6(7) 6(8) 6(23)	December 31, 2019 AMOUNT % $ 685,005 - 4,043,968 1 109,009,928 24 216,389 - 44,999 - 5,635,861 1 12,839,476 3 1,059,415 - 12,798,836 3 19,046,036 4 3,032,965 1 168,412,878 37 15,802,133 3 212,083,684 46 53,342,392 12 25,272 - 2,245,198 - 7,607,343 2 291,106,022 63 $ 459,518,900 100	December 31, 2018	December 31, 2018
		AMOUNT $ 685,005 4,043,968 109,009,928 216,389 44,999 5,635,861 12,839,476 1,059,415 12,798,836 19,046,036 3,032,965 168,412,878 15,802,133 212,083,684 53,342,392 25,272 2,245,198 7,607,343 291,106,022 $ 459,518,900	AMOUNT $ 13,078,861 4,016,864 101,602,443 390,702 331,826 7,578,823 17,772,122 2,780,938 11,253,442 18,218,122 2,001,794 179,025,937 19,076,660 215,607,318 53,141,664 - 2,173,083 6,122,759 296,121,484 $ 475,147,421	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1120 Current financial assets at fair value through other comprehensive income 1150 Notes receivable, net 1160 Notes receivable - related parties 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventory 1470 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				3 1 21 - - 2 4 1 2 4 -
				38
				4 45 11 - 1 1
				62
				100

(Continued)

29

FORMOSA CHEMICALS & FIBRE CORPORATION PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Liabilities and equity	December 31, 2019 December 31, 2018 Notes AMOUNT % AMOUNT % 6(9) $ 21,057,000 5 $ 9,637,300 2 6(9) 14,396,370 3 12,490,543 3 2,111,358 1 2,550,526 - 7 10,027,809 2 13,340,105 3 7 5,982,156 1 7,969,928 2 461,912 - 3,726,016 1 4,721 - - - 6(10)(11) 5,438,889 1 11,888,889 2 3,912,922 1 4,707,391 1 63,393,137 14 66,310,698 14 6(10) 32,100,000 7 27,850,000 6 6(11) 1,344,444 - 4,833,333 1 6(23) 49,271 - 58,857 - 20,726 - - - 6(12) 6,096,651 1 6,285,659 1 39,611,092 8 39,027,849 8 103,004,229 22 105,338,547 22 6(13) 58,611,863 13 58,611,863 12 6(14) 9,138,869 2 9,084,142 2 6(15) 61,364,852 14 56,487,920 12 60,171,925 13 53,131,385 11 64,990,184 14 84,098,904 18 6(16) 102,560,930 22 108,933,674 23 6(13) ( 323,952) - ( 539,014) - 356,514,671 78 369,808,874 78 9 and 11 $ 459,518,900 100 $ 475,147,421 100	December 31, 2018	December 31, 2018
			%
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2399 Other current liabilities 21XX Total current liabilities Non-current liabilities 2530 Corporate bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity			2 3 - 3 2 1 - 2 1
			14
			6 1 - - 1
			8
			22
			12 2 12 11 18 23 -
			78
			100

The accompanying notes are an integral part of these parent company only financial statements.

30

			626,468) $ 357,669,876 $ 60,831,200 $ 418,501,076			- 19,525,837 65,223 19,591,060		626,468) 377,195,713 60,896,423 438,092,136	- 48,769,317 6,671,701 55,441,018		- ( 15,510,961) ( 855,290) ( 16,366,251)	- 33,258,356 5,816,411 39,074,767			- - - -	- - - -	- ( 41,028,304) - ( 41,028,304)		- 58,076 - 58,076			- ( 22,638) - ( 22,638)		- 2,178 - 2,178		- ( 532) - ( 532)		- - ( 4,729,511) ( 4,729,511)		- - ( 12,536) ( 12,536)				87,454 87,454 - 87,454		- 258,368 488,282 746,650				- 203 ( 1,128,807) ( 1,128,604)				- - 2,183,363 2,183,363	539,014) $ 369,808,874 $ 63,513,625 $ 433,322,499
			8,077 ( $			-		8,077 (	-		23,942 )	23,942 )			-	-	-		-			-		-		-		-		-				-		-				-				-	15,865 ) ( $
			$								(	(																																	($
			$ 111,213,200			( 111,213,200)		-	-		-	-			-	-	-		-			-		-		-		-		-				-		-				-				-	$ -
			-			-		-	-		-	-			-	-	-		-			-		-		-		-		-				-		-				-				-	-
			$																																										$
			($ 2,052,251) $ -			- 125,624,639		( 2,052,251) 125,624,639	- -		239,000 ( 15,537,804 )	239,000 ( 15,537,804 )			- -	- -	- -		- -			- -		- -		- -		- -		- -				- -		- -				- 675,955				- -	($ 1,813,251) $ 110,762,790	(Continued)
			$ 84,218,728			5,114,398		89,333,126	48,769,317		( 188,215 )	48,581,102			( 5,441,080 )	( 6,564,296 )	( 41,028,304 )		-			-		-		-		-		-				-		( 105,892 )				( 675,752 )				-	$ 84,098,904
			$ 46,567,089			-		46,567,089	-		-	-			-	6,564,296	-		-			-		-		-		-		-				-		-				-				-	$ 53,131,385
			$ 51,046,840			-		51,046,840	-		-	-			5,441,080	-	-		-			-		-		-		-		-				-		-				-				-	$ 56,487,920
			$ 8,682,798			-		8,682,798	-		-	-			-	-	-		58,076			( 22,638 )		2,178		( 532 )		-		-				-		364,260				-				-	$ 9,084,142
			$ 58,611,863			-		58,611,863	-		-	-			-	-	-		-			-		-		-		-		-				-		-				-				-	$ 58,611,863
										6(18)			6(17)					6(16)		6(16)			6(16)		6(16)
For the year ended December		31, 2018	Balance at January 1, 2018	Effects of retrospective	application and retrospective	restatement	Balance at January 1 after	adjustments	Profit for the year	Other comprehensive income	(loss) for the year	Total comprehensive income	Appropriations of 2017	earnings	Legal reserve	Special reserve	Cash dividends	Dividends paid to subsidiaries to adjust capital surplus Changes in net interest of 31			associates recognised under	the equity method	Expired cash dividends	reclassified to capital surplus	Expired dividends paid from	capital surplus	Cash dividends paid by	consolidated subsidiaries	Shares returned from reduction	in consolidated subsidiaries	Adjustments in treasury stocks	due to changes in proportion	to its ownership interests in	subsidiaries	Changes in ownership interests	in subsidiaries	Disposal of equity instruments	measured at fair value	through other comprehensive	income	Increase in non-controlling	interest-disposal of	ownership interests in	subsidiaries	Balance at December 31, 2018

