NPC — Annual Report 2020

Dec 15, 2020

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Stock Code:1303

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2020 and 2019

Address: 101, Shuiguan Road, Renwu Dist., Kaohsiung City 814, Taiwan Telephone: (07)371-1411

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

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Table of contents

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

Page

1 2 3 4 5 6 7 8 9 9 9～10 10～30 30～33 33～69 69～76 76 76～77 77 77 77 78、82～95 78、96～98 78、99～100 78～79 79～81

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Representation Letter

The entities that are required to be included in the combined financial statements of NAN YA PLASTICS CORPORATION as of and for the year ended December 31, 2020 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, NAN YA PLASTICS CORPORATION and Subsidiaries do not prepare a separate set of combined financial statements.

Company name: NAN YA PLASTICS CORPORATION Chairman: Wu, Chia-Chau Date: March 18, 2021

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KPMG

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

Independent Auditors’ Report

To the Board of Directors of NAN YA PLASTICS CORPORATION:

Opinion

We have audited the consolidated financial statements of NAN YA PLASTICS CORPORATION ("the Company") and its subsidiaries (“the Group”), which comprise the consolidated statement of financial position as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2020 and 2019, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of other auditors (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“ IFRSs” ), International Accounting Standards (“ IASs” ), Interpretations developed by the International Financial Reporting Interpretations Committee (“ IFRIC” ) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit of the consolidated financial statements as of and for the year ended December 31, 2020 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, and the auditing standards generally accepted in the Republic of China. Furthermore, we conducted our audit of the Consolidated financial statements as of and for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission, and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

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

4-1

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters for the Group's financial statements are stated as follows:

1. Revenue recognition

How the matter was addressed in our audit

Please refer to note 4(p) "Revenue recognition" for accounting policy related to revenue recognition, and note 6(t) "Revenue" for information related to revenue recognition of the consolidated financial statements.

The operating performance of the Group has an effect on the distribution to its shareholders and stock price. Thus, their financial performance will have an impact on the users of financial statements. Therefore, the veracity and appropriateness of revenue recognition is a key matter when conducting our audit.

Our principal audit procedures included the following:

• (1) Assessing the accounting policies and appropriateness of revenue recognition (including sales returns and discounts).

• (2) Obtaining the list of the top ten newly-added clients and the list of newly added related parties for the current year, inspecting whether the transaction terms are different for normal clients, and reviewing the Consolidated Company’ s financial position after the reporting period to verify the frequency of the unusual sales returns for the purpose of assessing the appropriateness of revenue recognition.

• (3) Selecting a moderate number of samples from sales invoices to verify that the accounts receivable have been recovered and to ensure that the remitter matches the customer for the purpose of assessing the accuracy of revenue recognition.

• (4) Performing sales cut-off test on the period before and after the financial position date by vouching relevant documents of sales transactions to determine whether sales income, return, and discounts have been appropriately recognized.

• Valuation of inventories

How the matter was addressed in our audit

Please refer to note 4(h) "Inventories" for accounting policy related to valuation of inventories, and note 6(f) "Inventories, net" for information related to valuation of inventories of the consolidated financial statements.

The amount of inventories shall be disclosed by using the lower of cost or net realizable values. Since the net realizable value is influenced by the international raw material pricing, there is a risk that the cost will exceed the net realizable value. Therefore, the valuation of inventories is a key matter when conducting our audit.

4-2

Our principal audit procedures included the following:

• (1) Assessing the appropriateness of inventory valuation policies.

• (2) Ensuring the process of inventory valuation is in conformity with the accounting policies.

• (3) Understanding the net realizable value used by the management, and the variation of the prices in a period after the reporting date, to ensure the appropriateness of the valuation price.

• (4) Assessing whether the disclosure of provision for inventory valuation is appropriate.

Other Matter

We did not audit the financial statements of certain subsidiaries and investee companies, which represented investment in other entities accounted for using the equity method of the Group. Those statements were audited by other auditors, whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for certain subsidiaries and investee companies, is based solely on the report of other auditors. The financial statements of the aforementioned subsidiaries reflect the total assets constituting 12.12 percent and 9.8 percent of the consolidated total assets as at December 31, 2020 and 2019, respectively; and the total revenues constituting 9.31 percent and 11 percent of the consolidated total revenues for the years ended December 31, 2020 and 2019, respectively . The investment in aforementioned investee companies accounted for using the equity method constituted 12.88 percent and 14.44 percent of the consolidated total assets as at December 31, 2020 and 2019, respectively, and the related share of profit of associated and joint ventures accounted for using the equity method constituted 12.13 percent and 95.85 percent of consolidated total comprehensive income for the years ended December 31, 2020 and 2019, respectively.

The Company has prepared its parent-company-only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, IFRC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

4-3

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

4-4

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are

Kuo, Hsin-Yi and Yu, Chi-Lung.

KPMG

Taipei, Taiwan (Republic of China) March 18, 2021

Notes to Readers

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

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

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) NAN YA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2020 Assets Amount % Current assets: 1100 Cash and cash equivalents (notes 6(a) and (w)) $ 55,973,617 10 1110 Current financial assets at fair value through profit or loss (notes 6(b), (w)) 3,888,883 1 1120 Current financial assets at fair value through other comprehensive income (notes 6(c), (w), and 8) 40,320,070 7 1150 Notes receivable, net (notes 6(d) and (w)) 6,802,896 1 1170 Accounts receivable, net (notes 6(d) and (w)) 42,931,578 7 1180 Accounts receivable due from related parties (notes 6(d), (w) and 7) 2,316,909 - 1200 Other receivables (note 6(e) and (w)) 6,533,160 1 1210 Other receivables due from related parties (notes 6(e), (w), and 7) 4,526,070 1 130X Inventories (note 6(f)) 41,156,747 7 1470 Other current assets 4,387,886 1 Total current assets 208,837,816 36 Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (notes 6(b) and (w)) 558,228 - 1517 Non-current financial assets at fair value through other comprehensive income (notes 6(c) and (w)) 19,094,939 3 1550 Investments accounted for using equity method (notes 6(g) and 7) 162,007,684 28 1600 Property, plant and equipment (notes 6(h),7 and 8) 173,463,751 30 1755 Right-of-use assets (notes 6(i) and 7) 979,296 - 1782 Intangible assets (note 6(j)) 2,100,450 - 1812 Technology development expense 25,542 - 1840 Deferred tax assets (note 6(q)) 4,777,960 1 1915 Prepayments for purchase of equipment 3,154,801 - 1937 Overdue receivables (note 6(d)) - - 1975 Net defined benefit asset-non-current 52,083 - 1990 Other non-current assets 9,659,797 2 Total non-current assets 375,874,531 64 Total assets $ 584,712,347 100	December 31, 2019 Amount % 43,608,119 8 4,044,356 1 41,715,821 8 5,557,174 1 36,640,358 7 1,866,001 - 2,237,168 - 5,925,227 1 41,567,752 7 4,314,370 1 187,476,346 34 824,726 - 22,662,110 4 165,109,381 30 156,095,364 28 1,198,549 - 2,293,595 - 30,257 - 5,439,156 1 3,468,440 1 - - 1,865 - 10,078,890 2 367,202,333 66 554,678,679 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (notes 6(l), (w), and (z)) 2110 Short-term notes and bills payable (notes 6(k), (w) and (z)) 2170 Notes and accounts payable (note 6(w)) 2180 Accounts payable to related parties (notes 6(w) and 7) 2200 Other payables (including related parties) (note 7) 2280 Current lease liabilities (notes 6(o), (w), (z), and 7) 2321 Current portion of bonds payable (notes 6(n), (w) and (z)) 2322 Current portion of long-term borrowings (note 6(m), (w) and (z)) 2399 Other current liabilities Total current liabilities Non-Current liabilities: 2530 Bonds payable (notes 6(n), (w) and (z)) 2540 Long-term borrowings (notes 6(m), (w) and (z)) 2570 Deferred tax liabilities (note 6(q)) 2580 Non-current lease liabilities (notes 6(o), (w) , (z) and 7) 2611 Long-term notes payable (notes 6(m), (w) and (z)) 2640 Net defined benefit liability-non-current 2645 Guarantee deposits 2670 Other non-current liabilities Total non-current liabilities Total liabilities Equity attributable to owners of parent (notes 6(r)): 3110 Common Stock 3200 Capital surplus 3300 Retained earnings 3400 Others 36XX Non-controlling interests Total equity Total liabilities and equity	December 31, 2020		December 31, 2019
		Amount %		Amount %
		$ 55,121,553 10 18,296,579 3 12,214,602 2 7,549,472 1 18,986,213 3 115,819 - 5,747,142 1 656,436 - 1,199,522 - 119,887,338 20 63,581,765 11 4,269,309 1 17,936,747 3 216,808 - - - 21,454,134 4 672,731 - 107,037 - 108,238,531 19 228,125,869 39 79,308,216 14 26,523,931 5 212,630,726 36 26,153,994 4 11,969,611 2 356,586,478 61 $ 584,712,347 100		24,012,100 4 15,392,795 3 9,102,231 2 6,986,969 1 18,539,776 3 197,527 - 4,647,875 1 3,333,333 1 1,303,544 - 83,516,150 15 59,330,786 11 14,751,117 3 13,122,029 2 291,222 - 5,096,417 1 22,183,650 4 712,939 - 103,669 - 115,591,829 21 199,107,979 36 79,308,216 14 26,617,834 5 204,105,146 37 34,540,688 6 10,998,816 2 355,570,700 64 554,678,679 100

See accompanying notes to Consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) NAN YA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

4000 Operating revenue (notes 6(t) and 7) 5000 Operating costs (notes 6(f), (p), (u), 7 and 12) 5910 Less: Unrealized (realized) profit from affiliated companies (note 7) Gross profit from operation Operating expenses (notes 6(p), (u), 7 and 12): 6100 Selling expenses 6200 Administrative expenses 6450 Expected credit gain (notes 6(d)) Total operating expenses Net Operating income Non-operating income and expenses (notes 6(g), (o), (v) and 7): 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for using equity method 7100 Interest income Total non-operating income and expenses Profit before tax 7950 Less: Income tax expenses (note 6(q)) Profit 8300 Other comprehensive income (loss) (note 6(g), (q) and (r)): 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized (losses) gains from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Less: income tax related to components of other comprehensive income that will not be reclassified to profit or loss Total items that may not be reclassified subsequently to profit and loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Exchange differences on translation 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Less: income tax related to components of other comprehensive income that will be reclassified to profit or loss Total items that may be reclassified subsequently to profit and loss 8300 Other comprehensive income 8500 Total comprehensive income Profit, attributable to: 8610 Owners of parent 8620 Non-controlling interests Comprehensive income attributable to: 8710 Owners of parent 8720 Non-controlling interests Basic earnings per share (note 6(s)): 9710 Income from continuing operations Income from non-controlling equity 9750 Income attributable to shareholders of the parent	2020 Amount % $ 273,353,806 100 233,757,221 86 671 - 39,595,914 14 9,495,134 3 8,881,723 3 (1,049) - 18,375,808 6 21,220,106 8 4,895,473 2 (1,759,267) (1) (1,316,319) - 6,643,303 2 754,444 - 9,217,634 3 30,437,740 11 3,549,649 1 26,888,091 10 383,748 - (4,671,724) (2) (757,868) - 76,706 - (5,122,550) (2) (3,015,725) (1) 30,107 - - - (2,985,618) (1) (8,108,168) (3) $ 18,779,923 7 $ 25,709,049 10 1,179,042 - $ 26,888,091 10 $ 17,624,751 7 1,155,172 - $ 18,779,923 7 Before Tax After Tax $ 3.84 3.39 (0.36) (0.15) $ 3.48 3.24	2019 Amount % 286,303,059 100 258,172,796 90 (6,964) - 28,137,227 10 9,661,546 3 8,619,324 3 (29,028) - 18,251,842 6 9,885,385 4 5,281,134 2 213,753 - (1,620,428) (1) 11,838,753 4 1,090,433 - 16,803,645 5 26,689,030 9 3,479,507 1 23,209,523 8 (52,911) - (7,787,479) (3) (808,135) - (10,556) - (8,637,969) (3) (5,962,293) (2) 15,812 - - - (5,946,481) (2) (14,584,450) (5) 8,625,073 3 23,076,123 8 133,400 - 23,209,523 8 8,608,080 3 16,993 - 8,625,073 3 Before Tax After Tax 3.37 2.93 (0.27) (0.02) 3.10 2.91	2019 Amount % 286,303,059 100 258,172,796 90 (6,964) - 28,137,227 10 9,661,546 3 8,619,324 3 (29,028) - 18,251,842 6 9,885,385 4 5,281,134 2 213,753 - (1,620,428) (1) 11,838,753 4 1,090,433 - 16,803,645 5 26,689,030 9 3,479,507 1 23,209,523 8 (52,911) - (7,787,479) (3) (808,135) - (10,556) - (8,637,969) (3) (5,962,293) (2) 15,812 - - - (5,946,481) (2) (14,584,450) (5) 8,625,073 3 23,076,123 8 133,400 - 23,209,523 8 8,608,080 3 16,993 - 8,625,073 3 Before Tax After Tax 3.37 2.93 (0.27) (0.02) 3.10 2.91
		Before Tax 3.37 (0.27) 3.10
			2.91

See accompanying notes to Consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) NAN YA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the years ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of parent

Balance at January 1, 2019 Appropriation and distribution of retained earnings: Legal reserve appropriated Special reserve appropriated Cash dividends of ordinary share Reversal of special reserve Profit Other comprehensive income Total comprehensive income Other changes in capital surplus Changes in non-controlling interests Balance at December 31, 2019 Appropriation and distribution of retained earnings: Legal reserve appropriated Special reserve appropriated Cash dividends of ordinary share Reversal of special reserve Profit Other comprehensive income Total comprehensive income Reorganization Changes in ownership interests in subsidiaries Disposal of investments in equity instruments designated at fair value through other comprehensive income Changes in non-controlling interests Balance at December 31, 2020	Ordinary shares		Capital surplus		Retained earnings	Retained earnings	Retained earnings	Retained earnings	Retained earnings	Items of other equity interest	Items of other equity interest	Items of other equity interest	Items of other equity interest	Items of other equity interest	Items of other equity interest	Total equity attributable to owners of parent	Total equity attributable to owners of parent		Non- controlling interests	Total equity
										Exchange differences on translation of foreign financial statements		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income			Gains (losses) on hedging instruments
					Legal reserve		Special reserve	Unappropriated retained earnings
	$ 79,308,216 - - - - - - - - - 79,308,216 - - - - - - - - - - - $ 79,308,216		26,672,119		63,325,953		93,737,091		63,724,976		(5,705,296) - - - - - (5,866,135) (5,866,135) - - (11,571,431) - - - - - (3,053,963) (3,053,963) - - - - (14,625,394)		54,624,319		(15,181) - - - - - 15,812 15,812 - - 631 - - - - - 30,107 30,107 - - - - 30,738		375,672,197		11,232,795 - - - - 133,400 (116,407) 16,993 - (250,972) 10,998,816 - - - - 1,179,042 (23,870) 1,155,172 - - - (184,377) 11,969,611	386,904,992 - - (39,654,108) - 23,209,523 (14,584,450) 8,625,073 (54,285) (250,972) 355,570,700 - - (17,447,807) - 26,888,091 (8,108,168) 18,779,923 (38,058) (93,903) - (184,377) 356,586,478
			- - - - - -		5,274,602 - - - - -
			-		-
					- -
					68,600,555
					2,307,613 - - - - -
					-
					- - - -
					70,908,168

See accompanying notes to Consolidated financial statements.

