FPC - Interim / Quarterly Report 2021

Stock Code:1301

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Three Months Ended March 31, 2021 and 2020

Address: No.100, Shuiguan Rd., Renwu Dist., Kaohsiung City 814, Taiwan (R.O.C.) Telephone: (07)371-1411

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

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses Due to Major Disasters (11) Subsequent Events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information	Page
	1 2 3 4 5 6 7 8 8 8～10 10～11 12 13～48 48～54 54 55 55 55 55 56～61 62 62～63 63 64

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

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax 傳真 + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) Internet 網址 home.kpmg/tw

Independent Auditors’ Review Report

To the Board of Directors Formosa Plastics Corporation:

Introduction

We have reviewed the accompanying consolidated balance sheets of Formosa Plastics Corporation (“ the Company”) and its subsidiaries (together referred to as “the Group”) as of March 31, 2021 and 2020, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2021 and 2020, and notes to the consolidated financial statements, including a summary of significant accounting policies. The management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with Statement of Auditing Standard 65, “ Review of Financial Information Performed by the Independent Auditor of the Entity”. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the generally accepted auditing standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in Note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect the total assets amounting to $26,112,483 thousand and $36,137,309 thousand, constituting 5.12% and 7.85% of the consolidated total assets; and the total liabilities amounting to $15,394,964 thousand and $20,531,684 thousand, constituting 10.21% and 13.78% of the consolidated total liabilities as of March 31, 2021 and 2020, respectively; as well as the total comprehensive income (loss) amounting to $(46,086) thousand and $(2,450,320) thousand, constituting (0.17)% and 6.46% of the consolidated total comprehensive income (loss) for the three months ended March 31, 2021 and 2020, respectively.

Furthermore, as stated in Note 6(f), the other equity accounted investments of the Group in its investee companies of $101,472,647 thousand and $102,022,445 thousand as of March 31, 2021 and 2020, respectively, and its equity in net earnings on these investee companies of $214,536 thousand and $132,295 thousand for the three months ended March 31, 2021 and 2020, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

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

3-1

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2021 and 2020, and of its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “ Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Other Matter

We did not review the financial statements of certain investee companies under the equity method of the Group. Those financial statements were reviewed by other auditors, whose review report has been furnished to us, and our conclusion, insofar as it relates to the amounts included for those, were based solely on the review report of other auditors. The financial statements of the investee companies reflect the total assets amounting to $100,482,221 thousand and $91,503,552 thousand, constituting 19.71% and 19.88% of the consolidated total assets as of March 31, 2021 and 2020, respectively, as well as the related shares of profit of associates and joint ventures accounted for using the equity method amounting to $5,023,323 thousand and $(2,580,768) thousand, constituting 27.81% and (1,991.39)% of the consolidated income before income tax for the three months then ended respectively.

The engagement partners on the reviews resulting in this independent auditors’ review report are Hui-chih Kou and Chi-Lung Yu.

KPMG

Taipei, Taiwan (Republic of China) May 12, 2021

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such consolidated financial statements are those generally accepted and applied in the Republic of China.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of March 31, 2021 and 2020

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

March 31, 2021, December 31 and March 31, 2020 (Expressed in Thousands of New Taiwan Dollars)

March 31, 2021 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 17,305,150 3 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 3,898,180 1 1120 Current financial assets at fair value through other comprehensive income (Note 6(b)) 110,691,383 22 1150 Notes receivable (Notes 6(c)(r)) 2,697,504 - 1170 Accounts receivable, net (Notes 6(c)(r)) 13,497,426 3 1180 Accounts receivable－related parties (Notes 6(c)(r) and 7) 3,992,695 1 1200 Other receivables (Note 6(d)) 817,153 - 1210 Other receivables－related parties (Notes 6(d) and 7) 7,408,148 1 130X Inventories (Note 6(e)) 19,039,274 4 1470 Other current assets 4,592,039 1 Total current assets 183,938,952 36 Non-current assets: 1517 Financial assets at fair value through other comprehensive income-non-current (Note 6(b)) 20,161,756 4 1550 Investments accounted for using equity method (Note 6(f)) 201,954,868 40 1600 Property, plant and equipment (Note 6(g), 7 and 8) 89,375,247 18 1755 Right-of-use assets (Note 6(h)) 1,135,157 - 1780 Intangible assets 613,896 - 1840 Deferred tax assets 2,813,643 - 1900 Other non-current assets (Note 8) 9,931,794 2 Total non-current assets 325,986,361 64 Total assets $ 509,925,313 100	December 31, 2020 Amount % 14,145,110 3 3,888,883 1 102,218,948 21 2,148,261 1 10,372,878 2 3,439,213 1 936,148 - 6,499,202 1 16,681,271 4 5,305,846 1 165,635,760 35 18,647,715 4 193,979,093 40 86,785,954 18 1,147,126 - 590,274 - 2,859,857 1 9,634,644 2 313,644,663 65 479,280,423 100	March 31, 2020 Amount % 20,460,870 5 4,086,249 1 74,145,052 16 1,935,769 - 7,921,771 2 2,709,676 1 763,355 - 15,769,743 3 19,426,412 4 3,768,070 1 150,986,967 33 18,755,819 4 193,525,997 42 84,566,842 18 1,160,785 - 408,306 - 2,914,069 1 7,857,028 2 309,188,846 67 460,175,813 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (Notes 6(i)) 2110 Short-term notes and bills payable (Note 6(j)) 2170 Accounts payable 2180 Accounts payable－related parties (Note 7) 2200 Other payables 2220 Other payables－related parties (Note 7) 2280 Current lease liabilities (Note 6(m)) 2321 Current portion of bonds payable (Note 6(l)) 2322 Current portion of long-term debts (Notes 6(k) and 8) 2399 Other current liabilities (Note 7) Total current liabilities Non-Current liabilities: 2530 Bonds payable (Note 6(l)) 2540 Long-term debts (Note 6(k) and 8) 2570 Deferred tax liabilities 2580 Non-current lease liabilities (Note 6(m)) 2622 Long-term accounts payable to related parties (Note 7) 2640 Net defined benefit liabilities-non-current 2670 Other non-current liabilities (Note 6(f)) Total non-current liabilities Total liabilities Equity (Note 6(p)): 3110 Common stock 3200 Capital surplus Retained earnings: 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Total retained earnings 3400 Other components of equity Total equity Total liabilities and equity	March 31, 2021		December 31, 2020		March 31, 2020
			Amount %		Amount %		Amount %
			$ 15,072,591 3 17,597,142 3 4,031,184 1 9,651,708 2 5,334,839 1 1,656,281 - 13,585 - 2,898,401 1 - - 15,216,120 3 71,471,851 14 38,014,576 8 1,829,280 - 18,064,634 4 126,905 - 14,693,465 3 6,436,491 1 130,776 - 79,296,127 16 150,767,978 30 63,657,408 12 11,741,693 2 65,791,185 13 68,879,676 14 70,522,049 14 205,192,910 41 78,565,324 15 359,157,335 70 $ 509,925,313 100		15,356,724 3 16,996,824 4 6,012,635 1 7,102,565 1 3,481,665 1 1,705,923 - 21,452 - 2,898,401 1 2,000,000 - 12,678,838 3 68,255,027 14 38,012,054 8 1,569,776 - 17,703,674 4 121,923 - 14,396,540 3 6,560,931 2 124,358 - 78,489,256 17 146,744,283 31 63,657,408 13 11,742,124 2 65,791,185 14 68,879,676 14 55,559,015 12 190,229,876 40 66,906,732 14 332,536,140 69 479,280,423 100		27,168,288 5 16,495,502 4 2,124,575 - 4,921,985 1 2,319,796 - 21,173,322 5 37,429 - - - 4,606,781 1 11,565,342 3 90,413,020 19 32,566,389 7 1,944,444 - 16,972,455 4 133,962 - - - 6,836,169 2 87,437 - 58,540,856 13 148,953,876 32 63,657,408 14 11,729,585 3 62,058,769 13 63,968,902 14 71,926,525 16 197,954,196 43 37,880,748 8 311,221,937 68 460,175,813 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Reviewed only, not audited in accordance with generally accepted auditing standards

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2021 and 2020

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

			For the three months ended	For the three months ended	For the three months ended
				March	31,
			2021		2020
			Amount	%	Amount	%
4000	Operating revenue (Notes 6(r) and 7)	$	60,601,937	100	42,019,180	100
5000	Operating costs (Notes 6(e)(g)(h)(n)(s) and 7)		44,043,031	73	36,716,411	87
	Gross profit		16,558,906	27	5,302,769	13
	Operating expenses (Notes 6(c)(g)(h)(n)(s) and 7):
6100	Selling expenses		2,055,775	3	1,387,326	3
6200	Administrative expenses		1,251,384	2	1,103,137	3
6300	Research and development expenses		348,418	1	318,975	1
6450	Expected credit loss		18,569	-	938	-
	Total operating expenses		3,674,146	6	2,810,376	7
	Operating income		12,884,760	21	2,492,393	6
	Non-operating income and expenses (Notes 6(f)(g)(m)(t) and 7):
7100	Interest income		58,068	-	114,548	-
7010	Other income		38,177	-	37,903	-
7020	Other gains and losses		64,429	-	330,486	1
7050	Finance costs		(221,139)	-	(397,261)	(1)
7060	Recognized share of profit of associates and joint ventures accounted for using equity method,
	net		5,237,859	9	(2,448,473)	(6)
	Total non-operating income and expenses		5,177,394	9	(2,362,797)	(6)
	Profit from continuing operations before tax		18,062,154	30	129,596	-
9300	Less: Income tax expenses (Note 6(o))		3,102,212	5	523,260	1
	Profit(Loss)		14,959,942	25	(393,664)	(1)
8300	Other comprehensive income (loss): (Note 6(o)(p))
8310	Components of other comprehensive income (loss) that will not be reclassified to profit or
	loss
8316	Unrealized gains (losses) from investments in equity instruments measured at fair value
	through other comprehensive income(loss)		9,986,405	17	(30,937,937)	(73)
8320	Share of other comprehensive income of associates and joint ventures accounted for using
	equity method, components of other comprehensive income that will not be reclassified to
	profit or loss		2,012,831	3	(6,750,239)	(16)
8349	Income tax related to components of other comprehensive income that will not be reclassified
	to profit or loss		-	-	-	-
			11,999,236	20	(37,688,176)	(89)
8360	Components of other comprehensive income (loss) that will be reclassified to profit or loss
8361	Exchange differences on translation of foreign financial statements		(416,321)	(1)	28,098	-
8370	Share of other comprehensive income of associates and joint ventures accounted for using
	equity method, components of other comprehensive income that will be reclassified to
	profit or loss		18,523	-	42,297	-
8399	Income tax related to components of other comprehensive income that will be reclassified to
	profit or loss		(57,154)	-	(74,975)	-
	Components of other comprehensive income that will be reclassified to profit or loss		(340,644)	(1)	145,370	-
8300	Other comprehensive income (loss)		11,658,592	19	(37,542,806)	(89)
8500	Total comprehensive income (loss)	$	26,618,534	44	(37,936,470)	(90)
			Before After		Before After
	Basic earnings per share (Note 6(q))	$	2.84	2.35	0.02	(0.06)

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the three months ended March 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

			Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent		Total equity
	Share capital	Capital surplus		R	etained earnings Special reserve Unappropriate d retained earnings 63,968,902 72,320,189 - (393,664) - - - (393,664) - - - - 63,968,902 71,926,525 68,879,676 55,559,015 - 14,959,942 - - - 14,959,942 - 3,092 - - 68,879,676 70,522,049	Total	other equity inte
						Exchange differences on translation of foreign financial statements (5,278,250) - 143,244 143,244 - - (5,135,006) (9,603,060) - (359,801) (359,801) - - (9,962,861)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 80,701,025 - (37,688,176) (37,688,176) - - 43,012,849 76,471,804 - 11,999,236 11,999,236 - - 88,471,040
	Ordinary shares		Legal reserve		Special reserve 63,968,902 - - - - - 63,968,902 68,879,676 - - - - - 68,879,676
$ 63,657,408 - - - - - $ 63,657,408 $ 63,657,408 - - - - - $ 63,657,408	$ 63,657,408	11,724,498	62,058,769					349,153,320
	- -	- -	- -					(393,664) (37,542,806)
	-	-	-					(37,936,470)
	- -		- -					5,379 (292)
			62,058,769					311,221,937
			65,791,185					332,536,140
			- -					14,959,942 11,658,592
			-					26,618,534
			- -					3,092 (431)
			65,791,185					359,157,335

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three-month periods ended March 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Income before income tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss Net gain on financial assets or liabilities at fair value through profit Interest expense Interest income Share of (profit) loss of associates and joint ventures accounted for using equity method Gain on disposal of property, plant and equipment Unrealized foreign exchange gain Total adjustments to reconcile (profit) loss Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Accounts receivable Accounts receivable due from related parties Other receivables Other receivables due from related parties Inventories Other current assets Total changes in operating assets Changes in operating liabilities: Accounts payable Accounts payable to related parties Other payables Other payables to related parties Other current liabilities Net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Increase in other receivables due from related parties Increase in other non-current assets Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase in short-term notes and bills payable Proceeds from long-term debt Repayments of long-term debt Increase (Decrease) in due to related parties (recognized as other payables－related parties) Payment of lease liabilities Increase (Decrease) in other non-current liabilities Cash dividends paid Net cash flows (used in) from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period		For the three-mon March	th periods ended 31, 2020 129,596
		2021 $ 18,062,154 1,828,903 342,220 18,569 (9,297) 221,139 (58,068) (5,237,859) (4,367) (184,412) (3,083,172) (549,243) (2,958,688) (553,483) 110,858 (1,971) (2,538,123) 713,808 (5,776,842) (1,981,451) 2,549,143 (189,150) (49,641) 2,469,145 (124,441) 2,673,605 (3,103,237) (6,186,409) 11,875,745 71,089 50,626 (220,822) (591,118) 11,185,520 (884,531) (4,389,920) 4,604 (38,774) (911,859) (628,773) (6,849,253) 76,729,756 (77,008,413) 600,000 269,954 (2,000,000) 283,911 (9,453) 68,583 (431) (1,066,093) (110,134) 3,160,040 14,145,110 $ 17,305,150

			1,766,724 378,789 938 (41,893) 397,261 (114,548) 2,448,473 (4,057) (144,297)
			4,687,390
			648,920 (623,327) 852,340 229,644 (94,341) (1,258,781) (300,651)
			(546,196)
			(2,061,601) (1,778,540) (49,211) (825,942) (1,068,559) (74,538)
			(5,858,391)
			(6,404,587)
			(1,717,197)
			(1,587,601) 105,952 52,631 (393,304) (130,867)
			(1,953,189)
			- (728,513) 4,732 - (871,162) (312,021)
			(1,906,964)
			77,102,681 (70,244,270) 1,500,000 - (47,575) (1,960,036) (9,692) (96,995) (292)
			6,243,821
			(88,750)
			2,294,918 18,165,952
			20,460,870

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2021 and 2020

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

(1) Company history

Formosa Plastics Corporation (the “Company”) was incorporated on November 5, 1954, and established its factories in Kaohsiung City. The Company and its subsidiaries (the “ Group” ) engages in the manufacture and sale of plastic raw materials, chemical fibers, and petrochemical products. The Company has gone through several capital increases and established many divisions, and become a well-diversified enterprise.