			539,014) $ 369,808,874 $ 63,513,625 $ 433,322,499	- 29,702,242 4,746,115 34,448,357		- ( 6,828,737) ( 4,265,916 ) ( 11,094,653)	- 22,873,505 480,199 23,353,704			- - - -	- - - -	- ( 36,339,355) - ( 36,339,355)			- ( 4,649) - ( 4,649)			- 6,869 - 6,869		- 44,726 - 44,726		- ( 156) - ( 156)		- ( 90,205) 13,282 ( 76,923)				- - 467 467		- - ( 5,185,510 ) ( 5,185,510)				215,062 215,062 - 215,062				- - ( 6,045,771 ) ( 6,045,771)	323,952) $ 356,514,671 $ 52,776,292 $ 409,290,963
			15,865 ) ($	-		16,524	16,524			-	-	-			-			-		-		-		-				-		-				-				-	659 ($
			($																																				$
			-	-		-	-			-	-	-			-			-		-		-		-				-		-				-				-	-
			$																																				$
			-	-		-	-			-	-	-			-			-		-		-		-				-		-				-				-	-
			$																																				$
			$ 84,098,904 ($ 1,813,251) $ 110,762,790	29,702,242 - -		( 454,682 ) ( 2,747,355) ( 3,643,224 )	29,247,560 ( 2,747,355) ( 3,643,224 )			( 4,876,932 ) - -	( 7,040,540 ) - -	( 36,339,355 ) - -			- - -			- - -		- - -		- - -		( 98,142 ) - -				( 1,311 ) - 1,311		- - -				- - -				- - -	$ 64,990,184 ($ 4,560,606) $ 107,120,877
			$ 53,131,385	-		-	-			-	7,040,540	-			-			-		-		-		-				-		-				-				-	$ 60,171,925
			$ 56,487,920	-		-	-			4,876,932	-	-			-			-		-		-		-				-		-				-				-	$ 61,364,852
			$ 9,084,142	-		-	-			-	-	-			( 4,649 )			6,869		44,726		( 156 )		7,937				-		-				-				-	$ 9,138,869
			$ 58,611,863	-		-	-			-	-	-			-			-		-		-		-				-		-				-				-	$ 58,611,863
					6(18)			6(17)					6(16)			6(16)			6(16)		6(16)		6(16)
For the year ended December		31, 2019	Balance at January 1, 2019	Profit for the year	Other comprehensive income	(loss) for the year	Total comprehensive income	Appropriations of 2018	earnings	Legal reserve	Special reserve	Cash dividends	Changes in net interest of	associates recognised	under the equity method	Expired cash dividends	reclassified to capital	surplus Dividends paid to subsidiaries 32		to adjust capital surplus	Expired dividends paid from	capital surplus	Changes in ownership interests	in subsidiaries	Disposal of equity instruments	measured at fair value	through other comprehensive	income	Cash dividends paid by	consolidated subsidiaries	Adjustments in treasury stocks	due to changes in proportion	to its ownership interests in	subsidiaries	Increase in non-controlling	interest-disposal of	ownership interests in	subsidiaries	Balance at December 31, 2019

						Gains (losses) on	hedging	instruments Treasury stocks Total			$ - ($ 626,468 ) $ 357,669,876	8,077 - 19,525,837	8,077 ( 626,468 ) 377,195,713	- - 48,769,317	( 23,942) - ( 15,510,962)	( 23,942) - 33,258,355		- - -	- - -	- - ( 41,028,304)	- - 58,076		- - ( 22,638)	- - 2,178	- - ( 532)		- 87,454 87,454	- - 258,368		- - 204	($ 15,865) ($ 539,014 ) $ 369,808,874			($ 15,865) ($ 539,014 ) $ 369,808,874	- - 29,702,242	16,524 - ( 6,828,737)	16,524 - 22,873,505		- - -	- - -	- - ( 36,339,355)	- - 44,726		- - ( 4,649)	- - 6,869	- - ( 156)		- 215,062 215,062	- - ( 90,205)		- - -	$ 659 ($ 323,952 ) $ 356,514,671
Other Equity Interest				Hedging	Unrealised gain instrument gain	on available-for- on effective hedge	sale financial of cash flow	assets hedges			$ 111,213,200 $ 8,077	( 111,213,200 ) ( 8,077 )	- -	- -	- -	- -		- -	- -	- -	- -		- -	- -	- -		- -	- -		- -	$ - $ -			$ - $ -	- -	- -	- -		- -	- -	- -	- -		- -	- -	- -		- -	- -		- -	$ - $ -
Retained Earnings	Unrealised gains	(losses) from	financial assets	Financial measured at fair	statements value through	translation other	Unappropriated differences of comprehensive	Capital surplus Legal reserve Special reserve retained earnings foreign operations income			$ 8,682,798 $ 51,046,840 $ 46,567,089 $ 84,218,728 ($ 2,052,251) $ -	- - - 5,114,398 - 125,624,639	8,682,798 51,046,840 46,567,089 89,333,126 ( 2,052,251) 125,624,639	- - - 48,769,317 - -	- - - ( 188,215 ) 239,000 ( 15,537,805 )	- - - 48,581,102 239,000 ( 15,537,805 )		- 5,441,080 - ( 5,441,080 ) - -	- - 6,564,296 ( 6,564,296 ) - -	- - - ( 41,028,304 ) - -	58,076 - - - - -		( 22,638 ) - - - - -	2,178 - - - - -	( 532 ) - - - - -		- - - - - -	364,260 - - ( 105,892 ) - -		- - - ( 675,752 ) - 675,956	$ 9,084,142 $ 56,487,920 $ 53,131,385 $ 84,098,904 ($ 1,813,251) $ 110,762,790			$ 9,084,142 $ 56,487,920 $ 53,131,385 $ 84,098,904 ($ 1,813,251) $ 110,762,790	- - - 29,702,242 - -	- - - ( 454,682 ) ( 2,747,355) ( 3,643,224 )	- - - 29,247,560 ( 2,747,355) ( 3,643,224 )		- 4,876,932 - ( 4,876,932 ) - -	- - 7,040,540 ( 7,040,540 ) - -	- - - ( 36,339,355 ) - -	44,726 - - - - -		( 4,649 ) - - - - -	6,869 - - - - -	( 156 ) - - - - -		- - - - - -	7,937 - - ( 98,142 ) - -		- - - ( 1,311 ) - 1,311	$ 9,138,869 $ 61,364,852 $ 60,171,925 $ 64,990,184 ($ 4,560,606) $ 107,120,877
							Share capital -	common stock			$ 58,611,863	-	58,611,863	-	-	-		-	-	-	-		-	-	-		-	-		-	$ 58,611,863			$ 58,611,863	-	-	-		-	-	-	-		-	-	-		-	-		-	$ 58,611,863
								Notes	For the year ended December 31, 2018		Balance at January 1, 2018	Effects of retrospective application and retrospective restatement	Balance at January 1 after adjustments	Profit for the year	Other comprehensive income (loss) for the year 6(16)	Total comprehensive income (loss)	Appropriations of 2017 earnings 6(15)	Legal reserve	Special reserve	Cash dividends	Dividends paid to subsidiaries to adjust capital surplus 6(14)	Changes in the net interest of associates recognised under the equity 6(14)	method	Expired cash dividends reclassified to capital surplus 6(14)	Expired dividends paid from capital surplus 6(14)	Adjustments in treasury stocks due to changes in proportion to its	ownership interests in subsidiaries	Changes in ownership interests in subsidiaries 6(14) Disposal of investments in equity instruments designated at fair value through other comprehensive income 33			Balance at December 31, 2018	For the year ended December 31, 2019		Balance at January 1, 2019	Profit for the year	Other comprehensive income (loss) for the year 6(16)	Total comprehensive income (loss)	Appropriations of 2018 earnings 6(15)	Legal reserve	Special reserve	Cash dividends	Dividends paid to subsidiaries to adjust capital surplus 6(14)	Changes in the net interest of associates recognised under the equity 6(14)	method	Expired cash dividends reclassified to capital surplus 6(14)	Expired dividends paid from capital surplus 6(14)	Adjustments in treasury stocks due to changes in proportion to its	ownership interests in subsidiaries	Changes in ownership interests in subsidiaries 6(14)	Disposal of investments in equity instruments designated at fair	value through other comprehensive income	Balance at December 31, 2019