8

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

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit gain Net gain on diposal of financial assets Net loss on financial assets at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of associates and joint ventures accounted for using equity method Loss(Gain) on disposal of property, plant and equipment Property, plant and equipment transferred to expenses Gain on disposal of other assets Realized loss (profit) from affiliated companies Unrealized foreign exchange loss Other revenue, overdue dividends and compensation of board and directors Loss (gain) on reversal of impairment loss of property, plant and equipment Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: (Increase) decrease in notes receivable (Increase) decrease in accounts receivable (including related parties) Increase in other receivable (Increase) decrease in inventories Increase in other current assets Total changes in operating assets Increase (decrease) in notes and accounts payable Increase (decrease) in other payable (Decrease) increase in other current liabilities Decrease in net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash flows from operating activities Cash flows from (used in) investing activities: Proceeds from capital reduction of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Decrease in other receivables due from related parties Increase in other non-current assets Net cash flows used in investing activities Cash flows from (used in) financing activities: Increase in short-term loans Increase in short-term notes and bills payable Proceeds from issuing bonds Repayments of bonds Proceeds from long-term debt Repayments of long-term debt Decrease in other borrowings (long-term notes payables) (Decrease) increase in guarantee deposits received Payment of lease liabilities Increase (decrease) in other non-current liabilities Cash dividends paid Change in non-controlling interests Net cash flows from financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

See accompanying notes to Consolidated financial statements.

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) NAN YA PLASTICS CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

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

(1) Company history

Nan Ya Plastics Corporation was incorporated on August 22, 1958, and established its factories in Kaohsiung City. The Company engages in the manufacture and sale of plastic products, polyester fibers, petrochemical products, and electronic materials. It has gone through several capital increases and established many divisions. Currently, the Company has the following divisions: plastics, fiber, petrochemical, electronics, and engineering. It also has 10 manufacturing plants across Taiwan, 1 branch office in Mai-Liao and 1 branch office in Sen-Kong.

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

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on March 18, 2021.

(3) New standards, amendments and interpretations adopted:

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

The Group has initially adopted the new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2020.

• (b) The impact of IFRS issued by the FSC but not yet effective

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

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

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

Standards or Interpretations Amendments to IAS 1 “Disclosure of Accounting Policies”

Content of amendment Effective date per IASB The key amendments to IAS 1 include: ●requiring companies to disclose their material accounting policies rather than their significant accounting policies; ●clarifying that accounting policies related to immaterial transactions, other events or conditions are themselves immaterial and as such need not be disclosed; and ●clarifying that not all accounting policies that relate to material transactions, other events or conditions are themselves material to a company’ s financial statements. January 1, 2023

(Continued)

10

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Standards or Interpretations Amendments to IAS 8 “Definition of Accounting Estimates”

Content of amendment Effective date per IASB The amendments introduce a new definition for accounting estimates: clarifying that they are monetary amounts in the financial statements that are subject to measurement uncertainty. The amendments also clarify the relationship between accounting policies and accounting estimates by specifying that a company develops an accounting estimate to achieve the objective set out by an accounting policy. January 1, 2023

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

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

(4) Summary of significant accounting policies:

The significant accounting policies presented in the consolidated financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations” ) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed by the Financial Supervisory Commission, ROC.

• (b) Basis of preparation

Basis of measurement

Except for the following significant accounts, the consolidated financial statements have been prepared on a historical cost basis:

• (i) Financial instruments at fair value through profit or loss are measured at fair value;

• (ii) Fair value through other comprehensive income (Available-for-sale) financial assets are measured at fair value;

• (iii) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in note 4(r).

(Continued)

11

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Functional and presentation currency

The functional currency of each Consolidated Company entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’ s functional currency. All financial information presented in New Taiwan Dollars has been rounded to the nearest thousand.

• (c) Basis of consolidation

• (i) Principle of preparing consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Consolidated Company. The Consolidated Company ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.

• (ii) List of subsidiaries in the consolidated financial statements:

List of subsidiaries in	the consolidated financial	statements:
Investor	The name of subsidiaries	Business activity	Shareholding
			December 31, 2020 December 31, 2019 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 66.97 % 66.97 % 100.00 % 100.00 % 50.00 % 50.00 % - % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Nan Ya PCB Corporation Nan Ya PCB Corporation Nan Ya PCB (HK) Corporation Nan Ya Plastics (Hong Kong) Co., Ltd.	Nan Ya Plastics Corporation U.S.A. Nan Ya Plastics Corporation America Formosa Plastics Group Investment Corp. Nan Ya Plastics (Hong Kong) Co., Ltd. Superior World Wide Trading Co., Ltd. Nan Ya PCB Corporation Wen Fung Industrial Co., Ltd. Nan Chung Petrochemical Corporation Nan Ya Plastics International (Cayman) Limited PFG Fiber Glass Corporation PFG Fiber Glass (Hong Kong) Corporation Limited Nan Ya PCB (U.S.A.) Corporation Nan Ya PCB (HK) Corporation Nan Ya PCB (Kunshan) Corporation Nan Ya Plastics (Nantong) Co., Ltd.	production of plastic products production of plastic, polyester and chemical products investment plastics and electronic products trading, investment plastics trading, investment production of printed circuit board production of electronic components production of chemical products investment production of glass fiber investment retargeting electronic materials trading, investment production of printed circuit board production of plastic products, steam and electricity

(Continued)

12

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Investor	The name of subsidiaries	Business activity	Shareholding
			December 31, 2020 December 31, 2019 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 85.00 % 85.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00
Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Wen Fung Industrial Co., Ltd. Nan Ya Plastics Corporation America PFG Fiber Glass (Hong Kong) Corporation Limited	Nan Ya Electric (Nantong) Co., Ltd. China Nantong Huafeng Co., Ltd. Nantong Huafu Plastics Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Plastics (Huizhou) Co., Ltd. Nan Ya Electronic Materials (Huizhou) Co., Ltd. Nan Ya Trading (Huizhou) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. Wellink Technology Corporation Nan Ya Plastics Corporation Texas PFG Fiber Glass (Kunshan) Co., Ltd.	production of switch gear and control panel trading trading production of electronic materials, polyester products, steam and electricity production of fiber production of polyester products production of polyester products production of electronic materials trading production of plastic products production of plastic products and plasticizer production of electronic components production of chemical products production of glass fiber

The Company holds fifty-percent voting shares of Nan Chung Petrochemical Corporation (Nan Chung), therefore, the general manager of Nan Chung has been designated by the Company. As the Company has control over the operations of Nan Chung, hence, the Company included Nan Chung as one of its subsidiaries in its consolidated financial statements.

(iii) Subsidiaries excluded from the consolidated financial statements: None.

• (d) Foreign currency

• (i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of the Consolidated Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

(Continued)

13

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

• 1) an investment in equity securities designated as at fair value through other comprehensive income;

• 2) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

• 3) qualifying cash flow hedges to the extent that the hedges are effective.

• (ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Consolidated Company disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non controlling interests. When the Consolidated Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future. Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

• (e) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non current.

• (i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is expected to be realized within twelve months after the reporting period ; or

• (iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period date.

(Continued)

14

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

An entity shall classify a liability as current when:

• (i) It is expected to be settled in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is due to be settled within twelve months after the reporting period date; or

• (iv) The Consolidated Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period date. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

(f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(g) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Consolidated Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income (FVOCI); or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Consolidated Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

(Continued)

15

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Consolidated Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income derived from equity investments is recognized on the date that the Consolidated Company’s right to receive payment is established, which in the case of quoted securities is normally the ex-dividend date.

(Continued)

16

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Consolidated Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

• 4) Business model assessment

The Consolidated Company makes an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

• the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’ s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;

• how the performance of the portfolio is evaluated and reported to the Consolidated Company management;

• the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;

• how managers of the business are compensated ─ e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and

• the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered as sales for this purpose, and are consistent with the Consolidated Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

(Continued)

17

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 5) Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘ principal’ is defined as the fair value of the financial assets on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Consolidated Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Consolidated Company considers the following:

• contingent events that would change the amount or timing of cash flows;

• terms that may adjust the contractual coupon rate, including variable rate features;

• prepayment and extension features; and

• terms that limit the Consolidated Company's claim to cash flows from specified assets (e.g. non-recourse features)

• 6)

• Impairment of financial assets

The Consolidated Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and accounts receivable, other receivable, guarantee deposit paid and other financial assets) and contract assets.

The Consolidated Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

• debt securities that are determined to have low credit risk at the reporting date; and

• other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

(Continued)

18

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Consolidated Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Consolidated Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Consolidated Company’s historical experience and informed credit assessment, as well as forward-looking information.

The Consolidated Company assumes that the credit risk on a financial asset has increased significantly if there is a breach of contract.

The Consolidated Company considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations in full. The Consolidated Company measures its loss allowances at an amount equal to lifetime expected credit loss.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Consolidated Company in accordance with the contract and the cash flows that the Consolidated Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Consolidated Company assesses whether financial assets carried at amortized cost is credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

• significant financial difficulty of the borrower or issuer;

• a breach of contract such as a default or being more than one year past due;

• the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• it is probable that the borrower will enter bankruptcy or other financial reorganization; or

• the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

(Continued)

19

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The gross carrying amount of a financial asset is written off when the Consolidated Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Consolidated Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Consolidated Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Consolidated Company’s procedures for recovery of amounts due.

7) Derecognition of financial assets

The Consolidated Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Consolidated Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Consolidated Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

• (ii) Financial liabilities and equity instruments

• 1) Classification of debt or equity

Debt and equity instruments issued by the Consolidated Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions ofa financial liability and an equity instrument.

2) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

3) Derecognition of financial liabilities

The Consolidated Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Consolidated Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

(Continued)

20

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

4) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Consolidated Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(i) Investment in associates

Associates are those entities in which the Consolidated Company has significant influence, but not control or joint control, over the financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill which is arising from the acquisition less any accumulated impairment losses.

The consolidated financial statements include the Consolidated Company’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align the accounting policies with those of the Consolidated Company, from the date on which significant influence commences until the date on which significant influence ceases. The Consolidated Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual significant influence.

Gains and losses resulting from transactions between the Consolidated Company and an associate are recognized only to the extent of unrelated Group’s interests in the associate.

When the Consolidated Company’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the consolidated Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(Continued)

21

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

When the Consolidated Company subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment will differ from the amount of the Consolidated Company’s proportionate interest in the net assets of the associate. The Consolidated Company records such a difference as an adjustment to its investments, with the corresponding amount charged or credited to capital surplus. The aforesaid adjustment should first be adjusted under additional paid in capital. If the additional paid in capital resulting from changes in ownership interest is not sufficient, the remaining difference is debited to retained earnings. If the Consolidated Company’s ownership interest is reduced due to the additional subscription of the shares of the associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate will be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of its related assets or liabilities.

(j) Joint arrangements

A joint arrangement is an arrangement of which two or more parties have joint control. The IFRS classifies joint arrangements into two types — joint operations and joint ventures, which have the following characteristics:

• (i) the parties are bound by a contractual arrangement; and

• (ii) the contractual arrangement gives two or more of those parties joint control of the arrangement. IFRS 11 “Joint Arrangements” defines joint control as the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities (ie activities that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control.

A joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Consolidated Company accounts for the assets, liabilities, revenues and expenses in relation to its interest in a joint operation in accordance with the IFRSs applicable to the particular assets, liabilities, revenues and expenses. When assessing whether a joint arrangement is a joint operation or a joint venture, the Consolidated Company considers the structure and legal form of the arrangement, the terms agreed by the parties in the contractual arrangement and, when relevant, other facts and circumstances.

A joint venture is a joint arrangement whereby the Consolidated Company has joint control of the arrangement (i.e. joint venturers) in which the Consolidated Company has rights to the net assets of the arrangement , rather than rights to its assets and obligations for its liabilities.The Consolidated Company recognizes its interest in a joint venture as an investment and accounts for that investment using the equity method in accordance with IAS 28 “Investments in Associates and Joint Ventures”, unless the Consolidated Company qualifies for exemption from that Standard. Please refer to note 4(i) for the application of the equity method.

When assessing the classification of a joint arrangement, the Consolidated Company considers the structure and legal form of the arrangement, the terms in the contractual arrangement, and other facts and circumstances. When the facts and circumstances change, the Consolidated Company reevaluates whether the classification of the joint arrangement has changed.

(Continued)

22

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment. Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss. Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

(l) Property, plant and equipment

• (i) Recognition and measurement

Items of property, plant and equipment are measured at cost which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they

are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent cost

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Consolidated Company.

• (iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for the current and comparative years are as follows:

• 1) Buildings: 25 to 50 years.

• 2) Machinery and transportation equipment: 7 to 15 years.

• 3) Miscellaneous equipment: 7 to 15 years.

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(Continued)

23

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (iv) Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner occupied to investment property.

