FCFC - Interim / Quarterly Report 2017

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

SEPTEMBER 30, 2017 AND 2016

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

FORMOSA CHEMICALS & FIBRE CORPORATION

AND SUBSIDIARIES

INDEX

INDEX
Items Index Report of Independent Accountants Consolidated Balance Sheets Consolidated Statements of Comprehensive Income Consolidated Statements of Changes in Equity Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements	Pages
	1-2 3-4 5-6 7-8 9-10 11-108

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

PWCR17000112 To the Board of Directors and Shareholders of Formosa Chemicals & Fibre Corporation

We have reviewed the accompanying consolidated balance sheets of Formosa Chemicals & Fibre Corporation and subsidiaries as of September 30, 2017 and 2016, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the nine-month periods then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our reviews. We did not review the financial statements of certain investments accounted for using equity method of Formosa Chemicals & Fibre Corporation and subsidiaries and certain investees information disclosed in Note 13 for the ninemonth periods ended September 30, 2017 and 2016. The balance of related investment accounted for using equity method amounted to NT$77,412,112 thousand and NT$66,944,778 thousand as of September 30, 2017 and 2016, respectively. The comprehensive income (including share of profit (loss) of associates accounted for using equity method and share of profit (loss) and other comprehensive income of associates) amounted to NT$7,688,099 thousand, NT$3,452,512 thousand, NT$17,043,567 thousand and NT$12,009,829 thousand for the three-month periods and the nine-month periods ended September 30, 2017 and 2016, respectively. Those financial statements and the information disclosed in Note 13 were reviewed by other independent accountants whose reports thereon have been furnished to us, and our conclusion expressed herein is based solely on the review reports of the other independent accountants.

Except as described in the following paragraph, our reviews were made in accordance with the Generally Accepted Auditing Standards No. 36, “Review of Financial Statements” in the Republic of China. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards in the Republic of China, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

The financial statements of certain insignificant subsidiaries, investments accounted for using equity method and the information disclosed in Note 13 were not reviewed by independent accountants. Those statements reflect total assets (including investments accounted for using equity method) of

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NT$105,529,911 thousand and NT$103,508,358 thousand, constituting 19% and 20% of the consolidated total assets, and total liabilities of NT$18,110,919 thousand and NT$18,952,819 thousand, both constituting 12% of the consolidated total liabilities as of September 30, 2017 and 2016, respectively; and total operating revenues of NT$12,527,573 thousand, NT$11,624,727 thousand, NT$39,234,475 thousand and NT$36,121,185 thousand, constituting 14%, 15%, 15% and 15% of the consolidated operating revenue, and comprehensive income (including share of profit (loss) of associates accounted for using equity method and share of profit (loss) and other comprehensive income of associates) amounting to NT$1,733,986 thousand, NT$1,674,117 thousand, NT$3,043,232 thousand and NT$4,096,316 thousand, constituting 5%, 10%, 5% and 11% of the total comprehensive income for the three-month periods and nine-month periods ended September 30, 2017 and 2016, respectively.

Based on our reviews and the review reports of other independent accountants, except for the effect of such adjustments, if any, as might have been determined to be necessary had the financial statements of certain insignificant subsidiaries, investments accounted for using equity method and the information disclosed in Note 13 been reviewed by independent accountants, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with the “Regulations Governing the Preparation of Financial Statements by Securities Issuers”, and IAS 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Chou, Chien-Hung

[Juanlu, Man-Yu ]

for and on behalf of PricewaterhouseCoopers, Taiwan November 9, 2017

------------------------------------------------------------------------------------------------------------------------------------------------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.

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of September 30, 2017 and 2016 are reviewed, not audited)

Assets	Notes	September 30, 2017 AMOUNT % `$` `25,902,170` `5` `630,559` `-` `118,560,358` `21` `10,464,232` `2` `10,477` `-` `18,053,898` `3` `6,844,180` `1` `6,004,164` `1` `15,457,618` `3` `36,239,838` `7` `7,091,677` `1` `245,259,171` `44` `40,956,228` `7` `25,424,740` `5` `106,237,699` `19` `124,782,880` `23` `997` `-` `1,881,601` `-` `10,338,500` `2` `309,622,645` `56` `$` `554,881,816` `100`	December 31, 2016 AMOUNT % `$` `30,391,911` `6` `627,621` `-` `100,777,992` `18` `7,037,751` `1` `11,643` `-` `18,028,975` `3` `7,356,435` `1` `5,107,594` `1` `19,841,060` `4` `42,215,280` `8` `5,409,066` `1` `236,805,328` `43` `42,381,294` `8` `24,431,806` `5` `102,035,137` `19` `130,913,460` `24` `1,583` `-` `1,732,954` `-` `6,135,028` `1` `307,631,262` `57` `$` `544,436,590` `100`	September 30, 2016
			AMOUNT `$` `30,391,911` `627,621` `100,777,992` `7,037,751` `11,643` `18,028,975` `7,356,435` `5,107,594` `19,841,060` `42,215,280` `5,409,066` `236,805,328` `42,381,294` `24,431,806` `102,035,137` `130,913,460` `1,583` `1,732,954` `6,135,028` `307,631,262` `$` `544,436,590`	AMOUNT % `$` `28,039,964` `6` `627,540` `-` `86,834,035` `17` `6,411,915` `1` `1,949` `-` `15,825,842` `3` `5,930,594` `1` `6,859,799` `1` `17,320,804` `4` `34,643,134` `7` `10,417,886` `2` `212,913,462` `42` `35,603,848` `7` `23,860,960` `5` `93,246,280` `18` `134,039,915` `26` `1,995` `-` `2,039,654` `-` `7,745,111` `2` `296,537,763` `58` `$` `509,451,225` `100`
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1125 Available-for-sale financial assets - current 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 1523 Available-for-sale financial assets - non-current 1543 Financial assets carried at cost - non-current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets	6(1) 6(2) 6(3) 6(4) 7 6(5) 7 7 7 6(6) and 8 7 and 8 6(3) and 8 6(7) 6(8), 7 and 8 6(9) and 8

(Continued)

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of September 30, 2017 and 2016 are reviewed, not audited)

					September 30, 2017			December 31, 2016				September 30, 2016
	Liabilities and Equity	Notes			AMOUNT	%		AMOUNT	%			AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(10)		`$`	`28,482,016`		`5 $`	`26,146,750`		`5`	`$`	`22,607,585`	`4`
2110	Short-term notes and bills	6(10)
	payable				`1,679,521`		`-`	`1,499,464`		`-`		`1,799,654`	`-`
2120	Financial liabilities at fair	6(11)
	value through profit or loss -
	current				`-`		`-`	`1,381`		`-`		`388`	`-`
2150	Notes payable				`198,124`		`-`	`196,870`		`-`		`154,970`	`-`
2170	Accounts payable				`5,952,105`		`1`	`8,525,984`		`2`		`8,561,559`	`2`
2180	Accounts payable - related	7
	parties				`12,392,113`		`2`	`13,385,510`		`2`		`10,780,772`	`2`
2200	Other payables				`10,683,059`		`2`	`8,387,052`		`1`		`8,193,926`	`2`
2220	Other payables - related parties	7			`207,900`		`-`	`57,478`		`-`		`26,200`	`-`
2230	Current income tax liabilities				`2,516,332`		`1`	`3,708,596`		`1`		`3,018,266`	`1`
2320	Long-term liabilities, current	6(12)(13)
	portion				`12,320,122`		`2`	`14,416,502`		`3`		`14,153,027`	`3`
2399	Other current liabilities				`4,670,564`		`1`	`2,884,328`		`-`		`2,840,784`	`-`
21XX	Total current liabilities				`79,101,856`	`14`		`79,209,915`	`14`			`72,137,131`	`14`
	Non-current liabilities
2530	Corporate bonds payable	6(12)			`36,000,000`		`7`	`39,750,000`		`8`		`41,250,000`	`8`
2540	Long-term borrowings	6(13)			`32,068,253`		`6`	`38,614,620`		`7`		`39,677,428`	`8`
2570	Deferred income tax liabilities				`332,394`		`-`	`312,506`		`-`		`262,894`	`-`
2600	Other non-current liabilities	6(14)			`6,406,275`		`1`	`6,909,137`		`1`		`9,230,162`	`2`
25XX	Total non-current
	liabilities				`74,806,922`	`14`		`85,586,263`	`16`			`90,420,484`	`18`
2XXX	Total liabilities				`153,908,778`	`28`		`164,796,178`	`30`			`162,557,615`	`32`
	Equity attributable to owners of
	parent
	Share capital	6(15)
3110	Common stock				`58,611,863`	`11`		`58,611,863`	`11`			`58,611,863`	`12`
	Capital surplus	6(16)
3200	Capital surplus				`8,668,152`		`2`	`8,622,642`		`1`		`8,826,543`	`2`
	Retained earnings	6(17)
3310	Legal reserve				`51,046,840`		`9`	`46,663,535`		`9`		`46,663,535`	`9`
3320	Special reserve				`46,567,089`		`8`	`41,927,550`		`8`		`41,927,550`	`8`
3350	Unappropriated retained	6(25)
	earnings				`68,959,115`	`12`		`72,560,103`	`13`			`64,240,302`	`13`
	Other equity interest	6(18)
3400	Other equity interest				`110,020,893`	`20`		`91,965,445`	`17`			`73,332,887`	`14`
3500	Treasury stocks	6(15)	`(`		`595,688)`		`- (`	`360,572 )`		`- (`		`360,572)`	`-`
31XX	Equity attributable to
	owners of the parent				`343,278,264`	`62`		`319,990,566`	`59`			`293,242,108`	`58`
36XX	Non-controlling interest				`57,694,774`	`10`		`59,649,846`	`11`			`53,651,502`	`10`
3XXX	Total equity				`400,973,038`	`72`		`379,640,412`	`70`			`346,893,610`	`68`
	Significant contingent liabilities	9
	and unrecognized contract
	commitments
	Significant events after the	11
	balance sheet date
3X2X	Total liabilities and equity			`$`	`554,881,816`	`100 $`		`544,436,590`	`100`		`$`	`509,451,225`	`100`

The accompanying notes are an integral part of these consolidated financial statements.

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

(UNAUDITED)

Items	Notes	Three months endedSeptember30	Three months endedSeptember30
		2017	2016
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 8200 Profit for the period

(Continued)

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts) (UNAUDITED)

					Three months ended	Three months ended	Three months ended	Three months ended	September30					Nine months ended	Nine months ended	Nine months ended	September30
					2017				2016					2017			2016
	Items	Notes			AMOUNT	%			AMOUNT		%			AMOUNT	%		AMOUNT	%
	Other comprehensive income (net)	6(18)(25)
	Components of other comprehensive income that will be
	reclassified to profit or loss
8361	Financial statements translation differences of foreign
	operations			`$`	`409,628`	`1`	`($`		`2,473,613)`	`(`	`3) ($`			`3,316,776) (`	`1) (`	`$`	`5,346,998 ) (`	`2)`
8362	Unrealized gain on valuation of available-for-sale
	financial assets				`12,474,695`	`14`			`2,912,140`		`4`			`16,006,730`	`6`		`4,132,996`	`2`
8370	Share of other comprehensive income (loss) of associates
	and joint ventures accounted for under equity method				`2,873,204`	`3`	`(`		`242,590)`		`-`			`3,182,484`	`1 (`		`980,798 ) (`	`1)`
8399	Income tax relating to the components of other
	comprehensive income		`(`		`72,074 )`	`-`			`310,516`		`-`			`327,779`	`-`		`631,082`	`-`
8360	Components of other comprehensive income (loss)
	that will be reclassified to profit or loss				`15,685,453`	`18`			`506,453`		`1`			`16,200,217`	`6 (`		`1,563,718 ) (`	`1)`
8300	Total other comprehensive income (loss) for the period			`$`	`15,685,453`	`18`		`$`	`506,453`		`1`		`$`	`16,200,217`	`6 (`	`$`	`1,563,718 ) (`	`1)`
8500	Total comprehensive income for the period			`$`	`34,888,061`	`40`		`$`	`17,259,526`		`22`		`$`	`58,815,507`	`23`	`$`	`37,313,624`	`16`
	Net income attributable to:
8610	Owners of the parent			`$`	`18,092,995`	`21`		`$`	`14,942,090`		`19`		`$`	`38,244,499`	`16`	`$`	`34,984,219`	`16`
8620	Non-controlling interest				`1,109,613`	`1`			`1,810,983`		`2`			`4,370,791`	`1`		`3,893,123`	`1`
				`$`	`19,202,608`	`22`		`$`	`16,753,073`		`21`		`$`	`42,615,290`	`17`	`$`	`38,877,342`	`17`
	Total comprehensive income attributable to:
8710	Owners of the parent			`$`	`33,090,292`	`38`		`$`	`14,352,410`		`18`		`$`	`56,299,947`	`22`	`$`	`30,982,465`	`13`
8720	Non-controlling interest				`1,797,769`	`2`			`2,907,116`		`4`			`2,515,560`	`1`		`6,331,159`	`3`
				`$`	`34,888,061`	`40`		`$`	`17,259,526`		`22`		`$`	`58,815,507`	`23`	`$`	`37,313,624`	`16`
				Before Tax After Tax				Before Tax After			Tax		Before Tax After		Tax		Before Tax After Tax
	Basic earnings per share	6(26)
9710	Profit for the period from continuing operations		`$`		`3.60 $`	`3.29`	`$`		`3.05` `$`	`2.86`		`$`		`8.12 $`	`7.30`	`$`	`7.41` `$`	`6.65`
9720	Non-controlling interests		`(`		`0.29) (`	`0.19)`	`(`		`0.38) (`	`0.30)`		`(`		`1.00 ) (`	`0.75)`	`(`	`0.95) (`	`0.66 )`
9750	Profit attributable to common shareholders of the parent		`$`		`3.31 $`	`3.10`	`$`		`2.67` `$`	`2.56`		`$`		`7.12 $`	`6.55`	`$`	`6.46` `$`	`5.99`
	Assuming shares held by subsidiary are not deemed as treasury stock:
	Profit for the period from continuing operations		`$`		`3.58 $`	`3.28`	`$`		`3.04` `$`	`2.86`		`$`		`8.09 $`	`7.27`	`$`	`7.39` `$`	`6.63`
	Non-controlling interests		`(`		`0.29) (`	`0.19)`	`(`		`0.38) (`	`0.31)`		`(`		`1.00 ) (`	`0.74)`	`(`	`0.95) (`	`0.66 )`
	Profit attributable to common shareholders of the parent		`$`		`3.29 $`	`3.09`	`$`		`2.66` `$`	`2.55`		`$`		`7.09 $`	`6.53`	`$`	`6.44` `$`	`5.97`

The accompanying notes are an integral part of these consolidated financial statements.

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

Notes				Equity attributable to o	Equity attributable to o	wners of the parent	wners of the parent					Non-controlling interest	Total equity
	Share capital - common stock	Total capital surplus, additional paid-in capital		Retained Earnings			O	ther EquityInteres	t	Treasury stocks	Total
			Legal reserve	Special reserve	Unappropriated retained earnings	Financial statements translation differences of foreign operations		Unrealized gain or loss on available-for- sale financial assets	Hedging instrument gain (loss) on effective hedge of cash flow hedges
6(17) 6(16)	`$ 58,611,863` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 58,611,863`	`$ 8,875,002` `-` `-` `20,975` `-` `(` `69,434 )` `-` `-` `-` `-` `$ 8,826,543`	`$ 43,905,716` `2,757,819` `-` `-` `-` `-` `-` `-` `-` `-` `$ 46,663,535`	`$ 41,927,550` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 41,927,550`	`$ 52,528,055` `(` `2,757,819 )` `(` `20,514,153 )` `-` `-` `-` `-` `-` `34,984,219` `-` `$ 64,240,302`	`$ 4,649,520` `-` `-` `-` `-` `-` `-` `-` `-` `(` `4,003,591 )` `$ 645,929`		`$ 72,615,548` `-` `-` `-` `-` `-` `-` `-` `-` `41,259` `$ 72,656,807`	`$` `69,573` `-` `-` `-` `-` `-` `-` `-` `-` `(` `39,422 )` `$` `30,151`	`($ 352,309 )` `-` `-` `-` `-` `-` `(` `8,263 )` `-` `-` `-` `($ 360,572 )`	`$ 282,830,518` `-` `(` `20,514,153` `)` `20,975` `-` `(` `69,434` `)` `(` `8,263` `)` `-` `34,984,219` `(` `4,001,754` `)` `$ 293,242,108`	`$ 50,247,015` `-` `-` `-` `(` `62,524 )` `-` `-` `(` `2,864,148 )` `3,893,123` `2,438,036` `$ 53,651,502`	`$ 333,077,533` `-` `(` `20,514,153 )` `20,975` `(` `62,524 )` `(` `69,434 )` `(` `8,263 )` `(` `2,864,148 )` `38,877,342` `(` `1,563,718 )` `$ 346,893,610`

(Continued)

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

Notes				Equity attributable to o	Equity attributable to o	w	ners of the parent	ners of the parent						Non-controlling interest	Total equity
	Share capital - common stock	Total capital surplus, additional paid-in capital		Retained Earnings				O	ther EquityInteres	t		Treasury stocks	Total
			Legal reserve	Special reserve	Unappropriated retained earnings		Financial statements translation differences of foreign operations		Unrealized gain or loss on available-for- sale financial assets		Hedging instrument gain (loss) on effective hedge of cash flow hedges
6(17) 6(16)	`$ 58,611,863` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 58,611,863`	`$ 8,622,642` `-` `-` `-` `43,842` `-` `1,668` `-` `-` `-` `-` `$ 8,668,152`	`$ 46,663,535` `4,383,305` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 51,046,840`	`$ 41,927,550` `-` `4,639,539` `-` `-` `-` `-` `-` `-` `-` `-` `$ 46,567,089`	`$ 72,560,103` `(` `4,383,305 )` `(` `4,639,539 )` `(` `32,822,643 )` `-` `-` `-` `-` `-` `38,244,499` `-` `$ 68,959,115`	`$ 988,624` `-` `-` `-` `-` `-` `-` `-` `-` `-` `(` `2,424,921 )` `(` `$ 1,436,297 )`			`$ 90,933,647` `-` `-` `-` `-` `-` `-` `-` `-` `-` `20,502,940` `$ 111,436,587`		`$` `43,174` `-` `-` `-` `-` `-` `-` `-` `-` `-` `(` `22,571 )` `$` `20,603`	`($ 360,572 )` `-` `-` `-` `-` `-` `-` `( 235,116 )` `-` `-` `-` `($ 595,688 )`	`$ 319,990,566` `-` `-` `(` `32,822,643` `)` `43,842` `-` `1,668` `(` `235,116` `)` `-` `38,244,499` `18,055,448` `$ 343,278,264`	`$ 59,649,846` `-` `-` `-` `-` `2,790` `-` `-` `(` `4,473,422 )` `4,370,791` `(` `1,855,231 )` `$ 57,694,774`	`$ 379,640,412` `-` `-` `(` `32,822,643 )` `43,842` `2,790` `1,668` `(` `235,116 )` `(` `4,473,422 )` `42,615,290` `16,200,217` `$ 400,973,038`

The accompanying notes are an integral part of these consolidated financial statements.

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FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

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

Loss on inventory valuation

Impairment loss on financial assets

Interest expense

Interest income

Dividend income

Share of profit or loss of associates accounted for
under the equity method
Gain on disposal and scrap of property, plant and
equipment

Gain on disposal of investments

Changes in operating assets and liabilities
Changes in operating assets
Financial liabilities at fair value through profit or loss
Notes receivable
Notes receivable-related parties
Accounts receivable
Accounts receivable-related parties
Other receivables
Inventories
Other current assets
Other non-current assets
Changes in operating liabilities
Notes payable
Accounts payable
Accounts payable-related parties
Other payables
Other current liabilities
Accrued pension liabilities
Cash inflow generated from operations
Interest received
Interest paid
Income tax paid
Dividends received
Net cash flows from operating activities For the nine-month periods ended
September30,
Notes
2017
2016
$
47,415,100 $
43,294,752
6(9)(23)
10,887,997
12,181,573
6(23)
2,173,309
2,717,314
6(2)(11)(21)
(
4,319 ) (
2,510 )
6(6)
142
80,946
6(7)(21)
-
207,066
6(22)
1,798,610
1,469,642
6(20)
(
413,916 ) (
285,533 )
6(20)
(
7,468,397 ) (
6,243,361 )
(
13,799,842 ) (
13,427,505 )
6(21)
(
803,270 ) (
7,159 )
6(21)
(
198,314 ) (
182,497 )

-
30,350
(
3,426,481 )
169,994
1,166
3,286
(
24,923 ) (
1,143,538 )
512,255
889,726
(
880,946 ) (
1,826,854 )
5,920,243
5,387,201
(
1,682,611 ) (
4,087,830 )
(
203,186 )
320,973
1,254 (
45,157 )
(
2,573,879 )
1,624,670
(
993,397 ) (
1,506,823 )
1,449,487 (
58,007 )
1,786,236
639,499
(
563,562 ) (
2,081,140 )
38,908,756
38,119,078
423,371
233,769
(
1,848,068 ) (
1,525,322 )
(
5,955,370 ) (
4,253,760 )
21,887,200
17,439,723
53,415,889
50,013,488

(Continued)

~9~

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES
Decrease (increase) in other receivables-related parties
Acquisition of available-for-sale financial assets
Proceeds from disposal of available-for-sale financial
assets
Acquisition of financial assets measured at cost
Cash refund from capital reduction in financial assets
measured at cost
Proceeds from disposal of financial assets measured at cost
Acquisition of investments accounted for under the equity
method
Disposal of investments accounted for under equity method
Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and equipment
Acquisition of intangible assets
Increase in non-current assets
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings
Increase (decrease) in short-term notes and bills payable
Increase (decrease) in other payables-related parties
Increase in long-term borrowings
Payment of long-term borrowings
Payment of bonds payable
Increase (decrease) in other non-current liabilities
Decrease in guarantee deposits
Payment of cash dividends

Decrease in non-controlling interests
Net cash flows used in financing activities
Effect of foreign exchange translations
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period For the nine-month periods ended
September30,
Notes
2017
2016
$
4,383,442 ($
7,467,492 )
(
3,953,072 ) (
5,478,021 )
3,529,356
125,982
(
2,327,575 )
-
23,549
10,704

66,524
13,365
(
1,683,440 ) (
85,000 )

-
8,760
6(27)
(
7,327,748 ) (
7,408,470 )
929,213
28,722
(
179 ) (
234 )
(
6,222,161 ) (
2,026,304 )
(
12,582,091 ) (
22,277,988 )
2,335,266 (
4,065,063 )
180,057 (
249,710 )
150,422 (
2,320,309 )
10,620,011
11,510,916
(
16,520,921 ) (
10,640,698 )
(
5,250,000 ) (
6,000,000 )
176,640 (
16,695 )
(
115,940 ) (
18,231 )
6(27)
(
32,818,540 ) (
21,715,274 )
(
3,414,612 )
-
(
44,657,617 ) (
33,515,064 )
(
665,922 ) (
924,611 )
(
4,489,741 ) (
6,704,175 )
30,391,911
34,744,139
$
25,902,170 $
28,039,964

The accompanying notes are an integral part of these consolidated financial statements.

~10~

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2017 AND 2016

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

1. HISTORY AND ORGANIZATION

Formosa Chemicals & Fibre Corporation (the ‘‘Company”) was founded on March 5, 1965. The Company and its subsidiaries (together referred herein as the “Group”) now has eight business divisions, namely First Chemical Division, Petrochemicals Division, Third Chemical Division, Plastics Division, Textile Division, First Fiber Division and its subsidiaries, Second Fiber Division, and Engineering & Construction Division. The Group’s major businesses are production and sales of petrochemical products, including PTA, PS, AN, Butadiene, SM polymer, SM, benzene, toluene, p-xylene (PX) and o-xylene (OX), as well as nylon fiber, and rayon staple fiber. The Group is also engaged in spinning, weaving, dyeing and finishing.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on November 9, 2017.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

New standards, interpretations and amendments as endorsed by FSC effective from 2017 are as follows:

~11~

New Standards,Interpretations andAmendments	Effective Date by International Accounting StandardsBoard
Investment entities: applying the consolidation exception (amendments to IFRS 10, IFRS 12 and IAS 28)	January 1, 2016
Accounting for acquisition of interests in joint operations (amendments to IFRS 11)	January 1, 2016
IFRS 14,‘Regulatorydeferral accounts’	January1,2016
Disclosure initiative(amendments to IAS 1)	January1,2016
Clarification of acceptable methods of depreciation and amortisation (amendments to IAS 16 and IAS 38)	January 1, 2016
Agriculture: bearerplants(amendments to IAS 16 and IAS 41)	January1,2016
Defined benefit plans: employee contributions (amendments to IAS 19R)	July 1, 2014
Equitymethod in separate financial statements(amendments to IAS 27)	January1,2016
Recoverable amount disclosures for non-financial assets (amendments to IAS 36)	January 1, 2014
Novation of derivatives and continuation of hedge accounting (amendments to IAS 39)	January 1, 2014
IFRIC 21,‘Levies’	January1,2014
Improvements to IFRSs 2010-2012	July1,2014
Improvements to IFRSs 2011-2013	July1,2014
Improvements to IFRSs 2012-2014	January1,2016

The above standards and interpretations have no significant impact to the Group’s financial condition and operating results based on the Group’s assessment.

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

the Group

New standards, interpretations and amendments as endorsed by FSC effective from 2018 are as follows:

~12~

New Standards,Interpretations andAmendments	Effective Date by International Accounting StandardsBoard
Classification and measurement of share-based payment transactions (amendmentsto IFRS 2)	January 1, 2018
Applying IFRS 9, ‘Financial instruments’ with IFRS 4, ‘Insurance contracts’(amendments to IFRS 4)	January 1, 2018
IFRS 9,‘Financial instruments’	January1,2018
IFRS 15,‘Revenue from contracts with customers’	January1,2018
Clarifications to IFRS 15, ‘Revenue from contracts with customers’ (amendments to IFRS 15)	January 1, 2018
Disclosure initiative(amendments to IAS 7)	January1,2017
Recognition of deferred tax assets for unrealised losses (amendments to IAS 12)	January 1, 2017
Transfers of investmentproperty (amendments to IAS 40)	January1,2018
IFRIC 22,‘Foreign currencytransactions and advance consideration’	January1,2018
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 1,‘First-time adoption of International Financial Reporting Standards’	January 1, 2018
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 12,‘Disclosure of interests in other entities’	January 1, 2017
Annual improvements to IFRSs 2014-2016 cycle - Amendments to IAS 28,‘Investments in associates and joint ventures’	January 1, 2018

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. The quantitative impact will be disclosed when the assessment is complete.

