F.T.C - Interim / Quarterly Report 2019

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

REVIEW REPORT OF INDEPENDENT

ACCOUNTANTS

SEPTEMBER 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 September 30, 2019 and 2018, and the related consolidated statements of comprehensive income for the three months and nine months then ended, as well as the consolidated statements of changes in equity and of cash flows for the nine 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$21,101,934 thousand and NT$20,638,798 thousand, constituting 24% and 19% of the consolidated total assets, and total liabilities of NT$5,535,205 thousand and NT$5,233,598 thousand, both constituting 28% of the consolidated total liabilities as at September 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) amounting to NT$221,604 thousand, NT$116,632 thousand, NT$529,807 thousand and NT$314,780 thousand, constituting (5%), 1%, (39%) and 2% of total comprehensive income for the three months ended September 30, 2019 and 2018, and nine months ended September 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 September 30, 2019 and 2018, and of its consolidated financial performance for the three months and nine months then ended and its consolidated cash flows for the nine months 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 November 1, 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 balance sheets as of September 30, 2019 and 2018 are reviewed, not audited) September30,2019 December31,2018 Assets Notes AMOUNT % AMOUNT % Current assets 1100 Cash and cash equivalents 6(1) `$` `2,404,683` `3` `$` `3,391,896` `4` 1110 Financial assets at fair value through profit or loss - current 6(2) `625` `-` `479,490` `1` 1120 Current financial assets at fair value through other comprehensive income 6(3) `3,360,317` `4` `3,674,217` `4` 1140 Current contract assets 6(19) `1,292,107` `2` `788,643` `1` 1150 Notes receivable, net 6(4) `85,852` `-` `116,511` `-` 1160 Notes receivable - related parties 7 `3,705` `-` `4,429` `-` 1170 Accounts receivable, net 6(4) `4,604,023` `5` `4,110,277` `4` 1180 Accounts receivable - related parties 7 `1,978,563` `2` `1,228,428` `1` 1200 Other receivables 7 `365,829` `-` `326,802` `-` 130X Inventory 6(5) `8,525,015` `10` `8,710,037` `9` 1410 Prepayments `688,309` `1` `457,003` `1` 1470 Other current assets `376,619` `-` `483,826` `1` 11XX Total current assets `23,685,647` `27` `23,771,559` `26` Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 6(3) `42,075,838` `47` `46,512,701` `50` 1550 Investments accounted for under equity method 6(6) `3,361,131` `4` `3,216,506` `3` 1600 Property, plant and equipment 6(7) and 8 `18,496,412` `21` `18,770,958` `20` 1755 Right-of-use assets 6(8) `1,121,696` `1` `-` `-` 1840 Deferred income tax assets 6(25) `96,317` `-` `93,797` `-` 1900 Other non-current assets `480,696` `-` `660,972` `1` 15XX Total non-current assets `65,632,090` `73` `69,254,934` `74` 1XXX Total assets `$` `89,317,737` `100` `$` `93,026,493` `100`	(Expressed in thousands of New Taiwan dollars) (The balance sheets as of September 30, 2019 and 2018 are reviewed, not audited) September30,2019 December31,2018 Assets Notes AMOUNT % AMOUNT % Current assets 1100 Cash and cash equivalents 6(1) `$` `2,404,683` `3` `$` `3,391,896` `4` 1110 Financial assets at fair value through profit or loss - current 6(2) `625` `-` `479,490` `1` 1120 Current financial assets at fair value through other comprehensive income 6(3) `3,360,317` `4` `3,674,217` `4` 1140 Current contract assets 6(19) `1,292,107` `2` `788,643` `1` 1150 Notes receivable, net 6(4) `85,852` `-` `116,511` `-` 1160 Notes receivable - related parties 7 `3,705` `-` `4,429` `-` 1170 Accounts receivable, net 6(4) `4,604,023` `5` `4,110,277` `4` 1180 Accounts receivable - related parties 7 `1,978,563` `2` `1,228,428` `1` 1200 Other receivables 7 `365,829` `-` `326,802` `-` 130X Inventory 6(5) `8,525,015` `10` `8,710,037` `9` 1410 Prepayments `688,309` `1` `457,003` `1` 1470 Other current assets `376,619` `-` `483,826` `1` 11XX Total current assets `23,685,647` `27` `23,771,559` `26` Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 6(3) `42,075,838` `47` `46,512,701` `50` 1550 Investments accounted for under equity method 6(6) `3,361,131` `4` `3,216,506` `3` 1600 Property, plant and equipment 6(7) and 8 `18,496,412` `21` `18,770,958` `20` 1755 Right-of-use assets 6(8) `1,121,696` `1` `-` `-` 1840 Deferred income tax assets 6(25) `96,317` `-` `93,797` `-` 1900 Other non-current assets `480,696` `-` `660,972` `1` 15XX Total non-current assets `65,632,090` `73` `69,254,934` `74` 1XXX Total assets `$` `89,317,737` `100` `$` `93,026,493` `100`	(Expressed in thousands of New Taiwan dollars) (The balance sheets as of September 30, 2019 and 2018 are reviewed, not audited) September30,2019 December31,2018 Assets Notes AMOUNT % AMOUNT % Current assets 1100 Cash and cash equivalents 6(1) `$` `2,404,683` `3` `$` `3,391,896` `4` 1110 Financial assets at fair value through profit or loss - current 6(2) `625` `-` `479,490` `1` 1120 Current financial assets at fair value through other comprehensive income 6(3) `3,360,317` `4` `3,674,217` `4` 1140 Current contract assets 6(19) `1,292,107` `2` `788,643` `1` 1150 Notes receivable, net 6(4) `85,852` `-` `116,511` `-` 1160 Notes receivable - related parties 7 `3,705` `-` `4,429` `-` 1170 Accounts receivable, net 6(4) `4,604,023` `5` `4,110,277` `4` 1180 Accounts receivable - related parties 7 `1,978,563` `2` `1,228,428` `1` 1200 Other receivables 7 `365,829` `-` `326,802` `-` 130X Inventory 6(5) `8,525,015` `10` `8,710,037` `9` 1410 Prepayments `688,309` `1` `457,003` `1` 1470 Other current assets `376,619` `-` `483,826` `1` 11XX Total current assets `23,685,647` `27` `23,771,559` `26` Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 6(3) `42,075,838` `47` `46,512,701` `50` 1550 Investments accounted for under equity method 6(6) `3,361,131` `4` `3,216,506` `3` 1600 Property, plant and equipment 6(7) and 8 `18,496,412` `21` `18,770,958` `20` 1755 Right-of-use assets 6(8) `1,121,696` `1` `-` `-` 1840 Deferred income tax assets 6(25) `96,317` `-` `93,797` `-` 1900 Other non-current assets `480,696` `-` `660,972` `1` 15XX Total non-current assets `65,632,090` `73` `69,254,934` `74` 1XXX Total assets `$` `89,317,737` `100` `$` `93,026,493` `100`	September30,2018	September30,2018
		AMOUNT `$` `2,404,683` `625` `3,360,317` `1,292,107` `85,852` `3,705` `4,604,023` `1,978,563` `365,829` `8,525,015` `688,309` `376,619` `23,685,647` `42,075,838` `3,361,131` `18,496,412` `1,121,696` `96,317` `480,696` `65,632,090` `$` `89,317,737`	AMOUNT `$` `4,021,926` `632,524` `4,339,283` `710,504` `125,885` `5,476` `4,612,261` `1,301,937` `400,437` `8,192,345` `511,469` `423,810` `25,277,857` `60,549,400` `3,173,235` `18,441,314` `-` `137,544` `702,629` `83,004,122` `$` `108,281,979`	%
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)			`4` `1` `4` `1` `-` `-` `4` `1` `-` `8` `-` `-`
				`23`
				`56` `3` `17` `-` `-` `1`
				`77`
				`100`

(Continued)

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

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of September 30, 2019 and 2018 are reviewed, not audited) September30,2019 December31,2018 September30,2018 Liabilities andEquity Notes AMOUNT % AMOUNT % AMOUNT % Current liabilities 2100 Short-term borrowings 6(9) and 8 `$` `3,805,447` `4` `$` `3,638,538` `4` `$` `3,591,555` `4` 2110 Short-term notes and bills payable 6(10) `300,000` `1` `-` `-` `-` `-` 2120 Financial liabilities at fair value through profit or loss - current 6(11) `448` `-` `774` `-` `196` `-` 2150 Notes payable `168,817` `-` `251,576` `-` `180,782` `-` 2160 Notes payable - related parties 7 `194,688` `-` `335,830` `-` `360,539` `1` 2170 Accounts payable `1,856,257` `2` `1,312,601` `2` `1,366,938` `1` 2180 Accounts payable - related parties 7 `1,136,130` `1` `996,011` `1` `1,054,305` `1` 2200 Other payables 6(12) and 7 `1,927,581` `2` `1,949,497` `2` `1,839,854` `2` 2230 Current income tax liabilities 6(25) `447,192` `1` `391,662` `1` `351,678` `-` 2280 Current lease liabilities 6(8) `133,539` `-` `-` `-` `-` `-` 2300 Other current liabilities 6(13) `247,188` `-` `314,741` `-` `213,303` `-` 21XX Total current liabilities `10,217,287 11` `9,191,230` `10` `8,959,150` `9` Non-current liabilities 2540 Long-term borrowings 6(13) `7,992,654` `9` `8,022,299` `9` `8,989,909` `8` 2570 Deferred income tax liabilities 6(25) `304,267` `-` `292,165` `-` `253,326` `-` 2580 Non-current lease liabilities 6(8) `738,491` `1` `-` `-` `-` `-` 2600 Other non-current liabilities 6(14) `573,847` `1` `552,109` `-` `771,679` `1` 25XX Total non-current liabilities `9,609,259 11` `8,866,573` `9` `10,014,914` `9` 2XXX Total liabilities `19,826,546 22` `18,057,803` `19` `18,974,064` `18` Equity attributable to owners of parent Share capital 6(15) 3110 Share capital - common stock `16,846,646 19` `16,846,646` `18` `16,846,646` `16` Capital surplus 6(16) 3200 Capital surplus `1,274,676` `1` `1,268,860` `1` `1,261,773` `1` Retained earnings 6(17) 3310 Legal reserve `8,041,335` `9` `7,567,594` `8` `7,567,594` `7` 3320 Special reserve `2,214,578` `3` `2,214,578` `2` `2,214,578` `2` 3350 Unappropriated retained earnings `8,986,985 10` `9,743,048` `11` `9,427,290` `9` Other equity interest 6(18) 3400 Other equity interest `26,237,942 29` `31,291,978` `34` `45,841,685` `42` 3500 Treasury stocks 6(15) `(` `19,065)` `- (` `19,500)` `- (` `19,500)` `-` 31XX Equity attributable to owners of the parent `63,583,097 71` `68,913,204` `74` `83,140,066` `77` 36XX Non-controlling interest 6(18) `5,908,094` `7` `6,055,486` `7` `6,167,849` `5` 3XXX Total equity `69,491,191 78` `74,968,690` `81` `89,307,915` `82` Significant contingent liabilities and unrecognized contract commitments 9 Significant event after the balance sheet date 11 3X2X Total liabilities and equity `$` `89,317,737 100` `$` `93,026,493` `100` `$` `108,281,979` `100`	September30,2018	September30,2018
		%
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		`4` `-` `-` `-` `1` `1` `1` `2` `-` `-` `-`
		`9`
		`8` `-` `-` `1`
		`9`
		`18`
		`16` `1` `7` `2` `9` `42` `-`
		`77`
		`5`
		`82`
		`100`