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

The accompanying consolidated financial statements of the Group as of and for the three months ended 2021 were authorized for issue by the board of directors on May 12, 2021 .

(3) New standards, amendments and interpretations adopted:

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

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

●Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
－
●Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform Phase 2”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on April 1, 2021, would not have a significant impact on its consolidated financial statements:

●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

Standards or
Interpretations
Amendments to IAS 1
“Classification of Liabilities
as Current or Non-current”
Amendments to IAS 1
“Disclosure of Accounting
Policies”
Amendments to IAS 8
“Definition of Accounting
Estimates”

Content of amendment
Effective date per
IASB
The
amendments
aim
to
promote
consistency in applying the requirements
by helping companies determine whether,
in the statement of balance sheet, debt and
other
liabilities
with
an
uncertain
settlement date should be classified as
current (due or potentially due to be settled
within one year) or non-current.
The amendments include clarifying the
classification requirements for debt a
company might settle by converting it into
equity.
January 1, 2023
The key amendments to IAS 1 include:
●requiring companies to disclose their
material accounting policies rather than
their significant accounting policies;
●clarifying
that
accounting
policies
related to immaterial transactions, other
events or conditions are themselves
immaterial and as such need not be
disclosed; and
●clarifying
that
not
all
accounting
policies
that
relate
to
material
transactions, other events or conditions
are themselves material to a company’s
financial statements.
January 1, 2023
The
amendments
introduce
a
new
definition
for
accounting
estimates:
clarifying that they are monetary amounts
in the financial statements that are subject
to measurement uncertainty.
The
amendments
also
clarify
the
relationship between accounting policies
and accounting estimates by specifying that
a company develops an accounting estimate
to achieve the objective set out by an
accounting policy.
January 1, 2023

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
－
●Amendments to IAS 16 “Property, Plant and Equipment Proceeds before Intended Use”
－
●Amendments to IAS 37 “Onerous Contracts Cost of Fulfilling a Contract”
●Annual Improvements to IFRS Standards 2018-2020
●Amendments to IFRS 3 “Reference to the Conceptual Framework”

(4) Summary of significant accounting policies:

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect by FSC, and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS endorsed by the FSC) for a complete set of the annual consolidated financial statements.

Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statement for the year ended 31, 2020. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2020.

(b) Basis of consolidation

(i) List of subsidiaries in the consolidated interim financial statements:

Investor	Name of subsidiaries	Business activity	Percentage of Ownership (%) March 31, 2021 December 31, 2020 March 31, 2020 Note % 100 % 100 % 100 % 100 % 100 % 100 (Note) % - % - % 100 (Note 1)	Percentage of Ownership (%) March 31, 2021 December 31, 2020 March 31, 2020 Note % 100 % 100 % 100 % 100 % 100 % 100 (Note) % - % - % 100 (Note 1)
			March 31, 2021	December 31, 2020 % 100 % 100 % -
The Company The Company The Company	Formosa Plastics Corporation (Cayman) Limited Formosa Industries Corporation U.S.A Formosa Plastics International (Cayman) Limited	Investment High Density Polyethylene Investment	% 100 % 100 % -

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Investor	Name of subsidiaries	Business activity	Percentage of Ownership (%) March 31, 2021 December 31, 2020 March 31, 2020 Note % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100	Percentage of Ownership (%) March 31, 2021 December 31, 2020 March 31, 2020 Note % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100
			March 31, 2021	December 31, 2020 % 100 % 100 % 100
Formosa Plastics Corporation (Cayman) Limited Formosa Industries (Hong Kong) Limited Formosa Industries (Hong Kong) Limited	Formosa Industries (Hong Kong) Limited Formosa Industries (Ningbo) Co., Ltd. Formosa Electronic (Ningbo) Co., Ltd.	Investment Plastics Electronics	% 100 % 100 % 100

Note: The immaterial subsidiaries’ financial statements for the three-month periods ended March 31, 2021 and 2020 have not been reviewed by independent auditors.

Note 1: Formosa Plastics International (Cayman) Limited was liquidated on November 19, 2020.

(ii) Subsidiary not included in the consolidated financial statements: None.

(c) Employee Benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.

(d) Income Tax

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Financial Reporting Standards 34, Interim Reporting.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period by the effective annual tax rate as forecasted by the management. and allocated to current and deferred taxes based on its proportionate size).

For a change in tax rate that is substantively enacted in an interim period, the effect of the change immediately should be recognized in the interim period in which the change occurs.

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the tax rates that have been enacted or substantively enacted at the time of the asset or liability is recovered or settled and recognized directly in equity or other comprehensive income as tax expense.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The preparation of the consolidated financial statements in conformity with the Regulations and IFRSs (in accordance with IAS 34 “Interim Financial Reporting” and endorsed by the FSC) requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Except for the following, the preparation of the consolidated interim financial statements, estimates and underlying assumptions were reviewed on an ongoing basis in are in conformity with the consolidated financial statements for the year ended December 31, 2020. For related information, please refer to note 5 of the 2020 consolidated financial statements.

The accounting policies involved significant judgments and the information that have significant effect on the amounts recognized in the consolidated financial statements are as below:

(a) Judgment of whether the Group has substantive control over Formosa Petrochemical Corporation

The Group holds 28.56% outstanding ordinary shares of Formosa Petrochemical Corporation, who has a total number of 15 directors in its board, including 2 seats representing the Group. Although the Group is the biggest shareholder of Formosa Petrochemical Corporation, the Group does not have definite control on its overall operating related activities. Therefore, it is determined that the Group has no control over Formosa Petrochemical Corporation.

(b) Judgment of whether the Group has substantive control over Formosa Heavy Industries Corporation

The Group holds 32.92% outstanding ordinary shares of Formosa Heavy Industries Corporation, who has a total number of 7 directors in its board, with the Group obtaining none of the seats, but having only one supervisor serving as its representative. Although the Group is the biggest shareholder of Formosa Heavy Industries Corporation, the Group does not have definite control on its overall operating related activities. Therefore, it is determined that the Group has no control over Formosa Heavy Industries Corporation.

The Group holds 50.00% outstanding shares of Sky Dragon Investments Limited, which has only 1 director who is not connected with the Group. Although the Group is the biggest shareholder of Sky Dragon Investments Limited, the Group does not have definite control on its overall operating related activities. Therefore, it is determined that the Group has no control over Sky Dragon Investments Limited.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

Except for the following disclosures, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2020. Please refer to Note 6 of the 2020 annual consolidated financial statements

(a) Cash and cash equivalents

Cash on hand Bank deposit Cash equivalents Cash equivalents－Time deposits Repurchase bonds	March 31, 2021 $ 358 5,304,168 12,000,624 - $ 17,305,150	December 31, 2020 312 4,051,549 9,214,840 878,409 14,145,110	March 31, 2020
			334 1,964,922 17,570,779 924,835
			20,460,870

(b) Financial assets at fair value through profit or loss and other comprehensive income

March 31, 2021 (i) Mandatorily at FVTPL Private fund $ 3,898,180 Please refer to Notes 6(t) for amount of remeasurement at FVTPL. March 31, 2021 (ii) Equity investments at fair value through other comprehensive income Listed stocks $ 110,691,383 Non-listed stocks 4,753,762 Non-domestic stocks 15,407,994 Total $ 130,853,139	December 31, 2020 3,888,883 December 31, 2020 102,218,948 4,708,593 13,939,122 120,866,663	March 31, 2020
		4,086,249
		March 31, 2020
		74,145,052 5,309,380 13,446,439
		92,900,871

Equity investments at fair value through other comprehensive income.

The Group designated the investments shown above as equity instruments at fair value through other comprehensive income because these equity instruments represent those investments that the Group intends to hold for long-term for strategic purposes.

No strategic investments were disposed as of March 31, 2021 and 2020, and there were no transfers of any cumulative gain or loss within equity relating to these investments.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Notes receivable from operating activities Accounts receivable (including related parties) Less : allowance for doubtful receivables	March 31, 2021 $ 2,697,504 17,510,297 (20,176) $ 20,187,625	December 31, 2020 2,148,261 13,813,715 (1,624) 15,960,352	March 31, 2020 1,935,769 10,635,565 (4,118) 12,567,216

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables on March 31, 2021, December 31 and March 31, 2020. To measure the expected credit losses, accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information. The loss allowance provision were determined as follows:

	March 31, 2021
Gross carrying amount Weighted- average loss rate $ 19,574,298 0.038% 545,628 0.937% 81,154 7.508% 6,721 23.875% $ 20,207,801 December 31, 2020		Loss allowance provision
		7,366 5,112 6,093 1,605
		20,176

	Weighted- average loss rate 0.001% 0.195% 1.526% 3.090% March 31, 2020	Loss allowance provision
		80 1,309 234 1
		1,624

	Weighted- average loss rate 0.001% 0.292% 2.005% 3.687%	Loss allowance provision
		103 1,662 1,464 889
		4,118

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The movement of the allowance for doubtful receivable was as follows:

Beginning balance Impairment losses recognized Foreign exchange gains Ending balance	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 1,624 18,569 (17) $ 20,176	2020 3,188 938 (8) 4,118

The Group entered into a factoring and financing agreement (without-recourse) with a financial institution. According to the contract, the net accounts receivable that have matured but are still uncollected will be paid by the financial institution, except for those affected by trade disputes. As of March 31, 2021, the outstanding accounts receivable factoring transaction between the Group and the financial institution was as follows:

March 31, 2021 Purchaser Factoring Balance Factoring Line Advanced Amount Range of Interest Rate Guarantee project KC de Mexico CITIBANK USD 391,200 USD 4,991,217 - - None Other receivables March 31, 2021 December 31, 2020 March 31, 2020 Other receivables—loans to related parties $ 5,403,984 4,492,125 13,863,122 Other receivables—related parties 2,004,164 2,007,077 1,906,621 Other receivables 817,153 936,148 763,355 $ 8,225,301 7,435,350 16,533,098			March 31, 2021
	Purchaser
					13,863,122 1,906,621 763,355
					16,533,098

(d) Other receivables

As of March 31, 2021, December 31 and March 31, 2020, the aging analysis of other receivables were not recognized which estimated by the Group.

(e) Inventories

Finished goods Work in process Raw materials Supplies Machinery and accessories in process Others	March 31, 2021 $ 10,406,573 1,890,704 3,714,362 203,769 2,808,655 15,211 $ 19,039,274	December 31, 2020 8,834,651 1,407,913 3,358,022 294,201 2,775,208 11,276 16,681,271	March 31, 2020
			11,206,703 1,830,530 3,218,465 771,321 2,309,007 90,386
			19,426,412

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Change of net realizable value of inventories：

Gain from recovery of inventories

For the three months ended March 31,	For the three months ended March 31,
2021 $ 123,359	2020
	91,406

The changes in net realizable value of the above inventories have been recognized as cost of goods sold.

