FPC - Interim / Quarterly Report 2021

Stock Code:1301

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Six Months Ended June 30, 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 11～12 12～49 50～57 57 57 58 58 58 59～64 65 65～66 66 67

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 June 30, 2021 and 2020, and the related consolidated statements of comprehensive income for the three months and six months ended June 30, 2021 and 2020, as well as the changes in equity and cash flows for the six months ended June 30, 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 $26,395,905 thousand and $34,326,153 thousand, constituting 5.14% and 7.34% of the consolidated total assets; and the total liabilities amounting to $14,921,306 thousand and $20,703,657 thousand, constituting 9.63% and 11.65% of the consolidated total liabilities as of June 30, 2021 and 2020, respectively; as well as the total comprehensive income (loss) amounting to $757,080 thousand, $(1,983,129) thousand, $710,994 thousand and $(4,433,449) thousand, constituting 5.24%, (27.98)%, 1.73% and 14.37% of the consolidated total comprehensive income (loss) for the three-month and six-month periods ended June 30, 2021 and 2020, respectively.

Furthermore, as stated in Note 6(f), the other equity accounted investments of the Group in its investee companies of $102,438,301 thousand and $100,410,169 thousand as of June 30, 2021 and 2020, respectively, and its equity in net earnings on these investee companies of $2,644,280 thousand, $199,543 thousand, $2,858,816 thousand and $331,838 thousand for the three-month and six-month periods ended June 30, 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 June 30, 2021 and 2020, and of its consolidated financial performance for the three months and six months ended June 30, 2021 and 2020, as well as its consolidated cash flows for the six months ended June 30, 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 $101,101,920 thousand and $82,271,326 thousand, constituting 19.70% and 17.58% of the consolidated total assets as of June 30, 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 $4,001,587 thousand, $(2,378,556) thousand, $9,024,910 thousand and $(4,959,324) thousand, constituting 16.28%, 2,222.08%, 21.16% and (21,988.67)% of the consolidated income before income tax for the three-month and six-month periods 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) August 11, 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 June 30, 2021 and 2020

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

June 30, 2021, December 31 and June 30, 2020 (Expressed in Thousands of New Taiwan Dollars)

June 30, 2021 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 12,393,808 2 1110 Current financial assets at fair value through profit or loss (Note 6(b)) 3,811,937 1 1120 Current financial assets at fair value through other comprehensive income (Note 6(b)) 108,693,691 21 1150 Notes receivable (Notes 6(c)(r)) 3,616,737 1 1170 Accounts receivable, net (Notes 6(c)(r)) 13,869,986 3 1180 Accounts receivable－related parties (Notes 6(c)(r) and 7) 4,327,174 1 1200 Other receivables (Note 6(d)) 2,764,855 1 1210 Other receivables－related parties (Notes 6(d) and 7) 7,798,574 1 130X Inventories (Note 6(e)) 20,481,241 4 1470 Other current assets 5,501,777 1 Total current assets 183,259,780 36 Non-current assets: 1517 Financial assets at fair value through other comprehensive income-non-current (Note 6(b)) 20,481,683 4 1550 Investments accounted for using equity method (Note 6(f)) 203,540,221 40 1600 Property, plant and equipment (Note 6(g), 7 and 8) 91,848,196 18 1755 Right-of-use assets (Note 6(h)) 1,116,584 - 1780 Intangible assets 621,852 - 1840 Deferred tax assets 2,428,391 - 1900 Other non-current assets (Note 8) 9,996,788 2 Total non-current assets 330,033,715 64 Total assets $ 513,293,495 100	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	June 30, 2020 Amount % 24,024,730 5 4,023,306 1 86,073,509 18 1,833,305 - 7,919,773 2 3,093,502 1 8,542,942 2 15,948,018 4 15,561,196 3 5,579,448 1 172,599,729 37 15,959,662 3 182,681,495 39 83,796,488 18 1,130,198 - 499,458 - 3,004,394 1 8,277,796 2 295,349,491 63 467,949,220 100 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	June 30, 2021		December 31, 2020		June 30, 2020
			Amount %		Amount %		Amount %
			$ 8,036,085 2 17,095,561 3 4,644,496 1 7,590,990 1 21,081,400 4 1,681,558 - 5,445 - 6,246,333 1 - - 13,992,393 3 80,374,261 15 33,019,167 6 2,601,601 1 18,374,783 4 125,534 - 14,353,050 3 5,959,602 1 157,680 - 74,591,417 15 154,965,678 30 63,657,408 13 11,740,912 2 67,780,313 13 71,352,267 14 71,013,054 14 210,145,634 41 72,783,863 14 358,327,817 70 $ 513,293,495 100		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		19,714,173 4 16,484,375 4 2,199,470 1 5,866,966 1 29,438,726 6 20,770,124 4 37,763 - 1,648,209 - 2,939,702 1 14,469,923 3 113,569,431 24 39,257,202 8 309,373 - 16,913,065 4 124,510 - 593,200 - 6,796,005 2 90,642 - 64,083,997 14 177,653,428 38 63,657,408 14 11,729,088 2 65,791,185 14 68,879,676 15 34,638,244 7 169,309,105 36 45,600,191 10 290,295,792 62 467,949,220 100

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 and six months ended June 30, 2021 and 2020

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

For the three months ended June 30,	For the three months ended June 30,	For the three months ended June 30,	For the three months ended June 30,	For the three months ended June 30,	For the six mo June	nths ended 30, 2020 Amount % 85,003,282 100 74,418,107 88 10,585,175 12 2,795,415 3 2,198,934 2 678,668 1 (239) - 5,672,778 6 4,912,397 6 229,487 - 81,346 - 134,666 - (707,856) (1) (4,627,486) (5) (4,889,843) (6) 22,554 - 1,046,867 1 (1,024,313) (1) (21,451,766) (25) (5,946,608) (7) - - (27,398,374) (32) (2,554,618) (3) (87,234) - (216,863) - (2,424,989) (3) (29,823,363) (35) (30,847,676) (36) Before After - (0.16)
			2020 Amount % 42,984,102 100 37,701,696 88 5,282,406 12 1,408,089 3 1,095,797 2 359,693 1 (1,177) - 2,862,402 6 2,420,004 6 114,939 - 43,443 - (195,820) - (310,595) (1) (2,179,013) (5) (2,527,046) (6) (107,042) - 523,607 1 (630,649) (1) 9,486,171 22 803,631 2 - - 10,289,802 24 (2,582,716) (6) (129,531) - (141,888) - (2,570,359) (6) 7,719,443 18 7,088,794 17 Before After		2021 Amount % 132,254,846 100 93,573,808 71 38,681,038 29 4,158,225 3 2,469,732 2 705,414 - 46,593 - 7,379,964 5 31,301,074 24 119,030 - 77,555 - (314,813) - (422,532) (1) 11,883,726 9 11,342,966 8 42,644,040 32 7,453,397 5 35,190,643 27 8,219,663 6 201,625 - - - 8,421,288 6 (2,506,623) (2) (153,784) - (116,250) - (2,544,157) (2) 5,877,131 4 41,067,774 31 Before After 6.70 5.53
	Before		Before		Before 6.70	Before -
$ 3.86		3.18	(0.02)	(0.10)

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 six-month periods ended June 30, 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 - (1,024,313) - - - (1,024,313) - (3,732,416) 4,910,774 (4,910,774) - (28,009,259) - (5,183) - - - - 68,879,676 34,638,244 68,879,676 55,559,015 - 35,190,643 - - - 35,190,643 - (1,989,128) 2,472,591 (2,472,591) - (15,277,778) - 2,893 - - - - 71,352,267 71,013,054	Total	other equity inte
						Exchange differences on translation of foreign financial statements (5,278,250) - (2,468,996) (2,468,996) - - - - - - (7,747,246) (9,603,060) - (2,539,771) (2,539,771) - - - - - - (12,142,831)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 80,701,025 - (27,398,374) (27,398,374) - - - - - - 53,302,651 76,471,804 - 8,421,288 8,421,288 - - - - - - 84,893,092
	Ordinary shares		Legal reserve		Special reserve 63,968,902 - - - - 4,910,774 - - - - 68,879,676 68,879,676 - - - - 2,472,591 - - - - 71,352,267
$ 63,657,408 - - - - - - - - - $ 63,657,408 $ 63,657,408 - - - - - - - - - $ 63,657,408	$ 63,657,408	11,724,498	62,058,769					349,153,320
	- -	- -	- -					(1,024,313) (29,823,363)
	-	-	-					(30,847,676)
	- - - - - -		3,732,416 - - - - -					- - (28,009,259) (5,183) 5,394 (804)
			65,791,185					290,295,792
			65,791,185					332,536,140
			- -					35,190,643 5,877,131
			-					41,067,774
			1,989,128 - - - - -					- - (15,277,778) 2,893 (5) (1,207)
			67,780,313					358,327,817

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 six-month periods ended June 30, 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 (gain) Interest expense Interest income Dividend income Share of (profit) loss of associates and joint ventures accounted for using equity method Gain on disposal of property, plant and equipment Net loss on financial assets at fair value through profit or loss 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 operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income 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 issuing bonds Repayments of bonds 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 (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period		For the six-mont June	h periods ended 30, 2020 22,554
		2021 $ 42,644,040 3,633,974 514,767 46,593 422,532 (119,030) - (11,883,726) (4,595) 76,946 (84,418) (7,396,957) (1,468,475) (3,459,213) (887,962) 10,227 57,992 (4,019,309) (195,931) (9,962,671) (1,358,491) 488,425 (141,511) (24,365) 1,303,910 (601,329) (333,361) (10,296,032) (17,692,989) 24,951,051 118,916 50,626 (423,796) (3,783,253) 20,913,544 (91,000) (1,259,531) (9,250,311) 12,131 (61,753) (1,348,738) (856,800) (12,856,002) 124,099,603 (131,412,254) 100,000 - (1,650,000) 1,058,816 (2,000,000) 283,911 (18,964) 17,775 (1,207) (9,522,320) (286,524) (1,751,302) 14,145,110 $ 12,393,808

			3,535,993 192,647 (239) 707,856 (229,487) (6,445) 4,627,486 (5,741) 21,050 (26,423)
			8,816,697
			751,385 (568,754) 468,514 356,913 (192,841) 2,452,265 (2,111,038)
			1,156,444
			(2,015,966) (980,424) 168,021 (619,617) 1,785,850 (114,702)
			(1,776,838)
			(620,394)
			8,196,303
			8,218,857 215,676 59,076 (715,025) (1,789,981)
			5,988,603
			- - (2,431,952) 7,811 (108,309) (962,985) (825,925)
			(4,321,360)
			148,527,468 (149,020,915) 1,500,000 8,350,000 - 310,726 (3,638,704) (1,960,036) (19,054) (113,084) (804)
			3,935,597
			255,938
			5,858,778 18,165,952
			24,024,730