A.IFRS 9, ‘Financial instruments’
(a) Classification of debt instruments is driven by the entity’s business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset measured at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.
(b)The impairment losses of debt instruments are assessed using an ‘expected credit loss’ approach. An entity assesses at each balance sheet date whether there has been a significant increase in credit risk on that instrument since initial recognition to recognise 12-month expected credit losses or lifetime expected credit losses (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment would be calculated on the book value of net carrying amount (i.e. net of credit allowance). The Company shall always measure the loss allowance at an amount equal to lifetime expected

~13~

credit losses for trade receivables that do not contain a significant financing component.

(c)The amended general hedge accounting requirements align hedge accounting more closely with an entity’s risk management strategy. Risk components of non-financial items and a group of items can be designated as hedged items. The standard relaxes the requirements for hedge effectiveness, removing the 80-125% bright line, and introduces the concept of ‘rebalancing’; while its risk management objective remains unchanged, an entity shall rebalance the hedged item or the hedging instrument for the purpose of maintaining the hedge ratio.
B. IFRS 15, ‘Revenue from contracts with customers’
IFRS 15, ‘Revenue from contracts with customers’ replaces IAS 11, ‘Construction Contracts’, IAS 18, ‘Revenue’ and relevant interpretations. According to IFRS 15, revenue is recognised when a customer obtains control of promised goods or services. A customer obtains control of goods or services when a customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from the asset.

The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps:

Step 1: Identify contracts with customer

Step 2: Identify separate performance obligations in the contract(s)

Step 3: Determine the transaction price

Step 4: Allocate the transaction price

Step 5: Recognise revenue when the performance obligation is satisfied

Further, IFRS 15 includes a set of comprehensive disclosure requirements that requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

C. Amendments to IFRS 15, ‘Clarifications to 'Revenue from Contracts with Customers’
The amendments clarify how to identify a performance obligation (the promise to transfer goods or services to a customer) in a contract; determine whether a company is a principal (the provider of goods or services) or an agent (responsible for arranging for the goods or services to be provided); and determine whether the revenue from granting a license should be recognised at a point in time or over time. In addition to the clarifications, the amendments include two additional reliefs to reduce cost and complexity for a company when it first applies the new Standard.
D. Amendments to IAS 7, ‘Disclosure initiative’
This amendment requires that an entity shall provide more disclosures related to changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes.
E. Amendments to IAS 12, ‘Recognition of deferred tax assets for unrealised losses’ These amendments clarify the recognition of deferred tax assets for unrealised losses related to

~14~

debt instruments measured at fair value, and they clarify several of the general principles underlying the accounting for deferred tax assets. The amendments clarify that a deductible temporary difference exists whenever an asset is measured at fair value and that fair value is below the asset’s tax base. When an entity assesses whether taxable profits will be available against which it can utilise a deductible temporary difference, it considers a deductible temporary difference in combination with all of its other deductible temporary differences unless there are tax law restrictions, and the tax deduction resulting from temporary differences is excluded from estimated future taxable profits. The amendments are effective from January 1, 2017.

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

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

endorsed by the FSC are as follows:
New Standards, Interpretations and Amendments	Effective Date by International Accounting Standards Board
Prepayment features with negative compensation (amendments to IFRS9)	January 1, 2019
Sale or contribution of assets between an investor and its associate or joint venture (amendments to IFRS 10 and IAS 28)	To be determined by International Accounting Standards Board
IFRS 16, 'Leases'	January1, 2019
IFRS 17, 'Insurance contracts'	January1, 2021
Long-term interests in associates and joint ventures (amendments to IAS 28)	January 1, 2019
IFRIC 23, 'Uncertaintyover income tax treatments'	January1, 2019

A. Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’

The amendments resolve a current inconsistency between IFRS 10 and IAS 28. The gain or loss resulting from a transaction that involves sales or contribution of assets between an investor and its associates or joint ventures is recognized either in full or partially depending on the nature of the assets sold or contributed:

(a) If sales or contributions of assets constitute a ‘business’, the full gain or loss is recognized;
(b) If sales or contributions of assets do not constitute a ‘business’, the partial gain or loss is

recognized only to the extent of unrelated investors’ interests in the associate or joint venture.

B. IFRS 16, ‘Leases’

IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognise a 'right-of-use asset' and a lease liability (except for those leases with

~15~

terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.

C. IFRIC 23, ‘Uncertainty over income tax treatments’
This Interpretation clarifies when there is uncertainty over income tax treatments, an entity shall recognize and measure its current or deferred tax asset or liability applying the requirements in IAS 12 , ‘Income taxes’ based on taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates determined applying this Interpretation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standards 34, “Interim Financial Reporting” as endorsed by FSC.

(2) Basis of preparation
A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
- (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
- (b) Available-for-sale financial assets measured at fair value.
- (c) Defined benefit liabilities recognized based on the net amount of pension fund assets plus unrecognized past service cost and unrecognized actuarial losses, and less unrecognized actuarial gains and present value of defined benefit obligation.
B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries

~16~

and ceases when the Group loses control of the subsidiaries.

(b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
B. Subsidiaries included in the consolidated financial statements:

Name of Name of Main business investor subsidiary activities The Company Formosa Carpet Corp. Spinning, dyeing, printing, finishing and manufacturing synthetic fibre, rug and carpet The Company FCFC Investment Corp. (Cayman) Investing The Company FCFC International Limited (Cayman) Investing		Ownership (%)	September30,2016 Description 100.00 The Company holds more than 50% of voting rights. (Note l) 100.00 The Company holds more than 50% of voting rights. 100.00 The Company holds more than 50% of voting rights. (Note l)	Description
	September30,2017 100.00 100.00 100.00	December31,2016 100.00 100.00 100.00

~17~

Name of Name of Main business investor subsidiary activities FCFC Investment Corp. (Cayman) Formosa Power (Ningbo) Co., Ltd. Cogeneration power generation business FCFC Investment Corp. (Cayman) Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. Investing Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. Formosa ABS Plastics (Ningbo) Co., Ltd. Sale of Acrylonitrile Butadiene Styrene (ABS) Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. Formosa Phenol (Ningbo) Co., Ltd. Manufacturing Acetone and Synthetic Phenolic Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. Formosa PS (Ningbo) Co., Ltd. Production and marketing of Polystyrene Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Production and marketing of PTA The Company Formosa Biomedical Technology Corp. Manufacturing and sale of cleaner and cosmetics Formosa Biomedical Technology Corp. Hong Jing Resources Corp. Removal and disposal of waste Formosa Biomedical Technology Corp. Formosa Biomedical Technology (SAMOA) Co., Ltd. Investment		Ownership (%)	September30,2016 Description 100.00 The company holds more than 50% of voting rights through wholly-owned company - FCFC Investment Corp. (Cayman) 100.00 The company holds more than 50% of voting rights through wholly-owned company - FCFC Investment Corp. (Cayman) 100.00 The company holds more than 50% of voting rights through wholly-owned company - FCFC Investment Corp. (Hong Kong) 100.00 The company holds more than 50% of voting rights through wholly-owned company - FCFC Investment Corp. (Hong Kong) 100.00 The company holds more than 50% of voting rights through wholly-owned company - FCFC Investment Corp. (Hong Kong) 100.00 The company holds more than 50% of voting rights through wholly-owned company - FCFC Investment Corp. (Hong Kong) 88.59 The Company holds more than 50% of voting rights. (Note l) 51.00 The Company holds more than 50% of voting rights through a 88.59% of voting rights owned company - Formosa Biochemical Technology Corp. (Note 1) 100.00 Formosa Biochemical Technology holds more than 50% of voting rights. (Note 1)	Description
	September30,2017 100.00 100.00 100.00 100.00 100.00 100.00 88.59 51.00 100.00	December31,2016 100.00 100.00 100.00 100.00 100.00 100.00 88.59 51.00 100.00

~18~

Name of Name of Main business investor subsidiary activities Formosa Biomedical Technology (SAMOA) Co., Ltd. Formosa Biomedical Trading (Shanghai) Co., Ltd. Importing, exporting and wholesale of heatlhy food The Company Ta Shin Spining Corp. Spinning The Company Formosa Idemitsu Petrochemical Corp. Wholesale and retail of petrochemical and plastic raw materials The Company Formosa BP Chemicals Corp. Chemistry, international trade of petrochemistry The Company Formosa Industried Corp., Vietnam Production and marketing of textile, polyester staple fibre, cotton, hydropower The Company Formosa Taffeta Co., Ltd. Production and marketing of Polyamine fabric, Polyester fabric, cotton fabric, blended fabric and tire cord fabric Formosa Taffeta Co., Ltd. Formosa Advanced Technologies Co., Ltd. Assembly, testing, model processing and research and development of various integrated circuits Formosa Taffeta Co., Ltd. Formosa Taffeta (Zhong Shan) Co., Ltd. Production of cotton lun, Terylene greige cloth, coloured cloth and textured processing yarn products		Ownership (%)	September30,2016 Description 100.00 Formosa Biochemical Technology holds more than 50% of voting rights through a 100% owned company - Formsa Biomedical Technology (SAMOA) Co., Ltd (Note 1) 86.40 The Company holds more than 50% of voting rights. (Note l) 50.00 The Company has substantial control and thus regards Formosa Idemitsu Petrochemical Corp. as a subsidiary. (Note 1) 50.00 The Company has substantial control and thus regards Formosa BP Chemicals Corp. as a subsidiary. (Note 1) 42.50 The Company has substantial control and thus regards Formosa Industries Corp. as a subsidiary. (Note 1) 37.40 The Company has substantial control and thus regards Formosa Taffeta Corp. as a subsidiary. (Note 1) 65.68 Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. 100.00 Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. (Note l)
	September30,2017 100.00 86.40 50.00 50.00 42.50 37.40 65.68 100.00	December31,2016 100.00 86.40 50.00 50.00 42.50 37.40 65.68 100.00

~19~

Name of Name of Main business investor subsidiary activities Formosa Taffeta Co., Ltd. Formosa Taffeta (Vietnam) Co., Ltd. Production and marketing of textile, polyester staple fibre, cotton, hydropower Formosa Taffeta Co., Ltd. Formosa Development Co., Ltd. Assembly, testing, model processing and research and development of various integrated circuits Formosa Taffeta Co., Ltd. Formosa Taffeta (Hong Kong) Co., Ltd. Sale of Nylon and Polyamine fabric Formosa Taffeta Co., Ltd. Schoeller F.T.C. (Hong Kong) Co., Ltd. Sale of hi-tech performance fabric of 3XDRY, Nanosphere, Keprotec, Dynatec, Spirit and Reflex Formosa Taffeta Co., Ltd. Xiamen Xiangyu Formosa Import & Export Trading Co., Ltd. Import and export, entrepot trade, merchandise export processing, warehousing and design and drawing of black and white and colour graphs Formosa Taffeta Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Manufacturing of nylon and polyester filament products		Ownership (%)	September30,2016 Description 100.00 The Company and Formosa Taffeta Co., Ltd. hold more than 50% of voting rights. (Note l) 100.00 Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. (Note l) 100.00 Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. (Note l) 43.00 Formosa Taffeta Co., Ltd. has substantial control and thus regards Schoeller F.T.C. (Hong Kong) Co., Ltd. as a subsidiary. (Note l) 100.00 Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. (Note l) 100.00 Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. (Note l)
	September30,2017 100.00 100.00 100.00 43.00 100.00 100.00	December31,2016 100.00 100.00 100.00 43.00 100.00 100.00

~20~

Name of Name of Main business investor subsidiary activities Formosa Taffeta Co., Ltd. Formosa Taffeta (Cayman) Co., Ltd. Investment Formosa Taffeta (Hong Kong) Co., Ltd. Formosa Taffeta (Changshu) Co., Ltd. Manufacturing of processing fabric of nylon filament knitted cloth, weaving and dyeing as well as post processing of knitted fabric Formosa Development Co., Ltd. Public More Internation Co., Ltd. Employment services and temporary worker services		Ownership (%)	September30,2016 Description 100.00 Formosa Taffeta Co., Ltd. holds more than 50% of voting rights. (Note l) 100.00 Formosa Taffeta Co., Ltd. holds more than 50% of voting rights through a 100% owned company - Formosa Taffeta (Hong Kong) Co., Ltd. (Note l) - Formosa Taffeta Co., Ltd. holds more than 50% of voting rights through a 100% owned company - Formosa Development Co., Ltd. (Note l)
	September30,2017 100.00 100.00 100.00	December31,2016 100.00 100.00 -

Note 1: The financial statements of the entity as of and for the nine-month periods ended September 30, 2017 and 2016 were not reviewed by the independent auditors as the entity did not meet the definition of significant subsidiary.
C. Subsidiaries not included in the consolidated financial statements: None
D. Adjustments for subsidiaries with different balance sheet dates: None
E. Significant restrictions: None
F. Subsidiaries that have non-controlling interests that are material to the Group:
As of September 30, 2017, December 31, 2016 and September 30, 2016, the non-controlling interest amounted to $57,694,774, $59,649,846 and $53,651,502, respectively. The information of non-controlling interest and respective subsidiary is as follows:

Name of subsidiary	Amount Ownership (%) Amount Ownership (%) $41,170,284 62.60 $41,591,321 62.60 Non-controllinginterest September 30,2017 December 31,2016	Amount Ownership (%) Amount Ownership (%) $41,170,284 62.60 $41,591,321 62.60 Non-controllinginterest September 30,2017 December 31,2016	Amount Ownership (%) Amount Ownership (%) $41,170,284 62.60 $41,591,321 62.60 Non-controllinginterest September 30,2017 December 31,2016
	Amount Ownership (%) $41,170,284 62.60 September 30,2017
	Amount $41,170,284	Amount $41,591,321
Formosa Taffeta Co., Ltd.			62.60

~21~

Name of subsidiary	Principal place of business Taiwan	Amount Ownership (%) $ 36,613,977 62.60 September30,2016 Non-controllinginterest	Amount Ownership (%) $ 36,613,977 62.60 September30,2016 Non-controllinginterest
		Amount $ 36,613,977
Formosa Taffeta Co., Ltd.			62.60

Summarised financial information of the subsidiary:

Balance sheets

Balance sheets
Current assets Non-current assets Current liabilities Non-current liabilities Total net assets	Formosa Taffeta Co.,Ltd.
	September 30,2017 December 31,2016 23,604,240 $ 23,210,986 $ 67,287,202 68,819,110 8,901,502 9,293,527 12,313,167 12,456,669 69,676,773 $ 70,279,900 $	September 30,2016 22,166,265 $ 62,049,983 9,221,028 12,913,218 62,082,002 $

Statements of comprehensive income

Formosa Taffeta Co., Ltd.

Revenue Profit before income tax Income tax expense Profit for the period Other comprehensive income, net of tax Total comprehensive income for the period Comprehensive income attributable to non-controlling interest	Three-month period ended September30,2017	Three-month period ended September30,2016
	9,829,248 $ 974,623 57,881) ( 916,742 1,128,667 2,045,409 $ 234,489 $	9,532,720 $ 2,253,295 114,419) ( 2,138,876 2,106,319 4,245,195 $ 109,500 $

~22~

Formosa Taffeta Co., Ltd.

		Formosa Taf
Statements of cash flows Revenue Profit before income tax Income tax expense Profit for the period Other comprehensive (loss) income, net of tax Total comprehensive income for the period Comprehensive income attributable to non-controlling interest Net cash provided by (used in) operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities Effect of exchange rates on cash and cash equivalents Increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period		Nine-month period ended September 30,2017
		Nine-month period ended September30,2017
	5,462,368 $ 2,675,547) ( 2,672,646) ( 33,839) ( 80,336 5,653,854 5,734,190 $

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Group’s functional and presentation currency.

A. Foreign currency transactions and balances

(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are

~23~

recognized in profit or loss in the period in which they arise.

(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.
B. Translation of foreign operations
(a) The operating results and financial position of all the group entities, associates and jointly controlled entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
- iii. All resulting exchange differences are recognized in other comprehensive income.
(b) When the foreign operation partially disposed of or sold is an associate or jointly controlled entity, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, if the Group retains partial interest in the former foreign associate or jointly controlled entity after losing significant influence over the former foreign associate, or losing joint control of the former jointly controlled entity, such transactions should be accounted for as disposal of all interest in these foreign operations.

(5) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realized within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to

~24~

be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be paid off within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be paid off within twelve months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

A. Financial assets at fair value through profit or loss are financial assets held for trading or financial assets designated as at fair value through profit or loss on initial recognition. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the short-term. Derivatives are also categorized as financial assets held for trading unless they are designated as hedges. Financial assets that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition:
(a) Hybrid (combined) contracts; or
(b) They eliminate or significantly reduce a measurement or recognition inconsistency; or
(c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.
C. Financial assets at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets measured at cost’.

(8) Available-for-sale financial assets

A. Available-for-sale financial assets are non-derivatives that are either designated in this category or

~25~

not classified in any of the other categories.

B. On a regular way purchase or sale basis, available-for-sale financial assets are recognized and derecognized using trade date accounting.
C. Available-for-sale financial assets are initially recognized at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets measured at cost’.
(9) Loans and receivables
Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. Accounts receivable are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. However, short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(10) Impairment of financial assets

A. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
B. The criteria that the Group uses to determine whether there is objective evidence of an impairment loss is as follows:
(a) Significant financial difficulty of the issuer or debtor;
(b) A breach of contract, such as a default or delinquency in interest or principal payments;
(c) The Group, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider;
(d) It becomes probable that the borrower will enter bankruptcy or other financial reorganization;
(e) The disappearance of an active market for that financial asset because of financial difficulties;
(f) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group;
(g) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered;

~26~

(h) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
C. When the Group assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets:
(a) Financial assets measured at amortized cost
- The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate, and is recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortised cost that would have been at the date of reversal had the impairment loss not been recognized previously. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.
(b) Financial assets measured at cost
- The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognized in profit or loss. Impairment loss recognized for this category shall not be reversed subsequently. Impairment loss is recognized by adjusting the carrying amount of the asset through the use of an impairment allowance account.
(c) Available-for-sale financial assets
- The amount of the impairment loss is measured as the difference between the asset’s acquisition cost (less any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, and is reclassified from ‘other comprehensive income’ to ‘profit or loss’. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognized, then such impairment loss is reversed through profit or loss. Impairment loss of an investment in an equity instrument recognized in profit or loss shall not be reversed through profit or loss. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(11) Derecognition of financial assets

The Group derecognizes a financial asset when one of the following conditions is met:

A. The contractual rights to receive the cash flows from the financial asset expire.
B. The contractual rights to receive cash flows of the financial asset have been transferred and the

~27~

Group has transferred substantially all risks and rewards of ownership of the financial asset.

C. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has not retained control of the financial asset.
(12) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. The cost of finished goods and work in process comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(13) Investments accounted for using equity method /associates
A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 per cent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.
B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
C. When changes in an associate’s equity are not recognized in profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes the Group’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.
D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit

~28~

or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss.
G. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
H. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.

(14) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Land improvements 3 ~ 15 years Buildings 10 ~ 60 years Machinery and equipment 5 ~ 15 years

~29~

Transportation equipment 3 ~ 15 years Other equipment 2 ~ 15 years

(15) Intangible assets

Computer software is stated at cost and amortized on a straight-line basis over its estimated useful life.

(16) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

(17) Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

(18) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(19) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss are financial liabilities held for trading or financial liabilities designated as at fair value through profit or loss on initial recognition. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss on initial recognition:
(a)Hybrid (combined) contracts; or
(b)They eliminate or significantly reduce a measurement or recognition inconsistency; or
(c)They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management policy.

(20) Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability specified in the contract

~30~

is discharged or cancelled or expires.

(21) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(22) Derivative financial instruments

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. Any changes in the fair value are recognized in profit or loss.

(23) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

B. Pensions
(a) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expenses when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans
i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.
ii.Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as other equity.
iii.Past service costs are recognized immediately in profit or loss.
iv.Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. Also, the related information is disclosed

~31~

accordingly.

C. Employees’, directors’ and supervisors’ remuneration
Employees’ remuneration and directors’ and supervisors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(24) Income tax

A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
D. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are

~32~

levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.
F. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from acquisitions of equipment or technology and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.
G. The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

(25) Treasury shares

Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(26) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(27) Revenue recognition

A. Revenue is measured at the fair value of the consideration received or receivable taking into account corporate tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Group’s activities. Revenue arising from the sales of goods is recognized when the Group has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.
B. The Group offers customers price discounts. The Group estimates such discounts based on historical experience. Provisions for such liabilities are recorded when the sales are recognized. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments.

(28) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the

~33~

chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. The information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies
Financial assets—impairment of equity investments
The Group follows the guidance of IAS 39 to determine whether a financial asset-equity investment is impaired. This determination requires significant judgement. In making this judgement, the Group evaluates, among other factors, the duration and extent to which the fair value of an equity investment is less than its cost and the financial health of and short-term business outlook for the investee, including factors such as industry and sector performance, changes in technology and operational and financing cash flow.

(2) Critical accounting estimates and assumptions

A. Impairment assessment of tangible assets
The Group assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilized and industrial characteristics. Any changes of economic circumstances or estimates due to the change of the Group strategy might cause material impairment on assets in the future.
B. Realisability of deferred tax assets
Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized. Assessment of the realisability of deferred tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, available tax credits, tax planning, etc. Any variations in global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred tax assets.
C. Calculation of net defined benefit liabilities
When calculating the present value of defined pension obligations, the Group must apply judgements and estimates to determine the actuarial assumptions on balance sheet date, including discount rates and future salary growth rate. Any changes in these assumptions could significantly impact the carrying amount of defined pension obligations.

~34~

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and petty cash Checking accounts and demand deposits Cash equivalents Time deposits Bonds repurchased and commercial paper	September30,2017 56,941 $ 6,653,966 11,738,004 7,453,259 25,902,170 $	December31,2016 104,883 $ 8,374,036 14,186,540 7,726,452 30,391,911 $	September30,2016
			296,553 $ 8,507,574 13,900,126 5,335,711
			28,039,964 $

A. The Group associates with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. The Group’s maximum exposure to credit risk at balance sheet date is the carrying amount of all cash and cash equivalents.
B. The Group has no cash and cash equivalents pledged to others.

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

Items Current items: Financial assets at fair value through profit or loss Beneficiary certificate Non-hedging derivatives Valuation adjustments of financial assets at fair value through profit or loss	September30,2017 $ 619,504 1,244 620,748 9,811 630,559 $	December31,2016 $ 619,504 66 619,570 8,051 627,621 $	September30,2016
			$ 619,504 411
			619,915 7,625
			627,540 $

A. The Group recognized gain on valuation of financial assets at fair value through profit or loss amounting to $1,122, $593, $2,938 and $2,079 for the three-month and nine-month periods ended September 30, 2017 and 2016, respectively.
B. The non-hedging derivative instruments transaction and contract information are as follows:

~35~

Derivative Instruments Current items: Forward exchange contracts: Taipei Fubon Taipei Fubon CHB Derivative Instruments Current items: Forward exchange contracts: Taipei Fubon	Contract Amount (Notional Principal) (in thousands) JPY 201,980 Jul. 2017 - Nov. 2017 USD 939 Sep. 2017 - Oct. 2017 - - September30,2017 Contract Period	December31,2016	December31,2016
	Contract Amount (Notional Principal) (in thousands) JPY 201,980 USD 939 -	Contract Amount (Notional Principal) (in thousands) - - - - USD 1,000 Dec. 2016 - Feb. 2017 Contract Period September30,2016
		Contract Amount (Notional Principal) (in thousands) JPY 135,240	Aug. 2016 - Oct. 2016 Contract Period

The Group entered into forward exchange contracts to buy USD and JPY to hedge exchange rate risk of Ninth Naphtha Cracker Project from syndicated long-term borrowings. However, these forward exchange contracts are not accounted for under hedge accounting.

~36~

(3) Available-for-sale financial assets

Current items:
Listed (TSE and OTC) stocks
Unlisted stocks
Fund
Valuation adjustments of
available-for-sale financial
assets
Less: Accumulated impairment
Non-current items:
Listed (TSE and OTC) stocks
Valuation adjustments of
available-for-sale financial
assets
Less: Accumulated impairment

September 30,2017
December 31,2016
September 30,2016
26,176,309
$ 25,658,353
$ 25,764,333
$ 825,839
825,839
825,839
4,903,800
4,903,800
4,903,800
88,946,113
71,681,703
57,631,766
120,852,061
103,069,695
89,125,738
2,291,703)
(
2,291,703)
(
2,291,703)
(
118,560,358
$ 100,777,992
$ 86,834,035
$ 9,251,979
$ 9,418,267
$ 9,418,267
$ 34,317,334
35,576,112
28,798,666
43,569,313
44,994,379
38,216,933
2,613,085)
(
2,613,085)
(
2,613,085)
(
40,956,228
$ 42,381,294
$ 35,603,848
$

A. The Group purchased the Mega Private US Dollar Money Market Funds in January, March and May 2016. The trading unit was 2,500,000 units, 4,994,157 units and 7,483,835 units and the trading amount was USD 25 million, USD 50 million and USD 75 million, respectively.
B. The Group recognized $4,377,860, $5,897,644, $7,164,737 and $5,897,644 as dividend income from available-for-sale financial assets for the three-month periods and nine-month periods ended September 30, 2017 and 2016, respectively.
C. As of September 30, 2017, December 31, 2016 and September 30, 2016, no financial assets measured at cost held by the Group were pledged to others.

(4) Notes receivable, net

Notes receivable, net
Notes receivable Less: Allowance for bad debts	September30,2017 10,464,232 $ - 10,464,232 $	December31,2016 7,037,751 $ - 7,037,751 $	September30,2016
			6,411,915 $ -
			6,411,915 $

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(5) Accounts receivable, net

		September30,2017	September30,2017		December31,2016	December31,2016		September30,2016	September30,2016
Accounts receivable		$	18,313,590		$	18,303,379		$	16,103,550
Less: Allowance for bad debts	(		259,692)	(		274,404)	(		277,708)
		$	18,053,898		$	18,028,975		$	15,825,842

A. The credit quality of the Group’s accounts receivable that are neither past due nor impaired qualify the industrial characteristics, operating scale and profit situation of the counterparty.
B. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

. Up to 30 days 31 to 90 days 91 to 180 days Over 181 days	September30,2017 322,111 $ 49,747 9,147 5,097 386,102 $	December31,2016 332,950 $ 72,739 26,408 4,816 436,913 $	September30,2016
			453,862 $ 95,013 25,283 6,218
			580,376 $

The above ageing analysis was based on past due date.