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 earnings per share amount) (REVIEWED, NOT AUDITED)

Items	Notes	Threemonths ended September30	Threemonths ended September30
		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 income 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 earnings per share amount) (REVIEWED, NOT AUDITED)

Items	Notes		Threemonths ended September30	Threemonths ended September30	Threemonths ended September30
			2019		2018
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 (loss) 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 (loss) of associates and joint ventures accounted for under equity method 8360 Other comprehensive income (loss) that will be reclassified to profit or loss 8300 Total other comprehensive income (loss) for the period 8500 Total comprehensive income (loss) 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) 9710Profit for the period from continuing operations 9720 Non-controlling interest 9750Profit attributable to common shareholders of the parent Assuming shares held by subsidiaries are not deemed as treasury stock: Profit for the period 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 `$ 0.54` `0.17)` `(` `$ 0.37` `$ 0.54` `0.17)` `(` `$ 0.37`	A T
		`(` `(`

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

(Expressed in thousands of New Taiwan dollars)

(REVIEWED, NOT AUDITED)

Notes					Equityattributableto o	w	ners of the parent						Non-controlling interest	Total equity
	Share capital - common stock	Capital surplus		RetainedEarnings				Otherequityinterest			Treasury stocks	Total
			Legal reserve	Special reserve	Unappropriated retained earnings	d	Financial statements translation ifferences of foreign operations	Unrealized 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(15)(16) 6(16) 6(16) 6(18) 6(3)	`$` `16,846,646` `-` `16,846,646` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `16,846,646`	`$` `274,323` `-` `274,323` `-` `-` `-` `-` `-` `1,041` `-` `982,053` `(` `1 )` `4,357` `-` `-` `-` `-` `$ 1,261,773`	`$ 7,139,607` `-` `7,139,607` `-` `-` `-` `427,987` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 7,567,594`	`$` `2,214,578` `-` `2,214,578` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `2,214,578`	`$` `5,398,225` `4,890,917` `10,289,142` `4,569,070` `-` `4,569,070` `(` `427,987` `)` `(` `3,200,863` `)` `(` `1,041` `)` `2,577` `-` `-` `-` `-` `-` `(` `1,803,608` `)` `-` `$` `9,427,290`		`(` `$` `914,267 )` `-` `(` `914,267 )` `-` `27,578` `27,578` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `(` `$` `886,689 )`	`$` `-` `33,680,146` `33,680,146` `-` `11,364,651` `11,364,651` `-` `-` `-` `(` `2,577 )` `(` `118,806 )` `-` `-` `-` `-` `1,804,960` `-` `$` `46,728,374`		`$` `38,440,218` `(` `38,440,218 )` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-`	`($ 19,935 )` `-` `(` `19,935 )` `-` `-` `-` `-` `-` `435` `-` `-` `-` `-` `-` `-` `-` `-` `($ 19,500 )`	`$` `69,379,395` `130,845` `69,510,240` `4,569,070` `11,392,229` `15,961,299` `-` `(` `3,200,863 )` `435` `-` `863,247` `(` `1 )` `4,357` `-` `-` `1,352` `-` `$` `83,140,066`	`$ 3,803,175` `33,939` `3,837,114` `459,133` `92,082` `551,215` `-` `-` `-` `-` `(` `1,105 )` `-` `-` `(` `20,129 )` `(` `380,089 )` `3,114` `2,177,729` `$ 6,167,849`	`$` `73,182,570` `164,784` `73,347,354` `5,028,203` `11,484,311` `16,512,514` `-` `(` `3,200,863` `)` `435` `-` `862,142` `(` `1` `)` `4,357` `(` `20,129` `)` `(` `380,089` `)` `4,466` `2,177,729` `$` `89,307,915`

(Continued)

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FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

(REVIEWED, NOT AUDITED)

Notes					Equityattributableto o	w	ners of the parent						Non-controlling interest	Total equity
	Share capital - common stock	Capital surplus		RetainedEarnings				Otherequityinterest			Treasury stocks	Total
			Legal reserve	Special reserve	Unappropriated retained earnings	d	Financial statements translation ifferences of foreign operations	Unrealized 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(15)(16) 6(16) 6(16) 6(18)	`$` `16,846,646` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `16,846,646`	`$ 1,268,860` `-` `-` `-` `-` `-` `1,194` `46` `4,606` `(` `30 )` `-` `$ 1,274,676`	`$ 7,567,594` `-` `-` `-` `473,741` `-` `-` `-` `-` `-` `-` `$ 8,041,335`	`$` `2,214,578` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `2,214,578`	`$` `9,743,048` `3,255,474` `-` `3,255,474` `(` `473,741` `)` `(` `3,537,796` `)` `-` `-` `-` `-` `-` `$` `8,986,985`		`($` `744,846` `)` `-` `83,375` `83,375` `-` `-` `-` `-` `-` `-` `-` `($` `661,471` `)`	`$` `32,036,824` `-` `(` `5,137,411 )` `(` `5,137,411 )` `-` `-` `-` `-` `-` `-` `-` `$` `26,899,413`		`$` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-`	`($ 19,500 )` `-` `-` `-` `-` `-` `435` `-` `-` `-` `-` `($ 19,065 )`	`$` `68,913,204` `3,255,474` `(` `5,054,036 )` `(` `1,798,562 )` `-` `(` `3,537,796 )` `1,629` `46` `4,606` `(` `30 )` `-` `$` `63,583,097`	`$ 6,055,486` `509,594` `(` `65,607 )` `443,987` `-` `-` `-` `-` `-` `-` `(` `591,379 )` `$ 5,908,094`	`$` `74,968,690` `3,765,068` `(` `5,119,643 )` `(` `1,354,575 )` `-` `(` `3,537,796 )` `1,629` `46` `4,606` `(` `30 )` `(` `591,379 )` `$` `69,491,191`

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

~9~

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
Guarantee deposits paid
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 Nine months ended September 30,
Notes
2019
2018
$
4,481,013 $
5,854,240
6(7)(8)(22)
2,194,542
1,666,209
6(8)(24)
178,336
161,199
6(20)
(
31,191 ) (
19,627 )
6(20)
(
2,134,212 ) (
2,672,388 )
6(2)(21)
(
2,010 ) (
2,128 )
6(11)(21)
(
326 )
196
6(6)
(
234,876 ) (
222,158 )
6(21)
(
26,381 ) (
896,975 )
480,875
-
(
503,464 ) (
218,872 )
30,659
38,426
724
7,531
(
493,746 ) (
1,044,530 )
(
750,135 ) (
133,622 )
(
39,807 )
19,873
185,022 (
132,512 )
(
231,306 )
8,037
(
3,071 )
-
107,207
1,910
(
82,759 ) (
18,736 )
(
141,142 )
120,986
543,656 (
79,132 )
140,119 (
93,671 )
(
11,556 ) (
17,458 )
(
28,080 )
15,649
21,738 (
80,521 )
3,649,829
2,261,926
31,972
21,225
2,245,784
2,863,738
(
190,578 ) (
167,597 )
(
652,663 ) (
588,896 )
5,084,344
4,390,396

(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

Proceeds from capital reduction 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 in other non-current assets
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings

Decrease (increase) in short-term notes and bills
payable

Payment of long-term borrowings
Increase in long-term borrowings
Cash dividends paid
Payment of lease principal

Change in share of consolidated subsidiaries
Change in non-controlling interest
Net cash flows used in financing activities
Effect of foreign exchange rate
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period Nine months ended September 30,
Notes
2019
2018
($
373,096 ) ($
594,950 )
6(3)
-
769,609
-
5,780
6(27)
(
1,817,317 ) (
3,458,489 )
66,503
1,313,442
(
77,550 ) (
105,167 )
(
2,201,460 ) (
2,069,775 )
6(28)
166,909
785,865
6(28)
300,000 (
1,299,806 )
(
8,072,206 ) (
6,400,000 )
8,000,000
4,234,949
(
4,129,205 ) (
3,580,953 )
6(8)
(
112,775 )
-
-
862,142
-
2,177,729
(
3,847,277 ) (
3,220,074 )
(
22,820 ) (
21,540 )
(
987,213 ) (
920,993 )
6(1)
3,391,896
4,942,919
6(1)
$
2,404,683 $
4,021,926

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

~11~

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 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 September 30, 2019, the Company and its subsidiaries (collectively referred herein as the “Group”) had 10,318 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 November 1, 2019.

3. 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

~13~

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	Effective date by International Accounting Standards Board
Amendments 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.

~14~

(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 (%)	Description
			September 30, 2019	December 31, 2018	September 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	46.68 100	Note 1 Note 2

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Ownership (%)

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

Note 2: The financial statements of the entity as of and for the nine months ended September 30,

~16~

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 September 30, 2019, December 31, 2018 and September 30, 2018, the non-controlling interest amounted to $5,908,094, $6,055,486 and $6,167,849, respectively. The information on non-controlling interest and respective subsidiaries is as follows:

	Non-controllinginterest	Non-controllinginterest
September	Ownership (%) 53.32 30,2019	December
Amount 5,909,907 $
		September
		Amount 6,168,127 $

Summarized financial information on the subsidiaries:

Balance sheets

		Formosa Advanced	Formosa Advanced	Technologies Co.,	Technologies Co.,	Ltd.
	September 30,2019		December 31,2018		September 30,2018
Current assets	$	6,287,991	$	6,792,443	$	7,305,931
Non-current assets		6,623,131		5,882,131		5,538,894
Current liabilities	(	1,229,925)	(	1,231,815)	(	1,196,228)
Non-current liabilities	(	597,351)	(	86,280)	(	80,466)
Total net assets	$	11,083,846	$	11,356,479	$	11,568,131

~17~

Statements of comprehensive income

Statements of comprehensive income
			Formosa Advanced Technologies Co.,Ltd.
			Three months ended		September 30,
			2019		2018
Revenue	$		2,456,336	$	2,281,452
Profit before income tax			427,713		549,082
Income tax expense	(		71,896)	(	86,216)
Profit for the period			355,817		462,866
Other comprehensive loss,
net of tax	(		181,790)	(	56,861)
Total comprehensive income for the period	$		174,027	$	406,005
Comprehensive income attributable to non-
controlling interest	$		92,791	$	202,390
			Formosa Advanced Technologies Co.,Ltd.
			Nine months ended		September 30,
			2019		2018
Revenue	$		6,899,134	$	6,556,523
Profit before income tax			1,218,713		1,465,436
Income tax expense	(		262,707)	(	277,163)
Profit for the period			956,006		1,188,273
Other comprehensive (loss) income,
net of tax	(		123,182)		305,002
Total comprehensive income for the period	$		832,824	$	1,493,275
Comprehensive income attributable to non-
controlling interest	$		444,062	$	575,541
Statements of cash flows
			Formosa Advanced Technologies Co.,Ltd.
			Nine months ended		September 30,
			2019		2018
Net cash provided by operating activities		$	1,647,828	$	1,488,953
Net cash used in investing activities	(		1,557,304)	(	2,516,906)
Net cash used in financing activities	(		1,128,287)	(	1,105,556)
Decrease in cash and cash equivalents	(		1,037,763)	(	2,133,509)
Cash and cash equivalents, beginning of
period			1,267,335		3,479,352
Cash and cash equivalents, end of period		$	229,572	$	1,345,843

(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.