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

June 30, 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-month and sixmonth periods ended 2021 were authorized for issue by the board of directors on August 11, 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. 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”
●Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its consolidated financial statements:

－
●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”

(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 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(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 (%) June 30, 2021 December 31, 2020 June 30, 2020 Note % 100 % 100 % 100 % 100 % 100 % 100 (Note 1) % - % - % 100 (Note 1.2) % 100 % 100 % 100 % 100 % 100 % 100	Percentage of Ownership (%) June 30, 2021 December 31, 2020 June 30, 2020 Note % 100 % 100 % 100 % 100 % 100 % 100 (Note 1) % - % - % 100 (Note 1.2) % 100 % 100 % 100 % 100 % 100 % 100
			June 30, 2021	December 31, 2020 % 100 % 100 % - % 100 % 100
The Company The Company The Company Formosa Plastics Corporation (Cayman) Limited Formosa Industries (Hong Kong) Limited	Formosa Plastics Corporation (Cayman) Limited Formosa Industries Corporation U.S.A Formosa Plastics International (Cayman) Limited Formosa Industries (Hong Kong) Limited Formosa Industries (Ningbo) Co., Ltd.	Investment High Density Polyethylene Investment Investment Plastics	% 100 % 100 % - % 100 % 100

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Investor	Name of subsidiaries	Business activity	Percentage of Ownership (%) June 30, 2021 December 31, 2020 June 30, 2020 Note % 100 % 100 % 100	Percentage of Ownership (%) June 30, 2021 December 31, 2020 June 30, 2020 Note % 100 % 100 % 100
			June 30, 2021	December 31, 2020 % 100
Formosa Industries (Hong Kong) Limited	Formosa Electronic (Ningbo) Co., Ltd.	Electronics	% 100

Note1: The immaterial subsidiaries’ financial statements for the six-month periods ended June 30, 2021 and 2020 have not been reviewed by independent auditors.

Note2: 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.

(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.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the 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.

(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	June 30, 2021 $ 461 4,441,223 7,952,124 - $ 12,393,808	December 31, 2020 312 4,051,549 9,214,840 878,409 14,145,110	June 30, 2020
			296 4,842,877 18,270,796 910,761
			24,024,730

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

June 30, 2021 December 31, 2020 (i) Mandatorily at FVTPL Private fund $ 3,811,937 3,888,883 Please refer to Notes 6(t) for amount of remeasurement at FVTPL. June 30, 2021 December 31, 2020 (ii) Equity investments at fair value through other comprehensive income Listed stocks $ 108,693,691 102,218,948 Non-listed stocks 5,659,516 4,708,593 Non-domestic stocks 14,822,167 13,939,122 Total $ 129,175,374 120,866,663	June 30, 2020
	4,023,306
	June 30, 2020
	86,073,509 4,656,134 11,303,528
	102,033,171

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.

On May 12, 2021, the Group approved to obtain 1,300 thousand shares of PuriBlood Medical Co., Ltd., a domestic non-listed (cabinet) company, at a par value of $70 per share, amounting to $91,000 thousand, with the shareholding ratio of 9.14%.

No strategic investments were disposed as of June 30, 2021 and 2020, and there were no transfers of any cumulative gain or loss within equity relating to these investments.

Notes receivable from operating activities Accounts receivable (including related parties) Less : allowance for doubtful receivables	June 30, 2021 $ 3,616,737 18,245,307 (48,147) $ 21,813,897	December 31, 2020 2,148,261 13,813,715 (1,624) 15,960,352	June 30, 2020 1,833,305 11,016,202 (2,928) 12,846,579

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 June 30, 2021, December 31 and June 30, 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:

	June 30, 2021
Gross carrying amount Weighted- average loss rate $ 21,036,600 0.069% 718,473 1.728% 72,035 13.122% 34,936 33.707% $ 21,862,044 December 31, 2020		Loss allowance provision
		14,503 12,415 9,453 11,776
		48,147

	Weighted- average loss rate 0.001% 0.195% 1.526% 3.090% June 30, 2020	Loss allowance provision
		80 1,309 234 1
		1,624

	Weighted- average loss rate 0.001% 0.298% 1.921% 3.534%	Loss allowance provision
		552 1,246 736 394
		2,928

(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 Impairment losses reversed Foreign exchange gains Ending balance	For the six months ended June 30,	For the six months ended June 30,
	2021 $ 1,624 46,593 - (70) $ 48,147	2020 3,188 - (239) (21) 2,928

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 June 30, 2021, the outstanding accounts receivable factoring transaction between the Group and the financial institution was as follows:

June 30, 2021 Purchaser Factoring Balance Factoring Line Advanced Amount Range of Interest Rate Guarantee project KC de Mexico CITIBANK USD 728,640 USD 4,991,217 - - None Other receivables June 30, 2021 December 31, 2020 June 30, 2020 Other receivables—loans to related parties $ 5,840,862 4,492,125 13,954,945 Other receivables—related parties 1,957,712 2,007,077 1,993,073 Other receivables 2,764,855 936,148 8,542,942 $ 10,563,429 7,435,350 24,490,960			June 30, 2021
	Purchaser
					13,954,945 1,993,073 8,542,942
					24,490,960

(d) Other receivables

As of June 30, 2021, December 31 and June 30, 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	June 30, 2021 $ 10,822,611 1,856,288 4,469,126 331,359 2,989,819 12,038 $ 20,481,241	December 31, 2020 8,834,651 1,407,913 3,358,022 294,201 2,775,208 11,276 16,681,271	June 30, 2020
			8,483,452 1,506,923 2,118,658 749,523 2,569,996 132,644
			15,561,196

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Change of net realizable value of inventories：

Loss from devaluation (gain from recovery of inventories)	For the three months ended June 30, 2021 2020 $ 35,345 (574,921)		For the six months ended June 30,	For the six months ended June 30,
	2021 $ 35,345		2021 (88,014)	2020 (666,327)

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. Joint ventures Formosa Asahi Spandex Co., Ltd. Formosa Daikin Advanced Chemical Co., Ltd. Formosa Tokuyama Advanced Chemicals Co., Ltd.	June 30, 2021 $ 95,265,609 61,550,855 7,115,707 4,458,344 12,256,694 5,836,311 1,184,642 56,944 20,144 18,001 356,699 3,031 228,507 7,081,010 584,247 646,639 3,752,473 15,830 1,339,671 1,291,756 477,107 $ 203,540,221	December 31, 2020 87,874,676 61,291,795 7,017,408 4,723,141 12,415,495 5,912,495 1,136,716 68,246 20,159 18,098 259,334 3,029 227,327 6,169,287 568,402 649,229 2,892,722 108,322 1,288,207 1,210,071 124,934 193,979,093	June 30, 2020
			76,131,862 63,972,671 7,023,648 4,763,824 10,751,009 6,139,464 1,087,867 74,857 63,648 18,179 238,960 2,536 226,347 6,594,179 71,975 669,167 2,340,200 151,746 1,240,418 1,118,938 -
			182,681,495

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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.	For the three months ended June 30,	For the three months ended June 30,
	2021 $ 3,921,568 1,477,605 60,818 (46,776) 139,099 80,019 21,450 (6,835) - (54) 50,351 - 798 38,707 16,757 3,048 858,936 (43,216)	2020

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the three months ended June 30,	For the three months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
2021 $ 64,145 33,917 (9,576) (14,894) $ 6,645,867	2020	2021 102,090 81,685 (15,548) (22,827) 11,883,726	2020
	(8,128) 55,553 (10,181) - (2,179,013)		8,087 100,304 (22,456) -
			(4,627,486)

(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
			June 30, 2021	December 31, 2020 June 30, 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	June 30, 2021 $ 289,738,470	December 31, 2020 271,510,791	June 30, 2020
			240,768,587

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The financial information of Formosa Petrochemical Corporation was as follows:

June 30, 2021 Current assets $ 249,692,806 Non-current assets 165,942,742 Current liabilities (37,852,076) Non-current liabilities (38,888,151) Net asset $ 338,895,321 Net asset contributed to non-controlling interest of Formosa Petrochemical Corporation $ 4,398,023 Net asset contributed to Formosa Petrochemical Corporation $ 30,857,989 For the three months ended June 30, 2021 2020 Revenue $ 144,972,645 79,929,530 Net (loss) income $ 13,585,137 (8,673,765) Other comprehensive (loss) income (5,465,730) 3,564,540 Total comprehensive income (loss) $ 8,119,407 (5,109,225) Comprehensive (loss) income allocated to non- controlling interest of Formosa Petrochemical Corporation $ (122,624) (101,240) Comprehensive income (loss) allocated to Formosa Petrochemical Corporation $ 8,242,031 (5,007,985)	June 30, 2021 Current assets $ 249,692,806 Non-current assets 165,942,742 Current liabilities (37,852,076) Non-current liabilities (38,888,151) Net asset $ 338,895,321 Net asset contributed to non-controlling interest of Formosa Petrochemical Corporation $ 4,398,023 Net asset contributed to Formosa Petrochemical Corporation $ 30,857,989 For the three months ended June 30, 2021 2020 Revenue $ 144,972,645 79,929,530 Net (loss) income $ 13,585,137 (8,673,765) Other comprehensive (loss) income (5,465,730) 3,564,540 Total comprehensive income (loss) $ 8,119,407 (5,109,225) Comprehensive (loss) income allocated to non- controlling interest of Formosa Petrochemical Corporation $ (122,624) (101,240) Comprehensive income (loss) allocated to Formosa Petrochemical Corporation $ 8,242,031 (5,007,985)	June 30, 2021 Current assets $ 249,692,806 Non-current assets 165,942,742 Current liabilities (37,852,076) Non-current liabilities (38,888,151) Net asset $ 338,895,321 Net asset contributed to non-controlling interest of Formosa Petrochemical Corporation $ 4,398,023 Net asset contributed to Formosa Petrochemical Corporation $ 30,857,989 For the three months ended June 30, 2021 2020 Revenue $ 144,972,645 79,929,530 Net (loss) income $ 13,585,137 (8,673,765) Other comprehensive (loss) income (5,465,730) 3,564,540 Total comprehensive income (loss) $ 8,119,407 (5,109,225) Comprehensive (loss) income allocated to non- controlling interest of Formosa Petrochemical Corporation $ (122,624) (101,240) Comprehensive income (loss) allocated to Formosa Petrochemical Corporation $ 8,242,031 (5,007,985)	December 31, 2020 June 30, 2020 215,309,819 189,664,494 165,613,297 170,360,407 (28,887,601) (62,935,381) (39,408,447) (25,617,311) 312,627,068 271,472,209 4,525,709 4,743,105 308,101,359 266,729,104 For the six months ended June 30, 2021 2020 275,272,311 217,460,887 31,477,372 (18,676,989) 413,298 (17,285,626) 31,890,670 (35,962,615) (127,686) (93,248) 32,018,356 (35,869,367)
	2020		2021 275,272,311 31,477,372 413,298 31,890,670 (127,686) 32,018,356
	79,929,530

