F.T.C - Interim / Quarterly Report 2019

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

June 30, 2019 AND 2018

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

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REVIEW REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Formosa Taffeta Co., Ltd.

Introduction

We have reviewed the accompanying consolidated balance sheets of Formosa Taffeta Co., Ltd. and subsidiaries (the “Group”) as at June 30, 2019 and 2018, and the related consolidated statements of comprehensive income for the three months and six months then ended, as well as the consolidated statements of changes in equity and of cash flows for the six months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of 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 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 explained in Notes 4(3) and 6(6), the financial statements of certain insignificant consolidated subsidiaries and investments accounted for under equity method were not reviewed by independent accountants. Those statements reflect total assets (including investments accounted for using equity method) of NT$22,104,454 thousand and NT$22,363,731 thousand, constituting 23% and 22% of the consolidated total assets, and total liabilities of NT$6,037,158 thousand and NT$5,628,749 thousand, constituting 26% and 22% of the consolidated total liabilities as at June 30, 2019 and 2018, respectively,

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and total comprehensive income (including share of profit (loss) of associates accounted for using equity method and share of profit (loss) of associates and other comprehensive income of associates) amounted to NT$204,297 thousand, NT$164,670 thousand, NT$308,203 thousand and NT$198,148 thousand, constituting 123%, 4%, 9% and 4% of the total comprehensive income for the three months ended June 30, 2019 and 2018, and six months ended June 30, 2019 and 2018, respectively.

Qualified Conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries been reviewed by independent accountants, that we might have become aware of had it not been for the situation described above, 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 at June 30, 2019 and 2018, and of its consolidated financial performance and its consolidated cash flows for the six-months periods then ended in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Wu, Han-Chi Chou, Chien-Hung For and on behalf of PricewaterhouseCoopers, Taiwan August 8, 2019

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

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

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FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of June 30, 2019 and 2018 are reviewed, not audited)

Assets	Notes	June 30, 2019 AMOUNT % `$` `3,780,268` `4` `556,312` `1` `3,636,838` `4` `1,094,931` `1` `125,565` `-` `7,175` `-` `4,820,988` `5` `1,605,421` `2` `2,242,470` `2` `8,318,574` `8` `676,108` `1` `394,910` `-` `27,259,560` `28` `46,968,385` `48` `3,335,586` `3` `18,661,510` `19` `1,104,176` `1` `95,128` `-` `421,559` `1` `70,586,344` `72` `$` `97,845,904` `100`	December 31, 2018 AMOUNT % `$` `3,391,896` `4` `479,490` `1` `3,674,217` `4` `788,643` `1` `116,511` `-` `4,429` `-` `4,110,277` `4` `1,228,428` `1` `326,802` `-` `8,710,037` `9` `457,003` `1` `483,826` `1` `23,771,559` `26` `46,512,701` `50` `3,216,506` `3` `18,770,958` `20` `-` `-` `93,797` `-` `660,972` `1` `69,254,934` `74` `$` `93,026,493` `100`	June 30, 2018
			AMOUNT `$` `3,391,896` `479,490` `3,674,217` `788,643` `116,511` `4,429` `4,110,277` `1,228,428` `326,802` `8,710,037` `457,003` `483,826` `23,771,559` `46,512,701` `3,216,506` `18,770,958` `-` `93,797` `660,972` `69,254,934` `$` `93,026,493`	AMOUNT % `$` `4,981,785` `5` `631,854` `1` `4,168,067` `4` `659,715` `1` `115,796` `-` `9,290` `-` `4,617,764` `5` `1,506,087` `1` `513,665` `-` `8,163,067` `8` `599,846` `1` `558,561` `-` `26,525,497` `26` `52,833,053` `52` `3,140,269` `3` `18,032,787` `18` `-` `-` `90,524` `-` `617,701` `1` `74,714,334` `74` `$` `101,239,831` `100`
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1120 Current financial assets at fair value through other comprehensive income 1140 Current contract assets 1150 Notes receivable, net 1160 Notes receivable - related parties 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 130X Inventory 1410 Prepayments 1470 Other current assets 11XX Total current Assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets	6(1) 6(2) 6(3) 6(19) 6(4) 7 6(4) 7 7 6(5) 6(3) 6(6) 6(7) and 8 6(8) 6(25)

(Continued)

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FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of June 30, 2019 and 2018 are reviewed, not audited)

Liabilities and Equity	Notes	June 30, 2019	December 31, 2018 June 30, 2018 % AMOUNT % AMOUNT % `4 $` `3,638,538` `4 $` `3,734,957` `4` `-` `-` `-` `999,684` `1` `-` `774` `-` `-` `-` `-` `251,576` `-` `211,244` `-` `-` `335,830` `-` `355,836` `1` `2` `1,312,601` `2` `1,687,603` `2` `1` `996,011` `1` `928,568` `1` `6` `1,949,497` `2` `5,264,604` `5` `1` `391,662` `1` `331,223` `-` `-` `-` `-` `-` `-` `-` `314,741` `-` `208,698` `-` `14` `9,191,230` `10` `13,722,417` `14` `8` `8,022,299` `9` `11,089,898` `11` `-` `292,165` `-` `256,409` `-` `1` `-` `-` `-` `-` `1` `552,109` `-` `819,435` `1` `10` `8,866,573` `9` `12,165,742` `12` `24` `18,057,803` `19` `25,888,159` `26` `17` `16,846,646` `18` `16,846,646` `17` `1` `1,268,860` `1` `275,418` `-` `8` `7,567,594` `8` `7,567,594` `8` `2` `2,214,578` `2` `2,214,578` `2` `9` `9,743,048` `11` `6,391,740` `6` `33` `31,291,978` `34` `38,242,483` `37` `- (` `19,500 )` `- (` `19,935)` `-` `70` `68,913,204` `74` `71,518,524` `70` `6` `6,055,486` `7` `3,833,148` `4` `76` `74,968,690` `81` `75,351,672` `74` `100 $` `93,026,493` `100 $` `101,239,831` `100`	June 30, 2018
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2120 Financial liabilities at fair value through profit or loss - current 2150 Notes payable 2160 Notes payable - related parties 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2280 Current lease liabilities 2300 Other current liabilities 21XX Total current Liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total Liabilities Equity attributable to owners of parent Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3500 Treasury stocks 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments Significant event after the balance sheet date 3X2X Total liabilities and equity

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

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FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

(REVIEWED, NOT AUDITED)

Items	Notes	Three months ended June 30	Three months ended June 30
		2019	2018
4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for under equity method 7000 Total non-operating revenue and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the period

(Continued)

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FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount) (REVIEWED, NOT AUDITED)

Items	Notes		Three months ended June 30	Three months ended June 30	Three months ended June 30	Three months ended June 30	Three months ended June 30	Six months ended June 30	Six months ended June 30	Six months ended June 30	Six months ended June 30	Six months ended June 30
			2019		2018			2019		% `1` `-` `1` `1` `-` `1` `2` `14` `11` `1` `12` `13` `1` `14` t e r a x `1.77` `0.19)` `1.58` `1.77` `0.19)` `1.58`	2018
					AMOUNT `$` `2,126,299` `1,227` `2,127,526` `423,099` `84,509` `507,608` `$` `2,635,134` `$` `4,043,720` `$` `1,256,048` `152,538` `$` `1,408,586` `$` `3,841,668` `202,052` `$` `4,043,720` B e f o r e T a x A f T `$ 1.16` `$` `( 0.20)` `(` `$ 0.96` `$` `$ 1.16` `$` `( 0.20)` `(` `$ 0.96` `$`			AMOUNT `$` `280,218` `2,516` `282,734` `130,100` `19,846` `149,946` `$` `432,680` `$` `3,412,318` `$` `2,659,627` `320,011` `$` `2,979,638` `$` `3,060,974` `351,344` `$` `3,412,318` B e f o r e T a x A f T `$ 2.12` `$` `( 0.35)` `(` `$ 1.77` `$` `$ 2.12` `$` `( 0.35)` `(` `$ 1.77` `$`			AMOUNT `$` `3,533,909` `1,862` `3,535,771` `221,711` `30,871` `252,582` `$` `3,788,353` `$` `5,578,856` `$` `1,540,722` `249,781` `$` `1,790,503` `$` `5,206,700` `372,156` `$` `5,578,856` B e f o r e T a x A f T `$ 1.49` `$` `( 0.33)` `(` `$ 1.16` `$` `$ 1.49` `$` `( 0.33)` `(` `$ 1.16` `$`
Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8316 Unrealized gain (loss) on valuation of financial assets at fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures accounted for under equity method that will not be reclassified to profit or loss 8310 Other comprehensive income (loss) that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8370 Share of other comprehensive income of associates and joint ventures accounted for under equity method 8360 Other comprehensive income that will be reclassified to profit or loss 8300 Total other comprehensive income (loss) for the period 8500 Total comprehensive income for the period Profit, attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Basic and diluted earnings per share (in dollars) 9710 Profit for the year from continuing operations 9720 Non-controlling interest 9750 Profit attributable to common shareholders of the parent Assuming shares held by subsidiaries are not deemed as treasury stock: Profit for the year from continuing operations Non-controlling interest Profit attributable to common shareholders of the parent	6(18) 6(3) 6(26)
			e f o r e a x A T `$ 1.68` `0.20)` `(` `$ 1.48` `$ 1.67` `0.20)` `(` `$ 1.47`	A T	B e f o r e T a x `$ 1.16` `( 0.20)` `$ 0.96` `$ 1.16` `( 0.20)` `$ 0.96`			B e f o r e T a x `$ 2.12` `( 0.35)` `(` `$ 1.77` `$ 2.12` `( 0.35)` `(` `$ 1.77`			B e f o r e T a x `$ 1.49` `( 0.33)` `(` `$ 1.16` `$ 1.49` `( 0.33)` `(` `$ 1.16`
		`(` `(`				`(` `(`	`$`		`$`			`$`
							`$`		`$`			`$`
							`$`		`$`			`$`
							`$`		`$`			`$`

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

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FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2019 AND 2018 (Expressed in thousands of New Taiwan dollars)

(REVIEWED, NOT AUDITED)

Notes					Equity attributable to o	w	ners of the parent						Non-controlling interest	Total equity
	Share capital - common stock	Capital surplus		Retained Earnings				Other equityinterest			Treasury stocks	Total
			Legal reserve	Special reserve	Unappropriated retained earnings	d	Financial statements translation ifferences of foreign operations	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income	l	Unrealized gain or oss on available-for- sale financial assets
6(18) 6(16) 6(16) 6(18) 6(3) 6(18) 6(15)(16) 6(16) 6(18)	`$` `16,846,646` `-` `16,846,646` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `16,846,646` `$` `16,846,646` `-` `-` `-` `-` `-` `-` `-` `-` `$` `16,846,646`	`$` `274,323` `-` `274,323` `-` `-` `-` `-` `-` `1,105` `(` `10 )` `-` `-` `$` `275,418` `$ 1,268,860` `-` `-` `-` `-` `-` `1,194` `(` `16 )` `-` `$ 1,270,038`	`$ 7,139,607` `-` `7,139,607` `-` `-` `-` `427,987` `-` `-` `-` `-` `-` `$ 7,567,594` `$ 7,567,594` `-` `-` `-` `473,741` `-` `-` `-` `-` `$ 8,041,335`	`$` `2,214,578` `-` `2,214,578` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `2,214,578` `$` `2,214,578` `-` `-` `-` `-` `-` `-` `-` `-` `$` `2,214,578`	`$` `5,398,225` `4,890,917` `10,289,142` `1,540,722` `-` `1,540,722` `(` `427,987` `)` `(` `3,200,863` `)` `-` `-` `-` `(` `1,809,274` `)` `$` `6,391,740` `$` `9,743,048` `2,659,627` `-` `2,659,627` `(` `473,741` `)` `(` `3,537,796` `)` `-` `-` `-` `$` `8,391,138`		`($` `914,267` `)` `-` `(` `914,267` `)` `-` `252,367` `252,367` `-` `-` `-` `-` `-` `-` `($` `661,900` `)` `($` `744,846` `)` `-` `149,863` `149,863` `-` `-` `-` `-` `-` `($` `594,983` `)`	`$` `-` `33,680,146` `33,680,146` `-` `3,413,611` `3,413,611` `-` `-` `-` `-` `-` `1,810,626` `$` `38,904,383` `$` `32,036,824` `-` `251,484` `251,484` `-` `-` `-` `-` `-` `$` `32,288,308`		`$` `38,440,218` `(` `38,440,218 )` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-` `$` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-`	`($ 19,935 )` `-` `(` `19,935 )` `-` `-` `-` `-` `-` `-` `-` `-` `-` `($ 19,935 )` `($ 19,500 )` `-` `-` `-` `-` `-` `435` `-` `-` `($ 19,065 )`	`$` `69,379,395` `130,845` `69,510,240` `1,540,722` `3,665,978` `5,206,700` `-` `(` `3,200,863 )` `1,105` `(` `10 )` `-` `1,352` `$` `71,518,524` `$` `68,913,204` `2,659,627` `401,347` `3,060,974` `-` `(` `3,537,796 )` `1,629` `(` `16 )` `-` `$` `68,437,995`	`$ 3,803,175` `33,939` `3,837,114` `249,781` `122,375` `372,156` `-` `-` `(` `1,105 )` `-` `(` `377,047 )` `2,030` `$ 3,833,148` `$ 6,055,486` `320,011` `31,333` `351,344` `-` `-` `-` `-` `(` `588,275 )` `$ 5,818,555`	`$` `73,182,570` `164,784` `73,347,354` `1,790,503` `3,788,353` `5,578,856` `-` `(` `3,200,863` `)` `-` `(` `10` `)` `(` `377,047` `)` `3,382` `$` `75,351,672` `$` `74,968,690` `2,979,638` `432,680` `3,412,318` `-` `(` `3,537,796` `)` `1,629` `(` `16` `)` `(` `588,275` `)` `$` `74,256,550`

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

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FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars) (REVIEWED, NOT AUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation

Interest expense

Interest income

Dividend income

Gain on valuation of financial assets

Gain on valuation of financial liabilities

Share of profit of associates and joint ventures
accounted for under equity method

Gain on disposal and scrap of property, plant
and equipment

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or
loss
Current contract assets
Notes receivable , net
Notes receivable - related parties
Accounts receivable , net
Accounts receivable - related parties
Other receivables
Inventory
Prepayments
Other current assets
Changes in operating liabilities
Notes payable
Notes payable - related parties
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest received
Cash dividends received
Interest paid
Income tax paid
Net cash flows from operating activities Six months ended June 30,
Notes
2019
2018
$
3,565,035 $
2,510,728
6(7)(8)(22)
1,475,315
1,062,090
6(8)(24)
119,043
106,551
6(20)
(
17,360 ) (
12,648 )
6(20)
(
1,943,524 ) (
64,855 )
6(2)(21)
(
990 ) (
1,458 )
6(11)(21)
(
320 )
-
6(6)
(
96,568 ) (
65,137 )
6(21)
(
21,631 ) (
839,913 )
(
75,832 )
-
(
306,288 ) (
168,083 )
(
9,054 )
48,515
(
2,746 )
3,717
(
710,711 ) (
1,050,033 )
(
376,993 ) (
337,772 )
10,553
68,841
391,463 (
103,234 )
(
219,105 ) (
80,340 )
88,916 (
132,841 )
(
28,686 )
11,726
(
196,642 )
116,283
97,150
241,533
343,640 (
219,408 )
(
118,221 ) (
117,562 )
14,497
11,047
24,207 (
32,765 )
2,005,148
954,982
19,747
12,771
14,916
11,918
(
130,276 ) (
106,868 )
(
425,648 ) (
453,422 )
1,483,887
419,381

(Continued)

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FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars) (REVIEWED, NOT AUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through
other comprehensive income
Proceeds from disposal of financial assets at fair
value through other comprehensive income

Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and
equipment
(Increase) decrease in other non-current assets
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings

Decrease in short-term notes and bills payable

Payment of long-term borrowings
Increase in long-term borrowings
Payment of lease principal