~18~

B. Lease liabilities include the net present value of the remaining lease payments at the 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

~19~

cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. 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

~20~

sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are 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	September 30,2019 135,453 $ 1,757,676 290,625 220,929 2,404,683 $	December 31,2018 156,022 $ 1,797,743 419,938 1,018,193 3,391,896 $	September 30,2018
			154,930 $ 2,027,728 202,219 1,637,049
			4,021,926 $

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 interest rates of time deposits on September 30, 2019, December 31, 2018 and September 30, 2018 ranged from 1.75%~5.35%, 2.75%~5.47% and 1.72%~5.43%, 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	September 30,2019 - $ 625 625 - 625 $	December 31,2018 466,353 $ - 466,353 13,137 479,490 $	September 30,2018
			619,504 $ 452
			619,956 12,568
			632,524 $

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 loss are listed below:	to financial assets at fair value through profit or
Beneficiary certificates Forward foreign exchange contracts Beneficiary certificates Forward foreign exchange contracts	2019 2018 395 $ 695 $ 625 25) ( 1,020 $ 670 $ 2019 2018 1,385 $ 2,073 $ 625 55 2,010 $ 2,128 $ Nine months ended September 30, Three months ended September 30,
	2019 1,385 $ 625 2,010 $

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

September 30, 2019 September 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 83,180 2019.08~2019.10 JPY 50,000 2018.08~2018.10

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).

~22~

(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	September 30,2019 2,786,029 $ 100,000 2,886,029 474,288 3,360,317 $ 8,739,607 $ 6,879,771 15,619,378 26,456,460 42,075,838 $	December 31,2018 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 $	September 30,2018
			2,311,395 $ 100,000
			2,411,395 1,927,888
			4,339,283 $
			8,739,607 $ 6,710,723
			15,450,330 45,099,070
			60,549,400 $

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 $45,436,155, $50,186,918 and $64,888,683 as at September 30, 2019, December 31, 2018 and September 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 $772,686 which resulted in loss on disposal (including the portion attributable to non-controlling interests) of ($1,804,708) during the nine months ended September 30, 2018 which was reclassified to retained earnings.
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	Three months ended	September 30,
		2019		2018
Equity instruments at fair value through other
comprehensive income
Fair value change recognized in other
comprehensive income	($	5,485,826)	$	7,920,723
Cumulative losses reclassified to
retained earnings due to derecognition
(including the portion attributable to
non-controlling interest)	$	-	$	5,666

~23~

		Nine months ended	Nine months ended	September 30,
		2019		2018
Equity instruments at fair value through other
comprehensive income
Fair value change recognized in other
comprehensive income	($	5,203,092)	$	11,456,494
Cumulative losses reclassified to
retained earnings due to derecognition
(including the portion attributable to
non-controlling interest)	$	-	($	1,799,042)

D. As at September 30, 2019, December 31, 2018 and September 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 $45,436,155, $50,186,918 and $64,888,683, 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
	September 30,2019		December 31,2018		September 30,2018
Notes receivable	$	85,852	$	116,511	$	125,885
Accounts receivable	$	4,674,690	$	4,181,310	$	4,688,080
Less: Allowance for uncollectible
accounts	(	70,667)	(	71,033)	(	75,819)
	$	4,604,023	$	4,110,277	$	4,612,261
A. The ageing analysis of notes and accounts		receivable is as		follows:
	September 30,2019		December 31,2018		September 30,2018
Not past due	$	4,550,105	$	4,092,982	$	4,613,812
Up to 30 days		140,733		154,591		120,386
31 to 90 days		66,370		45,066		62,494
Over 90 days		3,334		5,182		17,273
	$	4,760,542	$	4,297,821	$	4,813,965

The above ageing analysis was based on past due date.

B. As of September 30, 2019 and 2018, accounts receivable and notes receivable were all from contracts with customers. As of January 1, 2018, the balance of receivables from contracts with customers amounted to $3,808,563.
C. As at September 30, 2019, December 31, 2018 and September 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 $4,760,542, $4,297,821 and $4,813,965, respectively.

~24~

D. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).

(5) Inventories

12(2). 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		September 30,2019
	Allowance for Cost valuation loss 1,749,693 $ 108,824) ($ 290,532 5,421) ( 2,642,435 7,371) ( 3,577,648 609,556) ( 239,321 - 444,729 - 254,024 94) ( 35,675 - 22,224 - 9,256,281 $ 731,266) ($ December 31,2018		Book value
			1,640,869 $ 285,111 2,635,064 2,968,092 239,321 444,729 253,930 35,675 22,224
			8,525,015 $

	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) ($		Book value
			1,667,336 $ 208,186 2,859,768 3,211,097 159,786 348,702 216,803 16,135 22,224
			8,710,037 $

~25~

Raw materials Supplies Work in process Finished goods Merchandise inventory Materials in transit Outsourced processed materials Construction in progress Land for construction		September 30,2018
	Allowance for Cost valuation loss 1,686,523 $ 42,253) ($ 263,491 4,074) ( 2,545,213 6,587) ( 3,323,436 470,826) ( 338,229 - 281,722 - 228,332 80) ( 26,995 - 22,224 - 8,716,165 $ 523,820) ($		Book value
			1,644,270 $ 259,417 2,538,626 2,852,610 338,229 281,722 228,252 26,995 22,224
			8,192,345 $

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:

		Three months ended	Three months ended	September 30,
		2019		2018
Cost of goods sold	$	9,969,847	$	10,019,663
Inventory valuation loss (gain)(Note 1)		8,519	(	28,450)
Others (Note 2)	(	2,048)	(	28,459)
	$	9,976,318	$	9,962,754
		Nine months ended		September 30,
		2019		2018
Cost of goods sold	$	31,039,765	$	29,624,036
Inventory valuation loss		47,066		3,087
Others (Note 2)	(	19,931)	(	57,768)
	$	31,066,900	$	29,569,355

Note 1: Gain on inventory for the three months ended September 30, 2018 arose from inventories which were previously provided with allowance but were subsequently sold.

Note 2: 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.	September 30,2019 2,090,391 $ 1,255,088 15,652 3,361,131 $	December 31,2018 2,008,842 $ 1,191,261 16,403 3,216,506 $	September 30,2018
			1,968,686 $ 1,188,101 16,448
			3,173,235 $

~26~

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	September 30,2019	December 31,2018	September 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%	Associate Associate Associate	Equity method Equity method Equity method

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

Balance sheets

below: Balance sheets
		Formosa Industries Co.,Ltd.
	September 30,2019		December 31,2018		September 30,2018
Current assets	$	19,773,533	$	12,272,938	$	20,227,561
Non-current assets		21,129,704		21,232,063		22,525,120
Current liabilities	(	14,777,020)	(	11,529,804)	(	16,943,776)
Non-current liabilities	(	6,123,659)	(	2,749,255)	(	6,903,804)
Total net assets	$	20,002,558	$	19,225,942	$	18,905,101
Share in associate’s net assets	$	2,000,256	$	1,922,594	$	1,890,510
Dividends receivable		-		-		62,211
Difference		90,135		86,248		15,965
Carrying amount of the associate	$	2,090,391	$	2,008,842	$	1,968,686
		QuangViet Enterprise Co.,			Ltd.
	September 30,2019		December 31,2018		September 30,2018
Current assets	$	10,295,816	$	7,605,631	$	9,772,490
Non-current assets		3,368,651		3,222,091		3,023,810
Current liabilities	(	5,536,363)	(	3,043,953)	(	5,355,506)
Non-current liabilities	(	337,354)	(	329,187)	(	85,834)
Total net assets	$	7,790,750	$	7,454,582	$	7,354,960
Share in associate’s net assets	$	1,401,556	$	1,341,079	$	1,318,009
Difference	(	146,468)	(	149,818)	(	129,908)
Carrying amount of the associate	$	1,255,088	$	1,191,261	$	1,188,101

~27~

		Changshu	Yu Yuan Development Co.,Ltd.	Yu Yuan Development Co.,Ltd.	Yu Yuan Development Co.,Ltd.
	September 30,2019		December 31,2018		September	30,2018
Current assets	$	82,471	$	96,864	$	96,391
Non-current assets		35		106		147
Current liabilities	(	14,010)	(	26,867)	(	26,576)
Total net assets	$	68,496	$	70,103	$	69,962
Share in associate’s net assets	$	27,933	$	28,588	$	28,530
Difference	(	12,281)	(	12,185)	(	12,082)
Carrying amount of the associate	$	15,652	$	16,403	$	16,448

Statements of comprehensive income

Statements of comprehensive income
		Formosa Industries Co.,Ltd.
		Three months ended September 30,
		2019		2018
Revenue	$	6,626,196	$	7,774,822
Profit for the period from continuing
operations
(Total comprehensive income)	$	154,209	$	234,123
		Formosa Industries Co.,Ltd.
		Nine months ended September 30,
		2019		2018
Revenue	$	21,178,472	$	23,662,787
Profit for the period from continuing
operations
(Total comprehensive income)	$	572,891	$	1,006,924
		QuangViet Enterprise Co.,Ltd.
		Three months ended September 30,
		2019		2018
Revenue	$	6,790,155	$	6,142,645
Profit for the period from continuing
operations	$	701,388	$	640,304
Other comprehensive loss, net of tax	(	38,959)		-
Total comprehensive income	$	662,429	$	640,304

~28~

Revenue

Profit for the period from continuing operations

Other comprehensive income, net of tax Total comprehensive income

Revenue

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

Revenue

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

	QuangViet Enterprise Co.,Ltd.	QuangViet Enterprise Co.,Ltd.	QuangViet Enterprise Co.,Ltd.
	Nine months ended September 30,
	2019		2018
$	13,143,259	$	10,245,050
$	1,083,303	$	806,537
	-		9
$	1,083,303	$	806,546
	Changshu Yu Yuan Development Co.,Ltd.
	Three months ended September 30,
	2019		2018
$	-	$	-
$	159	($	1,224)
	Changshu Yu Yuan Development Co.,Ltd.
	Nine months ended September 30,
	2019		2018
$	-	$	-
($	238)	$	210

B. The investment income of $138,308, $157,021, $234,876 and $222,158 for the three months ended September 30, 2019 and 2018, and nine months ended September 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 September 30, 2019, December 31, 2018 and September 30, 2018, the fair value were $2,603,349, $1,952,512 and $2,556,861, respectively.