(m) Lease

• (i) Identifying a lease

At inception of a contract, the Consolidated Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Consolidated Company assesses whether:

• 1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and

• 2) the Consolidated Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

• 3) the Consolidated Company has the right to direct the use of the asset throughout the period of use only if either:

• the Consolidated Company has the right to direct how and for what purpose the asset is used throughout the period of use; or

• the relevant decisions about how and for what purpose the asset is used are predetermined and:

  • － the Consolidated Company has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or

  • － the Consolidated Company designed the asset in a way that predetermines how and for what purpose it will be?used throughout the period of use.

At inception or on reassessment of a contract that contains a lease component, the Consolidated Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Consolidated Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

(Continued)

24

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) As a leasee

The Consolidated Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Consolidated Company’s incremental borrowing rate. Generally, the Consolidated Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• 1) fixed payments, including in-substance fixed payments;

• 2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• 3) amounts expected to be payable under a residual value guarantee; and

• 4) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• 1) there is a change in future lease payments arising from the change in an index or rate; or

• 2) there is a change in the Consolidated Company’s estimate of the amount expected to be payable under a residual value guarantee; or

• 3) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

• 4) there is a change of its assessment on whether it will exercise a extension or termination option; or

• 5) there is a change in scope, objecy or other conditions of a lease.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

(Continued)

25

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Consolidated Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-ofuse asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Consolidated Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Consolidated Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases of buildings that have a lease term of 12 months or less and leases of lowvalue assets. The Consolidated Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(iii) As a leasor

When the Consolidated Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Consolidated Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Consolidated Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Consolidated Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head leas. If a head lease is a short-term lease to which the Consolidated Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Consolidated Company applies IFRS15 to allocate the consideration in the contract.

The lessor recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The interest income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the lease. The Consolidated Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

(n) Intangible assets and technical cooperation fee

• (i) Intangible assets and technical cooperation fee

Other intangible assets, including intangible assets and technical cooperation fee, that are acquired by the Consolidated Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(Continued)

26

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

1) Goodwill 15 years 2) Technical cooperation fee 5~15 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(o) Impairment – Non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties, measured at fair value) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(Continued)

27

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Revenue recognition

• (i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Consolidated Company expects to be entitled in exchange for transferring goods or services to a customer. The Consolidated Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Consolidated Company’ s main types of revenue are explained below.

1) Sale of goods

The Consolidated Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Consolidated Company any has objective evidence that all criteria for acceptance have been satisfied.

2) Financing components

The Consolidated Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Consolidated Company does not adjust any of the transaction prices for the time value of money.

(q) Contract costs

• (i) Incremental costs of obtaining a contract

The Consolidated Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the Consolidated Company expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Consolidated Company incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Consolidated Company applies the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less.

(Continued)

28

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Costs to fulfill a contract

If the costs incurred in fulfilling a contract with a customer are not within the scope of another Standard (for example, IAS 2 Inventories, IAS 16 Property, Plant and Equipment or IAS 38 Intangible Assets), the Consolidated Company recognizes an asset from the costs incurred to fulfill a contract only if those costs meet all of the following criteria:

• ●the costs relate directly to a contract or to an anticipated contract that the Consolidated Company can specifically identify;

• ●the costs generate or enhance resources of the Consolidated Company that will be used in satisfying (or in continuing to satisfy) performance obligations in the future; and

• ●the costs are expected to be recovered.

General and administrative costs, costs of wasted materials, labor or other resources to fulfil the contract that were not reflected in the price of the contract, costs that relate to satisfied performance obligations (or partially satisfied performance obligations), and costs for which the Consolidated Company cannot distinguish whether the costs relate to unsatisfied performance obligations or to satisfied performance obligations (or partially satisfied performance obligations), the Consolidated Company recognizes these costs as expenses when incurred.

(r) Employee benefits

• (i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plans

The Consolidated Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Consolidated Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

(Continued)

29

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Consolidated Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Consolidated Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Consolidated Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(s) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

• (i) Temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

• (ii) Temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Consolidated Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

(iii) Taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

(Continued)

30

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Deferred tax assets and liabilities are offset if the following criteria are met:

• (i) the Consolidated Company has a legally enforceable right to set off current tax assets against current tax liabilities ; and

• (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

• 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax asset are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves..

(t) Earnings per share

The Consolidated Company discloses the Company’ s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as employee compensation.

(u) Operating segments

An operating segment is a component of the Consolidated Company that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Consolidated Company). Operating results of the operating segment are regularly reviewed by the Consolidated Company’ s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

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

The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

(Continued)

31

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

• (a) Judgment of whether Nanya Technology Corporation has substantive control over its investees

The Consolidated Company holds 29.51% of the outstanding voting shares of Nanya Technology Corporation, who has a total number of 12 directors in its board, including 3 seats representing the Consolidated Company. Although the Consolidated Company is the single largest shareholder of the investee, it has no absolute rights and influence on its management decisions. Therefore, it is determined that the Consolidated Company does not have control over Nanya Technology Corporation.

• (b) Judgment of whether Nan YA Photonics Incorporation has substantive control over its investees

The Consolidated Company holds 23.02% of the outstanding voting shares of Nan YA Photonics Incorporation, who has a total number of 6 directors in its board, including 3 seats representing the Consolidated Company. However, the Consolidated Company failed to make an agreement with other shareholders on the collective decision-making which should obtain more than half of the voting rights during a shareholders’ meeting. Therefore, it is determined that the Consolidated Company does not have control over Nan YA Photonics Incorporation.

• (c) Judgment of whether Formosa Automobile Sales Corporation has substantive control over its investees

The Consolidated Company holds 45.00% of the outstanding voting shares of Formosa Automobile Sales Corporation, who has a total number of 5 directors, including 2 seats representing the Consolidated Company. Although the Consolidated Company is the single largest shareholder of the investee, it has no absolute rights and influence on its management decisions. Therefore, it is determined that the Consolidated Company does not have control over Formosa Automobile Sales Corporation.

• (d) Judgment of whether Formosa Plastics Transport Corporation has substantive control over its investees.

The Consolidated Company holds 33.33% of the outstanding voting shares of Formosa Plastics Transport Corporation, who has a total number of 7 directors, including 1 seat representing the Consolidated Company. Although the Consolidated Company is the single largest shareholder of the investee, it has no absolute rights and influence on its management decisions. Therefore, it is determined that the Consolidated Company does not have control over Formosa Plastics Transport Corporation.

• (e) Judgment of whether Formosa Environmental Technology Corporation has substantive control over its investees

The Consolidated Company holds 26.99% of the outstanding voting shares of Formosa Environmental Technology Corporation, who has a total number of 5 directors, including 1 seat representing the Consolidated Company. Although the Consolidated Company is the single largest shareholder of the investee, it has no absolute rights and influence on its management decisions. Therefore, it is determined that the Consolidated Company does not have control over Formosa Environmental Technology Corporation.

(Continued)

32

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (f) Judgment of whether Formosa Fairway Corporation has substantive control over its investees

The Consolidated Company holds 33.34% of the outstanding voting shares of Formosa Fairway Corporation, who has a total number of 5 directors, including 2 seats representing the Consolidated Company. Although the Consolidated Company is the single largest shareholder of the investee, it has no absolute rights and influence on its management decisions. Therefore, it is determined that the Consolidated Company does not have control over Formosa Fairway Corporation.

• (g) Judgment of whether Hwa Ya Technology Park Management Consulting Corporation has substantive control over its investees

The Consolidated Company holds 34.00% of the outstanding voting shares of Hwa Ya Technology Park Management Consulting Corporation, who has a total number of 3 directors, including 1 seat representing the Consolidated Company. Although the Consolidated Company is the single largest shareholder of the investee, it has no absolute rights and influence on its management decisions. Therefore, it is determined that the Consolidated Company does not have control over Hwa Ya Technology Park Management Consulting Corporation.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is as follows:

(a) Evaluation of inventories

Because inventories are measured at the lower of cost and net realizable value, the Consolidated Company evaluates the amount of normal waste, obsolete, and inventories without market price as of the reporting date, and reduces the book value to net realizable value. Such evaluation method depends on the demand of merchandise for a particular period of time in the future; therefore, there might be significant change due to the rapid industry transformation. Please refer to note 6(f) for further description of the evaluation of inventories.

(b) Measurement of defined benefit obligations

Accrued pension liabilities and resulting pension expenses under defined benefit pension plans are calculated using the Projected Unit Credit Method. Actuarial assumptions comprise the discount rate, rate of employee turnover, future salary increase rate, etc. Changes in economic circumstances and market conditions will affect these assumptions and may have a material impact on the amount of the expense and the liability. Refer to note 6(p) for further description of the actuarial assumptions and sensitivity analysis.

The Consolidated Company’ s accounting policies include measuring financial and non-financial assets and liabilities at fair value through profit or loss. The Consolidated Company establishes a measurement and review mechanism for measuring fair value.

(Continued)

33

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Consolidated Company strives to use market observable inputs when measuring assets and liabilities. Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

• (a) Level 1: quoted prices (unadjusted) in active markets for identifiable assets or liabilities.

• (b) Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie as prices) or indirectly (ie derived from prices).

• (c) Level 3: inputs for the assets or liability that are not based on observable market data. For any transfer within the fair value hierarchy, the impact of the transfer is recognized on the reporting date. Please refer to note 6(w), financial instruments, for assumptions used in measuring fair value.

(6) Explanation of significant accounts:

• (a) Cash and Cash Equivalents

Cash on hand Cash in banks Time deposits Cash equivalents Cash and cash equivalents	December 31, 2020 $ 2,044 7,844,574 38,540,348 9,586,651 $ 55,973,617	December 31, 2019 1,483 5,922,259 28,061,383 9,622,994 43,608,119

Please refer to note 6(w) for the interest rate risk and fair value sensitivity analysis of the financial assets and liabilities of the Consolidated Company.

• (b) Financial assets at fair value through profit or loss

Current financial assets designated as at fair value through profit or loss: Funds Non-current financial assets designated as at fair value through profit or loss: Foreign Bonds Foreign Stocks Total	December 31, 2020 $ 3,888,883 December 31, 2020 $ 248,972 309,256 $ 558,228	December 31, 2019
		4,044,356
		December 31, 2019
		510,611 314,115
		824,726

Remeasurement at fair value recognized in profit or loss is disclosed in note 6(w).

(Continued)

34

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (c) Financial assets at fair value through other comprehensive income

Current financial assets at fair value through other comprehensive income

Equity instruments at fair value through other comprehensive income: Stocks	December 31, 2020 $ 40,320,070	December 31, 2019
		41,715,821

Non-current financial assets at fair value through other comprehensive income

Equity instruments at fair value through other comprehensive income: Stocks	December 31, 2020 $ 19,094,939	December 31, 2019
		22,662,110

• (i) Debt investments at fair value through other comprehensive income

The Consolidated Company has assessed that the following securities were held within a business model whose objective was achieved by both collecting the contractual cash flows and by selling securities. Therefore, they have been classified as debt investments at fair value through other comprehensive income.

• (ii) Equity investments at fair value through other comprehensive income

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

On September 2, 2020, the Consolidated Company acquires 8.6% of the shares of Nan YA Photonics Incorporarion, with a fair value of $169,815, recognized under investments accounted for using equity method, resulting in its shareholding ratio to increase to 23.02. Upon the disposal of the investment, the cumulative losses of $78,459 was reclassified from other equity interest to retained earnings.

There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of December 31, 2019.

(iii) For credit risk and market risk; please refer to note 6(w).

• (iv) The financial assets at fair value through other comprehensive income of the Consolidated Company had been pledged as collateral; please refer to note 8.

(Continued)

35

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Notes and accounts receivable

Notes receivable from operating activities Accounts receivable Overdue receivables Less: Loss allowance	December 31, 2020 $ 6,814,024 45,577,752 20,175 (360,568) $ 52,051,383	December 31, 2019 5,573,110 38,849,472 4,555 (363,604) 44,063,533

The Consolidated Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables on December 31, 2020 and 2019. To measure the expected credit losses, accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provision as of December 31, 2020 and 2019 amounted to $360,568 and$363,604, respectively. The expected loss rate on December 31, 2020, is 0.41% to 2.01% for current, 1.50% to 38.92% for 1 to 90 days past due, 9.94% to 58.23% for 90 to 180 days past due, 22.31% to 100% for 180 to 360 days past due, and 100% for more than 360 days past due. The expected loss rate less than 1% on December 31, 2019.

The Consolidated Company applies the expected credit losses to analyze notes and accounts receivable as of December 31, 2020 and 2019 as follows:

Past due 1 to 90 days Past due 90 to 180 days Past due 180 to 360 days Past due over 360 days	December 31, 2020 $ 147,258 53,270 108,167 69,973 $ 378,668	December 31, 2019
		99,867 63,102 45,317 56,025
		264,311

The movement in the allowance for notes and accounts receivable was as follows:

Balance at January 1, 2020 and 2019 Impairment losses reversed Foreign exchange gains/(losses) Balance at December 31, 2020 and 2019	For the years ended December 31 2020 2019 $ 363,604 399,954 (1,049) (29,028) (1,987) (7,322) $ 360,568 363,604
	2020 $ 363,604 (1,049) (1,987) $ 360,568

As of December 31, 2020 and 2019, notes and accounts receivable which were overdue or under legal proceedings amounted to $20,175 and $4,555. Such receivables were reclassified to overdue receivables under other assets and provided with a full impairment loss provision.

(Continued)

36

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Consolidated Company signed without-recourse factoring and financing contracts with financial institutions. According to these contracts, the net accounts receivable that have matured but are still uncollected will be paid by the financial institutions, except for those affected by trade disputes. As of December 31, 2020 and 2019, the outstanding accounts receivable factoring transactions between the Consolidated Company and the financial institutions were as follows:

EXPAFOL S.L. Gold Circuit Electronics, Ltd Gold Circuit Electronics, Ltd	December 31, 2020	December 31, 2020	December 31, 2020
	Purchaser Factoring Balance Factoring Line Advanced Amount HSBC Bank $ 5,300 USD 500 - E. Sun Bank $ 41,500 100,000 - December 31, 2019		Advanced Amount -	Range of Interest Rate Guarantee project - None - None
			-
	Purchaser Factoring Balance E. Sun Bank $ 69,693	Factoring Line 100,000	Advanced Amount -	Range of Interest Rate Guarantee project - None

(e) Other receivables

Other accounts receivable—other Other accounts receivable—loans to associates Less: Loss allowance Total	December 31, 2020 $ 6,533,160 4,526,070 - $ 11,059,230	December 31, 2019
		2,237,168 5,925,227 -
		8,162,395

Other receivables are financial assets with low credit risk, thus the Consolidated Company measured the loss allowance based on 12-month expected credit losses.