Expired cash dividends paid
Net cash flows from financing activities
Effect of foreign exchange rate
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period Six months ended June 30,
Notes
2019
2018
($
69,570 ) ($
594,949 )
6(3)
-
769,608
6(27)
(
1,291,446 ) (
2,387,420 )
51,219
1,230,397
(
21,484 )
26,384
(
1,331,281 ) (
955,980 )
6(28)
360,258
929,267
6(28)
- (
300,122 )
(
3,070,928 ) (
4,300,000 )
3,000,000
4,235,348
6(8)
(
75,361 )
-
(
16 ) (
10 )
213,953
564,483
21,813
10,982
388,372
38,866
6(1)
3,391,896
4,942,919
6(1)
$
3,780,268 $
4,981,785

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

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FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2019 AND 2018

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

(REVIEWED, NOT AUDITED)

1. HISTORY AND ORGANIZATION

(1) Formosa Taffeta Co., Ltd. (the “Company”) was incorporated on April 19, 1973 under the provisions of the Company Law of the Republic of China (R.O.C.). Factories were established in Douliou City of Yulin County, R.O.C. On December 24, 1985, the Company’s common stock was officially listed on the Taiwan Stock Exchange. The major operations of the Company’s various departments are as follows:

Business departments Major activities Primary department: Amine fabrics, polyester fabrics, cotton fabrics, Fabrics, dyeing and others blending fabrics and umbrella ribs Secondary department: Cord, plastic bags, refineries for gasoline, diesel, Cord fabrics, petroleum crude oil and the related petroleum products, cotton fibers, blending fibers and protection fibers Formosa Advanced Technologies Co., Ltd. Assembly, testing, model processing and research and development of various integrated circuits

(2) Formosa Chemicals & Fiber Corp. has significant control over the Company since Formosa Chemicals & Fiber Corp. holds over half of the Board seats after the stockholders’ meeting on June 27, 2008. Since June 27, 2008, Formosa Chemicals & Fiber Corp. became the Company’s parent company and accordingly, the Company and its subsidiaries are included in its consolidated financial statements.
(3) As of June 30, 2019, the Company and its subsidiaries (collectively referred herein as the “Group”) had 10,268 employees.
THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on August 8, 2019.
APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
(1) Effect of adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)
- New standards, interpretations and amendments as endorsed by the FSC effective from 2019 are as follows:

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New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative compensation’ IFRS 16, ‘Leases’ Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ Amendments to IAS 28, ‘Long-term interests in associates and joint ventures’ IFRIC 23, ‘Uncertainty over income tax treatments’ Annual improvements to IFRSs 2015-2017 cycle	January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. IFRS 16, ‘Leases’

A. IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognize a 'right-of-use asset' and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.
B. The Group has elected to apply IFRS 16 by not restating the comparative information (referred herein as the ‘modified retrospective approach’) when applying “IFRSs” effective in 2019 as endorsed by the FSC. Accordingly, the Group increased ‘right-of-use asset’ by $1,048,552 (including $260,897 reclassified from long-term prepaid rent) and ‘lease liability’ by $787,655 with respect to the lease contracts of lessees on January 1, 2019.
C. The Group has used the following practical expedients permitted by the standard at the date of initial application of IFRS 16:
(a) Reassessment as to whether a contract is, or contains, a lease is not required, instead, the application of IFRS 16 depends on whether or not the contracts were previously identified as leases applying IAS 17 and IFRIC 4.
(b) The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
(c) The exclusion of initial direct costs for the measurement of ‘right-of-use asset’.
(d) The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
D. The Group calculated the present value of lease liabilities by using the weighted average incremental borrowing interest rate of 1.01%.
E. The Group recognized lease liabilities which had previously been classified as ‘operating leases’ under the principles of IAS 17, ‘Leases’. The reconciliation between operating lease commitments

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under IAS 17 measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate and lease liabilities recognized as of January 1, 2019 is as follows:

Operating lease commitments disclosed by applying IAS 17 as at December 31, 2018 Total lease contracts amount recognized as lease liabilities by applying IFRS 16 on January 1, 2019 Incremental borrowing interest rate at the date of initial application Lease liabilities recognized as at January 1, 2019 by applying IFRS 16	859,527 $ 859,527 $ 1.01% 787,655 $

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

the Group

New standards, interpretations and amendments as endorsed by the FSC effective from 2020 are as follows:

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendment to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of Material’ Amendments to IFRS 3, ‘Definition of a business’	January 1, 2020 January 1, 2020

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

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

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

New Standards,Interpretations and Amendments	Effective date by International Accounting Standards Board
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’	To be determined by International Accounting Standards Board January 1, 2021

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted are consistent with Note 4 in the consolidated financial statements for the year ended December 31, 2018, except for the compliance statement, basis of preparation, basis of consolidation and additional policies as set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

A. The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Accounting Standard 34, ‘Interim financial reporting’ as endorsed by the FSC.
B. These consolidated financial statements are to be read in conjunction with the consolidated financial statements for the year ended December 31, 2018.

(2) Basis of preparation

A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
The basis for preparation of the consolidated financial statements is the same with the consolidated financial statements as of and for the year ended December 31, 2018.
B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name of subsidiary	Main business activities	Ownership (%)	Ownership (%)	Ownership (%)	Description
			June 30, 2019	December 31, 2018	June 30, 2018
Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd.	Formosa Advanced Technologies Co., Ltd. Formosa Taffeta (Zhong Shan) Co, Ltd.	Assembly, testing, model processing and research and development of various integrated circuits Manufacturing of nylon and polyester filament greige cloth, coloured cloth, printed cloth and textured processing yarn products	46.68 100	46.68 100	65.68 100	Note 1 Note 2

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Name of investor	Name of subsidiary	Main business activities		Ownership (%)	Ownership (%)	Description
			June 30, 2019	December 31, 2018	June 30, 2018
Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta Co., Ltd. Formosa Taffeta (Hong Kong) Co., Ltd. Formosa Development Co., Ltd.	Formosa Development Co., Ltd. Formosa Taffeta Vietnam Co., Ltd. Formosa Taffeta (Hong Kong) Co., Ltd. Schoeller F.T.C. (Hong Kong) Co., Ltd. Xiamen Xiangyu Formosa Import & Export Trading Co., Ltd. Formosa Taffeta Dong Nai Co., Ltd. Formosa Taffeta (Cayman) Limited Formosa Taffeta (Changshu) Co., Ltd. Public More International Company Ltd.	Urban land consolidation, development and rent and sale of residences and buildings, and development of new community and specialised zones Manufacturing, processing, supply and marketing of yarn, knitted fabric, dyeing and finishing, carpets, curtains and cleaning Sale of nylon and polyamine goods Sale of hi-tech performance fabric for 3XDRY, Nanosphere, Keprotec, Dynatec, Spirit and Reflex Export trading, entrepot trading, displaying goods, processing of exporting goods, warehousing and black and white and colour design and graph Manufacturing of nylon and polyester filament products Holding company Manufacturing and processing fabric of nylon filament knitted cloth, weaving and dyeing as well as post processing of knitted fabric Employment service, manpower allocation and agency service etc.	100 100 100 50 100 100 100 100 100	100 100 100 50 100 100 100 100 100	100 100 100 50 100 100 100 100 100	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2

Note 1: The Company sold shares of Formosa Advanced Technologies Co., Ltd. to Nan Ya Technology Corp. in July, 2018. The Company owns more than half of the seats in the Board of Directors of Formosa Advanced Technologies Co., Ltd., the Company has substantive control over the latter.

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Note 2: The financial statements of the entity as of and for the six months ended June 30, 2019 and 2018 were not reviewed by independent accountants as the entity did not meet the definition of significant subsidiary.

C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group:

As of June 30, 2019, December 31, 2018 and June 30, 2018, the non-controlling interest amounted to $5,818,555, $6,055,486 and $3,833,148, respectively. The information on non-controlling interest and respective subsidiaries is as follows:

Non-controlling interest

Name of Principal place subsidiary ofbusiness Formosa Advanced Technologies Co., Ltd. Taiwan Name of Principal place subsidiary ofbusiness Formosa Advanced Technologies Co., Ltd. Taiwan	Amount Ownership (%) 5,817,063 $ 53.32 June 30,2019	December
	Amount 5,817,063 $
		Amount 3,830,832 $

Summarized financial information on the subsidiaries:

Balance sheets

Balance sheets
			FormosaAdvancedTechnologies Co.,Ltd.
			June 30,2019	December31,2018		June 30,2018
Current assets		$	7,081,112	$	6,792,443	$	8,676,310
Non-current assets			6,577,214		5,882,131		4,945,963
Current liabilities	(		2,141,691)	(	1,231,815)	(	2,378,903)
Non-current liabilities	(		606,914)	(	86,280)	(	81,273)
Total net assets		$	10,909,721	$	11,356,479	$	11,162,097

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Statements of comprehensive income

Formosa Advanced Technologies Co., Ltd.

			Three months	endedJune30,	endedJune30,
			2019		2018
Revenue		$	2,269,832	$	2,227,335
Profit before income tax			470,835		563,493
Income tax expense	(		126,860)	(	120,375)
Profit for the period			343,975		443,118
Other comprehensive income,
net of tax	(		116,823)		148,875
Total comprehensive income for the period		$	227,152	$	591,993
Comprehensive income attributable to non-
controlling interest		$	121,117	$	203,172
		Formosa Advanced TechnologiesCo.,Ltd.
			Six months endedJune30,
			2019		2018
Revenue		$	4,442,798	$	4,275,071
Profit before income tax			791,000		916,354
Income tax expense	(		190,811)	(	190,947)
Profit for the period			600,189		725,407
Other comprehensive income,
net of tax			58,608		361,863
Total comprehensive income for the period		$	658,797	$	1,087,270
Comprehensive income attributable to non-
controlling interest		$	351,271	$	373,151
Statements of cash flows

Statements of cash flows controlling interest		351,271 $ 373,151 $	351,271 $ 373,151 $	351,271 $ 373,151 $	351,271 $ 373,151 $
		FormosaAdvancedTechnologies Co.,Ltd.
			Six months ended		June 30,
			2019		2018
Net cash provided by operating activities		$	906,417	$	781,149
Net cash used in investing activities	(		921,390)	(	1,473,566)
Net cash used in financing activities	(		14,028)		-
Decrease in cash and cash equivalents	(		29,001)	(	692,417)
Cash and cash equivalents, beginning of
period			1,267,335		3,479,352
Cash and cash equivalents, end of period		$	1,238,334	$	2,786,935

(4) Leasing arrangements (lessee) `－` right-of-use assets/ lease liabilities

Effective 2019

A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognized as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the

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commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the fixed payments, less any lease incentives receivable. The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability.
The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

(5) Employee benefits

A. Short-term employee benefits

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

B. Pensions
(a) Defined contribution plans

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

(b) Defined benefit plans
i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognized past service costs. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) instead.
ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and recorded as retained earnings.
iii. Past service costs are recognized immediately in profit or loss.
iv. Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted

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for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. The related information is disclosed accordingly.

C. Employees’ compensation and directors’ and supervisors’ remuneration Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.
(6) Income tax
A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
D. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an

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intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

F. A deferred tax asset shall be recognized for the carry forward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.
G. The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.
H. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognizes the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognized outside profit or loss is recognized in other comprehensive income or equity while the effect of the change on items recognized in profit or loss is recognized in profit or loss.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

There was no significant change during this period. Please refer to Note 5 to the consolidated financial statements as of and for the year ended December 31, 2018 for related information.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and petty cash Checking accounts and demand deposits Time deposits Commercial paper	June30,2019 137,181 $ 2,295,260 362,058 985,769 3,780,268 $	December31,2018 156,022 $ 1,797,743 419,938 1,018,193 3,391,896 $	June30,2018
			120,385 $ 1,813,776 157,317 2,890,307
			4,981,785 $

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. The rate range of time deposit on June 30, 2019, December 31, 2018 and June 30, 2018 are 2.49%~5.51%, 2.75%~5.47% and 1.72%~7.78%, respectively.
C. The Group has no cash and cash equivalents pledged to others.

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

Items Current items: Beneficiary certificates Forward foreign exchange contracts Valuation adjustment	June 30,2019 550,000 $ - 550,000 6,312 556,312 $	December31,2018 466,353 $ - 466,353 13,137 479,490 $	June 30,2018
			619,504 $ 478
			619,982 11,872
			631,854 $

A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

Amounts recognized in profit or loss in relation to financial assets at fair value through profit loss are listed below:	to financial assets at fair value through profit	to financial assets at fair value through profit
2019 2018 Beneficiary certificates 580 $ 676 $ Forward foreign exchange contracts 96) ( 248 484 $ 924 $ 2019 2018 Beneficiary certificates 990 $ 1,378 $ Forward foreign exchange contracts - 80 990 $ 1,458 $ Six months endedJune30, Three months endedJune30,	Three months endedJune30,
		2018
		676 $ 248
		924 $
	2019 990 $ - 990 $	2018
		1,378 $ 80
		1,458 $

B. The Group entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting. The information is listed below:

June 30, 2019 June 30, 2018 Derivative Contract Amount Contract Amount Instruments (Notional Principal) Contract Period (Notional Principal) Contract Period Current items: Forward foreign exchange contracts Taipei Fubon Bank - - JPY 157,280 2018.05~2018.08

The Group had no financial assets held for trading on December 31, 2018.

The forward exchange contracts are buy and sell to hedge the change of exchange rate due to import and export transactions, but not adopting hedge accounting.

C. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

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(3) Financial assets at fair value through other comprehensive income

Items Current items: Equity instruments Listed stocks Unlisted stocks Valuation adjustment Non-current items: Equity instruments Listed stocks Unlisted stocks Valuation adjustment	June30,2019 2,482,503 $ 100,000 2,582,503 1,054,335 3,636,838 $ 8,739,607 $ 6,885,867 15,625,474 31,342,911 46,968,385 $	December31,2018 2,482,503 $ 100,000 2,582,503 1,091,714 3,674,217 $ 8,739,607 $ 6,747,554 15,487,161 31,025,540 46,512,701 $	June30,2018
			2,311,395 $ 100,000
			2,411,395 1,756,672
			4,168,067 $
			8,739,607 $ 6,700,481
			15,440,088 37,392,965
			52,833,053 $

A. The Group has elected to classify equity investments that are considered to be steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $50,605,223, $50,186,918 and $57,001,120 as at June 30, 2019, December 31, 2018 and June 30, 2018, respectively.
B. Aiming to satisfy the operating capital needs, the Group sold its equity investment in Nan Ya Technology Corp. at fair value of $377,894 and $772,686 which resulted in loss on disposal (including the portion attributable to non-controlling interests) of ($885,419) and ($1,804,708) during the three months ended June 30, 2018 and six months ended June 30, 2018 which was reclassified to retained earnings, respectively.
C. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

		Three months	ended	June30,
		2019		2018
Equity instruments at fair value through other
comprehensive income
Fair value change recognized in other
comprehensive income	($	2,287,244)	$	2,127,526
Cumulative losses reclassified to
retained earnings due to derecognition
(including the portion attributable to
non-controlling interest)	$	-	($	885,419)

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Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income Cumulative losses reclassified to retained earnings due to derecognition (including the portion attributable to non-controlling interest)	2019 2018 282,734 $ 3,535,771 $ - $ 1,804,708) ($ Six months ended June 30,

D. As at June 30, 2019, December 31, 2018 and June 30, 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group were $50,605,223, $50,186,918 and $57,001,120, respectively.
E. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

(4) Notes and accounts receivable

Notes and accounts receivable
			June30,2019	December31,2018					June30,2018
Notes receivable		$	125,565		$	116,511		$	115,796
Accounts receivable		$	4,892,293		$	4,181,310		$	4,694,606
Less: Allowance for uncollectible
accounts	(		71,305)	(		71,033)	(		76,842)
		$	4,820,988		$	4,110,277		$	4,617,764
A. The ageing analysis of notes and		accounts receivable		is as follows:
			June30,2019	December31,2018					June30,2018
Not past due		$	4,686,347		$	4,092,982		$	4,487,386
Up to 30 days			235,050			154,591			168,759
31 to 90 days			65,371			45,066			106,675
Over 90 days			31,090			5,182			47,582
		$	5,017,858		$	4,297,821		$	4,810,402

The above ageing analysis was based on past due date.