C. Movement analysis of financial assets that were impaired is as follows:

Nine-month period ended September 30, 2017

0		Individual	provision			Group provision			Total
At January 1		$	156,022		$	118,382		$	274,404
Transfer to other income			-	(		228)	(		228)
Write-off	(		13,443)			-	(		13,443)
Effect of exchange rate			-	(		1,041)	(		1,041)
At September 30		$	142,579		$	117,113		$	259,692

0 At January 1 Write-off Effect of exchange rate At September 30	Individualprovision Group provision Total 156,022 $ 124,330 $ 280,352 $ - 127) ( 127) ( - 2,517) ( 2,517) ( 156,022 $ 121,686 $ 277,708 $ Nine-monthperiod ended September 30,2016

D. The Group does not hold any collateral as security.

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(6) Inventories

Inventories
Raw materials Materials Work in process Finished goods Other inventory Raw materials Materials Work in process Finished goods Other inventory Raw materials Materials Work in process Finished goods Other inventory		September30,2017
	Allowance for Cost valuation loss 11,748,629 $ 128,913) ($ 6,024,052 594,291) ( 6,509,245 7,852) ( 13,181,727 623,747) ( 130,988 - $ 37,594,641 ($1,354,803) December31,2016		Bookvalue
			11,619,716 $ 5,429,761 6,501,393 12,557,980 130,988
			$ 36,239,838

	Allowance for Cost valuation loss 17,685,864 $ 143,306) ($ 5,660,605 517,325) ( 6,371,263 18,564) ( 13,750,552 675,146) ( 102,503 1,166) ( $43,570,787 ($1,355,507) September30,2016		Bookvalue
			17,542,558 $ 5,143,280 6,352,699 13,075,406 101,337
			$42,215,280

	Allowance for Cost valuation loss 9,971,756 $ 82,478) ($ 5,737,759 204,339) ( 5,957,641 24,936) ( 13,720,125 625,847) ( 193,453 - 35,580,734 $ 937,600) ($		Bookvalue
			9,889,278 $ 5,533,420 5,932,705 13,094,278 193,453
			$ 34,643,134

A. Expense and loss incurred on inventories for the three-month periods and nine-month periods ended September 30, 2017 and 2016 were as follows:

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For the three-month periods ended September 30,

2017 Cost of inventories sold 73,946,298 $ (Gain) loss on inventory valuation (Note) 145,259) ( Idle capacity 70,968 Others 79,596 73,951,603 $	2016
	67,541,765 $ 398,426 193,179 -
	68,133,370 $

Cost of inventories sold Loss on inventory valuation (Note) Idle capacity Others	Forthenine-monthperiods ended September30,	Forthenine-monthperiods ended September30,
	2017 2016 220,641,494 $ 199,297,167 $ 142 80,946 1,188,971 588,616 230,165 10,736) ( 222,060,772 $ 199,955,993 $	2016
		199,955,993 $

Note: The gain from price recovery for the three-month period ended September 30, 2017 resulted from the disposal of inventory which were previously provided with allowance. As the market value of petroleum related products decreased for the three-month period ended September 30, 2016 and nine-month periods ended September 30, 2017 and 2016, the Group recognized related allowance for inventory valuation loss after assessment.

B. As of September 30, 2017 and 2016, inventories pledged are described in Note 8.

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(7) Financial assets measured at cost

Items	September30,2017	September30,2017	December31,2016	December31,2016	September30,2016	September30,2016
Mai Liao Harbor Administration Corp.	$	539,260	$	539,260	$	539,260
Formosa Plastic Corp. U.S.A		818,316		818,316		818,316
Taiwan Stock Exchange Corp.		1,800		1,800		1,800
Taiwan Aerospace Corp.		10,702		10,702		10,702
Yi-Jih Development Corp.		3,000		3,000		3,000
Chinese Television System Corp.		38,419		38,419		38,419
Formosa Automobile Corp.		1,750		1,750		1,750
Formosa Development Corp.		90,010		90,010		90,010
Formosa Technologies Corp.		15,913		15,848		16,058
Formosa Plastics Marine Corp.		15,000		15,000		15,000
Formosa Ocean Group Marine		856,948		856,948		856,948
Investment Corp.
Guangyuan Investment Corp.		50,000		50,000		50,000
Benjhou Technologies Corp.		2,000		-		-
Taiwan Leader Biotech Corp.		21,033		21,033		21,033
Toa Resin Corp., Ltd.		3,000		3,000		3,000
Shin Yun Natural Gas Corp.		3,100		3,100		3,100
Wk Technology Fund IV Ltd.		263		23,812		23,813
Syntronix Corporation		4,417		4,417		4,417
United Performance Materials Corp.		8,400		8,400		8,400
Association of R.O.C. in Xiamen		137		141		142
Nan Ya Photonics Inc.		294,583		294,583		294,583
United Biopharma, Inc.		613,159		635,828		635,828
Formosa Lithium Iron Oxide Corp.		53,000		53,000		53,000
Mega Growth Venture Capital Co.,Ltd.		25,000		25,000		25,000
Formosa Ha Tinh (Cayman) Limited		21,494,988		20,449,290		19,862,166
UBI Pharma Inc.		667,608		676,215		692,281
		25,631,806		24,638,872		24,068,026
Less: Accumulated impairment	(	207,066)	(	207,066)	(	207,066)
	$	25,424,740	$	24,431,806	$	23,860,960

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A. According to the Group’s intention, the investment in above stocks should be classified as available-for-sale financial assets. However, as these stocks are not traded in active market, and no sufficient industry information of companies similar to the Group’s financial information can be obtained, the fair value of the investment in stocks cannot be measured reliably. Accordingly, the Group classified those stocks as ‘financial assets measured at cost’.
B. The Group recognized $296,952, $340,322, $303,660 and $345,717 as dividend income from investment in financial assets measured at cost for the three-month periods and nine-month periods ended September 30, 2017 and 2016, respectively.
C. As the value of the stocks mentioned above was impaired, the Group recognized impairment loss of $207,066 from April 1, 2016 till December 31, 2016.
D. As of September 30, 2017, December 31, 2016 and September 30, 2016, no financial assets measured at cost held by the Group were pledged to others.

(8) Investments accounted for using equity method

. Formosa Heavy Industries Corp. Formosa Fairway Corp. Formosa Plastics Transport Corp. Formosa Petrochemical Corp. Mai Liao Power Corp. Hwa Ya Science Park Management Consulting Co., Ltd. Chia-Nan Enterprise Corp. Su Hua Transport Corp. Formosa Environmental Technology Corp. Formosa Synthetic Rubber Corp. Formosa Synthetic Rubber Corp. (Hong Kong) Formosa Resourse Corp. Formosa Group (Cayman) Corp. Formosa Construction Corp. Beyoung International Corp. Kuang Yueh Co., Ltd. Changshu Yu Yuan Co., Ltd.	September30,2017 7,706,620 $ 98,824 747,489 77,412,112 11,097,018 1,864 260,974 279,368 252,521 284,132 899,232 5,534,886 297,044 88,790 93,966 1,153,095 29,764 $106,237,699	December31,2016 7,644,268 $ 101,719 750,304 74,173,344 10,936,483 1,776 261,922 251,008 255,716 315,764 1,212,400 4,159,625 549,598 91,895 94,389 1,175,070 59,856 $102,035,137	September30,2016
			7,906,089 $ 78,247 762,187 66,944,778 10,886,989 1,965 260,658 243,766 257,652 356,696 113,809 4,078,405 212,728 92,824 93,043 901,966 54,478
			$ 93,246,280

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A. Associates

(a) The basic information of the associate that is material to the Group is as follows:

Shareholding ratio

Company name	Principal place of business	September 30,2017	December 31,2016	September 30,2016	Nature of relationship	Method of measurement
Formosa Petrochemical Corp.	Taiwan	24.15%	24.15%	24.15%	Investments accounted for using equity method	Equity method

(b) The summarised financial information of the associate that is material to the Group is shown below:

Balance sheets

below: Balance sheets
		Formosa		Petrochemical Corp.
.	September 30,2017		December 31,2016		September 30,2016
Current assets	$	247,948,449	$	281,610,398	$	240,202,278
Non-current assets		164,642,614		168,006,910		175,748,734
Current liabilities	(	66,179,017)	(	67,458,120)	(	56,302,260)
Non-current liabilities	(	24,268,935)	(	73,094,405)	(	81,004,323)
Total net assets	$	322,143,111	$	309,064,783	$	278,644,429
Share in associate's net assets	$	77,797,561	$	74,639,145	$	67,292,630
Unrealised profit from sale of
upstream transactions eliminations	(	274,730)	(	355,082)	(	229,111)
Net differences in share catiptal	(	110,719)	(	110,719)	(	118,741)
Carrying amount of the associate	$	77,412,112	$	74,173,344	$	66,944,778

Statements of comprehensive income

Statements of comprehensive income Carrying amount of the associate $	77,412,112 74,173,344 $ 66,944,778 $	77,412,112 74,173,344 $ 66,944,778 $
Revenue Profit for the period from continuing operations Other comprehensive income (loss), net of tax Total comprehensive income	Three-month period ended September 30,2017 Three-month period ended September 30,2016 153,030,797 $ 128,451,229 $ 22,260,708 $ 16,686,479 $ 11,146,684 480,348) ( 33,407,392 $ 16,206,131 $ Formosa Petrochemical Corp.
	Three-month period ended September 30,2017
	153,030,797 $ 22,260,708 $ 11,146,684 33,407,392 $	128,451,229 $ 16,686,479 $ 480,348) ( 16,206,131 $

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Revenue Profit for the period from continuing operations Other comprehensive income (loss), net of tax Total comprehensive income	Nine-month period ended September 30,2017 Nine-month period ended September 30,2016 455,525,709 $ 393,874,901 $ 56,930,628 $ 52,968,128 $ 13,303,457 2,939,132) ( 70,234,085 $ 50,028,996 $ Formosa Petrochemical Corp.	Nine-month period ended September 30,2017 Nine-month period ended September 30,2016 455,525,709 $ 393,874,901 $ 56,930,628 $ 52,968,128 $ 13,303,457 2,939,132) ( 70,234,085 $ 50,028,996 $ Formosa Petrochemical Corp.

	455,525,709 $ 56,930,628 $ 13,303,457 70,234,085 $	393,874,901 $ 52,968,128 $ 2,939,132) ( 50,028,996 $

(c) The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarised below:

As of September 30, 2017, December 31, 2016 and September 30, 2016, the carrying amount of the Group’s individually immaterial associates amounted to $28,825,587, $27,861,793 and $26,301,502, respectively.

Profit for the period from continuing operations Other comprehensive income (loss), net of tax Total comprehensive income Profit for the period from continuing operations Other comprehensive income (loss), net of tax ( Total comprehensive income	Three-month period ended September 30, 2017	Three-month period ended September 30, 2016
	1,632,565 $ 818,121 2,450,686 $ Nine-month period ended September 30, 2017	1,054,373 $ 506,597) ( 547,776 $ Nine-month period ended September 30, 2016
	912,175 $ 203,133) 709,042 $	3,810,053 $ 1,151,182) ( 2,658,871 $

(d) The fair value of the Group’s associates which have quoted market price was as follows:

Formosa Petrochemical Corp.	September 30,2017 $243,884,779	December 31,2016 $260,367,309	September 30,2016
			$216,735,341

B. Except for the financial statements of Formosa Petrochemical Corp., which were reviewed by the

Company’s appointed independent accountants, the financial statements of other investees accounted for using equity method for the nine-month periods ended September 30, 2017 and 2016 were not reviewed.

C. In response to Formosa Ha Tinh Steel Corporation’s planning of shareholding, the Group has

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signed an agreement for the transfer of capital contribution with Formosa Ha Tinh (Cayman) Limited in September 2014, whereby the Group will transfer all its capital contribution of US$689,955 thousand in Formosa Ha Tinh Steel Corporation as investment in Formosa Ha Tinh (Cayman) Limited. The Group has conducted restructuring in June, 2015, transferring 14.75% of equity in Formosa Ha Tinh (Cayman) Limited to Formosa Group Investment (Cayman) Limited as capital contribution. After reorganization, the Group now indirectly holds 19.71% of voting rights of Formosa Ha Tinh Steel Corporation through direct ownership in Formosa Ha Tinh (Cayman) Limited. Although the shareholding ratio is less than 20%, as the Group still has significant influence over Formosa Ha Tinh Steel Corp., the Group accounts for Formosa Ha Tinh Steel Corp. using equity method. In August, 2015, Formosa Ha Tinh (Cayman) Limited received cash from a capital increase. Since Formosa Taffeta (Cayman) Co., Ltd., the Group’s subsidiary, and Formosa Group Investment (Cayman) Corp., the Group’s associate, did not subscribe to the capital increase proportionately, the Group’s overall ownership percentage decreased from 19.71% to 16.5%. Accordingly, capital surplus was recognized. In January 2016, the Group has transferred all its share capital of Formosa Group Investment (Cayman) Corp. as investment in FCFC International Limited (Cayman). After reorganization, the Group’s subsidiaries, FCFC International Limited (Cayman) and Formosa Biomedical Technology (SAMOA) Co., Ltd. collectively hold 15.28% of share capital of Formosa Ha Tinh (Cayman) Limited. As the Group has no significant influence over the subsidiaries in management decisions, the Group discontinued accounting the subsidiary using the equity method when the Group lost significant influence and reclassified the investment as financial assets at cost.

D. In order to improve technical value and integrate related resources of biomedical industry and further develop the Group toward the high-end medical domain, the Group acquired 150 million shares of UBI Pharma Inc. at NT$4 per share and shareholding ratio is 21.99%. Since July 2016, the Group has lost significant influence in operational decision making over UBI Pharma Inc. As a result, the Group discontinued accounting for this investment under equity method and reclassified the investment as financial assets at cost. As of September 30, 2017, the shareholding ratio was 18.99%.
E. The Group received cash dividends of $14,415,665 and $11,196,362 for the nine-month periods ended September 30, 2017 and 2016, respectively, from its investments accounted for using equity method. The cash dividends are recorded as a deduction from the Group’s investments accounted for using equity method.
F. As of September 30, 2017 and 2016, certain equity investments were pledged to banks as described in Note 8.

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(9) Property, plant and equipment

									Construction in	Construction in
									progress and
	Land	and land				Machinery	Transportation		equipment to
.	improvements			Buildings	and equipment			equipment	be	inspected		Total
At January 1, 2017
Cost	$	8,779,868	$	44,776,889	$	293,971,383	$	14,692,225	$	14,151,660	$	376,372,025
Accumulated
depreciation
and impairment	(	170,292)	(	22,571,577)	(	210,261,607)	(	12,411,580)	(	43,509)	(	245,458,565)
	$	8,609,576	$	22,205,312	$	83,709,776	$	2,280,645	$	14,108,151	$	130,913,460
2017
Opening net
book amount	$	8,609,576	$	22,205,312	$	83,709,776	$	2,280,645	$	14,108,151	$	130,913,460
Additions		-		14,290		179,132		92,857		6,881,756		7,168,035
Disposals	(	43,196)	(	28,843)	(	48,782)	(	5,122)		-	(	125,943)
Reclassifications		108		2,175,134		7,712,935		186,367	(	10,019,488)		55,056
Depreciation
charge	(	217)	(	1,103,830)	(	9,424,101)	(	359,849)		-	(	10,887,997)
Net exchange
difference	(	45)	(	475,114)	(	1,396,209)	(	26,475)	(	441,888)	(	2,339,731)
Closing net
book amount	$	8,566,226	$	22,786,949	$	80,732,751	$	2,168,423	$	10,528,531	$	124,782,880
At September 30,	2017
Cost	$	8,736,483	$	46,280,670	$	297,214,287	$	14,741,915	$	10,528,531	$	377,501,886
Accumulated
depreciation
and impairment	(	170,257)	(	23,493,721)	(	216,481,536)	(	12,573,492)		-	(	252,719,006)
	$	8,566,226	$	22,786,949	$	80,732,751	$	2,168,423	$	10,528,531	$	124,782,880

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										Construction in	Construction in
										progress and
		Land	and land				Machinery	Transportation		equipment to
.		improvements			Buildings	and equipment			equipment	be	inspected		Total
At January 1, 2016
Cost		$	8,776,614	$	44,661,550	$	288,265,584	$	14,794,731	$	21,798,947	$	378,297,426
Accumulated
depreciation
and impairment	(		171,256)	(	21,484,545)	(	199,945,206)	(	12,332,660)		-	(	233,933,667)
		$	8,605,358	$	23,177,005	$	88,320,378	$	2,462,071	$	21,798,947	$	144,363,759
2016
Opening net
book amount		$	8,605,358	$	23,177,005	$	88,320,378	$	2,462,071	$	21,798,947	$	144,363,759
Additions			-		14,817		403,129		85,409		6,103,595		6,606,950
Disposals	(		6)	(	2,313)	(	11,173)	(	8,071)		-	(	21,563)
Reclassifications			4,758		865,277		10,589,388		158,222	(	11,726,888)	(	109,243)
Depreciation
charge	(		238)	(	1,087,129)	(	10,703,065)	(	391,141)		-	(	12,181,573)
Net exchange
difference	(		201)	(	890,127)	(	3,023,930)	(	42,029)	(	662,128)	(	4,618,415)
Closing net
book amount		$	8,609,671	$	22,077,530	$	85,574,727	$	2,264,461	$	15,513,526	$	134,039,915
At September 30,	2016
Cost		$	8,780,017	$	44,234,332	$	292,438,149	$	14,634,322	$	15,513,526	$	375,600,346
Accumulated
depreciation
and impairment	(		170,346)	(	22,156,802)	(	206,863,422)	(	12,369,861)		-	(	241,560,431)
		$	8,609,671	$	22,077,530	$	85,574,727	$	2,264,461	$	15,513,526	$	134,039,915

A. Amount of borrowing costs capitalized as part of property, plant and equipment and the range of the interest rates for such capitalization are as follows:

Amount capitalized Interest rate Amount capitalized Interest rate	For the three-monthperiods ended September 30,	For the three-monthperiods ended September 30,
	2017 2016 $21,869 $45,152 0.98%~3.03% 1.04%~3.00% For the nine-monthperiods ended September 30,	2016 $45,152 1.04%~3.00%
	2017 $62,080 0.98%~3.03%	2016 $135,557 1.04%~3.00%

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B. Under regulations, land may only be owned by individuals. Thus, the Group has already obtained ownership of the agricultural land for future plant expansion which was acquired by the Group under the name of a third party, and has pledged the full amount to the Company. As of September 30, 2017, the pledged amount was $822,993; as of December 31, 2016 and September 30, 2016, the pledged amount was $824,537.
C. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

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(10) Short-term loans and short-term notes and bills payable

==> picture [498 x 618] intentionally omitted <==

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

Type of loans September 30, 2017 Interest rate range Collateral
OA loans $ 5,361 0.34%~2.09% None
Secured loans 2,752,890 1.40%~2.50% Note 8
Unsecured loans 25,723,765 0.96%~4.57% None
Total short-term loans $ 28,482,016
Short-term notes and
bills payable $ 1,680,000 0.60%~0.61% None
Short-term notes and
bills payable discount ( 479)
Net short-term notes
and bills payable $ 1,679,521
Type of loans December 31, 2016 Interest rate range Collateral
OA loans $ 20,162 0.32%~1.95% None
Secured loans 2,969,220 1.40%~2.33% Note 8
Unsecured loans 23,157,368 0.87%~4.13% None
Total short-term loans $ 26,146,750
Short-term notes and
bills payable $ 1,500,000 0.43%~0.96% None
Short-term notes and
bills payable discount ( 536)
Net short-term notes
and bills payable $ 1,499,464
Type of loans September 30, 2016 Interest rate range Collateral
OA loans $ 2,558 0.41% None
Secured loans 2,921,865 1.40%~2.40% Note 8
Unsecured loans 19,683,162 0.69%~4.60% None
Total short-term loans $ 22,607,585
Short-term notes and
bills payable $ 1,800,000 0.43%~0.71% None
Short-term notes and
bills payable discount ( 346)
Net short-term notes
$ 1,799,654
and bills payable
(11) Financial liabilities at fair value through profit or loss
Items September 30, 2017 December 31, 2016 September 30, 2016
Current items:
Non-hedging derivatives $ - $ 1,381 $ 388
----- End of picture text -----

A. The Group recognized net gain on valuation of financial liabilities at fair value through profit or loss amounting to $894, $143, $1,381 and $431 for the three-month and nine-month periods

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ended September 30, 2017 and 2016, respectively.

B. The non-hedging derivative instruments transaction and contract information are as follows: As of September 30, 2017: None.

Derivative Financial Liabilities Current items: Forward foreign exchange contracts CHB Taipei Fubon Taipei Fubon	Contract Amount (Notional Principal) (In thousand dollars) Contract Period USD 5,000 Nov. 2016 ~ Feb. 2017 - - - - December31,2016	September30,2016	September30,2016
	Contract Amount (Notional Principal) (In thousand dollars) USD 5,000 - -	Contract Amount (Notional Principal) (In thousand dollars) - JPY 60,000 JPY 35,000	Contract Period
			- Sep. 2016 ~ Nov. 2016 Sep. 2016 ~ Oct. 2016

The Group entered into forward foreign exchange contracts to buy USD and JPY to hedge exchange rate risk of selling prices. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

(12) Bonds payable

Bonds payable Domestic unsecured nonconvertible corporate bonds Less: current portion	September 30,2017 December 31,2016 September 30,2016 41,250,000 $ 46,500,000 $ 50,000,000 $ 5,250,000) ( 6,750,000) ( 8,750,000) ( 36,000,000 $ 39,750,000 $ 41,250,000 $

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The terms of nonconvertible corporate bonds were as follows:

Description Second issued domestic unsecured nonconvertible corporate bonds First issued domestic unsecured nonconvertible corporate bonds - A First issued domestic unsecured nonconvertible corporate bonds - B Second issued domestic unsecured nonconvertible corporate bonds - A Second issued domestic unsecured nonconvertible corporate bonds - B Second issued domestic unsecured nonconvertible corporate bonds - C Third issued domestic unsecured nonconvertible corporate bonds - A Third issued domestic unsecured nonconvertible corporate bonds - B 2011 2012	Issuance date 2011.10.31 2012.7.26 2012.7.26 2012.12.7 2012.12.7 2012.12.7 2013.1.22 2013.1.22	Maturity date 2015.10.31~ 2016.10.31 2016.7.26~ 2017.7.26 2018.7.26~ 2019.7.26 2016.12.7~ 2017.12.7 2018.12.7~ 2019.12.7 2021.12.7~ 2022.12.7 2019.1.22~ 2020.1.22 2022.1.22~ 2023.1.22	Yield rate(%) 1.38 1.29 1.40 1.23 1.36 1.51 1.34 1.50	Issued principal amount $ 4,000,000 6,000,000 3,000,000 3,000,000 3,900,000 4,100,000 2,800,000 2,200,000	September 30,2017 $ - - 3,000,000 1,500,000 3,900,000 4,100,000 2,800,000 2,200,000	December 31,2016 $ - 3,000,000 3,000,000 1,500,000 3,900,000 4,100,000 2,800,000 2,200,000	September 30,2016 Note $ 2,000,000 Serial bonds, to be settled 50%, 50% 3,000,000 Serial bonds, to be settled 50%, 50% 3,000,000 Serial bonds, to be settled 50%, 50% 3,000,000 Serial bonds, to be settled 50%, 50% 3,900,000 Serial bonds, to be settled 50%, 50% 4,100,000 Serial bonds, to be settled 50%, 50% 2,800,000 Serial bonds, to be settled 50%, 50% 2,200,000 Serial bonds, to be settled 50%, 50%	Note

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Issuance Maturity Yield Issued principal Description date date rate(%) amount First issued domestic unsecured nonconvertible corporate bonds - A 2013.7.8 2017.7.8~ 2018.7.8 1.24 $ 4,500,000 First issued domestic unsecured nonconvertible corporate bonds - B 2013.7.8 2019.7.8~ 2020.7.8 1.38 2,700,000 First issued domestic unsecured nonconvertible corporate bonds - C 2013.7.8 2022.7.8~ 2023.7.8 1.52 2,800,000 Second issued domestic unsecured nonconvertible corporate bonds 2014.1.17 2025.1.17 ~ 2026..1.17 2.03 10,000,000 First issued domestic unsecured nonconvertible corporate bonds-A 2014.7.4 2023.7.4 ~ 2024.7.4 1.81 1,400,000 First issued domestic unsecured nonconvertible corporate bonds-B 2014.7.4 2028.7.4 ~ 2029.7.4 2.03 4,600,000 Less: Current portion of bonds payable 2013 2014	September 30,2017 $ 2,250,000 2,700,000 2,800,000 10,000,000 1,400,000 4,600,000 41,250,000 5,250,000) ( 36,000,000 $	December 31,2016 $ 4,500,000 2,700,000 2,800,000 10,000,000 1,400,000 4,600,000 46,500,000 6,750,000) ( 39,750,000 $	September 30,2016 Note $ 4,500,000 Serial bonds, to be settled 50%, 50% 2,700,000 Serial bonds, to be settled 50%, 50% 2,800,000 Serial bonds, to be settled 50%, 50% 10,000,000 Serial bonds, to be settled 50%, 50% 1,400,000 Serial bonds, to be settled 50%, 50% 4,600,000 Serial bonds, to be settled 50%, 50% 50,000,000 8,750,000) ( 41,250,000 $

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- (13) Long term bank loans and notes payable

Type of loans	Borrowing period/repayment term	Interest rate range	Collateral	September30,2017
Japanese Mitsubishi Bank China Trust Bank Sumitomo Mitsui Banking Corporation Mega International Commercial Bank Mega International Commercial Bank Long-term bank loans Unsecured loans	Mar. 29, 2016 ~ Mar. 29, 2019, payable at maturity date; interest payable monthly Aug. 24, 2015 ~ Aug. 24, 2020, payable in full after Aug. 24, 2018 or payable in full at maturity with a two- year extension Oct. 16, 2014 ~ Jul. 22, 2019, domestic: one hundred million principal payable semi-annually after Apr. 16, 2017; overseas: one hundred and ten million payable semi- annually after Apr. 16, 2017 with a two- year extension Nov. 19, 2012 ~ Nov. 17, 2017, principal payable semi-annually Nov. 17, 2016 ~ Nov. 17, 2021, principal payable semi-annually after 18 months	1.05%~1.08% LIBOR+1.25% (if TAIFX is higher than LIBOR+0.35%, the difference between TAIFX and LIBOR+0.35% is payable by the borrower) 2.49%~2.59% TAIFX+0.80% 3 months 1 to 5 years (including 5 years) rate of CBC, 4.75%	None " " " "	$ 3,000,000 2,878,414 4,605,462 575,795 1,566,185