~29~

(7) Property, plant and equipment

								Transportation		Construction in
		Land and land						equipment and	progress and equipment
At January 1, 2019		improvements		Buildings		Machinery		other equipment		to be inspected		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
Nine months ended September 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		65		1,821,631		1,826,610
Disposals	(	53)		-	(	36,953)	(	3,116)		-	(	40,122)
Transfers		-		39,808		1,780,769		70,269	(	1,890,846)		-
Depreciation charge	(	2,864)	(	270,734)	(	1,682,542)	(	123,931)		-	(	2,080,071)
Net exchange differences	(	340)		1,072		14,578		541		3,186		19,037
Closing net book amount	$	2,032,212	$	4,973,529	$	9,698,472	$	547,307	$	1,244,892	$	18,496,412
At September 30, 2019
Cost	$	2,202,505	$	11,414,244	$	45,349,229	$	8,914,773	$	1,244,892	$	69,125,643
Accumulated depreciation	(	14,555)	(	6,440,715)	(	35,650,640)	(	8,367,466)		-	(	50,473,376)
Accumulated impairment	(	155,738)		-	(	117)		-		-	(	155,855)
	$	2,032,212	$	4,973,529	$	9,698,472	$	547,307	$	1,244,892	$	18,496,412

~30~

								Transportation	Transportation		Construction in
		Land and land						equipment and		progress and equipment
		improvements		Buildings		Machinery		other	equipment		to be inspected		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
Nine months ended September 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		3,510,587		3,510,592
Disposals	(	342,670)		-	(	58,268)	(		563)	(	14,966)	(	416,467)
Transfers (Note)		-		367,874		3,740,385			79,167	(	4,131,331)		56,095
Depreciation charge	(	222)	(	273,793)	(	1,242,315)	(		149,879)		-	(	1,666,209)
Net exchange differences	(	44)	(	32,837)	(	25,178)	(		2,712)	(	4,204)	(	64,975)
Closing net book amount	$	2,032,514	$	5,244,149	$	9,215,161	$		613,390	$	1,336,100	$	18,441,314
At September 30, 2018
Cost	$	2,202,683	$	11,347,229	$	43,772,960	$		8,960,278	$	1,336,100	$	67,619,250
Accumulated depreciation	(	14,431)	(	6,103,080)	(	34,557,682)	(		8,346,888)		-	(	49,022,081)
Accumulated impairment	(	155,738)		-	(	117)			-		-	(	155,855)
	$	2,032,514	$	5,244,149	$	9,215,161	$		613,390	$	1,336,100	$	18,441,314

Note: Transferred from prepayments

~31~

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

Amount capitalized Amount capitalized Range of the interest rates for capitalization	Three months ended September 30,	Three months ended September 30,
	2019 2018 2,796 $ 5,909 $ Nine months ended September 30,	2018
		5,909 $
	2019 8,359 $ 0.99%-4.8%	2018
		9,920 $
		0.94%~4.5%

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
Land improvements Buildings Machinery and equipment Transportation equipment Other equipment		3 ~ 15 years 10 ~ 60 years 2 ~ 20 years 3 ~ 15 years 2 ~ 17 years

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 September 30, 2019, December 31, 2018 and September 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 ended September 30,2019 Depreciation charge 38,350 $	September 30,2019
		Carryingamount
		1,121,696 $
		Nine months ended September 30,2019
		Depreciation charge
		114,471 $

C. For the nine months ended September 30, 2019, the additions to right-of-use assets was $135,997.

~32~

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

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts	Three months ended September 30, 2019	Nine months ended September 30, 2019
	$ 2,071 485	$ 7,411 1,561

E. For the nine months ended September 30, 2019, the Group’s total cash outflow for leases was $112,775.

(9) Short-term borrowings

Type of borrowings	September	September	30,	2019	Interest rate range		Collateral
Bank borrowings
Mortgage loan	$	3,805,447			1.4%-3.7%	Property, plant and equipment
						and inventories
Type of borrowings	December		31,	2018	Interest rate range		Collateral
Bank borrowings
Mortgage loan	$	3,638,538			1.40%~4.35%	Property, plant and equipment
						and inventories
Type of borrowings	September		30,	2018	Interest rate range		Collateral
Bank borrowings
Mortgage loan	$	3,586,830			1.40%~3.31%	Property, plant and equipment
						and inventories
Purchase loans				4,725	0.31%~0.37%		`-`
	$	3,591,555
)Short-term notes and	bills payable
			September		30,2019 December 31,2018		September 30,2018
Commercial paper payable			$		300,000 $	-	- $
Interest rate				0.7%		-	-

(10) Short-term notes and bills payable

The abovementioned commercial paper payable is issued by Taishin International Bank.

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

Items Forward foreign exchange contracts	September 30,2019 448 $	December 31,2018 774 $	September 30,2018
			196 $

A. The Group recognized net gain (loss) of $0, ($196) ,$326 and ($196) on financial liabilities held for trading for the three months ended September 30, 2019 and 2018, and nine months ended

~33~

September 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:

	September	September	30,2019			December	December	31,2018
Derivative Financial	Contract Amount		Contract		Contract Amount			Contract
Liabilities	(Notional Principal)		Period		(Notional Principal)			Period
Current items:
Forward foreign
exchange contracts
Taipei Fubon Bank	JPY	83,180	2019.08~2019.10		JPY	50,000		2018.12~2019.2
Taipei Fubon Bank	JPY	83,180	2019.09~2019.10		JPY	56,800		2018.12~2019.2
Chang Hwa Bank		-	-		JPY	50,000		2018.12~2019.1
Chang Hwa Bank		-	-		JPY	50,210		2018.12~2019.1
						December		31,2018
Derivative Financial					Contract Amount			Contract
Liabilities					(Notional Principal)			Period
Current items:
Forward foreign
exchange contracts
Taipei Fubon Bank					USD	477		2018.09~2018.10
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.
Other payables
		September 30,2019		December 31,2018				September 30,2018
Salaries and year-end bonus
payable		$	634,120	$		784,330	674,040 $
Accrued utilities expenses			162,829			130,048		152,455
Payable on equipment			72,107			62,814		139,058
Commission payable			57,425			54,564		69,066
Dividend payable			14,478			9,943		-
Others			986,622			907,798		805,235
		$	1,927,581	$		1,949,497	1,839,854 $

(12) Other payables

- (13) Long term borrowings

Long-term borrowings
	September30,2019		December31,2018		September30,2018
Credit borrowings	$	8,123,082	$	8,192,200	$	9,060,706
Less: Current portion	(	130,428)	(	169,901)	(	70,797)
	$	7,992,654	$	8,022,299	$	8,989,909
Interest rate		0.94%~4.52%		0.98%~4.45%		0.95%~4.50%

~34~

(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, $21,771 and $29,607 for the three months ended September 30, 2019 and 2018, and nine months ended September 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 contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(b) The Company’s mainland 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 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

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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 September 30, 2019 and 2018, and nine months ended September 30, 2019 and 2018 were $38,384, $37,105, $113,297 and $110,044, respectively.

(15) Share capital

A. As of September 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 nine months ended September 30, 2019 and 2018, changes in the number of treasury stocks are as follows (in thousands of shares):

stocks are as follows (in thousands of shares):	ousands of shares):	ousands of shares):	ousands of shares):	ousands of shares):
Reason for Investee Beginning reacquisition company shares Additions Disposal Long-term equity investment transferred to treasury stock for parent company’s shares held by subsidiaries Formosa Development Co., Ltd. 2,243 - 50) ( Nine months ended September 30,2019 Reason for Investee Beginning Disposal reacquisition company shares Additions (Note) Long-term equity investment transferred to treasury stock for parent company’s shares held by subsidiaries Formosa Development Co., Ltd. 2,293 - 50) ( Nine months ended September 30,2018	Nine months ended September 30,2019
					Endingshares
					2,193

		Beginning shares 2,293	Additions -	Disposal (Note) 50) (	Endingshares
					2,243

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

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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.

	Nine months ended September 30,2019	Nine months ended September 30,2019	Nine months ended September 30,2019
Treasury share transactions	Difference between consideration and carrying amount of subsidiaries acquired or disposed	Donated assets received
25,297 $ 1,194 4,606 - - 31,097 $
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 $ - - - - - - - 1) ( 250,345 $ 1,501 $
19,899 $ 1,041 4,357 - - 25,297 $	545 $ - - 982,053 - 982,598 $	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

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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:

Legal reserve Cash dividends	Dividends Amount per share (in thousands) (in dollars) 473,741 $ 3,537,796 2.10 $ 2018 earnings	2017 earnings	2017 earnings
	Amount (in thousands) 473,741 $ 3,537,796	Amount (in thousands) 427,987 $ 3,200,863	Dividends per share (in dollars)
			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 September 30, 2019, December 31, 2018 and September 30, 2018, unpaid stock dividends amounted to $14,478, $9,943 and $11,305, respectively.
F. For information relating to employees’ compensation and directors’ and supervisors’ remuneration, please refer to Note 6(23).