(f) Investments accounted for using equity method

The components of the investments accounted for using equity method were as follows:

Associates Formosa Petrochemical Corporation Formosa Plastics Corp., U.S.A. Formosa Heavy Industries Corp. Sky Dragon Investments Limited Mai Liao Power Corp. Formosa Sumco Technology Corporation Formosa Transportation Corp. Formosa Fairway Corp. Yi-Jih Development Corp. Ya Tai Development Corp. Formosa Automobile Corporation Wha Ya Park Management Consulting Corporation Ltd. Formosa Environmental Technology Corporation Formosa Resources Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Olefins, L.L.C. Lolita Packaging, L.L.C.	March 31, 2021 $ 94,481,173 61,513,486 7,054,889 4,534,364 12,617,028 6,001,048 1,163,192 63,779 20,144 18,055 306,348 3,031 227,709 7,042,303 567,490 658,822 2,971,329 60,312	December 31, 2020 March 31, 2020 87,874,676 85,462,207 61,291,795 65,626,780 7,017,408 7,059,791 4,723,141 5,153,666 12,415,495 10,527,442 5,912,495 6,041,345 1,136,716 1,052,720 68,246 78,291 20,159 63,611 18,098 18,032 259,334 210,157 3,029 2,534 227,327 226,198 6,169,287 6,566,548 568,402 73,741 649,229 670,615 2,892,722 2,226,334 108,322 150,100

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Joint ventures Formosa Asahi Spandex Co., Ltd. Formosa Daikin Advanced Chemical Co., Ltd. Formosa Mitsui Advanced Chemical Co., Ltd. Formosa Tokuyama Advanced Chemicals Co., Ltd.	March 31, 2021 $ 1,275,526 1,257,839 - 117,001 $ 201,954,868	December 31, 2020 1,288,207 1,210,071 - 124,934 193,979,093	March 31, 2020
			1,248,546 1,063,385 3,954 -
			193,525,997

The Group’s shares of net income (loss) of associates and joint ventures were as follows:

Associates Formosa Petrochemical Corporation Formosa Plastics Corp., U.S.A. Formosa Heavy Industries Corp. Sky Dragon Investment Limited Mai Liao Power Corp. Formosa Sumco Technology Corporation Formosa Transportation Corp. Formosa Fairway Corp. Yi-Jih Development Corp. Ya Tai Development Corp. Formosa Automobile Corporation Wha Ya Park Management Consulting Corporation Ltd. Formosa Environmental Technology Corporation Formosa Resources Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Olefins, L.L.C. Lolita Packaging, L.L.C. Joint ventures Formosa Asahi Spandex Co., Ltd. Formosa Daikin Advanced Chemical Co., Ltd. Formosa Mitsui Advanced Chemical Co., Ltd. Formosa Tokuyama Advanced Chemicals Co., Ltd.	For the three months ended March 31, 2021 2020 $ 4,928,497 (2,695,454) 171,397 137,103 37,481 (30,861) (160,554) (301,196) 418 224,881 94,826 114,686 26,476 30,812 (4,467) (3,869) (15) 54 (43) (19) 47,014 28,836 2 4 382 529 (11,515) (49,386) (912) (1,780) 9,025 13,781 75,900 60,030 (47,861) (25,315) 37,945 16,215 47,768 44,751 (5,972) (12,275) (7,933) - $ 5,237,859 (2,448,473)
	2021 $ 4,928,497 171,397 37,481 (160,554) 418 94,826 26,476 (4,467) (15) (43) 47,014 2 382 (11,515) (912) 9,025 75,900 (47,861) 37,945 47,768 (5,972) (7,933) $ 5,237,859

Associates
Formosa Petrochemical Corporation
Formosa Plastics Corp., U.S.A.
Formosa Heavy Industries Corp.
Sky Dragon Investment Limited
Mai Liao Power Corp.
Formosa Sumco Technology Corporation
Formosa Transportation Corp.
Formosa Fairway Corp.
Yi-Jih Development Corp.
Ya Tai Development Corp.
Formosa Automobile Corporation
Wha Ya Park Management Consulting Corporation Ltd.
Formosa Environmental Technology Corporation
Formosa Resources Corporation
Formosa Plastics Construction Corporation
Formosa Group (Cayman) Limited
Formosa Olefins, L.L.C.
Lolita Packaging, L.L.C.
Joint ventures
Formosa Asahi Spandex Co., Ltd.
Formosa Daikin Advanced Chemical Co., Ltd.
Formosa Mitsui Advanced Chemical Co., Ltd.
Formosa Tokuyama Advanced Chemicals Co., Ltd.

For the three months ended
March 31,
2021
2020
$ 4,928,497
(2,695,454)
171,397
137,103
37,481
(30,861)
(160,554)
(301,196)
418
224,881
94,826
114,686
26,476
30,812
(4,467)
(3,869)
(15)
54
(43)
(19)
47,014
28,836
2
4
382
529
(11,515)
(49,386)
(912)
(1,780)
9,025
13,781
75,900
60,030
(47,861)
(25,315)
37,945
16,215
47,768
44,751
(5,972)
(12,275)
(7,933)
-
$
5,237,859
(2,448,473)

2021
$ 4,928,497
171,397
37,481
(160,554)
418
94,826
26,476
(4,467)
(15)
(43)
47,014
2
382
(11,515)
(912)
9,025
75,900
(47,861)
37,945
47,768
(5,972)
(7,933)
$
5,237,859

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Associates

1) The information of the major associate of the investments accounted for using the equity method was as follows:

Associates Formosa Petrochemical Corporation Formosa Plastics Corp., U.S.A.	Relationship	Registration Country	Percentage of ownership	Percentage of ownership
			March 31, 2021	December 31, 2020 March 31, 2020 % 28.56 % 28.56 % 22.66 % 22.66
	Formosa Petrochemical Corporation, the supplier of raw materials for the Group, engages in the manufacturing and sales of petroleum products and petrochemical raw materials. Formosa Plastics Corp., U.S.A, engages in the manufacturing and sales of oil, plastic raw materials, and petrochemical raw materials, and is also the sales target of the Group.	Taiwan U.S.A	% 28.56 % 22.66

The fair value of investments in publicly traded stocks of the major associate was as follows:

Formosa Petrochemical Corporation	March 31, 2021 $ 263,349,144	December 31, 2020 271,510,791	March 31, 2020 221,452,689

The aggregated financial information of the major associate was as follows:

The financial information of Formosa Petrochemical Corporation was as follows:

Current assets Non-current assets Current liabilities Non-current liabilities Net asset Net asset contributed to non-controlling interest of Formosa Petrochemical Corporation Net asset contributed to Formosa Petrochemical Corporation	March 31, 2021 $ 245,930,423 168,400,639 (38,644,970) (39,287,761) $ 336,398,331 $ 4,520,647 $ 331,877,684	December 31, 2020 215,309,819 165,613,297 (28,887,601) (39,408,447) 312,627,068 4,525,709 308,101,359	March 31, 2020 195,737,605 170,218,188 (35,269,327) (27,128,448)
			303,558,018
			4,177,503
			299,380,515

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

				For the three months ended	For the three months ended
				March	31,
				2021	2020
Revenue			$	130,299,666	137,531,357
Net (loss) income				17,892,235	(10,003,224)
Other comprehensive (loss) income				5,879,028	(20,850,166)
Total comprehensive income (loss)			$	23,771,263	(30,853,390)
Comprehensive (loss) income allocated	to non-controlling
interest of Formosa Petrochemical Corporation			$	(5,062)	7,992
Comprehensive income (loss) allocated	to Formosa
Petrochemical Corporation			$	23,776,325	(30,861,382)
				For the three months ended
				March	31,
				2021	2020
Beginning balance of investments in major associate at			$	87,874,676	94,112,087
January 1
Total comprehensive loss allocated to the Company				6,603,405	(8,655,259)
Share of net assets of affiliates as of September 30				94,478,081	85,456,828
Add: share premium acquired not according to
holding percentage				-	5,379
Add: Net adjustment				3,092	-
Total carrying amount of equity of the major associate as of
March 31			$	94,481,173	85,462,207
The financial information of Formosa Plastics Corp., U.S.A. was as follows:
		March 31,		December 31,	March 31,
		2021		2020	2020
Current assets	$	75,237,497		80,388,030	81,517,301
Non-current assets		252,840,174		253,057,520	250,760,111
Current liabilities		(16,440,261)		(23,145,830)	(11,849,612)
Non-current liabilities		(32,931,738)		(32,655,356)	(24,994,046)
Net asset	$	278,705,672		277,644,364	295,433,754
Net asset contributed to non-controlling
interest of Formosa Plastics Corp.,
U.S.A.	$	7,204,490		7,132,376	6,266,065
Net asset contributed to Formosa
Plastics Corp., U.S.A.	$	271,501,182		270,511,988	289,167,689

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Revenue Net (loss) income Other comprehensive (loss) income Total comprehensive (loss) income Comprehensive income (loss) allocated to non-controlling interest of Formosa Plastics Corp., U.S.A. Comprehensive income (loss) allocated to Formosa Plastics Corp., U.S.A. Beginning balance of investments in major associate at January 1 Total comprehensive income allocated to the Group Total carrying amount of equity of the major associate as of March 31	For the three months ended March 31,	For the three months ended March 31,
	2021 2020 $ 32,830,465 25,811,350 822,497 718,423 221,974 1,423,872 $ 1,044,471 2,142,295 $ 66,034 113,317 $ 978,437 2,028,978 For the three months ended March 31	2020
		25,811,350
		718,423 1,423,872
		2,142,295
		113,317
		2,028,978
		2020
		65,167,060 459,720
		65,626,780

2) The Group’s financial information for investments accounted for using the equity method that are individually insignificant was as follows:

March 31, 2021 Carrying amount of individually insignificant associates’ equity $ 43,309,843 Attributable to the Group: Net income Other comprehensive income (loss) Total comprehensive income (loss)	March 31, 2021

3) On March 10, 2021, the Group participated in the capital increase by cash of Formosa Resources Corporation, an associate owned by the Group, with the total investment amounting to USD31,250 thousand (equivalent to $884,531 thousand) based on its original shareholding ratio of 25%.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Joint ventures

The Group’s financial information for investments in individually insignificant joint venture accounted for using equity method at the reporting date was as follows. This financial information is included in the consolidated financial statements.

Individually insignificant joint venture Attributable to the Group: Net income Other comprehensive loss Total comprehensive income	March 31, 2021	March 31, 2021	December 31, 2020 March 31, 2020 2,623,212 2,315,885 For the three months ended March 31, 2021 2020 $ 71,808 48,691 213 (26) $ 72,021 48,665	December 31, 2020 March 31, 2020 2,623,212 2,315,885 For the three months ended March 31,	March 31, 2020
	$ 2,650,366				2,315,885

					2020
					48,691 (26)
					48,665

The Group, which invested in “Formosa Mitsui Advanced Chemical Co., Ltd.” (an investee accounted for using the equity method) recognized the loss of $5,972 thousand from this investment for the three months ended March 31, 2021. As of March 31, 2021, the Group’ s cumulative losses from this investment had already exceeded the book value of the investment by $31,526 thousand. As the Group intends to support this investee company which was reclassified to other non-current liabilities.

(iii) Collaterals

There are no investments accounted for using the equity method which were pledged to banks as collateral to secure the Group’s bank loans as of March 31, 2021, December 31 and March 31, 2020.

(g) Property, plant and equipment

The movements of cost and accumulated depreciation and impairments of property, plant and equipment of the Group for the three months ended March 31, 2021 and 2020 were as follows:

Cost: Balance at January 1, 2021 Additions Disposals Reclassification Effect of exchange rate changes Balance at March 31, 2021	Land and land improvements $ 12,086,178 - - - 1,364 $ 12,087,542	Buildings and constructions 29,415,324 509 - 77,207 (39,115) 29,453,925	Machinery and equipment 195,709,750 222,242 (210,179) 871,372 (242,403) 196,350,782	Other facilities 7,678,491 121,424 (45,935) 24,090 (10,086) 7,767,984	Construction in progress 10,780,602 4,045,745 - (921,644) 80,160 13,984,863	Total 255,670,345 4,389,920 (256,114) 51,025 (210,080) 259,645,096

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance at January 1, 2020 Additions Disposals Reclassification Effect of exchange rate changes Balance at March 31, 2020 Accumulated depreciation/ impairments: Balance at January 1, 2021 Depreciation for the period Disposals Reclassification Effect of exchange rate changes Balance at March 31, 2021 Balance at January 1, 2020 Depreciation for the period Disposals Reclassification Effect of exchange rate changes Balance at March 31, 2020 Carrying amounts: Balance at March 31, 2021 Balance at December 31, 2020 Balance at March 31, 2020	Land and land improvements $ 12,085,340 - - - 8,308 $ 12,093,648 $ 143,336 29,292 - - 260 $ 172,888 $ 29,575 29,641 - - 243 $ 59,459 $ 11,914,654 $ 11,942,842 $ 12,034,189	Buildings and constructions 29,172,864 2,660 - 40,753 (62,833) 29,153,444 18,130,360 217,612 - 193 (14,190) 18,333,975 17,231,129 218,746 - 212 (21,250) 17,428,837 11,119,950 11,284,964 11,724,607	Machinery and equipment 190,805,323 50,307 (176,098) 497,107 (338,729) 190,837,910 145,399,483 1,447,435 (210,148) (345) (153,451) 146,482,974 140,443,440 1,400,437 (175,589) (475) (234,891) 141,432,922 49,867,808 50,310,267 49,404,988	Other facilities 6,921,887 94,738 (31,848) 99,510 (16,024) 7,068,263 5,211,212 122,298 (45,729) (304) (7,465) 5,280,012 4,879,940 105,161 (31,682) 64 (11,820) 4,941,663 2,487,972 2,467,279 2,126,600	Construction in progress 9,234,653 580,808 - (447,117) (91,886) 9,276,458 - - - - - - - - - - - - 13,984,863 10,780,602 9,276,458	Total 248,220,067 728,513 (207,946) 190,253 (501,164)
						248,429,723
						168,884,391 1,816,637 (255,877) (456) (174,846)
						170,269,849
						162,584,084 1,753,985 (207,271) (199) (267,718)
						163,862,881
						89,375,247
						86,785,954
						84,566,842

(i) Collaterals

The property, plant and equipment pledged to secure bank loans as of March 31, 2021, December 31 and March 31, 2020, are described in Note 8.