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Type of loans	Borrowing period/repayment term	Interest rate range	Collateral	September30,2017
Taiwan Bank Taiwan Bank Taiwan Business Bank Chang Hwa Bank Hua Nan Bank Hua Nan Bank Sino Pac Bank	Oct. 22, 2014 ~ Oct. 21, 2019, principal payable semi- annually after Oct. 22, 2017, interest payable quarterly Oct. 24, 2014 ~ Oct. 21, 2019, principal payable semi- annually after three years; interest payable quarterly Jan.1, 2016 ~ Jan. 1, 2019, principal payable quarterly after 27 months Sep. 2017 ~ Sep. 2022, principal payable semi- annually after 36 months Feb. 3, 2017 ~ Feb. 3, 2020, principal payable at maturity date Mar. 15, 2017 ~ Mar. 15, 2019, payable in full at maturity Jun. 16, 2017 ~ Jun. 16, 2019, payable in full at maturity	The interest rate is 1.75% plus the average of the 3- month RMB interbank lending rate of HSBC (HK) and that of China Bank (HK), 2 business days before the interest accrued (the interest rate for the second year is 6.0173%, and the interest accrual period is from October to January) LIBOR+1.40% 3 months LIBOR+1.10% 3 months LIBOR+1.40% 3 months LIBOR+1.35% 3 months 1.03% 1.05%	None " " " " "	$ 547,936 2,424,400 586,337 383,556 159,815 1,500,000 300,000

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Type of loans	Borrowing period/repayment term	Interest rate range	Collateral September30,2017 None $ 300,000 " 2,000,000 " 900,000 " 500,000 " 500,000 " 200,000 " 1,000,000 " 1,500,000 " 200,000
O-BANK (Originally named Industrial Bank of Taiwan) First Commercial Bank Mizuho Corporate Bank E. Sun Bank China Trust Bank Land Bank of Taiwan KGI Bank Taipei Fubon Bank Bangkok Bank	Sep. 25, 2015 ~ Sep. 25, 2018, payable in full at maturity Sep. 16, 2015 ~ Sep. 16, 2018, payable in full at maturity Aug. 19, 2016 ~ Aug. 19, 2018, payable in full at maturity Aug. 20, 2015 ~ Aug. 20, 2018, payable in full at maturity Sep. 23, 2016 ~ Sep. 23, 2018, payable in full at maturity May. 25, 2017 ~ Sep. 30, 2018, payable in full at maturity Jun. 20, 2017 ~ Jun. 20, 2019, payable in full at maturity Jan. 11, 2017 ~ Jan. 11, 2019, payable in full at maturity Dec. 2, 2016 ~ Dec. 1, 2018, payable in full at maturity	1.07% 1.04% 1.06% 1.04% 1.05% 1.05% 1.04% 1.04% 1.05%

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Type of loans	Borrowing period/repayment term	Interest rate range	Collateral September30,2017 None 700,000 $ " 1,500,000 Land 10,755,556 Endorsement and guarantees of Formosa Taffeta Co,. Ltd. 498,863 None 56,056 39,138,375 7,070,122) ( 32,068,253 $	September30,2017
		1.00% 1.03% 1.63% SIBOR 6 months +1.6% 0.86%~1.01%

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Type of loans	Borrowing period/repayment term	Interest rate range	Collateral	December31,2016
Japanese Mitsubishi Bank Export-Import Bank of the ROC China Trust Bank Taipei Fubon Bank Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation Long-term bank loans Unsecured loans	Mar. 29, 2016 ~ Mar. 29, 2019, payable at maturity date; interest payable monthly Jul. 27, 2012 ~ Jul. 27, 2017, principal payable semi- annually Aug. 24, 2015 ~ Aug. 24, 2020, payable in full after Aug. 24, 2018 or payable in full at maturity with a two- year extension Aug. 2, 2016 ~ Aug. 2, 2018, payable at maturity date; interest payable monthly Aug. 2, 2016 ~ Aug. 2, 2018, payable at maturity date; interest payable monthly Oct. 16, 2014 ~ Jul. 22, 2019, domestic: one hundred million principal payable semi-annually after Apr. 16, 2017; overseas: one hundred and ten million payable semi- annually after Apr. 16, 2017 with a two- year extension	1.00%~1.13% 1.05%~1.19% LIBOR+1.25% (if TAIFX is higher than LIBOR+0.35%, the difference between TAIFX and LIBOR+0.35% is payable by the borrower) 1.14%~1.14% 0.82%~0.82% 2.08%~2.18%	None " " " " "	$ 3,000,000 114,286 3,067,876 600,000 1,100,000 6,135,751

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Type of loans	Borrowing period/repayment term	Interest rate range	Collateral	December31,2016
Mega International Commercial Bank Mega International Commercial Bank Taiwan Cooperative Bank Taiwan Cooperative Bank Taiwan Bank Taiwan Bank	Nov. 19, 2012 ~ Nov. 17, 2017, principal payable semi-annually Nov. 17, 2016 ~ Nov. 17, 2021, principal payable semi-annually after 18 months Dec. 10, 2013 ~ Dec. 7, 2018, principal payable semi-annually Dec. 10, 2013 ~ Dec. 7, 2018, principal payable semi-annually Oct. 22, 2014 ~ Oct. 21, 2019, principal payable semi- annually after Oct. 22, 2017, interest payable quarterly Oct. 24, 2014 ~ Oct. 21, 2019, principal payable semi- annually after three years; interest payable quarterly	TAIFX+0.80% 3 months 1 to 5 year (including 5 year) rate of CBC, 4.75% The interest rate is 1.3% plus the average of the 3- month RMB interbank lending rate of HSBC (HK) and that of China Bank (HK), 2 business days before the interest accrued (the interest rate for the third year is 6.598%, and the interest accrual period is from December to March) TAIFX+0.75% 3 months The interest rate is 1.75% plus the average of the 3- month RMB interbank lending rate of HSBC (HK) and that of China Bank (HK), 2 business days before the interest accrued (the interest rate for the second year is 6.0173%, and the interest accrual period is from October to January) LIBOR+1.4% 3 months	None " " " " "	$ 1,226,602 991,124 707,281 1,781,801 558,380 2,582,320

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Type of loans	Borrowing period/repayment term	Interest rate range	Collateral	December31,2016
Taiwan Business Bank Hua Nan Bank Sino Pac Bank Industrial Bank of Taiwan First Commercial Bank First Commercial Bank Mizuho Corporate Bank E. Sun Bank	Jan.1, 2016 ~ Jan.1, 2019, principal payable quarterly after 27 months Mar. 15, 2016 ~ Mar. 15, 2018, payable in full at maturity May. 16, 2016 ~ May. 16, 2018, payable in full at maturity Sep. 25, 2015 ~ Sep. 25, 2018, payable in full at maturity Sep. 16, 2015 ~ Sep. 16, 2018, payable in full at maturity May. 16, 2016 ~ Sep. 16, 2018, payable in full at maturity Aug. 19, 2015 ~ Aug. 19, 2017, payable in full at maturity Aug. 20, 2015 ~ Aug. 20, 2018, payable in full at maturity	LIBOR+1.1% 3 months 1.03% 1.05% 1.07% 0.99% 1.04% 1.06% 1.06%	None " " " " " " "	$ 624,530 1,500,000 300,000 500,000 1,500,000 500,000 900,000 500,000

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China Trust Bank KGI Bank Taipei Fubon Bank Bangkok Bank Far Eastern International Bank HSBC Mega International Commercial Bank Hua Nan Bank China Trust Bank ANZ Type of loans Secured loans	Borrowing period/repayment term	Interest rate range	Collateral	December31,2016
	Sep. 23, 2015 ~ Sep. 23, 2017, payable in full at maturity Jun. 20, 2015 ~ Jun. 20, 2017, payable in full at maturity Jan. 11, 2016 ~ Jan. 11, 2018, payable in full at maturity Dec. 2, 2015 ~ Dec. 1, 2017, payable in full at maturity Dec. 2, 2016 ~ Aug. 10, 2018, payable in full at maturity Dec. 19, 2015 ~ Dec. 19, 2017, payable in full at maturity Apr. 21, 2014 ~ Apr. 21, 2021, principal payable semi- annually after Apr. 21, 2017; interest payable monthly Apr. 26, 2010 ~ Jun. 11, 2019, principal payable annually	1.05% 1.04% 1.04% 1.05% 1.05% 1.03% 1.63%~1.65% SIBOR 6 months +1.6%	None " " " " " Land Endorsement and guarantees of Formosa Taffeta	$ 500,000 1,000,000 1,500,000 200,000 700,000 1,500,000 12,100,000 533,597

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Type of loans	Borrowing period/repayment term	Interest rate range	Collateral December31,2016 None 57,574 $ 46,281,122 7,666,502) ( 38,614,620 $	December31,2016
		0.86%~1.01%

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Type of loans	Borrowing period/repayment term	Interest rate range	Collateral	September30,2016
Japanese Mitsubishi Bank Export-Import Bank of the ROC China Trust Bank China Trust Bank Taipei Fubon Bank Sumitomo Mitsui Banking Corporation Long-term bank loans Unsecured loans	Mar. 29, 2016 ~ Mar. 29, 2019, payable at maturity date; interest payable monthly Jul. 27, 2012 ~ Jul. 27, 2017, principal payable semi- annually Aug. 24, 2015 ~ Aug. 24, 2020, payable in full after Aug. 24, 2018 or payable in full at maturity with a two- year extension Aug. 2, 2016 ~ Aug. 2, 2018, payable at maturity date; interest payable monthly Aug. 2, 2016 ~ Aug. 2, 2018, payable at maturity date; interest payable monthly Aug. 2, 2016 ~ Aug. 2, 2018, payable at maturity date; interest payable monthly	1.00%~1.13% 1.05%~1.19% LIBOR+1.25%(if TAIFX is higher than LIBOR+0.35%,th e difference between TAIFX and LIBOR+0.35% is payable by the borrower) 1.10%~1.10% 1.10%~1.37% 0.82%~0.82%	None " " " " "	$ 3,000,000 114,286 2,979,279 400,000 600,000 1,100,000

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Type of loans	Borrowing period/repayment term	Interest rate range	Collateral	September30,2016
Sumitomo Mitsui Banking Corporation Mega International Commercial Bank Taiwan Cooperative Bank Taiwan Cooperative Bank Taiwan Bank	Oct. 16, 2014 ~ Jul. 22, 2019, domestic: one hundred million principal payable semi-annually after Apr. 16, 2017; overseas: one hundred and ten million payable semi- annually after Apr. 16, 2017 with a two- year extension Nov. 19, 2012 ~ Nov. 17, 2017, principal payable semi-annually Dec. 10, 2013 ~ Dec. 7, 2018, principal payable semi-annually Dec. 10, 2013 ~ Dec. 7, 2018, principal payable semi-annually Oct. 22, 2014 ~ Oct. 21, 2019, principal payable semi- annually after Oct. 22, 2017, interest payable quarterly	2.08%~2.18% TAIFX+0.80% 3 months The interest rate is 1.3% plus the average of the 3-month RMB interbank lending rate of HSBC (HK) and that of China Bank (HK), 2 business days before the interest accrued (the interest rate for the third year is 6.598%, and the interest accrual period is from December to March) TAIFX+0.75% 3 months The interest rate is 1.75% plus the average of the 3- month RMB interbank lending rate of HSBC (HK) and that of China Bank (HK), 2 business days before the interest accrued (the interest rate for the second year is 6.0173%, and the interest accrual period is from October to January)	None " " " "	$ 5,958,558 1,787,862 892,441 2,164,254 563,646

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Borrowing

	Borrowing
Type of loans	period/repayment term	Interest rate range	Collateral	September30,2016
Taiwan Bank Taiwan Business Bank Hua Nan Bank Sino Pac Bank Industrial Bank of Taiwan First Commercial Bank First Commercial Bank Mizuho Corporate Bank E. Sun Bank China Trust Bank	Oct. 24, 2014 ~ Oct. 21, 2019, principal payable semiannually after Oct. 24, 2017; interest payable quarterly Jan.1, 2016 ~ Jan. 1, 2019, principal payable quarterly after 27 months Mar. 15, 2016 ~ Mar. 15, 2018, payable in full at maturity May. 16, 2016 ~ May. 16, 2018, payable in full at maturity Sep. 25, 2015 ~ Sep. 25, 2018, payable in full at maturity Sep. 16, 2015 ~ Sep. 16, 2018, payable in full at maturity May. 16, 2016 ~ Sep. 16, 2018, payable in full at maturity Aug. 20, 2015 ~ Aug. 20, 2017, payable in full at maturity Aug. 20, 2015 ~ Aug. 20, 2018, payable in full at maturity Sep. 25, 2015 ~ Sep. 25, 2017, payable in full at maturity	LIBOR+1.4% 3 months LIBOR+1.10% 3 months 1.11% 1.05% 1.07% 0.99% 1.04% 1.06% 1.10% 1.10%	None " " " " " " " " "	$ 2,509,280 606,865 1,200,000 300,000 500,000 1,500,000 500,000 900,000 500,000 500,000

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Borrowing

	Borrowing
Type of loans	period/repayment term	Interest rate range	Collateral		September30,2016
		1.03% 1.03% 1.12% 1.08% 1.63%~1.65% SIBOR 6 months +1.6% 0.86%~1.01%	None " " " Land Endorsement and guarantees of Formosa Taffeta Co,. Ltd. None	$ 500,000 1,500,000 200,000 1,500,000 12,100,000 606,983 97,001 45,080,455 5,403,027) ( 39,677,428 $

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A. The collaterals for long-term bank loans are described in Note 8.
B. The Group has signed contracts for syndicated loans with Mega Bank and others on November 14, 2013 to finance plant construction for Formosa Ha Tinh Steel Corp. Information is as follows: (a) Total credit line: $12,100,000
- (b) Interest rate: Based on the agreement with the banks
- (c) Period: 7 years
- (d) Collateral: Land in Six Naphtha Cracking Plant, Mailiao Township, Yunlin County The Group is required to meet certain financial covenants, namely liability ratio (liabilities/net equity) of less than 150% and current ratio (current assets/current liabilities) of above 100% at the end of each year. In the event the Group fails to meet the required covenants, a capital increase has to be completed by June of the following year.
C. Formosa Industries Corp.’s long-term borrowing from banks is for the plant construction. The borrowing is guaranteed by Nan Ya Plastics Corp.’s drawn note of $4,973,308.
(14) Pensions
A. (a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee.
- (b) For the aforementioned pension plan, the Group recognized pension costs of $59,549, $79,042, $164,833 and $237,208 for the three-month and nine-month periods ended September 30, 2017 and 2016, respectively.
- (c) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2018 are $170,521.
B. (a) From July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
- (b) The Company’s mainland subsidiaries have a defined contribution plan. Monthly

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contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. The contribution percentage for the three-month and nine-month periods ended September 30, 2017 and 2016 was 10%~20%, 14%, 10%~20% and 14%, respectively. Other than the monthly contributions, the Group has no further obligations.

  - (c) The pension costs under the defined contribution pension plans of the Group for the threemonth and nine-month periods ended September 30, 2017 and 2016 were $85,348, $102,459, $255,586 and $255,158, respectively.

(15) Capital stock
A. As of September 30, 2017, the Company’s authorized and paid-in capital was $58,611,863, and total issued stocks was 5,861,186 thousand shares with a par value of $10 per share. All proceeds from shares issued have been collected.
B. Changes in the treasury stocks for the nine-month periods ended September 30, 2017 and 2016 are set forth below:

Reason for reacquisition	Subsidiary	For the nine-monthperiod endedSeptember30,2017	For the nine-monthperiod endedSeptember30,2017	For the nine-monthperiod endedSeptember30,2017	For the nine-monthperiod endedSeptember30,2017
		Beginning shares	Additions	- - - Disposal	Ending shares
Parent company shares held by subsidiaries reclassified from long-term investment to treasury stock	Formosa Taffeta Co. Formosa Advanced Technologies Co.	11,219,610 7,316,000 18,535,610	950,000 6,571,000 7,521,000		12,169,610 13,887,000 26,056,610

Reason for reacquisition	Subsidiary	For the nine-monthperiod endedSeptember30,2016	For the nine-monthperiod endedSeptember30,2016	For the nine-monthperiod endedSeptember30,2016	For the nine-monthperiod endedSeptember30,2016
		Beginning shares	Additions	- - - Disposal	Ending shares
Parent company shares held by subsidiaries reclassified from long-term investment to treasury stock	Formosa Taffeta Co. Formosa Advanced Technologies Co.	11,219,610 7,037,000 18,256,610	- 279,000 279,000		11,219,610 7,316,000 18,535,610

C. The market value of treasury stocks was $92.1 and $84.3 (in dollars) per share at September 30, 2017 and 2016, respectively.

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D. The above treasury stocks of the parent company were purchased by subsidiaries.

(16) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Group has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

	For	the nine-monthperiod ended September	the nine-monthperiod ended September	30,2017
Share premium	Conversion premium of corporate bonds	Treasury share transactions	Effect from net stockholding of associates recognised usingequitymethod	Difference between stock price and book value for disposal of subsidiaries	Others
$ 2,710,554 - -	$ 5,514,032 - -			$ 9,447 - -	$204,224 - -
$2,710,554					$204,224
Share premium	Conversion premium of corporate bonds	Treasury share transactions	Effect from net stockholding of associates recognised usingequitymethod	Difference between stock price and book value for disposal of subsidiaries	Others
$ 2,710,554 - -	$ 5,514,032 - -	$ 138,407 20,975 -	$ 298,338 - (69,434) 228,904 $	$ 9,447 - -	$204,224 - -
2,710,554 $	5,514,032 $	159,382 $		9,447 $	$204,224

(17) Retained earnings

A. Under the Company's Articles of Incorporation, the current year's earnings, if any, shall first be used to pay all taxes and offset prior years' operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The remaining balance is to be set aside as special reserve if necessary; and distributed to shareholders as interest on capital. The remaining balance for current year, after allocating for interest on capital, shall be accumulated with remaining

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balance of previous year. Bonus distributed shall be proposed by the Board of Directors and resolved by the stockholders.

The special reserve includes:

(a)Reserve for a special purpose;
(b)Investment income recognized under equity method and deferred income tax assets arising from unused investment tax credits which are deemed unrealized and transferred to special reserve. Such investment income and deferred income tax assets are reclassified to unappropriated earnings only when they are realized;
(c)Net unrealized gains from financial instruments transactions. The special reserve for unrealized gains from financial instruments is reduced when the accumulated value of the unrealized gains also decreases; and
(d)Other special reserves as stipulated by other laws.
- The board of directors of the Company has approved the amended Articles of Incorporation of the Company on December 24, 2015, and the amended articles had been resolved in the shareholders’ meeting in 2016.
B. The Group is in the mature stage and the profit is stable. The Board of Directors shall establish the cash dividend or stock dividend percentage. At least 50% of the distributable earnings after deducting the legal reserve, directors' and supervisors' remuneration, employee bonus and special reserves shall be distributed to stockholders. The Group would prefer cash dividend. If the Group requires funds for significant investments or needs to improve its financial structure, part of the dividend will be in the form of stocks which shall not exceed 50% of the total dividends.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Group’s paid-in capital.
D. In accordance with the regulations, the Group shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
E. The appropriations of 2016 and 2015 earnings had been resolved at the stockholders’ meeting on June 9, 2017 and June 7, 2016, respectively. Details are as follows:

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For the years ended December 31,

Legal reserve Special reserve Cash dividends		Dividends per share Amount (in dollars) $ 4,383,305 4,639,539 32,822,643 $ 5.60 41,845,487 $ 2016	2015	2015
		Amount $ 4,383,305 4,639,539 32,822,643 41,845,487 $	Amount $ 2,757,819 - 20,514,153 23,271,972 $	Dividends per share (in dollars)
				$ 3.50

Information about the appropriation of employees’ bonus and directors’ and supervisors’ remuneration by the Group as proposed by the Board of Directors and resolved by the stockholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

F. Information relating to employees’ bonuses and directors’ and supervisors’ remuneration is summarized in Note 6(24).

(18) Other equity items

Other equity items
				Available-for-sale			Currency
		Hedging	reserve		investment		translation		Total
At January 1, 2017	$		43,174	$	90,933,647	$	988,624	$	91,965,445
Unrealised gain (loss)
on available-for-sale
investments:
–Group			-		16,722,010		-		16,722,010
–Associates			-		3,780,930		-		3,780,930
Cash flow hedges:
–Associates	(		22,571)		-		-	(	22,571)
Currency translation
differences:
–Group			-		-	(	2,176,825)	(	2,176,825)
–Tax of Group			-		-		327,779		327,779
–Associates			-		-	(	575,875)	(	575,875)
At September 30, 2017	$		20,603	$	111,436,587	($	1,436,297)	$	110,020,893

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				Available-for-sale	Available-for-sale	Available-for-sale		Currency	Currency
		Hedging	reserve			investment	translation				Total
At January 1, 2016	$		69,573	$		72,615,548	$	4,649,520		$	77,334,641
Unrealised gain (loss)
on available-for-sale
investments:
–Group			-			506,299			-		506,299
–Associates			-	(		465,040)			-	(	465,040)
Cash flow hedges:
–Associates	(		39,422)			-			-	(	39,422)
Currency translation
differences:
–Group			-			-	(	4,158,337)		(	4,158,337)
–Tax of Group			-			-			631,082		631,082
–Associates			-			-	(		476,336)	(	476,336)
At September 30, 2016	$		30,151	$		72,656,807	$		645,929	$	73,332,887
(19)Operating revenue
				For the three-monthperiods endedSeptember30,
						2017				2016
Sales revenue			$			87,931,175		$			79,762,609
Service revenue						152,255					104,223
Other operating revenue						118,465					72,655
			$			88,201,895		$			79,939,487
					Forthenine-monthperiods ended September30,
						2017				2016
Sales revenue			$			258,875,209		$			236,432,018
Service revenue						428,542					349,751
Other operating revenue						326,098					231,752
			$			259,629,849		$			237,013,521

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(20) Other income

Other gains and losses Rental revenue Interest income: Interest income from bank deposits Interest from current account with others Other interest income Dividend income Other revenue Rental revenue Interest income: Interest income from bank deposits Interest from current account with others Other interest income Dividend income Other revenue Net gain on financial assets at fair value through profit or loss Net gain on financial liabilities at fair value through profit or loss Net currency exchange gain (loss) Gain on disposal of investments Gain on disposal of property, plant and equipment Other losses	Forthe three-monthperiods ended September30,	Forthe three-monthperiods ended September30,
	2017 2016 33,827 $ 34,049 $ 85,221 55,998 43,116 51,296 10,146 1,465 138,483 108,759 4,674,812 6,237,966 295,005 287,127 5,142,127 $ 6,667,901 $ 2017 2016 103,498 $ 104,544 $ 270,956 162,552 120,121 115,381 22,839 7,600 413,916 285,533 7,468,397 6,243,361 817,304 901,837 8,803,115 $ 7,535,275 $ Forthenine-monthperiods ended September30, 2017 2016 1,122 $ 593 $ 894 143 293,478 1,132,060) ( 163,438 147,546 14,402 3,727 62,856) ( 84,656) ( 410,478 $ 1,064,707) ($ Forthe three-monthperiods ended September30,	2016
		34,049 $ 55,998 51,296 1,465
		108,759
		6,237,966 287,127
		6,667,901 $

(21) Other gains and losses

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For the nine-month periods ended September 30,

			2017			2016
Net gain on financial assets at fair value
through profit or loss		$	2,938		$	2,079
Net gain on financial liabilities at fair
value through profit or loss			1,381			431
Net currency exchange loss	(		1,313,077)	(		2,271,693)
Gain on disposal of investments			198,314			182,497
Gain on disposal of property, plant and
equipment			803,270			7,159
Impairment loss			-	(		207,066)
Other losses	(		178,506)	(		328,614)
	($		485,680)	($		2,615,207)

(22) Finance costs

Finance costs
	Forthe three-monthperiods ended September30,
			2017			2016
Interest expense:
Bank loans		$	406,774		$	286,819
Corporate bonds			173,307			201,167
Current account with others			2,758			3,229
Discount			22,289			15,342
Other interest expenses			12,273			12,481
			617,401			519,038
Less: Capitalisation of qualifying assets	(		21,869)	(		45,152)
Finance costs		$	595,532		$	473,886
	Forthenine-monthperiods				ended September30,
			2017			2016
Interest expense:
Bank loans	$		1,208,169	$		883,062
Corporate bonds			541,238			632,208
Current account with others			9,642			8,390
Discount			63,506			44,269
Other interest expenses			38,135			37,270
			1,860,690			1,605,199
Less: Capitalisation of qualifying assets	(		62,080)	(		135,557)
Finance costs	$		1,798,610	$		1,469,642

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(23) Expenses by nature

For the three-month periods ended September 30,

Depreciation charges on property, plant and equipment Employee benefit expense Amortisation	2017 3,603,968 $ 3,772,095 786,830 8,162,893 $	2016
		3,981,605 $ 3,839,876 877,400
		8,698,881 $

Depreciation charges on property, plant and equipment Employee benefit expense Amortisation

2017 2016 10,887,997 $ 12,181,573 $ 10,998,983 11,195,610 2,173,309 2,717,314 24,060,289 $ 26,094,497 $ For the nine-monthperiods ended September 30,	2017 2016 10,887,997 $ 12,181,573 $ 10,998,983 11,195,610 2,173,309 2,717,314 24,060,289 $ 26,094,497 $ For the nine-monthperiods ended September 30,	2017 2016 10,887,997 $ 12,181,573 $ 10,998,983 11,195,610 2,173,309 2,717,314 24,060,289 $ 26,094,497 $ For the nine-monthperiods ended September 30,
	2017 10,887,997 $ 10,998,983 2,173,309 24,060,289 $	2016
		12,181,573 $ 11,195,610 2,717,314
		26,094,497 $

(24) Employee benefit expense

Employee benefit expense	Employee benefit expense	Employee benefit expense
2017 2016 Wages and salaries 3,217,157 $ 3,298,134 $ Labor and health insurance fees 257,089 241,530 Pension costs 144,897 181,501 Other personnel expenses 152,952 118,711 3,772,095 $ 3,839,876 $ For the three-monthperiods ended September 30, 2017 2016 Wages and salaries 9,408,152 $ 9,593,721 $ Labor and health insurance fees 737,239 712,723 Pension costs 420,419 492,366 Other personnel expenses 433,173 396,800 10,998,983 $ 11,195,610 $ For the nine-monthperiods ended September 30,
	2017 2016 3,217,157 $ 3,298,134 $ 257,089 241,530 144,897 181,501 152,952 118,711 3,772,095 $ 3,839,876 $ For the nine-monthperiods ended September 30,	2016
		3,298,134 $ 241,530 181,501 118,711
		3,839,876 $
	2017 9,408,152 $ 737,239 420,419 433,173 10,998,983 $	2016
		9,593,721 $ 712,723 492,366 396,800
		11,195,610 $

A. In accordance with the Articles of Incorporation of the Company, after distributing earnings, the Company shall distribute bonus to the employees that accounts for 0.1%-1% of the total distributed amount.