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(18) Other equity items

Other equity items
		Unrealized gains		Currency		Non-controlling
		on valuation		translation		interest
January 1, 2019	$	32,036,824	($	744,846)	$	6,055,486
Revaluation
─Group	(	5,136,610)		-		-
─Associates	(	801)		-		-
─Non-controlling interest		-		-	(	65,681)
Difference of currency translation
─Group		-		60,600		-
─Associates		-		22,775		-
─Non-controlling interest		-		-		74
Net income of non-controlling
interest		-		-		509,594
Cash dividends paid by
consolidated subsidiaries		-		-	(	591,379)
September 30, 2019	$	26,899,413	($	661,471)	$	5,908,094

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(19)

Operating revenue
Unrealized gains
Currency
Non-controlling
on valuation
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
11,362,408
-
-
─Associates
2,243
-
-
─Non-controlling interest
-
-
91,843
Revaluation transferred to
retained earnings
─Group
1,804,960
-
-
─Non-controlling interest
-
-
3,114
Difference of currency translation
─Group
-
38,141
-
─Associates
-
10,563)
(
-
─Non-controlling interest
-
-
239
Net income of
non-controlling interest
-
-
459,133
Difference between consideration
and carrying amount of
subsidiaries acquired
118,806)
(
-
1,105)
(
Change in net share under equity
method
2,577)
(
-
-
Changes in share of consolidated
subsidiaries
-
-
20,129)
(
Cash dividends paid by
consolidated subsidiaries
-
-
380,089)
(
Change in non-controlling interest
-
-
2,177,729
September 30, 2018
46,728,374
$ 886,689)
($ 6,167,849
$

Operating revenue September 30, 2018 46,7 $	28,374 886,689) ($ 6,167,849 $	28,374 886,689) ($ 6,167,849 $
Sales revenue Service revenue Sales revenue Service revenue	Three months ended September 30,
	2019 2018 11,264,309 $ 11,256,873 $ 76,488 79,825 11,340,797 $ 11,336,698 $ Nine months ended September 30,	2018
		11,256,873 $ 79,825
		11,336,698 $
	2019 35,237,026 $ 193,366 35,430,392 $	2018
		33,583,030 $ 221,349
		33,804,379 $

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A. Contract assets

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

contract assets:
Contract assets relating to IC revenue	September 30,2019 1,292,107 $	December 31,2018 788,643 $	September 30,2018
			710,504 $

B. All Formosa Advanced Technologies Co., Ltd’s. 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 (expenses) Interest income from bank deposits Dividend income Other income	2019 2018 13,831 $ 6,979 $ 190,688 2,607,533 21,887 4,235) ( 226,406 $ 2,610,277 $ 2019 2018 31,191 $ 19,627 $ 2,134,212 2,672,388 129,758 116,524 2,295,161 $ 2,808,539 $ Nine months ended September 30, Three months ended September 30,
	2019 31,191 $ 2,134,212 129,758 2,295,161 $

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(21) Other gains and losses

Other gains and losses
		Three months ended		September 30,
		2019		2018
Gains on disposals of property, plant and	$	4,750	$	57,062
equipment
Net currency exchange gains (loss)		9,980	(	50,575)
Gains on financial assets at fair value
value through profit or loss		1,020		474
Gains on financial liabilities at fair value
through profit or loss		6		-
Bank charges	(	9,507)	(	9,980)
Other gains and losses	(	18,408)	(	13,189)
	($	12,159)	($	16,208)
		Nine months ended		September 30,
		2019		2018
Gains on disposals of property, plant and	$	26,381	$	896,975
equipment
Net currency exchange gains		59,380		29,387
Gains on financial assets at fair value
value through profit or loss		2,010		2,128
Gains (losses) on financial liabilities at fair value
through profit or loss		326	(	196)
Bank charges	(	27,994)	(	28,255)
Other gains and losses	(	57,784)	(	35,483)
	$	2,319	$	864,556
Expenses by nature
		Three months ended		September 30,
		2019		2018
Employee benefit expense	$	1,251,142	$	1,241,832
Depreciation charges on property, plant and
equipment		719,227		604,119
	$	1,970,369	$	1,845,951
		Nine months ended		September 30,
		2019		2018
Employee benefit expense	$	3,835,458	$	3,784,967
Depreciation charges on property, plant and
equipment		2,194,542		1,666,209
	$	6,030,000	$	5,451,176

(22) Expenses by nature

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(23) Employee benefit expense

Employee benefit expense
Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	Three months ended September 30,
	2019 2018 1,042,550 $ 1,038,548 $ 119,436 111,884 45,640 46,974 43,516 44,426 1,251,142 $ 1,241,832 $ Nine months ended September 30,	2018
		1,038,548 $ 111,884 46,974 44,426
		1,241,832 $
	2019 3,213,439 $ 359,129 135,067 127,823 3,835,458 $	2018
		3,177,082 $ 340,508 139,651 127,726
		3,784,967 $

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 September 30, 2019 and 2018, and nine months ended September 30, 2019 and 2018, employees’ compensation was accrued at $500, $500, $1500 and $1,333 respectively; while directors’ and supervisors’ remuneration was accrued at $250, $250, $750 and $667, 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 nine months ended September 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. 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.

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(24) Finance costs

		Three months ended	Three months ended	September 30,
		2019		2018
Interest expense:
Bank borrowings	$	60,018	$	60,557
Other financial expense		2,071		-
Less: Capitalization of qualifying assets	(	2,796)	(	5,909)
	$	59,293	$	54,648
		Nine months ended		September 30,
		2019		2018
Interest expense:
Bank borrowings	$	179,284	$	171,119
Other financial expense		7,411		-
Less: Capitalization of qualifying assets	(	8,359)	(	9,920)
	$	178,336	$	161,199

(25) Income tax

A. Components of income tax expense

ome tax Components of income tax expense
		Three months ended		September 30,
		2019		2018
Current tax:
Current tax on profits for the period	$	132,112	$	156,213
Prior year income tax underestimation
(overestimation)		2,520	(	65)
Effect of foreign exchange rate	(	391)	(	218)
Total current tax		134,241		155,930
Deferred tax:
Origination and reversal of temporary
differences	(	3,693)	(	50,118)
Total deferred tax	(	3,693)	(	50,118)
Income tax expense	$	130,548	$	105,812

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		Nine months ended	Nine months ended	September 30,
		2019		2018
Current tax:
Current tax on profit for the period	$	440,005	$	431,921
Land value increment tax		-		129,638
Tax on undistributed surplus earnings		232,354		46,659
Prior year income tax underestimation		36,369		134,949
Effect of foreign exchange rate	(	536)	(	912)
Total current tax		708,192		742,255
Deferred tax:
Origination and reversal of temporary
differences		7,753		91,513
Impact of change in tax rate		-	(	7,731)
Total deferred tax		7,753		83,782
Income tax expense	$	715,945	$	826,037

B. The income tax returns of the Company, Formosa Advanced Technologies Co., Ltd., Formosa Development Co., Ltd. and Public More International 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%.

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(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.

					Three months ended September	Three months ended September	30,	30,	2019
						Weighted-average
						common shares			Earnings	per share
			Amount			outstanding			(in dollars)
		Before tax			After tax	(in thousands)		Before tax		After	tax
Net income	$		915,978	$	785,430	1,682,439	$		0.54	$	0.47
Profit attributable to
the non-controlling
interest	(		288,587)	(	189,583)	(			0.17)	(	0.11)
Profit attributable to
the parent	$		627,391	$	595,847		$		0.37	$	0.36
					Three months ended September		30,		2018
						Weighted-average
						common shares			Earnings	per share
			Amount			outstanding			(in dollars)
		Before tax			After tax	(in thousands)		Before tax		After	tax
Net income	$		3,343,512	$	3,237,700	1,682,373	$		1.99	$	1.93
Profit attributable to
the non-controlling
interest	(		307,550)	(	209,352)	(			0.18)	(	0.12)
Profit attributable to
the parent	$		3,035,962	$	3,028,348		$		1.81	$	1.81

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Nine months ended September 30, 2019

						Weighted-average
						common shares			Earnings	per share
			Amount			outstanding			(in dollars)
		Before tax			After tax	(in thousands)		Before tax		After	tax
Net income	$		4,481,013	$	3,765,068	1,682,439	$		2.66	$	2.23
Profit attributable to
the non-controlling
interest	(		878,536)	(	509,594)		(		0.52)	(	0.30)
Profit attributable to
the parent	$		3,602,477	$	3,255,474		$		2.14	$	1.93
					Nine months ended September		30,2018
						Weighted-average
						common shares			Earnings	per share
			Amount			outstanding			(in dollars)
		Before tax			After tax	(in thousands)		Before tax		After	tax
Net income	$		5,854,240	$	5,028,203	1,682,373	$		3.48	$	2.99
Profit attributable to
the non-controlling
interest	(		860,535)	(	459,133)		(		0.51)	(	0.27)
Profit attributable to
the parent	$		4,993,705	$	4,569,070		$		2.97	$	2.72
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:
					Three months ended September 30,2019
						Common shares			Earnings	per share
			Amount			outstanding			(in dollars)
		Before tax			After tax	(in thousands)		Before tax		After	tax
Net income	$		915,978	$	785,430	1,684,665	$		0.54	$	0.47
Profit attributable to
the non-controlling
interest	(		288,587)	(	189,583)		(		0.17)	(	0.11)
Profit attributable to
the parent	$		627,391	$	595,847		$		0.37	$	0.36

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:

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Three months ended September 30, 2018

						Common shares			Earnings	per share	per share
			Amount			outstanding			(in dollars)
		Before tax			After tax	(in thousands)		Before tax		After	tax
Net income	$		3,343,512	$	3,237,700	1,684,665	$		1.99	$	1.92
Profit attributable to
the non-controlling
interest	(		307,550)	(	209,352)		(		0.19)	(	0.12)
Profit attributable to
the parent	$		3,035,962	$	3,028,348		$		1.80	$	1.80
					Nine months	ended September	30,		2019
						Common shares			Earnings	per share
			Amount			outstanding			(in dollars)
		Before tax			After tax	(in thousands)		Before tax		After	tax
Net income	$		4,481,013	$	3,765,068	1,684,665	$		2.66	$	2.23
Profit attributable to
the non-controlling
interest	(		878,536)	(	509,594)		(		0.52)	(	0.30)
Profit attributable to
the parent	$		3,602,477	$	3,255,474		$		2.14	$	1.93
					Nine months	ended September	30,		2018
						Common shares			Earnings	per share
			Amount			outstanding			(in dollars)
		Before tax			After tax	(in thousands)		Before tax		After	tax
Net income	$		5,854,240	$	5,028,203	1,684,665	$		3.48	$	2.98
Profit attributable to
the non-controlling
interest	(		860,535)	(	459,133)		(		0.52)	(	0.27)
Profit attributable to
the parent	$		4,993,705	$	4,569,070		$		2.96	$	2.71

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 September 30, 2019 and 2018, and nine months ended September 30, 2019 and 2018.

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(27) Supplemental cash flow information

Investing activities with partial cash payments:

pplemental cash flow information vesting activities with partial cash payments:
		Nine months ended September 30,
		2019		2018
Purchase of property, plant and equipment	$	1,826,610	$	3,510,592
Add: Opening balance of payable on
equipment		62,814		86,955
Less: Ending balance of payable on equipment	(	72,107)	(	139,058)
Cash paid during the period	$	1,817,317	$	3,458,489

(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 September 30, 2019 At January 1, 2018 Changes in cash flow from financing activities Impact of changes in foreign exchange rate At September 30, 2018		Short-term borrowings		Short-term notes and bills payable	Long-term borrowings (including currentportion)		Liabilities from financing activities-gross
		3,638,538 $ 166,909 - 3,805,447 $ Short-term borrowings		- $ 300,000 - 300,000 $ Short-term notes and bills payable	8,192,200 $ 72,206) ( 3,088 8,123,082 $ Long-term borrowings (including currentportion)		11,830,738 $ 394,703 3,088 12,228,529 $ Liabilities from financing activities-gross
		2,805,690 $ 785,865 - 3,591,555 $	1,299,806 $ 1,299,806) ( - - $		11,222,071 $ 2,165,051) ( 3,686 9,060,706 $	15,327,567 $ 2,678,992) ( 3,686 12,652,261 $

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.