B. As of June 30, 2019 and 2018, accounts receivable and notes receivable were all from contracts with customers. And as of January 1, 2018, the balance of receivables from contracts with customers amounted to $3,808,563
C. As at June 30, 2019, December 31, 2018 and June 30, 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes and accounts receivable were $5,017,858, $4,297,821 and $4,810,402, respectively.
D. Information relating to credit risk of accounts receivable and notes receivable is provided in Note

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12(2).

(5) Inventories

Raw materials Supplies Work in process Finished goods Merchandise inventory Materials in transit Outsourced processed materials Construction in progress Land for construction Raw materials Supplies Work in process Finished goods Merchandise inventory Materials in transit Outsourced processed materials Construction in progress Land for construction Raw materials Supplies Work in process Finished goods Merchandise inventory Materials in transit Outsourced processed materials Construction in progress Land for construction		June30,2019
	Allowance for Cost valuation loss 1,706,295 $ 101,300) ($ 301,456 4,679) ( 2,568,382 6,201) ( 3,436,503 610,488) ( 311,221 - 417,800 - 248,301 79) ( 29,139 - 22,224 - 9,041,321 $ 722,747) ($ December31,2018		Bookvalue
			1,604,995 $ 296,777 2,562,181 2,826,015 311,221 417,800 248,222 29,139 22,224
			8,318,574 $

	Allowance for Cost valuation loss 1,762,233 $ 94,897) ($ 212,154 3,968) ( 2,866,411 6,643) ( 3,789,718 578,621) ( 159,786 - 348,702 - 216,874 71) ( 16,135 - 22,224 - 9,394,237 $ 684,200) ($ June30,2018		Bookvalue
			1,667,336 $ 208,186 2,859,768 3,211,097 159,786 348,702 216,803 16,135 22,224
			8,710,037 $

	Allowance for Cost valuation loss 1,744,330 $ 43,528) ($ 285,102 3,995) ( 2,541,749 7,415) ( 3,266,806 497,210) ( 228,362 - 385,856 - 214,560 123) ( 26,349 - 22,224 - 8,715,338 $ 552,271) ($		Bookvalue
			1,700,802 $ 281,107 2,534,334 2,769,596 228,362 385,856 214,437 26,349 22,224
			8,163,067 $

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Information about the inventories that were pledged to others as collateral is provided in Note 8. The cost of inventories recognized as expense for the period:

			Threemonths	ended June 30,	ended June 30,	ended June 30,
			2019			2018
Cost of goods sold		$	10,764,841		$	10,185,850
Inventory valuation loss			31,554			7,979
Others (Note)	(		5,007)	(		26,412)
		$	10,791,388		$	10,167,417
			Six months ended June 30,
			2019			2018
Cost of goods sold		$	21,069,918		$	19,604,373
Inventory valuation loss			38,547			31,537
Others (Note)	(		17,883)	(		29,309)
		$	21,090,582		$	19,606,601

Note: Others consist of inventory overage/shortage and disposal of scrap and defective materials and service costs.

(6) Investments accounted for using equity method

Formosa Industries Co., Ltd. Quang Viet Enterprise Co., Ltd. Changshu Yu Yuan Development Co., Ltd.	June 30,2019 2,066,183 $ 1,253,013 16,390 3,335,586 $	December31,2018 2,008,842 $ 1,191,261 16,403 3,216,506 $	June 30,2018
			1,975,484 $ 1,147,168 17,617
			3,140,269 $

A. Associates

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

Shareholding ratio

Companyname	Principal place of business	June 30, 2019	December 31,2018	June 30, 2018	Nature of relationship	Method of measurement
Formosa Industries Co., Ltd. Quang Viet Enterprise Co., Ltd. Changshu Yu Yuan Development Co., Ltd.	Vietnam Taiwan China	10.00% 17.99% 40.78%	10.00% 17.99% 40.78%	10.00% 17.92% 40.78%

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(b) The summarized financial information of the associates that are material to the Group is shown below:

Balance sheets

below: Balance sheets
		Formosa IndustriesCo.,Ltd.
		June30,2019	December31,2018			June30,2018
Current assets	$	19,401,087	$	12,272,938	$	20,614,804
Non-current assets		21,007,338		21,232,063		22,004,940
Current liabilities	(	15,686,378)	(	11,529,804)	(	16,616,538)
Non-current liabilities	(	4,956,847)	(	2,749,255)	(	7,059,634)
Total net assets	$	19,765,200	$	19,225,942	$	18,943,572
Share in associate’s net assets	$	1,976,520	$	1,922,594	$	1,894,357
Dividends receivable		-		-		63,210
Difference		89,663		86,248		17,917
Carrying amount of the associate	$	2,066,183	$	2,008,842	$	1,975,484
		Quang VietEnterprise Co.,Ltd.
		June 30,2019	December31,2018			June 30,2018
Current assets	$	11,230,587	$	7,605,631	$	9,822,796
Non-current assets		3,635,938		3,222,091		3,097,411
Current liabilities	(	7,415,765)	(	3,043,953)	(	5,992,994)
Non-current liabilities	(	268,570)	(	329,187)	(	85,383)
Total net assets	$	7,182,190	$	7,454,582	$	6,841,830
Share in associate’s net assets	$	1,292,076	$	1,341,079	$	1,226,056
Difference	(	39,063)	(	149,818)	(	78,888)
Carrying amount of the associate	$	1,253,013	$	1,191,261	$	1,147,168
		Changshu	YuYuan Development Co.,Ltd.
		June 30,2019	December31,2018			June 30,2018
Current assets	$	88,031	$	96,864	$	133,334
Non-current assets		36		106		210
Current liabilities	(	17,425)	(	26,867)	(	60,025)
Total net assets	$	70,642	$	70,103	$	73,519
Share in associate’s net assets	$	28,808	$	28,588	$	29,981
Dividends receivable		-		-		17,439
Difference	(	12,418)	(	12,185)	(	29,803)
Carrying amount of the	$	16,390	$	16,403	$	17,617
i

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Statements of comprehensive income

Formosa Industries Co., Ltd.

Revenue

Formosa IndustriesCo.,Ltd.	Formosa IndustriesCo.,Ltd.
Three months endedJune30,
2019 7,317,479 $	2018
	8,280,106 $

Profit for the period from continuing operations

(Total comprehensive income)

Revenue

280,842 $ 442,986 $ Formosa IndustriesCo.,Ltd.	280,842 $ 442,986 $ Formosa IndustriesCo.,Ltd.
Six months endedJune30,
2019 14,552,276 $	2018
	15,887,965 $

Profit for the period from continuing operations

(Total comprehensive income)

Revenue

Profit for the period from continuing operations

Other comprehensive income, net of tax Total comprehensive income

Revenue

Profit for the period from continuing operations

Other comprehensive income, net of tax Total comprehensive income

Revenue

(Loss) profit for the period from continuing operations (Total comprehensive (loss) income)

$ 418,682 $ 772,801

QuangViet EnterpriseCo.,Ltd.	QuangViet EnterpriseCo.,Ltd.
Threemonths ended June 30,
2019 2018 4,037,192 $ 2,938,452 $ 423,517 $ 281,301 $ 7,910 50,084 431,427 $ 331,385 $ Quang VietEnterprise Co.,Ltd.	2018
	2,938,452 $
	281,301 $ 50,084
	331,385 $
Six months ended June 30,
2019 2018 6,353,104 $ 4,103,086 $ 381,915 $ 156,545 $ 38,959 52,240 420,874 $ 208,785 $ Changshu Yu Yuan DevelopmentCo.,Ltd.	2018
	4,103,086 $
	156,545 $ 52,240
	208,785 $
Three months endedJune30,
2019 - $ 339) $	2018
	- $
	1,747 $

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		Changshu Yu Yuan DevelopmentCo.,Ltd.	Changshu Yu Yuan DevelopmentCo.,Ltd.	Changshu Yu Yuan DevelopmentCo.,Ltd.
		Six months endedJune30,
		2019		2018
Revenue	$	-	$	-
(Loss) profit for the period from continuing
operations (Total comprehensive (loss)	($	397)	$	1,434
income)

B. The investment (loss) income of $74,710, $73,161, $96,568 and $65,137 for the three months ended June 30, 2019 and 2018, and six months ended June 30, 2019 and 2018, respectively, were accounted for under the equity method based on the unreviewed financial statements of the investee companies.
C. The Group is the director of Formosa Industries Co., Ltd. and Quang Viet Enterprise Co., Ltd. and has significant impact to its operations, thus, Formosa Industries Co., Ltd. and Quang Viet Enterprise Co., Ltd. are accounted for under the equity method.
D. The Group’s material associate, Quang Viet Enterprise Co., Ltd., has quoted market prices. As of June 30, 2019, December 31, 2018 and June 30, 2018, the fair value were $2,789,303, $1,952,512 and $2,417,396, respectively.

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(7) Property, plant and equipment

												Transportation		Construction in
			Land and land									equipment and	progress and equipment
At January 1, 2019			improvements			Buildings			Machinery			otherequipment		to beinspected			Total
Cost		$	2,202,809		$	11,402,399		$	44,120,710		$	8,938,006	$	1,310,921		$	67,974,845
Accumulated depreciation	(		14,616)	(		6,199,016)	(		34,499,873)	(		8,334,527)		-	(		49,048,032)
Accumulated impairment	(		155,738)			-	(		117)			-		-	(		155,855)
		$	2,032,455		$	5,203,383		$	9,620,720		$	603,479	$	1,310,921		$	18,770,958
Six months ended June 30,	2019
Opening net book amount		$	2,032,455		$	5,203,383		$	9,620,720		$	603,479	$	1,310,921		$	18,770,958
Additions			3,014			-			1,900			5		1,271,466			1,276,385
Disposals	(		53)			-	(		27,206)	(		2,329)		-	(		29,588)
Transfers			-			19,769			1,301,558			49,172	(	1,370,499)			-
Depreciation charge	(		2,814)	(		181,781)	(		1,131,837)	(		82,762)		-	(		1,399,194)
Net exchange differences	(		278)			19,256			19,866			1,547		2,558			42,949
Closing net book amount		$	2,032,324		$	5,060,627		$	9,785,001		$	569,112	$	1,214,446		$	18,661,510
At June 30, 2019
Cost		$	2,202,951		$	11,446,527		$	45,028,940		$	8,921,372	$	1,214,446		$	68,814,236
Accumulated depreciation	(		14,889)	(		6,385,900)	(		35,243,822)	(		8,352,260)		-	(		49,996,871)
Accumulated impairment	(		155,738)			-	(		117)			-		-	(		155,855)
		$	2,032,324		$	5,060,627		$	9,785,001		$	569,112	$	1,214,446		$	18,661,510

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											Transportation	Transportation		Construction in
			Land and land								equipment and		progress and equipment
			improvements			Buildings			Machinery		other	equipment		to beinspected			Total
At January 1, 2018
Cost		$	2,545,786		$	11,047,542		$	41,347,517		$	9,003,970	$	1,976,014		$	65,920,829
Accumulated depreciation	(		14,598)	(		5,864,637)	(		34,546,863)	(		8,316,598)		-	(		48,742,696)
Accumulated impairment	(		155,738)			-	(		117)			-		-	(		155,855)
		$	2,375,450		$	5,182,905		$	6,800,537		$	687,372	$	1,976,014		$	17,022,278
Six months ended June 30,	2018
Opening net book amount		$	2,375,450		$	5,182,905		$	6,800,537		$	687,372	$	1,976,014		$	17,022,278
Additions			-			-			-			5		2,380,381			2,380,386
Disposals	(		342,670)			-	(		32,497)	(		436)	(	14,881)	(		390,484)
Transfers (Note)			-			129,801			2,248,235			45,881	(	2,414,446)			9,471
Depreciation charge	(		149)	(		181,834)	(		778,885)	(		101,222)		-	(		1,062,090)
Net exchange differences			18			26,090			31,304			2,444		13,370			73,226
Closing net book amount		$	2,032,649		$	5,156,962		$	8,268,694		$	634,044	$	1,940,438		$	18,032,787
At June 30, 2018
Cost		$	2,203,258		$	11,218,315		$	42,734,035		$	8,972,243	$	1,940,438		$	67,068,289
Accumulated depreciation	(		14,871)	(		6,061,353)	(		34,465,224)	(		8,338,199)		-	(		48,879,647)
Accumulated impairment	(		155,738)			-	(		117)			-		-	(		155,855)
		$	2,032,649		$	5,156,962		$	8,268,694		$	634,044	$	1,940,438		$	18,032,787

Note: Transferred from prepayments

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

Amount capitalized Amount capitalized Range of the interest rates for capitalization	Three months endedJune30,	Three months endedJune30,
	2019 2018 2,633 $ 2,423 $ Six months endedJune30,	2018
		2,423 $
	2019 5,563 $ 1.00%~4.6%	2018
		4,011 $
		0.94%~4.3%

B. The significant components and useful lives of property, plant and equipment are as follows:

Items	Significant components Pipelines Factory and gasoline stations Impregnating machine, dyeing machine and other machinery equipment Pallet trucks and fork lift trucks Cogeneration power generation equipment	Estimated useful lives 3 ~ 15 years 10 ~ 60 years 2 ~ 20 years 3 ~ 15 years 2 ~ 17 years
Land improvements Buildings Machinery and equipment Transportation equipment Other equipment

C. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.
D. Certain regulations restrict ownership of land to individuals. Accordingly, the titles of land which the Company has acquired for future plant expansion are under the name of third parties. Such land titles were transferred and mortgaged to the Company. As of June 30, 2019, December 31, 2018 and June 30, 2018, the land mortgaged to the Company was $808,300.
－
(8) Leasing arrangements lessee Effective 2019
A. The Group leases various assets including land. Rental contracts are typically made for periods of 3 to 25 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Land	Three months endedJune30,2019 Depreciation charge 38,099 $	June 30,2019
		Carryingamount
		1,104,176 $
		Six months endedJune30,2019
		Depreciation charge
		76,121 $

C. For the three months ended June 30, 2019 and six months ended June 30, 2019, the additions to

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right-of-use assets were $0 and $135,997, respectively.

D. The information on income and expense accounts relating to lease contracts is as follows:

Three months ended June 30, 2019 Six months ended June 30, 2019

Items affecting profit
or loss
Interest expense on lease liabilities	$ 2,789 $	5,340
Expense on short-term
lease contracts	1,053	1,076

E. For the six months ended June 30, 2019, the Group’s total cash outflow for leases was $75,361.

(9) Short-term borrowings

Type of borrowings Bank borrowings Mortgage loan Purchase loans Type of borrowings Bank borrowings Mortgage loan Type of borrowings Bank borrowings Mortgage loan Purchase loans	June30,2019 3,987,614 $ 11,182 3,998,796 $ December31,2018 3,638,538 $ June 30,2018 3,732,425 $ 2,532 3,734,957 $	Interest rate range 1.40%~4.32% 2.87% Interest rate range 1.40%~4.35% Interest rate range 1.64%~4.48% 0.36%	Collateral
			Property, plant and equipment and inventories `-` Collateral
			Property, plant and equipment and inventories Collateral
			Property, plant and equipment and inventories `-`

(10) Short-term notes and bills payable

Commercial paper payable Less: Commercial paper payable discount Interest rate	June30,2019 - $ - - $ -	December31,2018 June30,2018 - $ 1,000,000 $ - 316) ( - $ 999,684 $ - 0.76%

The abovementioned commercial paper payable is issued by International Bills Finance Corp. etc.

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(11) Financial liabilities at fair value through profit or loss - current

Items Forward foreign exchange contracts	June 30,2019 454 $	December31,2018 774 $	June 30,2018
			- $

A. The Group recognized net gain (loss) of $(438), $0 ,$320 and $0 on financial liabilities held for trading for the three months ended June 30, 2019 and 2018, and six months ended June 30, 2019 and 2018, respectively.
B. Explanations of the transactions and contract information in respect of derivative financial liabilities that the Group does not adopt hedge accounting are as follows:

Derivative Financial Contract Amount Liabilities (Notional Principal) Current items: Forward foreign exchange contracts Taipei Fubon Bank 144,600 JPY Taipei Fubon Bank - Chang Hwa Bank - Chang Hwa Bank - June 30,	June 30,	Contract Contract Amount Contract Period (Notional Principal) Period 2019.7~2019.8 50,000 JPY 2018.12~2019.2 - 56,800 JPY 2018.12~2019.2 - 50,000 JPY 2018.12~2019.1 - 50,210 JPY 2018.12~2019.1 2019 December31,2018	December31,2018

The Group had no financial liabilities held for trading on June 30, 2018.