CASH FLOWS FROM OPERATING ACTIVITIES
Profit from continuing operations before tax			$	37,107,470		$	61,965,292
Profit from discontinued operations before tax	6(9)			1,526,054			1,750,953
Profit before tax				38,633,524			63,716,245
Adjustments
Adjustments to reconcile profit (loss)
Depreciation	6(7)(8)(23)			14,881,648			14,431,281
Amortisation	6(24)			3,601,074			4,404,062
Net gain on financial assets and liabilities at fair value	6(21)
through profit or loss		(		29,303 )	(		217,379 )
Interest expense	6(22)			1,840,275			2,299,699
Interest income	6(20)	(		426,898 )	(		678,987 )
Dividend income	6(20)	(		10,027,034 )	(		9,633,949 )
Gain on disposal of discontinued operations	6(9)	(		2,016,760 )			-
Share of profit or loss of associates accounted for
under the equity method		(		9,214,254 )	(		15,037,424 )
Impairment loss on property, plant and equipment	6(7)(21)			-			313,855
Gain on disposal and scrap of property, plant and	6(21)
equipment		(		8,364 )	(		843,722 )
Changes in operating assets and liabilities
Changes in operating assets
Contract assets-current		(		550,812 )	(		297,011 )
Notes receivable				8,186,536	(		4,115,490 )
Notes receivable-related parties		(		1,966 )			8,577
Accounts receivable				4,314,446			732,877
Accounts receivable-related parties				2,031,485			578,066
Other receivables				381,954	(		808,302 )
Inventories				691,546	(		3,960,364 )
Other current assets				292,395	(		3,021,210 )
Changes in operating liabilities
Notes payable		(		30,066 )			56,062
Notes payable-related parties				41,545			-
Accounts payable				790,057	(		1,583,233 )
Accounts payable-related parties		(		4,459,043 )	(		2,051,838 )
Other payables		(		1,807,792 )			559,066
Other current liabilities		(		1,087,240 )			752,278
Accrued pension liabilities		(		136,101 )	(		365,335 )
Cash inflow generated from operations				45,890,852			45,237,824
Interest received				445,745			662,438
Dividends received				21,752,336			24,442,383
Interest paid		(		1,926,634 )	(		2,331,390 )
Income tax paid		(		7,149,771 )	(		7,379,703 )
Net cash flows from operating activities				59,012,528			60,631,552

(Continued)

34

CASH FLOWS FROM INVESTING ACTIVITIES
(Increase) decrease in other receivables-related parties		($		1,422,034 )		$	2,351,004
Acquisition of financial assets at fair value through profit
or loss		(		300,000 )			-
Acquisition of financial assets at fair value through other
comprehensive income		(		320,901 )	(		2,442,128 )
Proceeds from disposal of financial assets at fair value
through profit or loss				780,875			926,098
Shares returned from reduction in financial assets at fair
value through other comprehensive income				8,204			5,780
Proceeds from disposal of financial assets at fair value
through other comprehensive income				445			771,198
Acquisition of investments accounted for under the equity
method		(		2,379,580 )	(		2,011,490 )
Proceeds from disposal of subsidiaries	6(27)			1,556,230			-
Acquisition of property, plant and equipment	6(27)	(		16,972,497 )	(		18,444,308 )
Proceeds from disposal of property, plant and equipment				187,845			1,406,983
Acquisition of intangible assets		(		1,031 )	(		130 )
Increase in non-current assets		(		6,554,233 )	(		3,229,177 )
Net cash flows used in investing activities		(		25,416,677 )	(		20,666,170 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings				421,582			8,805,907
Increase in short-term notes and bills payable				1,905,827			10,910,780
Decrease in other payables-related parties				-	(		118,800 )
Increase in corporate bonds payable				7,000,000			-
Increase in long-term borrowings				15,155,886			2,861,228
Payment of long-term borrowings		(		23,993,392 )	(		12,207,924 )
Payment of bonds payable		(		6,200,000 )	(		5,700,000 )
Payment of lease liabilities		(		155,845 )			-
(Decrease) increase in other non-current liabilities		(		1,097 )			8,749
(Decrease) increase in guarantee deposits		(		26,729 )			52,267
Payment of cash dividends	6(27)	(		36,329,900 )	(		41,009,931 )
Payment of expired cash dividends reclassified to capital
surplus		(		156 )	(		532 )
Payment of cash dividends - non-controlling interest		(		5,185,510 )	(		4,729,511 )
Changes in ownership interests in subsidiaries				-			734,114
Changes in non-controlling interest				-			2,183,363
Net cash flows used in financing activities		(		47,409,334 )	(		38,210,290 )
Effect of foreign exchange translations		(		2,297,074 )	(		229,882 )
Net (decrease) increase in cash and cash equivalents		(		16,110,557 )			1,525,210
Cash and cash equivalents at beginning of year				31,209,809			29,684,599
Cash and cash equivalents at end of year			$	15,099,252		$	31,209,809

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FORMOSA CHEMICALS & FIBRE CORPORATION PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortization Net gain on financial assets and liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of profit or loss of associates accounted for under the equity method Impairment loss on property, plant and equipment Gain on disposal and scrap of property, plant and equipment Realised (gain) loss from sales Changes in operating assets and liabilities Changes in operating assets Notes receivable Notes receivable-related parties Accounts receivable Accounts receivable-related parties Other receivables Inventory Other current assets Changes in operating liabilities Accounts payable Accounts payable-related parties Other payables Other current liabilities Accrued pension liabilities Cash inflow generated from operations Interest received Dividends received Interest paid Income tax paid Net cash flows from operating activities

For the years ended December 31 Notes 2019 2018 $ 31,898,538 $ 54,348,837 6(7)(8)(21) 5,497,457 5,875,223 6(21) 3,038,884 3,808,155 6(19) ( 27,104 ) ( 215,870 ) 6(20) 933,004 1,023,172 6(18) ( 248,856 ) ( 432,743 ) 6(18) ( 7,935,339 ) ( 7,010,822 ) ( 15,820,271 ) ( 22,422,542 ) 6(7)(19) - 313,855 6(19) ( 24,641 ) ( 5,981 ) ( 254,779 ) 244,384 174,313 56,840 286,827 ( 92,274 ) 1,942,962 1,291,712 4,932,646 ( 1,560,624 ) 1,700,334 ( 104,192 ) ( 827,914 ) ( 978,667 ) ( 1,031,171 ) ( 459,602 ) ( 439,168 ) ( 727,398 ) ( 3,312,296 ) ( 2,207,546 ) ( 1,876,723 ) 675,931 ( 794,469 ) 672,554 ( 531,098 ) ( 232,158 ) 17,281,136 31,860,244 270,745 426,472 22,594,777 25,618,054 ( 936,581 ) ( 1,044,268 ) ( 4,999,175 ) ( 5,271,852 ) 34,210,902 51,588,650

(Continued)

36

FORMOSA CHEMICALS & FIBRE CORPORATION PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES (Increase) decrease in other receivables-related parties Proceeds from disposal of financial assets at fair value through profit or loss Proceeds fom capital reduction of financial assets at fair value through other comprehensive income Acquisition of investments accounted for under the equity method Proceeds from disposal of investments accounted for under the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in non-current assets Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Increase in short-term notes and bills payable Increase in long-term borrowings Payment of long-term borrowings Increase in corporate bonds payable Payment of corporate bonds payable Payment of lease liabilities (Decrease) increase in other non-current liabilities Payment of cash dividends Expired dividends paid from capital surplus Net cash flows used in financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

For the years ended December 31 Notes 2019 2018 ($ 1,545,394 ) $ 301,850 - 772,909 7,749 - ( 6,054,554 ) ( 8,266,061 ) - 79,640 6(25) ( 5,824,832 ) ( 9,306,445 ) 46,830 7,978 ( 4,522,873 ) ( 2,616,960 ) ( 17,893,074 ) ( 19,027,089 ) 11,419,700 4,688,900 1,905,827 12,490,543 700,000 800,000 ( 7,188,889 ) ( 2,716,355 ) 7,000,000 - ( 6,200,000 ) ( 5,700,000 ) ( 6,020 ) - ( 12,246 ) 57,389 6(25) ( 36,329,900 ) ( 41,009,931 ) ( 156 ) ( 532 ) ( 28,711,684 ) ( 31,389,986 ) ( 12,393,856 ) 1,171,575 13,078,861 11,907,286 $ 685,005 $ 13,078,861

The accompanying notes are an integral part of these parent company only financial statements.