According to the Articles of Incorporation of the Company, when distributing earnings, the Company shall distribute bonus to the employees and pay remuneration to the directors and supervisors. However, in accordance with the Company Act amended on May 20, 2015, a company shall distribute employee remuneration, based on the current year's profit condition, in a fixed amount or a proportion of profits. If a company has accumulated deficit, earnings should

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be channeled to cover losses. Aforementioned employee remuneration could be paid by cash or stocks. Specifics of the compensation are to be determined in a board meeting that registers twothirds of directors in attendance, and the resolution must receive support from half of participating members. The resolution should be reported to the shareholders during the shareholders’ meeting. Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements, entitled to receive aforementioned stock or cash may be specified in the Articles of Incorporation.

The board of directors of the Company has approved the amended Articles of Incorporation of the Company on December 24, 2015. In accordance with the amended articles, a ratio of profit before income tax of the current year distributable, after covering accumulated losses, shall be distributed as employees' compensation. The ratio shall not be lower than 0.05% and shall not be higher than 0.5% for employees’ compensation. The amended articles had been resolved in the shareholders’ meeting in 2016.

B. For the three-month periods and nine-month periods ended September 30, 2017 and 2016, employees’ remuneration (bonuses) was accrued at $19,313, $15,614, $41,577 and $37,755, respectively. The aforementioned amount was recognized in salary expenses.
For the nine-month periods ended September 30, 2017 and 2016, the employees’ compensation was estimated and accrued based on approximately 0.1% of the retained earnings.
Employees’ compensation for 2016 as resolved by the Board of Directors was in agreement with the amount of $47,608 recognized in the profit or loss for 2016. Employees’ compensation of 2016 has been distributed.
Information about the appropriations of employees’ bonus and directors’ and supervisors’ remuneration by the Company as proposed by the Board of Directors and resolved by the stockholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(25) Income tax

A. Income tax expense

(a)Components of income tax expense:

For the three-month periods ended September 30

Current tax: Current tax on profits for the period Adjustments in respect of prior years Total current tax Deferred tax: Effect of exchange rate Origination and reversal of temporary differences Total deferred tax Income tax expense Current tax: Current tax on profits for the period Additional tax on undistributed earnings Adjustments in respect of prior years Total current tax Deferred tax: Effect of exchange rate Origination and reversal of temporary differences Total deferred tax Income tax expense	2017 2016 $ 1,668,164 $ 1,057,374 ( 69,556) 15,804 1,598,608 1,073,178 ( 2,518) 17,840 206,126 2,392 203,608 20,232 $1,802,216 $1,093,410 2017 2016 $ 4,203,421 $ 3,919,514 688,790 390,244 (290,626) (143,442) 4,601,585 4,166,316 ( 795) 31,517 199,020 219,577 198,225 251,094 $4,799,810 $4,417,410 Forthenine-monthperiods ended September30,	2017 2016 $ 1,668,164 $ 1,057,374 ( 69,556) 15,804 1,598,608 1,073,178 ( 2,518) 17,840 206,126 2,392 203,608 20,232 $1,802,216 $1,093,410 2017 2016 $ 4,203,421 $ 3,919,514 688,790 390,244 (290,626) (143,442) 4,601,585 4,166,316 ( 795) 31,517 199,020 219,577 198,225 251,094 $4,799,810 $4,417,410 Forthenine-monthperiods ended September30,	2016
	2017
	$ 4,203,421 688,790 (290,626) 4,601,585 ( 795) 199,020 198,225 $4,799,810	$ 3,919,514 390,244 (143,442) 4,166,316 31,517 219,577 251,094 $4,417,410

(b)The income tax charge relating to components of other comprehensive income is as follows:

For the three-month periods ended September 30,

		2017	2016
Currency translation differences	($	72,074)	$310,516

		For the nine-monthperiods ended September 30,
		2017	2016
Currency translation differences	$	327,779	$631,082

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B. Unappropriated retained earnings:

Unappropriated retained earnings:
Earnings generated in and before 1997 Earnings generated in and after 1998	September30,2017 6,198,462 $ 62,760,653 68,959,115 $	December31,2016 6,198,462 $ 66,361,641 72,560,103 $	September30,2016
			6,198,462 $ 58,041,840
			64,240,302 $

C. Information on the imputation credit account is as follows:

. Balance of the imputation credit account Creditable tax rate	September 30,2017 September 30,2016 4,269,475 $ 2,944,461 $ December 31,2016 4,453,266 $ 2016(Estimate) 14.65% 2015(Actual) 12.76%

(26) Earnings per share

A. Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders of the parent by the weighted average number of ordinary shares in issue during the period.

					For the three-monthperiod ended September 30,2017	For the three-monthperiod ended September 30,2017	For the three-monthperiod ended September 30,2017	For the three-monthperiod ended September 30,2017	For the three-monthperiod ended September 30,2017
						Weighted average
						number of
						ordinary shares		Earnings	per share
			Amount			outstanding		(in dollars)
			Before tax		After tax	(shares in thousands)	Before tax			After tax
Basic earnings per share
Consolidated net income		$	21,004,824	$	19,202,608		$	3.60	$	3.29
Net income of non-
controlling interest	(		1,710,837)	(	1,109,613)		(	0.29)	(	0.19)
Profit attributable to
ordinary shareholders
of the parent		$	19,293,987	$	18,092,995	5,835,130	$	3.31	$	3.10

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For the three-month period ended September 30, 2016

					Weighted average
					number of
					ordinary shares		Earnings	per share
		Amount			outstanding		(in dollars)
		Before tax		After tax	(shares in thousands)	Before tax		After	tax
Basic earnings per share
Consolidated net income	$	17,846,483	$	16,753,073		$	3.05	$	2.86
Net income of non-
controlling interest	(	2,231,907)	(	1,810,983)		(	0.38)	(	0.30)
Profit attributable to
ordinary shareholders
of the parent	$	15,614,576	$	14,942,090	5,842,651	$	2.67	$	2.56
				For the nine-monthperiod endedSeptember30,2017
					Weighted average
					number of
					ordinary shares		Earnings per share
		Amount			outstanding		(in dollars)
	Before tax			After tax	(shares in thousands)	Before tax		After tax
Basic earnings per share
Consolidated net income	$	47,415,100	$	42,615,290		$	8.12	$	7.30
Net income of non-
controlling interest	(	5,879,695)	(	4,370,791)		(	1.00)	(	0.75)
Profit attributable to
ordinary shareholders
of the parent	$	41,535,405	$	38,244,499	5,837,790	$	7.12	$	6.55
				For the nine-monthperiod endedSeptember30,2016
					Weighted average
					number of
					ordinary shares		Earnings per share
		Amount			outstanding		(in dollars)
	Before tax			After tax	(shares in thousands)	Before tax		After tax
Basic earnings per share
Consolidated net income	$	43,294,752	$	38,877,342		$	7.41	$	6.65
Net income of non-
controlling interest	(	5,539,397)	(	3,893,123)		(	0.95)	(	0.66)
Profit attributable to
ordinary shareholders
of the parent	$	37,755,355	$	34,984,219	5,842,651	$	6.46	$	5.99

B. Employees’ bonus could be distributed in the form of stock. Since there is no significant impact when calculating diluted earnings per share, basic earnings per share equals diluted earnings per share.

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C. If stocks of the parent company held by subsidiaries are not treated as treasury stocks, the calculation of basic earnings per share is as follows:

For the three-month period ended September 30, 2017

					Weighted average
					number of
					ordinary shares			Earnings		per share
		Amount			outstanding			(in dollars)
		Before tax		After tax	(shares in thousands)		Before tax			After	tax
Basic earnings per share
Consolidated net income	$	21,004,824	$	19,202,608			$	3.58		$	3.28
Net income of non-
controlling interest	(	1,710,837)	(	1,109,613)		(		0.29)		(	0.19)
Profit attributable to ordinary
shareholders of the parent	$	19,293,987	$	18,092,995	5,861,186		$	3.29		$	3.09
				For the three-monthperiod ended September 30,2016
					Weighted average
					number of
					ordinary shares			Earnings		per share
		Amount			outstanding			(in dollars)
		Before tax		After tax	(shares in thousands)		Before tax			After	tax
Basic earnings per share
Consolidated net income	$	17,846,483	$	16,753,073			$	3.04		$	2.86
Net income of non-
controlling interest	(	2,231,907)	(	1,810,983)		(		0.38)		(	0.31)
Profit attributable to ordinary
shareholders of the parent	$	15,614,576	$	14,942,090	5,861,186		$	2.66		$	2.55
				For the nine-monthperiod ended September 30,2017
					Weighted average
					number of
					ordinary shares			Earnings	per share
		Amount			outstanding			(in dollars)
	Before tax			After tax	(shares in thousands)	Before tax				After tax
Basic earnings per share
Consolidated net income	$	47,415,100	$	42,615,290		$		8.09		$	7.27
Net income of non-
controlling interest	(	5,879,695)	(	4,370,791)		(		1.00)	(		0.74)
Profit attributable to ordinary
shareholders of the parent	$	41,535,405	$	38,244,499	5,861,186	$		7.09		$	6.53

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For the nine-month period ended September 30, 2016

Before tax After tax Consolidated net income 43,294,752 $ 38,877,342 $ Net income of non- controlling interest 5,539,397) ( 3,893,123) ( Profit attributable to ordinary shareholders of the parent 37,755,355 $ 34,984,219 $ Basic earnings per share Amount	Weighted average number of ordinary shares outstanding (shares in thousands) Before tax After tax 7.39 $ 6.63 $ 0.95) ( 0.66) ( 5,861,186 6.44 $ 5.97 $ Earnings per share (in dollars)	Earnings per share (in dollars)	Earnings per share (in dollars)
			After tax
			5.97 $

(27) Non-cash transactions

1.Investing activities with partial cash payments:

			For the nine-monthperiods endedSeptember30,	For the nine-monthperiods endedSeptember30,	For the nine-monthperiods endedSeptember30,	For the nine-monthperiods endedSeptember30,
			2017			2016
Purchase of fixed assets	$		7,168,035	$		6,606,950
Add: Opening balance of payable on
equipment			789,871			1,485,927
Less: Ending balance of payable on
equipment	(		630,158)	(		684,407)
Cash paid during the period	$		7,327,748	$		7,408,470
.Financing activities with partial cash flow effects
			For the nine-monthperiods endedSeptember30,
			2017			2016
Appropriation for cash dividends		$	32,822,643		$	20,514,153
(Increase) decrease in dividends payable	(		4,103)			1,201,121
Cash dividends paid during the period	$		32,818,540	$		21,715,274

2.Financing activities with partial cash flow effects

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

LATED PARTY TRANSACTIONS
Names of related parties and relationship

Names of related parties

Relationship withthe Group

Formosa Petrochemical Corp.
Formosa Heavy Industries Corp.
Formosa Plastics Transport Corp.
Formosa Plastics Maritime Corp.
Mai Liao Power Corp.
Formosa Environmental Technology Corp.
Chia-Nan Enterprise Corp.
Su Hua Transport Corp.
Hwa Ya Science Park Management Consulting
Corp.
Formosa Resourses Corp.
Formosa Synthetic Rubber Corp.
Formosa Synthetic Rubber (Hong Kong) Corp.
Formosa Group (Cayman) Corp.
Kuang Yueh Co., Ltd.
Formosa Synthetic Rubber (Ningbo) Corp.
BP Chemicals (Malaysia) SDN Corp.
BP Singapore Ltd. (BPSG)
Idemitsu Kosan Co., Ltd
Formosa Heavy Industry Co.(Guangzhou) Ltd.
Formosa Plastics Logistics Corp.
Formosa Plastics Corp.
Nan Ya Plastics Corp.
Asia Pacific Investment Corp.
Nan Ya PCB Corp.
Mai Liao Harbor Administration Corp.
Formosa Plastics Marine Corp.
Formosa Plastics Marine Co., Ltd.
Yue Chi Development Corp.
PFG Fiber Glass Corp.
Formosa Automobile Corp.
Hua Ya Power Corp.
Nan Ya Technology Corp.
Formosa Network Technology Corp.
Asia Pacific Technology Corp.
Ya Tai Development Corp.
Asia Pacific Development Corp.
Chang Gung Memorial Hospital

Associates
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Other related parties
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Names of related parties

Relationship withthe Group

Chang Gung University
Kong You Industrial Co., Ltd.
Yugen Co., Ltd.
Kuang Yueh Co., Ltd.
Hong Jing Metal Corp.
Formosa Plastics Transport (Ningbo) Co., Ltd.
Formosa Industries (Ningbo) Co., Ltd.
Formosa Electronic (Ningbo) Co., Ltd.
Formosa Polypropylene (Ningbo) Co., Ltd.
Formosa Acrylic Esters (Ningbo) Co., Ltd.
Nan Ya Plastics Construction Materials Co.,
Ltd.
Nan Ya Plastics Film (Nan Tong) Corp.
Nan Ya Plastics (Nan Tong) Corp.
Nan Ya Plastics Film (Hui Zhou) Corp.
Nan Ya Plastics (Hui Zhou) Corp.
Nan Ya Chemical Fiber (KunShan) Corp.
Nan Ya Plastics (Xiamen) Corp.
Nan Ya Epoxy Resin (Kun Shan) Co., Ltd.
Nan Ya Rigid Film (Guangzhou) Co., Ltd.
Nan Ya Plastics (Anshan) Corp.
Nan Ya Electronic Materials (Kunshan) Corp.
Formosa Ha Tinh (Cayman) Ltd.
Formosa Ha Tinh Steel Corp. -TW
Formosa Ha Tinh Steel Corp.
Formosa Plastics Building Parking Lot
Formosa Trading Co., Ltd.
Sino-Asia Steel (Ningbo) Co., Ltd.
Hwa Ya Technologies Corp.
(Lost the related party relationship in substance
after merger with Micron Technology Co., Ltd.
in December 2016 )
Fujian Fuxin Special Steel Co., Ltd.
Nan Ya Electronic Materials Co., Ltd.
Bio Trust International Corp.

Other related parties
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(2) Significant related party transactions

A. Sales of goods:

nificant related party transactions Sales of goods:	nificant related party transactions Sales of goods:	nificant related party transactions Sales of goods:
2017 2016 Sales of goods: － Associates 6,632,403 $ 4,895,598 $ `－` Other related parties 11,383,047 10,415,130 18,015,450 $ 15,310,728 $ For the three-monthperiods ended September 30, 2017 2016 Sales of goods: － Associates 19,009,126 $ 13,741,138 $ `－` Other related parties 33,932,203 33,555,661 52,941,329 $ 47,296,799 $ For the nine-monthperiods endedSeptember30,
	2017 19,009,126 $ 33,932,203 52,941,329 $	2016
		13,741,138 $ 33,555,661
		47,296,799 $

The Group sells goods to related parties. Except for terms to certain related parties which are longer, prices are the same with third parties.

B. Purchases of goods:

The Group sells goods to related parties. Except for terms to certain related parties which are longer, prices are the same with third parties. Purchases of goods:	The Group sells goods to related parties. Except for terms to certain related parties which are longer, prices are the same with third parties. Purchases of goods:	The Group sells goods to related parties. Except for terms to certain related parties which are longer, prices are the same with third parties. Purchases of goods:
2017 2016 Purchases of goods: － Associates Formosa Petrochemical Corp. 33,188,522 $ 27,437,816 $ Others 526 236 `－` Other related parties 4,128,273 3,866,640 37,317,321 $ 31,304,692 $ For the three-monthperiods ended September 30, 2017 2016 Purchases of goods: － Associates Formosa Petrochemical Corp. 94,536,901 $ 85,413,418 $ Others 1,208 1,460 `－` Other related parties 14,488,354 12,289,008 109,026,463 $ 97,703,886 $ For the nine-monthperiods ended September 30,
	2017 94,536,901 $ 1,208 14,488,354 109,026,463 $	2016
		85,413,418 $ 1,460 12,289,008
		97,703,886 $

The payment terms for related parties are within 30~60 days of purchase. The purchase prices and terms for related parties are the same with non-related parties.

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C. Receivables from related parties:

`.` Receivables from related parties: － Associates `－` Other related parties Other receivables: `－` Other related parties	September 30,2017 2,251,813 $ 4,602,844 6,854,657 104 6,854,761 $	December 31,2016 2,456,042 $ 4,912,036 7,368,078 440,981 7,809,059 $	September 30,2016 1,669,236 $ 4,263,307 5,932,543 907,971 6,840,514 $

Receivables from related parties are mainly from sales of goods and receivables for payments on behalf of others for construction design services. Receivables for sales are due 30~120 days from the date of sale; receivables for payments on behalf of others for construction design services are due 270 days from the services rendered. The receivables do not bear interest and no collaterals were pledged. No provision was accrued for receivables from related party.

D. Payables to related parties:

. Payables to related parties: － Associates Formosa Petrochemical Corp. Others `－` Other related parties	September30,2017 11,032,207 $ 388 1,359,518 12,392,113 $	December31,2016 11,291,646 $ - 2,093,864 13,385,510 $	September30,2016 9,196,177 $ - 1,584,595 10,780,772 $

The payables to related parties arise mainly from purchase transactions and are due 30~60 days after the date of purchase. The payables bear no interest.

E. Expansion and repair project

(a)Expansion and repair project:

r the date of purchase. The payables bear no ansion and repair project Expansion and repair project:	interest.	interest.	interest.	interest.
	For the three-monthperiods ended September 30,
		2017		2016
Expansion and repair works of factory sites
－ Associates	$	67,040	$	81,141
`－` Other related parties		38,474		11,169
	$	105,514	$	92,310
	For the nine-monthperiods endedSeptember30,
		2017		2016
Expansion and repair works of factory sites
－ Associates	$	126,001	$	306,532
`－` Other related parties		159,363		41,736
	$	285,364	$	348,268

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(b)Ending balance of payables for expansion and repair project:

`.` Payables to related parties: － Associates `－` Other related parties	September 30,2017 26,500 $ 20,921 47,421 $	December 31,2016 - $ 3,738 3,738 $	September 30,2016 4,561 $ 4,180 8,741 $

The Group contracted the expansion and repair works of the factory sites to related parties. The payment terms are in accordance with the industry practice with payment due within a month after inspection.

F. Financing
(a) Loans to related parties:
- (i)Ending balance of accounts receivable - related parties

`.` － Associates Formosa Group (Cayman) Corp. Formosa Heavy Industries Corp. Formosa Synthetic Rubber (Ningbo) Co., Ltd. Others `－` Other related parties Nan Ya Technology Corp. Formosa Plastics Marine Co., Ltd. Formosa Ha Tinh (Cayman) Co., Ltd. Others	September30,2017 4,259,500 $ 1,800,000 2,191,728 260,000 8,511,228 - 3,943,790 3,002,600 - 6,946,390 15,457,618 $	December31,2016 8,006,500 $ 1,000,000 1,163,291 490,000 10,659,791 1,500,000 3,680,924 3,960,345 40,000 9,181,269 19,841,060 $	September30,2016 8,006,500 $ - 563,640 460,000 9,030,140 4,500,000 3,710,664 - 80,000 8,290,664 17,320,804 $

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(ii)Interest income

For the three-month periods ended September 30,

2017 2016 － Associates Formosa Group (Cayman) Corp. 329 $ 17,446 $ Formosa Synthetic Rubber (Ningbo) Co., Ltd. 15,516 - Formosa Heavy Industries Corp. 3,937 - Others 7,481 4,097 27,263 21,543 `－` Other related parties Nan Ya Technology Corp. - 15,921 Formosa Plastics Marine Co., Ltd. 13,028 13,041 Others 2,316 134 15,344 29,096 42,607 $ 50,639 $ 2017 2016 － Associates Formosa Group (Cayman) Corp. 16,712 $ 17,446 $ Formosa Synthetic Rubber (Ningbo) Co., Ltd. 33,885 - Formosa Heavy Industries Corp. 7,521 - Others 10,193 7,446 68,311 24,892 `－` Other related parties Nan Ya Technology Corp. 1,999 49,806 Formosa Plastics Marine Co., Ltd. 38,256 36,424 Formosa Ha Tinh (Cayman) Co.,Ltd. 10,875 - Others 171 3,578 51,301 89,808 119,612 $ 114,700 $ For the nine-monthperiods endedSeptember30,	2017 2016 － Associates Formosa Group (Cayman) Corp. 329 $ 17,446 $ Formosa Synthetic Rubber (Ningbo) Co., Ltd. 15,516 - Formosa Heavy Industries Corp. 3,937 - Others 7,481 4,097 27,263 21,543 `－` Other related parties Nan Ya Technology Corp. - 15,921 Formosa Plastics Marine Co., Ltd. 13,028 13,041 Others 2,316 134 15,344 29,096 42,607 $ 50,639 $ 2017 2016 － Associates Formosa Group (Cayman) Corp. 16,712 $ 17,446 $ Formosa Synthetic Rubber (Ningbo) Co., Ltd. 33,885 - Formosa Heavy Industries Corp. 7,521 - Others 10,193 7,446 68,311 24,892 `－` Other related parties Nan Ya Technology Corp. 1,999 49,806 Formosa Plastics Marine Co., Ltd. 38,256 36,424 Formosa Ha Tinh (Cayman) Co.,Ltd. 10,875 - Others 171 3,578 51,301 89,808 119,612 $ 114,700 $ For the nine-monthperiods endedSeptember30,	2016
		17,446 $ - - 4,097
		21,543
		15,921 13,041 134
		29,096
		50,639 $
	2017 16,712 $ 33,885 7,521 10,193 68,311 1,999 38,256 10,875 171 51,301 119,612 $	2016
		17,446 $ - - 7,446
		24,892
		49,806 36,424 - 3,578
		89,808
		114,700 $

The loan terms to related parties are in accordance with the contract’s repayment schedule after the loan is made; interest was collected at 1.41%~3.48% and 1.41%~3.05% per annum

~86~

for the nine-month periods ended September 30, 2017 and 2016, respectively.

(b) Loans from related parties:
(i)Ending balance of payables to related parties

(ii)Interest expense － Associates `－` Other related parties	September 30,2017 207,900 $ - 207,900 $	December 31,2016 15,600 $ 41,878 57,478 $	September 30,2016 26,200 $ - 26,200 $

i)Interest expense
－ Associates `－` Other related parties － Associates `－` Other related parties	2017 2016 529 $ 136 $ 3 - 532 $ 136 $ For the three-monthperiods endedSeptember30, 2017 2016 912 $ 539 $ 619 2,597 1,531 $ 3,136 $ For the nine-monthperiods endedSeptember30,
	2017 912 $ 619 1,531 $

The loan terms from associates are in accordance with the contract’s repayment schedule after the loan is made; interest is paid at a rate of 1.41% and 1.41%~3.92% per annum for the ninemonth periods ended September 30, 2017 and 2016, respectively.

G. Receivables for payment on behalf of others

September 30, 2017 December 31, 2016 September 30, 2016 － $ - $ 164,332 $ 164,832 Other related parties

The amount for equipment for resale that the Company paid on behalf of associates is recorded as other current assets.

H. Operating expenses

other current assets. Operating expenses
	Forthe three-monthperiods ended September30,
		2017		2016
Transportation charges
`－` Other related parties
Formosa Plastics Marine Corp.	$	305,897	$	167,774
Formosa Plastics Transport (Ningbo) Corp.		390,679		164,435
Others		-		51,483
	$	696,576	$	383,692

~87~

For the nine-month periods ended September 30,

Transportation charges `－` Other related parties Formosa Plastics Marine Corp. Formosa Plastics Transport (Ningbo) Corp. Others		2017 $ 913,322 635,316 - 1,548,638 $	2016
			$ 533,646 523,505 144,370
			1,201,521 $

I. Rental revenue

Rental revenue	Rental revenue	Rental revenue
2017 2016 － Associates Formosa Petrochemical Corp. 5,036 $ 5,036 $ Others 3,092 3,126 8,128 8,162 `－` Other related parties Nan Ya Plastics Corp. 6,362 6,371 Formosa Plastics Building Parking Lot 3,837 3,916 Formosa Network Technology Corp. 3,850 3,850 Others 7,821 7,860 21,870 21,997 29,998 $ 30,159 $ For the three-monthperiods ended September 30, 2017 2016 － Associates Formosa Petrochemical Corp. 15,108 $ 15,108 $ Others 9,277 9,874 24,385 24,982 `－` Other related parties Nan Ya Plastics Corp. 19,621 19,245 Formosa Plastics Building Parking Lot 11,510 11,747 Formosa Network Technology Corp. 11,550 11,550 Others 23,445 23,996 66,126 66,538 90,511 $ 91,520 $ For the nine-monthperiods ended September 30,
	2017 15,108 $ 9,277 24,385 19,621 11,510 11,550 23,445 66,126 90,511 $	2016
		15,108 $ 9,874
		24,982
		19,245 11,747 11,550 23,996
		66,538
		91,520 $

The rental prices charged to related parties are determined considering the local rental prices and payments, and are collected monthly.

~88~

J. Property transactions:
(a) Acquisition of property, plant and equipment

Property transactions: a) Acquisition of property, plant and equipment	Property transactions: a) Acquisition of property, plant and equipment	Property transactions: a) Acquisition of property, plant and equipment
2017 2016 Purchase of property, plant and equipment － Associates 53,610 $ 39,877 $ Forthe three-monthperiods ended September30, 2017 2016 urchase of property, plant and equipment － Associates 77,100 $ 208,567 $ `－` Other related parties 108 34 77,208 $ 208,601 $ For the nine-monthperiods endedSeptember30,
	2017 77,100 $ 108 77,208 $	2016
		208,567 $ 34
		208,601 $

Purchase of property, plant and equipment

－ Associates

－ Other related parties
(b) Acquisition of financial assets

Items	Number of shares	Name of the securities	Three-month period ended September30,2017
			Acquisition cost
Financial assets measured at cost Items	75,471,717 Number of shares	Formosa Ha Tinh (Cayman) Limited Name of the securities Formosa Resources Corp. Formosa Ha Tinh (Cayman) Limited	2,322,552 $ Nine-month period ended September30,2017
			Acquisition cost
Investments accounted for using equity method Financial assets measured at cost	168,344,000 75,471,717		1,683,440 $ 2,322,552 4,005,992 $

For the three-month period ended September 30, 2016: None.