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(2) Names of related parties and relationship

Names of related parties Relationship with the Group Formosa Chemicals & Fibre Corp. Parent company Quang Viet Enterprise Co., Ltd. Associate Formosa Industries Corp. Associate Formosa Biomedical Technology Corp. Other related party Toa Resin Corp. Other related party Formosa Petrochemical Corp. Other related party Formosa Heavy Industries Corp. Other related party Formosa Network Technology Corp. Other related party Formosa Plastics Corp. Other related party Formosa Plastics Transport Corp. Other related party Formosa Asahi Spandex Corp. Other related party Nan Ya Technology Corp. Other related party Nan Ya Plastics Corp. Other related party Nan Ya PCB Corp. Other related party Nan Ya Photonics Inc. Other related party Yumaowu Enterprise Co., Ltd. Other related party Great King Garment Co., Ltd. Other related party Bellmart Industrial Co., Ltd. Other related party Yugen Yueh Co.,Ltd. Other related party Chang Gung Biotechnology Co., Ltd. Other related party Nan Ya Polyester Fiber (Kunshan) Corp. Other related party Nanya Plastic (Guangzhou) Co.,Ltd. Other related party Nan Ya (Kunshan) Corp. Other related party Kwang Viet Garment Co., Ltd. Other related party Yu Yuang Textile Co., Ltd. Other related party Yu Maowu Complex Co., Ltd. Other related party Piecemakers Technology, Inc. (Not related parties since February,2018) Other related party Kong You Industrial Co., Ltd. Other related party Jiaxing Quang Viet Garment Co., Ltd. Other related party Formosa HA Tinh(Cayman) Limited Other related party FG INC. Other related party NKFG Other related party

~50~

(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 ended September 30,
	2019 2018 126 $ 125 $ 23,098 65,179 1,833,392 1,587,386 243,321 213,906 2,099,937 $ 1,866,596 $ Nine months ended September 30,	2018
		125 $ 65,179 1,587,386 213,906
		1,866,596 $
	2019 781 $ 299,973 5,183,993 916,886 6,401,633 $	2018
		421 $ 346,174 4,560,496 775,084
		5,682,175 $

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 ended September 30,
	2019 2018 465,897 $ 659,810 $ 195,332 246,685 2,609,711 3,041,352 438,122 354,746 3,709,062 $ 4,302,593 $ Nine months ended September 30,	2018
		659,810 $ 246,685 3,041,352 354,746
		4,302,593 $
	2019 1,531,803 $ 693,013 8,069,789 1,373,524 11,668,129 $	2018
		1,758,269 $ 654,651 8,293,801 1,305,239
		12,011,960 $

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

C. Receivables from related parties

commercial terms and conditions. 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.	September 30,2019 78 $ 19,607 1,700,716 261,867 1,982,268 - 1,982,268 $	December 31,2018 98 $ 41,091 1,006,359 185,309 1,232,857 - 1,232,857 $	September 30,2018
			38 $ 46,007 1,036,274 225,094
			1,307,413 63,211
			1,370,624 $

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

Notes and accounts payable: －Ultimate parent －Associates `－`Other related party Formosa Petrochemical Corp. Others	September 30,2019 628,951 $ 50,344 436,180 215,343 1,330,818 $	December 31,2018 693,798 $ 46,854 397,563 193,626 1,331,841 $	September 30,2018 651,332 $ 72,484 554,434 136,594 1,414,844 $

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	2019 2018 46,354 $ - $ Three months ended September 30	Nine months ended September 30	Nine months ended September 30
	2019 46,354 $	2019 54,164 $	2018
			- $

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(b) Disposal of property, plant and equipment:

The Group had no disposal transactions from January 1 to September 30, 2019.

Other related party		Three months ended September 30,2018	Three months ended September 30,2018	Three months ended September 30,2018		Nine months ended September 30,2018	Nine months ended September 30,2018	Nine months ended September 30,2018
		Disposal proceeds		Gain (loss) on disposal		Disposal proceeds		Gain (loss) on disposal
		85 $		- $		14,966 $		- $

(c) Acquisition of financial assets:

The Group had no acquisition transactions from June 1 to September 30, 2018 and 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	No. of shares - No. of shares 19,000,970	Objects		Nine months ended September 30,2019
				Consideration 69,570 $ Nine months ended September 30,2018
		FG INC. Objects
				Consideration 566,417 $
		Formose Ha Tinh (Cayman) Linited

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 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 September 30, 2019 and 2018, and nine months ended September 30,

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2019 and 2018, Formosa Taffeta Dong Nai Co., Ltd. has recognized lease service fee income in investment district of $8,867, $9,047, $26,228 and $25,275, respectively, for rendering the abovementioned consigned services. As of September 30, 2019, December 31, 2018 and September 30, 2018, the uncollected amount of $3,196, $3,241 and $4,804, respectively, was recognized under ‘other receivables’.

For the above land leasing, as of September 30, 2019, December 31, 2018 and September 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 $34,553, $37,745 and $33,225, respectively, and was recognized under ‘other payables’.

(4) Key management compensation

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 ended September 30,
	2019 2018 8,356 $ 7,988 $ 14 27 8,370 $ 8,015 $ Nine months ended September 30,	2018
		7,988 $ 27
		8,015 $
	2019 37,692 $ 68 37,760 $	2018
		37,674 $ 78
		37,752 $

8. PLEDGED ASSETS

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

Book Value

Item Property, plant and equipment Inventories (Held-to-maturity land)	September 30,2019 137,436 $ 21,264 158,700 $	December 31,2018 137,962 $ 21,264 159,226 $	September 30,2018 Purpose 138,137 $ Security for short-term borrowings 21,264 Security for short-term borrowings 159,401 $	Purpose

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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 September 30, 2019, the items in custody are as follows:

		September 30,2019	September 30,2019
Quantity (Unit：PC) 461,111 NTD 0.015~0.792 84,651,323 USD 1.4~20 3,876,180 USD 0.3~0.8 3,355,351 NTD 0.34~10.43 2,983,567 USD 0.3~20 557,074 USD 1.4~9.403 88,389 USD 1.2~6.5 95,972,995 Quantity (Unit：PC) 594,403 NTD 0.015~0.792 204,723,431 USD 1.4~20 5,581,490 USD 0.3~0.8 7,429,573 NTD 0.34~10.43 815,555 USD 0.3~20 98,519 USD 1.4~9.403 60,440 USD 1.2~6.5 219,303,411 Market value (per PC) Market value (per PC)	Quantity (Unit：piece) - - - - - - 794 794 Quantity (Unit：piece) - - - - - - 538 538	Market value (perpiece) - - - - - - 1,600 USD Market value (perpiece) - - - - - - 1,600 USD	Quantity (Unit：bar) - - - - 96,591 - - 96,591 Quantity (Unit：bar) - - - - 44,715 - - 44,715	Market value (per bar) - - - - USD 9.5~ 290 - - Market value (per bar) - - - - USD 9.5~ 290 - -	Quantity (Unit：stick) - - - 604 - - - 604 Quantity (Unit：stick) - - - 668 - - - 668	Market value (stick)
						- - - NTD 24~1,307 - - - Market value (stick)
						- - - NTD 24~1,307 - - -

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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

Less than 1 year Between 1 and 5 years More than 5 years	December 31, 2018 133,799 $ 398,418 327,310 859,527 $	September 30,2018
		133,524 $ 405,755 331,962
		871,241 $

(3) Significant commitments and contingent liabilities

As of September 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	September 30,2019
	Amount(In Thousands)
	1,487 $ 256,689

(4) Endorsements and guarantees

As of September 30, 2019, in order to assist the subsidiaries is obtaining a credit line, the Company has guaranteed the following amounts for subsidiaries:

has 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.	September 30,2019
	1,023,660 $ 1,551,000 1,706,100 4,528,920 7,195,837 3,000

(5) Contingencies-Lawsuit

In August 2019, Taiwan Cooperative Bank Ltd. and DBS Bank (Taiwan) Ltd. filed a complaint against the Company and the subsidiary, Formosa Taffeta Dong Nai Co., Ltd, alleging that several employees of the Company and Formosa Taffeta Dong Nai Co., Ltd., instead of making the truthful representations during the credit assessment procedures, cooperated with New Site Industries INC. and New Brite Industries INC. to conduct false statements and provide misleading information with regard to the fact that New Site Industries INC. and New Brite Industries INC. owned the accounts receivable due from the Company and Formosa Taffeta Dong Nai Co., Ltd., thereby causing losses to the plaintiffs. As a result, the plaintiffs alleged that the Company and Formosa Taffeta Dong Nai Co., Ltd. shall be liable for the losses incurred due to poor supervision. The Company and Formosa Taffeta Dong Nai Co., Ltd. have appointed a legal counsel to represent them. Based on the opinion of the legal counsel, it is difficult to predict the judge’s decision at this stage as the case is still in the

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course of preliminary proceedings at the court of first instance. Therefore, the outcome and impact of the case cannot yet be determined.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

Owing to the capital increase of Schoeller Textil AG, the Board of Directors during its meeting on October 17, 2019 resolved to invest in Schoeller Textil AG for an equity interest of 50%. The estimated investment amount shall not exceed 40,000 Swiss francs.

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.

(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	September 30,2019 625 $ 45,436,155 9,442,655 54,879,435 $ 448 $ 17,512,002 872,030 18,384,480 $	December 31,2018 479,490 $ 50,186,918 9,178,343 59,844,751 $ 774 $ 16,676,253 - 16,677,027 $	September 30,2018
			632,524 $ 64,888,683 10,467,922
			75,989,129 $
			196 $ 17,454,679 -
			17,454,875 $

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,

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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:

liabilities are as follows:
Financial assets Monetary items USD:NTD USD:RMB Non-monetary items VND:NTD HKD:NTD RMB:NTD USD:NTD Financial liabilities Monetary items USD:NTD USD:RMB Financial assets Monetary items USD:NTD JPY:NTD Non-monetary items VND:NTD HKD:NTD RMB:NTD USD:NTD Financial liabilities Monetary items USD:NTD	September 30,2019
	Foreign Currency Amount (In Thousands) Exchange Rate 121,969 $ 31.04 10,095 7.07 4,914,689,836 0.0013 297,039 3.96 643,818 4.39 146,319 31.04 4,173 31.04 13,446 7.07 December 31,2018		Book Value (NTD)
			3,785,918 $ 313,349 6,389,097 1,176,274 2,826,361 4,541,742 129,530 417,364
	Foreign Currency Amount (In Thousands) 117,372 $ 412,840 4,723,641,239 289,967 439,400 183,430 3,951	Exchange Rate 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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September 30, 2018

Financial assets Monetary items USD:NTD USD:RMB JPY:NTD Non-monetary items VND:NTD HKD:NTD RMB:NTD USD:NTD Financial liabilities Monetary items USD:RMB	Foreign Currency Amount (In Thousands) 121,541 $ 9,306 488,476 4,646,629,205 286,631 589,031 171,396 17,267	Exchange Rate 30.55 6.88 0.28 0.0013 3.91 4.44 30.55 6.88	Book Value (NTD)
			3,713,078 $ 284,298 136,773 6,040,618 1,120,727 2,615,298 5,236,148 527,507

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 September 30, 2019 and 2018, and nine months ended September 30, 2019 and 2018 amounted to $9,980, ($50,575), $59,380 and $29,387, respectively.