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Beginning balance of investments in major associate at January 1 Total comprehensive loss allocated to the Company Dividend Received Share of net assets of affiliates as of June 30 Add: share premium acquired not according to holding percentage Add: Net adjustment Total carrying amount of equity of the major associate as of June 30	For the six months ended June 30, 2021 2020 $ 87,874,676 94,112,087 8,993,169 (10,090,829) (1,605,124) (7,889,592) 95,262,721 76,131,666 (5) 5,379 2,893 (5,183) $ 95,265,609 76,131,862
	2021 $ 87,874,676 8,993,169 (1,605,124) 95,262,721 (5) 2,893 $ 95,265,609

The financial information of Formosa Plastics Corp., U.S.A. was as follows:

June 30, 2021 Current assets $ 82,368,028 Non-current assets 246,922,061 Current liabilities (15,789,423) Non-current liabilities (33,515,942) Net asset $ 279,984,724 Net asset contributed to non-controlling interest of Formosa Plastics Corp., U.S.A. $ 8,318,861 Net asset contributed to Formosa Plastics Corp., U.S.A. $ 271,665,863 For the three months ended June 30, 2021 2020 Revenue $ 43,168,722 22,191,982 Net income (loss) $ 7,816,560 (1,304,374) Other comprehensive (loss) income (6,356,494) (5,712,645) Total comprehensive income (loss) $ 1,460,066 (7,017,019) Comprehensive income allocated to non-controlling interest of Formosa Plastics Corp., U.S.A. $ 1,295,136 283,407	June 30, 2021 Current assets $ 82,368,028 Non-current assets 246,922,061 Current liabilities (15,789,423) Non-current liabilities (33,515,942) Net asset $ 279,984,724 Net asset contributed to non-controlling interest of Formosa Plastics Corp., U.S.A. $ 8,318,861 Net asset contributed to Formosa Plastics Corp., U.S.A. $ 271,665,863 For the three months ended June 30, 2021 2020 Revenue $ 43,168,722 22,191,982 Net income (loss) $ 7,816,560 (1,304,374) Other comprehensive (loss) income (6,356,494) (5,712,645) Total comprehensive income (loss) $ 1,460,066 (7,017,019) Comprehensive income allocated to non-controlling interest of Formosa Plastics Corp., U.S.A. $ 1,295,136 283,407	June 30, 2021 Current assets $ 82,368,028 Non-current assets 246,922,061 Current liabilities (15,789,423) Non-current liabilities (33,515,942) Net asset $ 279,984,724 Net asset contributed to non-controlling interest of Formosa Plastics Corp., U.S.A. $ 8,318,861 Net asset contributed to Formosa Plastics Corp., U.S.A. $ 271,665,863 For the three months ended June 30, 2021 2020 Revenue $ 43,168,722 22,191,982 Net income (loss) $ 7,816,560 (1,304,374) Other comprehensive (loss) income (6,356,494) (5,712,645) Total comprehensive income (loss) $ 1,460,066 (7,017,019) Comprehensive income allocated to non-controlling interest of Formosa Plastics Corp., U.S.A. $ 1,295,136 283,407	December 31, 2020 June 30, 2020 80,388,030 74,456,836 253,057,520 248,286,316 (23,145,830) (10,333,004) (32,655,356) (24,062,047) 277,644,364 288,348,101 7,132,376 6,423,281 270,511,988 281,924,820 For the six months ended June 30, 2021 2020 75,999,187 48,003,332 8,639,057 (585,951) (6,134,520) (4,288,773) 2,504,537 (4,874,724) 1,361,170 396,724
	2020		2021 75,999,187 8,639,057 (6,134,520) 2,504,537 1,361,170
	22,191,982

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

		For the three months ended	For the three months ended		For the	six months	ended
		June 30,				June 30,
		2021	2020		2021		2020
Comprehensive
income (loss)
allocated to
Formosa Plastics
Corp., U.S.A.	$	164,930	(7,300,426)		1,143,367		(5,271,448)
					For the	six months	ended
						June 30
					2021		2020
Beginning balance of investments in major associate at				$	61,291,795		65,167,060
January 1
Total comprehensive	income allocated to the		Group		259,060		(1,194,389)
Total carrying amount of equity of the major			associate as of
June 30				$	61,550,855		63,972,671

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

June 30, 2021 Carrying amount of individually insignificant associates’ equity $ 43,615,223 For the three months ended June 30, 2021 2020 Attributable to the Group: Net income $ 1,173,102 621,241 Other comprehensive loss (625,400) (524,774) Total comprehensive income (loss) $ 547,702 96,467	June 30, 2021	June 30, 2021		December 31, 2020 June 30, 2020 42,189,410 40,217,606 For the six months ended June 30, 2021 2020 1,239,259 682,428 (455,655) (1,312,451) 783,604 (630,023)
		2020		2021 1,239,259 (455,655) 783,604

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

1) 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.

June 30, 2021 Individually insignificant joint venture $ 3,108,534 For the three months ended June 30, 2021 2020 Attributable to the Group: Net income $ 73,592 37,244 Other comprehensive income (loss) 255 (12) Total comprehensive income $ 73,847 37,232	June 30, 2021 Individually insignificant joint venture $ 3,108,534 For the three months ended June 30, 2021 2020 Attributable to the Group: Net income $ 73,592 37,244 Other comprehensive income (loss) 255 (12) Total comprehensive income $ 73,847 37,232	June 30, 2021	June 30, 2021		December 31, 2020 June 30, 2020 2,623,212 2,359,356 For the six months ended June 30, 2021 2020 145,400 85,935 468 (38) 145,868 85,897
	2021 $ 73,592 255 $ 73,847		2020		2021 145,400 468 145,868

2) The Group, which invested in “ Formosa Mitsui Advanced Chemical Co., Ltd.” (an investee accounted for using the equity method) recognized the loss of $15,548 thousand from this investment for the six months ended June 30, 2021. As of June 30, 2021, the Group’ s cumulative losses from this investment had already exceeded the book value of the investment by $40,847 thousand. As the Group intends to support this investee company which was reclassified to other non-current liabilities.
3) On May 12, 2021, the Group participated in the cash capital increase of Formosa Tokuyama Co., Ltd., an joint venture owned by the Group, with the total investment amounting to $375,000 thousand based on its original shareholding ratio of 50%.

(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 June 30, 2021, December 31 and June 30, 2020.

(iv) The share of profit or loss and other comprehensive income of those investments accounted for using equity method, except that Formosa Petrochemical Corporation and Formosa Sumco Technology Corporation are calculated based on financial statements reviewed by CPA, is calculated based on unreviewed financial statements.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Property, plant and equipment

The movements of cost and accumulated depreciation and impairments of property, plant and equipment of the Group for the six months ended June 30, 2021 and 2020 were as follows:

Cost: Balance at January 1, 2021 Additions Disposals Reclassification Effect of exchange rate changes Balance at June 30, 2021 Balance at January 1, 2020 Additions Disposals Reclassification Effect of exchange rate changes Balance at June 30, 2020 Accumulated depreciation/ impairments: Balance at January 1, 2021 Depreciation for the period Disposals Reclassification Effect of exchange rate changes Balance at June 30, 2021 Balance at January 1, 2020 Depreciation for the period Disposals Reclassification Effect of exchange rate changes Balance at June 30, 2020 Carrying amounts: Balance at June 30, 2021 Balance at December 31, 2020 Balance at June 30, 2020	Land and land improvements $ 12,086,178 - - - (37,842) $ 12,048,336 $ 12,085,340 - - 86,526 (25,037) $ 12,146,829 $ 143,336 58,153 - - (3,851) $ 197,638 $ 29,575 59,545 - - (1,192) $ 87,928 $ 11,850,698 $ 11,942,842 $ 12,058,901	Buildings and constructions 29,415,324 509 (6,772) 77,207 (90,784) 29,395,484 29,172,864 2,660 - 124,923 (189,474) 29,110,973 18,130,360 437,345 (6,772) 373 (29,220) 18,532,086 17,231,129 436,609 - 410 (59,459) 17,608,689 10,863,398 11,284,964 11,502,284	Machinery and equipment 195,709,750 313,158 (630,347) 1,643,797 (935,305) 196,101,053 190,805,323 108,382 (276,026) 3,612,047 (1,453,947) 192,795,779 145,399,483 2,865,576 (624,313) (822) (349,878) 147,290,046 140,443,440 2,800,896 (275,500) (958) (670,560) 142,297,318 48,811,007 50,310,267 50,498,461	Other facilities 7,678,491 238,571 (106,346) 71,470 (22,843) 7,859,343 6,921,887 191,041 (55,801) 319,170 (47,184) 7,329,113 5,211,212 248,381 (104,844) (682) (15,349) 5,338,718 4,879,940 214,028 (54,257) 88 (32,776) 5,007,023 2,520,625 2,467,279 2,322,090	Construction in progress 10,780,602 8,698,073 - (1,682,077) 5,870 17,802,468 9,234,653 2,129,869 - (3,888,221) (61,549) 7,414,752 - - - - - - - - - - - - 17,802,468 10,780,602 7,414,752	Total 255,670,345 9,250,311 (743,465) 110,397 (1,080,904)
						263,206,684
						248,220,067 2,431,952 (331,827) 254,445 (1,777,191)
						248,797,446
						168,884,391 3,609,455 (735,929) (1,131) (398,298)
						171,358,488
						162,584,084 3,511,078 (329,757) (460) (763,987)
						165,000,958
						91,848,196
						86,785,954
						83,796,488

(i) Collaterals

The property, plant and equipment pledged to secure bank loans as of June 30, 2021, December 31 and June 30, 2020, are described in Note 8.

(ii) As of June 30, 2021, December 31 and June 30, 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.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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.