The Group entered into forward foreign exchange contracts to hedge exchange rate risk of assets and liabilities denominated in foreign currencies. However, these forward foreign exchange contracts do not meet all conditions of hedge accounting and are not accounted for under hedge accounting.

(12) Other payables

accounting. Other payables
Dividend payable Salaries and year-end bonus payable Accrued utilities expenses Payable on equipment Commission payable Others	June 30,2019 4,135,906 $ 485,072 168,794 47,752 63,033 1,025,156 5,925,713 $	December31,2018 9,943 $ 784,330 130,048 62,814 54,564 907,798 1,949,497 $	June 30,2018
			3,588,124 $ 574,950 163,669 79,921 59,774 798,166
			5,264,604 $

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- (13) Long term borrowings

Long-term borrowings
			June 30,2019	December31,2018				June 30,2018
Credit borrowings		$	8,123,037	$	8,192,200		$	11,160,692
Less: Current portion	(		99,523)	(	169,901)	(		70,794)
		$	8,023,514	$	8,022,299		$	11,089,898
Interest rate			0.94%~4.60%		0.98%~4.45%			1.00%~4.36%

(14) Pensions

A. (a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 2%~15% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned employees pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March.
(b) For the aforementioned pension plan, the Group recognized pension costs of $7,257, $9,869, $14,514 and $19,738 for the three months ended June 30, 2019 and 2018, and six months ended June 30, 2019 and 2018, respectively.
(c) Expected contributions to the defined benefit pension plans of the Company and its domestic subsidiaries for the year ending December 31, 2020 amount to $88,821.
B. (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established defined contribution pension plans (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries c20ontribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The Company’s mainland China subsidiaries, Formosa Taffeta (Zhong Shan) Co., Ltd., Formosa Taffeta (Changshu) Co., Ltd., and Xiamen Xiangyu Formosa Import & Export Trading Co., Ltd., have defined contribution plans. Monthly contributions to an independent

~34~

fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on a certain percentage of the employees’ monthly salaries and wages. The contribution percentage was between 10% and 20%. Other than the monthly contributions, the Group has no further obligations.

  - (c) The Company’s subsidiaries, Formosa Taffeta Vietnam Co., Ltd. and Formosa Taffeta (Dong Nai) Co., Ltd., have defined contribution plans. Contributions of social security to an independent fund administered by the government in accordance with the pension regulations of local governments are based on certain percentage of employees’ salaries and wages. Other than the monthly contributions, the Group has no further obligations.

  - (d) Formosa Taffeta (Hong Kong) Co., Ltd. and Schoeller FTC (Hong Kong) Co., Ltd. have defined contribution plans whereby contributions are made to the mandatory provident fund based on a percentage of the employees’ salaries and wages as full-time employees’ pension benefit.

  - (e) Formosa Taffeta (Cayman) Co., Ltd. does not have a pension plan, and is not required to have one under local regulations.

  - (f) The pension costs under the defined contribution pension plans of the Group for the three months ended June 30, 2019 and 2018, and six months ended June 30, 2019 and 2018 were $37,674, $36,707, $74,913 and $72,939, respectively.

(15) Share capital
A. As of June 30, 2019, the Company’s authorized and issued capital was $16,846,646, consisting of 1,684,665,000 shares of common stock, with a par value of $10 per share.
B. For the six months ended June 30, 2019 and 2018, changes in the number of treasury stocks are as follows (in thousands of shares):

Six months ended June 30, 2019 Reason for Investee Beginning reacquisition company shares Additions Disposal Ending shares Long-term equity investment transferred to treasury stock for parent Formosa company’s shares held Development by subsidiaries Co., Ltd. 2,243 - ( 50) 2,193

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Reason for Investee reacquisition company Long-term equity investment transferred to treasury stock for parent company’s shares held by subsidiaries Formosa Development Co., Ltd.		Six months endedJune30,2018	Six months endedJune30,2018	Six months endedJune30,2018	Six months endedJune30,2018
		Beginning shares 2,293	Additions -		Disposal (Note) -	Endingshares
						2,293

C. The abovementioned treasury stocks were acquired by the subsidiary, Formosa Development Co., Ltd., for investment purposes.

(16) Capital surplus

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

Six months ended June 30, 2019

At January 1, 2019 Disposal of treasury shares Paid expired cash dividends transferred to capital surplus At June 30, 2019	Treasury share transactions	Treasury share transactions		Difference between consideration and carrying amount of subsidiaries acquired or disposed		Donated assets received		Changes in net equity of associates and joint ventures accounted for under equitymethod Other 1,236,557 $ 3,324 $ - - - 16) ( 1,236,557 $ 3,308 $
		25,297 $ 1,194 - 26,491 $		1,650 $ - - 1,650 $		2,032 $ - - 2,032 $

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Six months ended June 30, 2018

At January 1, 2018 Difference between consideration and carrying amount of subsidiaries acquired Paid expired cash dividends transferred to capital surplus At June 30, 2018	Treasury share transactions	Treasury share transactions		Difference between consideration and carrying amount of subsidiaries acquired or disposed		Donated assets received		Changes in net equity of associates and joint ventures accounted for under equitymethod Other 250,345 $ 1,502 $ - - - 10) ( 250,345 $ 1,492 $
		19,899 $ - - 19,899 $		545 $ 1,105 - 1,650 $		2,032 $ - - 2,032 $

(17) Retained earnings

A. According to the R.O.C. Securities and Exchange Act No. 41, a company should reserve the amount equal to any valuation or contra-account in the stockholders' equity in the fiscal year from the net income and prior unappropriated earnings as special reserve. If the valuation or contra-account in stockholders’ equity belongs to prior periods, the same amount from prior period earnings should be considered as special reserve and cannot be distributed. The special reserve includes: i) reserve for special purposes, ii) investment income recognized under the equity method, iii) net proceeds from the recognition of financial asset transactions; only when the accumulated value decreases should the special reserve be adjusted by the same amount, subject to the provisions in this section; and iv) other special reserves set out by legal provisions.
B. The Company’s dividend policy is summarized below:
As the Company operates in a volatile business environment and is in the stable growth stage, the dividend policy includes cash dividends, stock dividends and capital increase by earnings recapitalization. At least 50% of the Company’s distributable earnings shall be appropriated as dividends after deducting the legal reserve and special reserves. The Company would prefer distributing cash dividends. However, if significant investment measures are taken or the Company’s financial structure needs to be improved, part of the dividends would be in the form of stock dividends but not to exceed 50% of the total dividends.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
D. The appropriations of 2018 and 2017 earnings had been resolved at the stockholders’ meeting on June 20, 2019 and June 22, 2018, respectively. Details are summarized below:

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Legal reserve Cash dividends	Dividends Amount per share (inthousands) (indollars) 473,741 $ 3,537,796 2.10 $ 2018earnings	2017 earnings	2017 earnings
	Amount (inthousands) 473,741 $ 3,537,796	Amount (inthousands) 427,987 $ 3,200,863	Dividends per share (indollars)
			1.90 $

The estimated appropriations of 2018 and 2017 earnings proposed by the Board of Directors were the same as the actual appropriations approved by the shareholders. Information on the appropriation of the Company’s earnings as resolved by the Board of Directors and approved by stockholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange Corporation.

E. As of June 30, 2019, December 31, 2018 and June 30, 2018, unpaid stock dividends amounted to $4,135,906, $9,943 and $ 3,588,124, respectively.
F. For information relating to employees’ compensation and directors’ and supervisors’ remuneration, please refer to Note 6(23).

(18) Other equity items

Other equity items
January 1, 2019 Revaluation ─Group ─Associates ─Non-controlling interest Difference of currency translation ─Group ─Associates ─Non-controlling interest Net income of non-controlling interest Cash dividends paid by consolidated subsidiaries June 30, 2019	Unrealized gains Currency Non-controlling onvaluation translation interest 32,036,824 $ 744,846) ($ 6,055,486 $ 248,968 - - 2,516 - - - - 31,250 - 130,017 - - 19,846 - - - 83 320,011 - - 588,275) ( 32,288,308 $ 594,983) ($ 5,818,555 $	Non-controlling interest
		5,818,555 $

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(19)	Operating revenue Unrealized gains Currency Non-controlling onvaluation translation interest January 1, 2018 38,440,218 $ 914,267) ($ 3,803,175 $ Retrospective adjustments 4,760,072) ( - 33,939 January 1, 2018 after adjustments 33,680,146 914,267) ( 3,837,114 Revaluation ─Group 3,411,749 - - ─Associates 1,862 - - ─Non-controlling interest - - 122,160 Revaluation transferred to retained earnings ─Group 1,810,626 - - ─Non-controlling interest - - 2,030 Difference of currency translation ─Group - 221,496 - ─Associates - 30,871 - ─Non-controlling interest - - 215 Net income of non-controlling interest - - 249,781 Difference between consideration and carrying amount of subsidiaries aquired or disposed - - 1,105) ( Cash dividends paid by consolidated subsidiaries - - 377,047) ( June 30, 2018 38,904,383 $ 661,900) ($ 3,833,148 $ 2019 2018 Sales revenue 12,308,206 $ 11,653,466 $ Service revenue 62,542 83,792 12,370,748 $ 11,737,258 $ 2019 2018 Sales revenue 23,972,717 $ 22,326,157 $ Service revenue 116,878 141,524 24,089,595 $ 22,467,681 $ Threemonths ended June 30, Six months ended June 30,	Operating revenue Unrealized gains Currency Non-controlling onvaluation translation interest January 1, 2018 38,440,218 $ 914,267) ($ 3,803,175 $ Retrospective adjustments 4,760,072) ( - 33,939 January 1, 2018 after adjustments 33,680,146 914,267) ( 3,837,114 Revaluation ─Group 3,411,749 - - ─Associates 1,862 - - ─Non-controlling interest - - 122,160 Revaluation transferred to retained earnings ─Group 1,810,626 - - ─Non-controlling interest - - 2,030 Difference of currency translation ─Group - 221,496 - ─Associates - 30,871 - ─Non-controlling interest - - 215 Net income of non-controlling interest - - 249,781 Difference between consideration and carrying amount of subsidiaries aquired or disposed - - 1,105) ( Cash dividends paid by consolidated subsidiaries - - 377,047) ( June 30, 2018 38,904,383 $ 661,900) ($ 3,833,148 $ 2019 2018 Sales revenue 12,308,206 $ 11,653,466 $ Service revenue 62,542 83,792 12,370,748 $ 11,737,258 $ 2019 2018 Sales revenue 23,972,717 $ 22,326,157 $ Service revenue 116,878 141,524 24,089,595 $ 22,467,681 $ Threemonths ended June 30, Six months ended June 30,	Operating revenue Unrealized gains Currency Non-controlling onvaluation translation interest January 1, 2018 38,440,218 $ 914,267) ($ 3,803,175 $ Retrospective adjustments 4,760,072) ( - 33,939 January 1, 2018 after adjustments 33,680,146 914,267) ( 3,837,114 Revaluation ─Group 3,411,749 - - ─Associates 1,862 - - ─Non-controlling interest - - 122,160 Revaluation transferred to retained earnings ─Group 1,810,626 - - ─Non-controlling interest - - 2,030 Difference of currency translation ─Group - 221,496 - ─Associates - 30,871 - ─Non-controlling interest - - 215 Net income of non-controlling interest - - 249,781 Difference between consideration and carrying amount of subsidiaries aquired or disposed - - 1,105) ( Cash dividends paid by consolidated subsidiaries - - 377,047) ( June 30, 2018 38,904,383 $ 661,900) ($ 3,833,148 $ 2019 2018 Sales revenue 12,308,206 $ 11,653,466 $ Service revenue 62,542 83,792 12,370,748 $ 11,737,258 $ 2019 2018 Sales revenue 23,972,717 $ 22,326,157 $ Service revenue 116,878 141,524 24,089,595 $ 22,467,681 $ Threemonths ended June 30, Six months ended June 30,	Operating revenue Unrealized gains Currency Non-controlling onvaluation translation interest January 1, 2018 38,440,218 $ 914,267) ($ 3,803,175 $ Retrospective adjustments 4,760,072) ( - 33,939 January 1, 2018 after adjustments 33,680,146 914,267) ( 3,837,114 Revaluation ─Group 3,411,749 - - ─Associates 1,862 - - ─Non-controlling interest - - 122,160 Revaluation transferred to retained earnings ─Group 1,810,626 - - ─Non-controlling interest - - 2,030 Difference of currency translation ─Group - 221,496 - ─Associates - 30,871 - ─Non-controlling interest - - 215 Net income of non-controlling interest - - 249,781 Difference between consideration and carrying amount of subsidiaries aquired or disposed - - 1,105) ( Cash dividends paid by consolidated subsidiaries - - 377,047) ( June 30, 2018 38,904,383 $ 661,900) ($ 3,833,148 $ 2019 2018 Sales revenue 12,308,206 $ 11,653,466 $ Service revenue 62,542 83,792 12,370,748 $ 11,737,258 $ 2019 2018 Sales revenue 23,972,717 $ 22,326,157 $ Service revenue 116,878 141,524 24,089,595 $ 22,467,681 $ Threemonths ended June 30, Six months ended June 30,

			2019 2018 12,308,206 $ 11,653,466 $ 62,542 83,792 12,370,748 $ 11,737,258 $ Six months ended June 30,	2018
				11,653,466 $ 83,792
				11,737,258 $
			2019 23,972,717 $ 116,878 24,089,595 $	2018
				22,326,157 $ 141,524
				22,467,681 $

A. Contract assets

Formosa Advanced Technologies Co., Ltd. has recognized the following IC revenue-related contract assets:

~39~

Contract assets relating to IC revenue	June 30,2019 December31,2018 1,094,931 $ 788,643 $	June 30,2018 659,715 $

B. All Formosa Advanced Technologies Co., Ltd. assembly and testing services contracts of various integrated circuits are for periods of one year or less. As permitted under IFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed.