37

Formosa Chemicals & Fibre Corporation Statement of Profits Distribution For the year of 2019 Unit：NT$	Explanation	1. Registered capital of the company is NT$58,611,862,910; outstanding shares entitled to cash dividends distribution are 5,861,186,291. 2. The Company plans to distribute dividends of $3.8 per share for current year (among which, $2.67 will be distributed as dividends and $1.13 will be distributed as bonus); all of which are cash dividends. 3. The Company distributes dividends and bonus, all of which are from net profit after tax of 2019. 4. While the distribution of cash dividends to each individual shareholder is less than 1 dollar, the distribution will be rounded to the nearest dollar. 5. Other comprehensive income reclassified to unappropriated retained earnings of current year, all of which are adjustment for actuarial pension valuation. 6. Adjustments are changes in equity interests in subsidiaries and the disposal of equity instruments at fair value through other comprehensive income.
	Amount	2,970,224,208 6,156,413,739 22,272,507,906 33,591,038,039	64,990,183,892
		ion Items: priation of legal reserve of the after-tax profit ) priation of Special s reserve ution of dividends h ( $3.8 per share) propriated retained gs carried forward t year	Total
	Items	Distribut (1) Appro (10% (2) Appro surplu (3) Distrib in cas (4) Unap earnin to nex
	Amount	35,842,076,651 29,702,242,077 -454,681,954 -99,452,882	64,990,183,892
		le for ution: ppropriated ined earnings of ious years profit after tax urrent year Other prehensive me reclassified nappropriated ined earnings of ent year Adjustments	Total
	Items	Availab Distrib (1) Una reta prev (2) Net of c Minus: com inco to u reta curr Minus:

38

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR19000297 To the Board of Directors and Shareholders of Formosa Chemicals & Fibre Corporation

Introduction

We have audited the accompanying consolidated balance sheets of Formosa Chemicals & Fibre Corporation and its subsidiaries (the “Group”) as at December 31, 2019 and 2018, and the related consolidated statements of comprehensive income, of changes in equity and of 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 reports of other independent accountants, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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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, we do not provide a separate opinion on these matters

Assessment of loss allowance for accounts receivable

Description

Refer to Note 4(10) for accounting policy on accounts receivable, Note 5(2) for uncertainty of accounting estimates and assumptions in relation to impairment of accounts receivable, and Note 6(4) for details of loss allowance for accounts receivable. As of December 31, 2019, the Group’s accounts receivable amounted to NT$21,188,124 thousand, net of loss allowance in the amount of NT$284,724 thousand.

The Group assessed expected credit impairment loss on accounts receivable based on historical experience, forward-looking information and known reason or existing objective evidences. For those accounts which are considered uncollectible, the Company recognised impairment with a credit to accounts receivable. Management evaluates the reasonableness of estimated provision periodically. As the estimation of loss allowance is subject to management’s judgement and business indicators, the amount of provision is based on the collectability of accounts receivable, and considering that accounts receivable and loss allowance are material to the financial statements, we consider the loss allowance for accounts receivable a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

1. Obtained the overdue aging report used when management assessed the expected credit impairment loss, assessed whether the logic of data source was consistently applied, and tested its accuracy with proper documents.

2. Assessed the reasonableness of estimates used by management in calculating expected credit impairment loss and obtained supporting documents, including forward-looking information, disputed accounts, overdue accounts, subsequent collection, and other indications that would show the customer would be unable to repay on schedule.

40

1. Performed subsequent collection test in order to verify the adequacy of loss allowance provided for accounts receivable.

Evaluation of inventories

Description

Refer to Note 4(12) for accounting policy on inventory valuation, Note 5(2) for accounting estimates and assumption uncertainty in relation to inventory valuation, and Note 6(5) for detailed information on allowance for inventory valuation losses. As of December 31, 2019, the inventory and allowance for inventory valuation losses were NT$43,048,548 thousand and NT$1,779,284 thousand, respectively.

The Group is primarily engaged in the manufacture and sales of petrochemical plastic products, fibers weaving and cords. As the price of petrochemical plastic products is subject to the fluctuations in international crude oil price, and the textile market is competitive, there is a higher risk for inventory valuation loss. The Group recognises inventories at the lower of cost and net realisable value, and the net realisable value is calculated based on average price less selling expenses. Since the net realisable value used in inventory valuation involves subjective judgement and high uncertainty in estimation, and the allowance for inventory valuation losses is material to the financial statements, we considered the allowance for inventory valuation losses as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

1. Assessed the reasonableness of policies and procedures on allowance for inventory valuation loss, including the reasonableness of classification of inventory in determining the net realisable value.

2. Understood the Group’s warehousing control procedures. Reviewed the annual physical inventory count plan and participated in the annual inventory count in order to assess the effectiveness of the classification of inventory and internal control over inventory.

3. Checked the method in calculating the net realisable value of inventory and assessed the reasonableness of allowance for valuation loss.

41

Other matter – audits of the other independent accountants

We did not audit the financial statements of a wholly-owned consolidated subsidiary and certain investments accounted for under the equity method, which statements reflect total assets (including investments accounted for under equity method) of NT$151,374,296 thousand and NT$153,033,742 thousand, constituting 27% and 26% of consolidated total assets as of December 31, 2019 and 2018, respectively, operating income of NT$32,963,852 thousand and NT$37,429,243 thousand, constituting 10% and 9% of consolidated total operating income for the years then ended, respectively, and comprehensive income of NT$8,097,645thousand and NT$12,222,715 thousand, constituting 35% and 31% of consolidated total comprehensive income for the years then ended, respectively. Those financial statements were audited by other independent accountants whose reports thereon have been furnished to us, and our opinion expressed herein insofar as it relates to the amounts included in the financial statements relative to the subsidiary and investee companies, is based solely on the audit reports of the other independent accountants.

Other matter – parent company only financial statements

We have audited the parent company only financial statements of Formosa Chemicals & Fibre Corporation as of and for the years ended December 31, 2019 and 2018, and have expressed an unqualified opinion on such financial statements.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, 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.

42

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 audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditor’s 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 ROC GAAS 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 ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

43

1. 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 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 auditor’s 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 auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

2. 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.

3. Obtain sufficient 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.

44

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 auditor’s 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.

Wu, Han-Chi

Chou, Chien-Hung

For and on behalf of PricewaterhouseCoopers, Taiwan March 13, 2020

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

45

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR19000237 To the Board of Directors and Shareholders of FORMOSA CHEMICALS & FIBRE CORPORATION

Opinion

We have audited the accompanying parent company only balance sheets of FORMOSA CHEMICALS & FIBRE CORPORATION as at December 31, 2019 and 2018, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (refer to the Other Matter – Audits of the Other Independent Accountants section of our report), the accompanying parent company only financial statements present fairly, in all material respects, the financial position of FORMOSA CHEMICALS & FIBRE CORPORATION as at December 31, 2019 and 2018, 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 generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of FORMOSA CHEMICALS & FIBRE CORPORATION in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. Based on our audits and the reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

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

Assessment of loss allowance for accounts receivable

Description

Refer to Note 4(9) of parent company only financial statements for accounting policy on accounts receivable, Note 5(2) for uncertainty of accounting estimates and assumptions in relation to impairment of accounts receivable, and Note 6(4) for details of loss allowance for accounts receivable. As of December 31, 2019, the Company’s accounts receivable amounted to NT$18,475,337 thousand, net of loss allowance in the amount of NT$200,834 thousand.

The Company assessed expected credit impairment loss on accounts receivable based on historical experience, forward-looking information and known reason or existing objective evidences. For those accounts which are considered uncollectible, the Company recognised impairment with a credit to accounts receivable. Management evaluates the reasonableness of estimated provision periodically. As the estimation of loss allowance is subject to management’s judgement and business indicators, the amount of provision is based on the collectability of accounts receivable, and considering that accounts receivable and loss allowance are material to the financial statements, we consider the loss allowance for accounts receivable a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Obtained the overdue aging report used when management assessed the expected credit impairment loss, assessed whether the logic of data source was consistently applied, and tested its accuracy with proper documents.