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

Nine months ended September	Nine months ended September	30,2019
Sensitivityanalysis
Degree of variation 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit or loss 37,859 $ 3,133 - - - - 1,295 4,174	Effect on other comprehensive income
		- $ - 63,891 11,763 28,264 45,417 - -

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Nine months ended September 30, 2018

	Nine months ended September	Nine months ended September	30,2018
Financial assets Monetary items USD:NTD USD:RMB JPY:NTD Non-monetary items VND:NTD HKD:NTD RMB:NTD USD:NTD Financial liabilities Monetary items USD:RMB	Sensitivityanalysis
	Degree of variation 1% 1% 1% 1% 1% 1% 1% 1%	Effect on profit or loss 37,131 $ 2,843 1,368 - - - - 5,275	Effect on other comprehensive income
			- $ - - 60,406 11,207 26,153 52,361 -

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 nine months ended September 30, 2019 and 2018 would have increased/decreased by $5 and $5,060, 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 $454,362 and $648,887, 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 nine months ended September 30, 2019 and 2018, the Group’s borrowings at variable rate were denominated in the NTD and USD.
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

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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 nine months ended September 30, 2019 and 2018 would have decreased/increased by $63,200 and $69,600, 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 nine months ended September 30, 2019 and 2018 would have decreased/increased by $741 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 receivable, accounts receivable and contract assets. On September 30, 2019, December 31, 2018 and September 30, 2018, the provision matrix is as follows:

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Notpast due	Up to 30 days past due	Over 90 days past due	Total
0% 4,550,105 $ 16,273 Notpast due	7% 140,733 $ 9,890 Up to 30 days past due	100% 3,334 $ 3,334 Over 90 days past due	4,760,542 $ 70,667 Total
1% 4,092,982 $ 31,694 Notpast 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% 4,613,812 $ 17,761	17% 120,386 $ 20,419	82% 17,273 $ 14,228	4,813,965 $ 75,819

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:

Nine months ended September 30,2019	Nine months ended September 30,2019	Nine months ended September 30,2019
Notes receivable Accounts receivable Contract assets - $ 71,033) ($ - $ - 366 - - $ 70,667) ($ - $ Nine months ended September 30,2018		Contract assets
		- $ -
		- $
Notes receivable - $ - - $	Accounts receivable 76,521) ($ 702 75,819) ($	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 September 30, 2019, December 31, 2018 and September 30, 2018, the Group held money market position of $47,706,010, $53,902,282 and $69,388,203, 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) September 30, 2019 December 31, 2018 September 30, 2018 Lease liability September 30, 2019	Less than 1year 130,428 $ 169,901 70,797 133,539 $	Over 1year
		7,992,654 $ 8,022,299 8,989,909 738,491 $

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:

September 30, 2019 Financial assets: Recurring fair value measurements Financial assets at fair value through profit or loss Forward exchange contracts 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 - $ 40,111,015 40,111,015 $ - $	Level 2 625 $ 333,100 333,725 $ 448 $	Level 3 - $ 4,992,040 4,992,040 $ - $	Total
				625 $ 45,436,155
				45,436,780 $
				448 $

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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 September 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 Financial liabilities: Recurring fair value measurements Financial liabilities at fair value through profit or loss Forward exchange contracts	Level 1 479,490 $ 43,914,680 44,394,170 $ - $ Level 1 - $ 632,072 58,725,152 59,357,224 $ - $	Level 2 - $ 403,500 403,500 $ 774 $ Level 2 452 $ - 550,300 550,752 $ 196 $	Level 3 - $ 5,868,738 5,868,738 $ - $ Level 3 - $ - 5,613,231 5,613,231 $ - $	Total
				479,490 $ 50,186,918
				50,666,408 $
				774 $
				Total
				452 $ 632,072 64,888,683
				65,521,207 $
				196 $

(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:

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Listed shares Open-end fund Market quoted price 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 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 nine months ended September 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 nine months ended September 30, 2019 and 2018:

and 2018:
	Nine months ended September 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	(	932,240)
Effect of exchange rate changes		55,542
At September 30	$	4,992,040
	Nine months ended September 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	(	936,821)
Effect of exchange rate changes		131,393
At September 30	$	5,613,231

F. For the nine months ended September 30, 2019 and 2018, there was no transfer into or out from

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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 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:

Fair value at September 30, Valuation Significant Relationship 2019 technique unobservable input of inputs to fair value Non-derivative equity instrument: Unlisted shares $ 450,364 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 for EBITA multiple, discount lack of marketability, the for lack of marketability lower the fair value 4,541,676 Net asset Not applicable Not applicable value

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Non-derivative equity instrument: Unlisted shares Non-derivative equity instrument: Unlisted shares	Fair value at December 31, 2018	Valuation technique	Significant unobservable input	Relationship of inputs to fair value
	344,372 $ 5,524,366 Fair value at September 30, 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
	377,000 $ 5,236,231	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

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:

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Input	Change	September 30,2019	September 30,2019	September 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
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%	3,770 $		3,770 $

13. SUPPLEMENTARY DISCLOSURES

(4) Significant transactions information

In accordance with “Rules Governing the Preparation of Financial Statements by Securities Issuers”, significant transactions for the nine months ended September 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

~69~

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.
(5) Information on investees

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

(6) Information on investments in Mainland China

A. Basic information: Please refer to table 8.
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.

~70~

(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.

~71~

(3) Information about segment profit or loss and assets

	Nine months ended September 30,2019	Nine months ended September 30,2019	Nine months ended September 30,2019
First business group 12,367,703 $ 1,166,406 13,534,109 $ 3,691,445 $ 14,593,354 $	Cord fabric Gasoline department department Other segment 5,986,294 $ 8,841,303 $ 1,335,958 $ 251,747 - 222,141 6,238,041 $ 8,841,303 $ 1,558,099 $ (25,300) $ 329,136 $ 58,698 $ 6,607,639 $ 1,282,502 $ 3,245,612 $ Second businessgroup		FATC Adjustment department and write-off 6,899,134 $ - $ - 1,640,294) ( 6,899,134 $ 1,640,294) ($ 1,218,713 $ 791,679) ($ 7,967,989 $ 3,525) ($	Total
	Cord fabric department 5,986,294 $ 251,747 6,238,041 $ (25,300) $ 6,607,639 $	Gasoline department 8,841,303 $ - 8,841,303 $ 329,136 $ 1,282,502 $
				35,430,392 $ -
				35,430,392 $
				4,481,013 $
				33,693,570 $ 3,361,131 52,263,036
				89,317,737 $

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Nine months ended September 30, 2018

Second business group

==> picture [722 x 271] intentionally omitted <==

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

First business Cord fabric Gasoline FATC Adjustment
group department department Other segment department and write-off Total
Segment revenue
Revenue from
external customers $ 11,105,059 $ 5,677,085 $ 9,080,440 $ 1,385,272 $ 6,556,523 $ - $ 33,804,379
Inter-segment revenue 1,029,822 240,754 - 118,447 - ( 1,389,023) -
Total segment
revenue $ 12,134,881 $ 5,917,839 $ 9,080,440 $ 1,503,719 $ 6,556,523 ($ 1,389,023) $ 33,804,379
Segment income $ 4,675,763 $ 201,022 $ 310,336 $ 104,205 $ 1,465,436 ($ 902,522) $ 5,854,240
Segment assets
Identifiable assets $ 14,078,061 $ 6,623,534 $ 1,407,920 $ 3,586,550 $ 7,086,513 ($ 103,360) $ 32,679,218
Investments accounted
for under equity methed 3,173,235
General assets 72,429,526
Total assets $ 108,281,979
----- End of picture text -----

(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).

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FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

Provision of endorsements and guarantees to others

For the nine months ended September 30, 2019

Table 1

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 September 30, 2019 (Note 4)	Outstanding endorsement/ guarantee amount at September 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	41,329,013 $ 41,329,013 41,329,013 41,329,013 41,329,013 188,563	1,042,800 $ 1,580,000 1,738,000 4,803,200 7,330,382 3,000	1,023,660 $ 1,551,000 1,706,100 4,528,920 7,195,837 3,000	108,750 $ 529,348 350,695 2,994,134 7,195,837 3,000	$ - - - - - -	1.61 2.44 2.68 7.12 11.32 1.03	82,658,026 $ 82,658,026 82,658,026 82,658,026 82,658,026 377,127	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 am

Table 1, Page 1

Expressed in thousands of NTD

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 nine months ended September 30, 2019

Table 2

(Except as otherwise indicated)

Securities held by	Marketable securities (Note 1)	Relationship with the securities issuer(Note 2)	General ledger account		As of September 30,2019	As of September 30,2019		Footnote (Note 4)
				Numberofshares	Book value (Note 3)	Ownership (%)	Fairvalue
FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD.	FORMOSA 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. WK TECHNOLOGY FUND IV LIMITED NAN YA PHOTONICS INC.	Ultimate parent company - Other related party 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 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 14,400 730,556 1,348,731 4,393,973	1,055,105 $ - 61 33,609 333,100 620,736 35,869,276 4,970 35,621 17,365 12,394 69,161	0.21 - - 0.01 2.35 0.25 3.83 0.45 10.00 1.20 3.17 9.53	1,055,105 $ - 61 33,609 333,100 620,736 35,869,276 4,970 35,621 17,365 12,394 69,161

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 nine months ended September 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 September 30,2019	As of September 30,2019		Footnote (Note 4)
				Numberofshares	Book value (Note 3)	Ownership (%)	Fairvalue
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. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD.	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. NAN YA TECHNOLOGY CORPORATION NAN YA PHOTONICS INC. SYNTRONIX CORPORATION	Other related party Other related party Parent company Other related party Other related party Utimate parent company Other related party 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 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	600 209,010,676 2,193,228 146,388 2,907,512 16,812,000 2,692,000 7,376,215 2,196,986 65,939	274,616 $ 4,541,676 74,131 13,833 202,655 1,457,600 264,354 593,786 34,580 1,657	3.00 3.85 0.13 - 0.04 0.29 0.03 0.24 4.77 0.15	274,616 $ 4,541,676 74,131 13,833 202,655 1,457,600 264,354 593,786 34,580 1,657