(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, 2021 Additions Disposals Effect of exchange rate change Balance at June 30, 2021 Balance at January 1,2020 Additions Disposals Effect of exchange rate change Balance at June 30, 2020 Accumulated depreciation: Balance at January 1, 2021 Depreciation for the period Disposals Effect of exchange rate change Balance at June 30, 2021 Balance at January 1,2020 Depreciation for the period Disposals Effect of exchange rate change Balance at June 30, 2020 Carrying amount: Balance at June 30, 2021 Balance at December 31, 2020 Balance at June 30, 2020	Land $ 1,237,853 6,568 (80,275) (12,884) $ 1,151,262 $ 1,204,383 128,886 - (145,891) $ 1,187,378 $ 90,727 24,519 (80,275) (292) $ 34,679 $ 149,273 24,793 - (116,703) $ 57,363 $ 1,116,583 $ 1,147,126 $ 1,130,015	Buildings and constructions - - - - - 304 244 (304) - 244 - - - - - 243 122 (304) - 61 - - 183	Total 1,237,853 6,568 (80,275) (12,884) 1,151,262 1,204,687 129,130 (304) (145,891) 1,187,622 90,727 24,519 (80,275) (292) 34,679 149,516 24,915 (304) (116,703) 57,424 1,116,583 1,147,126 1,130,198

For the six months ended June 30, 2021 and 2020, the Group increased the right-of-use assets, please refer to Notes 6(m).

(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	June 30, 2021 $ 7,903,420 132,665 $ 8,036,085 0.748%~3.100%	December 31, 2020 14,975,936 380,788 15,356,724 0.405%~1.035%	June 30, 2020 19,331,297 382,876
			19,714,173
			0.490%~3.450%

(ii) Issuance and redemption of loans

Balance as of January 1, 2021 New issuance during the period Repayments during the period Effect of exchange rate change Balance as of June 30, 2021 Balance as of January 1, 2020 New issuance during the period Repayments during the period Effect of exchange rate change Balance as of June 30, 2020	For the six months ended June 30, 2021 $ 15,356,724 124,099,603 (131,412,254) (7,988) $ 8,036,085 For the six months ended June 30, 2020 $ 20,255,096 148,527,468 (149,020,915) (47,476) $ 19,714,173

(j) Short-term notes and bills payable

June 30, 2021

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	Institutions

(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
Taishin International Bank 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 Less: Discount on short-term notes and bills payable Total	June 30, 2020 Institutions Interest rate Amount CTBC Bank Co., Ltd 0.385%~0.443% $ 3,700,000 Ta Ching Securities Co., Ltd. 0.450% 600,000 China Bills Finance Corporation 0.325%~0.400% 4,200,000 Mega Bills Finance Co., Ltd. 0.395% 1,000,000 Grand Bills Finance Corporation 0.700% 1,900,000 Taipei Fubon Commercial Bank Co., Ltd. 0.400% 1,600,000 Yuanta Commercial Bank Co., Ltd. 0.385%~0.395% 2,500,000 Taishin International Bank Co., Ltd. 0.325% 1,000,000 16,500,000 (15,625) $ 16,484,375
	Institutions
	CTBC Bank Co., Ltd Ta Ching Securities Co., Ltd. China Bills Finance Corporation Mega Bills Finance Co., Ltd. Grand Bills Finance Corporation Taipei Fubon Commercial Bank Co., Ltd. Yuanta Commercial Bank Co., Ltd. Taishin International Bank Co., Ltd.

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

June 30, 2020
Institutions
Interest rate
Amount
CTBC Bank Co., Ltd
0.385%~0.443% $ 3,700,000
Ta Ching Securities Co., Ltd.
0.450%
600,000
China Bills Finance Corporation 0.325%~0.400%
4,200,000
Mega Bills Finance Co., Ltd.
0.395%
1,000,000
Grand Bills Finance Corporation
0.700%
1,900,000
Taipei Fubon Commercial Bank
Co., Ltd.
0.400%
1,600,000
Yuanta Commercial Bank Co.,
Ltd.
0.385%~0.395%
2,500,000
Taishin International Bank Co.,
Ltd.
0.325%
1,000,000
16,500,000
(15,625)
$
16,484,375

Institutions

CTBC Bank Co., Ltd
Ta Ching Securities Co., Ltd.
China Bills Finance Corporation
Mega Bills Finance Co., Ltd.
Grand Bills Finance Corporation
Taipei Fubon Commercial Bank
Co., Ltd.
Yuanta Commercial Bank Co.,
Ltd.
Taishin International Bank Co.,
Ltd.

(k) Long-term debts

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

Unsecured long-term debts Less: Current portion Total Repayment period Interest rate	June 30, 2021 $ 2,601,601 - $ 2,601,601 2025 0.930%~4.075%	December 31, 2020 3,569,776 (2,000,000) 1,569,776 2021~2025 0.800%~4.075%	June 30, 2020
			3,249,075 (2,939,702
			309,373
			2020~2025
			0.800%~4.075%

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 June 30, 2021 Balance of January 1, 2020 New issuance during the period Repayment during the period Effect of exchange rate charge Balance of June 30, 2020	Total $ 3,569,776 1,058,816 (2,000,000) (26,991) $ 2,601,601 Total $ 6,610,540 310,726 (3,638,704) (33,487) $ 3,249,075

(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 June 30, 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).
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%.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

  - 6) The Group did not breach the above-mentioned financial covenants in respect of its financial statements as of December 31, 2020 .

  - 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	June 30, 2021 $ 39,265,500 (6,246,333) $ 33,019,167 2021~2030	December 31, 2020 40,910,455 (2,898,401) 38,012,054 2021~2030	June 30, 2020 40,905,411 (1,648,209) 39,257,202 2021~2030

(ii) Issuance and repayment of bonds payable:
1) Issuance

Amount Interest rate Expiry 2) Repayment Amount		For the six months ended June 30 2021 2020 $ - 8,350,000 - 0.58%、0.63%、0.67%
		2021 $ - -
		- 115、117、119 For the six months ended June 30, 2021 2020 1,650,000 -
		2021 1,650,000
	$

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) The terms of domestic corporate bonds as of June 30, 2021, December 31 and June 30, 2020 were as follows:

Issue amount 2021.06.30 Ending balance 2021.06.30 Current portion 2020.12.31 Ending balance 2020.12.31 Current portion 2020.06.30 Ending balance 2020.06.30 Current portion Issuance date Coupon rate Interest payment date Repayment method	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
	$ 9,000,000 2,499,078 1,249,349 2,498,752 1,249,349 2,498,427 - November 5, 2012 1.25%、1.39%、1.53% November 5 Payable in 2 equal installments for each different coupon rate in 2016~2017, 2018~2019 and 2021~2022 respectively.	11,500,000 1,496,970 748,485 1,496,213 - 1,495,455 - June 10, 2013 1.23%、1.52% June 10 Payable in 2 equal installments for each different coupon rate in 2016~2017 and 2022~2023, respectively.	8,500,000 6,297,159 - 6,296,571 - 6,295,984 - 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.	6,000,000 5,995,713 - 5,995,166 - 5,994,619 - 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.

Issue amount 2021.06.30 Ending balance 2021.06.30 Current portion 2020.12.31 Ending balance 2020.12.31 Current portion 2020.06.30 Ending balance 2020.06.30 Current portion Issuance date Coupon rate Interest payment date Repayment method	The first domestic unsecured nonconvertible corporate bond in 2017	The first domestic unsecured nonconvertible corporate bond in 2018	The first domestic unsecured nonconvertible corporate bond in 2020
	$ 7,000,000 5,346,420 1,649,158 6,995,471 1,649,052 6,994,523 1,648,209 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 9,291,435 2,599,341 9,290,447 - 9,289,458 - 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 8,338,725 - 8,337,835 - 8,336,945 - 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	June 30, 2021 $ 5,445 $ 125,534	December 31, 2020 21,452 121,923	June 30, 2020
			37,763
			124,510

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

On June 30, 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 June 30, 2020, the amounts of lease liabilities incurred from the rentals of land and building increased by $128,886 thousand and $244 thousand, with the interest rates of 2.05% and 1.41%, maturing in December 2042 and March 2021, respectively.

The amount recognized in profit or loss was as follows:

For the three months ended June 30, 2021 2020 $ 693 811 $ 19,619 23,307	For the six months ended June 30,	For the six months ended June 30,
2021 $ 693 $ 19,619	2021 1,414 36,921	2020
		1,880
		47,331

The amount recognized in cash flows statement was as follows:

Total cash outflow for leases	For the six months ended June 30,	For the six months ended June 30,
	2021 $ 57,299	2020
		68,265

(i) Real estate leases

As of June 30, 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:

For the three months ended June 30,	For the three months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
2021 $ 26,493 1,069 10,093 $ 37,655	2020	2021 52,990 2,115 20,204 75,309	2020
	23,445 1,438 15,680		47,178 2,871 31,078
	40,563		81,127

(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:

For the three months ended June 30,	For the three months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
2021 $ 59,160 2,623 27,847 $ 89,630	2020	2021 117,093 5,240 54,999 177,332	2020
	41,972 2,516 23,839		88,327 5,009 48,117
	68,327		141,453

(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 June 30, 2021 and 2020 and the six months ended June 30, 2021 and 2020 were as follows:

For the three months ended June 30, 2021 2020 Current income tax expense$ 3,596,688 552,450 Deferred tax expense (income) The origination of temporary differences 754,497 (28,843) Income tax expense $ 4,351,185 523,607	For the three months ended June 30,		For the six months ended June 30,	For the six months ended June 30,
			2021 6,234,572 1,218,825 7,453,397	2020 1,098,457 (51,590) 1,046,867

(ii) The income tax expense related to components of other comprehensive income for the three months ended June 30, 2021 and 2020 and the six months ended June 30, 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 June 30,	For the three months ended June 30,		For the six months ended June 30,	For the six months ended June 30,
	2021 $ (59,096)	2020		2021 (116,250)	2020 (216,863)

(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 six months ended June 30, 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.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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	June 30, 2021 $ 8,130,081 16,263 202,106 394,959 2,997,503 $ 11,740,912	December 31, 2020 8,130,081 16,263 202,111 396,166 2,997,503 11,742,124	June 30, 2020
			8,130,081 16,263 202,098 383,143 2,997,503
			11,729,088

(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.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 June 30, 2021, December 31 and June 30, 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.

3) Earnings distribution

The appropriation of earning in 2020 has reached the statutory resolution threshold through electronic voting on June 20, 2021 and was approved during the shareholders’ meeting held on July 29, 2021.