~89~

Nine-month period ended September 30, 2016

－ Associates `－` Other related parties `－` Other related parties	Items	Number of shares	Name of the securities		Acquisition cost
	Investments accounted for using equity method Financial assets measured at cost Available-for-sale financial assets	8,500,000 508,236,725 15,297,204	Formosa Construction Corp. Formosa Ha Tinh (Cayman) Limited Nan Ya Technology Corp.		85,000 $ 16,084,840 558,348 16,728,188 $

For the three-month periods ended September 30, 2017 and 2016: None. For the nine-month period ended September 30, 2017: None.

Formosa Group Investment Corp. (Cayman)	Items	Number of shares	Name of the securities		Nine-month period ended September30,2016	Nine-month period ended September30,2016
					Disposal proceeds	Gain (loss) on disposal
	Investments accounted for using equity method	508,249,225	Formosa Group Investment Corp. (Cayman) (Note)		16,085,211 $	- $

Note: Details of the Group’s acquisition of financial assets are provided in Note 6(8) C.

K. Details of affiliates endorsed/guaranteed for the Group’s borrowings are provided in Note 6(13).

(3) Key management compensation

Note: Details of the Group’s acquisition of financial assets are provided in Note 6(8) C. K. Details of affiliates endorsed/guaranteed for the Group’s borrowings are provided in Note 6(13). Key management compensation	Note: Details of the Group’s acquisition of financial assets are provided in Note 6(8) C. K. Details of affiliates endorsed/guaranteed for the Group’s borrowings are provided in Note 6(13). Key management compensation	Note: Details of the Group’s acquisition of financial assets are provided in Note 6(8) C. K. Details of affiliates endorsed/guaranteed for the Group’s borrowings are provided in Note 6(13). Key management compensation
2017 2016 Salaries 16,721 $ 14,714 $ Post-employment benefits 441 452 17,162 $ 15,166 $ For the three-monthperiods endedSeptember30, 2017 2016 Salaries 85,759 $ 78,599 $ Post-employment benefits 1,351 1,363 87,110 $ 79,962 $ For the nine-monthperiods endedSeptember30,
	2017 85,759 $ 1,351 87,110 $	2016
		78,599 $ 1,363
		79,962 $

~90~

8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

Pledged assets Long-term equity investments accounted for under the equity method Property, plant and equipment Inventory	Bookvalue	September30,2016 Purpose 12,875,116 $ Collateral for bank loans 6,865,834 Collateral for bank loans 21,264 Limited transfer for land tax reassessment and collateral 19,762,214 $	Purpose
	September30,2017 December31,2016 - $ - $ 6,547,443 6,594,298 21,264 21,264 6,568,707 $ 6,615,562 $

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

The details of commitments and contingencies as of September 30, 2017 were as follows:

(1) Capital expenditures of property, plant and equipment that were contracted but not yet paid amounted to $5,823,186 thousand, RMB 287,916 thousand and VND 407,287,246 thousand.
(2) The outstanding letters of credit for major raw materials and equipment purchases amounted to USD 29,733 thousand, JPY 3,592 thousand and EUR 2,766 thousand.
(3) The provision of endorsements and guarantees to others are as follows:

Formosa Industries Corp. Formosa Resources Corp. Formosa Group (Cayman) Corp. Formosa Ha Tinh (Cayman) Corp. Formosa Taffeta (Zhong Shan) Co., Ltd. Formosa Taffeta (Vietnam) Co., Ltd. Formosa Taffeta (Changshu) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Public More Internation Co., Ltd.	September 30,2017 December 31,2016 4,973,308 $ 5,297,258 $ 3,257,788 - 25,380,438 33,247,370 15,644,565 14,380,788 317,730 564,375 79,892 86,251 311,678 407,382 2,509,181 2,405,391 3,000 - 52,477,580 $ 56,388,815 $	September 30,2016 5,147,427 $ - 34,620,223 9,385,571 674,240 51,031 448,448 2,311,145 - 52,638,085 $

(4) The promissory notes issued for others are as follows:
A. Beginning in 2013, the Group’s investment accounted for using equity method, Formosa Synthetic Rubber Corp. (Ningbo), entered into a syndicated loan contract with the syndicated banking group including Hua Nan Bank, arranging the credit facilities of USD130 million and RMB300 million to meet the operation needs. The Company is required to issue a promissory note equivalent to the shareholding ratio of 33.33% and is obliged to facilitate the repayment for the borrower whenever necessary.
B. Beginning in 2012, the Group’s consolidated entity, Formosa Phenol (Ningbo) Limited Co., entered into a syndicated loan contract with the syndicated banking group including Mega

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International Commercial Bank, Taiwan Cooperative Bank and Bank of Taiwan, arranging the credit facilities of USD244 million and RMB310 million to meet the capital needs of building the plant. The Company is required to issue a promissory note and is obliged to facilitate the repayment of the borrower whenever necessary.

C. The Company’s indirect investee, Formosa Ha Tinh (Cayman) Limited Co., was provided a bank loan facility of USD835 million to meet the operation needs. To secure the rights of its shareholders, the Company is required to issue a promissory note to ensure the borrower has fulfilled its obligation for repayment.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

The Company’s indirect investee, Formosa Ha Tinh (Cayman) Limited Co., was provided a short-term bank loan facility of USD75 million to meet the operation needs. To secure the rights of its shareholders, the Company is required to issue a promissory note to ensure the borrower has fulfilled its obligation for repayment.

12. OTHERS

(1) Litigation

The Company’s operating permit and bituminous coal usage permit for co-generation equipment, M16, M17 and M22, have expired on September 28, 2016. The Company has applied for permit extension in June, 2016, however, after months of investigation and review, the Changhua County Government stated that improvements were not satisfied and decided to revoke the extension application on September 29, 2016. The Company filed a suspension application with Taichung High Administrative Court on September 30, 2016 and asked for continued operations until judgment on the administrative lawsuit has been rendered. Meanwhile, the Company filed an administrative appeal with the Executive Yuan.

Under the Taichung High Administrative Court judgement, the suspension application filed regarding discontinued operations of M16, M17 and M22 had been denied. The loss or dangerous status of discontinued operation of co-generation equipment claimed by the Company was considered ‘possible’ but not ‘certain’ before November 1, 2016, and the discontinued operation has not resulted in plant shutdown and industry safety hazard.

The Company filed an appeal with the EPA on the case mentioned above on October 7, 2016. The EPA decided to revoke the original administrative action, ordered the original authority to make another action in accordance with appropriate regulations, and dismissed the administrative action for extension approval which was based on initial content of license. Accordingly, the Company reapplied for an extension of the three related licenses of Changhua plant with the Changhua City Government, and submitted the opinion on the review of the original administrative action. As of November 9, 2017, the Changhua City Government has not replied yet.

The Company’s Changhua plant was forced to shut down and consequently, incurred losses due to

~92~

the lack of vapor power. The Company will explore all available legal remedies in filing a claim for indemnity and protect stockholders’ and the Company’s interest.

Because of the Changhua plant shutdown, the Company assessed that part of idle production equipment may not be recoverable. Accordingly, the Company recognized impairment loss on property, plant and equipment amounting to $466,785 for the year ended December 31, 2016.

On October 2, 2017, Economic Daily News and other mass media reported that the Company did not fulfill the environmental impact assessment commitments. However, the coal-fired boiler of the Company’s Changhua plant has been working under the coal use permit and operation license, which were both approved by Changhua County Government. All the emission degree from coalfired boiler are better than the environmental impact assessment standards and national standards. The central and local competent authority have inspected and audited for many times and found no violation of environmental impact assessment. As of November 9, 2017, the Company has not received written sanction.

(2) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt.

The gearing ratios at September 30, 2017, December 31, 2016 and September 30, 2016 were as follows:

Total borrowings Less: cash and cash equivalents Net debt Total equity Total capital Gearing ratio	September30,2017 December31,2016 September30,2016 110,549,912 $ 120,427,336 $ 119,487,694 $ 25,902,170) ( 30,391,911) ( 28,039,964) ( 84,647,742 90,035,425 91,447,730 400,973,038 379,640,412 346,893,610 485,620,780 $ 469,675,837 $ 438,341,340 $ 17% 19% 21%

(3) Financial instruments

A. Fair value information of financial instruments

Except those listed in the table below, the carrying amounts of the Group’s financial instruments not measured at fair value (including cash and cash equivalents, notes receivable (including related parties), accounts receivable (including related parties), other receivables (including related parties)), are approximate to their fair values. Because the interest rates of the long-term

~93~

loans (including portion maturing within one year or one operating cycle, whichever is longer) are close to the market interest rate, thus the carrying amount is a reasonable basis for the estimation of fair value. The fair value information of financial instruments measured at fair value is provided in Note 12(4).

B. Financial risk management policies
(a)The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial position and financial performance. The Group uses derivative financial instruments to hedge certain risk exposures (see Notes 6(2) and 6(11)).
(b)Risk management is carried out by a central treasury department (Company treasury) under policies approved by the board of directors. Company treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
C. Significant financial risks and degrees of financial risks
(a)Market risk

Foreign exchange risk

i.The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the USD and RMB. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities.
ii.Management has set up a policy to manage its foreign exchange risk against its functional currency. The Group hedges its entire foreign exchange risk exposure. To manage its foreign exchange risk arising from future commercial transactions and recognized assets and liabilities, the Group uses forward foreign exchange contracts.
iii.The Group hedges recognized assets or liabilities denominated in foreign currencies or highly expectable transactions by utilizing forward exchange contracts and trading forward exchanges and cross currency swap contracts amongst other derivative financial instruments in order to lower the risk from changes in fair value resulting from fluctuations in the exchange rate. The Group also monitors the changes in the exchange rate and sets stop loss points to lower the risk from exchange rate.
iv.The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD, VND and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate

~94~

fluctuations is as follows:

.
Financial assets
Monetary items
USD：NTD
JPY：NTD
Non-monetary items
RMB：NTD
USD：NTD
VND：NTD
JPY：NTD
Financial liabilities
Monetary items
USD：NTD
JPY：NTD
USD：RMB
USD：VND
.
Financial assets
Monetary items
USD：NTD
JPY：NTD
Non-monetary items
RMB：NTD
USD：NTD
VND：NTD
Financial liabilities
Monetary items
USD：NTD
JPY：NTD
USD：RMB
USD：VND Foreign Currency
Amount(In Thousands)
Exchange Rate
Book Value(NTD)
666,466
$ 30.31
20,200,584
$ 574,078
0.27
155,001
8,461,112
$ 4.57
38,667,282
$ 572,423
30.31
17,350,141
7,362,142,489
0.0013
9,570,785
39,942
0.27
10,784
42,369
$ 30.31
1,284,204
$ 327,067
0.27
88,308
410,984
30.31
12,456,925
247,000
30.31
7,486,570
September 30,2017
Foreign Currency
Amount(In Thousands)
Exchange Rate
Book Value(NTD)
486,040
$ 32.28
15,689,371
$ 574,020
0.28
160,726
6,644,783
$ 4.65
30,898,241
$ 518,328
32.28
16,731,628
7,791,363,252
0.0014
10,907,909
59,914
$ 32.28
1,934,024
$ 350,755
0.28
98,211
380,661
32.28
12,287,737
285,000
32.28
9,199,800
December 31,2016

Foreign Currency
Amount(In Thousands)
486,040
$ 574,020
6,644,783
$ 518,328
7,791,363,252
59,914
$ 350,755
380,661
285,000

~95~

		September 30,2016	September 30,2016
		Foreign Currency
`.`	Amount(In Thousands)		Exchange Rate	Book Value(NTD)
Financial assets
Monetary items
USD`：`NTD	$	497,056	31.37	$	15,592,647
JPY`：`NTD		301,360	0.31		93,422
Non-monetary items
RMB`：`NTD	$	6,585,586	4.70	$	30,952,254
USD`：`NTD		488,621	31.37		15,328,041
VND`：`NTD		7,682,654,596	0.0014		10,755,716
JPY`：`NTD		144,891	0.31		44,916
Financial liabilities
Monetary items
USD`：`NTD	$	67,378	31.37	$	2,113,648
JPY`：`NTD		498,952	0.31		154,675
USD`：`RMB		1,583,259	31.37		49,666,835
USD`：`VND		285,000	31.37		8,940,450
v.Total exchange gain (loss), including realized and unrealized arising from significant
foreign exchange variation on the monetary items held by the Group				for the three-month
and nine-month periods ended September 30, 2017 and 2016 amounted to $293,478,
($1,132,060), ($1,313,077) and ($2,271,693), respectively.

vi.Analysis of foreign currency market risk arising from significant foreign exchange variation:

~96~

	Nine-month	period ended September 30,2017	period ended September 30,2017	period ended September 30,2017
		Sensitivityanalysis
				Effect on other
			Effect on	comprehensive
	Degree of variation		profit or loss	income
Financial assets
Monetary items
USD`：`NTD	1%	$ 202,006 $ -
JPY`：`NTD	1%		1,550 -
Non-monetary items
RMB`：`NTD	1%	$		- $ 386,673
USD`：`NTD	1%			- 173,501
VND`：`NTD	1%			- 95,708
JPY`：`NTD	1%			- 108
Financial liabilities
Monetary items
USD`：`NTD	1%	$ 12,842 $ -
JPY`：`NTD	1%		883 -
USD`：`RMB	1%		124,569 -
USD`：`VND	1%		74,866 -

~97~

	Nine-month	period ended September 30,2016	period ended September 30,2016	period ended September 30,2016
		Sensitivityanalysis
				Effect on other
			Effect on	comprehensive
	Degree of variation		profit or loss	income
Financial assets
Monetary items
USD`：`NTD	1%	$ 155,926 $ -
JPY`：`NTD	1%		934 -
Non-monetary items
RMB`：`NTD	1%	$		- $ 309,523
USD`：`NTD	1%			- 153,280
VND`：`NTD	1%			- 107,557
USD`：`NTD	1%			- 450
Financial liabilities
Monetary items
USD`：`NTD	1%	$ 21,136 $ -
JPY`：`NTD	1%		1,547 -
USD`：`RMB	1%		496,668 -
USD`：`VND	1%		89,405 -

Price risk

i. The Group is exposed to equity securities price risk because of investments held by the Group and classified on the consolidated balance sheet either as available-for-sale or at fair value through profit or loss. The Group is not exposed to commodity price risk. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
ii.The Group’s investments in equity securities comprise domestic listed and unlisted stocks. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, components of equity for the nine-month periods ended September 30, 2017 and 2016 would have increased/decreased by $1,549,407 and $1,197,837, respectively, as a result of gains/losses on equity securities classified as available-for-sale.

Interest rate risk

i. The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During the nine-month periods ended September

~98~

30, 2017 and 2016, the Group’s borrowings at variable rate were denominated in the NTD and USD.

ii. At September 30, 2017 and 2016, if interest rates on denominated borrowings had been 1% higher/lower with all other variables held constant, post-tax profit for the nine-month periods ended September 30, 2017 and 2016 would have been $324,849 and $374,168 lower/higher, respectively, mainly as a result of higher/lower interest expense on floating rate borrowings.
(b)Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. The Group utilizes certain credit enhancement instruments (such as sales revenue or guarantees received in advance) at appropriate times to lower the credit risk from specific customers. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board of directors. The utilization of credit limits is regularly monitored. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables. For banks and financial institutions, only independently rated parties are accepted.
ii. No credit limits were exceeded during the reporting periods, and management does not expect any significant losses from non-performance by these counterparties.
(c)Liquidity risk
i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable, external regulatory or legal requirements, for example, currency restrictions.
ii. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in interest bearing current accounts, loans to related parties, time deposits and cash equivalents, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts.

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iii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

September 30, 2017 Short-term borrowings Short-term notes and bills payable Notes payable (including related parties) Accounts payable (including related parties) Other payables (including related parties) Bonds payable Long-term borrowings December 31, 2016 Short-term borrowings Short-term notes and bills payable Notes payable (including related parties) Accounts payable (including related parties) Other payables (including related parties) Bonds payable Long-term borrowings	Less than 1year 28,482,016 $ 1,679,521 198,124 18,344,218 10,890,959 5,250,000 7,070,122 Less than 1year 26,146,750 $ 1,499,464 196,870 21,911,494 8,444,530 6,750,000 7,666,502	Between 1 and 2years - $ - - - - 6,200,000 22,165,654 Between 1 and 2years - $ - - - - 5,700,000 21,089,630	Between 3 and 5years - $ - - - - 9,250,000 9,902,599 Between 3 and 5years - $ - - - - 8,950,000 17,524,990	Over 5years
				- $ - - - - 20,550,000 - Over 5years
				- $ - - - - 25,100,000 -

~100~

September 30, 2016 Less than 1year Short-term borrowings 22,607,585 $ Short-term notes and bills payable 1,799,654 Notes payable (including related parties) 154,970 Accounts payable (including related parties) 19,342,331 Other payables (including related parties) 8,220,126 Bonds payable 8,750,000 Long-term borrowings 5,403,027 September 30, 2017 Less than 1year Forward exchange contracts - $ Derivative financial liabilities: December 31, 2016 Less than 1year Forward exchange contracts 1,381 $ September 30, 2016 Less than 1year Forward exchange contracts 388 $	Between 1 and 2years - $ - - - - 5,250,000 19,807,321 Between 1 and 2years - $ Between 1 and 2years - $ Between 1 and 2years - $	Between 3 and 5years - $ - - - - 10,900,000 19,870,107 Between 3 and 5years - $ Between 3 and 5years - $ Between 3 and 5years - $	Over 5years
			- $ - - - - 25,100,000 - Over 5years
September 30, 2017 Forward exchange contracts December 31, 2016 Forward exchange contracts September 30, 2016 Forward exchange contracts
			- $ Over 5years
			- $ Over 5years
			- $

iv. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(4) Fair value estimation

A. Details of the fair value of the Group’s financial assets and financial liabilities not measured at fair value are provided in Note 12(3) A.
B. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

~101~

Level 3: Inputs for the asset or liability that are not based on observable market data.

C. The following table presents the Group’s financial assets and liabilities that are measured at fair value at September 30, 2017, December 31, 2016 and September 30, 2016:

September 30, 2017 Assets: Recurring fair value measurement Financial assets at fair value through profit or loss Forward exchange contracts Beneficiary certificate Available-for-sale financial assets Equity securities Fund Liabilities: Recurring fair value measurement Financial liabilities at fair value through profit or loss Forward exchange contracts	Level 1 - $ 629,315 150,377,338 - 151,006,653 $ - $	Level 2 1,244 $ - 4,514,470 4,624,778 9,140,492 $ - $	Level3 - $ - - - - $ - $	Total
				1,244 $ 629,315 154,891,808 4,624,778
				160,147,145 $
				- $

~102~

==> picture [459 x 360] intentionally omitted <==

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

December 31, 2016 Level 1 Level 2 Level 3 Total
Assets:
Recurring fair value
measurement
Financial assets at fair
value through profit
or loss
Forward exchange $ - $ 66 $ - $ 66
contracts
- -
Beneficiary certificate 627,555 627,555
Available-for-sale
financial assets
-
Equity securities 135,122,609 3,162,625 138,285,234
Fund - 4,874,052 - 4,874,052
$ 135,750,164 $ 8,036,743 $ - $ 143,786,907
Liabilities:
Recurring fair value
measurement
Financial liabilities
at fair value through
profit or loss
Forward exchange $ - $ 1,381 $ - $ 1,381
contracts
----- End of picture text -----

~103~

September 30, 2016 Assets: Recurring fair value measurement Financial assets at fair value through profit or loss Forward exchange contracts Beneficiary certificate Available-for-sale financial assets Equity securities Fund Liabilities: Recurring fair value measurement Financial liabilities at fair value through profit or loss Forward exchange contracts	Level 1 - $ 627,129 115,420,304 - 116,047,433 $ - $	Level 2 411 $ - 2,293,555 4,724,024 7,017,990 $ 388 $	Level 3 - $ - - - - $ - $	Total
				411 $ 627,129 117,713,859 4,724,024
				123,065,423 $
				388 $

D. The methods and assumptions the Group used to measure fair value are as follows:
(a) The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Listed shares Open-end fund Market quoted price Closing price Net asset value

(b) Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.
(c) When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.
(d) The valuation of derivative financial instruments is based on valuation model widely accepted

~104~

  - by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate. Structured interest derivative instruments are measured by using appropriate option pricing models (i.e. Black-Scholes model) or other valuation methods, such as Monte Carlo simulation.

(e) The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.
(f) The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.
E. For the nine-month periods ended September 30, 2017 and 2016, there was no transfer between Level 1 and Level 2.
F. For the nine-month periods ended September 30, 2017 and 2016, there was no transfer into or out from Level 3.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: Please refer to table 1.
B. Provision of endorsements and guarantees to others: Please refer to table 2.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to table 4.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: Please refer to table 5.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 6.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 7.
I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Notes 6(2), and (11); 12(3) and (4).
J. Significant intragroup transactions during the reporting periods: Please refer to table 8.

~105~

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 9.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 10.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 11.

14. SEGMENT INFORMATION

(1) General information

The Group’s reportable segments are strategic business units and provide different products and services. Strategic business units are separately managed because each unit needs different techniques and marketing strategies. The Group’s reportable segments are as follows:

1st Petrochemical Div: responsible for production of benzene, p-xylene and o-xylene.

2nd Petrochemical Div: responsible for production of styrene, synthetic phenolic and acetone.

3rd Petrochemical Div and Formosa Chemicals Industries (Ningbo) Limited Co.: responsible for production of purified terephthalic acid.

Plastics Division, Formosa ABS Plastics (Ningbo) Co., Ltd. and Formosa PS (Ningbo) Co., Ltd.: responsible for production of ABS resin, polypropylene and PS.

Formosa Taffeta Co., Ltd.: responsible for production of blended fabric, spun fabric, cross-woven fabric, polyamine and polyester fabric, epidemic fabric, designer sportswear fabric, high-tech and function fabric, tire cord fabric, pure cotton yarn, blended yarn, various functional yarn, fireproof fabric, anti-static cloth and industrial fabric, and operation of petrol stations to sell petroleum, diesel fuel, kerosene and small package of petroleum products and provide car wash services.

Formosa Advanced Technologies Co.: responsible for IC packaging, testing and production of memory module.

(2) Measurement of segment information

The Group has not yet amortized tax expenses or non-recurring gains and losses to reportable segments. Furthermore, not all reportable segments’ profit or loss include significant non-cash items besides depreciation and amortization. Reporting amount and reports for operating decision-maker are the same.

The Group’s operating segment profit or loss is measured based on operating income before tax for performance assessment basis. The Group considers the sale and transfer among segments as transactions with third parties and measured at market price.

~106~

(3) Information about segment profit or loss, assets and liabilities

For the nine-month period ended September 30, 2017

External revenue Internal revenue Total revenue Segment profit (loss) Total assets of segments	1st Petrochemical Div $ 36,656,263 50,590,856 $ 87,247,119 $7,830,005 $ 38,678,367	2nd Petrochemical Div $ 31,331,377 23,203,261 $ 54,534,638 $ 3,733,547 $ 34,204,959	3rd Petrochemical Div and Formosa Chemical Industries $ 46,156,712 1,805,573 $47,962,285 $4,297,059 $ 37,102,118	Plastics Division, Formosa ABS Plastics Co., Ltd. and Formosa PS $ 79,229,316 9,586,701 $ 88,816,017 $7,580,528 $46,282,723	Formosa Taffeta Co.,Ltd. $ 19,169,705 220,882 $19,390,587 $ 3,989,094 $ 82,085,650	Formosa Advanced Technologies Co.,Ltd. $ 5,978,529 - $ 5,978,529 $1,129,924 $11,625,329	Other divisions	Reconciliation and offset $ - (95,706,102) ($ 95,706,102) ($ 5,250,857) ($110,897,030)	Total
							$ 41,107,947 10,298,829 $ 51,406,776 $24,105,800 $415,799,700		$ 259,629,849 -
									$259,629,849 $47,415,100 $ 554,881,816

For the nine-month period ended September 30, 2016

1st Petrochemical Div	2nd Petrochemical Div	3rd Petrochemical Div and Formosa Chemical Industries	Plastics Division, Formosa ABS Plastics Co., Ltd. and Formosa PS	Formosa Taffeta Co.,Ltd.	Formosa Advanced Technologies Co.,Ltd.	Other divisions	Reconciliation and offset	Total
$ 29,125,142 48,729,666 $77,854,808 $6,496,282 $38,026,897	$ 31,752,381 24,683,741 $56,436,122 $6,501,004 $33,074,864	$ 39,681,315 1,788,739 $41,470,054 ($111,183) $34,598,006	$ 67,749,823 8,029,003 $75,778,826 $5,926,924 $44,387,767	$ 17,227,913 1,337,718 $18,565,631 $3,364,546 $75,196,585	$ 6,410,042 -	$ 45,066,905 10,451,966 $55,518,871 $23,446,598 $372,273,299	$ - (95,020,833) ($ 95,020,833) ($3,251,114) ($ 98,925,720)	$ 237,013,521 -
					$6,410,042 $ 921,695 $10,819,527			$237,013,521
								$43,294,752
								$509,451,225

~107~

(4) Reconciliation for segment income (loss)

Sales between segments are carried out at arm’s length. The revenue from external parties reported to the chief operating decision-maker is measured in a manner consistent with that in the income statement.