(20) Other income

Other income
Interest income from bank deposits Dividend income Other income Interest income from bank deposits Dividend income Other income	Threemonths ended June 30,
	2019 2018 8,831 $ 3,387 $ 1,943,524 64,855 70,419 94,357 2,022,774 $ 162,599 $ Six months ended June 30,	2018
		3,387 $ 64,855 94,357
		162,599 $
	2019 17,360 $ 1,943,524 107,871 2,068,755 $	2018
		12,648 $ 64,855 120,759
		198,262 $

(21) Other gains and losses

Other gains and losses
			Threemonths	ended June 30,
			2019	2018
Gains on disposals of property, plant and
equipment		$	12,449	$	838,970
Net currenty exchange gains			24,611		122,753
Forward foreign exchange contracts
Gains on financial assets at fair
value through profit or loss			484		2,256
Losses on financial liabilities at fair
value through profit or loss	(		438)		-
Bank charges	(		9,667)	(	9,253)
Other gains and losses	(		29,497)	(	25,266)
	($		2,058)	$	929,460

~40~

Expenses by nature 2019 2018 Gains on disposals of property, plant and equipment 21,631 $ 839,913 $ Net currenty exchange gains 49,400 79,962 Forward foreign exchange contracts Gains on financial assets at fair value through profit or loss 990 1,458 Gains on financial liabilities at fair value through profit or loss 320 - Bank charges 18,487) ( 18,275) ( Other gains and losses 39,376) ( 22,294) ( 14,478 $ 880,764 $ Six months ended June 30, 2019 2018 Employee benefit expense 1,276,945 $ 1,272,954 $ Depreciation charges on property, plant and equipment 738,163 553,087 2,015,108 $ 1,826,041 $ 2019 2018 Employee benefit expense 2,584,316 $ 2,543,135 $ Depreciation charges on property, plant and equipment 1,475,315 1,062,090 4,059,631 $ 3,605,225 $ Six months ended June 30, Threemonths ended June 30,	Expenses by nature 2019 2018 Gains on disposals of property, plant and equipment 21,631 $ 839,913 $ Net currenty exchange gains 49,400 79,962 Forward foreign exchange contracts Gains on financial assets at fair value through profit or loss 990 1,458 Gains on financial liabilities at fair value through profit or loss 320 - Bank charges 18,487) ( 18,275) ( Other gains and losses 39,376) ( 22,294) ( 14,478 $ 880,764 $ Six months ended June 30, 2019 2018 Employee benefit expense 1,276,945 $ 1,272,954 $ Depreciation charges on property, plant and equipment 738,163 553,087 2,015,108 $ 1,826,041 $ 2019 2018 Employee benefit expense 2,584,316 $ 2,543,135 $ Depreciation charges on property, plant and equipment 1,475,315 1,062,090 4,059,631 $ 3,605,225 $ Six months ended June 30, Threemonths ended June 30,	Expenses by nature 2019 2018 Gains on disposals of property, plant and equipment 21,631 $ 839,913 $ Net currenty exchange gains 49,400 79,962 Forward foreign exchange contracts Gains on financial assets at fair value through profit or loss 990 1,458 Gains on financial liabilities at fair value through profit or loss 320 - Bank charges 18,487) ( 18,275) ( Other gains and losses 39,376) ( 22,294) ( 14,478 $ 880,764 $ Six months ended June 30, 2019 2018 Employee benefit expense 1,276,945 $ 1,272,954 $ Depreciation charges on property, plant and equipment 738,163 553,087 2,015,108 $ 1,826,041 $ 2019 2018 Employee benefit expense 2,584,316 $ 2,543,135 $ Depreciation charges on property, plant and equipment 1,475,315 1,062,090 4,059,631 $ 3,605,225 $ Six months ended June 30, Threemonths ended June 30,
	2019 2018 1,276,945 $ 1,272,954 $ 738,163 553,087 2,015,108 $ 1,826,041 $ Six months ended June 30,	2018
		1,272,954 $ 553,087
		1,826,041 $
	2019 2,584,316 $ 1,475,315 4,059,631 $	2018
		2,543,135 $ 1,062,090
		3,605,225 $

(22) Expenses by nature

(23) Employee benefit expense

Employee benefit expense
Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	Three months endedJune30,
	2019 1,070,102 $ 119,627 44,931 42,285 1,276,945 $	2018
		1,070,292 $ 114,541 46,576 41,545
		1,272,954 $

~41~

Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	Six months ended June 30,	Six months ended June 30,
	2019 2,170,889 $ 239,693 89,427 84,307 2,584,316 $	2018
		2,138,534 $ 228,624 92,677 83,300
		2,543,135 $

A. In accordance with the Company’s Articles of Incorporation, a ratio of distributable profit of the current year after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall be between 0.05%-0.5% for employees’ compensation and shall not be higher than 0.5% for directors’ and supervisors’ remuneration.
B. For the three months ended June 30, 2019 and 2018, and six months ended June 30, 2019 and 2018, employees’ compensation was accrued at $500, $500, $1,000 and $833, respectively; while directors’ and supervisors’ remuneration was accrued at $250, $250, $500 and $417, respectively. The aforementioned amounts were recognized in salary expenses.
The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on the Company’s Articles of Incorporation of profit of current year distributable for the six months ended June 30, 2019.
The employees’ compensation and directors’ and supervisors’ remuneration for 2018 as approved by shareholders were the same as the amounts shown in the 2018 financial statements. The employees’ compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors were both $15,815 in the form of cash.
Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(24) Finance costs

Finance costs
			Three months	endedJune30,
			2019	2018
Interest expense:
Bank borrowings		$	59,760	$	53,159
Other financial expense			2,789		-
Less: Capitalization of qualifying assets	(		2,633)	(	2,423)
		$	59,916	$	50,736

~42~

			Six months ended June 30,	Six months ended June 30,
			2019	2018
Interest expense:
Bank borrowings		$	119,266	$	110,562
Other financial expense			5,340		-
Less: Capitalization of qualifying assets	(		5,563)	(	4,011)
		$	119,043	$	106,551

(25) Income tax

A. Components of income tax expense

ome tax Components of income tax expense
			Three months	endedJune30,
			2019	2018
Current tax:
Current tax on profits for the period		$	168,631	$	180,015
Land value increment tax			-		129,638
Tax on undistributed surplus earnings			232,354		46,659
Prior year income tax underestimation			9,759		105,397
Prepayment of taxes			-		508
Effect of foreign exchange rate			597	(	830)
Total current tax			411,341		461,387
Deferred tax:
Origination and reversal of temporary
differences			2,319		87,844
Total deferred tax			2,319		87,844
Income tax expense		$	413,660	$	549,231
			Six months endedJune30,
			2019	2018
Current tax:
Current tax on profit for the period		$	307,893	$	274,757
Land value increment tax			-		129,638
Tax on undistributed surplus earnings			232,354		46,659
Prior year income tax underestimation			33,849		135,014
Prepayment of taxes			-		951
Effect of foreign exchange rate	(		145)	(	694)
Total current tax			573,951		586,325
Deferred tax:
Origination and reversal of temporary
differences			11,446		141,631
Impact of change in tax rate			-	(	7,731)
Total deferred tax			11,446		133,900
Income tax expense		$	585,397	$	720,225

~43~

B. The income tax returns of the Company, Formosa Advanced Technologies Co., Ltd., Formosa Development Co., Ltd. and Public More Internation Company Ltd. through 2017, 2016, 2017 and 2017 have been assessed and approved by the Tax Authority, respectively.
C. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China in February, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Group has assessed the impact of the change in income tax rate.
D. Starting from January 1, 2007, the enterprise income tax of Formosa Taffeta (Zhong Shan) Co., Ltd., Formosa Taffeta (Changshu) Co., Ltd. and Xiamen Xiangyu Formosa Import & Export Trading Co., Ltd. is based on 25% of income generated within and outside Mainland China. In addition, Formosa Taffeta (Zhong Shan) Co., Ltd. was certified as high-tech enterprise by Guangdong Provincial Government and qualified to the applicable income tax rate of 15% for 3 years from 2018.
E. The income tax rate of Formosa Taffeta Vietnam Co., Ltd. was approved by Vietnam government to be 10% for 15 years from the year of official establishment (December 1993). The Company was granted income tax exemption for 4 years from the first profit-making year and 20% income tax exemption for the next 4 years.
F. The income tax rate of Formosa Taffeta Dong Nai Co., Ltd. was approved by Vietnam government to be 15% for 12 years from the year of official establishment (October 2006); 20% after 12 years. The Company was granted income tax exemption for 3 years from the first profit-making year and income tax reduction of 15% or 20% for the next 4 to 10 years.
G. In accordance with local tax regulations, the applicable income tax rate of Schoeller F.T.C. (Hong Kong) Co., Ltd. and indirectly owned subsidiary, Formosa Taffeta (Hong Kong) Co., Ltd., was 16.5%.
(26) Earnings per share
A. Basic earnings per share
- The calculation of basic earnings per share is profit or loss attributable to the common stockholders of the Company’s parent company divided by the weighted average number of outstanding common stocks for the period.

~44~

Three months ended June 30, 2019

					Weighted-average
					common shares			Earnings	per share
		Amount			outstanding			(indollars)
	Before tax			Aftertax	(inthousands)		Before tax		After	tax
Net income	$	2,831,905	$	2,418,245	1,682,423		$	1.68	$	1.44
Profit attributable to
the non-controlling
interest	(	336,531)	(	183,063)		(		0.20)	(	0.11)
Profit attributable to
the parent	$	2,495,374	$	2,235,182			$	1.48	$	1.33
				Threemonths ended June 30,			2018
					Weighted-average
					common shares			Earnings	per share
		Amount			outstanding			(indollars)
	Before tax			Aftertax	(inthousands)		Before tax		After	tax
Net income	$	1,957,817	$	1,408,586	1,682,372		$	1.16	$	0.84
Profit attributable to
the non-controlling
interest	(	333,570)	(	152,538)		(		0.20)	(	0.09)
Profit attributable to
the parent	$	1,624,247	$	1,256,048			$	0.96	$	0.75
				Six months ended June 30,		2019
					Weighted-average
					common shares			Earnings	per share
		Amount			outstanding			(indollars)
	Before tax			Aftertax	(inthousands)		Before tax		Aftertax
Net income	$	3,565,035	$	2,979,638	1,682,423		$	2.12	$	1.77
Profit attributable to
the non-controlling
interest	(	589,949)	(	320,011)		(		0.35)	(	0.19)
Profit attributable to
the parent	$	2,975,086	$	2,659,627			$	1.77	$	1.58

~45~

Six months ended June 30, 2018

						Weighted-average
						common shares			Earnings	per share
			Amount			outstanding			(indollars)
		Before tax			Aftertax	(inthousands)		Before tax		After	tax
Net income		$	2,510,728	$	1,790,503	1,682,372		$	1.49	$	1.06
Profit attributable to
the non-controlling
interest	(		552,985)	(	249,781)		(		0.33)	(	0.15)
Profit attributable to
the parent		$	1,957,743	$	1,540,722			$	1.16	$	0.91

The following is earnings per share assuming the shares of the Company held by its subsidiary, Formosa Development Co., Ltd., are not deemed as treasury stock:

					Threemonths ended June 30,	Threemonths ended June 30,	2019	2019
						Common shares		Earnings	per share
			Amount			outstanding		(in dollars)
		Before tax			After tax	(in thousands)	Before tax		After	tax
Net income		$	2,831,905	$	2,418,245	1,684,665	$	1.67	$	1.44
Profit attributable to
the non-controlling
interest	(		336,531)	(	183,063)	(		0.20)	(	0.11)
Profit attributable to
the parent		$	2,495,374	$	2,235,182		$	1.47	$	1.33
					Threemonths ended June 30,		2018
						Common shares		Earnings	per share
			Amount			outstanding		(in dollars)
		Before tax			After tax	(in thousands)	Before tax		After	tax
Net income		$	1,957,817	$	1,408,586	1,684,665	$	1.16	$	0.84
Profit attributable to
the non-controlling
interest	(		333,570)	(	152,538)	(		0.20)	(	0.09)
Profit attributable to
the parent		$	1,624,247	$	1,256,048		$	0.96	$	0.75

~46~

Six months ended June 30, 2019

						Common shares			Earnings	per share	per share
			Amount			outstanding			(indollars)
		Before tax			Aftertax	(inthousands)		Before tax		After	tax
Net income		$	3,565,035	$	2,979,638	1,684,665		$	2.12	$	1.77
Profit attributable to
the non-controlling
interest	(		589,949)	(	320,011)		(		0.35)	(	0.19)
Profit attributable to
the parent		$	2,975,086	$	2,659,627			$	1.77	$	1.58
					Six months ended June 30,		2018
						Common shares			Earnings	per share
			Amount			outstanding			(indollars)
		Before tax			Aftertax	(inthousands)		Before tax		After	tax
Net income		$	2,510,728	$	1,790,503	1,684,665		$	1.49	$	1.06
Profit attributable to
the non-controlling
interest	(		552,985)	(	249,781)		(		0.33)	(	0.15)
Profit attributable to
the parent		$	1,957,743	$	1,540,722			$	1.16	$	0.91

B. Employees' bonuses could be distributed in the form of stock. It does not have significant effect on the financial statements and diluted earnings per share for the three months ended June 30, 2019 and 2018, and six months ended June 30, 2019 and 2018.

(27) Supplemental cash flow information

A. Investing activities with partial cash payments:

			Six months ended June 30,	Six months ended June 30,	Six months ended June 30,
			2019		2018
Purchase of property, plant and equipment		$	1,276,385	$	2,380,386
Add: Opening balance of payable on
equipment			62,814		86,955
Less: Ending balance of payable on equipment	(		47,753)	(	79,921)
Cash paid during the period		$	1,291,446	$	2,387,420

B. Financing activities with no cash flow effects:

Financing activities with no cash flow effects:
Cash dividends paid	Six months ended June 30,
	2019 3,537,796 $	2018
		3,200,863 $

~47~

(28) Changes in liabilities from financing activities

At January 1, 2019 Changes in cash flow from financing activities Impact of changes in foreign exchange rate At June 30, 2019 At January 1, 2018 Changes in cash flow from financing activities Impact of changes in foreign exchange rate At June 30, 2018		Short-term borrowings 2,805,690 $ 929,267 - 3,734,957 $	Short-term borrowings	Long-term borrowings (including current portion)	Liabilities from financing activities- gross
			3,638,538 $ 360,258 - 3,998,796 $ Short-term notespayable	8,192,200 $ 70,928) ( 1,765 8,123,037 $ Long-term borrowings (including current portion) 11,222,071 $ 64,652) ( 3,273 11,160,692 $	11,830,738 $ 289,330 1,765 12,121,833 $ Liabilities from financing activities- gross
			1,299,806 $ 300,122) ( - 999,684 $		15,327,567 $ 564,493 3,273 15,895,333 $

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

The Company is controlled by FORMOSA CHEMICALS & FIBRE CORPORATION (incorporated in R.O.C), which owns 37.4% of the Company’s shares, and is also the ultimate controlling party.

~48~

(2) Names of related parties and relationship

Names of related parties

Formosa Chemicals & Fibre Corp. Quang Viet Enterprise Co., Ltd.

Formosa Industries Corp. Formosa Biomedical Technology Corp. Toa Resin Corp. Formosa Petrochemical Corp. Formosa Heavy Industries Corp. Formosa Network Technology Corp. Formosa Plastics Corp. Formosa Plastics Transport Corp. Formosa Asahi Spandex Corp. Nan Ya Technology Corp. Nan Ya Plastics Corp. Nan Ya PCB Corp. Nan Ya Photonics Inc. Yumaowu Enterprise Co., Ltd. Great King Garment Co., Ltd. Bellmart Industrial Co., Ltd. Yugen Yueh Co.,Ltd. Chang Gung Biotechnology Co., Ltd. Nan Ya Polyester Fiber (Kunshan) Corp. Nanya Plastic (Guangzhou) Co.,Ltd. Nan Ya (Kunshan) Corp. Kwang Viet Garment Co., Ltd. Yu Yuang Textile Co., Ltd. Yu Maowu Complex Co., Ltd. Piecemakers Technology, Inc. (Note) Kong You Industrial Co., Ltd. Jiaxing Quang Viet Garment Co., Ltd. Formosa HA Tinh(Cayman) Limited FG INC. NKFG

Relationship with the Group Parent company Associate

Associate

Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party

Note: Since Nan Ya Technology Corp. sold all owned shares of Piecemakers Technology Inc. in February 2018, Piecemakers Technology Inc. is no longer a related party of the Group.

~49~

(3) Significant related party transactions and balances

A. Operating revenue

gnificant related party transactions and balances Operating revenue
Sales of goods: －Ultimate parent －Associates `－`Other related party Nan Ya Technology Corp. Others Sales of goods: －Ultimate parent －Associates `－`Other related party Nan Ya Technology Corp. Others	Three months endedJune30,
	2019 2018 104 $ 139 $ 143,585 145,362 1,725,281 1,572,072 358,939 287,915 2,227,909 $ 2,005,488 $ Six months ended June 30,	2018
		139 $ 145,362 1,572,072 287,915
		2,005,488 $
	2019 655 $ 276,875 3,350,601 673,565 4,301,696 $	2018
		296 $ 280,995 2,973,110 561,178
		3,815,579 $

Goods are sold based on the price lists in force and terms that would be available to third parties. B. Purchases of goods

Purchases of goods
Purchases of goods: －Ultimate parent －Associates `－`Other related party Formosa Petrochemical Corp. Others Purchases of goods: －Ultimate parent －Associates `－`Other related party Formosa Petrochemical Corp. Others	Three months endedJune30,
	2019 2018 553,132 $ 569,833 $ 256,278 174,314 2,788,589 2,723,826 414,514 454,448 4,012,513 $ 3,922,421 $ Six months ended June 30,	2018
		569,833 $ 174,314 2,723,826 454,448
		3,922,421 $
	2019 1,065,906 $ 497,681 5,460,078 935,402 7,959,067 $	2018
		1,098,459 $ 407,966 5,252,449 950,493
		7,709,367 $

Goods and services are purchased from ultimate parent and other related parties on normal commercial terms and conditions.