(ii) As of March 31, 2021, December 31 and March 31, 2020, the Group’s parcels of land with title temporarily registered under the names of third parties for trust purpose had carrying value as of $33,529 thousand which were recorded under property, plant and equipment. The Group has implemented a deed of trust with the authorities to secure the Group’s rights related to the abovementioned properties.
(iii) Please refer to Note 6(t) for further information about the capitalized interest on borrowings for the purchase of the property, plant and equipment and gain on disposal of property, plant and equipment.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Right-of-use assets

The Group leases many assets including land and buildings, vehicle and machinery Information about cost and depreciation is as follows:

Cost: Balance at January 1, 2020 Additions Effect of exchange rate change Balance at March 31, 2021 Balance at January 1,2020 Disposals Effect of exchange rate change Balance at March 31, 2020 Accumulated depreciation: Balance at January 1, 2020 Depreciation for the period Effect of exchange rate change Balance at March 31, 2021 Balance at January 1,2020 Depreciation for the period Disposals Effect of exchange rate change Balance at March 31, 2020 Carrying amount: Balance at March 31, 2021 Balance at December 31, 2020 Balance at March 31, 2020	Land $ 1,237,853 6,568 (6,414) $ 1,238,007 $ 1,204,383 - (12,579) $ 1,320,690 $ 90,727 12,266 (143) $ 102,850 $ 149,273 12,678 - (2,046) $ 159,905 $ 1,135,157 $ 1,147,126 $ 1,160,785	Buildings and constructions - - - - 304 (304) - - - - - - 243 61 (304) - - - - -	Total 1,237,853 6,568 (6,414) 1,238,007 1,204,687 (304) (12,579) 1,320,690 90,727 12,266 (143) 102,850 149,516 12,739 (304) (2,046) 159,905 1,135,157 1,147,126 1,160,785

For the three months ended March 31, 2021 and 2020, the Group increased the right-of-use assets, please refer to Notes 6(m), then on the year ended of 2020, the Group decreased the right-of-use assets, because the Group didn't continue to sign the lease.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Short-term borrowings

(i) Short-term borrowings consisted of the following:

Unsecured short-term borrowings Employees’savings Total Interest rate	March 31, 2021 $ 14,973,538 99,053 $ 15,072,591 0.432%~0.790%	December 31, 2020 14,975,936 380,788 15,356,724 0.405%~1.035%	March 31, 2020 26,793,917 374,371
			27,168,288
			0.750%~3.480%

(ii) Issuance and redemption of loans

Balance as of January 1, 2020 New issuance during the period Repayments during the period Effect of exchange rate change Balance as of March 31, 2021 Balance as of January 1, 2019 New issuance during the period Repayments during the period Effect of exchange rate change Balance as of March 31, 2020	For the three months ended March 31, 2021 $ 15,356,724 76,729,756 (77,008,413) (5,476) $ 15,072,591 For the three months ended March 31, 2020 $ 20,255,096 77,102,681 (70,244,270) 54,781 $ 27,168,288

(j) Short-term notes and bills payable

Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Less: Discount on short-term notes and bills payable Total	March 31, 2021	March 31, 2021
	Institutions	Interest rate Amount 0.215%~0.245% $ 7,000,000 0.215%~0.255% 3,300,000 0.215% 600,000 0.215%~0.255% 3,200,000 0.215%~0.255% 2,600,000 0.205% 500,000 0.215% 400,000 17,600,000 (2,858) $ 17,597,142
	CTBC Bank Co., Ltd. China Bills Finance Corporation Mega Bills Finance Co., Ltd. Grand Bills Finance Corporation Yuanta Commercial Bank Co., Ltd. Ta Ching Securities Co., Ltd. KGI International Commercial Bank

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable

Less: Discount on short-term notes and bills payable

Total

December	31, 2020
Institutions	Interest rate		Amount
CTBC Bank Co., Ltd.	0.269%	$	3,000,000
China Bills Finance Corporation	0.239%~0.269%		3,200,000
Mega Bills Finance Co., Ltd.	0.269%		1,000,000
Grand Bills Finance Corporation	0.239%~0.269%		3,800,000
E.SUN Commercial Bank, Ltd.	0.229%		2,500,000
Yuanta Commercial Bank Co., Ltd.	0.239%~0.269%		2,000,000
Ta Ching Securities Co., Ltd.	0.229%~0.239%		1,500,000
			17,000,000
			(3,176)
		$	16,996,824

Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable

Short-term notes and bills payable Short-term notes and bills payable Short-term notes and bills payable

Short-term notes and bills payable Short-term notes and bills payable

Less: Discount on short-term notes and bills payable

Total

March	31, 2020
Institutions	Interest rate		Amount
Mega Bills Finance Co., Ltd.	0.857%	$	1,000,000
Grand Bills Finance Corporation	0.540%~0.790%		3,100,000
China Bills Finance Corporation	0.520%~0.540%		2,500,000
International Bills Finance
Corporation	0.777%		500,000
Ta Ching Securities Co., Ltd.	0.580%		600,000
CTBC Bank Co., Ltd.	0.530%		2,600,000
Taipei Fubon Commercial Bank
Co., Ltd.	0.545%		3,000,000
E.SUN Commercial Bank, Ltd.	0.530%		1,700,000
Yuanta Commercial Bank Co.,
Ltd.	0.540%		1,500,000
			16,500,000
			(4,498)
		$	16,495,502

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Long-term debts

(i) Long-term debts consisted of the following:

Unsecured long-term debts Secured long-term debts Less: Current portion Total Repayment period Interest rate	March 31, 2021 $ 1,829,280 - - $ 1,829,280 2025 0.930%~4.075%	December 31, 2020 3,569,776 - (2,000,000) 1,569,776 2024 0.800%~4.075%	March 31, 2020 3,117,892 3,433,333 (4,606,781) 1,944,444 2020~2021 0.800%~4.750%

(ii) Issuance and redemption of loan

Balance of January 1, 2021 New issuance during the period Repayments during the period Effect of exchange rate charge Balance of March 31, 2021 Balance of January 1, 2020 Repayment during the period Effect of exchange rate charge Balance of March 31, 2020	Total $ 3,569,776 269,954 (2,000,000) (10,450) $ 1,829,280 Total $ 6,610,540 (47,575) (11,740) $ 6,551,225

(iii) Secured bank loans

In order to raise funds to build the plant and accessory equipment, the Group signed a syndicated loan agreement with Bank of Taiwan, the lead bank of the syndicated loan, and 19 other banks on November 14, 2013. As of March 31, 2021, the details of the loan agreement are as follows:

1) Credit line: $10,300,000 thousand.
2) Interest rate: as settled with each participating bank.
3) Period: 7 years (including a 3-year extension).

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

4) Collateral: the land at Sixth Naphtha Cracker pledged for 120 percent of the credit line financed by the loan.
5) The financial covenants under the loan agreement include the requirement to maintain certain financial ratios based on the audited consolidated financial reports. If the Group breaches these financial covenants, the syndicated banks may determine to declare the unpaid principal, interest, fees and other sums payable by the Group under the loan agreement to be immediately due and payable. These financial ratios are as follows:
a) Current Ratio (total current assets divided by total current liabilities): not lower than 100%.
b) Leverage Ratio (total liabilities plus contingent liabilities to tangible net worth): not higher than 150%.
6) The Group did not breach the above-mentioned financial covenants in respect of its financial statements as of March 31, 2021.
7) As of May 29, 2020, $10,300,000 thousand of the credit line had been used, and the loan had been repaid all.

(iv) The assets pledged to secure loans are described in Note 8.

(l) Bonds payable
(i) Bonds payable consisted of the following:

Domestic unsecured nonconvertible corporate bonds Less: current portion Total Expiry	March 31, 2021 $ 40,912,977 (2,898,401) $ 38,014,576 2021~2030	December 31, 2020 40,910,455 (2,898,401) 38,012,054 2030	March 31, 2020
			32,566,389 -
			32,566,389
			2021~2028

(ii) Issuance and repayment of bonds payable: .There were no significant issues, repurchases and repayments of bonds payable for the three months ended March 31, 2021 and 2020.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) The terms of domestic corporate bonds as of March 31, 2021, December 31 and March 31, 2020 were as follows:

Issue amount 2021.03.31 Ending balance 2021.03.31 Current portion 2020.12.31 Ending balance 2020.12.31 Current portion 2020.03.31 Ending balance Issuance date Coupon rate Interest payment date Repayment method Issue amount 2021.03.31 Ending balance 2021.03.31 Current portion 2020.12.31 Ending balance 2020.12.31 Current portion 2020.03.31 Ending balance 2020.03.31 Current portion Issuance date Coupon rate Interest payment date Repayment method	The third domestic unsecured nonconvertible corporate bond in 2012	The third domestic unsecured nonconvertible corporate bond in 2012	The first domestic unsecured nonconvertible corporate bond in 2013		The second domestic unsecured nonconvertible corporate bond in 2013	The first domestic unsecured nonconvertible corporate bond in 2014 6,000,000 5,995,440 - 5,995,166 - 5,994,345 May 21, 2014 1.83%、1.92% May 21 Payable in 2 equal installments for each different coupon rate in 2023~2024 and 2025~2026, respectively. The first domestic unsecured nonconvertible corporate bond in 2020
					8,500,000 6,296,865 - 6,296,571 - 6,295,690 November 8, 2013 1.42%、1.94% November 8 Payable in 2 equal installments for each different coupon rate in 2017~2018 and 2022~2023, respectively. The first domestic unsecured nonconvertible corporate bond in 2018
		$ 7,000,000 6,995,945 1,649,052 6,995,471 1,649,052 6,994,049 - May 19, 2017 1.09%、1.32% May 19 Payable in 2 equal installments for each different coupon rate in 2021~2022 and 2023~2024, respectively.		9,300,000 9,290,941 - 9,290,447 - 9,288,964 - June 26, 2018 0.82%、0.93%、1.09% June 26 Payable in 2 equal installments for each different coupon rate in 2022~2023, 2024~2025 and 2027~2028 respectively.		8,350,000 8,338,280 - 8,337,835 - - - June 22, 2020 0.58%、0.63%、0.67% June 22 Payable in 2 equal installments for each different coupon rate in 2024~2025, 2026~2027 and 2029~2030 respectively.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Lease liabilities

Lease liabilities consisted of the following:

Current Non-current financial assets	March 31, 2021 $ 13,585 $ 126,905	December 31, 2020 21,452 121,923	March 31, 2020
			37,429
			133,962

Please refer to Note 6 (u) the maturity analysis.

On March 31, 2021, the amounts of lease liabilities incurred from the rentals of land increased by $6,568 thousand, with the interest rates of 2.05%, maturing in October 2042. On March 31, 2020, the amounts of lease liabilities incurred from the rentals of land increased by $128,886 thousand, with the interest rates of 2.05%, maturing in December 2042.

The amount recognized in profit or loss was as follows:

Interest on lease liabilities Expenses relating to short-term leases	For the three months ended March 31, 2021 2020 $ 721 1,069 $ 17,302 24,024	For the three months ended March 31,	For the three months ended March 31,
			2020
			1,069
			24,024

The amount recognized in cash flows statement was as follows:

Total cash outflow for leases	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 27,476	2020
		34,785

(i) Real estate leases

As of March 31, 2021, the Group leases land and buildings for its office space and employee dormitory. The leases of office space typically run for a period of 2 to 50 years, and 1 year for employee dormitory. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Certain leases provide for additional rent payments that are based on changes in the local price indices, or sales that the Group incurred at the leased store in the period；others require the Group to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined annually.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

The Group also leases its buildings with contract terms of one year. These leases are short-term and the Group has elected not to recognize its right-of-use assets and lease liabilities for these leases.

(n) Employee benefits

(i) Defined benefit plan

Subsequent to December 31, 2020, there is apparently no evidence of any material market volatility, material curtailment, reimbursement and settlement or other material one-time events. Therefore, pension cost in the consolidated financial statements is measured and disclosed according to the respective actuarial report for the years ended December 31, 2020 and 2019.

The Group’s pension costs recognized in loss were as follows:

Operating costs Selling expenses Administrative expenses	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 26,497 1,046 10,111 $ 37,654	2020
		23,733 1,433 15,398
		40,564

(ii) Defined contribution plan

The Labor Pension Act (“The Act”) prescribes a defined contribution plan. Pursuant to the Act, the Company has made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts.

Subsidiaries in China are governed by China laws and regulation. Based on China laws and regulation, those companies contribute for employees’ pension benefits at rates ranging from 14% of salary every month and remit those contributions to the related authority.

The Group’s pension costs recognized in profit or loss were as follows:

Operating costs Selling expenses Administrative expenses	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 57,933 2,617 27,152 $ 87,702	2020
		46,355 2,493 24,278
		73,126

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Income tax

(i) The components of income tax for the three months ended March 31, 2021 and 2020 were as follows:

Current income tax expense Deferred tax expense (income) The origination of temporary differences Income tax expense	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 2,637,884 464,328 $ 3,102,212	2020 546,007 (22,747) 523,260

(ii) The income tax expense related to components of other comprehensive income for the three months ended March 31, 2021 and 2020 was as follows:

Items that will subsequently be reclassified to profit or loss: Exchange differences on translation of foreign financial statements	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 57,154	2020 74,975

(iii) The Company’s income tax returns have been examined and approved through 2019 by the R.O.C tax authorities.

(p) Capital and other equity

Except as described below, there was no material change in equity for the three months ended March 31, 2021 and 2020. Please refer to Note 6(p) of the consolidated financial statements as of and for the year ended December 31, 2020 for the related detail disclosures on equity.

(i) Capital surplus

The components of capital surplus were as follows:

Paid-in capital in excess of par value Treasury stock transactions Equity in capital surplus of investee companies Overdue unpaid directors’ remuneration and dividends Paid in capital in excess of the par value derived from overseas corporate bond conversion	March 31, 2021 $ 8,130,081 16,263 202,111 395,735 2,997,503 $ 11,741,693	December 31, 2020 8,130,081 16,263 202,111 396,166 2,997,503 11,742,124	March 31, 2020 8,130,081 16,263 202,083 383,655 2,997,503 11,729,585 (Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Retained earnings

According to the rules of the Company’s articles and Company Act, the Company’s annual net profit, after providing for income tax and covering the losses of previous years, is first set aside for legal reserve at the rate of 10% thereof. In addition, a special reserve in accordance with applicable laws and regulations shall also be set aside. The remainder plus the undistributed earnings of the previous years are distributed or left undistributed for business purposes according to the resolution of the stockholders’ dividend distribution plan, which are initially proposed by the Board of Directors and adopted by the shareholders in the Annual Stockholders’ Meeting.

The Company also adopts a dividend distribution policy, under which, net earnings after deducting the legal reserve and special reserve may first be distributed by way of cash dividends which shall be equal to at least fifty percent (50%) of the Company’s total dividend distribution every year. The capitalization of earnings and capital surplus shall not exceed fifty percent of the total dividends.

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

As the Company opted to avail of the exemptions allowed under IFRS 1 “ First-time Adoption of International Financial Reporting Standards” during the Company’s firsttime adoption of the IFRS as endorsed by the FSC, unrealized revaluation increments and cumulative translation adjustments (gains) of $2,790,507 thousand, which were previously recognized in shareholders’ equity were reclassified to retained earnings. In accordance with Regulatory Permit No. 1010012865 as issued by the FSC on April 6, 2012, a special reserve is appropriated from retained earnings for aforementioned reclassification. In addition, during the use, disposal or reclassifications of relevant assets, this special reserve is reverted to distributable earnings proportionately. The carrying amount of special reserve amounted to $2,790,507 thousand as of March 31, 2021, December 31 and March 31, 2020.