(f) Inventories

The components of inventories were as follows:

Finished goods Work in process Machinery and accessories in process Raw materials Supplies Consigned-out raw materials Consigned-out finished goods Goods in transit Inventories, net	December 31, 2020 $ 10,098,939 9,295,952 8,267,094 10,589,196 1,094,324 159,341 10,586 1,641,315 $ 41,156,747	December 31, 2019
		12,537,778 10,154,245 4,835,894 11,326,558 950,930 189,211 16,881 1,556,255
		41,567,752

(Continued)

37

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The details of the cost of sales were as follows:

Inventory that has been sold Write-down of inventories (Reversal of write-downs) Unallocated production overheads	For the years ended December 31 2020 2019 $ 230,218,132 254,673,143 (59,439) (306,449) 3,598,528 3,806,102 $ 233,757,221 258,172,796
	2020 $ 230,218,132 (59,439) 3,598,528 $ 233,757,221

For December 31, 2020 and 2019, the Consolidated Company did not provide any inventory as collateral for its loans.

(g) Investments accounted for using equity method

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

Associates $ Joint ventures $	December 31, 2020 161,467,015 540,669 162,007,684	December 31, 2019
		164,591,844 517,537
		165,109,381

(i) Associates

The Consolidated Company’s share of net income (loss) of associates was as follows:

The Consolidated Company’s share of net income of associates	For the years ended December 31 2020 2019 6,537,474 11,731,913	For the years ended December 31 2020 2019 6,537,474 11,731,913
		2019 11,731,913

1) The unrealized translation gain or loss arising from the investment in foreign entities, which was determined on exchange rates as of December 31, 2020 and 2019, were recognized in comprehensive income.

2) The unrealized sales profits from downstream transactions with investees under the equity method are treated as deductions from gross income. The realized sales profits from downstream sales are added to gross income. Details of these transactions are disclosed in note 7.

(Continued)

38

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 3) In January, March , June and December 2020, the Consolidated Company participated in the cash capital increase of FG Inc. and Formosa Plastics Construction Corporation, with the total investments amounting to USD8,200 thousand (equivalent to $245,909) and $500,000, respectively. Also, in September 2020, The Company purchased the shares of Nan YA Photonics Incorporation at an amount of $101,252.

• 4) Formosa Synthetic Rubber Corporation Limited, an associate originally owned by the Company, was liquidated in September 2020, and 0.8% of the total outstanding voting shares of Formosa Synthetic Rubber (Hong Kong) Corporation Limited, accounted for using equity method, had been transferred to the Company, resulting in the accumulated other comprehensive income of $(44,168) to be reclassified from other equity interest to retained earnings.

• 5) Yi Jih Development Corporation, an associate originally owned by the Company, carried out a capital reduction on December 31, 2020, resulting in a refund of $44,665, recognized in other receivables. However, the shareholding ratio remained unchanged after the above transaction.

• 6) In March, August and December, 2019, the Consolidated Company participated in the capital increase by cash of FG Inc. and Formosa Resources Corporation, with the total investment amounting to USD7,500 thousand (equivalent to $231,570), $1,570,000 and $46,000, respectively.

• 7) The Consolidated Company’s financial information for investments accounted for using the equity method that are individually insignificant was as follows:

Carrying amount of individually insignificant associates’ equity Attributable to the Consolidated Company: Net Income Other comprehensive income Total comprehensive income	December 31, 2020 December 31, 2019 $ 161,467,015 164,591,844 For the years ended December 31 2020 2019 $ 6,537,474 11,731,913 (2,474,550) (1,739,976) $ 4,062,924 9,991,937	December 31, 2020 December 31, 2019 $ 161,467,015 164,591,844 For the years ended December 31 2020 2019 $ 6,537,474 11,731,913 (2,474,550) (1,739,976) $ 4,062,924 9,991,937	December 31, 2019
			164,591,844
	2020 $ 6,537,474 (2,474,550) $ 4,062,924
		11,731,913 (1,739,976) 9,991,937

• (ii) Joint ventures

The Consolidated Company’s share of net income of joint venture was as follows:

The Consolidated Company’s share of net income of joint ventures	For the years ended December 31 2020 2019 $ 105,829 106,840	For the years ended December 31 2020 2019 $ 105,829 106,840
		2019
		106,840

(Continued)

39

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The carrying value of joint ventures that were not individually material Attributable to the Consolidated Company: Net income Other comprehensive income Total comprehensive income	December 31, 2020 December 31, 2019 $ 540,669 517,537 For the years ended December 31	December 31, 2019
		517,537
		2019
		106,840 -
		106,840

(iii) Collateral

As of December 31, 2020 and 2019, the Consolidated Company did not provide any investment accounted for using equity method as collaterals to any financial institutions or court for its loans.

(h) Property, Plant and Equipment

The cost, depreciation, and impairment of property, plant and equipment of the Consolidated Company were as follows:

Cost or deemed cost: Balance on January 1, 2020 Additions Disposals Reclassification Effect of movements in exchange rates Balance on December 31, 2020 Balance on January 1, 2019 Additions Disposals Reclassification Effect of movements in exchange rates Balance on December 31, 2019	Land $ 13,500,497 - (463) (1,075) (3,889) $ 13,495,070 $ 13,494,231 9,869 (2,016) - (1,587) $ 13,500,497	Building and construction 61,688,821 10,217 - 8,937,403 (385,526) 70,250,915 62,744,023 1,927 (38,438) (107,656) (911,035) 61,688,821	Machinery and equipment 347,328,836 1,991,812 (4,497,392) 37,782,314 (1,478,276) 381,127,294 344,851,726 1,448,022 (5,598,968) 11,025,265 (4,397,209) 347,328,836	Transportation equipment 1,533,383 21,287 (33,094) 110,411 (9,424) 1,622,563 1,547,158 15,152 (50,393) 36,040 (14,574) 1,533,383	Other facilities 12,978,622 304,429 (270,025) 766,466 21,472 13,800,964 12,480,222 270,447 (318,298) 701,345 (155,094) 12,978,622	Construction in progress 41,836,464 27,807,145 (39,803) (43,798,892) (648,457) 25,156,457 22,470,349 27,738,562 (45,986) (7,493,082) (833,379) 41,836,464	Total 478,866,623 30,134,890 (4,840,777) 3,796,627 (2,504,100)
							505,453,263
							457,587,709 29,483,979 (6,054,099) 4,161,912 (6,312,878)
							478,866,623

(Continued)

40

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Depreciation and impairment loss: Balance on January 1, 2020 Depreciation for the period Impairment loss Disposals Reclassification Effect of movements in exchange rates Balance on December 31, 2020 Balance on January 1, 2019 Depreciation for the period Reversal of impairment Disposals Reclassification Effect of movements in exchange rates Balance on December 31, 2019 Carrying amounts: Balance on December 31, 2020 Balance on December 31, 2019	Land $ - - - - - - $ - $ - - - - - - $ - $ 13,495,070 $ 13,500,497	Building and construction 36,320,619 1,939,733 - - 15,422 (74,026) 38,201,748 34,982,056 1,996,284 - (20,320) (158,796) (478,605) 36,320,619 32,049,167 25,368,202	Machinery and equipment 275,222,625 12,325,952 36,198 (4,380,867) (207,071) (798,853) 282,197,984 270,655,062 12,319,601 (59) (4,641,689) 6,982 (3,117,272) 275,222,625 98,929,310 72,106,211	Transportation equipment 1,339,699 54,328 - (32,825) (787) (5,753) 1,354,662 1,357,620 51,865 - (49,482) (8,525) (11,779) 1,339,699 267,901 193,684	Other facilities 9,888,316 666,679 - (269,017) (73,149) 22,289 10,235,118 9,685,710 640,467 - (312,134) (6,991) (118,736) 9,888,316 3,565,846 3,090,306	Construction in progress - - - - - - - - - - - - - - 25,156,457 41,836,464	Total 322,771,259 14,986,692 36,198 (4,682,709) (265,585) (856,343)
							331,989,512
							316,680,448 15,008,217 (59) (5,023,625) (167,330) (3,726,392)
							322,771,259
							173,463,751
							156,095,364

(i) Collateral

Please refer to note 8 for the property, plant and equipment pledged to secure bank loans as of December 31, 2020 and 2019.

(ii) Property, plant and equipment under construction

For the years ended December 31, 2020 and 2019 the capitalized interest on borrowings for the purchase of the property, plant and equipment of the Consolidated Company amounted to $348,661 and $299,843, respectively. The capitalized interest rate ranged from 1.2500%~2.5600% and 1.3030%~3.5230% for the years ended December 31, 2020 and 2019, respectively.

(i) Right-of-use assets

The Consolidated Company leases many assets including land and buildings, machinery and transportation equipment. Information about leases for which the Consolidated Company as a lessee is presented below:

Cost： Balance at January 1, 2020 Additions Disposal Effect of movements in exchange rates Balance at December 31, 2020	Land $ 743,721 2,539 (67,504) 38,343 $ 717,099	Building and construction 198,861 775 (112,121) 19 87,534	Machinery and equipment 27,945 25,560 (1,655) 455 52,305	Transportation equipment 458,110 31,794 (596) (25,434) 463,874	Total 1,428,637 60,668 (181,876) 13,383 1,320,812

(Continued)

41

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance on January 1, 2019 Additions Disposal Effect of movements in exchange rates Balance on December 31, 2019 Accumulated depreciation and impairment losses: Balance at January 1, 2020 Depreciation for the period Disposal Effect of movements in exchange rates Balance at December 31, 2020 Balance on January 1, 2019 Depreciation for the period Disposal Effect of movements in exchange rates Balance on December 31, 2019 Carrying amount: Balance at December 31, 2020 Balance at December 31, 2019	Land $ 777,198 2,270 (272) (35,475) $ 743,721 $ 20,273 26,802 (22,957) 30,734 $ 54,852 $ - 29,094 (272) (8,549) $ 20,273 $ 662,247 $ 723,448	Building and construction 121,009 79,378 (1,486) (40) 198,861 62,671 64,930 (112,121) 12 15,492 - 62,694 - (23) 62,671 72,042 136,190	Machinery and equipment 29,296 - (1,047) (304) 27,945 8,020 8,991 (1,655) 68 15,424 - 9,203 (1,047) (136) 8,020 36,881 19,925	Transportation equipment 467,297 356 - (9,543) 458,110 139,124 129,211 (596) (11,991) 255,748 - 142,903 - (3,779) 139,124 208,126 318,986	Total 1,394,800 82,004 (2,805) (45,362) 1,428,637 230,088 229,934 (137,329) 18,823 341,516 - 243,894 (1,319) (12,487) 230,088 979,296 1,198,549

(j) Intangible assets

The cost, amortization and impairment of the intangible assets of the Consolidated Company were as follows:

Costs : Balance at December 31, 2020 (as same as balance at January 1, 2020) Balance at December 31, 2019 (as same as balance at January 1, 2019) Accumulated amortization and impairment losses : Balance at January 1, 2020 Amortization for the period Balance at December 31, 2020 Balance at January 1, 2019 Amortization for the period Balance at December 31, 2019 Carrying value： Balance at December 31, 2020 Balance at December 31, 2019

Trademark

$ 2,897,172 $ 2,897,172 $ 603,577 193,145 $ 796,722 $ 410,432 193,145 $ 603,577 $ 2,100,450 $ 2,293,595

(Continued)

42

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The amortization expense relating to the intangible assets of the Consolidated Company for the years ended December 31, 2020 and 2019 was recognized in the administrative expenses in the statements of comprehensive income.

• (k) Short-term notes and bills payable

Short-term notes and bills payable Discount on short-term notes and bills payable Total Interest rates	December 31, 2020 $ 18,300,000 (3,421) $ 18,296,579 0.225%~0.29%	December 31, 2019
		15,400,000 (7,205)
		15,392,795
		0.532%~0.695%

• (l) Short-term borrowings

Unsecured short-term borrowings Unused short-term credit lines Range of interest rates	December 31, 2020 $ 55,121,553 $ 125,653,890 0.61%~1.27%	December 31, 2019
		24,012,100
		117,915,845
		0.67%~0.99%

The Consolidated Company did not provide any assets as collaterals for its short-term borrowings.

• (m) Long-term debts

Long-term debts consisted of the following:

Unsecured bank long-term debts Unsecured long-term debts Less: current portion Total Unused long-term credit lines		December 31, 2020 Interest rate Expiration Amount 0.7866%~0.9449% 2021~2023 $ 4,300,000 1.0005%~1.2455% 2023 625,745 (656,436) $ 4,269,309 $ 11,819,516
	Currency	Interest rate
	TWD USD	0.7866%~0.9449% 1.0005%~1.2455%

Secured bank long-term debts Unsecured bank long-term debts Unsecured long-term debts Long-term notes payable Less: current portion Total Unused long-term credit lines		December 31, 2019 Interest rate Expiration Amount 0.9900%~1.6316% 2020~2021 $ 4,000,000 0.9456%~1.0920% 2020~2022 4,300,000 3.2140%~3.5230% 2021 9,784,450 0.5700%~0.8420% 2020 5,096,417 (3,333,333) $ 19,847,534 $ 17,930,020
	Currency	Interest rate
	TWD TWD USD TWD	0.9900%~1.6316% 0.9456%~1.0920% 3.2140%~3.5230% 0.5700%~0.8420%

(Continued)

43

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (i) Please refer to note 6(w) for information on the Consolidated Company’s exposure to liquidity risk, and risk of changes in interest rates and liquidation risk.

• (ii) Pledged assets for bank loans

For the collateral for long-term borrowings, please refer to note 8.