~50~

C. Receivables from related parties

Notes and accounts receivable: －Ultimate parent －Associates `－`Other related party Nan Ya Technology Corp. Others Other receivables - dividends `－`Associates Formosa Industries Corp.	June 30,2019 51 $ 103,221 1,130,019 379,305 1,612,596 - 1,612,596 $	December31,2018 98 $ 41,091 1,006,359 185,309 1,232,857 - 1,232,857 $	June 30,2018
			87 $ 130,858 1,069,564 314,868
			1,515,377 153,557
			1,668,934 $

The receivables from related parties arise mainly from sale transactions. The receivables are due 45~120 days after the date of sale. There are no provisions held against receivables from related parties.

D. Notes and accounts payable

parties. Notes and accounts payable
Notes and accounts payable: －Ultimate parent －Associates `－`Other related party Formosa Petrochemical Corp. Others	June 30,2019 652,878 $ 67,952 601,937 156,072 1,478,839 $	December31,2018 693,798 $ 46,854 397,563 193,626 1,331,841 $	June 30,2018
			587,276 $ 86,051 464,047 147,030
			1,284,404 $

The payables to related parties arise mainly from purchase transactions and are due 15~60 days after the date of purchase. The payables bear no interest.

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

Other related party		Three months	2018 endedJune30		2019 2018 7,810 $ - $ Six months endedJune30	2019 2018 7,810 $ - $ Six months endedJune30
		2019			2019
		7,810 $	- $		7,810 $	- $

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(b) Disposal of property, plant and equipment:

Other related party Other related party	Disposal proceeds Gain (loss) on disposal - $ - $ Disposal proceeds Gain (loss) on disposal - $ - $ Threemonths ended June 30,2019 Six months ended June 30, 2019	Disposal proceeds Gain (loss) on disposal 14,881 $ - $ Disposal proceeds Gain (loss) on disposal 14,881 $ - $ Threemonths ended June 30,2018 Six months ended June 30, 2018

The group had no transaction from April 1 to June 30, 2019.

Accounts Other related party Non-current financial assets at fair value through other comprehensive income Accounts Other related party Non-current financial assets at fair value through other comprehensive income Accounts Other related party Non-current financial assets at fair value through other comprehensive income	No. ofshares 19,000,970 No.of shares - No. ofshares 19,000,970	Objects Formose Ha Tinh(Cayman) Limited Objects FG INC. Objects Formose Ha Tinh(Cayman) Limited	Three months ended June 30,2018
			Consideration 566,417 $ Six months ended June 30,2019
			Consideration 69,570 $ Six months ended June 30,2018
			Consideration 566,417 $

F. Others

Formosa Taffeta Dong Nai Co., Ltd. was engaged by the related party, Formosa Industry, to provide management services to Nhon Trach 3 Industrial Zone. In accordance with the yearly service consignment contract signed by Formosa Taffeta Dong Nai Co., Ltd. and Nhon Trach 3 Industrial Zone, Formosa Taffeta Dong Nai Co., Ltd. is responsible for managing land that is available for rent, meter reading and payment collection of water, electricity, steam and other utilities sold to lessees in investment district, repairing and performing services on various public facilities of

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power plant. Under the contract, Formosa Taffeta Dong Nai Co., Ltd. shall collect a service fee as follows:

i. Land lease fee: 3% of Formosa Industry’s land rent revenue
ii. Utilities service fee: 3% of Formosa Industry’s monthly sale of electricity to lessees in investment district
iii. Management fee: the full amount of management fee collected from lessees in investment district to Formosa Industry shall be paid to the Company and its subsidiaries.

For the three months ended June 30, 2019 and 2018, and six months ended June 30, 2019 and 2018, Formosa Taffeta Dong Nai Co., Ltd. has recognized lease service fee income in investment district of $8,832, $8,412, $17,361 and $16,228, respectively, for rendering the abovementioned consigned services. As of June 30, 2019, December 31, 2018 and June 30, 2018 the uncollected amount of $3,175, $3,241 and $3,052, respectively, was recognized under ‘other receivables’. For the above land leasing, as of June 30, 2019, December 31, 2018 and June 30, 2018, the total management expenses and utility expenses which Formosa Taffeta Dong Nai Co., Ltd. is due to collect from the related party, Formosa Industry, were $34,876, $37,745 and $31,185, respectively, and was recognized under ‘other payables’.

(4) Key management compensation

and was recognized under ‘other payables’. Key management compensation
Salaries and other short-term employee benefits Post-employment benefits Salaries and other short-term employee benefits Post-employment benefits	Three months endedJune30,
	2019 2018 3,951 $ 3,857 $ 27 25 3,978 $ 3,882 $ Six months endedJune30,	2018
		3,857 $ 25
		3,882 $
	2019 29,336 $ 54 29,390 $	2018
		29,686 $ 51
		29,737 $

8. PLEDGED ASSETS

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

PLEDGED ASSETS The Group’s assets pledged	as collateral are as follows:
Item Property, plant and equipment Inventories (Held-to-maturity land)	Book Value	June30,2018 Purpose 138,312 $ Security for short- term borrowings 21,264 Security for short- term borrowings 159,576 $	Purpose
	June30,2019 December31,2018 137,612 $ 137,962 $ 21,264 21,264 158,876 $ 159,226 $

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9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) Formosa Advanced Technologies Co., Ltd. is engaged in the processing of various integrated circuits packaging test and is responsible for custody for which the subsidiary needs to be compensated if lost. As of June 30, 2019, the items in custody are as follows:

		June 30,2019	June 30,2019
Quantity (Unit：PC) 8,186,477 NTD 0.015~0.8 60,534,625 USD 0.99~13.3 4,271,234 USD 0.32~0.58 3,377,385 NTD 0.34~10.54 2,174,171 USD 0.32~13.3 705,410 USD 1.337~4.143 12,339 USD 1.25~3 79,261,641 Quantity (Unit：PC) 1,416,126 NTD 0.015~0.8 181,924,518 USD 0.99~13.3 6,305,107 USD 0.32~0.58 7,437,928 NTD 0.34~10.54 1,033,496 USD 0.32~13.3 50,505 USD 1.337~4.143 18,134 USD 1.25~3 198,185,814 Market value (per PC) Market value (per PC)	Quantity (Unit：piece) - - - - - - 2,640 2,640 Quantity (Unit：piece) - - - - - - 288 288	Market value (perpiece) - - - - - - 1,500 USD Market value (perpiece) - - - - - - 1,500 USD	Quantity (Unit：bar) - - - - 91,943 - - 91,943 Quantity (Unit：bar) - - - - 43,680 - - 43,680	Market value (perbar) - - - - USD 9.01~257.57 - - Market value (perbar) - - - - USD 9.01~257.57 - -	Quantity (Unit：stick) - - - 298 - - - 298 Quantity (Unit：stick) - - - 110 - - - 110	Market value (stick)
						- - - NTD 24.2~1,320 - - - Market value (stick)
						- - - NTD 24.2~1,320 - - -

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(2) The company leases factory and land of gas station. The lease expense estimated to be incurred is as follows:

Effective 2018

follows: Effective 2018
Less than 1 year Between 1 and 5 years More than 5 years	December 31, 2018 133,799 $ 398,418 327,310 859,527 $	June 30,2018
		125,918 $ 395,181 325,810
		846,909 $

(3) As of June 30, 2019, the significant commitments and contingent liabilities are the outstanding letters of credit for materials and equipment purchases with various companies listed as follows:

Currency USD JPY EUR	June 30,2019
	Amount (In Thousands)
	2,091 $ 931,229 769

(4) Endorsements and guarantees

As of June 30, 2019, in order to assist the subsidiaries is obtaining credit line, the Company has

guaranteed the following amounts for subsidiaries:

guaranteed the following amounts for subsidiaries:
Name of company Formosa Taffeta (Zhong Shan) Co., Ltd. Formosa Taffeta Vietnam Co., Ltd. Formosa Taffeta (Changshu) Co., Ltd. Formosa Taffeta Dong Nai Co., Ltd. Formosa HA Tinh (Cayman) Limited Public More International Company Ltd.	June 30,2019
	1,024,980 $ 1,553,000 1,708,300 4,721,120 7,205,116 3,000

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

There was no significant change during this period. Please refer to Note 12 to the consolidated financial statements as of and for the year ended December 31, 2018 for related information.

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(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets measured at fair value through profit or loss Financial assets measured at fair value through other comprehensive income Financial assets at amortized cost Financial liabilities Financial liabilities measured at fair value through profit or loss Financial liabilities at amortized cost Lease liabilities	June 30,2019 December31,2018 556,312 $ 479,490 $ 50,605,223 50,186,918 12,581,887 9,178,343 63,743,422 $ 59,844,751 $ 454 $ 774 $ 21,159,026 16,676,253 847,435 - 22,006,915 $ 16,677,027 $	June 30,2018
		631,854 $ 57,001,120 11,681,178
		69,314,152 $
		- $ 24,343,188 -
		24,343,188 $

Note: Financial assets at amortized cost includes cash, notes and accounts receivable (including related parties) and other receivables; financial liabilities at amortized cost includes shortterm borrowings, short-term notes and bills payable, notes and accounts payables (including related parties), other payables and long-term borrowings.
B. Financial risk management policies

There was no significant change during this period. Please refer to Note 12 to the consolidated

financial statements as of and for the year ended December 31, 2018 for related information.

C. Significant financial risks and degrees of financial risks

Except for the following items, there was no significant change during this period. Please refer to Note 12 to the consolidated financial statements as of and for the year ended December 31, 2018 for related information.

(a) Market risk

Foreign exchange risk

i. Some of the Group’s transactions are conducted in foreign currencies, which are subject to exchange rate fluctuation. The information on foreign currency denominated assets and liabilities are as follows:

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	June 30,2019
Foreign Currency Amount (In Thousands) ExchangeRate 127,716 $ 31.07 14,717 6.87 308,083 0.29 4,846,071,321 0.0013 305,000 3.97 637,538 4.52 167,221 31.07 4,533 31.07 16,341 6.87 December31,2018		Book Value (NTD)
		3,968,136 $ 457,257 89,344 6,299,893 1,210,850 2,881,672 5,195,556 140,840 507,715
Foreign Currency Amount (In Thousands) 117,372 $ 412,840 4,723,641,239 289,967 439,400 183,430 3,951	ExchangeRate 30.73 0.28 0.0013 3.93 4.48 30.73 30.73	Book Value (NTD)
		3,606,842 $ 115,595 6,140,734 1,139,570 1,968,512 5,636,804 121,414

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	June 30,2018
Foreign Currency Amount (In Thousands) 112,401 $ 10,694 431,491 2,849 4,670,201,665 298,790 587,304 1,248,532 6,030 18,307	ExchangeRate 30.50 6.62 0.28 35.40 0.0013 3.89 4.61 30.50 30.50 6.62	Book Value (NTD)
		3,428,231 $ 326,167 120,817 100,855 6,071,262 1,162,293 2,707,471 38,080,226 183,915 558,364

ii.The total exchange income, including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the three months ended June 30, 2019 and 2018, and six months ended June 30, 2019 and 2018 amounted to $24,611, $122,753, $49,400 and $79,962, respectively.

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

Six months ended June 30,	Six months ended June 30,	2019
Sensitivity analysis
Degree ofvariation 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit or loss 39,681 $ 4,573 893 - - - - 1,408 5,077	Effect on other comprehensive income
		- $ - - 62,999 12,109 28,817 51,956 - -

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Six months ended June 30, 2018

Sensitivity analysis

Financial assets Monetary items USD:NTD USD:RMB JPY:NTD EUR:NTD Non-monetary items VND:NTD HKD:NTD RMB:NTD USD:NTD Financial liabilities Monetary items USD:NTD USD:RMB	Degree ofvariation 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit or loss 34,282 $ 3,262 1,208 1,009 - - - - 1,839 5,584	Effect on other comprehensive income
			- $ - - 60,713 11,623 27,075 380,802 - -

Price risk

i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income and available-for-sale financial assets. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
ii. The Group’s investments in equity securities comprise shares, open-end funds and beneficiary certificates issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the six months ended June 30, 2019 and 2018 would have increased/decreased by $5,563 and $6,319, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $506,052 and $570,011, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

i. The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. During the six months ended June 30, 2019 and 2018, the Group’s borrowings at variable rate were denominated in the NTD and USD.

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ii. The Group’s borrowings are measured at amortized cost. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.
iii. If the borrowing interest rate of NTD dollars had increased/decreased by 1% with all other variables held constant, profit, net of tax for the six months ended June 30, 2019 and 2018 would have decreased/increased by $63,200 and $86,400, respectively. The main factor is that changes in interest expense result from floating rate borrowings.
iv. If the borrowing interest rate of USD dollars had increased/decreased by 1% with all other variables held constant, profit, net of tax for the six months ended June 30, 2019 and 2018 would have decreased/increased by $988 and $2,319, respectively. The main factor is that changes in interest expense result from floating rate borrowings.
(b) Credit risk
i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.
ii. The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with good rating are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.
iii. The Group adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
iv. The Group adopts the assumption under IFRS 9, that is, the default occurs when the contract payments are past due over 90 days.
v. The Group classifies customer’s accounts receivable and contract assets in accordance with product types and customer types. The Group applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis.
vi. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.
vii. The Group uses the forecastability of National Development Council Business Cycle Indicator to adjust historical and timely information to assess the default possibility of notes

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receivable, accounts receivable and contract assets. On June 30, 2019, December 31, 2018 and June 30, 2018, the provision matrix is as follows:

Not past due	Up to 30 days past due	Over 90 days past due	Total
0% 4,686,347 $ 12,751 Not past due	7% 235,050 $ 16,610 Up to 30 days past due	80% 31,090 $ 24,786 Over 90 days past due	5,017,858 $ 71,305 Total
1% 4,092,982 $ 31,694 Not past due	9% 154,591 $ 14,088 Up to 30 days past due	75% 5,182 $ 3,884 Over 90 days past due	4,297,821 $ 71,033 Total
0% 4,487,386 $ 11,070	17% 168,759 $ 27,916	32% 47,583 $ 14,994	4,810,403 $ 76,842

viii. Movements in relation to the Group applying the simplified approach to provide loss allowance for notes receivable, accounts receivable and contract assets are as follows:

Six months ended June 30,2019	Six months ended June 30,2019	Six months ended June 30,2019
Notesreceivable Accounts receivable Contract assets - $ 71,033) ($ - $ - 272) ( - - $ 71,305) ($ - $ Six months ended June 30,2018		Contract assets
		- $ -
		- $
Notesreceivable - $ - - $	Accounts receivable 76,521) ($ 321) ( 76,842) ($	Contract assets
		- $ -
		- $

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(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets.
ii.Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in interest bearing current accounts, time deposits, commercial paper and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. As at June 30, 2019, December 31, 2018 and June 30, 2018, the Group held money market position of $54,804,622, $53,902,282 and $62,494,374, respectively, that are expected to readily generate cash inflows for managing liquidity risk.
iii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities.

Non-derivative financial liabilities:

Non-derivative financial liabilities:
Long-term borrowings (including current portion) June 30, 2019 December 31, 2018 June 30, 2018 Lease liability June 30, 2019	Less than 1year 99,523 $ 169,901 70,794 125,918 $	Over 1year
		8,023,514 $ 8,022,299 11,089,898 721,517 $

Except for the above, the Group’s non-derivative financial liabilities were all due in one year.