Pursuant to the Regulatory Permit mentioned above, the Company is also required to set aside an additional special reserve, as part of the distribution of its annual earnings, equal to the difference between the amount of above-mentioned special reserve and net debit balance of the other components of stockholders’ equity.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Earnings distribution

The appropriations of earnings in 2020 and 2019 were approved in the stockholders' meeting on March 17, 2021, and June 10, 2020, respectively. The amounts of appropriation of dividends per share were as follows:

Dividends attributable to ordinary shareholders: Cash dividends Dividends per share	For the years ended December 31,	For the years ended December 31,
	2020 $ 15,277,778 $ 2.40	2019 28,009,259 4.40

(iii) Other equity

Balance at January 1, 2021 Exchange differences arising on translation of foreign operations Share of exchange differences on associates and joint ventures accounted for using equity method Share of unrealized gains or losses on associates accounted for using equity method and their financial assets at fair value through other comprehensive income Unrealized gains on financial assets at fair value through other comprehensive income Share of cash flow hedge of associates and joint ventures Balance at March 31, 2021 Balance at January 1, 2020 Exchange differences arising on translation of foreign operations Share of exchange differences on associates and joint ventures accounted for using equity method Share of unrealized gains or losses on associates accounted for using equity method and their financial assets at fair value through other comprehensive income Unrealized gains on financial assets at fair value through other comprehensive income Share of cash flow hedge of associates and joint ventures Balance at March 31, 2020	Exchange differences on translation of foreign operations $ (9,603,060) (359,167) (634) - - - $ (9,962,861) $ (5,278,250) 103,073 40,171 - - - $ (5,135,006)	Unrealized gain (loss) on financial assets at fair value through profit or loss 76,471,804 - - 2,012,831 9,986,405 - 88,471,040 80,701,025 - - (6,750,239) (30,937,937) - 43,012,849	Gain (loss) on hedging instruments 37,988 - - - - 19,157 57,145 779 - - - - 2,126 2,905	Total 66,906,732 (359,167) (634) 2,012,831 9,986,405 19,157
				78,565,324
				75,423,554 103,073 40,171 (6,750,239) (30,937,937) 2,126
				37,880,748

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(q) Earnings per share

The basic earnings per share was calculated as follows:

The basic earnings per share was calculated as follows:
Profit attributable to ordinary shareholders Weighted average number of outstanding ordinary shares	For the three months ended March 31, 2021 2020 $ 14,959,942 (393,664) 6,365,741 6,365,741 $ 2.35 (0.06)
	2021 $ 14,959,942 6,365,741 $ 2.35

(r) Revenue from Contracts with Customers

(i) Revenue Segmentation

		For the three m	onths ended Ma	rch 31, 2021
Plastic division $ 5,569,329 5,915,341 9,232,397 $ 20,717,067 $ 15,840,954 2,653,954 - - - - - - - - - - - - 2,222,159 $ 20,717,067	Polyolefin division 2,871,405 4,576,510 4,786,993 12,234,908 - - 3,592,083 3,673,527 4,936,028 - - - - - - - - - 33,270 12,234,908	Polypropylene division 2,044,099 6,003,424 1,720,094 9,767,617 - - - - - 9,199,480 568,137 - - - - - - - - 9,767,617	Tairylan division 2,239,626 5,281,705 2,604,965 10,126,296 - - - - - - - 5,832,292 1,611,631 826,698 1,122,457 - - - 733,218 10,126,296	Chemistry division 5,171,520 513,250 1,097,967 6,782,737 - - - - - - - - - - - 3,453,121 763,575 1,050,512 1,515,529 6,782,737	Others divisions 689,175 75,801 208,336 973,312 - - - - - - - - - - - - - - 973,312 973,312	Total 18,585,154 22,366,031 19,650,752
						60,601,937
						15,840,954 2,653,954 3,592,083 3,673,527 4,936,028 9,199,480 568,137 5,832,292 1,611,631 826,698 1,122,457 3,453,121 763,575 1,050,512 5,477,488
						60,601,937

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

		For the three m	onths ended Ma	rch 31, 2020
Plastic division $ 4,699,298 3,736,366 6,564,922 $ 15,000,586 $ 10,074,217 3,322,333 - - - - - - - - - - - - 1,604,036 $ 15,000,586	Polyolefin division 2,129,185 2,788,191 3,682,929 8,600,305 - - 3,232,517 2,557,361 2,739,312 - - - - - - - - - 71,115 8,600,305	Polypropylene division 1,721,131 3,947,083 1,015,216 6,683,430 - - - - - 6,244,917 438,513 - - - - - - - - 6,683,430	Tairylan division 1,284,459 2,940,270 1,823,298 6,048,027 - - - - - - - 2,643,951 1,562,136 749,341 575,994 - - - 516,605 6,048,027	Chemistry division 3,246,486 717,086 772,413 4,735,985 - - - - - - - - - - - 1,879,591 551,944 1,194,357 1,110,093 4,735,985	Others divisions 805,500 65,983 79,364 950,847 - - - - - - - - - - - - - - 950,847 950,847	Total 13,886,059 14,194,979 13,938,142
						42,019,180
						10,074,217 3,322,333 3,232,517 2,557,361 2,739,312 6,244,917 438,513 2,643,951 1,562,136 749,341 575,994 1,879,591 551,944 1,194,357 4,252,696
						42,019,180

(ii) Balance of contracts

Notes receivable Accounts receivable (including related parties) Less: allowance for doubtful receivables Total	March 31, 2021 $ 2,697,504 17,510,297 (20,176) $ 20,187,625	December 31, 2020 2,148,261 13,813,715 (1,624) 15,960,352	March 31, 2020 1,935,769 10,635,565 (4,118) 12,567,216

Please refer to Note 6(c) for the disclosure of accounts receivable and impairment.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(s) Employee bonus

According to the Company’s articles, 0.05%~0.5% of the Company’s profit, excluding employee compensations, and after being appropriated to offset accumulated deficits, if any, should be distributed as employee compensations.

For the three months ended March 31, 2021 and 2020, the appropriated employee compensations amounted to $17,363 thousand and $1,076 thousand, respectively. These amounts were calculated based on the Company’ s articles of incorporation and the net profit before tax after deducting employee compensations, and were recognized under operating costs and operating expenses. If there would be any changes after the reporting date, the changes shall be accounted for as changes in accounting estimates and shall be recognized as profit or loss in the following year.

For the years ended December 31, 2020 and 2019, the appropriated employee compensations amounted to $30,211 thousand and $55,553 thousand, respectively, which were consistent with the actual distributions. Related information can be accessed from the Market Observation Post System website.

(t) Non-operating income and expenses

(i) Interest income

Interest income
Interest income from bank deposits Other interest income Total Interest income	For the three months ended March 31
	2021 $ 37,656 20,412 $ 58,068	2020 75,504 39,044 114,548

(ii) Other income

Rental income Other gains and losses Gain on disposal of property, plant and equipment Foreign currency exchange (loss) gain Gain on financial assets at fair value through profit or loss Other gains Other losses Net of other gains and losses	For the three months ended March 31, 2021 2020 $ 38,177 37,903 For the three months ended March 31, 2021 2020 $ 4,367 4,057 (94,758) 235,315 9,297 41,893 177,898 81,513 (32,375) (32,292) $ 64,429 330,486
	2021 $ 4,367 (94,758) 9,297 177,898 (32,375) $ 64,429

(iii) Other gains and losses

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Finance costs

Interest expense Less: capitalized interest Interest expense from bank loans Capitalized interest rate	For the three months ended March 31, 2021 2020 $ 276,605 419,056 (55,466) (21,795) $ 221,139 397,261 0.800%-2.885% 1.330%~2.885%
	2021 $ 276,605 (55,466) $ 221,139 0.800%-2.885%

(u) Financial Instruments

Except as described below, there was no material change with regard to the fair value and exposure risks of credit risk, liquidity risk and market risk on financial instruments. Please refer to Note 6(u) of the consolidated financial statements as of and for the year ended December 31, 2020 for the related detail disclosures on financial instruments.

(i) Exposure to currency risk

Financial assets Monetary items USD EUR JPY RMB Financial liabilities Monetary items USD EUR JPY		March 31, 2021
	Foreign currency (in thousand) $ 666,078 3,536 900 14,505 91,179 396 78,333	Exchange Rate New Taiwan Dollars 28.5310 19,003,871 33.3849 118,049 0.2582 232 4.3418 62,978 28.5310 2,601,428 33.3849 13,220 0.2582 20,226

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets Monetary items USD EUR JPY RMB Financial liabilities Monetary items USD EUR JPY Financial assets Monetary items USD EUR JPY RMB Financial liabilities Monetary items USD EUR JPY			December 31, 2020
			Exchange Rate New Taiwan Dollars 28.5080 12,368,110 34.5600 224,951 0.2724 3,754 4.3691 40,786 28.5080 1,178,293 34.5600 8,122 0.2724 20,901 March 31, 2020
	Foreign currency (in thousand) $ 696,487 717 4,673 844 19,475 1,207 183,542		Exchange Rate New Taiwan Dollars 30.2540 21,071,518 33.4489 23,983 0.2807 1,312 4.2701 3,604 30.2540 589,197 33.4489 40,373 0.2807 51,520

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group’ s exposure to foreign currency risk arises from the foreign currency exchange fluctuations on cash and cash equivalents, accounts receivable, other receivables, loans and borrowings, accounts payable and other payables which are denominated in different foreign currencies. A 1% appreciation of the NTD against the USD, EUR, JPY, RMB and CHF as of 2021 would have decreased the net income before tax by $165,503 thousand and $204,193 thousand for the three months ended March 31, 2021 and 2020, respectively. This analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The management believes that the analysis is performed on the same basis

Because there are a variety of functional currencies, the Group discloses a summary of its information on exchange gain or loss. The realized and unrealized exchange (loss) gain amounted to $(94,758) thousand and $235,315 thousand for the three months ended March 31, 2021 and 2020, respectively.

(ii) Liquidity risk

The following are the remaining contractual maturities at the end of the reporting period of financial liabilities, including estimated interest payments but excluding the impact of netting agreements:

agreements:
Carrying amount March 31,2021 Non-derivative financial liabilities Unsecured bank loans $ 16,802,818 Unsecured Bonds payable 40,912,977 Short-term notes and bills payable 17,597,142 Accounts payable (including related parties) 13,682,892 Other payables (including related parties) 6,991,120 Loans from related parties 14,693,465 Other current liabilities 8,751,197 Employees’ savings 99,053 Lease liabilities 140,490 $ 119,671,154	Carrying amount	Contractual cash flow	Within 6 months	6~12months	1~2years	2~5years 2,144,128 20,963,435 - - - - - - 23,414 23,130,977	Over 5 years
		17,173,926 42,869,260 17,600,000 13,682,892 6,991,120 15,201,271 8,751,197 99,444 171,457	15,029,798 2,918,555 17,600,000 13,682,892 6,991,120 - 8,751,197 99,444 12,222	- - - - - - - - 4,033	- 9,661,880 - - - 15,201,271 - - 8,001		- 9,325,390 - - - - - - 123,787
		122,540,567	65,085,228	4,033	24,871,152		9,449,177

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Contractual cash flow	Within 6 months	6~12months	1~2years	Over 5 years
18,903,103 42,878,823 17,000,000 13,126,143 5,187,590 14,894,084 6,665,774 382,863 173,549	17,045,469 1,658,993 17,000,000 13,126,143 5,187,590 - 6,665,774 382,863 20,285	- 1,269,125 - - - - - - 3,846	- 9,661,880 - - - 14,894,084 - - 7,692	- 9,325,390 - - - - - - 119,435
119,211,929	61,087,117	1,272,971	24,563,656	9,444,825
30,223,141 34,691,935 3,498,704 16,500,000 7,046,560 3,979,288 19,513,830 6,814,069 374,371 203,824	28,190,127 - 1,153,783 16,500,000 7,046,560 3,979,288 - 6,814,069 374,371 20,224	2,033,014 - 1,163,122 - - - 19,513,830 - - 20,224	- 2,974,220 1,181,799 - - - - - - 15,881	- 8,634,670 - - - - - - - 125,008
122,845,722	64,078,422	22,730,190	4,171,900	8,759,678

It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Other market price risk

If the securities price changes at the reporting date (sensitivity analyses were performed using the same basis for both twelve-month period ended September 30, 2020 and 2019, and other factors remain unchanged), impacts on comprehensive income are as below:

Prices of securities at the reporting date	For the three months ended March 31,	For the three months ended March 31,	For the three months ended March 31,	For the three months ended March 31,
	2021		2020
	Other comprehensive income after tax	Net income	Other comprehensive income after tax 741,451 (741,451)	Net income
Increasing 1% Decreasing 1%	$ 1,106,914 $ (1,106,914)	-		-
		-		-

(iv) Fair value

1) Types and fair value of financial instruments

The Group’ s financial assets and liabilities are listed as follows: (including (1) the information on the levels in fair value hierarchy, wherein, disclosures are not required for financial instruments not measured at fair value with a carrying value approximating its fair value; and (2) those equity investments in which the fair value cannot be reliably measured and without any quoted price in the open market)

March 31, 2021

Carrying value		Fair value	Fair value
	Level 1	Level 2	Level 3 - - - 20,161,756 20,161,756 - - - - 20,161,756	Total
$ 3,898,180 3,898,180 110,691,383 20,161,756 130,853,139 17,305,150 20,187,625 8,225,301 45,718,076 $ 180,469,395	-	3,898,180		3,898,180
	-	3,898,180		3,898,180
	110,691,383 -	- -		110,691,383 20,161,756
	110,691,383	-		130,853,139
	- - -	- - -		- - -
	-	-		-
	110,691,383	3,898,180		134,751,319

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	March 31, 2021	March 31, 2021	March 31, 2021
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - - - - - - - -	Total
$ 40,912,977 17,597,142 15,072,591 1,829,280 14,693,465 13,682,892 6,991,120 8,751,197 140,490 $ 119,671,154	- - - - - - - - -	- - - - - - - - -		- - - - - - - - -
	-	-		-

	December 31, 2020	December 31, 2020	December 31, 2020
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - 18,647,715 18,647,715 - - - - 18,647,715	Total
$ 3,888,883 3,888,883 102,218,948 18,647,715 120,866,663 14,145,110 15,960,352 7,435,350 37,540,812 $ 162,296,358	-	3,888,883		3,888,883
	-	3,888,883		3,888,883
	102,218,948 -	- -		102,218,948 18,647,715
	102,218,948	-		120,866,663
	- - -	- - -		- - -
	-	-		-
	102,218,948	3,888,883		124,755,546

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - - - - - - - -	Total
$ 40,910,455 16,996,824 15,356,724 3,569,776 14,396,540 13,115,200 5,187,588 6,665,774 143,375 $ 116,342,256	- - - - - - - - -	- - - - - - - - -		- - - - - - - - -
	-	-		-

Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - 18,755,819 18,755,819 - - - - 18,755,819	Total
$ 4,086,249 4,086,249 74,145,052 18,755,819 92,900,871 20,460,870 12,567,216 16,533,098 49,561,184 $ 146,548,304	-	4,086,249		4,086,249
	-	4,086,249		4,086,249
	74,145,052 -	- -		74,145,052 18,755,819
	74,145,052	-		92,900,871
	- - -	- - -		- - -
	-	-		-
	74,145,052	4,086,249		96,987,120

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	March 31, 2020	March 31, 2020	March 31, 2020
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - - - - - - - -	Total
$ 32,566,389 16,495,502 27,168,288 6,551,225 19,513,830 7,046,560 3,979,288 6,814,069 171,391 $ 120,306,542	- - - - - - - - -	- - - - - - - - -		- - - - - - - - -
	-	-		-

2) Valuation techniques for financial instruments not measured at fair value

The Group’ s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

Financial liabilities measured at amortized cost.