2. Assessed the reasonableness of estimates used by management in calculating expected credit impairment loss and obtained supporting documents, including forward-looking information, disputed accounts, overdue accounts, subsequent collection, and other indications that would show the customer would be unable to repay on schedule.

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1. Performed subsequent collection test in order to verify the adequacy of loss allowance provided for accounts receivable.

Evaluation of inventories

Description

Refer to Note 4(11) for accounting policy on inventory valuation, Note 5(2) for accounting estimates and assumption uncertainty in relation to inventory valuation, and Note 6(5) for detailed information on allowance for inventory valuation losses. As of December 31, 2019, the inventory and allowance for inventory valuation losses were NT$19,737,670 thousand and NT$691,634 thousand, respectively. The Company is primarily engaged in the manufacture and sales of petrochemical plastic products, fibers weaving and cords. Because the price of petrochemical plastic products is subject to the fluctuations in international crude oil prices, and the textile market is competitive, there is a higher risk of inventory valuation loss. The Company recognises inventories at the lower of cost and net realisable value, and the net realisable value is calculated based on average price less selling expenses. Since the net realisable value used in inventory valuation involves subjective judgement and high uncertainty in estimation, and the allowance for inventory valuation loss is material to the financial statements, we considered the allowance for inventory valuation losses as a key audit matter.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1. Assessed the reasonableness of policies and procedures on allowance for inventory valuation loss, including the reasonableness of classification of inventory in determining the net realisable value;

2. Understood the Company’s warehousing control procedures, reviewed the annual physical inventory count plan and participated in the annual inventory count in order to assess the effectiveness of the classification of inventory and internal control over inventory.

3. Checked the method in calculating the net realisable value of inventory and assessed the reasonableness of allowance for valuation loss.

Other matter – audits of the other independent accountants

We did not audit the financial statements of certain investments accounted for under the equity method. Investments accounted for under the equity method amounted to NT$116,967,421 thousand and NT$117,816,823 thousand, both constituting 25% of total assets as of December 31, 2019 and 2018,

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respectively and comprehensive income was NT$7,912,093 thousand and NT$12,678,194 thousand, constituting 35% and 38% of total comprehensive income for the years then ended, respectively. Those financial statements were audited by other independent accountants whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on the audit reports of the other independent accountants.

Responsibilities of management and those charged with governance for the parent company only financial statements

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

In preparing the parent company only financial statements, management is responsible for assessing 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 audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

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As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on 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 auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the 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.

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

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

Wu, Han-Chi

Chou, Chien-Hung

for and on behalf of PricewaterhouseCoopers, Taiwan March 13, 2020

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for[the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation. ]

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Information regarding the Proposed Employees and Directors’ Compensation to Adopted by the Board of Directors of the Com n pa y:

1. Amounts of employees’ cash compensation, stock compensation, and Directors’ com ensation: p Employees Cash Compensation NT$ 31,930,468 Employees Stock Compensation NT$ 0 Directors Cash Compensation NT$ 0 2. Share amount of the employees’ stock compensation and the percentage of the share amount to that of all stock dividends capitalization: Share amount of em lo ees’ stock com ensation 0 share p y p Percentage of the share amount to that of all stock 0% dividends ca italization p

The above-listed amount of employees’ cash compensation is consistent with the proposed amount adopted by the Board of Directors of the Company.

Effect upon Business Performance and Earnings Per Share of the Company by the Stock Dividend Distribution Proposed at the 2020 Annual Shareholders’ Meeting:

Not applicable since the Company does not propose the stock dividend distribution at the 2020 Annual Shareholders’ Meeting and does not required preparing financial forecast information.

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Articles of Incorporation of Formosa Chemicals & Fibre Corporation

Amended by the Annual Shareholders’ Meeting on June 15, 2018

Chapter 1 General Provisions

• Article 1: The Company shall be incorporated as a company limited by shares under the Company Act and its name shall be “Formosa Chemicals & Fibre Corporation”.

• Article 2: The scope of business of the Company shall be as follows:

• A201010 Afforestation business

• A202040 Logging business

• C301010 Yarn Spinning Mills

• C302010 Knit Fabric Mills

• C305010 Printing, Dyeing, and Finishing Mills

• C501010 Timbering industry

• C601010 Paper mills

• C801010 Basic Industrial Chemical Manufacturing

• C801020 Petrochemical Manufacturing

• C801030 Precision chemical materials manufacturing

• C801100 Synthetic Resin & Plastic Manufacturing

• C801120 Manmade Fiber Manufacturing

• C801990 Other Chemical Materials Manufacturing

• C802080 Manufacturing of environmental use medicine

• C802090 cleaning preparations manufacturing

• C802100 Cosmetics Manufacturing

• C901990 Non-metallic mineral products

• CB01010 Machinery and Equipment Manufacturing

• CC01080 Electronic Parts and Components Manufacturing

• D101050 Steam and Electricity Paragenesis

• E502010 Fuel Pipe Construction

• E599010 Pipe Lines Construction

• E601010 Electric Appliance Construction

• E603010 Cable Construction

• E603040 Fire Fighting Equipment Construction

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1. E603050 Cybernation Equipment Construction

2. E603090 Illumination Equipment Construction

3. E603100 Electric Welding Construction

4. E603110 Cold work engineering

5. E603120 Sand Spurting Construction

6. E604010 Machinery Installation Construction

7. E605010 Computing Equipment Installation

8. E901010 Painting engineering

9. E903010 Eroding and Rusting Construction

10. EZ02010 Hoisting engineering

11. EZ05010 Apparatus and Gauge Installation

12. EZ15010 Warming and Cooling Maintenance Construction

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

14. Article 3: The Company shall have its head office in Changhua County. The Board of Directors may decide to set up subsidiaries, plants and branch offices at various locations within and without the territory of the Republic of China as necessary. Their establishment or change or abolishment shall be managed upon the resolutions of the Board of Directors.

15. Article 4: Public announcements of the Company shall be published in accordance with Article 28 of the Company Act.

16. The Company may provide guarantees for related parties. The total investment amount of the Company may exceed forty percent of the paid-in capital.

Chapter 2 Shares

• Article 5: The total capital of the Company shall be in the amount of 58,611,862,900 New Taiwan Dollars, divided into 5,861,186,290 shares, at a par value of 10 New Taiwan Dollars per share, issued in full.

• Article 6: The Company may be exempted from printing any share certificates in accordance with relevant regulations.

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However, those shares shall be registered in a centralized securities depository enterprise.

Article 7: (deleted)

• Article 8: (deleted)

• Article 9: The shareholders shall submit their seal specimen to the Company for record. Afterward, the shareholders shall receive the dividend or exercise their rights in writing against the specimen kept by the Company.

• In the event that the seal specimen is lost or stolen, the shareholders shall fill out the application of lost seal with detailed share certificate numbers and shares and submit the same along with identity documents and copies, new seal specimen and share certificates to the Company for registration. The new seal card will be replaced upon approval and will be effective on the next day of completed registration. When preceding replacement of seal specimen is entrusted to others or managed by communication, the individual shareholder shall also have the seal certificate issued by the Householder Registration Office enclosed; while the application shall be enclosed by the corporate shareholders.

• Article 10: No transfer of share certificates shall be permitted within 60 days prior to regular shareholders’ meeting, 30 days prior to a special shareholders’ meeting, or within 5 days prior to the record day on which a dividend, bonus, or any other benefit is scheduled to be paid by the Company.

Chapter 3 Shareholders’ Meeting

• Article 11: The shareholders’ meetings of the Company are divided into two types as follows:

• Regular meetings shall be convened by the Board of Directors within 6 months after the close of each fiscal year. Special meetings shall be convened pursuant to Company Act as necessary.

• Article 12: The notice and announcement of regular shareholders’ meeting shall be given to shareholders within 30 days in

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advance, while the notice and announcement of the special shareholders’ meetings shall be given to shareholders within 15 days in advance. The reasons for convening a shareholders’ meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form.