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

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a

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market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates with quoted market prices is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in some unlisted stocks and most derivative instruments is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.
B. Financial instruments not measured at fair value
The carrying amounts of cash and cash equivalents, notes receivable (including related parties), accounts receivable (including related parties), other receivables, short-term borrowings, shortterm bills payable, notes payable (including related parties), accounts payable (including related parties), other payables and long-term borrowings (including current portion) are approximate to their fair values.
C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:
(a) The related information of the nature of the assets and liabilities is as follows:

June 30, 2019 Financial assets: Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities Financial liabilities: Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward exchange contracts	Level 1 556,312 44,565,231 45,121,543 $ - $	Level 2 - 406,800 406,800 $ 454 $	Level3 - 5,633,192 5,633,192 $ - $	Total
				556,312 50,605,223
				51,161,535 $
				454 $

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December 31, 2018 Financial assets: Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities Financial liabilities: Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward exchange contracts June 30, 2018 Financial assets: Recurring fair value measurements Financial assets at fair value through profit or loss Forward exchange contracts Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities	Level 1 479,490 $ 43,914,680 44,394,170 $ - $ Level 1 - $ 631,376 49,585,102 50,216,478 $	Level 2 - $ 403,500 403,500 $ 774 $ Level 2 478 $ - 583,500 583,978 $	Level3 - $ 5,868,738 5,868,738 $ - $ Level3 - $ - 6,832,518 6,832,518 $	Total
				479,490 $ 50,186,918
				50,666,408 $
				774 $
				Total
				478 $ 631,376 57,001,120
				57,632,974 $

(b)The methods and assumptions the Group used to measure fair value are as follows:

i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

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

ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques such as current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including applying a model using

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market information available at the consolidated balance sheet date.

iii. The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present value techniques and option pricing models. Forward exchange contracts are usually valued based on the current forward exchange rate.
iv. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality.
D. For the six months ended June 30, 2019 and 2018, there was no transfer between Level 1 and Level 2.
E. The following chart is the movement of Level 3 for the six months ended June 30, 2019 and 2018:

			Six months ended June 30,2019
			Non-derivative equityinstruments
At January 1		$	5,868,738
Recorded as unrealized losses on valuation of
investments in equity instruments measured
at fair value through other comprehensive income	(		296,482)
Effect of exchange rate changes			60,936
At June 30		$	5,633,192
			Six months ended June 30,2018
			Non-derivative equityinstruments
At January 1		$	5,786,870
Retrospective adjustments			65,372
At January 1 after adjustments			5,852,242
Acquired in the period			566,417
Recorded as unrealized losses on valuation of
investments in equity instruments measured
at fair value through other comprehensive income			258,290
Effect of exchange rate changes			155,569
At June 30		$	6,832,518

F. For the six months ended June 30, 2019 and 2018, there was no transfer into or out from Level 3.
G. The accounting segment is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment 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, and frequently calibrating valuation model, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

The accounting segment set up valuation policies, valuation processes and rules for measuring

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fair value of financial instruments and ensure compliance with the related requirements in IFRS. The related valuation results are reported to the supervisor of accounting segment monthly. The supervisor is responsible for managing and reviewing valuation processes.

H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non-derivative equity instrument: Unlisted shares Non-derivative equity instrument: Unlisted shares	Fair value at June 30,2019	Valuation technique	Significant unobservable input	Relationship of inputs to fair value
	437,688 $ 5,195,504 Fair value at December 31, 2018	Market comparable companies Net asset value Valuation technique	Price to earnings ratio multiple, price to book ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability Not applicable Significant unobservable input	The higher the multiple, the higher the fair value the higher the discount for lack of marketability, the lower the fair value Not applicable Relationship of inputs to fair value
	344,372 $ 5,524,366	Market comparable companies Net asset value	Price to earnings ratio multiple, price to book ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability Not applicable	The higher the multiple, the higher the fair value the higher the discount for lack of marketability, the lower the fair value Not applicable

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Fair value at Valuation Significant Relationship June 30, 2018 technique unobservable input of inputs to fair value Non-derivative equity instrument: Unlisted shares $ 379,652 Market Price to earnings ratio The higher the multiple, comparable multiple, price to book ratio the higher the fair value companies multiple, enterprise value to the higher the discount EBITA multiple, discount for lack of marketability, for lack of marketability the lower the fair value 6,452,866 Net asset Not applicable Not applicable value

I. The Group has carefully assessed the valuation models and assumptions used to measure fair value. 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:

Input	Change	June 30,2019	June 30,2019
		Recognized in other comprehensive income
		Favourable change	Unfavourable change
Input Price to earnings ratio multiple, price to book ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability	Change ±1%
		Recognized in other comprehensive income
		Favourable change	Unfavourable change
Price to earnings ratio multiple, price to book ratio multiple, enterprise value to EBITA multiple, discount for lack of marketability	±1%	3,444 $	3,444 $

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June 30, 2018

Recognized in other comprehensive income

Favourable Unfavourable Input Change change change Financial assets Equity instrument Price to earnings ratio multiple, ±1% price to book ratio multiple, enterprise value to EBITA multiple, discount for lack of $ 3,797 $ 3,797 marketability

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

In accordance with “Rules Governing the Preparation of Financial Statements by Securities Issuers”, significant transactions for the six months ended June 30, 2019 are stated as follows. Furthermore, the inter-company transactions were eliminated based on the financial statements of investees which were not reviewed by other independent accountants, except for the reviewed financial statements of Formosa Advanced Technologies Co., Ltd. The following disclosures are for reference only.

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

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 7.

(3) Information on investments in Mainland China

A. Basic information: Please refer to table 8.

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B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 9.

14. SEGMENT INFORMATION

(1) General information
A. The Group operates and sets policies from product and service perspective; thus, management also identifies reportable segments using the same method.
B. The Group has four reportable segments: First business group, Second business group consisting of Cord fabric department, Gasoline department and FORMOSA ADVANCED TECHNOLOGIES CO., LTD. (FATC) department. Details are as follows:
- (a) First business group: Mainly produces and sells woven, dyeing and finishing products and manages plants of overseas subsidiaries–FORMOSA TAFFETA (ZHONG SHAN) CO., LTD., FORMOSA TAFFETA VIETNAM CO., LTD. and FORMOSA TAFFETA (HONG KONG) CO., LTD, etc.
- (b) Cord fabric department: Mainly produces and provides tire cords.
- (c) Gasoline department: Mainly operates gasoline stations, sells gasoline and provides car washing.
- (d) FATC department: The subsidiary – FORMOSA ADVANCED TECHNOLOGIES CO., LTD. mainly provides installation and testing of various integrated circuit and engages in processing and research and development of modules.

(2) Measurement of segment information

The measurement based on each operating segment’s profit before tax excludes the effects of nonrecurring expenditure, i.e. from the unrealized gain or loss on financial instruments. Furthermore, interest income and expense are not allocated to operating segments.

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(3) Information about segment profit or loss and assets

Six months ended June 30, 2019

Cord fabric Gasoline department department Othersegment 4,124,787 $ 5,876,630 $ 870,511 $ 179,308 - 155,455 4,304,095 $ 5,876,630 $ 1,025,966 $ (43,052) $ 227,220 $ 17,563 $ 6,681,374 $ 1,364,592 $ 3,215,188 $ Second business group	Cord fabric Gasoline department department Othersegment 4,124,787 $ 5,876,630 $ 870,511 $ 179,308 - 155,455 4,304,095 $ 5,876,630 $ 1,025,966 $ (43,052) $ 227,220 $ 17,563 $ 6,681,374 $ 1,364,592 $ 3,215,188 $ Second business group	Total
Cord fabric department 4,124,787 $ 179,308 4,304,095 $ (43,052) $ 6,681,374 $	Gasoline department 5,876,630 $ - 5,876,630 $ 227,220 $ 1,364,592 $
		24,089,595 $ -
		24,089,595 $
		3,565,035 $
		33,539,233 $ 3,335,586 60,971,085
		97,845,904 $

~70~

Six months ended June 30, 2018

Second business group

Segment revenue Revenue from external customers Inter-segment revenue Total segment revenue Segment income Segment assets Identifiable assets Investments accounted for under equity methed General assets Total assets	First business group 7,722,775 $ 629,354 8,352,129 $ 1,728,960 $ 14,594,885 $	Cord fabric department 3,659,007 $ 113,887 3,772,894 $ 197,592 $ 6,641,216 $	Gasoline department 5,872,819 $ - 5,872,819 $ 211,140 $ 1,283,376 $	Other segment 938,009 $ 71,280 1,009,289 $ 80,499 $ 3,634,252 $	FATC Adjustment department andwrite-off 4,275,071 $ - $ - 814,521) ( 4,275,071 $ 814,521) ($ 916,354 $ 623,817) ($ 6,358,133 $ 67,070) ($	Total
						22,467,681 $ -
						22,467,681 $
						2,510,728 $
						32,444,792 $ 3,140,269 65,654,770
						101,239,831 $

(4) Reconciliation for segment income (loss)

A. Sales between segments are carried out at arm’s length. The revenue from external customers reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income.
B. The total consolidated profit (loss) after adjustment and reconciliation information for profit after tax of reportable segments are provided in Note 14(3).

~71~

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

Provision of endorsements and guarantees to others

Table 1

For the six months ended June 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1) Endorser/ guarantor	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3,8)	Maximum outstanding endorsement/ guarantee amount as of June 30, 2019 (Note 4)	Outstanding endorsement/ guarantee amount at June 30, 2019 (Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 3,8)	Provision of endorsements/ guarantees by parent company to subsidiary (Note 7)	Provision of endorsements/ guarantees by subsidiary to parent company (Note 7)	Provision of endorsements/ guarantees to the party in Mainland China (Note 7)	Footnote
	Companyname Relationship with the endorser/ guarantor (Note2)
0 FORMOSA TAFFETA CO., LTD. 0 FORMOSA TAFFETA CO., LTD. 0 FORMOSA TAFFETA CO., LTD. 0 FORMOSA TAFFETA CO., LTD. 0 FORMOSA TAFFETA CO., LTD. 1 FORMOSA DEVELOPMENT CO., LTD.	FORMOSA TAFFETA (ZHONG SHAN) CO., LTD. 2 FORMOSA TAFFETA VIETNAM CO., LTD. 2 FORMOSA TAFFETA (CHANGSHU) CO., LTD. 2 FORMOSA TAFFETA DONG NAI CO., LTD. 2 FORMOSA HA TINH (CAYMAN) LIMITED 6 PUBLIC MORE INTERNATIONAL COMPANY LTD. 2	44,484,696 $ 44,484,696 44,484,696 44,484,696 44,484,696 188,563	1,042,800 $ 1,580,000 1,738,000 4,803,200 7,330,382 3,000	1,024,980 $ 1,553,000 1,708,300 4,721,120 7,205,116 3,000	201,890 $ 435,889 387,710 3,100,839 7,205,116 3,000	$ - - - - - -	1.50 2.27 2.50 6.90 10.53 1.03	88,969,393 $ 88,969,393 88,969,393 88,969,393 88,969,393 377,127	Y Y Y Y N Y	N N N N N N	Y N Y N N N

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

(1)The Company is ‘0’.

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

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

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

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

(4)The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

(5)Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.

(6)Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

(7)Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

Note 3: Fill in limit on endorsements/guarantees provided for a single party and ceiling on total amount of endorsements/guarantees provided as prescribed in the endorser/guarantor company’s “Procedures for Provision of Endorsements and

Guarantees”, and state each individual party to which the endorsements/guarantees have been provided and the calculation for ceiling on total amount of endorsements/guarantees provided in the footnote.

Note 4: Fill in the year-to-date maximum outstanding balance of endorsements/guarantees provided as of the reporting period.
Note 5: Fill in the amount approved by the Board of Directors or the chariman if the chairman has been authorised by the Board of Directors based on subparagraph 8, Article 12 of the Regulations Governing

Loaning of Funds and Making of Endorsements/Guarantees by Public Companies.

Note 6: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.
Note 7: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary and provision by subsidiary to listed parent company, and provision to the party in Mainland China.
Note 8: In accordance with the Company’s procedures of endorsements and guarantees, limit on the Company’s total guarantee amount is 1.3 times of the Company's net assets, and limit on endorsement/guarantee to a single party is 50% of the aforementioned total amount.

Table 1, Page 1

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

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

For the six months ended June 30, 2019

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Securities held by	Marketable securities (Note 1)	Relationship with the securities issuer(Note 2)	General ledger account		As of June	30,2019		Footnote (Note 4)
				Number of shares	Book value (Note 3)	Ownership (%)	Fair value
FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD.	FORMOSA CHEMICALS & FIBRE CORPORATION PACIFIC ELECTRIC WIRE AND CABLE CO., LTD. FORMOSA PLASTICS CORPORATION NAN YA PLASTICS CORPORATION ASIA PACIFIC INVESTMENT CO. (APIC) NAN YA TECHNOLOGY CORPORATION FORMOSA PETROCHEMICAL CORP. SYNTRONIX CORPORATION TOA RESIN CORPORATION LIMITED SHIN YUN GAS CO., LTD.	Ultimate parent company - Other related party Other related party Other related party Other related party Other related party - Other related party -	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 other comprehensive income 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	12,169,610 32 640 482,194 10,000,000 7,711,010 365,267,576 191,885 14,400 676,441	1,253,470 $ - 74 37,900 406,800 497,360 40,362,067 4,037 33,961 17,724	0.21 - - 0.01 2.35 0.25 3.83 0.45 10.00 1.20	1,253,470 $ - 74 37,900 406,800 497,360 40,362,067 4,037 33,961 17,724

Table 2, Page 1

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

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

For the six months ended June 30, 2019

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Securities held by	Marketable securities (Note 1)	Relationship with the securities issuer(Note 2)	General ledger account		As of June	30,2019		Footnote (Note 4)
				Number of shares	Book value (Note 3)	Ownership (%)	Fair value
FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA (CAYMAN) LIMITED FORMOSA DEVELOPMENT CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD.	WK TECHNOLOGY FUND IV LIMITED NAN YA PHOTONICS INC. FG INC FORMOSA HA TINH (CAYMAN) LIMITED FORMOSA TAFFETA CO., LTD. FORMOSA PLASTICS CORPORATION NAN YA PLASTICS CORPORATION FORMOSA CHEMICALS & FIBRE CORPORATION FORMOSA PETROCHEMICAL CORP.	- Other related party Other related party Other related party Parent company Other related party Other related party Utimate parent company Other related party	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 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 other comprehensive income	1,348,731 4,393,973 600 209,010,676 2,193,228 146,388 2,907,512 15,249,000 1,110,000	12,673 $ 62,043 274,881 5,195,504 85,755 16,761 228,531 1,570,647 122,655	3.17 9.53 3.00 3.85 0.13 - 0.04 0.26 0.01	12,673 $ 62,043 274,881 5,195,504 85,755 16,761 228,531 1,570,647 122,655

Table 2, Page 2

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

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

For the six months ended June 30, 2019

Table 2

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by	Marketable securities (Note 1)	Relationship with the securities issuer(Note 2)	General ledger account		As of June	30,2019		Footnote (Note 4)
				Number of shares	Book value (Note 3)	Ownership (%)	Fair value
FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD.	NAN YA TECHNOLOGY CORPORATION NAN YA PHOTONICS INC. SYNTRONIX CORPORATION MEGA DIAMOND MONEY MARKET FUND JIH SUN MONEY MARKET FUND	Other related party Other related party - - -	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 Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current	7,376,215 2,196,986 65,939 20,396,748 20,240,320	475,766 $ 31,023 1,346 256,071 300,241	0.24 4.77 0.15 - -	475,766 $ 31,023 1,346 256,071 300,241

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. Note 2: Leave the column blank if the issuer of marketable securities is non-related party. Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

Table 2, Page 3

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

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

For the six months ended June 30, 2019

Table 3 Investor	Marketable securities (Note 1)	General ledger account	Counterparty (Note 2)	Relationship with the investor (Note 2)	Balance as at January1,2019	Balance as at January1,2019	Addition (Note 3)(Note 4)	Addition (Note 3)(Note 4)		Disposal (Note 3)	Disposal (Note 3)		Expressed in thousands of NTD (Except as otherwise indicated) Balance as at June 30,2019	Expressed in thousands of NTD (Except as otherwise indicated) Balance as at June 30,2019
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
FORMOSA ADVANCED TECHNOLOGIES CO., LTD.	JIH SUN MONEY MARKET FUND	Financial assets at fair value through profit or loss - current	-	-	15,147,454	$ 224,084	20,240,320	$ 300,000	15,147,454	$ 224,167	$ 224,084	$ 83	20,240,320	$ 300,241

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.