If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

Valuation techniques for financial instruments measured at fair value

The fair value of the financial instruments traded in active markets is based on quoted market prices. The fair value of listed equity instruments is based on the market prices that were published at main stock exchanges.

If the financial instruments possessed by the Group have quoted market prices in active markets, the fair value was as follows:

The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices (includes publicly traded stocks).

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

4) There was no transfer between the fair value hierarchy levels for the three months ended March 31, 2021 and 2020.
5) Movement of financial instruments grouped into level 3

January 1, 2021 Total gains and losses recognized: In other comprehensive income Effect of exchange rate changes March 31, 2021 January 1, 2020 Total gains and losses recognized: In other comprehensive income Effect of exchange rate changes March 31, 2020	Financial assets at fair value through other comprehensive income Unquoted equity instruments $ 18,647,715 1,513,970 71 $ 20,161,756 $ 21,408,559 (2,740,909) 88,169 $ 18,755,819

6) The valuation procedures for fair value measurements being categorized within Level 3 is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price. According to the group’s accounting policy, at the reporting date, the analysis of value changes of remeasured or reevaluated assets and liabilities is performed to ensure the reasonability of the evaluation results.
7) The quantitative information of significant unobservable inputs (Level 3)

Most of the group’ s financial instruments that use Level 3 inputs have only one significant unobservable input. Only equity investment with no-active markets have multiple significant unobservable inputs.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Quantified information of significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income – unquoted equity instruments	Valuation technique Market comparable companies Net Asset Value Method	Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement Price to earnings ratio multiple, price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability The higher the multiple, the higher the fair value Not applicable Not applicable

8) Valuation model used in Level 3 fair value measurement - sensitivity analysis of the fair value to the reasonable replaceable assumption

The valuation models and assumptions used to measure the fair value of the financial instruments is reasonable. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

March 31, 2021 Financial assets at fair value through other comprehensive income – unquoted equity instruments	Input Price to earnings ratio multiple price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability	Recognized in other comprehensive income Change Favorable change Unfavorable change ± 1% $ 162,290 (162,290)

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2020 Financial assets at fair value through other comprehensive income – unquoted equity instruments March 31, 2020 Financial assets at fair value through other comprehensive income – unquoted equity instruments	Input Price to earnings ratio multiple price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability Price to earnings ratio multiple price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability	Recognized in other comprehensive income Change Favorable change Unfavorable change ± 1% $ 147,165 (147,165) ± 1% $ 151,984 (151,984)	Recognized in other comprehensive income	Recognized in other comprehensive income
				Unfavorable change
				(147,165)
				(151,984)

(v) Financial risk management

There were no material changes in financial risk management in comparison to Note 6(v) of the consolidated financial statements as of and for the year ended December 31, 2020.

(w) Capital management

There were no material changes in capital management target adopted for capital management in comparison to Note 6(w) of the consolidated financial statements as of and for the year ended December 31, 2020.

(x) Changes in liabilities come from financing activities

Changes of liabilities arising from financing activities were as follows:：

Short-term borrowings Short-term notes and bills payable Long term loan (including current portion) Bonds payable (including current portion) Lease liabilities Loans from related parties Total liabilities arisings from financing activities	January 1, 2021 $ 15,356,724 16,996,824 3,569,776 40,910,455 143,375 14,396,540 $ 91,373,694	Change in cash flows (278,657) 600,000 (1,730,046) - (9,453) 283,911 (1,134,245)	Changes in non-cash - 318 - 2,522 6,568 - 9,408	Effect of exchange rate changes (5,476) - (10,450) - - 13,014 (2,912)	March 31, 2021 15,072,591 17,597,142 1,829,280 40,912,977 140,490 14,693,465 90,245,945

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Short-term borrowings Short-term notes and bills payable Long term loan (including current portion) Bonds payable (including current portion) Lease liabilities Loans from related parties Total liabilities arisings from financing activities	January 1, 2020 $ 20,255,096 14,991,544 6,610,540 32,564,312 52,197 21,375,260 $ 95,848,949	Change in cash flows 6,858,411 1,500,000 (47,575) - (9,692) (1,960,036) 6,341,108	Changes in non-cash - 3,958 - 2,077 128,886 - 134,921	Effect of exchange rate changes 54,781 - (11,740) - - 98,606 141,647	March 31, 2020
					27,168,288 16,495,502 6,551,225 32,566,389 171,391 19,513,830
					102,466,625

(7) Related-party transactions:

(a) Name of related parties

Name of related party Relationship with Consolidated Company Formosa Petrochemical Corporation Associates Formosa Plastics Corp., U.S.A. Associates Formosa Heavy Industries Corp. Associates Mai Liao Power Corp. Associates Formosa Sumco Technology Corporation Associates Formosa Transportation Corp. Associates Wha Ya Park Management Consulting Corporation Associates Ltd. Formosa Resources Corporation Associates Formosa Group (Cayman) Limited Associates Hua Ya Power Corp. Associates Formosa Heavy Industries (Ningbo) Corp. Associates Japan Formosa Sumco Technology Corp. Associates Fujian Fuxin Special Steel Co., Ltd. Associates Formosa Transportation (Ningbo) Corp. Associates Formosa Automobile Corporation Associates Formosa Plastics Construction Corporation Associates Formosa Asahi Spandex Co., Ltd. Joint venture Formosa Daikin Advanced Chemical Co., Ltd. Joint venture Formosa Mitsui Advanced Chemical Co., Ltd. Joint venture Formosa Tokuyama Advanced Chemicals Co., Ltd. Joint venture FNan Ya Plastics Corporation Other related parties Formosa Chemicals and Fiber Corporation Other related parties

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of related party

Chang Gung Medical Foundation Nan Ya PCB Corporation PFG Fiber Glass Corporation Nan Chung Petrochemical Corporation Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics Film (Huizhou) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. Nan Ya Plastics (Indonesia) Co., Ltd. Nan Ya Plastics Corporation America Formosa Industries Corp., Vietnam Formosa Taffeta Co., Ltd. Formosa BP Chemicals Corp. Formosa Biomedical Technology Corp. Formosa Carpet Co., Ltd. Formosa Idemitsu Petrochemical Corp. Hong Jing Resources Corp. Formosa Power (Ningbo) Co., Ltd. Formosa Chemicals Industries (Ningbo) Co., Ltd. Formosa Plastics Marine Corp. Formosa Group Ocean Marine Corp Formosa Ha Tinh Steel Corporation Nan Ya Technology Corporation Inteplast Taiwan Corporation Formosa Ha Tinh (Cayman) Ltd. Xiamen Chang Gung hospital Formosa Port (Ningbo) Co., Ltd. Chang Gung Biotechnology Corporation Formosa Petrochemical Transportation Corporation, Ltd.

INTEPLAST GROUP Chang Gung University

Relationship with Consolidated 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 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 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 Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties

Other related parties Other related parties

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Significant related-party transactions

(i) Sales to related parties

The Group’s significant sales to related parties were as follows:

Associates Joint ventures Other related parties	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 1,871,202 34,916 6,600,784 $ 8,506,902	2020
		1,762,668 34,526 5,218,424
		7,015,618

The receivables from related parties were as follows:

Associates Joint ventures Other related parties	March 31, 2021 $ 1,096,195 8,067 2,888,433 $ 3,992,695	December 31, 2020 856,346 7,481 2,575,386 3,439,213	March 31, 2020
			787,561 5,712 1,916,403
			2,709,676

The selling prices and collection terms for the sales to related parties are not significantly different from those third-party customers, and receivables are collected on the 27th of the month following the month of sales. The terms of receivables from other foreign related parties are O/A 60 days, O/A 90 days or L/C at sight.

(ii) Purchase from related parties

The Group’s significant purchases from related parties were as follows:

Associates Formosa Petrochemical Corporation Other Other related parties	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 20,584,064 1,833,113 1,528,495 $ 23,945,672	2020
		15,173,839 1,916,697 744,721
		17,835,257

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The payables from related parties were as follows:

Associates Formosa Petrochemical Corporation Other Other related parties	March 31, 2021 $ 8,414,802 414,757 822,149 $ 9,651,708	December 31, 2020 6,272,990 399,809 429,766 7,102,565	March 31, 2020 4,246,376 424,095 251,514 4,921,985

The purchase price and payment terms for the purchase from related parties are not significantly different from those with third-party vendors, and payables are paid on the 27th of the month following the month of purchase.

(iii) Property plant and equipment
1) Disposal of property, plant and equipment (recognized as property, plant and equipment and right-of-use assets), the group has no related transactions for the three months ended March 31, 2021.
2) Purchase property, plant and equipment

Purchase of lands and equipment (recognized as property, plant and equipment) from related parties and the balance of payable were as follow：

Other related parties	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 60,946	2020
		105,255

The outstanding balance of the Group at the end of the period is as follow (recognized as other payable-related parties):

March 31, 2021 December 31, 2020 Other related parties $ 92,263 50,757 3) Acquisition of financial assets Financial Statement Account Number of Shares (in thousands) Transaction Shares Associates- Formosa Resources Corporation Investments accounted for using equity method 88,453 Shares of stock of Formosa Resources Corporation	March 31, 2020
	42,807
	For the three months ended March 31,2021
	$ 884,531

The Group has no related transactions for the three months ended March 31, 2020.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Loans to related parties

The Group’s significant financing transactions with related parties were as follows:

1)

Due from related parties (recognized as other receivables-related parties)	Due from related parties (recognized as other receivables-related parties)	Due from related parties (recognized as other receivables-related parties)
March 31, 2021 $ - 1,302,528 247,480 3,853,976 - $ 5,403,984	December 31, 2020 - - 249,039 4,243,086 - 4,492,125	March 31, 2020
		8,300,000 - 115,292 5,407,830 40,000
		13,863,122

As of March 31, 2021, December 31 and March 31, 2020, the interest revenue receivables from the abovementioned transactions amounted to $11,654 thousand, $7,363 thousand and $13,204 thousand, respectively, which was recognized as other receivables-related parties.

2)

Associates Formosa Plastics Corp., U.S.A.	Due to related parties (recognized as other payables–related parties) March 31, 2021 December 31, 2020 March 31, 2020 $ 14,693,465 14,396,540 19,513,830	Due to related parties (recognized as other payables–related parties) March 31, 2021 December 31, 2020 March 31, 2020 $ 14,693,465 14,396,540 19,513,830	Due to related parties (recognized as other payables–related parties) March 31, 2021 December 31, 2020 March 31, 2020 $ 14,693,465 14,396,540 19,513,830	Due to related parties (recognized as other payables–related parties) March 31, 2021 December 31, 2020 March 31, 2020 $ 14,693,465 14,396,540 19,513,830
	March 31, 2021 $ 14,693,465		December 31, 2020 14,396,540
				19,513,830

As of March 31, 2021, December 31 and March 31, 2020, the accrued interest expense from the abovementioned transactions amounted to $17,315 thousand, $17,959 thousand and $50,516 thousand respectively, which was recognized as other current liabilities.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Endorsements and guarantees

The Group’s endorsements guarantees to secure related parties’ loans were as follows:

Associates Formosa Group (Cayman) Limited Formosa Resources Corporation Other related Parties Formosa Ha Tinh (Cayman) Ltd.	March 31, 2021 $ 7,132,750 3,067,083 16,895,419 $ 27,095,252	December 31, 2020 7,127,000 3,064,610 18,967,581 29,159,191	March 31, 2020
			7,563,500 3,252,305 20,855,583
			31,671,388

(vi) Other transactions

1) The Group’ s income received from related parties, such as sewage treatment income, wharf usage income and utility and steam income was as follows:

Other receivables–related	Other receivables–related	parties
March 31, 2021 $ 15 4 9,470 $ 9,489	December 31, 2020 17 - 1,769 1,786	March 31, 2020
		- - -
		-

2) The Group’s expenses paid to related parties, such as sewage treatment expense, wharf usage expense, utility and steam expenses, transportation expense and restoration expense were as follows:

Associates Other related parties	Other payables–related parties	Other payables–related parties	Other payables–related parties
	March 31, 2021 $ 1,348,587 215,431 $ 1,564,018	December 31, 2020 1,434,109 221,057 1,655,166	March 31, 2020 1,402,263 214,422 1,616,685

(vii) Receivables from payment on behalf of related parties

1) The Group paid for construction design service fees on behalf of related parties as follows:

Associates Fujian Fuxin Special steel Cor., Ltd	Other receivables–related parties	Other receivables–related parties	Other receivables–related parties
	March 31, 2021 $ 1,983,021	December 31, 2020 1,997,928	March 31, 2020 1,893,417

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(viii) Rental (recognized as other income)

The Group lease its office and building to related parties, and derived rental income thereon as follows:

Associates Formosa Petrochemical Corporation Formosa Heavy Industries Corp. Other Joint ventures Formosa Daikin Advanced Chemical Co., Ltd. Other Other related parties Nan Ya Plastics Corporation Other	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 4,142 14,691 1,742 3,187 2,013 6,066 12,486 $ 44,327	2020
		4,142 14,691 1,742 4,109 149 6,327 4,455
		35,615

The rentals charged to related parties are determined based on the local market prices, and rents are collected depending on the contract periods (e.g. monthly, semi-annually or annually).