• Article 13: The Chairman of the Board of Directors shall preside over the shareholders’ meetings. In the Chairman’s absence, the Vice Chairman shall act on his behalf. In the absence of in case that the Vice Chairman is unable to exercise rights for causes, the Chairman of the Board of Directors shall designate one Managing Director to act on his behalf.

• Article 14: Each share of stock owned by shareholders shall be entitled for one vote, except for those shares without voting rights as set forth in Article 179, paragraph 2 of the Company Act.

• Article 15: If a shareholder is unable to attend a meeting, who may sign and show the proxy with extinct scope of authorization issued and appoint a representative to attend it. Except for the trust business or stock affairs agency as approved by the competent securities authority, the voting rights of a shareholder representing two and more shareholders shall not exceed 3% of total shares issued and the voting shares exceeding the percentage will be excluded from the calculation. After the proxy is delivered to the Company, the shareholder shall give written notice of proxy cancellation at least two days before the meeting if the shareholder intends to attend the meeting in person or to exercise voting rights in writing or via electronic method. For cancellation beyond the deadline, the voting rights exercised by the proxy shall prevail.

• Article 16: Resolution passed by Shareholders, such Shareholders holding not less than half of the Shares held by all Shareholders attending that meeting, and such meeting attended by Shareholders holding not less than half of all issued Shares of the Company.

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• Article 17: Revolutions adopted at a shareholders’ meeting shall be recorded in the minutes of the meeting. The minutes of shareholders' meeting shall record the date and place of the meeting, the name of the chairman, the method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting, which shall be affixed with the signature or seal of the chairman of the meeting. The electronic method may be adopted for the production and distribution of meeting minutes.

• The resolutions of the shareholders’ meeting shall be recorded in the minutes, and such minutes shall be signed by or sealed with the chop of the chairman of the meeting. Such minutes, together with the attendance list and proxies, shall be filed and kept at least one year. If, however, minutes file a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation. The minutes shall be drafted in both the Chinese language and the English language.

The distribution of preceding meeting minutes may be replaced by the announcement made on the MOPS.

Chapter 4 Directors

• Article 18: The Company shall have 11 to 15 directors, to be elected at the shareholders’ meeting from the nominees listed in the roster of candidates under the candidate nomination system. The total number of shares held by the directors of the Company shall follow the rules promulgated by the competent securities authority.

The Company shall have three independent directors among the directors above. The matters regarding method of nomination and other matters shall be conducted in accordance with the Company Act and related regulations of competent securities authority.

The Company shall have the Audit Committee organized by all independent directors in accordance with Article 14-4 of the Securities Exchange Act. For matters regarding the

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competence and related events, the Company shall follow the Securities Exchange Act and other relevant laws and regulations.

• Article 19: The terms of office of directors shall be three years and they shall be eligible for re-election. Where the term of office expires before the closing date of the General Meeting of Shareholders in the last fiscal year of such term, the term of office shall be extended to the closing date of such General Meeting.

• Article 20: When the number of Directors falls short by one-third of the total number of Directors elected, the Company shall convene a meeting for election of Directors within 60 days. In respect of a Director who is elected to fill a vacancy, the term of office of such Director shall not exceed the term that remained when the person who has ceased to be a Director ceased to hold.

• Article 21: The directors constitute the Board of Directors and shall elect at least three Managing Directors, which shall not more than one-third of total number of the directors. At least one of the Managing Directors shall be an independent director. Meanwhile, the Managing Directors shall elect among them a Chairman and a vice Chairman by way of preceding election. The Chairman shall represent the Company.

• The directors shall attend meeting in person. Except for regulations provided otherwise by the Company Act for directors living abroad, if any Director of the Board of the Company cannot attend the meeting for causes, he may issue a written proxy to other directors for attending the meeting. However, a director may accept the appointment to act as the proxy with extinct extent of authorization of one other director only. In case a meeting of the Board of Directors is proceeded via visual communication network, then the directors taking part in such a visual communication meeting shall be deemed to have attended the meeting in person.

In calling a meeting of the Board of Directors, the notice with

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reasons specified shall be given to all directors within 7 days in advance. However, the meeting may be convened anytime for emergency events. The notice of the meeting of the Board of Directors may be made in writing, email or facsimile.

• Article 22: Directors shall participate in the resolution of company operational guidelines and other important issue. The Chairman of the Board of Directors shall preside of the meeting of the Board of Directors. In the absence of the Chairman, the Board of Directors shall act according to the preceding paragraph.

Determine the procurement and disposition of important properties of the Company is not include in the aforesaid other important issue.

The Board of the Directors may authorize the Chairman to exercise functions of the Board during the adjourned period. Except for the material interest or related parties transactions involved to be resolved by the Board of Directors pursuant to the laws of related articles, the content of authorization is as follows:

1. Approve all important contracts.

2. Approve the mortgage loan of real estate and other loans.

3. Approve acquisition or disposal of the general assets and real estate.

4. Assign the directors and supervisors of the investee.

5. Approve the record date of capital increment or reduction and divided distribution.

6. Article 23: The resolutions of the Board of Directors of the Company shall be adopted by a majority vote of the shareholders’ present, who represent more than one-half of the total number of voting shares.

Article 24: (deleted)

Article 25: (deleted)

Article 26: (deleted)

• Article 27: The Board of Directors is authorized to determine the

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compensation of directors according to their degree of participation and contribution with normal standard in the same industry.

The Company may obtain directors liability insurance with respect to liabilities resulting from exercising their duties during their terms of directorship.

Chapter 5 Managers

• Article 28: The Company may have managers. The employment, discharge and compensation shall be managed in accordance with Article 29 of the Company Act.

• Article 29: Managers enforce the resolutions of the Board of Directors. A managerial personnel of a company shall not concurrently act as a managerial personnel of another company, nor shall he/she operate, for the benefit of his/her own or others, any business which is the same as that of the company employs him/her, unless otherwise concurred in by the Board of Directors.

Chapter 6 Accounting

• Article 30: The fiscal year of the Company shall be from January 1 to December 31 every year. After the close of each fiscal year, the Board of Directors shall prepare following statements and records and submit the same to the general meeting of shareholders for ratification:

• 1.The business report;

• 2.The financial statements; and

• 3.The surplus earning distribution or loss off-setting proposals.

• Article 31: When allocating the net profits for each fiscal year, the Company shall set aside 0.05% to 0.5% of the balance of pretax profit prior to deducting employees compensation as compensation of employees. However, the Company's accumulated losses shall have been covered.

The resolution of employees compensation pursuant to Article 235-1 of the Company Act.

• Article 32: Where there is surplus of the annual final account, when

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allocating the net profits for each fiscal year, the Company shall first pay its income tax and offset its prior years’ accumulated losses and set aside 10% legal capital reserve and special earning reserve as necessary followed by the dividend. For remaining surplus incorporated with the accumulated earning in previous years, the Board of Directors shall prepare the proposal concerning the appropriation of net profits and submit the same to the shareholders’ meeting for resolution.

Preceding special earning reserves include:

• 1.The earning reserved recognized for special purpose

• Investment income recognized under the equity method

• 3.The net assessment income recognized due to financial product transactions, however, when the accumulated amount is reduced, the equal amount of special earning reserve shall be reduced simultaneously and up to the reserved number.

• Other special earning reserve pursuant to laws and regulations

The Company is in matured phase of business cycle with stable profit every year. The dividend policies adopt the combination of cash dividend, capital increment by earning and by capital reserve. At least 50% of distributable earning deducted by the legal and special reserve shall be distributed, and the cash dividend shall be prioritized. Meanwhile, the percentage of capital increment by earning and capital reserve shall not exceed 50% of all dividend in that year.

• Article 33: Matters not provided for in these Articles of Incorporation shall be governed by the Company Act and other relevant laws.