Note 2: Fill in the columns the counterparty and relationship if securities are accounted for under the equity method; otherwise leave the columns blank. Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more. Note 4: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Table 3, Page 1

Table 4

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

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

For the six months ended June 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Differences in transaction terms compared to third party transactions (Note 1)	Differences in transaction terms compared to third party transactions (Note 1)	Notes/accounts receivable(payable)	Notes/accounts receivable(payable)	Footnote (Note 2)
			Purchases(sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD.	YUGEN YUEH CO., LTD. FORMOSA PETROCHEMICAL CORP. (FPCC) NAN YA PLASTICS CORPORATION FORMOSA PLASTICS CORPORATION NAN YA TECHNOLOGY CORPORATION QUANG VIET ENTERPRISE CO., LTD. FORMOSA CHEMICALS & FIBRE CORPORATION	Other related party Other related party Other related party Other related party Other related party Associate Ultimate parent company	Sales Purchases Purchases Purchases Sales Purchases Sales	276,875) ($ 142,609) ( 5,460,078 861,729 474,951 128,865 3,350,601) (	1.93) ( 0.99) ( 46.44 7.33 4.04 1.10 75.42) (	Pay 120 days after delivery Pay every 15 days by mail transfer Pay every 15 days by mail transfer Pay every 15 days by mail transfer 60 days after monthly billings Draw promissory notes due in 2 months after inspection Pay by mail transfer 60 days after delivery	- - - - - $ - -	- - - - - - -	Notes receivable $ 116 Accounts receivable 103,105 Accounts receivable 64,142 Accounts payable 601,937) ( Notes payable 133,217) ( Accounts payable 439,730) ( Accounts payable 62,324) ( Accounts payable 26,743) ( Accounts receivable 1,130,019	- 4.22 2.63 33.56) ( 7.43) ( 24.52) ( 3.48) ( 1.49) ( 69.08

Table 4, Page 1

Table 4

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

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

For the six months ended June 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Differences in transaction

							Differences in transaction	Differences in transaction
Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction			terms compared to third party transactions (Note 1)		Notes/accounts receivable(payable)		Footnote (Note 2)
			Purchases(sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
FORMOSA TAFFETA (ZHONG SHAN) CO., LTD. FORMOSA TAFFETA VIETNAM CO., LTD. FORMOSA TAFFETA DONG NAI CO., LTD. FORMOSA TAFFETA DONG NAI CO., LTD. FORMOSA TAFFETA DONG NAI CO., LTD. FORMOSA TAFFETA DONG NAI CO., LTD. FORMOSA TAFFETA DONG NAI CO., LTD. FORMOSA TAFFETA (CHANGSHU) CO.,	FORMOSA TAFFETA (CHANGSHU) CO., FORMOSA INDUSTRY CO., LTD. FORMOSA TAFFETA VIETNAM CO., LTD. FORMOSA TAFFETA CO., LTD. KWANG VIET GARMENT CO., LTD. FORMOSA INDUSTRY CO., LTD. FORMOSA CHEMICALS & FIBRE CORPORATION JIAXING QUANG VIET GARMENT CO., LTD.	Associate Associate Associate Parent company Other related party Associate Ultimate parent company Other related party	sales Purchases Sales Sales sales Purchases Purchases sales	(213,761) $ 105,071 208,984) ( 221,913) ( 146,641) ( 377,356 201,721 148,776) (	19.62) ( 11.73 7.95) ( 8.44) ( 5.58) ( 18.05 9.65 14.42) (	60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings 60 days after monthly billings Pay by mail transfer 60 days after delivery	- - - - $ - - - -	- - - - - - - -	Accounts receivable 183,846 $ Accounts payable 17,036) ( Accounts receivable 143,082 Accounts receivable 84,584 Accounts receivable 94,774 Accounts payable 47,507) ( Accounts payable 78,303) ( Accounts receivable 86,255	44.61 15.80) ( 10.67 6.31 7.06 8.93) ( 14.73) ( 17.96

Note 1: If terms of related party transactions are different from third party transactions, explain the differences and reasons in the ‘Unit price’ and ‘Credit term’ columns.

Note 2: In case related-party transaction terms involve advance receipts (prepayments) transactions, explain in the footnote the reasons, contractual provisions, related amounts, and differences in types of transactions compared to third-party transactions.

Note 3: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Note 4:The transactions are disclosed by presenting revenues. The related transactions are not disclosed.

Table 4, Page 2

Table 5

Expressed in thousands of NTD

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

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

For the six months ended June 30, 2019

(Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at June 30, 2019 (Note 1)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA TAFFETA (ZHONG SHAN) CO., LTD. FORMOSA TAFFETA DONG NAI CO., LTD. FORMOSA TAFFETA CO., LTD.	NAN YA TECHNOLOGY CORPORATION FORMOSA TAFFETA (CHANG SHU) CO., LTD. FORMOSA TAFFETA VIETNAM CO., LTD. QUANG VIET ENTERPRISE CO., LTD.	Other related party Associate Associate Associate	1,130,019 $ 183,846 143,082 Notes receivable 116 Accounts receivable 103,105	6.27 2.17 8.71 7.67	`-` `$` `-` `-`	`-` `-` `-`	570,757 $ 37,426 67,253 42,827	- $ `-` `-`

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

Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Table 5, Page 1

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

Table 6

Significant inter-company transactions during the reporting period

For the six months ended June 30, 2019

Expressed in thousands of NTD

(Except as otherwise indicated)

Transaction

						Transaction
Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0 0 0	FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD.	FORMOSA CHEMICALS & FIBRE CORPORATION FORMOSA CHEMICALS & FIBRE CORPORATION FORMOSA CHEMICALS & FIBRE CORPORATION	1 1 1	Purchases Accounts payable Notes payable	861,729 $ 439,730 133,217	Draw promissory notes due in 2 months after inspection Draw promissory notes due in 2 months after inspection Draw promissory notes due in 2 months after inspection	3.58 0.45 0.14

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

(1) Parent company is ‘0’.

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

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

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

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

Note 4: The amount of transactions which is listed in the table is determined by its material.�

Table 6, Page 1

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

Information on investees

Table 7

For the six months ended June 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee (Notes 1 and 2)	Location	Main business activities	Initial invest	ment amount	Shares	held as at June 30,2019	held as at June 30,2019	Net profit (loss) of the investee for the six months ended June 30, 2019 (Note 2(2))	Investment income (loss) recognized by the company for the six months ended June 30, 2019 `（`Note 2(3)`）`	Footnote
				Balance as at June30,2019	Balance as at December31,2018	Number of shares	Ownership (%)	Bookvalue
FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD.	FORMOSA TAFFETA (HONG KONG) CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA DEVELOPMENT CO., LTD. FORMOSA TAFFETA VIETNAM CO., LTD. SCHOELLER FTC (HONG KONG) CO., LTD.	Hong Kong Taiwan Taiwan Vietnam Hong Kong	Sale of spun fabrics and filament textile IC assembly, testing and modules Handling urban land consolidation, development, rent and sale of industrial plants, residences and building Production, processing, further processing various yam and cotton cloth, and dyeing and finishing clothes, curtains, towels, bed covers and carpets Trading of textiles	1,356,862 $ 2,681,906 114,912 1,709,221 2,958	1,356,862 $ 2,681,906 114,912 1,709,221 2,958	- 206,442,472 16,100,000 - -	100.00 46.68 100.00 100.00 50.00	1,203,897 $ 5,657,951 216,590 2,069,342 6,374	59,943 $ 600,189 3,589 92,933 1,256	59,943 $ 280,168 3,589 92,933 628

Table 7, Page 1

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

Information on investees

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

For the six months ended June 30, 2019

Investor	Investee (Notes 1 and 2)	Location	Main business activities	Initial invest	ment amount	Shares	held as at June 30,2019	held as at June 30,2019	Net profit (loss) of the investee for the six months ended June 30, 2019 (Note 2(2))	Investment income (loss) recognized by the company for the six months ended June 30, 2019 `（`Note 2(3)`）`	Footnote
				Balance as at June30,2019	Balance as at December31,2018	Number of shares	Ownership (%)	Bookvalue
FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA DEVELOPMENT CO., LTD. FORMOSA DEVELOPMENT CO., LTD.	QUANG VIET ENTERPRISE CO., LTD. FORMOSA INDUSTRIES CORPORATION FORMOSA TAFFETA (CAYMAN) LIMITED FORMOSA TAFFETA DONG NAI CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. PUBLIC MORE INTERNATIONAL COMPANY LTD.	Taiwan Vietnam Cayman Islands Vietnam Taiwan Taiwan	Processing and producion of ready-to-wear, processing and trading of cotton cloth, and import and export of the aforementioned products Synthetic fiber, spinning, weaving, dyeing and finishing and electricity generation Investments Production, processing and sale of various dyeing and finishing textiles and yarn IC assembly, testing and modules Employment service, manpower allocation and agency service etc	213,771 $ 1,987,122 6,241,670 2,590,434 21,119 5,000	213,771 $ 1,987,122 6,241,670 2,590,434 21,119 5,000	18,595,352 - 171,028,736 - 469,500 -	17.99 10.00 100.00 100.00 0.11 100.00	1,253,013 $ 2,066,183 5,195,556 2,319,442 24,569 9,278	381,390 $ 471,543 - 3,315 600,189 3,637	47,053 $ 49,677 - 3,315 655 3,637

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

Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:

(1)The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at June 30, 2019’ should fill orderly in the Company’s (public company’s) information on investees and every directly or indirectly controlled investee’s investment information, and note the relationship between the Company (public company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column.

(2)The ‘Net profit (loss) of the investee for the six months ended June 30, 2019’ column should fill in amount of net profit (loss) of the investee for this period.

(3)The ‘Investment income (loss) recognised by the Company for the six months ended June 30, 2019’ column should fill in the Company (public company) recognised investment income (loss) of its direct subsidiary and recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

Table 7, Page 2

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

Information on investments in Mainland China

For the six months ended June 30, 2019

Table 8

Expressed in thousands of NTD

(Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method `（`Note 1`）`	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2019	Amount remitted Mainlan Amount re to Taiwan for t ended June	from Taiwan to d China/ mitted back he six months 30,2019	Accumulated amount of remittance from Taiwan to Mainland China as of June 30, 2019	Net income of investee for the six months ended June 30, 2019	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the six months ended June 30, 2019 `（`Note 2`）`	Book value of investments in Mainland China as of June 30, 2019	Accumulated amount of investment income remitted back to Taiwan as of June 30, 2019	Footnote
					Remitted to MainlandChina	Remitted back to Taiwan
FORMOSA TAFFETA (ZHONG SHAN) CO., LTD. XIAMEN XIANGYU FORMOSA IMPORT & EXPORT TRADING CO., LTD. FORMOSA TAFFETA (CHANGSHU) CO., LTD. CHANG SHU YU YUAN DEVELOPMENT. CO., LTD.	Production and sale of polyester and polyamide fabrics Import and export, entrepot trade, merchandise export processing, warehousing and design and drawing of black and white and colour graphs Weaving and dyeing as well as post dressing of high-grade loomage face fabric Building and selling real estate	1,402,085 $ 15,273 1,302,019 70,788	(1) (1) (2) (2)	1,402,085 $ 15,273 1,334,739 -	- $ - - -	- $ - - -	1,402,085 $ 15,273 1,334,739 -	72,474 $ 269) ( 60,059 397) (	100.00 100.00 100.00 40.78	72,474 $ 269) ( 60,059 162) (	1,783,350 $ 13,011 1,085,157 16,390	- $ - - -	Note 3 Note 4 Note 5 Note 6

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 amount of ‘Investment income (loss) recognised by the Company for the six months ended June 30, 2019 were derived from financial statements which were reviewed by independent accountants. Note 3: The Company's paid-in capital and accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2019 and June 30, 2019 are both US$46,400,000 (remitted out US$46,388,800 and equipment amounted to US$11,200).

Note 4: The Company’s paid-in capital and accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2019 and June 30, 2019 are both US$570,000.

Note 5: The Company’s paid-in capital and accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2019 is US$42,000,000. Formosa Taffeta (Changshu) Co., Ltd. reduced its capital amounting to US$900,000 and divided the housing land to establish a new company named Changshu Fushun Enterprise Management Co., Ltd. in March 2015. Thus, the original currency of paid-in capital and accumulated amount of remittance from Taiwan as of June 30, 2019 was US$41,100,000.�

Note 6: The Company was the surviving company after the consolidation of Changshu Yu Yuan Development.Co.,Ltd. and Changshu Fushun Enterprise Management Co., Ltd. Its paid-in capital is RMB$13,592,920.�

Table 8, Page 1

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of June 30, 2019	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
FORMOSA TAFFETA (ZHONG SHAN) CO., LTD. XIAMEN XIANGYU FORMOSA IMPORT & EXPORT TRADING CO., LTD. FORMOSA TAFFETA (CHANGSHU) CO., LTD.	1,402,085 $ 15,273 1,334,739	1,441,648 $ 17,710 1,304,940	44,553,930 $ 44,553,930 44,553,930

Note `：`

(1)The investment in FORMOSA TAFFETA (ZHONG SHAN) CO., LTD. approved by the Investment Commission of MOEA is US$46,400,000.

(2)The investment in XIAMEN XIANGYU FORMOSA IMPORT & EXPORT TRADING CO., LTD. approved by the Investment Commission of MOEA is US$570,000.

(3)The investment in FORMOSA TAFFETA (CHANG SHU) CO., LTD. approved by the Investment Commission of MOEA is US$42,000,000, while the company reduced its capital and divided some part of housing land to Changshu Fushun Enterprise Management Co.,Ltd. Such investment is still awaiting approval by MOEA.

(4)The original currency of paid-in capital was translated at USD:TWD = 1:31.07

Table 8, Page 2

Table 9

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

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

For the six months ended June 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Sale(purchase)	Sale(purchase)	Propertytran	saction	Accounts receivable (payable)	Accounts receivable (payable)		Provision of endorsements/guarantees or collaterals		Financing	Financing		Others
	Amount	%	Amount	%	Balance at June 30, 2019	%	Balance at June 30, 2019	Purpose	Maximum balance during the six months ended June30,2019	Balance at June30,2019	Interest rate	Interest during the six months ended June 30, 2019
FORMOSA TAFFETA (ZHONG SHAN) CO., LTD. FORMOSA TAFFETA (CHANGSHU) CO., LTD.	10,547 $ 27,366	0.07 0.19	$ - -	- -	$ 3,198 14,722	0.13 0.60	$ 1,024,980 1,708,300	For short-tem loans from financial institutions For short-tem loans from financial institutions	$ - -	- $ -	- -	- $ -

Table 9, Page 1

AI assistant

F.T.C — Interim / Quarterly Report 2019

51797_rns_2019-12-04_a9669887-125c-4d9c-83ca-b014f91240f4.pdf

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2019 AND 2018 (Expressed in thousands of New Taiwan dollars)

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS SIX MONTHS ENDED JUNE 30, 2019 AND 2018

1. HISTORY AND ORGANIZATION

STATEMENTS AND PROCEDURES FOR AUTHORIZATION

the Group

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

Non-controlling interest

Balance sheets

Statements of comprehensive income

(4) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

Effective 2019

(5) Employee benefits

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

(3) Financial assets at fair value through other comprehensive income

(4) Notes and accounts receivable

12(2).

(5) Inventories

(6) Investments accounted for using equity method

Shareholding ratio

Statements of comprehensive income

Formosa Industries Co., Ltd.

(7) Property, plant and equipment

(9) Short-term borrowings

(10) Short-term notes and bills payable

(11) Financial liabilities at fair value through profit or loss - current

(12) Other payables

- (13) Long term borrowings

(14) Pensions

(16) Capital surplus

(17) Retained earnings

(18) Other equity items

A. Contract assets

(20) Other income

(22) Expenses by nature

(23) Employee benefit expense

(24) Finance costs

(25) Income tax

A. Components of income tax expense

(27) Supplemental cash flow information

A. Investing activities with partial cash payments:

(28) Changes in liabilities from financing activities

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

(2) Names of related parties and relationship

(3) Significant related party transactions and balances

A. Operating revenue

C. Receivables from related parties

D. Notes and accounts payable

(b) Disposal of property, plant and equipment:

F. Others

(4) Key management compensation

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(4) Endorsements and guarantees

10. SIGNIFICANT DISASTER LOSS

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

12. OTHERS

(1) Capital management

F.T.C Interim / Quarterly Report 2019

(4) Leasing arrangements (lessee) `－` right-of-use assets/ lease liabilities

Note `：`