In addition, the appropriation of earnings from the paid-in capital, in excess of the par value, in 2019 was approved during the shareholders’ meeting held on June 10, 2020. The amounts of dividends distributed to owners were as follows:

The amounts of dividends distributed to owners were	as follows:	as follows:
Dividends attributable to ordinary shareholders: Cash dividends Dividends per share	For the years ended December 31,
	2020 $ 15,277,778 $ 2.40	2019
		28,009,259
		4.40

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 June 30, 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 June 30, 2020	Exchange differences on translation of foreign operations $ (9,603,060) (2,390,373) (149,398) - - - $ (12,142,831) $ (5,278,250) (2,337,755) (131,241) - - - $ (7,747,246)	Unrealized gain (loss) on financial assets at fair value through profit or loss 76,471,804 - - 201,625 8,219,663 - 84,893,092 80,701,025 - - (5,946,608) (21,451,766) - 53,302,651	Gain (loss) on hedging instruments 37,988 - - - - (4,386) 33,602 779 - - - - 44,007 44,786	Total 66,906,732 (2,390,373) (149,398) 201,625 8,219,663 (4,386)
				72,783,863
				75,423,554 (2,337,755) (131,241) (5,946,608) (21,451,766) 44,007
				45,600,191

(q) Earnings per share

The basic earnings per share was calculated as follows:

Profit (loss) attributable to ordinary shareholders Weighted average number of outstanding ordinary shares	For the three months ended June 30,	For the three months ended June 30,		For the six months ended June 30, 2021 2020 35,190,643 (1,024,313) 6,365,741 6,365,741 5.53 (0.16)
	2021 $ 20,230,701 6,365,741 $ 3.18	2020		2021 35,190,643 6,365,741 5.53

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Revenue from Contracts with Customers

(i) Revenue Segmentation

		For the three	months ended Ju	ne 30, 2021
Plastic division $ 6,040,800 6,515,262 11,093,935 $ 23,649,997 $ 17,235,275 2,995,675 - - - - - - - - - - - - 3,419,047 $ 23,649,997	Polyolefin division 2,894,366 5,727,492 7,620,258 16,242,116 - - 4,703,075 5,340,156 6,158,996 - - - - - - - - - 39,889 16,242,116	Polypropylene division 2,270,048 6,428,921 1,782,357 10,481,326 - - - - - 9,813,479 667,847 - - - - - - - - 10,481,326 For the three	Tairylan division 2,792,179 5,662,688 2,370,636 10,825,503 - - - - - - - 6,930,327 1,675,885 882,923 445,477 - - - 890,891 10,825,503 months ended Ju	Chemistry division 7,349,304 807,987 1,445,684 9,602,975 - - - - - - - - - - - 4,981,772 1,281,829 1,561,019 1,778,355 9,602,975 ne 30, 2020	Others divisions 655,635 109,344 86,013 850,992 - - - - - - - - - - - - - - 850,992 850,992	Total 22,002,332 25,251,694 24,398,883
						71,652,909
						17,235,275 2,995,675 4,703,075 5,340,156 6,158,996 9,813,479 667,847 6,930,327 1,675,885 882,923 445,477 4,981,772 1,281,829 1,561,019 6,979,174
						71,652,909

	Polyolefin division 2,202,178 3,626,630 3,004,848 8,833,656 - - 3,406,957 2,926,704 2,463,021 - - - - - - - - - 36,974 8,833,656	Polypropylene division 1,860,206 6,036,908 746,262 8,643,376 - - - - - 8,187,741 455,635 - - - - - - - - 8,643,376	Tairylan division 1,097,171 4,265,737 1,387,590 6,750,498 - - - - - - - 2,898,614 1,585,552 823,909 651,835 - - - 790,588 6,750,498	Chemistry division 2,775,327 790,822 521,414 4,087,563 - - - - - - - - - - - 1,602,418 709,253 973,356 802,536 4,087,563	Others divisions 766,663 98,110 83,717 948,490 - - - - - - - - - - - - - - 948,490 948,490	Total 12,949,378 19,378,568 10,656,156
						42,984,102
						9,437,560 2,957,046 3,406,957 2,926,704 2,463,021 8,187,741 455,635 2,898,614 1,585,552 823,909 651,835 1,602,418 709,253 973,356 3,904,501
						42,984,102

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

		For the six m	onths ended Jun	e 30, 2021
Plastic division $ 11,610,129 12,430,603 20,326,332 $ 44,367,064 $ 33,076,229 5,649,629 - - - - - - - - - - - - 5,641,206 $ 44,367,064	Polyolefin division 5,765,771 10,304,002 12,407,251 28,477,024 - - 8,295,158 9,013,683 11,095,024 - - - - - - - - - 73,159 28,477,024	Polypropylene division 4,314,147 12,432,345 3,502,451 20,248,943 - - - - - 19,012,959 1,235,984 - - - - - - - - 20,248,943	Tairylan division 5,031,805 10,944,393 4,975,601 20,951,799 - - - - - - - 12,762,619 3,287,516 1,709,621 1,567,934 - - - 1,624,109 20,951,799	Chemistry division 12,520,824 1,321,237 2,543,651 16,385,712 - - - - - - - - - - - 8,434,893 2,045,404 2,611,531 3,293,884 16,385,712	Others divisions 1,344,810 185,145 294,349 1,824,304 - - - - - - - - - - - - - - 1,824,304 1,824,304	Total 40,587,486 47,617,725 44,049,635
						132,254,846
						33,076,229 5,649,629 8,295,158 9,013,683 11,095,024 19,012,959 1,235,984 12,762,619 3,287,516 1,709,621 1,567,934 8,434,893 2,045,404 2,611,531 12,456,662
						132,254,846

		For the six m	onths ended Jun	e 30, 2020
Plastic division $ 8,947,131 8,296,727 11,477,247 $ 28,721,105 $ 19,511,777 6,279,379 - - - - - - - - - - - - 2,929,949 $ 28,721,105	Polyolefin division 4,331,363 6,414,821 6,687,777 17,433,961 - - 6,639,474 5,484,065 5,202,333 - - - - - - - - - 108,089 17,433,961	Polypropylene division 3,581,337 9,983,991 1,761,478 15,326,806 - - - - - 14,432,658 894,148 - - - - - - - - 15,326,806	Tairylan division 2,381,630 7,206,007 3,210,888 12,798,525 - - - - - - - 5,542,565 3,147,688 1,573,250 1,227,829 - - - 1,307,193 12,798,525	Chemistry division 6,021,813 1,507,908 1,293,827 8,823,548 - - - - - - - - - - - 3,482,009 1,261,197 2,167,713 1,912,629 8,823,548	Others divisions 1,572,163 164,093 163,081 1,899,337 - - - - - - - - - - - - - - 1,899,337 1,899,337	Total 26,835,437 33,573,547 24,594,298
						85,003,282
						19,511,777 6,279,379 6,639,474 5,484,065 5,202,333 14,432,658 894,148 5,542,565 3,147,688 1,573,250 1,227,829 3,482,009 1,261,197 2,167,713 8,157,197
						85,003,282

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Balance of contracts

Notes receivable Accounts receivable (including related parties) Less: allowance for doubtful receivables Total	June 30, 2021 $ 3,616,737 18,245,307 (48,147) $ 21,813,897	December 31, 2020 2,148,261 13,813,715 (1,624) 15,960,352	June 30, 2020 1,833,305 11,016,202 (2,928) 12,846,579

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

(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 June 30, 2021 and 2020 and the six months ended June 30, 2021 and 2020, the appropriated employee compensations amounted to $17,364 thousand, $0 thousand, $34,727 thousand and $260 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

For the three months ended June 30	For the three months ended June 30	For the six months ended June 30	For the six months ended June 30
2021 $ 29,240 31,722 $ 60,962	2020	2021 66,896 52,134 119,030	2020
	75,809 39,130		151,313 78,174
	114,939		229,487

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other income

For the three months ended June 30,	For the three months ended June 30,	For the six months ended June 30, 2021 2020 77,555 74,901 - 6,445 77,555 81,346 For the six months ended June 30, 2021 2020 4,595 5,741 (547,426) (126,126) (76,946) (21,050) 370,816 344,219 (65,852) (68,118) (314,813) 134,666 For the six months ended June 30, 2021 2020 491,530 745,005 (68,998) (37,149) 422,532 707,856 0.800%-2.885% 0.800%-2.885%
2021 2020 $ 39,378 36,998 - 6,445 $ 39,378 43,443 For the three months ended June 30,	2020
	36,998 6,445
	43,443
	2020
	2020	2021 491,530 (68,998) 422,532 0.800%-2.885%

(iii) Other gains and losses

(iv) Finance costs

(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.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Exposure to currency risk

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 Financial assets Monetary items USD EUR JPY RMB		June 30, 2021
	Foreign currency (in thousand) $ 594,274 5,232 46,816 1,031 67,469 733 54,179 Foreign currency (in thousand) $ 433,847 6,509 13,783 9,335 41,332 235 76,828	Exchange Rate New Taiwan Dollars 27.8700 16,562,416 33.2287 173,853 0.2527 11,830 4.3142 4,448 27.8700 1,880,361 33.2287 24,357 0.2527 13,691 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 June 30, 2020
	Foreign currency (in thousand) $ 842,966 2,280 12,957 4,627	Exchange Rate New Taiwan Dollars 29.6600 25,002,372 33.0326 75,314 0.2725 3,531 4.1863 19,370

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial liabilities Monetary items USD EUR JPY		June 30, 2020
	Foreign currency (in thousand) $ 20,054 962 62,969	Exchange Rate New Taiwan Dollars 29.6600 594,802 33.0326 31,777 0.2725 17,159

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 $148,341 thousand and $244,568 thousand for the six months ended June 30, 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 $547,426 thousand and $126,126 thousand for the six months ended June 30, 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:

Carrying amount June 30,2021 Non-derivative financial liabilities Unsecured bank loans $ 10,505,021 Unsecured Bonds payable 39,265,500 Short-term notes and bills payable 17,095,561 Accounts payable (including related parties) 12,235,486 Other payables (including related parties) 22,762,958 Loans from related parties 14,353,050 Other current liabilities 7,828,771 Employees’ savings 132,665 Lease liabilities 130,979 $ 124,309,991	Carrying amount		Contractual cash flow		Within 6 months		6~12months		1~2years		2~5years 2,936,531 19,611,068 - - - - - - 23,414 22,571,013	Over 5 years
			10,870,129 40,857,901 17,100,000 12,235,486 22,762,958 14,849,091 7,828,771 133,189 161,252		7,933,598 1,259,563 17,100,000 12,235,486 22,762,958 - 7,828,771 133,189 4,033		- 5,050,705 - - - - - - 4,033		- 10,393,050 - - - 14,849,091 - - 7,936			- 4,543,515 - - - - - - 121,836
			126,798,777		69,257,598		5,054,738		25,250,077			4,665,351

(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
23,974,114 43,123,115 16,500,000 8,066,436 31,078,150 19,762,102 9,780,381 384,857 193,896	21,591,824 - 16,500,000 8,066,436 31,078,150 19,130,700 9,780,381 384,857 20,347	2,009,882 1,667,985 - - - - - - 20,285	- 6,389,660 - - - 631,402 - - 7,692	372,408 11,241,980 - - - - - - 123,150
152,863,051	106,552,695	3,698,152	7,028,754	11,737,538