Chapter 7 Additional provision

• Article 34: These Articles of Incorporation were adopted on Oct.28, 1964. The 1st Amendment was on May 10,1966, 2nd Amendment on May 31, 1967, 3rd Amendment on Jan. 30, 1968, 4th Amendment on Sept. 29, 1969, 5th Amendment on

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July 30, 1970, 6th Amendment on Aug. 20, 1971, 7th Amendment on May 20, 1972, 8th Amendment on June 30, 1973, 9th Amendment on June 26, 1974, 10th Amendment on June 20, 1975, 11th Amendment on June 15, 1976, 12th Amendment on June 15, 1977, 13th Amendment on June 15, 1978, 14th Amendment on June 15, 1979, 15th Amendment on June 16, 1980, 16th Amendment on June 15, 1981, 17th Amendment on June 15, 1982, 18th Amendment on June 16, 1983, 19th Amendment on June 15, 1984, 20th Amendment on May 23, 1985, 21st Amendment on May 25, 1986, 22nd Amendment on Mar. 8, 1987, 23rd Amendment on May 12, 1988, 24th Amendment on May 20, 1989, 25th Amendment on May 11, 1990, 26th Amendment on May 14, 1991, 27th Amendment on May 14, 1992, 28th Amendment on May 10, 1994, 29th Amendment on May 12, 1995, 30th Amendment on May 22, 1996, 31st Amendment on May 28, 1997, 32nd Amendment on June 12, 1998, 33rd Amendment on May 12, 1999, 34th Amendment on May 10, 2000, 35th Amendment on May 10, 2001, 36th Amendment on June 7, 2002, 37th Amendment on May 29, 2003, 38th Amendment on May 28, 2004, 39th Amendment on June 10, 2005, 40th Amendment on June 16, 2006, 41st Amendment on June 8, 2007, 42nd Amendment on June 6, 2008, 43rd Amendment on June 19, 2009, 44th Amendment on June 18, 2010, 45th Amendment on June 15, 2012, 46th Amendment on June 17, 2013, 47th Amendment on June 16, 2014, 48th Amendment. The articles in related with addition of Audit Committee and deletion of Supervisors will be applied upon the expiry of the term of office of Supervisors selected in the shareholders’ meeting on June 15, 2012. The 49th Amendment on June 16, 2015, 50th Amendment on June 7, 2016, 51th Amendment on June 15, 2018.

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Rules of Procedure for Shareholders’ Meetings of Formosa Chemicals & Fibre Corporation

Amended by the Annual Shareholders’ Meeting on June 7, 2016

• Article 1:[To establish a strong governance system and sound supervisory ] capabilities for the Company's shareholders’ meetings, and to strengthen management capabilities, these Rules are adopted pursuant to the Corporate Governance Best Practice Principles for Taiwan Stock Exchange Corp (“TWSE”)/ Taipei Exchange (“TPEx”) Listed Companies.

• Article 2:[The rules of procedures for the Company's shareholders’ ] meetings, except as otherwise provided by law, regulation, or the Articles of Incorporation, shall be as provided in these Rules.

• Article 3:[Unless otherwise provided by law or regulation, the Company's ] Shareholders’ Meetings shall be convened by the Board of Directors.

A notice to convene an annual shareholders’ meeting shall be given to each shareholder no later than 30 days prior to the scheduled meeting date; while a notice may be given to registered shareholders who own less than 1,000 shares of nominal stocks no later than 30 days prior to the scheduled meeting date in the form of a public announcement on the Market Observation Post System (MOPS) of the TWSE. A notice to convene a special shareholders’ meeting shall be given to each shareholders no later than 15 days prior to the scheduled meeting date. A public notice may be given to registered shareholders who own less than 1,000 shares of nominal stocks no later than 15 days prior to the scheduled meeting date in the form of a public announcement on the MOPS of the TWSE.

To convene a shareholders’ meeting, the Company shall prepare a meeting handbook. The Company shall prepare electronic versions of a shareholders’ meeting notice and proxy forms, and

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causes of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors, and upload them to the MOPS no later than 30 days prior to the scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the scheduled Special Shareholders’ Meeting date. The Company shall prepare electronic versions of a shareholders’ meeting handbook and supplemental meeting materials and upload them to the MOPS no later than 21 days prior to the scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the scheduled Special Shareholders’ Meeting date. In addition, the Company shall also have prepared a shareholders’ meeting handbook and supplemental meeting materials and made them available for review by shareholders at any time no later than 15 days prior to the scheduled Shareholders’ Meeting date. The Meeting Agenda and supplemental materials shall also be displayed at the Company and the professional shareholder services agent engaged by the Company as well as being distributed on-site at the meeting place.

The reasons for convening a shareholders’ meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form.

Election or dismissal of directors, amendments to the Articles of Incorporation, the dissolution, merger, or demerger of the corporation, or any matter under paragraph 1 of Article 185 of the Company Act or Articles 26-1 and 43-6 of the Securities and Exchange Act, Articles 56-1 and 60-2 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out in the notice of the causes to convene the shareholders’ meeting. None of the above matters may be raised by an extraordinary motion.

A shareholder holding 1 percent or more of the total number of issued shares may submit to the Company a written proposal for discussion at an annual shareholders’ meeting. Such proposals,

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however, are limited to one item only, and no proposal containing more than one item will be included in the Meeting Agenda. In addition, when the circumstances of any subparagraph of paragraph 4 of Article 172-1 of the Company Act apply to a proposal put forward by a shareholder, the Board of Directors may exclude it from the Agenda.

Prior to the book closure date before an annual shareholders’ meeting is held, the Company shall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days.

Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. The shareholder making the proposal shall be present in person or by proxy at the Annual Shareholders’ Meeting and take part in discussion of the proposal.

Prior to the date for issuance of notice of a shareholders’ meeting, the Company shall inform the shareholders who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. At the Shareholders’ Meeting the Board of Directors shall explain the reasons for exclusion of any shareholder proposals not included in the agenda.

• Article 4:[For each shareholders’ meeting, a shareholder may appoint a ] proxy to attend the meeting by providing the proxy form issued by the Company and stating the scope of the power authorized to the proxy.

• A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders’ meeting, and shall deliver the proxy form to the Company no later than 5 days prior to the Shareholders’ Meeting date. When duplicate proxy forms are delivered, the one received earliest shall prevail unless a declaration is made to revoke the previous proxy appointment. After a proxy form has been delivered to the Company, if the

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shareholder intends to attend the meeting in person or to exercise voting rights in writing or by way of electronic transmission, a written notice of proxy rescission shall be submitted to the Company no later than 2 days prior to the meeting date. If the rescission notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.

• Article 5:[The venue for a shareholders’ meeting shall be the premises of ] the Company, or a place easily accessible to shareholders and suitable for a shareholders’ meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m.

• Article 6:[The Company shall specify in its shareholders’ meeting notices ] the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

• The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel assigned to handle the registrations.

• The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors, pre-printed ballots shall also be furnished. Shareholders and their proxies (collectively, "shareholders") shall attend shareholders’ meetings based on attendance cards, sign-in cards, or other certificates of attendance. The Company shall not impose arbitrary requirements on shareholders to provide additional evidentiary documents beyond those showing eligibility to attend. Solicitors soliciting proxy forms shall also bring identification documents for verification.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders’

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meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

• Article 7:[If a shareholders’ meeting is convened by the Board of Directors, ] the meeting shall be chaired by the Chairman. When the Chairman is on leave or for any reason unable to exercise the powers of the Chairman, the Vice Chairman shall act in place of the Chairman; if there is no Vice Chairman or the Vice Chairman also is on leave or for any reason unable to exercise the powers of the Vice Chairman, the Chairman shall appoint one of the Managing Director to act as chair, or, if there are no Managing Directors, one of the Directors shall be appointed to act as chair. Where the Chairman does not make such a designation, the Managing Directors or the Directors shall select from among themselves one person to serve as chair.