~108~

Formosa Chemicals and Fibre Corporation and subsidiaries

Loans to others

For the nine-month period ended September 30, 2017

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

No. （Note 1）	Creditor	Borrower	General ledger account （Note 2）	Is a related party	Maximum outstanding balance during the nine-month period ended September 30, 2017 （Note 3）	Balance at September 30, 2017 （Note 8）	Actual amount drawn down	Interest rate	Nature of loan （Note 4）	Amount of transactions with the borrower （Note 5）	Reason for short-term financing `（`Note 6`）`	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party （Note 7）	Ceiling on total loans granted （Note 7）	Footnote
													Item	Value
0 0 0 0 0 0 0 0	The Company The Company The Company The Company The Company The Company The Company The Company	Formosa Plastics Corp. Formosa Idemitsu Petrochemical Corp. Nan Ya Plastics Corp. Formosa Biomedical Technology Corp. Formosa Heavy Industries Corp. Formosa Plastics Marine Corp. Formosa BP Chemicals Corp. Formosa Carpet Corp.	Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties	Yes Yes Yes Yes Yes Yes Yes Yes	7,000,000 $ 800,000 7,000,000 600,000 10,800,000 5,482,846 1,500,000 100,000	6,000,000 $ 800,000 6,000,000 600,000 7,800,000 5,453,790 1,500,000 100,000	- $ - - - 1,800,000 3,943,790 - 2,000	1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41	1 1 1 2 2 2 1 2	2 2 2 1 1 1 2 1	Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital	- $ - - - - - - -	- - - - - - - -	- $ - - - - - - -	85,819,566 $ 85,819,566 85,819,566 68,655,653 68,655,653 68,655,653 85,819,566 68,655,653	171,639,132 $ 171,639,132 171,639,132 137,311,306 137,311,306 137,311,306 171,639,132 137,311,306	- - - - - - - -

Table 1, Page 1

No. （Note 1）	Creditor	Borrower	General ledger account （Note 2）	Is a related party	Maximum outstanding balance during the nine-month period ended September 30, 2017 （Note 3）	Balance at September 30, 2017 （Note 8）	Actual amount drawn down	Interest rate	Nature of loan （Note 4）	Amount of transactions with the borrower （Note 5）	Reason for short-term financing `（`Note 6`）`	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party （Note 7）	Ceiling on total loans granted （Note 7）	Footnote
													Item	Value
0 0 0 0 0 0 0 0 0 0	The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Hong Jing Resources Corp. Formosa Group (Cayman) Limited Tah Shin Spinning Corp. Formosa Petrochemical Corp. Nan Ya Technology Corp. Formosa Plastics Transport Corp. Mai-Liao Harbor Administration Corp. Formosa Ha Tinh Steel Corporation-TW Formosa Ha Tinh (Cayman) Limited Mai-Liao Power Corp.	Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	1,600,000 $ 8,006,500 100,000 17,000,000 900,000 460,000 40,000 30,000 7,023,483 1,200,000	1,600,000 $ 4,259,500 100,000 6,000,000 - 260,000 - - 3,002,600 1,200,000	275,700 $ 4,259,500 - - - 260,000 - - 3,002,600 -	1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41 1.41	2 2 2 1 2 2 2 2 2 2	1 1 1 2 1 1 1 1 1 1	Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital	- $ - - - - - - - - -	- - - - - - - - - -	- $ - - - - - - - - -	68,655,653 $ 68,655,653 68,655,653 85,819,566 68,655,653 68,655,653 68,655,653 68,655,653 68,655,653 68,655,653	137,311,306 $ 137,311,306 137,311,306 171,639,132 137,311,306 137,311,306 137,311,306 137,311,306 137,311,306 137,311,306	- - - - - - - - -

Table 1, Page 2

No. （Note 1）	Creditor	Borrower	General ledger account （Note 2）	Is a related party	Maximum outstanding balance during the nine-month period ended September 30, 2017 （Note 3）	Balance at September 30, 2017 （Note 8）	Actual amount drawn down	Interest rate	Nature of loan （Note 4）	Amount of transactions with the borrower （Note 5）	Reason for short-term financing `（`Note 6`）`	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party （Note 7）	Ceiling on total loans granted （Note 7）	Footnote
													Item	Value
1 2 2 2 2 3 3	Formosa Biomedical Technology Corp. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd.	Hong Jing Resources Corp. Formosa ABS Plastics (Ningbo) Co., Ltd. Formosa Phenol (Ningbo) Limited Co. Formosa Synthetic Rubber (Ningbo) Limited Co. Formosa PS (Ningbo) Co., Ltd. Formosa Phenol (Ningbo) Limited Co. Formosa ABS Plastics (Ningbo) Co., Ltd.	Other receivables- related parties Receivables from related party Receivables from related party Receivables from related party Receivables from related party Receivables from related party Receivables from related party	Yes Yes Yes Yes Yes Yes Yes	15,000 $ 2,686,635 749,841 2,191,728 910,158 182,644 1,518,228	15,000 $ 1,999,952 127,851 2,191,728 214,607 182,644 1,518,228	15,000 $ 1,999,952 127,851 2,191,728 214,607 182,644 1,518,228	1.41 3.05-3.48 3.05-3.48 3.05-3.48 3.05-3.48 3.48 3.48	2 2 2 2 2 2 2	1 1 1 1 1 1 1	Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital Additional operating capital	- $ - - - - - -	- - - - - - -	- $ - - - - - -	777,390 $ 5,334,343 5,334,343 5,334,343 5,334,343 3,943,473 3,943,473	1,943,475 $ 13,335,858 13,335,858 13,335,858 13,335,858 9,858,682 9,858,682	- - - - - - -

Table 1, Page 3

No. （Note 1）	Creditor	Borrower	General ledger account （Note 2）	Is a related party	Maximum outstanding balance during the nine-month period ended September 30, 2017 （Note 3）	Balance at September 30, 2017 （Note 8）	Actual amount drawn down	Interest rate	Nature of loan （Note 4）	Amount of transactions with the borrower （Note 5）	Reason for short-term financing `（`Note 6`）`	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party （Note 7）	Ceiling on total loans granted （Note 7）	Footnote
													Item	Value
3	Formosa Chemicals Industries (Ningbo)	Formosa PS (Ningbo) Co., Ltd.	Receivables from related party	Yes	210,321 $	- $	- $	3.48	2	1	Additional operating capital	- $	-	- $	3,943,473 $	9,858,682 $	-

Co., Ltd.

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:
(1)The Company is ‘0’.
(2)The subsidiaries are numbered in order starting from ‘1’.
Note 2: Name of account in which the loans are recognised including but not limited to accounts receivables-related parties, other receivables-related parties and, current account with stockholders, prepayments, and temporary payments, etc.

Note 3 : Maximum outstanding balance of loans to others during the nine-month period ended September 30, 2017

Note 4 : The nature of loans:

(1) Related to business transactions is "1".
(2) Short-term financing is "2".

Note 5 : Amount of business transactions with the borrower :

(1) No business transactions is "1".
(2) Business transactions amount is provided in Note 13 (1) G.

Note 6 : Provided that loans to others are for necessary short-term financing by nature, shall specifically note necessary reasons for the loans and purposes of the borrowers, for example, repayment of loans, acquisition of equipment, and financing for operation, etc.

Note 7 : The calculation of line of credit:

The limit on loans granted by the Company to a single party, related party and party with business transactions shall not be more than 25% of the Company's net assets, and limit to others is 20% of the Company's net assets. The ceiling on loans granted by the Company to others shall not be more than 50% of the Company's net assets, and ceiling on loans granted a short-term financing borrower with no business transactions shall not be more than 40% of the Company's net assets.

The limit on loans granted by a subsidiary to a single party, related party and party with business transactions shall not be more than 50% of the subsidiary's net assets, and limit to others is 40% of the subsidiary's net assets. The ceiling on loans granted by a subsidiary to others shall not be more than 100% of the Company's net assets, and ceiling on loans granted a short-term financing borrower with no business transactions shall not be more than 40% of the Company's net assets.

Note 8 : The amount was resolved by the Board of Directors.

Table 1, Page 4

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Formosa Chemicals and Fibre Corporation and subsidiaries Provision of endorsements and guarantees to others

For the nine-month period ended September 30, 2017

Number （Note 1） Endorser/ guarantor	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party （Note 3）	Maximum outstanding endorsement/ guarantee amount as of September 30, 2017 （Note 4）	Outstanding endorsement/ guarantee amount at September 30, 2017	Actual amount drawn down	Amount of endorsements / guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided （Note 3）	Provision of endorsements/ guarantees by parent company to subsidiary （Note 5）	Provision of endorsements/ guarantees by subsidiary to parent company （Note 5）	Provision of endorsements/ guarantees to the party in Mainland China （Note 5）	Footnote
	Companyname Relationship with the endorser/ guarantor （Note 2）
0 The Company 0 The Company 0 The Company 0 The Company 1 Formosa Taffeta Co., Ltd. 1 Formosa Taffeta Co., Ltd. 1 Formosa Taffeta Co., Ltd. 1 Formosa Taffeta Co., Ltd. 1 Formosa Taffeta Co., Ltd. 2 Formosa Development Co., Ltd.	Formosa Industries Corp.,Vietnam 1 Formosa Group (Cayman) Limited 6 Formosa Ha Tinh (Cayman) Limited 6 Formosa Resources Corporation 6 Formosa Taffeta (Zhongshan) Co., Ltd. 2 Formosa Taffeta (Vietnam) Co., Ltd. 2 Formosa Taffeta (Changshu) Co., Ltd. 3 Formosa Taffeta (Dong Nai) Co., Ltd. 2 Formosa Ha Tinh (Cayman) Co., Ltd. 6 Public More Internation Company Co., Ltd. 3	14,554,881 $ 223,130,872 223,130,872 223,130,872 42,902,295 42,902,295 42,902,295 42,902,295 42,902,295 179,056	5,146,443 $ 32,300,800 15,694,038 3,271,870 1,410,525 1,567,250 2,037,425 4,599,520 5,273,383 3,000	4,973,308 $ 25,380,438 15,694,038 3,257,788 1,301,180 1,513,000 1,966,900 4,599,520 5,273,383 3,000	4,973,308 $ 25,380,438 11,709,900 3,257,788 317,730 79,892 311,678 2,509,181 3,934,665 3,000	- $ - - - - - - - - -	1.45 7.39 4.57 0.95 1.97 2.29 2.98 6.97 7.99 1.09	446,261,744 $ 446,261,744 446,261,744 446,261,744 85,804,590 85,804,590 85,804,590 85,804,590 85,804,590 358,113	Y N N N Y Y Y Y N Y	N N N N N N N N N N	N N N N Y N Y N N N	- - - - - - - - - -

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1)The Company is ‘0’.

(2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following six categories: (1)Having business relationship.

(2)The endorser/guarantor parent company owns directly more than 50% voting shares of the endorsed/guaranteed subsidiary.

(3)The endorser/guarantor parent company and its subsidiaries jointly own more than 50% voting shares of the endorsed/guaranteed company.

(4)The endorsed/guaranteed parent company directly or indirectly owns more than 50% voting shares of the endorser/guarantor subsidiary.

(5)Mutual guarantee of the trade as required by the construction contract.

(6)Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

Note 3: In accordance with Company's procedures of endorsements and guarantees, limit on the Company's total guarantee amount is 130% of the Company's net assets, the limit on endorsement/guarantee to a single party is 50% of the aforementioned total amount. For companies having business relationship with the Company and thus being provided endorsements/guarantees, the limit on endorsements to a single party is the higher value of purchasing or selling.

Note 4: Year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.

Note 5: 'Y' represents cases of provision of endorsements/guarantees by listed parent company to subsidiary, provision by subsidiary to listed parent company, or provision to the party in Mainland China.

Table 2, Page 1

Formosa Chemicals and Fibre Corporation and subsidiaries

Table 3

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

For the nine-month period ended September 30, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

Securities held by	Marketable securities （Note 1）	Relationship with the securities issuer（Note 2）	General ledger account		As ofSeptember30,2017	As ofSeptember30,2017	Fairvalue Footnote
				Number of shares	Bookvalue	Ownership (%)
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Stocks_Formosa Plastics Corp. Stocks_Asia Pacific Investment Corp. Stocks_Nan Ya Plastics Corp. Stocks_Nan Ya Technology Corp. Stocks_Formosa Union Chemical Corp. Mega Private US Dollar Money Market Funds Stocks_Mai-Liao Harbor Administration Corp. Stocks_Formosa Plastic Corp. U.S.A Stocks_Central Leasing Corp. Stocks_Taiwan Stock Exchange Corp. Stocks_Taiwan Aerospace Corp. Stocks_Yi-Jih Development Corp. Stocks_Chinese Television System Corp. Stocks_Formosa Plastics Maritime Corp. Stocks_Formosa Development Corp.	Other related parties Other related parties Other related parties Other related parties - - Other related parties Other related parties - - - Other related parties - Other related parties Other related parties	Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent	486,978,692 63,621,500 413,327,750 364,815,409 15,498,339 14,977,992 39,562,740 8,999 1,778,611 13,533,879 1,070,151 300,000 2,376,202 355,880 14,672,636	44,704,644 $ 3,901,270 30,999,581 31,483,570 278,195 4,624,778 539,260 818,316 - 1,800 10,702 3,000 38,419 1,750 90,010	7.65 14.97 5.21 13.26 3.16 - 17.98 2.92 1.07 2.00 0.79 1.51 1.41 18.22 17.32	44,704,644 $ - 3,901,270 - 30,999,581 - 31,483,570 - 278,195 - 4,624,778 - 539,260 - 818,316 - - - 1,800 - 10,702 - 3,000 - 38,419 - 1,750 - 90,010 -

Table 3, Page 1

Securities held by	Marketable securities （Note 1）	Relationship with the securities issuer（Note 2）	General ledger account		As ofSeptember30,2017	As ofSeptember30,2017	Fairvalue Footnote
				Number of shares	Bookvalue	Ownership (%)
The Company The Company The Company The Company The Company FCFC International (Cayman) Limited Tah Shin Spinning Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Hong Jing Resources Corp.	Stocks_Formosa Network Technology Corp. Stocks_Formosa Plastics Marine Corp. Stocks_Formosa Ocean Group Marine Investment Corp. Stocks_Guangyuan Investment Corp. Stocks_Mega Growth Venture Capital Co., Ltd. Stocks_Formosa Ha Tinh(Cayman) Limited Stocks_Nan Ya Technology Corp. Stocks_Formosa Union Chemical Corp. Stocks_Changs Ascending Enterprise Corp., Ltd. Stocks_Formosa Energy & Material Technology Corp. Stocks_Formosa Network Technology Corp. Stocks_Taiwan Leader Biotech Corp. Stocks_United Performance Materials Corp. Stocks_United Biopharma, Inc. Stocks_UBI Pharma Inc. Stocks_Bemjhou Technology Corp.	Other related parties Other related parties Other related parties - - Other related parties - - - Other related parties Other related parties - Other related parties - - -	Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent	2,925,000 2,428,500 2,622 5,000,000 2,500,000 564,707,472 6,367 877,879 3,000 5,300,000 471,120 2,100,000 423,720 22,179,750 26,850,922 200,000	13,331 $ 15,000 856,948 50,000 25,000 15,920,554 549 16,351 149 53,000 2,582 21,033 8,400 613,159 667,608 2,000	12.50 15.00 19.00 3.91 1.97 11.43 - 0.18 0.01 15.14 2.01 6.30 0.46 12.63 18.99 8.33	13,331 $ - 15,000 - 856,948 - 50,000 - 25,000 - 15,920,554 - 549 - 16,351 - 149 - 53,000 - 2,582 - 21,033 - 8,400 - 613,159 - 667,608 - 2,000 -

Table 3, Page 2

Securities held by	Marketable securities （Note 1）	Relationship with the securities issuer（Note 2）	General ledger account		As ofSeptember30,2017	As ofSeptember30,2017	Fairvalue Footnote
				Number of shares	Bookvalue	Ownership (%)
Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta (Cayman) Co., Ltd. Formosa Development Co., Ltd. Xiamen Xiangyu Formosa Import & Export Trading Co., Ltd.	Stocks_Formosa Chemicals & Fibre Corp. Stocks_Pacific Electric Wire & Cable Corp., Ltd. Stocks_Formosa Plastics Corp. Stocks_Nan Ya Plastics Corp. Stocks_Asia Pacific Investment Corp. Stocks_Nan Ya Technology Corp. Stocks_Formosa Petrochemical Corp. Stocks_Syntronix Corporation Stocks_Toa Resin Corp., Ltd. Stocks_Shin Yun Natural Gas Corp. Stocks_Wk Technology Fund IV Ltd. Stocks_Nan Ya Optical Corp. Stocks_Formosa Ha Tinh (Cayman) Limited Stocks_Formosa Taffeta Co., Ltd. Stocks_Association of R.O.C. in Xiamen	Parent company - Other related parties Other related parties Other related parties Other related parties Other related parties - Other related parties - - Other related parties Other related parties Parent company -	Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - noncurrent Available-for-sale financial assets - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Available-for-sale financial assets - noncurrent Financial assets measured at cost - noncurrent	12,169,610 32 640 482,194 10,000,000 15,421,010 365,267,576 174,441 14,400 644,230 1,926,759 4,261,443 190,009,706 2,293,228 -	1,120,821 $ - 59 36,164 613,200 1,330,833 38,718,363 3,236 3,000 3,100 263 58,345 5,574,434 70,517 137	0.21 - - 0.01 2.35 0.56 3.83 0.45 10.00 1.20 3.17 9.53 3.85 0.14 0.11	1,120,821 $ - - - 59 - 36,164 - 613,200 - 1,330,833 - 38,718,363 - 3,236 - 3,000 - 3,100 - 263 - 58,345 - 5,574,434 - 70,517 - 137 -

Table 3, Page 3

Securities held by	Marketable securities （Note 1）	Relationship with the securities issuer（Note 2）	General ledger account		As ofSeptember30,2017	As ofSeptember30,2017	Fairvalue Footnote
				Number of shares	Bookvalue	Ownership (%)
Formosa Advanced Technologies Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Advanced Technologies Co., Ltd.	Stocks_Formosa Plastics Corp. Stocks_Nan Ya Plastics Corp. Stocks_Formosa Chemicals & Fibre Corp. Stocks_Formosa Petrochemical Corp. Stocks_Nan Ya Technology Corp. Stocks_Nan Ya Optical Corp. Stocks_Syntronix Corporation Beneficiary certificates_Jih Sun Money Market Fund Beneficiary certificates_Mega Diamond Money Market Fund	Other related parties Other related parties Ultimate parent company Other related parties Other related parties Other related parties - - -	Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - noncurrent Financial assets measured at cost - noncurrent Financial assets measured at cost - noncurrent Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current	146,388 312,512 13,887,000 574,000 10,510,215 2,130,721 59,945 25,512,583 20,396,748	13,439 $ 23,438 1,278,993 60,844 907,032 29,172 1,181 375,339 253,976	- - 0.24 0.01 0.38 4.77 0.15 - -	13,439 $ - 23,438 - 1,278,993 - 60,844 - 907,032 - 29,172 - 1,181 - 375,339 - 253,976 -

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities, as defined in IAS 39 "Financial instruments: Recognition and Measurement". Note 2: The column is left blank if the issuer of marketable securities is non-related party.

Note 3: The Company's stocks held by the subsidiaries—Formosa Taffeta Co., Ltd. anf Formosa Advanced Technologies Co., Ltd.—are deemed as treasury stocks. Details are provided in Note 6 (15). Note 4: Not a limited liability company and thus, not applicable.

Table 3, Page 4

Formosa Chemicals and Fibre Corporation and subsidiaries

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

For the nine-month period ended September 30, 2017

Table 4 Investor	Marketable securities `（`Note 1`）`	General ledger account	Counterparty `（`Note 2`）`	Relationship with the investor `（`Note 2`）`	Balance as at January1,2017	Balance as at January1,2017	Addition `（`Note 3`）`	Addition `（`Note 3`）`		Disposal `（`Note 3`）`	Disposal `（`Note 3`）`		Expressed in thousands of NTD (Except as otherwise indicated) Balance as at September 30,2017	Expressed in thousands of NTD (Except as otherwise indicated) Balance as at September 30,2017
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
The Company The Company The Company The Company The Company The Company FCFC International (Cayman) Limited Formosa Advanced Technologies Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Taffeta (Cayman) Co., Ltd.	Formosa Resource Corp. Franklin Templeton Sinoam Money Market Fund CapitalMoney Market Fund Fubon Chi- Hsiang Money Market Fund Jih Sun Money Market Fund Yuanta Wan Tai Money Market Fund Formosa Ha Tinh (Cayman) Limited Formosa Chemicals & Fibre Corp. Nan Ya Technology Corp. Formosa Ha Tinh (Cayman) Limited	Investments accounted for under equity method Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Available-for-sale financial assets - current Financial assets measured at cost - noncurrent Available-for-sale financial assets - current Available-for-sale financial assets - current Financial assets measured at cost - noncurrent	Formosa Resource Corp. - - - - - - - - -	- - - - - - - - - -	416,250,000 - - - - - 508,236,725 7,316,000 15,041,215 171,008,736	$ 4,159,625 - - - - - 15,132,580 704,531 726,491 5,316,710	168,344,000 29,259,443 31,228,335 64,217,415 54,423,250 39,899,984 56,470,747 6,571,000 - 19,000,970	$ 1,683,440 300,000 500,000 1,000,000 800,000 600,000 1,738,438 601,325 - 587,072	- 29,259,443 31,228,335 64,217,415 54,423,250 39,899,984 - - 4,531,000 -	$ - 300,056 500,084 1,000,161 800,141 600,060 - - 328,854 -	$ - 300,000 500,000 1,000,000 800,000 600,000 - - 166,287 -	$ - 56 84 161 141 60 - - 162,567 -	584,594,000 - - - - - 564,707,472 13,887,000 10,510,215 190,009,706	$ 5,593,661 - - - - - 15,920,554 1,278,993 907,032 5,574,434

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank.

Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach $300 million or 20% of paid-in capital or more. Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In case that shares were issued with no par value or a par value other than NT$10 per share, the 20% of paid-in capital level shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Table 4, Page 1

Formosa Chemicals and Fibre Corporation and subsidiaries

Disposal of real estate reaching $300 million or 20% of paid-in capital or more

For the nine-month period ended September 30, 2017

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Real estate disposed by	Real estate	Transaction date or date of the event	Date of acquisition	Book value	Disposal amount	Status of collection of proceeds	Gain (loss) on disposal	Counterparty	Relationship with the seller	Reason for disposal	Basis or reference used in settingtheprice	Other commitments
The Company	25 lands No. 269 and etc. in Shinfang section, Xinyuan Township, Pingtung County	2017/3/17	1980/12/1	41,652 $	830,541 $	Completed	788,889 $	Ming Dih Industry Co., Ltd.	-	Disposal of idle land	Taiwan Dawa Real Estate Appraisers Firm valuated at $881,436; Cushman & Wakefield valuated at $888,714.	-

Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate disposed of should be appraised pursuant to the regulations. Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Note 3: Date of the event referred to herein is the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.

Table 5, Page 1

Formosa Chemicals and Fibre Corporation and subsidiaries

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more

For the nine-month period ended September 30, 2017

Purchaser/seller	Counterparty	Relationship with the counterparty		Transac	tion		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote `（`Note 1`）`
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Formosa Plastics Corp. Nan Ya Plastics Corp. Formosa Petrochemical Corp. Formosa ABS Plastics (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa PS (Ningbo) Co., Ltd. Formosa Phenol (Ningbo) Limited Co. Formosa Industries Corp.,Vietnam PFG Fiber Glass Corp. Nan Ya Plastics Corp., U.S.A. Formosa Idemitsu Petrochemical Corp. Nan Ya Plastics (Ningbo) Corp. Formosa Taffeta (Dong Nai) Corp. Formosa Taffeta Co., Ltd.	Other related parties Other related parties Associates Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Other related parties Other related parties Subsidiary Other related parties Subsidiary Subsidiary	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	1,820,159) ($ 19,688,289) ( 1,298,679) ( 16,242,474) ( 2,490,009) ( 13,798,804) ( 4,293,568) ( 1,413,395) ( 1,435,805) ( 337,429) ( 246,837) ( 8,347,946) ( 230,211) ( 175,772) (	1) ( 12) ( 1) ( 10) ( 1) ( 8) ( 3) ( 1) ( 1) ( - - 5) ( - -	30 days 30 days 30 days 90 days 90 days 90 days 90 days 30 days 30 days 30 days 30 days 30 days 60 days 60 days	$ - - - - - - - - - - - - - -	- - - - - - - - - - - - - -	253,019 $ 2,055,979 Notes receivable 167,880 Accounts receivable 275,752 2,073,460 615,875 5,786,981 1,748,582 126,887 274,050 47,981 69,429 266,448 47,791 43,491	1 10 31 1 10 3 28 8 1 1 - - 1 - -	- - - - - - - - - - - - - -

Table 6, Page 1

Purchaser/seller	Counterparty	Relationship with the counterparty		Transac	tion		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote `（`Note 1`）`
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The Company Formosa BP Chemicals Corp. Formosa BP Chemicals Corp. Formosa BP Chemicals Corp. Formosa BP Chemicals Corp. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd.	Formosa Plastics Corp. Nan Ya Plastics Corp. Formosa Petrochemical Corp. Formosa Industries Corp.,Vietnam The Company Nan Ya Plastics Corp. Formosa Petrochemical Corp. Formosa Petrochemical Corp. Formosa ABS Plastics (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Phenol (Ningbo) Co., Ltd. Formosa Plastics (Ningbo) Co., Ltd. Nan Ya Plastics (Ningbo) Corp. Formosa Synthetic Rubber (Ningbo) Co., Ltd. Nan Ya Plastics (Ningbo) Corp.	Other related parties Other related parties Associates Subsidiary Parent company Other related parties Associates Associates Associates Associates Associates Other related parties Other related parties Associates Other related parties	Purchases Purchases Purchases Purchases Sales Sales Sales Purchases Sales Sales Sales Sales Sales Sales Sales	4,519,180 $ 4,921,552 83,910,894 247,259 823,182) ( 192,731) ( 370,084) ( 1,320,456 579,344) ( 1,086,888) ( 645,182) ( 1,756,054) ( 373,207) ( 368,581) ( 545,210) (	4 4 66 - 24) ( 6) ( 11) ( 54 11) ( 21) ( 12) ( 34) ( 7) ( 7) ( 3) (	30 days 30 days 30 days 30 days 30 days 30 days 30 days 45 days 30 days 30 days 30 days 30 days 30 days 30 days 90 days	$ - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - -	467,934) ($ 82,167) ( 10,265,150) ( 21,168) ( 63,993 8,971 6,770 63,709) ( 73,136 133,456 77,541 219,408 52,415 4,009 106,670	3) ( 1) ( 73) ( - 15 2 2 61) ( 11 20 12 33 8 1 8	- - - - - - - - - - - - - - -

Table 6, Page 2

Purchaser/seller	Counterparty	Relationship with the counterparty		Transac	tion		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote `（`Note 1`）`
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Formosa ABS Plastics (Ningbo) Co., Ltd. Formosa ABS Plastics (Ningbo) Co., Ltd. Formosa Industries Corp. Formosa Industries Corp. Formosa Industries Corp. Formosa Idemitsu Petrochemical Corp. Formosa Idemitsu Petrochemical Corp. Formosa Idemitsu Petrochemical Corp. Formosa Idemitsu Petrochemical Corp. Formosa Idemitsu Petrochemical Corp. Formosa Idemitsu Petrochemical Corp.	Formosa Plastics Corp. Formosa Petrochemical Corp. Nan Ya Plastics Corp. Formosa Taffeta (Dong Nai) Corp. Formosa Taffeta (Long An) Corp. The Company Idemitsu Europe Co., Ltd. Idemitsu Chemicals Taiwan Corp. Idemitsu Kosan Co., Ltd. Idemitsu Chemicals (Hong Kong) Co., Ltd. Idemitsu Chemicals (U.S.A) Co., Ltd.	Other related parties Associates Other related parties Associates Associates Parent company Associates Associates Associates Associates Associates	Purchases Purchases Purchases Sales Sales Sales Sales Sales Sales Sales Sales	1,536,497 $ 745,962 2,111,557 432,280) ( 165,167) ( 556,460) ( 262,173) ( 380,984) ( 622,251) ( 590,238) ( 106,928) (	9 4 13 2) ( 1) ( 5) ( 2) ( 3) ( 6) ( 5) ( 1) (	90 days 90 days 30 days 60 days 60 days 30 days 30 days after closing date 30 days after closing date 30 days after closing date 30 days after closing date 30 days after closing date	$ - - - - - - - - - - -	- - - - - - - - - - -	259,776) ($ 81,472) ( 397,466) ( 115,477 41,496 86,612 33,680 62,079 51,138 65,215 11,571	14) ( 4) ( 20) ( 6 2 15 6 11 9 11 2	- - - - - - - - - - -

Table 6, Page 3

Purchaser/seller	Counterparty	Relationship with the counterparty		Transac	tion		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote `（`Note 1`）`
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Formosa Phenol (Ningbo) Limited Co. Formosa Phenol (Ningbo) Limited Co. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Advanced Technologies Co., Ltd.	Nan Ya Plastics (Ningbo) Corp. Formosa Petrochemical Corp. Quang Viet Enterprise Co., Ltd. Yugen Co., Ltd. Formosa Petrochemical Corp. Nan Ya Plastics Corp. Formosa Plastics Corp. Nan Ya Technology Corp. Nan Ya PCB Corp.	Other related parties Associates Associates Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties	Sales Purchases Sales Sales Purchases Purchases Purchases Sales Purchases	3,273,672) ($ 1,447,580 318,771) ( 231,864) ( 7,093,320 610,578 245,253 3,989,535) ( 110,075	31) ( 15 2) ( 1) ( 67 6 2 67) ( 5	30 days 90 days Pay by mail transfer 60 days after delivery Pay 120 days after delivery Pay every 15 days by mail transfer Pay every 15 days by mail transfer Pay every 15 days by mail transfer 60 days after monthly billings 45 days after inspection	$ - - - - - - - - -	- - - - - - - - -	511,773 $ 158,795) ( 33,937 81,475 460,990) ( 67,678) ( 20,766) ( 873,701 6,248) (	41 24) ( 2 4 27) ( 4) ( 1) ( 60 2) (	- - - - - - - - -

Table 6, Page 4

Purchaser/seller	Counterparty	Relationship with the counterparty		Transac	tion		Differences in transaction terms compared to third partytransactions	Differences in transaction terms compared to third partytransactions	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote `（`Note 1`）`
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Formosa Taffeta (Zhong Shan) Co., Ltd. Formosa Taffeta (Zhong Shan) Co., Ltd. Formosa Taffeta (Vietnam) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd.	Formosa Taffeta (Changshu) Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Industries Corp.,Vietnam Formosa Taffeta (Vietnam) Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Industries Corp.,Vietnam	Associates Parent company Associates Associates Parent company Parent company Associates	Sales Sales Purchases Sales Sales Purchases Purchases	289,923) ($ 108,049) ( 155,355 217,647) ( 516,964) ( 256,999 125,796	23) ( 9) ( 19 8) ( 18) ( 15 7	60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings	$ - - - - - - -	- - - - - - -	174,947 $ 22,158 22,375) ( 45,850 162,507 ( 13,439) 7,545) (	54 7 16) ( 5 19 ( 4) 2) (	- - - - - - -

Note 1: The disclosed transaction is the revenue side and related transactions are no longer disclosed.