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

(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 June 30, 2021 and 2020, and other factors remain unchanged), impacts on comprehensive income are as below:

Prices of securities at the reporting date	For the six months ended June 30,	For the six months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
	2021		2020
	Other comprehensive income after tax	Net income	Other comprehensive income after tax 860,735 (860,735)	Net income
Increasing 1% Decreasing 1%	$ 1,086,937 $ (1,086,937)	-		-
		-		-

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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)

	June 30, 2021	June 30, 2021	June 30, 2021
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - 20,481,683 20,481,683 - - - - 20,481,683 - - - - - - - - - -	Total
$ 3,811,937 3,811,937 108,693,691 20,481,683 129,175,374 12,393,808 21,813,897 10,563,429 44,771,134 $ 177,758,445 $ 39,265,500 17,095,561 8,036,085 2,601,601 14,353,050 12,235,486 22,762,958 7,828,771 130,979 $ 124,309,991	-	3,811,937		3,811,937
	-	3,811,937		3,811,937
	108,693,691 -	- -		108,693,691 20,481,683
	108,693,691	-		129,175,374
	- - -	- - -		- - -
	-	-		-
	108,693,691	3,811,937		132,987,311
	- - - - - - - - -	- - - - - - - - -		- - - - - - - - -
	-	-		-

(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 - - - 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 $ 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	-	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

	June 30, 2020	June 30, 2020	June 30, 2020
Carrying value		Fair value
	Level 1	Level 2	Level 3 - - - 15,959,662 15,959,662 - - - - 15,959,662 - - - - - - - - - -	Total
$ 4,023,306 4,023,306 86,073,509 15,959,662 102,033,171 24,024,730 12,846,580 24,490,960 61,362,270 $ 167,418,747 $ 40,905,411 16,484,375 19,714,173 3,249,075 19,723,900 8,066,436 31,078,150 9,780,381 162,273 $ 149,164,174	-	4,023,306		4,023,306
	-	4,023,306		4,023,306
	86,073,509 -	- -		86,073,509 15,959,662
	86,073,509	-		102,033,171
	- - -	- - -		- - -
	-	-		-
	86,073,509	4,023,306		106,056,477
	- - - - - - - - -	- - - - - - - - -		- - - - - - - - -
	-	-		-

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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.

3) 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).

4) There was no transfer between the fair value hierarchy levels for the six months ended June 30, 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 June 30, 2021 January 1, 2020 Total gains and losses recognized: In other comprehensive income Effect of exchange rate changes June 30, 2020	Financial assets at fair value through other comprehensive income Unquoted equity instruments $ 18,647,715 1,744,920 91,000 (1,952) $ 20,481,683 $ 21,408,559 (5,183,196) (265,701) $ 15,959,662

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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.

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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:

June 30, 2021 Financial assets at fair value through other comprehensive income – unquoted equity instruments December 31, 2020 Financial assets at fair value through other comprehensive income – unquoted equity instruments June 30, 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 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% $ 158,040 (158,040) ± 1% $ 147,165 (147,165) ± 1% $ 121,938 (121,938)

(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.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 (7,312,651) 100,000 (941,184) (1,650,000) (18,964) 283,911 (9,538,888)	Changes in non-cash - (1,263) - 5,045 6,568 - 10,350	Effect of exchange rate changes (7,988) - (26,991) - - (327,401) (362,380)	June 30, 2021
					8,036,085 17,095,561 2,601,601 39,265,500 130,979 14,353,050
					81,482,776

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 (493,447) 1,500,000 (3,327,978) 8,350,000 (20,934) (1,960,036) 4,047,605	Changes in non-cash - (7,169) - (8,901) 131,010 - 114,940	Effect of exchange rate changes (47,476) - (33,487) - - 308,676 227,713	June 30, 2020
					19,714,173 16,484,375 3,249,075 40,905,411 162,273 19,723,900
					100,239,207

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(7) Related-party transactions:

(a) Name of related parties

Relationship with Consolidated Company Associates Associates Associates Associates Associates Associates Associates

Name of related party

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 Chang Gung Medical Foundation Other related parties Nan Ya PCB Corporation Other related parties PFG Fiber Glass Corporation Other related parties Nan Chung Petrochemical Corporation Other related parties Nan Ya Plastics (Guangzhou) Co., Ltd. Other related parties Nan Ya Plastics (Nantong) Co., Ltd. Other related parties Nan Ya Plastics Film (Huizhou) Co., Ltd. Other related parties Nan Ya Plastics (Xiamen) Co., Ltd. Other related parties Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. Other related parties Nan Ya Electronic Materials (Kunshan) Co., Ltd. Other related parties Nan Ya Plastics (Ningbo) Co., Ltd. Other related parties

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of related party

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 Technologies 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

(b) Significant related-party transactions
(i) Sales to related parties

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

For the three months ended June 30,	For the three months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
2021 $ 2,239,283 38,069 8,633,706 $ 10,911,058	2020	2021 4,110,485 72,985 15,234,490 19,417,960	2020
	1,421,560 28,300 4,708,861		3,184,228 62,826 9,927,285
	6,158,721		13,174,339

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The receivables from related parties were as follows:

Associates Joint ventures Other related parties	June 30, 2021 $ 1,140,068 11,383 3,175,723 $ 4,327,174	December 31, 2020 856,346 7,481 2,575,386 3,439,213	June 30, 2020
			908,589 11,040 2,173,873
			3,093,502

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:

For the three months ended June 30,	For the three months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
2021 $ 19,331,190 2,408,085 1,630,061 $ 23,369,336	2020	2021 39,915,254 4,241,198 3,158,556 47,315,008	2020
	11,323,498 1,773,915 809,059		26,497,337 3,690,612 1,553,780
	13,906,472		31,741,729

The payables from related parties were as follows:

Associates Formosa Petrochemical Corporation Other Other related parties	June 30, 2021 $ 6,557,255 346,634 687,101 $ 7,590,990	December 31, 2020 6,272,990 399,809 429,766 7,102,565	June 30, 2020
			5,013,799 500,906 352,261
			5,866,966

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.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Property plant and equipment
1) Sales of equipment (recognized as property, plant and equipment) from related parties were as follow：

Joint ventures	For the three months ended June 30, 2021 Disposal price Gain from disposal $ 200 200	For the six months ended June 30, 2021	For the six months ended June 30, 2021
	Disposal price $ 200	Disposal price 200	Gain from disposal
			200

The group has no related transactions for the six months ended June 30, 2020.

2) Purchase property, plant and equipment

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

Other related parties	For the three months ended June 30,	For the three months ended June 30,		For the six months ended June 30,	For the six months ended June 30,
	2021 $ 18,292	2020		2021 79,238	2020
		79,668			184,923

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

Other related parties 3) Acquisition of financial assets	June 30, 2021 $ 10,756	December 31, 2020 50,757	June 30, 2020
			12,130

For the three Financial Number of months ended Statement Shares June 30, Account (in thousands) Transaction Shares 2021 Joint venturesFormosa Tokuyama Shares of stock of Advanced Investments Formosa Tokuyama Chemicals Co., accounted for using Advanced Chemicals Ltd. equity method 37,500 Co., Ltd. $ 375,000

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Associates- Formosa Resources Corporation Joint ventures- Formosa Tokuyama Advanced Chemicals Co., Ltd.	Financial Statement Account Number of Shares (in thousands) Investments accounted for using equity method 88,453 Investments accounted for using equity method 37,500	Transaction Shares For the six months ended June 30,2021 Shares of stock of Formosa Resources Corporation $ 884,531 Shares of stock of Formosa Tokuyama Advanced Chemicals Co., Ltd. 375,000 $ 1,259,531

The Group has no related transactions for the six months ended June 30, 2020.

(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)
June 30, 2021 $ - 2,157,087 159,624 3,524,151 $ 5,840,862	December 31, 2020 - - 249,039 4,243,086 4,492,125	June 30, 2020
		8,150,000 - 234,615 5,570,330
		13,954,945

As of June 30, 2021, December 31 and June 30, 2020, the interest revenue receivables from the abovementioned transactions amounted to $25,164 thousand, $7,363 thousand and $13,839 thousand, respectively, which was recognized as other receivables-related parties.

Associates Formosa Plastics Corp., U.S.A.	Due to related parties (recognized as other payables–related parties) June 30, 2021 December 31, 2020 June 30, 2020 $ 14,353,050 14,396,540 19,723,900	Due to related parties (recognized as other payables–related parties) June 30, 2021 December 31, 2020 June 30, 2020 $ 14,353,050 14,396,540 19,723,900	Due to related parties (recognized as other payables–related parties) June 30, 2021 December 31, 2020 June 30, 2020 $ 14,353,050 14,396,540 19,723,900	Due to related parties (recognized as other payables–related parties) June 30, 2021 December 31, 2020 June 30, 2020 $ 14,353,050 14,396,540 19,723,900
	June 30, 2021 $ 14,353,050		December 31, 2020 14,396,540
				19,723,900

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

As of June 30, 2021, December 31 and June 30, 2020, the accrued interest expense from the abovementioned transactions amounted to $15,993 thousand, $17,959 thousand and $21,509 thousand respectively, which was recognized as other current liabilities.

(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.	June 30, 2021 $ 6,967,500 2,996,025 13,795,806 $ 23,759,331	December 31, 2020 7,127,000 3,064,610 18,967,581 29,159,191	June 30, 2020
			7,415,000 3,188,450 20,090,082
			30,693,532

(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
June 30, 2021 $ 27 6 340 $ 373	December 31, 2020 17 - 1,769 1,786	June 30, 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
	June 30, 2021 $ 1,472,061 198,741 $ 1,670,802	December 31, 2020 1,434,109 221,057 1,655,166	June 30, 2020 1,408,784 218,510 1,627,294

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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
	June 30, 2021 $ 1,932,175	December 31, 2020 1,997,928	June 30, 2020 1,979,234

(viii) Rental (recognized as other income)

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

For the three months ended June 30,	For the three months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
2021	2020	2021 8,284 29,382 3,485 8,698 4,025 12,131 10,326 8,850 7,156 92,337	2020
$ 4,142 14,691 1,743 5,511 2,012 6,065 10,326 - 3,520 $ 48,010	4,142 14,691 1,743 4,349 149 6,327 701 13,956 4,455		8,284 29,382 3,485 8,458 298 12,654 701 13,956 8,910
	50,513		86,128

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 June 30,	For the three months ended June 30,		For the six months ended June 30, 2021 2020 34,552 37,623	For the six months ended June 30, 2021 2020 34,552 37,623
	2021 $ 16,103	2020		2021 34,552
		19,893			37,623

(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 non-current assets) Certificate of deposit $	June 30, 2021 $ 2,155,744 92,681 2,248,425	December 31, 2020 2,156,562 92,675 2,249,237	June 30, 2020
			2,157,422 88,541
			2,245,963

(9) Commitments and contingencies:

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

Endorsements and guarantees	June 30, 2021 $ 23,759,331	December 31, 2020 29,159,191	June 30, 2020 30,693,532

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

Unused outstanding letters	June 30, 2021 $ 310,010	December 31, 2020 456,046	June 30, 2020 315,325

(c) As of June 30, 2021, the Company’ s investee, Formosa Ha Tinh (Cayman) Ltd. and Formosa Ha Tinh Steel Corporation, signed several contracts of syndicated credit lines of US$1,602,500 thousand with different banks amounting to US$1,485,000 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.