• When a Managing Director or a Director serves as chair, as referred to in the preceding paragraph, the Managing Director or Director shall be one who has held that position for 6 months or more and who understands the financial and business conditions of the Company. The same shall be true for a representative of a juristic person director that serves as chair.

• It is advisable that shareholders’ meetings convened by the Board of Directors be chaired by the Chairman, that a majority of the Directors attend in person, and that at least one member of each functional committee attend as representative. Attendance details should be recorded in the Shareholders Meeting minutes. If a shareholders’ meeting is convened by a party having the convening right but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.

The Company may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders’ meeting in a non-voting capacity.

Article 8:[The Company, beginning from the time it accepts shareholder ]

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attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders’ meeting, and the voting and vote counting procedures.

The recorded materials of the preceding paragraph shall be retained for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

• Article 9:[Quorum at shareholders’ meetings shall be calculated based on ] numbers of shares. The quorum shall be calculated according to the shares indicated by the sign-in cards handed in plus the number of shares whose voting rights are exercised in writing or by way of electronic transmission.

The Chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the Chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the Chair shall declare the meeting adjourned.

If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to paragraph 1 of Article 175 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders’ meeting shall be convened within 1 month.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the Chair may resubmit the tentative resolution for a vote by the shareholders’ meeting pursuant to Article 174 of the Company Act.

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• Article 10:[If a shareholders’ meeting is convened by the Board of Directors, ] the meeting agenda shall be set by the Board of Directors. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders’ meeting. The provisions of the preceding paragraph apply mutatis mutandis to a shareholders’ meeting convened by a party having the convening right that is not the Board of Directors.

• The Chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders’ meeting. If the Chair declares the meeting adjourned in violation of the rules of procedure, the other members of the Board of Directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by a majority of the votes represented by the attending shareholders, and then continue the meeting.

• The Chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the Chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the Chair may announce the discussion closed and call for a vote.

• Article 11:[Before speaking, an attending shareholder must specify on a ] speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the Chair. A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.

Except with the consent of the Chair, a shareholder may not speak more than twice on the same proposal, and a single speech

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may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the Chair may terminate the speech.

When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the Chair and the shareholder that has the floor; the Chair shall stop any violation.

When a juristic person shareholder appoints two or more representatives to attend a shareholders’ meeting, only one of the representatives so appointed may speak on the same proposal. After an attending shareholder has spoken, the Chair may respond in person or direct relevant personnel to respond.

Article 12:[Voting at a shareholders’ meeting shall be calculated based on ] the number of shares.

With respect to resolutions of shareholders’ meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of the Company, that shareholder may not vote on that item, and may not exercise voting rights as proxy for any other shareholder.

In case a director of the Company has created a pledge on the Company’s shares more than half of the Company’s shares being held by him/her/it at the time he/she/it is elected, the voting power of the excessive portion of shares shall not be exercised.

The number of shares for which voting rights may not be exercised under the preceding two paragraphs shall not be calculated as part of the voting rights represented by attending shareholders.

With the exception of a trust enterprise or a stock agency approved by the competent securities authority, when one person is concurrently appointed as proxy by two or more shareholders,

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the voting rights represented by that proxy may not exceed 3 percent of the voting rights represented by the total number of voting shares, otherwise, the portion of excessive voting rights shall not be counted.

• Article 13:[A shareholder shall be entitled to one vote for each share held, ] except when the shares are restricted shares or are deemed nonvoting shares under paragraph 2 of Article 179 of the Company Act.

When the Company holds a shareholders’ meeting, it may allow the shareholders to exercise voting rights in writing or by way of electronic transmission. When voting rights are exercised in writing or by way of electronic transmission, the method for exercising the voting rights shall be specified in the shareholders’ meeting notice. A shareholder exercising voting rights in writing or by way of electronic transmission will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting.

A shareholder intending to exercise voting rights in writing or by way of electronic transmission under the preceding paragraph shall deliver a written declaration of intent to the Company no later than 2 days prior to the scheduled shareholders’ meeting date. When duplicate declarations of intent are delivered, the one received earliest by the Company shall prevail, except when a declaration is made to revoke the earlier declaration of intention. After a shareholder has exercised voting rights in writing or by way of electronic transmission, in the event the shareholder intends to attend the shareholders’ meeting in person, a written declaration of intent to rescind the voting rights already exercised under the preceding paragraph shall be made known to the Company, by the same means by which the voting rights were exercised, no later than 2 days prior to the scheduled shareholders’ meeting date. If the notice of rescission is submitted after that time, the voting rights already exercised in writing or by way of electronic transmission shall prevail. When

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a shareholder has exercised voting rights both in writing or by way of electronic transmission and by appointing a proxy to attend a shareholders’ meeting, the voting rights exercised by the proxy in the meeting shall prevail.

Except as otherwise provided in the Company Act and in the Company's Articles of Incorporation, the adoption of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the Chair or a person designated by the Chair shall announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the MOPS.

When there is an amendment or an alternative to a proposal, the Chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the Chair, provided that all monitoring personnel shall be shareholders of the Company. Vote counting for shareholders’ meeting proposals or elections shall be conducted in public at the place of the shareholders’ meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

• Article 14:[The election of directors at a shareholders’ meeting shall be held ] in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they

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were elected.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

• Article 15:[Matters relating to the resolutions of a shareholders’ meeting ] shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the Chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form.

• The Company may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS.

• The meeting minutes shall accurately record the year, month, day, and place of the meeting, the Chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the duration of the existence of the Company.

• Article 16:[On the day of a shareholders’ meeting, the Company shall ] compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at the place of the shareholders’ meeting.

• If matters put to a resolution at a shareholders’ meeting constitute material information under applicable laws or regulations or under TWSE regulations, the Company shall upload the content of such resolution to the MOPS within the prescribed time period.

Article 17:[Staff handling administrative affairs of a shareholders’ meeting ]

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shall wear identification cards or arm bands.

The Chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."

At the place of a shareholders’ meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by the Company, the Chair may prevent the shareholder from so doing.

• When a shareholder violates the rules of procedure and defies the Chair's correction, obstructing the proceedings and refusing to heed calls to stop, the Chair may direct the proctors or security personnel to escort the shareholder from the meeting.

• Article 18:[When a meeting is in progress, the Chair may announce a break ] based on time considerations. If a force majeure event occurs, the Chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

• If the meeting venue is no longer available for continued use and not all of the items (including extraordinary motions) on the meeting agenda have been addressed, the shareholders’ meeting may adopt a resolution to resume the meeting at another venue. A resolution may be adopted at a shareholders’ meeting to postpone or resume the meeting within 5 days in accordance with Article 182 of the Company Act.

• Article 19:[These Rules and any amendments hereto, shall be implemented ] after adoption by shareholders’ meetings.

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Formosa Chemicals & Fibre Corporation Current Shareholdin of Directors gs

Title	Name	Shareholding (share)
Chairman	Wen Yuan, Wong	129,198,084
Vice Chairman	Fu Yuan, Hong	272,804
Managing Director	Wilfred, Wang	16,867,218
Managing Director	Nan Ya Plastics Corporation Representative: RueyYu,Wang	140,519,648
Managing Director (Independent Director)	Ruey Long, Chen	0
Independent Director	Hwei Chen,Huang	0
Independent Director	Tai Lang, Chien	0
Director	Formosa Petrochemical Corporation Representative: Walter Wang	48,567,575
Director	Wen Chin, Lu	3,236
Director	DongTerng,Huang	27,410
Director	IngDar,Fang	73
Director	ChingFen,Lee	0
Director	Jin Hua,Pan	0
Director	Wei Keng,Chien	0
Director	TsungYuan,Chang	0

Note: According to Article 26 of Securities and Exchange Act, the

minimum shareholdings of the Company’s Directors are 93,778,981 shares. As of April 7, 2020, the actual shareholdings of the Company’s Directors are 335,456,048 shares.

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