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 2

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 nine months ended September 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 September 30,2019	Expressed in thousands of NTD (Except as otherwise indicated) Balance as at September 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	35,387,774	$ 524,629	$ 524,325	$ 304	-	$ -

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 nine months ended September 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 CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA ADVANCED TECHNOLOGIES CO., LTD. FORMOSA TAFFETA (ZHONG SHAN) CO., LTD. FORMOSA TAFFETA (ZHONG SHAN) CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD.	FORMOSA TAFFETA DONG NAI CO., LTD. YUGEN YUEH CO., LTD. FORMOSA PETROCHEMICAL CORP. (FPCC) NAN YA PLASTICS CORPORATION FORMOSA PLASTICS CORPORATION NAN YA TECHNOLOGY CORPORATION FORMOSA TAFFETA (CHANGSHU) CO., FORMOSA TAFFETA CO., LTD. QUANG VIET ENTERPRISE CO., LTD. FORMOSA CHEMICALS & FIBRE CORPORATION	Associate Other related party Other related party Other related party Other related party Other related party Associate Parent company Associate Ultimate parent company	Sales Sales Purchases Purchases Purchases Sales Sales Sales Purchases Sales	299,973) ($ 198,749) ( 217,899) ( 8,069,789 1,256,675 661,782 187,217 5,183,993) ( 334,955) ( 104,243) (	1.42) ( 0.94) ( 1.03) ( 46.20 7.19 3.79 1.07 75.14) ( 22.33) ( 6.95) (	60 days after monthly billings 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 60 days after monthly billings 60 days after monthly billings Draw promissory notes due in 2 months after inspection Pay by mail transfer 60 days after delivery	- - - - - - - - $ - -	- - - - - - - - - -	Accounts receivable $ 19,607 Accounts receivable 40,460 Accounts receivable 75,007 Accounts payable 436,180) ( Notes payable 181,207) ( Accounts payable 405,953) ( Accounts payable 90,209) ( Accounts payable 17,889) ( Accounts receivable 1,700,716 Accounts receivable 228,583 Accounts receivable 7,786	0.80 1.64 3.04 22.47) ( 9.34) ( 20.91) ( 4.65) ( 0.92) ( 73.94 66.17 2.25

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 nine months ended September 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 VIETNAM 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 INDUSTRY CO., LTD. KWANG VIET GARMENT 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	Purchases Sales Sales Sales Sales Purchases Purchases Sales	136,884 $ 121,517) ( 299,245) ( 313,901) ( 180,516) ( 538,020 270,948 170,675) (	37.26 5.28) ( 7.78) ( 8.16) ( 4.69) ( 17.13 8.63 12.82) (	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 60 days after monthly billings 60 days after monthly billings Pay by mail transfer 60 days after delivery	$ - - - - - - - -	- - - - - - - -	Accounts payable 9,570) ($ Accounts receivable 45,036 Accounts receivable 45,554 Accounts receivable 74,449 Accounts receivable 56,475 Accounts payable 38,730) ( Accounts payable 40,984) ( Accounts receivable 10,309	6.94) ( 7.42 3.84 6.28 4.77 7.66) ( 8.11) ( 5.33

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 nine months ended September 30, 2019

(Except as otherwise indicated)

Creditor	Counterparty	Relationship with the counterparty	Balance as at September 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.	NAN YA TECHNOLOGY CORPORATION FORMOSA TAFFETA (CHANG SHU) CO., LTD.	Other related party Associate	1,700,716 $ 228,583	5.11 2.03	`-` `$` `-`	`-` `-`	1,078,025 $ 38,465	- $ `-`

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 nine months ended September 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	1,256,675 $ 405,953 181,207	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	3.55 0.45 0.20

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

For the nine months ended September 30, 2019

Table 7 Investor	Investee (Notes 1 and 2)	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at September	Shares held as at September	30,2019	Net profit (loss) of the investee for the nine months ended September 30, 2019 (Note 2(2))	Investment income (loss) recognized by the company for the nine months ended September 30, 2019 `（`Note 2(3)`）` Expressed in thousands of NTD (Except as otherwise indicated) Footnote	Investment income (loss) recognized by the company for the nine months ended September 30, 2019 `（`Note 2(3)`）` Expressed in thousands of NTD (Except as otherwise indicated) Footnote
				Balance as at September30,2019	Balance as at December31,2018	Numberofshares	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	1,175,297 $ 5,223,126 211,482 2,130,411 3,500	63,396 $ 956,006 10,105 144,387 1,733	63,396 $ 446,264 5,500 144,387 867

Table 7, Page 1

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

Information on investees

For the nine months ended September 30, 2019

Table 7 Investor	Investee (Notes 1 and 2)	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at September	Shares held as at September	30,2019	Net profit (loss) of the investee for the nine months ended September 30, 2019 (Note 2(2))	Investment income (loss) recognized by the company for the nine months ended September 30, 2019 `（`Note 2(3)`）` Expressed in thousands of NTD (Except as otherwise indicated) Footnote	Investment income (loss) recognized by the company for the nine months ended September 30, 2019 `（`Note 2(3)`）` Expressed in thousands of NTD (Except as otherwise indicated) Footnote
				Balance as at September30,2019	Balance as at December31,2018	Numberofshares	Ownership (%)	Bookvalue
FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD. FORMOSA TAFFETA CO., LTD.	QUANG VIET ENTERPRISE CO., LTD. FORMOSA INDUSTRIES CORPORATION FORMOSA TAFFETA (CAYMAN) LIMITED FORMOSA TAFFETA DONG NAI CO., LTD.	Taiwan Vietnam Cayman Islands Vietnam	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	213,771 $ 1,987,122 6,241,670 2,590,434	213,771 $ 1,987,122 6,241,670 2,590,434	18,595,352 - 171,028,736 -	17.99 10.00 100.00 100.00	1,255,088 $ 2,090,391 4,541,729 2,355,053	1,083,303 $ 572,891 - 24,854	175,161 $ 59,812 - 24,854

Table 7, Page 2

Table 7

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

Information on investees

For the nine months ended September 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee (Notes 1 and 2)	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at September	Shares held as at September	30,2019	Net profit (loss) of the investee for the nine months ended September 30, 2019 (Note 2(2))	Investment income (loss) recognized by the company for the nine months ended September 30, 2019 `（`Note 2(3)`）`	Footnote
				Balance as at September30,2019	Balance as at December31,2018	Numberofshares	Ownership (%)	Bookvalue
FORMOSA DEVELOPMENT CO., LTD. FORMOSA DEVELOPMENT CO., LTD.	FORMOSA ADVANCED TECHNOLOGIES CO., LTD. PUBLIC MORE INTERNATIONAL COMPANY LTD.	Taiwan Taiwan	IC assembly, testing and modules Employment service, manpower allocation and agency service etc	21,119 $ 5,000	21,119 $ 5,000	469,500 -	0.11 100.00	23,755 $ 10,977	956,006 $ 5,335	1,015 $ 5,335

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 September 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 nine months ended September 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 nine months ended September 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 3

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES

Information on investments in Mainland China

For the nine months ended September 30, 2019

Table 8 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 from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine months ended September 30,2019	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine months ended September 30,2019	Accumulated amount of remittance from Taiwan to Mainland China as of September 30,2019	Net income of investee for the nine months ended September 30, 2019	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the nine months ended September 30, 2019 `（`Note 2`）`	Expressed in thousands of NTD (Except as otherwise indicated) Accumulated amount of investment income remitted back to Taiwan as of September 30, 2019 Footnote Book value of investments in Mainland China as of September 30,2019	Expressed in thousands of NTD (Except as otherwise indicated) Accumulated amount of investment income remitted back to Taiwan as of September 30, 2019 Footnote Book value of investments in Mainland China as of September 30,2019	Expressed in thousands of NTD (Except as otherwise indicated) Accumulated amount of investment income remitted back to Taiwan as of September 30, 2019 Footnote Book value of investments in Mainland China as of September 30,2019
					Remitted to Mainland China	Remitted back toTaiwan
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 -	96,400 $ 156) ( 63,391 238) (	100.00 100.00 100.00 40.78	96,400 $ 156) ( 63,391 97) (	1,755,450 $ 12,741 1,057,438 15,652	- $ - - -	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 nine months ended September 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 September 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 September 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 September 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

Investment Ceiling on amount approved investments in Accumulated amount of by the Investment Mainland China remittance from Taiwan Commission of imposed by the to Mainland China the Ministry of Investment as of September 30, Economic Affairs Commission of Company name 2019 (MOEA) MOEA FORMOSA $ 1,402,085 $ 1,440,256 $ 41,694,714 TAFFETA (ZHONG SHAN) CO., LTD. XIAMEN 15,273 17,693 41,694,714 XIANGYU FORMOSA IMPORT & EXPORT TRADING CO., LTD. FORMOSA 1,334,739 1,303,680 41,694,714 TAFFETA (CHANGSHU) CO., LTD.

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 = 1:31.04

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 nine months ended September 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Sale(purchase)	Propertytransaction	Accounts receivable (payable)	Provision of endorsements/guarantees or collaterals	Maximum balance during the nine months ended September 30,2019 Balance at September 30,2019 Interest rate Interest during the nine months ended September 30,2019 Others Financing
	Amount %	Amount %	Balance at September 30, 2019 %	Balance at September 30, 2019 Purpose
FORMOSA TAFFETA (ZHONG SHAN) CO., LTD. FORMOSA TAFFETA (CHANGSHU) CO., LTD.	13,852 $ 0.07 33,728 0.16	$ - - - -	$ 1,080 0.04 5,441 0.22	$ 1,023,660 For short-tem loans from financial institutions 1,706,100 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_dd630b5e-b523-4f73-8722-b71ed4b723f7.pdf

FORMOSA TAFFETA CO., LTD. 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

FORMOSA TAFFETA CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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 NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018

1. HISTORY AND ORGANIZATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

Balance sheets

Statements of comprehensive income

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

Current items:

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

(5) Inventories

(6) Investments accounted for using equity method

A. Associates

Shareholding ratio

Revenue

(7) Property, plant and equipment

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

(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

(15) Share capital

(16) Capital surplus

(17) Retained earnings

(18) Other equity items

A. Contract assets

(20) Other income

(21) Other gains and losses

(23) Employee benefit expense

(24) Finance costs

(25) Income tax

A. Components of income tax expense

(26) Earnings per share

A. Basic earnings per share

(27) Supplemental cash flow information

(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:

(c) Acquisition of financial assets:

F. Others

(4) Key management compensation

8. PLEDGED ASSETS

Book Value

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

as follows:

F.T.C Interim / Quarterly Report 2019

Note `：`