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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 periods ended June 30, 2021	For the three months periods ended June 30, 2021	For the three months periods ended June 30, 2021	For the three months periods ended June 30, 2021	For the three months periods ended June 30, 2020	For the three months periods ended June 30, 2020	For the three months periods ended June 30, 2020	For the three months periods ended June 30, 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	1,394,461 119,706 85,653 - 73,978 1,388,704 169,676	923,552 70,974 41,632 1,810 24,995 415,861 350	- - - - - 506 2,521	2,318,013 190,680 127,285 1,810 98,973 1,805,071 172,547	1,412,071 107,077 65,418 - 83,329 1,365,642 92,012	947,003 63,572 43,472 1,900 25,719 403,124 855	- - - - - 503 2,776	2,359,074 170,649 108,890 1,900 109,048 1,769,269 95,643

	For the six months periods ended June 30, 2021				For the six months periods ended June 30, 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	2,797,599 239,022 170,083 - 149,827 2,796,186 509,014	1,849,784 141,423 82,558 3,650 49,963 836,761 710	- - - - - 1,027 5,043	4,647,383 380,445 252,641 3,650 199,790 3,633,974 514,767	2,831,781 215,222 135,505 - 159,954 2,738,440 185,375	1,881,919 126,968 87,075 3,730 51,853 796,536 1,720	- - - - - 1,017 5,552	4,713,700 342,190 222,580 3,730 211,807 3,535,993 192,647

(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	7,500,000 7,500,000 7,500,000 9,100,000 4,852,082 600,000 245,898 (CNY 57,000) 2,157,000 (CNY 500,000)	6,000,000 6,000,000 6,000,000 6,000,000 4,108,151 - 159,618 (CNY 37,000) 2,157,000 (CNY 500,000)	- - - - 3,524,151 - 159,624 (CNY 37,000) 2,157,087 (CNY 500,000)	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	- - - - - - - -	- - - - - - - -	- - - - - - - -	71,665,563 71,665,563 71,665,563 71,665,563 71,665,563 71,665,563 18,509,096 23,136,370	143,331,127 143,331,127 143,331,127 143,331,127 143,331,127 143,331,127 46,272,739 46,272,739	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 June 30, 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 4.314 to CNY1; and the exchange rate for the actual usage during the period was TWD4.3141750 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-party of guarantee and endorsement	Counter-party of guarantee and endorsement	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	232,913,081 232,913,081 232,913,081	7,132,750 18,903,708 3,067,083	6,967,500 13,795,806 2,996,025	6,967,500 13,795,806 2,996,025	- - -	% 1.94 % 3.85 % 0.84	465,826,162 465,826,162 465,826,162	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 June 30, 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	2,689,914 1,351,462 18,237 39,789 27,489 269,632	% 16.17 % 17.99 % 0.81 % 1.05 % 0.80 % 18.00	2,689,914 1,351,462 18,237 39,789 27,489 269,632

(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 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 Technologies Corporation 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 PuriBlood Medical 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 -	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 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 1,300 - 783,357 198,744 334,815 12,479	- 72,639 159,947 353,739 2,009,080 327,666 34,762 - 46,036 20,800 200,305 12,612,005 47,099 20,280,601 201,082 20,481,683 65,175,291 16,833,612 26,684,788 108,693,691 3,811,937	% 9.55 % 12.00 % 12.50 % 15.00 % 19.00 % 18.11 % 3.91 % 1.43 % 18.00 % 1.97 % 19.07 % 11.43 % 9.14 % 16.11 % 9.88 % 3.39 % 10.85 % 25.00	- 72,639 159,947 353,739 2,009,080 327,666 34,762 - 46,036 20,800 200,305 12,612,005 47,099 20,280,601 201,082 20,481,683 65,175,291 16,833,612 26,684,788 108,693,691 3,811,937

(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 The Company	Securities-Formosa Resources Corporation Formosa Tokuyama Advanced Chemicals Co., Ltd.	Investments accounted for using equity method Investments accounted for using equity method	Formosa Resources Corporation Formosa Tokuyama Advanced Chemicals Co., Ltd.	Associates Joint venture	741,594 12,500	6,169,287 124,934	88,453 37,500	884,531 375,000	- -	- -	- -	- -	830,047 50,000	7,081,010 (Note 1) 477,107 (Note 2)

Note 1: The ending balance includes the share of profit or loss of subsidiaries, associates and joint ventures accounted for using equity method of $27,192 thousand. Note 2 : The ending balance includes the share of profit or loss of subsidiaries, associates and joint ventures accounted for using equity method of ($22,827) 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 The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd.	Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Formosa Petrochemical Corporation Formosa Chemicals Industries (Ningbo) Co., Ltd Formosa Heavy Industries Corp. Formosa Taffeta Co. Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Formosa Industries Corp., Vietnam Formosa Industries (Ningbo) Co., Ltd. Formosa Plastics Corp., U.S.A. Inteplast Taiwan Corporation The Company	Other related parties 〃 Associates Other related parties Associates Other related parties Other related parties Other related parties Parent- subsidiary Associates Other related parties Parent- subsidiary	(Sales) 〃〃〃〃〃〃〃〃〃〃〃	(7,870,283) (3,337,794) (3,054,584) (1,101,399) (111,519) (103,508) (210,505) (222,178) (6,390,437) (841,110) (140,374) (888,151)	% (7.67) % (3.25) % (2.98) % (1.07) % (0.11) % (0.10) % (0.21) % (0.22) % (6.23) % (0.82) % (0.14) % (2.85)	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 Before the 27th of the following month Before the 30th of the following month O/A 60 days O/A 60 days O/A 90 days O/A 90 days Before the 27th of the following month Before the 30th of the following month	- - - - - - - - - - - -		1,469,223 608,678 616,087 410,191 5,665 14,625 39,236 37,856 1,610,305 494,451 25,390 211,969	9.43% 3.91% 3.95% 2.63% 0.04% 0.09% 0.25% 0.24% 10.34% 3.17% 0.16% 3.11%	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)
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 The Company The Company The Company The Company Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries Corporation U.S.A	Nan Ya Plastics Film (Nantong) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. The Company INTEPLAST GROUP Nan Ya Plastics Corporation Formosa Chemicals & Fiber Corporation Formosa Petrochemical Corporation Formosa Heavy Industries Corp. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries Corporation U.S.A The Company Nan Ya Plastics Corporation Formosa Plastics Corp., U.S.A.	Other related parties 〃〃 Parent- subsidiary Other related parties 〃〃 Associates 〃 Parent- subsidiary Parent- subsidiary Parent- subsidiary Other related parties Associates	(Sales) 〃〃〃〃 Purchase 〃〃〃〃〃〃〃	(636,600) (124,542) (344,807) (326,478) (907,309) 1,056,546 1,352,700 39,915,254 829,055 888,151 326,478 14,163,716 685,118 3,412,143	% (2.04) % (0.40) % (1.11) % (5.47) % (15.21) % 1.66 % 2.13 % 62.87 % 1.31 % 1.40 % 0.51 % 45.10 % 2.18 % 94.59	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 Before the 27th of the following month Before the 27th of the following month O/A 90 days O/A 90 days O/A 90 days O/A 90 days Before the 10th of the following month	- - - - - - - - - - - - - -		136,891 42,111 75,043 46,783 251,984 (199,671) (221,443) (6,557,255) (128,523) (211,969) (46,783) (2,624,121) (259,900) (218,111)	2.01% 0.62% 1.10% 3.71% 20.00% (2.17)% (2.40)% (71.11)% (1.39)% (2.30)% (0.51)% (48.19)% (4.77)% (81.00)%	Note 1 Note 1 Note 1 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)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate	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	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.	Other related parties Other related parties Associates Other related parties Parent-subsidiary Associates	1,469,223 608,678 616,087 410,191 1,610,305 494,451	% 11.65 % 12.49 % 11.78 % 5.99 % 9.06 % 3.65	- - - - - -		1,037,510 406,101 386,897 224,264 277,401 111,224	- - - - - -	Note

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

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 Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Industries Corporation 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. The Nan Ya Plastics (Nantong) Co., Ltd. INTEPLAST GROUP	Other related parties Parent-subsidiary Associates Parent-subsidiary Joint venture Associates Other related parties Other related parties	3,524,151 1,013,816 1,932,175 211,969 159,624 2,157,087 136,891 251,984	% - % 14.64 % - % 13.81 % - % - % 11.46 % 10.53	- - - - - - - -		- - - - - - - -	- - - - - - - -	Note Note

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

(ix) Trading in derivative instruments: Please refer to notes .
(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 U.S.A Formosa Industries Corporation U.S.A	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	6,390,437 1,610,305 7,773,279 1,013,816 888,151 211,969 326,478 46,783	O/A 90 days 〃 O/A 60 days 〃 Before the 30th of the following month 〃 Before the 10th of the following month 〃	4.83% 0.31% 5.88% 0.20% 0.67% 0.04% 0.25% 0.01%

Note 1: Assigned numbers represent the following:

0 represents the parent company.
The subsidiaries are represented numerically starting from 1.

Note 2: The terms of transactions are defined as follows:

Represents the parent company having transaction with a subsidiary.
Represents a subsidiary having transaction with the parent company.
Represents a subsidiary having transaction with a subsidiary.