(c) Compensation of key management

The compensation to key management was as follows:

Short-term employee benefits	For the three months ended March 31,	For the three months ended March 31,
	2021 $ 18,449	2020
		17,730

(8) Pledged assets:

The Group’s assets pledged to secure loans were as follows:

Classification of assets Nature of Pledged Assets Property plant and equipment Land and building Refundable deposits (classified under other assets) Certificate of deposit	March 31, 2021 $ 2,156,153 92,675 $ 2,248,828	December 31, 2020 2,156,562 92,675 2,249,237	March 31, 2020
			2,157,852 88,535
			2,246,387

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(9) Commitments and contingencies:

(a) The amounts of endorsements and guarantees for related parties were as follows:

Endorsements and guarantees	March 31, 2021 $ 27,095,252	December 31, 2020 29,159,191	March 31, 2020
			31,671,388

(b) The amounts of unused outstanding letters of credit for the importation of raw materials for related parties were as follows:

Unused outstanding letters	March 31, 2021 $ 354,414	December 31, 2020 456,046	March 31, 2020
			283,416

(c) As of March 31, 2021, the Company’ s investee, Formosa Ha Tinh (Cayman) Ltd., signed several contracts of syndicated credit lines with different banks amounting to US$1,485,000 thousand and credit line of $1,437,500 thousand for its operational needs. According to the requirement of the bank consortium, the Company together with the other related parties have to issue a letter of undertaking and to manage the necessary funds to fulfill the repayment of obligations when needed.

(10) Losses Due to Major Disasters: None

(11) Subsequent Events: None

(12) Other:

(a) The nature of operating costs and expenses of the Group was as follows:

	For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2021	For the three months ended March 31, 2020	For the three months ended March 31, 2020	For the three months ended March 31, 2020	For the three months ended March 31, 2020
	Operating costs	Operating expenses	Non- operating expenses	Total	Operating costs	Operating expenses	Non- operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension Remuneration of directors Others Depreciation expenses Amortization expenses	1,403,138 119,316 84,430 - 75,849 1,407,482 339,338	926,232 70,449 40,926 1,840 24,968 420,900 360	- - - - - 521 2,522	2,329,370 189,765 125,356 1,840 100,817 1,828,903 342,220	1,419,710 108,145 70,088 - 76,625 1,372,798 375,148	934,916 63,396 43,602 1,830 26,134 393,412 865	- - - - - 514 2,776	2,354,626 171,541 113,690 1,830 102,759 1,766,724 378,789

(b) Seasonality of operations

The Group's operations were not affected by seasonality or cyclicality factors.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The significant transactions required by the “Guidelines” for the Group were as follows:

(i) Fund financing to other parties:

(In Thousands of New Taiwan Dollars)

No.	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing	Note
													Item	Value
0 0 0 0 0 0 1 1	The Company The Company The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd.	Formosa Petrochemical Corp. Formosa Chemicals & Fiber Corp. Nan Ya plastic Corp. Formosa Heavy Industries Corp. Formosa Group Ocean Marine Corp. Japan Formosa Sumco Technology Corp. Formosa Mitsui Advanced Chemical Co., Ltd. Formosa Heavy Industries (Ningbo) 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	4,500,000 4,500,000 4,500,000 5,700,000 4,852,082 600,000 247,494 (CNY 29,000) 1,302,600 (CNY 300,000)	4,500,000 4,500,000 4,500,000 5,700,000 4,183,976 600,000 247,494 (CNY 29,000) 1,302,600 (CNY 300,000)	- - - - 3,853,976 - 247,480 (CNY 29,000) 1,302,528 (CNY 300,000)	1.230% 1.230% 1.230% 1.230% 1.230% 1.000% 3.080% 3.080%	2 2 2 2 2 2 2 2	- - - - - - - -	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - - - - -	- - - - - - - -	- - - - - - - -	71,831,467 71,831,467 71,831,467 71,831,467 71,831,467 71,831,467 17,715,072 22,143,840	143,662,934 143,662,934 143,662,934 143,662,934 143,662,934 143,662,934 44,287,681 44,287,681	Note 4 Note 4

Note 1: (1) Those with business contact please fill in 1

(2) Those necessary for short-term financing please fill in 2.

Note 2: (1) The maximum financing allowed should not exceed 50% of the Company’s net equity, and the maximum short-term financing to companies with no transaction with the Company could not exceed 40% of the Company’s net equity as of March 31, 2021.

(2) The Company grants financing to a related party even if the Company has no normal business transactions with the entity. However, such financing is limited to 25% of the related party’s equity based on the current independent auditor’s report.

(3) The Company grants financing to an entity even if the Company has no normal business transactions with the entity. However, such financing is limited to 20% of the Company’s equity based on the current independent auditor’s report.

(4) 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 3: The ending balance was approved by the Board of Directors.

Note 4: The exchange rate of NTD to CNY for the highest balance of financing to other parties during the period and for the ending balance was TWD 4.342 to CNY1; and the exchange rate for the actual usage during the period was TWD4.3417589 to CNY1.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No.	Name of guarantor	Counter- guarant endors	party of ee and ement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0 0 0	The Company The Company The Company	Formosa Group (Cayman) Limited Formosa Ha Tinh (Cayman) Limited Formosa Resources Corporation	6 6 6	233,452,268 233,452,268 233,452,268	7,132,750 18,903,708 3,067,083	7,132,750 16,895,419 3,067,083	7,132,750 16,895,419 3,067,083	- - -	% 1.99 % 4.70 % 0.85	466,904,536 466,904,536 466,904,536	N N N	N N N	N N N

Note 1: The guarantees and endorsements of the Company and its subsidiaries were listed in the form of numbers with the rules below:

  - (1) The Company is represented by 0.

  - (2) The subsidiaries are represented numerically starting from 1.

Note 2: There are seven conditions in which the Company may have guarantees or endorsements for other parties as follows:
- (1) The Company has business relationship.
- (2) The Company holds directly and indirectly more than 50% of the voting shares of the subsidiaries.
- (3) In aggregate, the Company holds directly or its subsidiaries hold indirectly more than 50% of the investee.
- (4) Subsidiaries in which the Company holds directly or indirectly more than 90% of the voting shares make endorsement and guarantees for each other.
- (5) The Company is required to provide guarantees or endorsements for the construction project based on the construction contract.
- (6) The stockholders of the Company provide guarantees or endorsements for the investee in proportion to their stockholding percentage.
- (7) According to Consumer Protection Act, companies are required to provide guarantees and endorsements for joint and several liability if take part in business of preconstruction real estate.
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.
(iii) Securities held as of March 31, 2021 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company The Company The Company The Company The Company The Company	Asian Pacific Investment Corp. Mai-Liao Harbor Administration Corp. Taiwan Aerospace Corp. Chinese Television System Inc. China Investment & Development Co., Ltd. Formosa Plastics Development Corp.	Other related parties Other related parties - - - Other related parties	Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current	68,743 39,574 1,103 1,769 1,287 18,255	2,404,630 937,832 14,907 38,091 21,359 268,719	% 16.17 % 17.99 % 0.81 % 1.05 % 0.80 % 18.00	2,404,630 937,832 14,907 38,091 21,359 268,719

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title		Ending balance	Ending balance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair 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 Formosa Plastics Corp. (Cayman Ltd) The Company The Company The Company The Company	Xiangho Aircraft Leasing Corp. Formosa Petrochemical Transportation Corporation, Ltd. Formosa Network Technology Corp. Formosa Plastics Marine Corp. Formosa Group Ocean Investment Corp. Formosa Plastics Maritime Corp. Guangyuan Investment Corp. Central Leasing International Corp. Inteplast Taiwan Corporation Mega Growth Venture Capital Co., Ltd. Minima Technology Co., Ltd. Formosa Ha Tinh (Cayman) Limited Swancor (Jiangsu) Carbon Fiber Composite Co., Ltd. Nan Ya Plastics Corporation Formosa Chemicals & Fibre Corporation Nan Ya Technology Corp. Mega Prosperity Private Placement Fund	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 Other related parties Other related parties -	Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss	2,071 2,642 2,925 2,429 3 354 3,750 2,373 2,160 2,500 7,405 621,178 - 783,357 198,744 334,815 12,479	- 71,581 160,230 258,840 4,790,872 285,371 25,088 - 47,483 21,325 198,306 10,456,473 20,001,107 160,649 20,161,756 62,511,878 17,409,969 30,769,536 110,691,383 3,898,180	% 9.55 % 12.00 % 12.50 % 15.00 % 19.00 % 18.11 % 3.91 % 1.43 % 18.00 % 1.97 % 19.07 % 11.43 % 16.11 % 9.88 % 3.39 % 10.85 % 25.00	- 71,581 160,230 258,840 4,790,872 285,371 25,088 - 47,483 21,325 198,306 10,456,473 20,001,107 160,649 20,161,756 62,511,878 17,409,969 30,769,536 110,691,383 3,898,180

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of $300 thousand or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Category and name of security	Account name	Name of counter-party	Relationship with the company	Beginning Balance	Beginning Balance	Purchases	Purchases	Sales	Sales	Sales	Sales	Ending Balance	Ending Balance
					Shares	Amount	Shares	Amount	Shares	Price	Cost	Gain (loss) on disposal	Shares	Amount
The Company	Securities-Formosa Resources Corporation	Investments accounted for using equity method	Formosa Resources Corporation	Associates	741,594	6,169,287	88,453	884,531	-	-	-	-	830,047	7,042,303 (Note 1)

Note 1: The ending balance includes the share of profit or loss of subsidiaries, associates and joint ventures accounted for using equity method of ($11,515) thousand.

(v) Acquisition of individual real estate with amount exceeding the lower of $300 thousand or 20% of the capital stock: None.
(vi) Disposal of individual real estate with amount exceeding the lower of $300 thousand or 20% of the capital stock: None.
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions wit from	h terms different others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company The Company The Company The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries Corporation Formosa Industries Corporation The Company The Company	Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Formosa Petrochemical Corporation Formosa Chemicals Industries (Ningbo) Co., Ltd Formosa Industries Corp., Vietnam Formosa Industries (Ningbo) Co., Ltd. Formosa Plastics Corp., U.S.A. The Company Nan Ya Plastics Film (Nantong) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. The Company INTEPLAST GROUP Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation	Other related parties 〃 Associates Other related parties Other related parties Parent- subsidiary Associates Parent- subsidiary Other related parties 〃 Parent- subsidiary Other related parties 〃〃	(Sales) 〃〃 (Sales) (Sales) 〃〃〃〃〃〃 Purchase 〃	(3,447,088) (1,513,418) (1,431,347) (418,886) (118,747) (3,469,373) (344,741) (397,862) (283,361) (138,838) (175,185) (324,149) 496,901 602,002	% (7.21) % (3.16) % (2.99) % (0.88) % (0.25) % (7.25) % (0.72) % (2.73) % (1.95) % (0.95) % (7.86) % (14.54) % 1.63 % 1.98	Before the 27th of the following month Before the 27th of the following month Before the 27th of the following month O/A 60 days O/A 60 days O/A 90 days O/A 90 days Before the 30th of the following month Before the 30th of the following month Before the 30th of the following month Before the 10th of the following month Before the 10th of the following month Before the 27th of the following month Before the 27th of the following month	- - - - - - - - - - - - - -		1,437,907 639,772 743,121 309,192 60,796 2,143,429 343,970 202,110 85,368 80,230 45,097 96,435 (209,598) (301,041)	8.87% 3.95% 4.58% 1.91% 0.37% 13.22% 2.12% 3.61% 1.52% 1.43% 5.90% 12.63% (1.82)% (2.61)%	Note 1 Note 1 Note 1

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company The Company Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries Corporation	Formosa Petrochemical Corporation Formosa Heavy Industries Corp. The Company Nan Ya Plastics Corporation Formosa Plastics Corp., U.S.A.	Associates 〃 Parent- subsidiary Other related parties Associates	Purchase 〃〃〃〃	20,584,064 391,869 8,057,700 388,376 1,441,244	% 67.59 o % 1.29 o % 52.72 % 2.54 % 93.89 o	Before the 27th f the following month Before the 27th f the following month O/A 90 days O/A 90 days Before the 10th f the following month	- - - - -		(8,414,802) (28,061) (3,700,326) (297,712) (386,696)	(72.94)% (0.24)% (67.13)% (5.40)% (91.99)%	Note、 Note 1

Note: Including the purchases of raw materials on behalf of related parties.

Note 1: The transaction has already been written off in the consolidated financial statements.