• (n) Bonds payable

Domestic unsecured nonconvertible corporate bonds Costs of issuing bonds Current portion Total	December 31, 2020 $ 69,400,000 (71,093) (5,747,142) $ 63,581,765	December 31, 2019 64,050,000 (71,339) (4,647,875) 59,330,786

The terms of domestic corporate bonds as of December 31, 2020 were as follows:

Issued amount Balance, end of year Current portion Issuance date Issuance period Coupon rate Interest payment date Repayment method	The first domestic unsecured nonconvertible corporate bond in 2013	The third domestic unsecured nonconvertible corporate bond in 2013	The first domestic unsecured nonconvertible corporate bond in 2014	The second domestic unsecured nonconvertible corporate bond in 2014	The first domestic unsecured nonconvertible corporate bond in 2016
	TWD6,000,000 3,599,008 - February 25, 2013 7 years and 10 years 1.36% and 1.50% February 25 Payable in 2 equal installments for each coupon rate in 2019~2020 and 2022~2023, respectively	TWD10,400,000 10,391,082 - December 18, 2013 10 years and 12 years 1.98% and 2.08% December 18 Payable in 2 equal installments for each coupon rate in 2022~2023 and 2024~2025, respectively	TWD10,000,000 9,985,677 - June 24, 2014 14 years and 15 years 2.04% June 24 Payable in 2 equal installments for each coupon rate in 2028 and 2029, respectively.	TWD5,000,000 1,499,108 - November 11, 2014 5 years and 10 years 1.45% and 1.93% November 11 Payable in 2 equal installments for each coupon rate in 2018~2019 and 2023~2024, respectively.	TWD5,000,000 2,499,000 2,499,000 August 16, 2016 5 years 0.68% August 16 Payable in 2 equal Installments for cash Coupon rate in 2020~2021, respectively.

Issued amount Balance, end of year Current portion Issuance date Issuance period Coupon rate Interest payment date Repayment method	The first domestic unsecured nonconvertible corporate bond in 2017	The first domestic unsecured nonconvertible corporate bond in 2018	The first domestic unsecured nonconvertible corporate bond in 2019	The second domestic unsecured nonconvertible corporate bond in 2019	The first domestic unsecured nonconvertible corporate bond in 2020
	TWD9,500,000 9,494,569 3,248,142 July 10, 2017 5 years and 7 years 1.03% and 1.25% July 10 Payable in 2 equal installments for each coupon rate in 2021~2022 and 2023~2024, respectively	TWD10,500,000 10,489,813 - September 6, 2018 5 years, 7 years and 10 years 0.83%, 0.91% and 1.07% September 6 Payable in 2 equal installments for each coupon rate in 2022~2023, 2024~2025, and 2027~2028, respectively	TWD6,300,000 6,292,220 - June 17, 2019 5 years, 7 years and 10 years 0.74%, 0.82% and 0.91% June 17 Payable in 2 equal installments for each coupon rate in 2023~2024, 2025~2026, and 2028~2029, respectively	TWD5,100,000 5,093,326 - October 15, 2019 5 years, 7 years and 10 years 0.71%, 0.75% and 0.84% October 15 Payable in 2 equal installments for each coupon rate in 2023~2024, 2025~2026, and 2028~2029, respectively	TWD10,000,000 9,985,104 - September 24, 2020 5 years,7 years and 10 years 0.49%, 0.58% and 0.62% September 24 Payable in 2 equal Installments for cash Coupon rate in 2024~2025, 2026~2027 and 2029~2030, respectively.

(Continued)

44

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(o) Lease liabilities

The carrying values of lease liabilities were as follows:

The carrying values of lease liabilities were as follows:
Current Non-current	December 31, 2020 $ 115,819 $ 216,808	December 31, 2019
		197,527
		291,222

For information on the maturity analysis, please refer to note 6(w).

The amounts recognized in profit or loss were as follows:

Interest on lease liabilities Expenses relating to short-term leases	For the years ended December 31	For the years ended December 31
	2020 $ 12,157 $ 141,759	2019
		17,681
		128,661

The amounts recognized in the statement of cash flows for the Consolidated Company were as follows:

Total cash outflow for leases	For the years ended December 31	For the years ended December 31
	2020 $ 357,314	2019
		356,283

(i) Real estate leases

The Consolidated Company leases land and buildings for its office space and plants. The leases of land typically run for a period of 4 to 20 years, of office space for 2 to 20 years, and of plants for 3 years. Besides, the rights-of-use for land in mainland China typically run for 50 years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Some leases require the Consolidated Company to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined annually.

The Consolidated Company expects the relative proportions of fixed and variable lease payments to remain broadly consistent in future years.

(Continued)

45

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

The Consolidated Company leases transportation equipment, with lease terms of 2 to 7 years. In some cases, the Consolidated Company has options to purchase the assets at the end of the contract term.

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

(p) Employee Benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities	December 31, 2020 $ 30,088,510 (8,686,459) $ 21,402,051	December 31, 2019 31,416,494 (9,234,709) 22,181,785

The Consolidated Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for its employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of plan assets

The Consolidated Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Consolidated Company’ s Bank of Taiwan labor pension reserve account balance amounted to $8,478,981 as of December 31, 2020. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(Continued)

46

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) Movements in the present value of the defined benefit obligation

The movements in the present value of the defined benefit obligation were as follows:

Balance, beginning of year Current service cost and interest expense Remeasurements of the net defined benefit liabilities: Actuarial losses (gains) arising from changes in financial assumptions Experience adjustments Benefits paid from plan assets Increase from transfer of related party employees Effect of movements in exchange rates Balance, end of year	For the years ended December 31 2020 2019 $ 31,416,494 31,872,431 661,446 775,748 (7,326) (8,649) 1,231 448,365 (2,017,320) (1,672,846) 43,517 4,886 (9,532) (3,441) 30,088,510 31,416,494
	2020 $ 31,416,494 661,446 (7,326) 1,231 (2,017,320) 43,517 (9,532) 30,088,510

• 3) Movements in the fair value of the plan assets

The movements in the fair value of the plan assets were as follows:

Balance, beginning of year Interest income Remeasurements of the net defined benefit liabilities: Return on plan assets Contributions from employer Benefits paid Effect of movements in exchange rates Balance, end of year	For the years ended December 31 2020 2019 $ 9,234,709 9,586,086 91,803 120,577 377,653 386,803 457,938 406,606 (1,464,037) (1,261,962) (11,607) (3,401) $ 8,686,459 9,234,709
	2020 $ 9,234,709 91,803 377,653 457,938 (1,464,037) (11,607) $ 8,686,459

• 4) Expenses recognized in profit or loss

The expenses recognized in profit or loss were as follows:

Current service cost Net interest expense of net defined benefit liabilities	For the years ended December 31	For the years ended December 31
	2020 $ 350,014 219,629 $ 569,643	2019
		379,380 275,791
		655,171

(Continued)

47

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Operating Costs Selling expenses Administrative expenses	For the years ended December 31	For the years ended December 31
	2020 $ 449,950 19,869 99,824 $ 569,643	2019
		518,447 22,202 114,522
		655,171

• 5) Remeasurement of net defined benefit liability recognized in other comprehensive income

The Consolidated Company's remeasurement of the net defined benefit liability recognized in other comprehensive income were as follows:

Accumulated amount at January 1 Recognized during the period Accumulated amount at December 31	For the years ended December 31 2020 2019 $ (6,118,162) (6,065,249) 383,748 (52,913) $ (5,734,414) (6,118,162)
	2020 $ (6,118,162) 383,748 $ (5,734,414)

• 6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	December 31, 2020 December 31, 2019 1.00%~2.47% 1.00%~3.24% 2.50%~4.75% 2.50%~4.62%

The expected allocation payment to be made by the Consolidated Company to the defined benefit plans for the one-year period after the reporting date is $451,341.

The weighted average lifetime of the defined benefits plans is 8.8~20 years.

• 7) Sensitivity analysis

As the principle actuarial assumptions change, the present value of the defined benefit obligation of the Company, Nan Ya PCB Corp., Nan Chung Petrochemical Corp., Wellink Technology Corp., and PFG Fiber Glass Corporation would increase (decrease) as follows:

December 31, 2020 Discount rate( 0.25% variation) Future salary increasing rate( 1.00% variation) December 31, 2019 Discount rate( 0.25% variation) Future salary increasing rate( 1.00% variation)	Influences of defined benefit obligations Increase Decrease $ (486,740) 512,247 2,154,509 (1,900,029) (559,036) 581,465 2,480,687 (2,169,550)

(Continued)

48

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

As the principle actuarial assumptions change, the present value of the defined benefit obligation of Nan Ya Plastics Corporation U.S.A. would increase (decrease) as follows:

December 31, 2020 Discount rate( 1.00% variation) Future salary increasing rate( 1.50% variation) December 31, 2019 Discount rate( 1.00% variation) Future salary increasing rate( 1.50% variation)	Influences of defined benefit obligations Increase Decrease $ (17,062) 21,038 7,129 (5,937) (15,200) 18,520 6,225 (5,220)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions remain constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2020 and 2019.

(ii) Defined contribution plan

The Labor Pension Act (“The Act”) prescribes a defined contribution plan. Pursuant to the Act, the Company, and its subsidiaries namely, Nan Ya PCB Corp., Wen Fung Industrial Corp., Nan Chung Petrochemical Corp., Wellink Technology Corp. and PFG Fiber Glass Corporation have made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts.

Nan Ya Plastics Corporation America and Nan Ya PCB (U.S.A.) Corporation adopt a Defined Contribution Plan and periodically provide contributions thereon according to local law. Those contributions are recognized as an expense on an accrual basis.

Subsidiaries in China are governed by China laws and regulation. Based on China laws and regulation, those companies contribute for employees’ pension benefits at rates ranging from 6% to 20% of salary every month and remit those contributions to the related authority.

The Consolidated Company’ s pension costs under the defined contribution pension plan amounted to $1,072,001 and $1,334,582 for the years ended December 31, 2020 and 2019, respectively.

(Continued)

49

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(q) Income Tax

(i) Income tax expense

The components of income tax expense were as follows:

Current income tax expense Current period Adjustment for prior periods Deferred tax expense Origination and reversal of temporary differences Total income tax expense	For the years ended December 31 2020 2019 $ (1,490,766) 2,887,588 (489,224) (57,400) 5,529,639 649,319 $ 3,549,649 3,479,507
	2020 $ (1,490,766) (489,224) 5,529,639 $ 3,549,649

The amount of income tax recognized in other comprehensive income for 2020 and 2019 were as follows:

Items that will not be reclassified subsequently to profit or loss: Re-measurement from defined benefit plans Reconciliation of income tax and profit before tax for 2019 Income tax using the Company's domestic tax rate Effect of tax rate in foreign jurisdiction Tax effect on tax-exempt dividend income Tax-exempt income Tax effect on unrecognized deferred assets of tax losses Tax effect on unrecognized temporary differences Income tax expense arising from investment income in joint ventures Tax effect on investment income recognized under equity method Differences between estimated and actual income tax and income tax adjustments on prior years Undistributed earnings additional tax Recognition of previously unrecognized tax losses Other income tax adjustments Income tax expense

For the years ended December 31 2020 2019 $ 76,706 (10,556) and 2018 were as follows: For the years ended December 31 2020 2019 $ 8,395,853 6,671,347 277,534 158,174 (440,653) (642,419) 23,354 (36,841) (478,499) 92,790 (256) (85,969) 13,953 25,374 (2,984,634) (3,341,606) (489,224) (57,400) - 391,303 - (3,204) (767,779) 307,958 $ 3,549,649 3,479,507

2020 $ 8,395,853 277,534 (440,653) 23,354 (478,499) (256) 13,953 (2,984,634) (489,224) - - (767,779) $ 3,549,649

(Continued)

50

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Deferred tax assets and liabilities

• 1) Unrecognized deferred tax assets

Deferred tax assets have not been recognized in respect of the following items:

Tax effect of deductible temporary differences The carryforward of unused tax losses	December 31, 2020 $ 551,200 244 $ 551,444	December 31, 2019
		1,029,699 500
		1,030,199

The R.O.C Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Consolidated Company can utilize the benefits therefrom.

As of December 31, 2020, the information of the Consolidated Company’s unutilized business losses for which no deferred tax assets were recognized are as follows:

Occurrence year	Unutilized creditable amount Expiry date $ 26,915 2020 23,925 2021 36,173 2022 17,189 2023 36,692 2024 93 2025 299,143 2026 1,886,099 2027 429,770 2028 $ 2,755,999
2010 2011 2012 2013 2014 2015 2016 2017 2018

(Continued)

51

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 2) Recognized deferred tax assets and liabilities

Movement in the deferred tax assets and liabilities for 2020 and 2019 were as follows:

Deferred tax liabilities:

Balance on January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Foreign currency translation differences for foreign operations Balance on December 31, 2020 Balance on January 1, 2019 Recognized in profit or loss Recognized in other comprehensive income Foreign currency translation differences for foreign operations Balance on December 31, 2019 Deferred tax assets:	Foreign investment income recognized under equity method $ 12,300,792 745,231 - - $ 13,046,023 $ 11,822,444 478,348 - - $ 12,300,792	Defined benefit plans (3,594) (37) (911) 254 (4,288) (4,179) (81) 554 112 (3,594)	Others 824,831 4,233,207 - (163,026) 4,895,012 820,759 10,483 - (6,411) 824,831	Total 13,122,029 4,978,401 (911) (162,772) 17,936,747 12,639,024 488,750 554 (6,299) 13,122,029

Balance on January 1, 2020 Recognized in profit or loss Recognized in other comprehensive income Foreign currency translation differences for foreign operations Balance on December 31, 2020 Balance on January 1, 2019 Recognized in profit or loss Recognized in other comprehensive income Foreign currency translation differences for foreign operations Balance on December 31, 2019	Investment tax credits $ - 20,000 - - $ 20,000 $ - - - - $ -	Defined benefit plans 4,424,259 (68,925) (77,617) - 4,277,717 4,446,111 (32,962) 11,110 - 4,424,259	Idle capacity 78,262 (40,769) - - 37,493 78,039 223 - - 78,262	Loss carryforward - 26,827 - - 26,827 - - - - -	Others 936,635 (488,371) - (32,341) 415,923 995,713 (127,830) - 68,752 936,635	Total
						5,439,156 (551,238) (77,617) (32,341)
						4,777,960
						5,519,863 (160,569) 11,110 68,752
						5,439,156

(iii) Assessment of tax

The Corporation’ s income tax return for the year 2018 had been examined by the tax authorities.

(Continued)

52

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Capital and other equity

As of December 31, 2020 and 2019, the Consolidated Company’ s government registered total authorized capital and issued capital stock both amounted to $79,308,216, divided into 7,930,822 thousand shares of stock with $10 par value per share.