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

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

(b) Information on investees:

The following is the information on investees for the six months ended June 30, 2021 (excluding information on investees in Mainland China):

Mainland China):	Mainland China):	Mainland China):	Mainland China):
						(In Thousands of New Taiwan Dollars) Balance as of June 30, 2021 Net income Share of Shares (thousands) Percentage of ownership Carrying value (losses) of investee profits/losses of investee Note 2,720,549 % 28.56 95,265,609 31,505,067 8,850,065 Note, Note 2 70 % 22.66 61,550,855 7,277,887 1,649,002 Note, Note 2 651,828 % 32.92 7,115,707 322,808 98,299 Note, Note 2 425,800 % 50.00 4,458,344 (414,661) (207,330) Note, Note 2 77 % 100.00 46,705,785 4,425,828 4,425,828 Note, Note 1 601,733 % 24.94 12,256,694 559,364 139,517 Note, Note 2 112,708 % 29.06 5,836,311 601,676 174,845 Note, Note 2 6,566 % 33.33 1,184,642 143,778 47,926 Note, Note 2 4,698 % 33.33 56,944 (33,908) (11,302) Note 2 1,200 % 28.72 20,144 (53) (15) Note 2 1,306 % 45.04 18,001 (216) (97) Note 2 50 % 50.00 1,339,671 204,180 102,090 Note 2 27,044 % 45.00 356,699 216,372 97,365 Note 2 33 % 33.00 3,031 7 2 Note 2 24 % 50.00 1,291,756 163,370 81,685 Note 2 830,047 % 25.00 7,081,010 108,769 27,192 Note, Note 2 41,714 % 24.34 228,507 4,849 1,180 Note, Note 2 60,000 % 33.33 584,247 47,536 15,845 Note 2 13 % 25.00 646,639 48,292 12,073 Note, Note 2 5 % 100.00 11,474,599 962,533 962,533 Note, Note 1 50,000 % 50.00 477,107 (45,655) (22,827) Note 2 - % 100.00 46,690,865 (USD1,675,309) 4,441,437 (USD157,599) 4,441,437 (USD157,599) Note, Note 1, Note 3 - % 33.00 3,752,473 (USD104,769) 2,832,836 (USD100,520) 934,836 (USD33,171) Note 2, Note 3 - % 38.00 15,830 (USD2,569) (239,676) (USD-8505) (91,077) (USD-3232) Note 2, Note 3
Name of investor	Name of investee	Location	Main businesses and products	Original investment amount		Balance as of June 30, 2021			Net income (losses) of investee	Share of profits/losses of investee	Note
				June 30, 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 The Company The Company The Company The Company The Company The Company Formosa Plastics Corp. (Cayman) Ltd. Formosa Industries Corporation U.S.A Formosa Industries Corporation U.S.A	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. Formosa Resources Corporation Formosa Environmental Technology Corporation Formosa Plastics Construction Corporation Formosa Group (Cayman) Limited Formosa Industries Corporation U.S.A Formosa Tokuyama Advanced Chemicals Co., Ltd. Formosa Industries (Hong Kong) Limited Formosa Olefins, L.L.C. Lolita Packaging, L.L.C.	Taiwan U.S.A Taiwan Samoa Cayman Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Cayman U.S.A Taiwan Hong Kong U.S.A U.S.A	Petrochemicals Chemicals Mechanical equipment Investment Investment Electricity Electronics manufacture Transportation Transportation Construction Development of land Artificial fiber Automobile Consulting service Chemical industry Mining industry Environmental industry Construction Investment Chemicals Semiconductor Reinvestment Olefins Transportation	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 8,300,471 417,145 600,000 377 15,640,245 500,000 15,801,889 (USD501,902) 3,527,939 (USD108,075) 306,478 (USD9,880)	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 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)	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 24 830,047 41,714 60,000 13 5 50,000 - - -	% 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 % 25.00 % 24.34 % 33.33 % 25.00 % 100.00 % 50.00 % 100.00 % 33.00 % 38.00	95,265,609 61,550,855 7,115,707 4,458,344 46,705,785 12,256,694 5,836,311 1,184,642 56,944 20,144 18,001 1,339,671 356,699 3,031 1,291,756 7,081,010 228,507 584,247 646,639 11,474,599 477,107 46,690,865 (USD1,675,309) 3,752,473 (USD104,769) 15,830 (USD2,569)	31,505,067 7,277,887 322,808 (414,661) 4,425,828 559,364 601,676 143,778 (33,908) (53) (216) 204,180 216,372 7 163,370 108,769 4,849 47,536 48,292 962,533 (45,655) 4,441,437 (USD157,599) 2,832,836 (USD100,520) (239,676) (USD-8505)	8,850,065 1,649,002 98,299 (207,330) 4,425,828 139,517 174,845 47,926 (11,302) (15) (97) 102,090 97,365 2 81,685 27,192 1,180 15,845 12,073 962,533 (22,827) 4,441,437 (USD157,599) 934,836 (USD33,171) (91,077) (USD-3232)	Note, Note 2 Note, Note 2 Note, Note 2 Note, Note 2 Note, Note 1 Note, Note 2 Note, Note 2 Note, Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note, Note 2 Note, Note 2 Note 2 Note, Note 2 Note, Note 1 Note 2 Note, Note 1, 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 June 30, 2021, was 27.8700 to 1. The average exchange rate of New Taiwan dollars to US dollars for the six months ended June 30, 2021, was 28.1819 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 capital	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 June 30, 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.	Plastics Electronics Electrolyte	31,188,509 (USD989,023) 74,648 (USD2,260) 244,196 (USD8,200)	( 2 ) ( 2 ) ( 2 )	26,928,755 (USD845,270) 66,137 (USD2,000) 122,098 (USD4,100)	- - -	- - -	26,928,755 (USD845,270) 66,137 (USD2,000) 122,098 (USD4,100)	4,417,411 (USD156,746) 24,026 (USD853) (31,096) (USD-1,103)	100.00% 100.00% 50.00%	4,417,411 (USD156,746) 24,026 (USD853) (15,548) (USD-552)	46,272,739 (USD1,660,306 418,126 (USD15,003 (40,847 (USD-1,466	) - ) - ) ) -

(Continued)

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements

Name of investee	Main businesses and products	Total amount of paid-in capital	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 June 30, 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
Fujian Fuxin Special Steel Co., Ltd Swancor (Jiangsu) Carbon Fiber Composite Co., Ltd.	Steel Carbon fiber	34,347,344 (USD1,460,000) 616,986 (USD19,000)	( 2 ) ( 2 )	13,221,416 (USD425,800) 99,993 (USD3,060)	- -	- -	13,221,416 (USD425,800) 99,993 (USD3,060)	(710,896) (USD-25,225) 124,338 (USD4,412)	29.16% 16.11%	(207,329) (USD-7,357) -	4,457,921 (USD159,954) 201,082 (USD7,215)	- -

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.

(ii) Limitation on investment in Mainland China:

itation on investment in Mainland China:
Accumulated Investment in Mainland China as of June 30, 2021	Investment Amounts Authorized by Investment Commission, MOEA (Note 1)	Upper Limit on Investment (Note 2)
40,438,399 (USD 1,280,230)	39,693,652 (USD 1,424,243)	-

Note: The exchange rate of New Taiwan dollars to US dollars on June 30, 2021, was 27.870 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 th	ree months periods ended June	ree months periods ended June	30, 2021		Total 71,652,909 -
Plastic division $ 23,649,996 321,208 $ 23,971,204 $ 7,971,246	Polyolefin division 16,242,117 8,022 16,250,139 4,379,887	Polypropylene division 10,481,326 15,486 10,496,812 1,485,173 For the th	Tairylan division Chemistry division 10,825,503 9,602,976 39,698 535,772 10,865,201 10,138,748 2,422,203 3,390,130 ree months periods ended June		Others divisions 850,991 1,906,710 2,757,701 192,043 30, 2020	Adjustments and eliminated - (2,826,896) (2,826,896) 4,741,204
							71,652,909
							24,581,886
							Total 42,984,102 -
Plastic division $ 13,720,520 316,660 $ 14,037,180 $ 1,380,526	Polyolefin division 8,833,656 128,654 8,962,310 (118,754)	Polypropylene division 8,643,376 12,959 8,656,335 1,035,703 For the s	Tairylan division Chemistry division Others divisions 6,750,498 4,087,562 948,490 14,895 309,932 1,575,914 6,765,393 4,397,494 2,524,404 (280,247) 136,074 246,036 ix months periods ended June 30, 2021			Adjustments and eliminated - (2,359,014) (2,359,014) (2,506,380)
							42,984,102
							(107,042)
							Total 132,254,846 -
Plastic division $ 44,367,064 624,221 $ 44,991,285 $ 14,012,396	Polyolefin division 28,477,024 15,921 28,492,945 6,601,942	Polypropylene division 20,248,943 26,218 20,275,161 2,515,056 For the s	Tairylan division Chemistry division Others divisions 20,951,799 16,385,712 1,824,304 61,286 965,803 3,641,626 21,013,085 17,351,515 5,465,930 4,606,692 5,066,400 418,860 ix months periods ended June 30, 2020			Adjustments and eliminated - (5,335,075) (5,335,075) 9,422,694
							132,254,846
							42,644,040
							Total 85,003,282 -
Plastic division $ 28,721,105 659,650 $ 29,380,755 $ 3,495,029 Plastic division $ 32,578,267 $ 28,996,176 $ 26,453,736 Plastic division $ 4,694,169 $ 4,860,295 $ 3,781,141	Polyolefin division 17,433,961 559,164 17,993,125 (195,079) Polyolefin division 12,106,486 37,366,934 36,495,745 Polyolefin division 1,961,137 17,188,904 21,769,381	Polypropylene division 15,326,806 21,758 15,348,564 1,485,997 Polypropylene division 24,567,601 18,838,077 15,568,576 Polypropylene division 2,940,096 2,278,123 2,340,302	Tairylan division 12,798,525 28,095 12,826,620 (834,797) Tairylan division 25,648,640 21,677,004 21,621,326 Tairylan division 2,596,703 1,536,343 1,866,101	Chemistry division 8,823,548 616,200 9,439,748 636,159 Chemistry division 7,513,549 5,859,038 5,156,821 Chemistry division 650,660 310,147 179,091	Others divisions 1,899,337 2,697,802 4,597,139 421,737 Others divisions 472,472,440 421,068,884 443,161,692 Others divisions 141,284,706 121,577,220 149,366,135	Adjustments and eliminated - (4,582,669) (4,582,669) (4,986,492) Adjustments and eliminated (61,593,488) (54,525,690) (80,508,676) Adjustments and eliminated 838,207 (1,006,749) (1,648,723)
							85,003,282
							22,554
							Total 513,293,495
							479,280,423
							467,949,220
							Total 154,965,678
							146,744,283
							177,653,428

AI assistant

FPC — Interim / Quarterly Report 2021

51762_rns_2021-12-02_de3a40fd-4787-4347-899c-a8c322e600fa.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

Notes to Readers

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(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 and six months ended June 30, 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 six-month periods ended June 30, 2021 and 2020

Notes to the Consolidated Financial Statements

June 30, 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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Employee Benefits

(d) Income Tax

(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

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

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Joint ventures

(iii) Collaterals

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Property, plant and equipment

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

Total

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Issuance and redemption of loan

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

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

(n) Employee benefits

(i) Defined benefit plan

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Income tax

(p) Capital and other equity

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Capital surplus

(ii) Retained earnings

FPC Interim / Quarterly Report 2021