(viii) Receivables from related parties with amounts exceeding the lower of $100 thousand or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue	Overdue	Amounts received in subsequent period	Allowance for bad debts	Note
					Amount	Action taken
The Company The Company The Company The Company The Company The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd.	Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Formosa Petrochemical Corporation Formosa Chemicals Industries (Ningbo) Co., Ltd Formosa Industries (Ningbo) Co., Ltd. Formosa Plastics Corp., U.S.A. Formosa Group Ocean Marine Corp. Formosa Industries (Ningbo) Co., Ltd. Fujian Fuxin Special Steel Co., Ltd The Company Formosa Mitsui Advanced Chemical (Ningbo) Co., Ltd. Formosa Heavy Industries (Ningbo) Corp.	Other related parties Other related parties Associates Other related parties Parent-subsidiary Associates Other related parties Parent-subsidiary Associates Parent-subsidiary Joint venture Other related parties	1,437,907 639,772 743,121 309,192 2,143,429 343,970 3,853,976 1,556,897 1,983,021 202,110 247,480 1,302,528	3.44 3.67 3.28 1.76 2.76 1.19 - 4.59 - 4.29 - -	- - - - - - - - - - - -		937,011 414,837 487,882 142,023 406,738 - - - - - - -	- - - - - - - - - - - -	Note Note Note

Note: The transaction has already been written off in the consolidated financial statements.

(ix) Trading in derivative instruments: Please refer to notes .

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(x) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

				(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No.	Name of company	Name of counter-party	Nature of relationship	Intercompany transactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0 0 0 0 1 1 2 2	The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd Formosa Industries (Ningbo) Co., Ltd Formosa Industries Corporation Formosa Industries Corporation	Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. The Company The Company The Company The Company	1 1 1 1 2 2 2 2	Sales Accounts receivable Other revenue (Note 3) Other receivables－ related parties Sales Accounts receivable Sales Accounts receivable	3,469,373 2,143,429 4,588,327 1,556,897 397,862 202,110 175,185 45,097	O/A 90 days 〃 O/A 60 days 〃 Before the 30th of the following month 〃 Before the 10th of the following month 〃	5.72% 0.42% 7.57% 0.31% 0.66% 0.04% 0.29% 0.01%

==> picture [180 x 93] intentionally omitted <==

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

Note 1: Assigned numbers represent the following:
1. 0 represents the parent company.
2. The subsidiaries are represented numerically starting from 1.
Note 2: The terms of transactions are defined as follows:
1. Represents the parent company having transaction with a subsidiary.
2. Represents a subsidiary having transaction with the parent company.
3. Represents a subsidiary having transaction with a subsidiary.
----- End of picture text -----

Note 3: Including the purchases of raw materials on behalf of related parties.

(b) Information on investees:

The following is the information on investees for the three months ended March 31, 2021 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of March 31, 2021	Balance as of March 31, 2021	Balance as of March 31, 2021	Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2021	December 31, 2020	Shares (thousands)	Percentage of ownership	Carrying 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 The Company The Company	Formosa Petrochemical Corporation Formosa Plastics Corp., U.S.A. Formosa Heavy Industries Corp. Sky Dragon Investment Limited Formosa Plastics Corp. (Cayman Ltd.) Mai Liao Power Corp. Formosa Sumco Technology Corp. Formosa Transportation Corp. Formosa Fairway Corp. Yi-Jih Development Corp. Ya Tai Development Corp. Formosa Asahi Spandex Co., Ltd. Formosa Automobile Corporation Wha Ya Park Management Consulting Corporation Ltd. Formosa Daikin Advanced Chemical Co., Ltd.	Taiwan U.S.A Taiwan Samoa Cayman Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Petrochemicals Chemicals Mechanical equipment Investment Investment Electricity Electronics manufacture Transportation Transportation Construction Development of land Artificial fiber Automobile Consulting service Chemical industry	30,144,951 5,614,024 2,498,463 13,221,416 27,218,686 5,985,531 1,709,987 110,664 33,330 12,003 54,034 501,752 270,442 341 100,000	30,144,951 5,614,024 2,498,463 13,221,416 27,218,686 5,985,531 1,709,987 110,664 33,330 12,003 54,034 501,752 270,442 341 100,000	2,720,549 70 651,828 425,800 77 601,733 112,708 6,566 4,698 1,200 1,306 50 27,044 33 24	% 28.56 % 22.66 % 32.92 % 50.00 % 100.00 % 24.94 % 29.06 % 33.33 % 33.33 % 28.72 % 45.04 % 50.00 % 45.00 % 33.00 % 50.00	94,481,173 61,513,486 7,054,889 4,534,364 44,731,619 12,617,028 6,001,048 1,163,192 63,779 20,144 18,055 1,275,526 306,348 3,031 1,257,839	17,900,835 756,463 122,648 (321,107) 2,144,441 1,674 326,316 79,427 (13,407) (52) (94) 75,890 104,477 5 95,535	4,928,497 171,397 37,481 (160,554) 2,144,441 418 94,826 26,476 (4,467) (15) (43) 37,945 47,014 2 47,768	Note, Note 2 Note, Note 2 Note, Note 2 Note, Note 2 Note, Note 1, Note 2 Note, Note 2 Note, Note 2 Note, Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of March 31, 2021	Balance as of March 31, 2021	Balance as of March 31, 2021	Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2021	December 31, 2020	Shares (thousands)	Percentage of ownership	Carrying value
The Company The Company The Company The Company The Company The Company Formosa Plastics Corp. (Cayman) Ltd. Formosa Industries Corporation Formosa Industries Corporation	Formosa Resources Corporation Formosa Environmental Technology Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Industries Corporation Formosa Tokuyama Advanced Chemicals Co., Ltd. Formosa Industries (Hong Kong) Limited Formosa Olefins, L.L.C. Lolita Packaging, L.L.C.	Taiwan Taiwan Taiwan Cayman U.S.A Taiwan Hong Kong U.S.A U.S.A	Mining industry Environmental industry Construction Investment Chemicals Semiconductor Reinvestment Olefins Transportation	8,300,471 417,145 600,000 377 15,640,245 125,000 15,801,889 (USD501,902) 3,527,939 (USD108,075) 306,478 (USD9,880)	7,415,940 417,145 600,000 377 15,640,245 125,000 15,801,889 (USD501,902) 3,527,939 (USD108,075) 306,478 (USD9,880)	830,047 41,714 60,000 13 5 12,500 - - -	% 25.00 % 24.34 % 33.33 % 25.00 % 100.00 % 50.00 % 100.00 % 33.00 % 38.00	7,042,303 227,709 567,490 658,822 10,717,519 117,001 44,693,522 ( USD1,566,490 ) 2,971,329 (USD74,721) 60,312 (USD4,115)	(46,061) 1,571 (2,736) 36,101 (54,501) (15,865) 2,150,443 (USD75,744) 230,001 (USD8,101) (125,951) (USD-4436)	(11,515) 382 (912) 9,025 (54,501) (7,933) 2,150,443 (USD75,744) 75,900 (USD2,673) (47,861) (USD-1686)	Note, Note 2 Note, Note 2 Note 2 Note, Note 2 Note, Note 1, Note 2 Note 2 Note, Note 1, Note 2, Note 3 Note 2, Note 3 Note 2, Note 3

Note ： Including cumulative translation adjustments.

Note 1：The transaction has already been written off in the consolidated financial statements.

Note 2：Long-term equity investments under equity method.

Note 3：The exchange rate of New Taiwan dollars to US dollars on March 31, 2021, was 28.5310 to 1. The average exchange rate of New Taiwan dollars to US dollars for the three months ended March 31, 2021, was 28.3911 to 1.
(c) Information on overseas branches and representative offices:
(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capita	l Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2021	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of March 31, 2021	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) (Note 3)	Book value	Accumulated remittance of earnings in currentperiod
					Outflow	Inflow
Formosa Industries (Ningbo) Co., Ltd. (note 2) Formosa Electronic (Ningbo) Co., Ltd. (note 2) Formosa Mitsui Advanced Chemical Co., Ltd. Fujian Fuxin Special Steel Co., Ltd Swancor (Jiangsu) Carbon Fiber Composite Co., Ltd.	Plastics Electronics Electrolyte Steel Carbon fiber	31,188,509 (USD989,023 74,648 (USD2,260 244,196 (USD8,200 34,347,344 (USD1,460,000 616,986 (USD19,000	) ( 2 ) ) ( 2 ) ) ( 2 ) ) ( 2 ) ) ( 2 )	26,928,755 (USD845,270) 66,137 (USD2,000) 122,098 (USD4,100) 13,221,416 (USD425,800) 99,993 (USD3,060)	- - - - -	- - - - -	26,928,755 (USD845,270) 66,137 (USD2,000) 122,098 (USD4,100) 13,221,416 (USD425,800) 99,993 (USD3,060)	2,141,369 (USD75,424) 9,074 (USD320) (11,941) (USD-421) (550,512) (USD-19,390) 149,512 (USD5,266)	100.00% 100.00% 50.00% 29.16% 16.11%	2,141,369 (USD75,424) 9,074 (USD320) (5,972) (USD-210) (160,554) (USD-5,655) -	44,287,681 (USD1,552,265) 405,842 (USD14,225) (31,526) (USD1,105) 4,533,930 (USD158,912) 160,649 (USD5,631)	- - - - -

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.

Note 2: The transaction has already been written off in the consolidated financial statements.

Note 3 : The amount is based on financial statements reviewed by CPA of Formosa Plastic Corp.(the mother company), except for Formosa Mitsui Advanced Chemical Co., LTD and Fujian Fuxin Special Steel Co., Ltd., which are evaluated based on financial statements that have not been reviewed, and for Swanc or (Jiangsu) Carbon Fiber Composite Co., Ltd., which is evaluated as financial assets at fair value through other comprehensive income- non-current.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(ii) Limitation on investment in Mainland China:

	Accumulated Investment in Mainland China as of March 31, 2021	Investment Amounts Authorized by Investment Commission, MOEA (Note 1)	Upper Limit on Investment (Note 2)
	40,438,399 (USD 1,280,230)	40,635,077 (USD 1,424,243)	-

Note: The exchange rate of New Taiwan dollars to US dollars on March 31, 2021, was 28.531 to 1.

Note 1: Including US$144,013 thousand approved capital increase out of retained earnings.

Note 2: The Industrial Development Bureau of the MOEA issued a letter to the Company stating that it qualifies under Section 12 of the Statute for Upgrading Industries.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information on significant transactions”.

(d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Chang Gung Medical Foundation	601,011,035	% 9.44
Formosa Chemicals and Fiber Corporation	486,978,693	% 7.64
The business department of Standard Chartered International Commercial Bank is entrusted with the custody of Credit Suisse Bank-Credit Suisse Singapore Branch investment account	398,731,554	% 6.26

(i) The information on major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, summarized the shareholders who held over 5% of total non-physical common stocks and preferred stocks (including treasury stocks) on the last business date of each quarter. The registered non-physical stocks may be different from the capital stocks disclosed in the financial statement due to different calculations basis.
(ii) If shares are entrusted, the above information regarding such shares will be revealed by each trustors of individual trust account, The shareholders holding more than 10% of the total shares of the company should declare insider’ s equity according to Securities and Exchange Act. The numbers of the shares declared by the insider include the shares of the trust assets which the insider has discretion over use. For details of the insider’s equity announcement please refer to the TWSE website.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Information on investment in mainland China:

Operating segments are combined and reconciled as follows:

		For the	three months e	nded March 31,	2021		Total 60,601,937 -
Plastic division $ 20,717,067 303,014 $ 21,020,081 $ 6,041,150	Polyolefin division 12,234,908 7,898 12,242,806 2,222,055	Polypropylene division 9,767,617 10,732 9,778,349 1,029,883 For the	Tairylan division 10,126,296 21,588 10,147,884 2,184,489 three months e	Chemistry division 6,782,737 430,030 7,212,767 1,676,270 nded March 31,	Others divisions 973,312 1,734,916 2,708,228 226,817 2020	Adjustments and eliminated - (2,508,178) (2,508,178) 4,681,490
							60,601,937
							18,062,154
							Total 42,019,180 -
Plastic division $ 15,000,586 342,989 $ 15,343,575 $ 2,114,503 Plastic division $ 30,941,906 $ 28,996,176 $ 26,869,958 Plastic division $ 4,794,779 $ 4,860,295 $ 3,253,074	Polyolefin division 8,600,305 430,510 9,030,815 (76,325) Polyolefin division 38,543,033	Polypropylene division 6,683,430 8,799 6,692,229 450,294 Polypropylene division 21,775,601	Tairylan division 6,048,027 13,200 6,061,227 (554,550) Tairylan division 23,634,655	Chemistry division 4,735,985 306,269 5,042,254 500,085 Chemistry division 7,252,030	Others divisions 950,847 1,121,888 2,072,735 175,701 Others divisions 446,743,286 421,068,884 408,538,284 Others divisions 124,774,174 121,577,220 122,220,520	Adjustments and eliminated - (2,223,655) (2,223,655) (2,480,112) Adjustments and eliminated (58,965,198) (54,525,690) (59,122,220) Adjustments and eliminated (3,726,301) (1,006,749) (1,492,993)
							42,019,180
							129,596
							Total 509,925,313
	37,366,934	18,838,077	21,677,004	5,859,038			479,280,423
	38,963,335	16,974,357	22,844,970	5,107,129			460,175,813
	Polyolefin division 17,710,134	Polypropylene division 4,525,664	Tairylan division 2,088,955	Chemistry division 600,573			Total 150,767,978
	17,188,904	2,278,123	1,536,343	310,147			146,744,283
	21,534,335	1,773,994	1,342,361	322,585			148,953,876

AI assistant

FPC — Interim / Quarterly Report 2021

51762_rns_2021-12-02_28688c3d-bda1-480a-8bbf-c31b164c3339.pdf

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

Other Matter

KPMG

Notes to Readers

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

Reviewed only, not audited in accordance with generally accepted auditing standards

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2021 and 2020

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three-month periods ended March 31, 2021 and 2020

Notes to the Consolidated Financial Statements

March 31, 2021 and 2020

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

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of significant accounting policies:

(a) Statement of compliance

(b) Basis of consolidation

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Employee Benefits

(d) Income Tax

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Other receivables

(e) Inventories

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Associates

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Joint ventures

(iii) Collaterals

(g) Property, plant and equipment

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Right-of-use assets

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Short-term borrowings

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Long-term debts

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Lease liabilities

(i) Real estate leases

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

(n) Employee benefits

(i) Defined benefit plan

(ii) Defined contribution plan

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Income tax

(p) Capital and other equity

FPC Interim / Quarterly Report 2021