(i) Capital surplus

The components of capital surplus were as follows:

Paid-in capital from conversion of corporate bond to common stock in excess of par value Gains on acquisition of Taiwan Plasticizer Corporation Other Total	December 31, 2020 $ 8,997,136 74,474 17,452,321 $ 26,523,931	December 31, 2019
		8,997,136 74,474 17,546,224
		26,617,834

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(ii) Retained earnings

1) Legal reserve

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

2) Special reserve

As the Company opted to avail of the exemptions allowed under IFRS 1“ First-time Adoption of International Financial Reporting Standards” during the Company’s firsttime adoption of the IFRSs as endorsed by the FSC, unrealized revaluation increments and cumulative translation adjustments (gains) of $6,277,052, which were previously recognized in shareholders’ equity were reclassified to retained earnings. In accordance with Regulatory Permit No. 1010012865 as issued by the FSC on April 6, 2012, a special reserve is appropriated from retained earnings for aforementioned reclassification. In addition, during the use, disposal or reclassifications of relevant assets, these special reserves can be reverted to distributable earnings proportionately. As the amount appropriated exceeds the increase in retained earnings arising from the adoption of IFRSs, only $6,243,060 is appropriated in compliance to the IFRSs as endorsed by the FSC. The balance of special reserve amounted to $6,126,609 and $6,128,451 as of December 31, 2020 and 2019.

(Continued)

53

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Pursuant to the Regulatory Permit mentioned above, the Company is also required to set aside an additional special reserve from current-period earnings and undistributed priorperiod earnings during earnings distribution. The amount to be set aside should be equal to the difference between net current-period reduction of the other stockholders’ equity and the amount of above-mentioned special reserve. The accumulated prior-period reduction of the other stockholders’ equity shall be set aside as an additional special reserve, which does not qualify for earnings distribution, from undistributed prior-period earnings. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

3) Earnings distribution

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

The Company belongs to a mature industry, in which the annual profit is stable. It adopts three kinds of dividend distribution policies, which are cash dividends, capitalization of earnings, and capital surplus. The net earnings after deducting the legal reserve and special reserve may first be distributed by way of cash dividends which shall be equal to at least fifty percent of the Company’ s total dividend distribution every year. The capitalization of earnings and capital surplus shall not exceed fifty percent of the total dividends.

Based on the resolutions approved by stockholders during meetings held on June 12, 2020 and June 12, 2019, the distributions of the Company's earnings in 2019 and 2018, respectively, were as follows:

espectively, were as follows:
Dividends per share: Cash dividends	2019 $ 2.20	2018
		5.00

The aforementioned earnings distributions did not differ from those proposed by the board of directors and those estimated and accrued amount in the financial statements. The related information can be obtained from the Market Observation Post System website.

(Continued)

54

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Other equity accounts (net of tax)

Balance at January 1, 2020 Exchange differences arising on translation of foreign operations Exchange differences on associates / joint ventures accounts for using equity method Unrealized gains (losses) from financial assets at fair value through other comprehensive income Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates and joint ventures accounted for using equity method Share of cash flow hedge of associates / joint ventures Disposal of equity instrument at fair value through other comprehensive income Balance at December 31, 2020 Balance at January 1, 2019 Exchange differences arising on translation of foreign operations Exchange differences on associates / joint ventures accounted for using equity method Unrealized gains (losses) from financial assets at fair value through other comprehensive income Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income, associates and joint ventures accounted for using equity method Share of cash flow hedge of associates / joint ventures Balance at December 31, 2019	Exchange differences on translation of foreign financial statements $ (11,571,431) (1,308,553) (1,745,410) - - - - $ (14,625,394) $ (5,705,296) (4,917,128) (949,007) - - - $ (11,571,431)	Unrealized gains (losses) on financial assets at fair value through other comprehensive income 46,111,488 - - (4,671,269) (814,196) - 122,627 40,748,650 54,624,319 - - (7,787,927) (724,904) - 46,111,488	Gains (losses) on hedging instruments 631 - - - - 30,107 - 30,738 (15,181) - - - - 15,812 631	Total 34,540,688 (1,308,553) (1,745,410) (4,671,269) (814,196) 30,107 122,627
				26,153,994
				48,903,842 (4,917,128) (949,007) (7,787,927) (724,904) 15,812
				34,540,688

(s) Earnings Per Share

The basic earnings per share for the years ended December 31, 2020 and 2019 were calculated on profit attributable to ordinary shareholders of the Company of $25,709,049 and $23,076,123, respectively, and weighted average number of outstanding shares of stock were 7,930,822 ordinary shares, were calculated as follows:

(i) Profit attributable to ordinary shareholders

Profit attributable to ordinary shareholders	For the years ended December 31,	For the years ended December 31,
	2020 $ 25,709,049	2019
		23,076,123

(ii) Weighted average number of outstanding ordinary shares

Shares outstanding as of January 1 is the same as weighted average number of common stock outstanding as of December 31	For the years ended December 31,	For the years ended December 31,
	2020 $ 7,930,822	2019
		7,930,822

(Continued)

55

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(t) Revenue from contracts with customers

Primary geographical markets Taiwan China Other Main Products PVC sheet Rigid sheet Pipes Phthalate Plasticizers BPA EG CCL Epoxy PCB Polyester Staple Fiber PET Resin DTY Machinery and Switchgear Others Primary geographical markets Taiwan China Other Main Products PVC sheet Rigid sheet Pipes Phthalate Plasticizers BPA EG CCL Epoxy PCB Polyester Staple Fiber PET Resin DTY Machinery and Switchgear Others		For the years ended December 31, 2020	For the years ended December 31, 2020	For the years ended December 31, 2020	For the years ended December 31, 2020
	Plastics industry $ 18,360,094 10,806,529 11,754,107 $ 40,920,730 $ 6,448,270 7,525,329 6,288,755 - - - - - - - - - - 20,658,376 $ 40,920,730	Chemical industry Electronic industry Polyester industry Other industries 19,870,580 31,066,877 10,603,454 3,617,812 30,915,234 67,173,627 3,647,077 426,650 14,116,047 21,536,735 29,329,627 129,356 64,901,861 119,777,239 43,580,158 4,173,818 - - - - - - - - - - - - 8,828,459 - - - 16,211,943 - - - 24,311,563 - - - - 26,140,571 - - - 25,904,386 - - - 38,510,044 - - - - 8,434,954 - - - 17,275,223 - - - 11,806,915 - - - - 3,785,310 15,549,896 29,222,238 6,063,066 388,508 64,901,861 119,777,239 43,580,158 4,173,818 For the years ended December 31, 2019				Total 83,518,817 112,969,117 76,865,872
						273,353,806
						6,448,270 7,525,329 6,288,755 8,828,459 16,211,943 24,311,563 26,140,571 25,904,386 38,510,044 8,434,954 17,275,223 11,806,915 3,785,310 71,882,084
						273,353,806
		Chemical industry 22,595,689 33,512,667 16,077,139 72,185,495 - - - 11,428,993 13,964,330 30,699,552 - - - - - - - 16,092,620 72,185,495	Electronic industry 25,289,724 63,121,695 23,846,227 112,257,646 - - - - - - 26,609,055 26,508,047 31,089,732 - - - - 28,050,812 112,257,646	Polyester industry 13,513,450 4,420,270 37,216,856 55,150,576 - - - - - - - - - 10,914,349 20,728,025 17,271,587 - 6,236,615 55,150,576	Other industries 2,529,949 1,052,976 597,036 4,179,961 - - - - - - - - - - - - 3,954,305 225,656 4,179,961	Total 82,326,864 111,761,547 92,214,648
						286,303,059
						6,900,551 8,170,411 5,600,558 11,428,993 13,964,330 30,699,552 26,609,055 26,508,047 31,089,732 10,914,349 20,728,025 17,271,587 3,954,305 72,463,564
						286,303,059

(Continued)

56

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(u) Employee compensation

According to the specifications of the Company’s article, 0.05% to 0.5% of the earnings before tax and bonuses should be appropriated to employees as bonuses. However, certain amounts of the earnings should be reserved if there is an accumulated loss from the operations in the previous years in advance of the appropriation of the employee bonuses.

The remunerations to employees amounted to $27,657 and $24,588, respectively, for the years ended December 31, 2020 and 2019, respectively. These amounts were calculated using the Company's net income before tax without the remunerations to employees for each period, multiplied by the proposed percentage which is stated under the Company's proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period. If there are any subsequent adjustments to the actual remuneration amounts after the annual shareholder’ meeting, the adjustment will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year.

For the year ended December 31, 2019 and 2018, the remunerations to employees amounted to $24,588 and $57,879, respectively, which were paid in cash. There was no difference from the actual distribution. The information is available on the Market Observation Post System website.

(v) Non-operating income and expenses

• (iii) Interest income

The details of interest income were as follows:

The details of interest income were as follows:
Interest income from bank deposits Other interest income	2020 $ 632,226 122,218 $ 754,444	2019
		803,595 286,838
		1,090,433

• (iv) Other income

The details of other income were as follows:

The details of other income were as follows:
Dividend income Other income	2020 $ 2,234,780 2,660,693 $ 4,895,473	2019
		3,237,464 2,043,670
		5,281,134

(Continued)

57

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Other gains and losses

The details of other gains and losses were as follows:

(Loss) Gain on disposal of property, plant and equipment Foreign currency exchange (loss) gain Loss on financial assets at fair value through profit or loss Gain on disposal of financial assets Reversal of impairment loss (Impairment loss) on plant, property, and equipment Others	2020 $ (30,415) (1,241,364) (209,673) 89,307 (36,198) (330,924) $ (1,759,267)	2019 307,736 100,199 (26,211) 53,863 59 (221,893) 213,753

(vi) Finance costs

The details of finance costs were as follows:

Interest expense Less: interest capitalized	2020 $ 1,664,980 (348,661) $ 1,316,319	2019 1,920,271 (299,843) 1,620,428

(w) Financial Instruments

(i) Credit Risk

• 1) Credit risk exposure

The Consolidated Company is exposed to credit risk primarily from cash and cash equivalents, deposits, and trade receivables.

2) Concentration of credit risk

As sales are made to customers worldwide, the Consolidated Company’ s exposure to credit risk concentration is expected to be low. Also, the Consolidated Company mitigates its exposure by evaluating the customers’ financial situation regularly.

(Continued)

58

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

December 31, 2020 Non-derivative financial liabilities Short-term notes and bills payable Notes and accounts payable Accounts payables to related parties Short-term borrowings Long-term borrowings Bonds payable (TWD) Lease liabilities December 31, 2019 Non-derivative financial liabilities Short-term notes and bills payable Notes and accounts payable Accounts payables to related parties Short-term borrowings Long-term borrowings Bonds payable Bonds payable (TWD) Lease liabilities	Carrying amount $ 18,296,579 12,214,602 7,549,472 55,121,553 4,925,745 69,328,907 332,627 $ 167,769,485 $ 15,392,795 9,102,231 6,986,969 24,012,100 18,084,450 63,978,661 5,096,417 488,749 $ 143,142,372	Contractual cash flows 18,303,421 12,214,602 7,549,472 55,336,507 4,990,590 73,629,785 358,262 172,382,639 15,402,402 9,102,231 6,986,969 22,500,021 18,235,167 68,740,741 5,185,968 520,549 146,674,048	Within 6 months 18,303,421 12,214,602 7,549,472 33,025,613 17,112 309,920 65,765 71,485,905 15,402,402 9,102,231 6,986,969 22,500,021 711,826 1,526,240 7,164 109,000 56,345,853	6-12 months - - - 22,310,894 667,660 6,299,830 57,708 29,336,092 - - - - 2,698,470 3,975,235 7,164 99,955 6,780,824	1-2 years - - - - 2,135,674 11,584,275 68,936 13,788,885 - - - - 13,020,488 6,553,430 2,128,656 112,797 21,815,371	2-5 years - - - - 2,170,144 30,297,385 92,913 32,560,442 - - - - 1,804,383 31,840,153 3,042,984 131,903 36,819,423	Over 5 years
							- - - - - 25,138,375 72,940
							25,211,315
							- - - - - 24,845,683 - 66,894
							24,912,577

It is expected that the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

• (iii) Currency risk

• 1) Exposure to foreign currency risk

The Consolidated Company’ s significant exposure to foreign currency risk was as follows:

Financial assets Monetary items USD JPY EUR HKD CNY	December 31, 2020	December 31, 2020
	Foreign Currency $ 916,904 160,915 2,258 4,450 8,085	Exchange Rate TWD 28.5080 26,139,099 0.2724 43,833 34.5600 78,036 3.6549 16,264 4.3691 35,324

(Continued)

59

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Non-monetary items USD CNY IDR VND Financial liabilities Monetary items USD JPY EUR CNY Financial assets Monetary items USD JPY EUR HKD CNY Non-monetary items USD CNY IDR VND Financial liabilities Monetary items USD JPY EUR	December 31, 2020	December 31, 2020
	Foreign Currency Exchange Rate TWD $ 135,220 28.5080 3,854,852 69,606 4.3691 304,116 122,119,192 0.0019 232,026 6,494,031,285 0.0012 7,792,838 217,766 28.5080 6,208,073 1,324,035 0.2724 360,667 3,189 34.5600 110,212 98 4.3691 428 December 31, 2019
	Foreign Currency $ 814,690 391,109 598 5,840 23,304 482,507 59,888 119,869,376 6,283,412,736 159,283 1,487,754 2,498	Exchange Rate TWD 30.1060 24,527,057 0.2763 108,063 33.6895 20,146 3.8597 22,541 4.3155 100,568 30.1060 14,526,356 4.3155 258,447 0.0022 263,713 0.0013 8,168,437 30.1060 4,795,374 0.2763 411,066 33.6895 84,156

(Continued)

60

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Sensitivity analysis

The Consolidated Company’ s exposure to exchange rate risk arises from the foreign currency exchange fluctuations on cash and cash equivalents, accounts receivable, other receivables, loans and borrowings, accounts payable and other payables that are dominated in foreign currency. The overall effects to net income before tax for the years ended December 31, 2020 and 2019 assuming the TWD depreciated or appreciated by 1% against the USD, JPY, EUR, HKD and CNY as of December 31, 2020 and 2019 were as follows:

Appreciation in value of 1% Depreciation in value of 1%	For the years ended December 31, 2020 2019 $ (196,376) (194,865) 196,376 194,865

This analysis is performed on the same basis for the two periods.