Table 6, Page 5

Formosa Chemicals and Fibre Corporation and subsidiaries

Table 7

Receivables from related parties reaching $100 million or 20% of paid-in capital or more

For the nine-month period ended September 30, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

Creditor	Counterparty	Relationship withthe counterparty	Balance as at September 30, 2017 `（`Note1`）`	Turnover rate	Overduereceivables	Overduereceivables	Amount collected subsequent to the balance sheet date	Allowance for doubtfulaccounts
					Amount	Actiontaken
The Company The Company The Company Formosa Power (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Phenol (Ningbo) Limited Co. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Industries Corp., Vietnam Formosa Advanced Technologies Co., Ltd. Formosa Taffeta (Zhong Shan) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. The Company The Company The Company The Company The Company The Company The Company	Formosa Plastics Corp. Nan Ya Plastics Corp. Formosa Idemitsu Petrochemical Corp. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Plastics (Ningbo) Co., Ltd. Nan Ya Plastics (Ningbo) Corp. Nan Ya Plastics (Ningbo) Corp. Formosa Taffeta (Dong Nai) Co., Ltd. Nan Ya Technology Corp. Formosa Taffeta (Changshu) Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Petrochemical Corp. Formosa Industries Corp., Vietnam Formosa ABS Plastics (Ningbo) Co., Ltd. Formosa PS (Ningbo) Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Phenol (Ningbo) Limited Co. Formosa Chemicals Industries (Ningbo) Co., Ltd.	Other related parties Other related parties Subsidiary Associates Other related parties Other related parties Other related parties Other related parties Other related parties Associates Parent company Subsidiary Associates Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary	253,019 $ 2,055,979 Accounts receivable 2,073,460 Other receivables 68,623 Notes receivable 167,880 Accounts receivable 275,752 Accounts receivable 274,050 Other receivables 150,069 Accounts receivable 615,875 Other receivables 538,600 Accounts receivable 126,887 Other receivables 32,072 Accounts receivable 1,748,582 Other receivables 412,152 Accounts receivable 5,786,981 Other receivables 311,146 266,448 133,456 219,408 511,773 106,670 115,477 873,701 174,947 162,507	11.29 11.94 16.71 10.23 16.53 8.14 9.66 5.72 5.70 2.85 5.13 10.25 7.84 29.70 2.43 3.80 3.51 3.56	- $ - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - -	253,019 $ 2,055,979 2,073,460 22,285 136,114 152,416 173,614 102,788 22,719 2,622 - 276 488,000 - 2,055,120 955 266,448 133,456 219,408 511,773 106,670 29,714 435,959 69,121 24,931	- $ - - - - - - - - - - - - - - - - - -

Note 1: Fill in separately the balances of accounts receivable–related parties, notes receivable–related parties, other receivables–related parties….

Table 7, Page 1

Formosa Chemicals and Fibre Corporation and subsidiaries

Table 8

Significant inter-company transactions during the reporting period

For the nine-month period ended September 30, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)			Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
0 0	The Company The Company	Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Idemitsu Petrochemical Corp.	1 1	Sales revenue Sales revenue	13,798,804) ($ 8,347,946) (	In regular terms In regular terms	(5) (3)

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(1)Parent company is ‘0’.

(2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

(1)Parent company to subsidiary.

(2)Subsidiary to parent company.

(3)Subsidiary to subsidiary.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Note 4: If the transaction amount in this sheet reaches 3% of consolidated operating income or total assets, it is considered material.

Table 8, Page 1

Formosa Chemicals and Fibre Corporation and subsidiaries

Information on investees (Excluding those in Mainland China)

Table 9

For the nine-month period ended September 30, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee `（`Note 1`）`	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at September 30,2017	Shares held as at September 30,2017	Shares held as at September 30,2017	Net profit (loss) of the investee for the nine-month period ended September 30,2017	Investment income (loss) recognised by the Company for the nine-month period ended September 30,2017	Footnote
				Balance as at September 30,2017	Balance as at December 31,2016	Number of shares	Ownership (%)	Book value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Tah Shin Spinning Corp. Formosa Taffeta Co., Ltd. Formosa Heavy Industries Corp. Formosa Fairway Corporation Formosa Plastics Transport Corp. Formosa Petrochemical Corp. Mai-Liao Power Corp. FCFC Investment Corp. (Cayman) Hwa Ya Science Park Management Consulting Co, Ltd. Chia-Nan Enterprise Corporation Formosa Idemitsu Petrochemical Corp. Su Hua Transport Corp. Formosa Industries Corp., Vietnam	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Cayman Islands Taiwan Taiwan Taiwan Taiwan Vietnam	Spinning Spinning Machinery Transportation Transportation Chemistry Electricity generation Investments Management Electricity generation Wholesale and retail of petrochemical and plastic raw materials Transportation Textile, polyester staple fibre, cotton	85,188 $ 719,003 2,497,721 33,320 17,255 25,842,468 5,985,531 25,690,257 340 225,034 299,999 50,000 8,435,801	85,188 $ 719,003 2,497,721 33,320 17,255 25,842,468 5,985,531 19,534,946 340 225,034 299,999 50,000 8,435,801	18,467,619 630,022,431 651,706,181 4,697,951 4,770,420 2,300,799,801 547,030,137 84,000 33,000 12,448,800 60,000,000 10,494,785 -	86.40 37.40 32.91 33.33 33.33 24.15 24.94 100.00 33.00 30.00 50.00 25.00 42.50	122,066 $ 23,958,314 7,706,620 98,824 747,489 77,412,112 11,097,018 38,345,194 1,864 260,974 2,298,788 279,368 7,923,319	5,668) ($ 3,848,539 181,759 2,132) ( 8,445) ( 56,930,628 1,575,373 2,091,737 266 42,481 2,107,100 113,441 734,350	11,088) ($ 1,395,448 62,351 711) ( 2,815) ( 13,830,782 392,939 2,091,737 88 12,745 1,057,032 28,360 312,099	- - - - - - - - - - - - -

Table 9, Page 1

Investor	Investee `（`Note 1`）`	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at September 30,2017	Shares held as at September 30,2017	Shares held as at September 30,2017	Net profit (loss) of the investee for the nine-month period ended September 30,2017	Investment income (loss) recognised by the Company for the nine-month period ended September 30,2017	Footnote
				Balance as at September 30,2017	Balance as at December 31,2016	Number of shares	Ownership (%)	Book value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company FCFC Investment Corp. (Cayman)	Formosa BP Chemicals Corp. Formosa Environmental Technology Co. Formosa Biomedical Technology Corp. Formosa Carpet Corp. Formosa Synthetic Rubber Corp. Formosa Synthetic Rubber (Hong Kong) Co., Ltd. Formosa Resources Corporation Formosa Group Corp. (Cayman) Formosa Construction Corp. FCFC International (Cayman) Limited Formosa Chemicals & Fibre (Hong Kong) Co., Ltd.	Taiwan Taiwan Taiwan Taiwan Taiwan Hong Kong Taiwan Cayman Islands Taiwan Cayman Islands Hong Kong	Chemistry, international of petrochemistry Disposals of wastes and sewage Manufacturing and sale of cosmetics Yarn spinning mills, finishing of textiles and carpet manufacturing Manufacturing of synthetic rubber Manufacturing of synthetic rubber Mining industry and its trading, wholesale of chemical material and international trading Investments Development and sale of rebuilt housing, buildings and plants under urban redevelopment Investments Investments	1,201,500 $ 417,145 1,566,879 300,000 400,000 2,151,560 5,845,940 377 100,000 17,823,278 21,637,470	1,201,500 $ 417,145 1,566,879 300,000 400,000 2,151,560 4,162,500 377 100,000 16,084,840 15,482,159	120,150,000 41,714,475 147,556,136 22,037,185 40,000,000 - 584,594,000 - 10,000,000 50,000 -	50.00 24.34 88.59 100.00 33.33 33.33 25.00 25.00 33.33 100.00 100.00	1,523,246 $ 252,521 1,718,905 210,781 284,132 899,232 5,534,886 297,044 88,790 16,229,048 25,298,744	397,850 $ 13,127) ( 78,059 4,272) ( 94,904) ( 939,599) ( 250,405) ( 882,104) ( 9,354) ( - 1,353,328	188,525 $ 3,195) ( 69,153 4,272) ( 31,631) ( 313,168) ( 62,601) ( 220,526) ( 3,118) ( - 1,353,328	- - - - - - - - - - -

Table 9, Page 2

Investor	Investee `（`Note 1`）`	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at September 30,2017	Shares held as at September 30,2017	Shares held as at September 30,2017	Net profit (loss) of the investee for the nine-month period ended September 30,2017	Investment income (loss) recognised by the Company for the nine-month period ended September 30,2017	Footnote
				Balance as at September 30,2017	Balance as at December 31,2016	Number of shares	Ownership (%)	Book value
Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Biomedical Technology Corp. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd.	Beyoung International Corp. Hong Jing Resources Corp. Formosa Biomedical Technology (Samoa) Co., Ltd. Formosa Development Co., Ltd. Formosa Advanced Technologies Co., Ltd. Formosa Taffeta (Hong Kong) Co., Ltd. Formosa Taffeta (Vietnam) Co., Ltd.	Taiwan Taiwan Samoa Taiwan Taiwan Hong Kong Vietnam	International trading Recycle of spent catalyst Investments 1.Handling urban land consolidation 2.Development, rent and sale of industrial plants, residences and building IC assembly, testing and modules Sale of spun fabrics and filament textile Production, processing, further processing various yam and cotton cloth, dyeing and finishing clothes, curtains, towels, bed covers and carpets	90,000 $ 252,969 29,610 114,912 3,773,440 1,356,862 1,709,221	90,000 $ 252,969 29,610 114,912 3,773,440 1,356,862 1,709,221	467,600 19,289,016 - 16,100,000 290,464,472 - -	30.00 51.00 100.00 100.00 65.68 100.00 100.00	95,619 $ 319,037 16,831 204,780 7,101,089 1,084,282 1,799,257	6,438 $ 33,802 2,792) ( 17,390 996,666 80,143 126,612	1,931 $ 17,239 2,792) ( 14,499 654,610 80,143 126,612	- - - - - - -

Table 9, Page 3

Investor	Investee `（`Note 1`）`	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at September 30,2017	Shares held as at September 30,2017	Shares held as at September 30,2017	Net profit (loss) of the investee for the nine-month period ended September 30,2017	Investment income (loss) recognised by the Company for the nine-month period ended September 30,2017	Footnote
				Balance as at September 30,2017	Balance as at December 31,2016	Number of shares	Ownership (%)	Book value
Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Development Co., Ltd. Formosa Development Co., Ltd.	Kuang Yueh Co., Ltd. Schoeller F.T.C. (Hong Kong) Co., Ltd. Formosa Taffeta (Dong Nai) Co., Ltd. Formosa Industries Corp., Vietnam Formosa Taffeta (Cayman) Co., Ltd. Formosa Advanced Technologies Co., Ltd. Public More Internation Co., Ltd.	Taiwan Hong Kong Vietnam Vietnam Cayman Islands Taiwan Taiwan	Processing and production of ready-to-wear, processing and trading of cotton cloth, and import and export of the aforementioned products Trading of textiles Production, processing and sale of various dyeing and finishing textiles and yarn Synthetic fiber, spinning, weaving, dyeing and finishing and electricity generation Investments IC assembly, testing and modules Employment service, manpower allocation and agency service	213,771 $ 2,958 2,590,434 1,987,122 5,675,253 21,119 5,000	213,771 $ 2,958 2,590,434 1,987,122 5,090,180 21,119 -	18,595,352 - - - 171,028,736 469,500 500,000	17.92 43.00 100.00 10.00 100.00 0.11 100.00	1,153,095 $ 3,150 2,245,886 2,142,051 5,574,621 23,223 5,842	567,570 $ 3,418 60,883 734,350 - 996,666 842	109,017 $ 1,470 60,883 72,933 - 1,058 842	- - - - - - -

Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only disclose the information of the overseas holding company about the disclosure of related overseas investee information.

Table 9, Page 4

Formosa Chemicals and Fibre Corporation and subsidiaries

Information on investments in Mainland China

For the nine-month period ended September 30, 2017

Table 10 Investee in Mainland China	Main business activities	Paid-incapital	Investment method `（`Note1`）`	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2017	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine-month period ended September 30, 2017	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine-month period ended September 30, 2017	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2017	Net income of investee for the nine-month period ended September 30, 2017	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the nine-month period ended September30,2017	Expressed in thousands of NTD (Except as otherwise indicated) Accumulated amount of investment income remitted back to Taiwan as of September 30, 2017 Footnote Book value of investments in Mainland China as of September 30,2017	Expressed in thousands of NTD (Except as otherwise indicated) Accumulated amount of investment income remitted back to Taiwan as of September 30, 2017 Footnote Book value of investments in Mainland China as of September 30,2017	Expressed in thousands of NTD (Except as otherwise indicated) Accumulated amount of investment income remitted back to Taiwan as of September 30, 2017 Footnote Book value of investments in Mainland China as of September 30,2017
					Remitted to Mainland China	Remitted back toTaiwan
Formosa ABS Plastics (Ningbo) Co., Ltd. Formosa Power (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa PS (Ningbo) Co., Ltd. Formosa Phenol (Ningbo) Limited Co. Formosa Synthetic Rubber (Ningbo) Co., Ltd.	Sale of Acrylonitrile Butadiene Styrene (ABS) Cogeneration power generation business Production and market of PTA Sale of Polystyrene Production and sale of phenol- acetone and acetone Production and sale of synthetic rubber	5,618,707 $ 4,834,511 12,199,971 1,732,458 7,701,923 6,743,008	2、4 2、4 2、4 2、4 2、4 2、4	4,682,741 $ 4,051,414 9,066,960 1,732,458 - 2,151,560	$ - - 3,133,011 - 3,022,300 -	$ - - - - - -	4,682,741 $ 4,051,414 12,199,971 1,732,458 3,022,300 2,151,560	1,825,883 $ 738,409 455,417) ( 193,574 210,712) ( 939,599) (	100 100 100 100 100 33	1,825,883 $ 738,409 455,417) ( 193,574 210,712) ( 313,168) (	9,160,039 $ 13,335,858 9,858,682 1,399,498 4,880,525 899,232	$ - - - - - -	2 2 2 2 2 7

Table 10, Page 1

Investee in Mainland China	Main business activities	Paid-incapital	Investment method `（`Note1`）`	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2017	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine-month period ended September 30, 2017	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine-month period ended September 30, 2017	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2017	Net income of investee for the nine-month period ended September 30, 2017	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the nine-month period ended September30,2017	Book value of investments in Mainland China as of September 30,2017	Accumulated amount of investment income remitted back to Taiwan as of September 30, 2017	Footnote
					Remitted to Mainland China	Remitted back toTaiwan
Formosa Biomedical Trading (Shanghai) Co., Ltd. Formosa Taffeta (Zhong Shan) Co., Ltd. Xiamen Xiangyu Formosa Import & Export Trading Co., Ltd. Formosa Taffeta (Changshu) Co., Ltd.	Investments Production and sale of polyester and polyamide fabrics Import and export, entrepot trade, merchandise exhibition, export processing, warehousing and design and drawing of black and white and colour graphs Weaving and dyeing as well as post dressing of high-grade loomage face fabric	29,610 $ 1,402,085 15,273 1,302,019	2、4 1 1 2	29,610 $ 1,402,085 15,273 1,334,739	$ - - - -	$ - - - -	29,610 $ 1,402,085 15,273 1,334,739	2,792) ($ 63,767 755) ( 81,590	100 100 100 100	2,792) ($ 63,767 755) ( 81,590	14,187 $ 1,625,766 6,408 972,295	$ - - - -	7 3`、`7 4`、`7 5`、`7

Table 10, Page 2

Investee in Mainland China	Main business activities	Paid-incapital	Investment method `（`Note1`）`	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2017	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine-month period ended September 30, 2017	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine-month period ended September 30, 2017	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2017	Net income of investee for the nine-month period ended September 30, 2017	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the nine-month period ended September30,2017	Book value of investments in Mainland China as of September 30,2017	Accumulated amount of investment income remitted back to Taiwan as of September 30, 2017	Footnote
					Remitted to Mainland China	Remitted back toTaiwan
Changshu Yu Yuan Development Co., Ltd.	Building and selling real estate	70,788 $	2	$ -	$ -	$ -	- $	1,515) ($	40.78	606) ($	29,764 $	$ -	6`、`7

Note 1: Investment methods are classified into the following three categories.

(1) Directly invest in a company in Mainland China..
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China.
(3) Others
(4) Formosa Power (Ningbo) Co., Ltd. is an investee company in Mainland China through the Company's investee - FCFC Investment Corp. (Cayman).
Formosa Chemicals Industries (Ningbo) Co., Ltd., Formosa PS (Ningbo) Co., Ltd., Formosa ABS Plastics (Ningbo) Co., Ltd. and Formosa Phenol (Ningbo) Limited Co. were investee companies in Mainland China through the Company's investee - FCFC Investment Corp. (Cayman). After share structure adjustment in 2008 and 2014, the parent company of the 4 investees became Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. Formosa Chemicals & Fibre (Hong Kong) Co., Ltd. is a wholly-owned subsidiary through reinvestment of FCFC Investment Corp. (Cayman).
Formosa Synthetic Rubber (Ningbo) Co., Ltd. is an investee company in Mainland China through the investee - Formosa Synthetic Rubber (Hong Kong) Co., Ltd..
Formosa Biomedical Trading (Shanghai) Co., Ltd. is an investee company in Mainland China through the investee - Formosa Biomedical (Samoa) Co., Ltd..
Formosa Taffeta (Changshu) Co., Ltd. is an investee company in Mainland China through the subsidiary - Formosa Taffeta (Hong Kong) Co., Ltd..
The Company is the surviving company after the consolidation of Changshu Yu Yuan Development.Co.,Ltd. and Changshu Fushun Enterprise Management Co.,Ltd. It’s paid-in capital is RMB$13,592,920.
Note 2: Investment income recognized in current period is based on the financial reports reviewed by CPAs of the Taiwan parent company .
Note 3: The Company's paid-in capital, accumulative remittance from Taiwan as of January 1, 2017 and that as of September 30, 2017 all amount to US$46,400,000.
(The remittance of US$46,388,800 and the capitalised value of machinery and equipment of US$11,200)
Note 4: The Company's paid-in capital, accumulative remittance from Taiwan as of January 1, 2017 and that as of September 30, 2017 all amount to US$570,000.
Note 5: The Company's paid-in capital, accumulative remittance from Taiwan as of January 1, 2017 and that as of September 30, 2017 all amount to US$42,000,000. In order to effectively utilise the residential land of the Company, Formosa Chemicals & Fibre Co. split the residential land and established Changshu Fushun Enterprise Management Co., Ltd. by capitalizing the residential land in the first quarter, 2015.
Formosa Chemicals & Fibre Co. reduced the capital of Formosa Taffeta (Changshu) Co., Ltd. by US$900,000, so the Company's paid-in capital amounts to $41,100,000.
Note 6: The Company is the surviving company after the merger with Changshu Yu Yuan Development.Co., Ltd. in the third quarter, 2015. The paid-in capital of the Company is RMB$13,592,920. Note 7: Investment income recognized in current period is based on the financial reports not reviewed by the independent auditors.

Accumulated amount of Investment Ceiling on remittance from amount approved investments in Taiwan to by the Investment Mainland China Mainland Commission of imposed by the China the Ministry of Investment as of September Economic Affairs Commission of Company name 30, 2017 (MOEA) MOEA The Company $ 27,840,444 $ 37,501,528 Note

Note: Corporations that are qualified with operations headquarters certification issued by the Industrial Development Bureau, Ministry of Economic Affairs, R.O.C.

Table 10, Page 3

Table 11

Formosa Chemicals and Fibre Corporation and subsidiaries

Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas

For the nine-month period ended September 30, 2017

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Sale(purchase)	Sale(purchase)	Propertytransaction	Propertytransaction	Accounts receivable (payable)	Accounts receivable (payable)	Provision of endorsements/guarantees or collaterals	Provision of endorsements/guarantees or collaterals		Financing	Financing		Others
	Amount	%	Amount	%	Balance at September 30, 2017	%	Balance at September 30, 2017	Purpose	Maximum balance during the nine-month period ended September 30, 2017	Balance at September30,2017	Interest rate	Interest during the nine-month period ended September 30, 2017
Formosa Taffeta (Zhongshan) Co., Ltd. Formosa Taffeta (Changshu) Co., Ltd.	$ 18,998 24,133	0.10 0.12	$ - 29,526	- -	$ 6,411 3,029	0.30 0.14	$ 1,301,180 1,966,900	For short-term loans from financial institutions For short-term loans from financial institutions	$ - -	- $ -	- -	- $ -	- -

Table 11, Page 1

AI assistant

FCFC — Interim / Quarterly Report 2017

51780_rns_2017-12-01_f0cd8db9-731b-4f55-9ef2-17126a20ecc5.pdf

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

ACCOUNTANTS

SEPTEMBER 30, 2017 AND 2016

FORMOSA CHEMICALS & FIBRE CORPORATION

AND SUBSIDIARIES

INDEX

REVIEW REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

Chou, Chien-Hung

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FORMOSA CHEMICALS & FIBRE CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2017 AND 2016

1. HISTORY AND ORGANIZATION

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(3) Basis of consolidation

Balance sheets

Statements of comprehensive income

Formosa Taffeta Co., Ltd.

(4) Foreign currency translation

A. Foreign currency transactions and balances

(6) Cash equivalents

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

(8) Available-for-sale financial assets

(10) Impairment of financial assets

(11) Derecognition of financial assets

(14) Property, plant and equipment

(15) Intangible assets

(16) Impairment of non-financial assets

(17) Borrowings

(18) Notes and accounts payable

(19) Financial liabilities at fair value through profit or loss

(20) Derecognition of financial liabilities

(21) Offsetting financial instruments

(22) Derivative financial instruments

(23) Employee benefits

(24) Income tax

(25) Treasury shares

(26) Dividends

(27) Revenue recognition

(28) Operating segments

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

(2) Critical accounting estimates and assumptions

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

(3) Available-for-sale financial assets

(4) Notes receivable, net

(5) Accounts receivable, net

Nine-month period ended September 30, 2017

(6) Inventories

(7) Financial assets measured at cost

(8) Investments accounted for using equity method

A. Associates

Balance sheets

(9) Property, plant and equipment

(10) Short-term loans and short-term notes and bills payable

- (13) Long term bank loans and notes payable

Borrowing

(16) Capital surplus

(17) Retained earnings

(20) Other income

(21) Other gains and losses

(22) Finance costs

(23) Expenses by nature

(24) Employee benefit expense

FCFC Interim / Quarterly Report 2017