• 3) Foreign exchange gain and loss on monetary items

Since the Consolidated Company has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. for the years ended December 31, 2020 and 2019, foreign exchange gain (loss) (including realized and unrealized portions) amounted to loss $1,241,364 and gain $100,199, respectively.

(iv) Other market price risks

For the years ended December 31, 2020 and 2019, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the comprehensive income as illustrated below:

Prices of securities at the reporting date Increasing 1% Decreasing 1%	For the year ended December 31, 2020 For the year ended December 31, 2019 Other comprehensive income after tax Other comprehensive income after tax $ 403,201 417,158 $ (403,201) (417,158)

(Continued)

61

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Consolidated Company's financial assets and liabilities.

The following sensitivity analysis is based on the risk exposure to the interest rates risk of derivative and non derivative financial instruments on the reporting date. For variable rate instruments, the sensitivity analysis assumes the liabilities bearing variable interest rates are outstanding for the whole year. A 1% increase or decrease in interest rate is assessed by management to be a reasonable possible change in interest rate.

An increase or decrease of 1% in interest rates mainly from loans with floating interest rates at the reporting date would have increased or decreased net income by $786 and $978 for the years ended December 31, 2020 and 2019, respectively.

• (vi) Fair value of financial instruments

1) Fair value hierarchy

The fair value of financial assets and liabilities at fair value through profit or loss and financial assets at fair value though other comprehensive income is measured on a recurring basis. The carrying amount and fair value of the Consolidated Company’ s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

Financial assets at fair value through profit or loss Designated at fair value through profit or loss Financial assets at fair value through other comprehensive income Stocks in listed companies Unquoted equity instruments Subtotal Financial assets measured at amortized cost Cash and cash equivalent Notes and accounts receivable (including related parties) Other receivables due from related parties Subtotal		December 31, 2020	December 31, 2020	December 31, 2020
	Book Value $ 4,447,111 $ 40,320,070 19,094,939 $ 59,415,009 $ 55,973,617 52,051,383 11,059,230 $ 119,084,230	Level 1 - 40,320,070 - 40,320,070 - - - -	Fair Value
			Level 2 3,888,883 - - - - - - -	Level 3 558,228 - 19,094,939 19,094,939 - - - -	Total 4,447,111
					40,320,070 19,094,939
					59,415,009
					- - -
					-

(Continued)

62

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial liabilities at amortized cost Short-term borrowings Lease liabilities Short-term notes and bills payable Notes and accounts payable (including related parties) Bonds payable Long-term borrowings Subtotal Financial assets at fair value through profit or loss Designated at fair value through profit or loss Financial assets at fair value through other comprehensive income Stocks in listed companies Unquoted equity instruments Subtotal Financial assets measured at amortized cost Cash and cash equivalent Notes and accounts receivable (including related parties) Other receivables due from related parties Subtotal Financial liabilities at amortized cost Short-term borrowings Lease liabilities Short-term notes and bills payable Notes and accounts payable (including related parties) Bonds payable Long-term borrowings Long-term notes payable Subtotal		December 31, 2020	December 31, 2020	December 31, 2020
	Book Value $ 55,121,553 332,627 18,296,579 19,764,074 69,328,907 4,925,745 $ 167,769,485	Fair Value Level 1 Level 2 Level 3 55,121,553 - - - - - 18,296,579 - - - - - 69,328,907 - - 4,925,745 - - 147,672,784 - - December 31, 2019	Fair Value
					Total 55,121,553 - 18,296,579 - 69,328,907 4,925,745
					147,672,784
		Level 1 - 41,715,821 - 41,715,821 - - - - 24,012,100 - 15,392,795 - 63,978,661 18,084,450 5,096,417 126,564,423	Fair Value
			Level 2 4,044,356 - - - - - - - - - - - - - - -	Level 3 824,726 - 22,662,110 22,662,110 - - - - - - - - - - - -	Total 4,869,082
					41,715,821 22,662,110
					64,377,931
					- - -
					-
					24,012,100 - 15,392,795 - 63,978,661 18,084,450 5,096,417
					126,564,423

(Continued)

63

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

• a) Financial assets measured at amortized cost

If the quoted prices in active markets are available, the market price is established as the fair value. However, if quoted prices in active markets are not available, the estimated valuation or prices used by competitors are adopted.

• b) Financial liabilities measured at amortized cost

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

• 3) Valuation techniques for financial instruments measured at fair value

• a) Non-derivative financial instruments

Financial instruments traded in active markets are measured at fair value based on the quoted market prices. Quoted prices are the prices announced by the main stock exchanges and over-the-counter markets. They are the basis for recognizing the fair value of the listed and over-the-counter equity instruments.

Financial instrument possesses a quoted price in the active markets if the trading prices fairly represent the frequent and orderly transactions for financial instrument, and are readily available from trade centers, security brokers, underwriters, trade unions, pricing service institutes or other related authorities. The market for the said financial instrument shall be seen as inactive should the aforementioned requirements have not been met. Large or significantly increasing gap between the purchase and the exit prices of a financial instrument, or low trade volume, are general indicators of an inactive market.

If the financial instrument of the Consolidated Company possesses an active market, its fair value should be recognized according to different categories and characteristics as follows:

For listed and over-the-counter stocks with standard terms and are publicly traded in active markets, their fair value are calculated by the market’s quoted prices.

Other financial instruments that are not traded in active markets are measured with fair values provided by using the valuation techniques via market approach or the discounted cash flow method or other available methods.

If the financial instruments held by the Consolidated Company are not traded in active markets, the valuation of their fair value is categorized as follows:

(Continued)

64

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Bond investments that has no quoted prices: Fair value is measured with the income approach by applying the discounted cash flow method that convert future cash flow amounts to a single current amount on the basis of the value indicated by current market expectations about those future amounts.

• 4) Transfers between levels of the fair value hierarchy

There were no transfers between levels of the fair value hierarchy for the years ended December 31, 2020 and 2019.

• 5) Reconciliation of Level 3 fair value

Balance at January 1, 2020 Total gains and losses recognized: In profit or loss In other comprehensive income Refund capital reduction Disposals Reclassified Effect of exchange rate changes Balance at December 31, 2020 Balance at January 1, 2019 Total gains and losses recognized: In profit or loss In other comprehensive income Disposals Effect of exchange rate changes Balance at December 31, 2019	Fair value through profit and loss Fair value through other comprehensive income Bond investment and others Unquoted equity instruments $ 824,726 22,662,110 35,107 - - (12,757,279) - (12,500) (266,103) 9,482,686 - (169,816) (35,502) (110,262) $ 558,228 19,094,939 $ 1,047,877 28,011,349 545 - - (4,975,987) (207,799) - (15,897) (373,252) $ 824,726 22,662,110

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

(Continued)

65

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 7) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

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

Quantified information of significant unobservable inputs was as follows:

Inter-relationship between significant unobservable inputs Significant and fair value Item Valuation technique unobservable inputs measurement Financial assets at Market comparable Price to earnings ratio The higher the fair value through companies multiple, price to book multiple, the higher the ratio multiple, fair value other enterprise value to comprehensive operating income ratio income - multiple, enterprise equity instruments value to EBITDA without an active market multiple, discount for lack of marketability Net Asset Value Not applicable Not applicable Method

• 8) Fair value measurement in Level 3 - sensitivity analysis of the possible alternative assumptions

The valuation models and assumptions used to measure the fair value of the financial instruments is reasonable. However, the use of different valuation models or assumptions may result in different measurements. For fair value measurements in Level 3, changing one or more of the assumptions to reflect reasonably possible alternative assumptions would have the following effects:

Recognized in other comprehensive income Favorable Unfavorable Input Change change change December 31, 2020 Price to earnings ratio multiple, price to book ratio Financial assets at fair multiple, enterprise value to value through other operating income ratio comprehensive income – multiple, enterprise value to unquoted equity EBITDA multiple, discount instruments for lack of marketability ± 1% $ 153,228 (153,228) December 31, 2019

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Financial assets at fair value through other comprehensive income – unquoted equity instruments	Input	Change	Recognized in other comprehensive income	Recognized in other comprehensive income
			Favorable change $ 189,147	Unfavorable change (189,147)
	Price to earnings ratio multiple, price to book ratio multiple, enterprise value to operating income ratio multiple, enterprise value to EBITDA multiple, discount for lack of marketability	± 1%

(x) Financial risk management

• (i) The Consolidated Company have exposures to the following risks from its financial instruments:

• 1) Credit risk

• 2) Liquidity risk

• 3) Market risk

The following likewise discusses the Consolidated Company's objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying consolidated financial statements.

• (ii) Structure of risk management

The Consolidated Company’s risk management policies are established to identify and analyze the risks faced by the Consolidated Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.

The Consolidated Company Audit Committee oversees how management monitors compliance with the Consolidated Company’ s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Consolidated Company.

• (iii) Credit risk

Credit risk is the risk of financial loss to the Consolidated Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

To maintain the credit quality of receivables, a credit risk management policy has been established. Under this policy, each customer is analyzed individually regarding customer’s financial situation, external and internal credit rating, historical trading record, and current economic condition which may affect customer’s payment ability. In addition, some methods are adopted to reduce the credit risk for specific customers, such as prepayment and insurance of accounts receivable.

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67

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The credit risk exposure on bank deposits and other financial instruments are measured and monitored by the Consolidated Company’s finance department. As the Consolidated Company’ s transactions are done with the banks and other external parties with good credit standing, management is not aware of any noncompliance issues and is not expecting significant credit risk.

(iv) Liquidity risk

Liquidity risk is the risk that the Consolidated Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Consolidated Company’ s approach to managing liquidity is to ensure, as much as possible, that it will always have sufficient current funds, such as cash and cash equivalents, securities with high liquidity and sufficient credit line from banks, to meet its liabilities when due, without incurring unacceptable losses or risking damage to the Consolidated Company’s reputation.

(v) Market risk

Market risk is the risk that changes in the market, such as foreign exchange rates, interest rates, and equity prices, of that will affect the Consolidated Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Consolidated Company is exposed to currency risk is due to global transactions that are denominated in a currency other than the respective functional currency of the Company, primarily the New Taiwan Dollars (TWD). The currencies used in these transactions are denominated in USD. The currency risk mainly arises from future business transactions and recognized assets and liabilities. Part of the currency risks arising from purchases and sales can be offset each other to achieve automatic hedge.

When the Consolidated Company has foreign currency needs, the Consolidated Company uses spot exchange contracts and forward exchange contracts if the exchange rate is advantageous to the Consolidated Company to manage the risk. If necessary, the Consolidated Company uses derivatives operated by prestigious international banks to manage its exposure to foreign currency exchange rate fluctuation risk, which monitor the exchange rate risks and adhere to acceptable levels by the Consolidated Company.

2) Interest rate risk

The Consolidated Company’s interest rate risk mainly arises from long-term loans with variable interest rates, which bear cash flow risks to the Consolidated Company. Part of the interest rate risks can be offset by cash and cash equivalents with variable interest rates held by the Consolidated Company.

The Consolidated Company manages interest rate risks by using derivatives when necessary, to lower the risk to acceptable levels.

(Continued)

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Other market price risk

The Consolidated Company is exposed to fair value change risk due to financial assets at fair value through other comprehensive income (available-for-sale financial assets), which were measured at fair value.

(y) Capital Management

Although business operated by the Consolidated Company has reached the stage of maturity, a sufficient amount of capital is still required to support the operation of investee companies, construction and expand its production facilities and equipment.

The Consolidated Company’s policy is to maintain sufficient financial resources and operating plan to meet future demands such as operating capital, capital expenditure, research and development expenditures, loan reimbursements, and dividend distributions.

The Consolidated Company and other entities in the same industry use the debt-to-equity ratio to manage its capital. This ratio is the total net debt divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, and other equity plus net debt. The Consolidated Company’s debt-to-equity ratio at the end of the reporting period were as follows:

Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-equity ratio at December 31	December 31, 2020 $ 228,125,869 (55,973,617) $ 172,152,252 $ 356,586,478 % 32.56	December 31, 2019 199,107,979 (43,608,119) 155,499,860 355,570,700 % 30.43

(z) Reconciliation of liabilities arising from financing activities

Short-term borrowings Balance as of January 1, 2020 $ 24,012,100 Change in cash from financing activities 32,098,262 Non-cash changes - Influence due to fluctuation of exchange rate (988,809) Balance as of December 31, 2020 $ 55,121,553	Short-term notes payable 15,392,795 2,900,000 3,784 - 18,296,579	Long-term notes payable 5,096,417 (5,100,000) 3,583 - -	Long-term borrowings (including current portion) 18,084,450 (12,973,694) - (185,011) 4,925,745	Bonds payable (including current portion) 63,978,661 5,334,330 15,916 - 69,328,907	Lease liabilities (including current portion) 488,749 (203,398) 60,668 (13,392) 332,627	Total liabilities arising from financing activities 127,053,172 22,055,500 83,951 (1,187,212) 148,005,411

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Short-term borrowings Balance as of January 1, 2019 $ 21,253,381 Change in cash from financing activities 2,772,313 Non-cash changes - Influence due to fluctuation of exchange rate (13,594) Balance as of December 31, 2019 $ 24,012,100	Short-term notes payable 8,897,747 6,500,000 (4,952) - 15,392,795	Long-term notes payable 7,096,550 (2,000,000) (133) - 5,096,417	Long-term borrowings (including current portion) 12,270,805 6,133,209 - (319,564) 18,084,450	Bonds payable (including current portion) 58,531,455 5,431,560 15,646 - 63,978,661	Lease liabilities (including current portion) 624,278 (209,941) 80,518 (6,106) 488,749	Total liabilities arising from financing activities
						108,674,216 18,627,141 91,079 (339,264)
						127,053,172

(7) Related-party transactions:

• (a) Parent company and ultimate controlling party

The Company is the ultimate controlling party of the Consolidated Company and its subsidiaries.

• (b) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements.

in the consolidated financial statements.
	Relationship with the
Name of related party	Consolidated Company
Formosa Petrochemical Corporation	Associates
Nanya Technology Corporation	Associates
Formosa Resources Corporation	Associates
Formosa Plastics Construction Corporation	Associates
Formosa Heavy Industries Corporation	Associates
Formosa Heavy Industries (Ningbo) Co., Ltd.	Associates
Formosa Fairway Corporation	Associates
Formosa Synthetic Rubber (Hong Kong) Corporation Limited	Associates
Formosa Synthetic Rubber (Ningbo) Co., Ltd.	Associates
Formosa Industries Corporation	Associates
Formosa Group (Cayman) Limited	Associates
Formosa Utility Venture, Ltd.	Associates
Formosa Environmental Technology Corporation	Associates
Formosa Plastics Transport Corporation	Associates
FG Inc.	Associates
Nan Ya Plastics (Zhengzhou) Co., Ltd.	Joint ventures
Nanya Kyowa Plastics (Nantong) Co., Ltd.	Joint ventures
P.T. Indonesia Nanya Indah Plastics Co.	Joint ventures
Formosa Plastics Corporation	Other related parties

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of related party

Relationship with the Consolidated Company

Formosa Chemicals and Fiber Corporation Other related parties Hwa Ya Power Corporation Other related parties Formosa Taffeta Co., Ltd. Other related parties Formosa Advanced Technologies Co., Ltd. Other related parties Formosa Industries Corporation Other related parties Formosa Taffeta (Dong Nai) Co., Ltd. Other related parties Formosa Ha Tinh (Cayman) Ltd. Other related parties Formosa Ha Tinh Steel Corporation Other related parties Formosa Ha Tinh (Cayman) Limited Taiwan Branch Other related parties China Man-made Fiber Corporation Other related parties Mai Liao Harbor Administration Corp. Other related parties Formosa Industries (Ningbo) Co., Ltd. Other related parties Formosa Power (Ningbo) Limited Company Other related parties Formosa Chemicals and Fiber (Ningbo) Corporation Other related parties Xiamen Haicang Investment Group Co., Ltd. Other related parties Formosa Plastics Marine Corporation Other related parties Formosa Plastics Corporation U.S.A. Other related parties FG LA LLC Other related parties Ming Chi University Of Technology Other related parties Formosa Industries Corporation, U.S.A. Other related parties Formosa Plastics Marine Corporation Other related parties Formosa Electronic (Ningbo) Co., Ltd. Other related parties

(c) Significant related-party transactions

(i) Sales to related parties

The amounts of significant sales by the Consolidated Company to related parties were as follows:

Associates and joint ventures Other related parties	For the years ended December 31	For the years ended December 31
	2020 $ 3,254,207 12,439,106 $ 15,693,313	2019
		4,823,266 13,749,358
		18,572,624

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The receivables from related parties were as follows:

Associates and joint ventures Other related parties	December 31, 2020 $ 760,461 1,556,448 $ 2,316,909	December 31, 2019
		683,497 1,182,504
		1,866,001

The selling prices and collection terms of sales to related parties are not significantly different from those of third-party customers. The accounts receivable arising from sales of machinery and equipment, and machine parts are collected after the delivery inspection, and the accounts receivable arising from sales of other products are collected on the 30th day of the following month.

The Consolidated Company sells mainly machinery and provides engineering services to related parties in China and Vietnam. Payment is made after the test run of machinery sold. Also, it sells other products to these related parties. Selling prices and collection terms of other products sold to these associates are not materially different from those to non-related general buyers. Payments are collected 30 to 180 days after shipping of these other products.

(ii) Purchase from related parties

The amounts of significant purchases by the Consolidated Company from related parties were as follows:

Associates and joint ventures Formosa Petrochemical Corporation Other associates and joint ventures Formosa Chemicals and Fiber Corporation Other related parties The payables to related parties were as follows: Associates and joint ventures Formosa Petrochemical Corporation Other associates and joint ventures Other related parties Formosa Chemicals and Fiber Corporation Other related parties	For the years ended December 31	For the years ended December 31
	2020 $ 27,967,532 181,317 20,967,759 20,128,777 $ 69,245,385 December 31, 2020 $ 2,762,347 5,045 2,172,574 2,608,624 $ 7,548,590	2019
		35,608,519 39,150 24,944,681 21,870,354
		82,462,704
		December 31, 2019
		2,862,473 4,727 1,959,178 2,160,591
		6,986,969

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Purchase prices and payment terms of purchases from related parties are not materially different from those of non-related general suppliers. Payment shall be paid within 30 to 180 days of the month following the month of purchase with checks which are due and payable immediately.

• (iii) Unrealized sales profit

Significant unrealized (realized) profits from sales to related parties were as follows:

Investee Associates and joint ventures	For the y	e	ar ended Decembe	r	31, 2020 Unrealized sales profit at end of period 39,666	For the y	e	ar ended December	31, 2019
	Unrealized sales profit at beginning of period		(Realized) Unrealized sales profits			Unrealized sales profit at beginning of period 45,959		(Realized) Unrealized sales profits (6,964)	Unrealized sales profit at end of period 38,995
	$ 38,995		671

(iv) Construction

The Consolidated Company contracted with associates to construct and expand the factory. The construction costs were as follows:

Associates and joint ventures Formosa Heavy Industries Corporation Other related parties The payables to related parties were as follows: Formosa Heavy Industries Corporation	For the years ended December 31	For the years ended December 31
	2020 $ 439,734 - $ 439,734 December 31, 2020 $ 882	2019
		3,082,860 17,988
		3,100,848
		December 31, 2019
		-

(v) Utility expenses

Part of the utilities of the Consolidated Company's Lin-Yuan plant and all of the utilities of the Consolidated Company’s Ren-Wu plant, including power, water and steam, are supplied by or paid on behalf of the Consolidated Company by the utility plants of Formosa Plastics Corporation. The utilities of the Consolidated Company’s Mai Liao plant, including power, water and steam, are supplied by Formosa Petrochemical Corporation. The expenses for utilities were as follows:

Associates and joint ventures Formosa Petrochemical Corporation Other related parties Other related parties	For the years ended December 31	For the years ended December 31
	2020 $ 6,426,666 102,129 $ 6,528,795	2019
		7,217,914 106,786
		7,324,700

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73

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The payables to related parties were as follows:

Associates and joint ventures Formosa Petrochemical Corporation	December 31, 2020 $ 266	December 31, 2019
		84,083

• (vi) Property transactions

• 1) Purchase of Property, Plant and Equipment

The purchases price of property, plant and equipment purchased from related parties were as follows:

were as follows:
Formosa Heavy Industries Corporation Other related parties	December 31, 2020 $ 215,765 - $ 215,765	December 31, 2019
		- 9,618
		9,618

In January, June, November, 2020 and November, December 2019, the Consolidated Company purchased property, plant, and equipment, amounting to $215,765 and $9,618, respectively. As of December 31, 2020 and 2019, the ownership transfer process has been finished. The purchase price for the property, plant, and equipment was determined based on market condition and asset evaluation report. For further description of the property, plant, and equipment, please refer to note 6(i).

.

• 2) Acquisition of financial assets

Account Associates－FG Inc. Investments accounted for using equity method Associates－ Formosa Plastics Construction Corporation Investments accounted for using equity meth	Number of Shares (in thousands) - 50,000	Purpose For the year ended December 31, 2020 Shares of stock of FG Inc. $ 245,909 Shares of stock of Formosa Plastics Construction Corporation 500,000 $ 745,909

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74

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Account Associates－ Formosa Resources Corporation Investments accounted for using equity method Associates－FG Inc. Investments accounted for using equity meth Associates－ Formosa Synthetic Rubber Corporation Limited Investments accounted for using equity method Subsidiaries－Nan Ya PCB Corporation Investments accounted for using equity method"	Number of Shares (in thousands) 157,000 - 4,600 13,267	Purpose For the year ended December 31, 2019 Shares of stock of Formosa Resources Corporation $ 1,570,000 Shares of stock of FG Inc. 231,570 Shares of stock of Formosa Synthetic Rubber Corporation Limited 46,000 Shares of stock of Formosa Advanced Technologies Co.,Ltd 472,968 $ 2,320,538

3) Disposals of property, plant and equipment

The disposals of property, plant and equipment to related parties are summarized as follows:

Associates Formosa Industries Corporation Other related parties Formosa Chemicals and Fiber (Ningbo) Corporation	For the years ended December 31, 2020 Disposal price Gain (loss) from disposal $ - - 6 - $ 6 -	For the years ended December 31, 2019 Disposal price Gain (loss) from disposal 1,247,436 (62,144) - - 1,247,436 (62,144)
	Disposal price $ - 6 $ 6	Disposal price 1,247,436 - 1,247,436

As of December 31, 2020 and 2019, the outstanding balance was $0 and $748,193, respectively. Please refer to note 6(h) for the details of property, plant and equipment.

(vii) Loans to related parties

The loans to related parties were as follows:

Associates and joint ventures Other associates and joint ventures Other related parties Formosa Plastics Marine Corporation Other related parties	Other receivables from related parties	Other receivables from related parties
	December 31, 2020 $ 175,489 4,263,200 87,381 $ 4,526,070	December 31, 2019 198,097 5,640,819 86,311 5,925,227

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(viii) Endorsements and guarantees

The amounts of the Consolidated Company’s endorsements and guarantees for securing related parties’ loans were as follows:

Associates and joint ventures Formosa Group (Cayman) Limited Formosa Industries Corporation Formosa Resources Corporation Other related parties Formosa Ha Tinh (Cayman) Ltd.	December 31, 2020 $ 7,127,000 - 3,064,610 18,967,581 $ 29,159,191	December 31, 2019
		7,526,500 602,120 3,236,395 20,753,559
		32,118,574

(ix) Leases

• 1) The rental income of the Consolidated Company from leasing its plants to its related parties, recognized as other income, was as follows:

		For the years ended
		December 31
		2020 2019
Associates and joint ventures
Nan Ya Technology Corporation	$	263,341 258,976

The rentals charged to related parties are determined based on the local market prices, and rents are collected monthly depending on the contract.

• 2) The rental expenses of the Consolidated Company's offices and buildings leased its related parties, recognized as operating costs and expenses, were as follows:

The Consolidated Company rented an office building and a piece of land from Formosa Plastics Corporation. The rentals charged to related parties are determined based on the local market prices. For the years ended December 31, 2020 and 2019, the Consolidated Company recognized the amount of $210 and $564 as interest expense, respectively. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to $1,121 and 26,385, respectively.

The Consolidated Company rented an office building from Formosa Chemicals and Fiber Corporation. The rentals charged to related parties are determined based on the local market prices. For the years ended December 31, 2020 and 2019 amount to $207 and $584 as interest expense, respectively. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to $0 and $26,918, respectively.

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76

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Consolidated Company rented an office building from Ming Chi University Of Technology. The rentals charged to related parties are determined based on the local market prices. For the years ended December 31, 2020 and 2019 amount to $940 and $984 as interest expense, respectively. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to 64,808 and $67,947, respectively.

(x) Other

	For the year	For the year
	ended
	December	31,
	2019
Associates－Formosa Plastics Corporation	$	10

For the year ended December 31, 2019, the Consolidated Company purchased official vehicles from Formosa Plastics Corporation, which were managed assets, and recognized as miscellaneous purchases. The Consolidated Company did not have similar transactions for the year ended December 31, 2020.

• (d) Key management personnel compensation

Key management personnel compensation comprised:

Key management personnel compensation comprised:
Short-term employee benefits	For the years ended December 31
	2020 $ 149,956	2019
		143,949

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged assets	Object	Usage	December 31, 2020 $ 1,227,750 7,529,494 $ 8,757,244	December 31, 2019 1,271,053 7,529,494 8,800,547
Current Financial asset at fair value through other comprehensive income－stock of Formosa Plastics Corporation Land (include idle land) Total	Others Bank loans	The collateral to provisional execution in litigation Bank loans

(9) Significant Commitments and contingencies:

(a) Outstanding standby letter of credit (b) Endorsements and guarantees (c) Bonding guarantees by banks (d) Letters of credit guarantees by banks	December 31, 2020 December 31, 2019 $ 1,661,064 2,358,537 29,159,191 32,118,574 35,000 29,000 32,000 24,000

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (e) Formosa Ha Tinh (Cayman) Ltd., Company’s investees, signed a syndicated line of credit with a group of financial institutions amounting to USD 1,485,000 thousand, for its operational needs. According to the requirement of the consortium, the Company has to offer a letter of undertaking or a letter of support based on its ownership of 11.432% and commit to monitor the operations of Formosa Ha Tinh (Cayman) Ltd. to ensure that it complete its financial obligation.

• (f) Nan Ya Electronic Materials (Huizhou) Co., Ltd, a Company's investee, planned to apply for a fiveyear syndicated loan with a total amount of no more than CNY 1,000,000 thousand, with a group of financial institutions, among which Mega International Commercial Bank Suzhou Branch and Fubon Bank (China) Co., Ltd. act as leading banks. According to the requirement of the consortium, the Company has to offer a letter of support, and commit to monitor the operations of Nan Ya Electronic Materials (Huizhou) Co., Ltd to ensure that it completes its financial obligation.

• (g) Litigation between the Company and DBTEL Incorporated

The Company’s client, DBTEL Inc. (DBTEL), placed several orders from the Company concerning LCD monitors since May 2003. However, in June 2004, it decided to cancel some of them, even demanding the Company to postpone its delivery; and in some cases, it went to a certain extent as to refuse accepting the goods delivered by the Company, resulting in a stock up of both raw materials and finished products in the Company’s warehouse amounting to USD 5,409,815 and TWD 100,846,141. In light of this matter, the Company filed a lawsuit against DBTEL to the Taiwan High Court on April 6, 2006, demanding for compensation for the damage caused by DBTEL. In reply, as stated in the second judgement rendered after the case has been remanded by Taiwan High Court on April 22, 2020, the original judgement which ordered DBTEL to pay the amount exceeding USD 5,395,363 and NTD 100,846,141 (both including principal and interest), related provisional execution and litigation fee were abolished. According to the aforementioned abolishment, the application the Company made in the judgement of the court of the first instance and the application for provisional execution were both denied. The rest of the appeal was also denied. DEBTEL has appealed to a higher court and the case is being adjudicated on the Supreme Court. The Company will file a favorable response actively.

(10) Losses Due to Major Disasters: None

(11) Subsequent Events: None

(12) Other:

A summary of current-period employee benefits, depreciation, and amortization, by function, was as follows:

follows:
by function by item	For the years ended December 31,
	2020				2019
	Operating Costs	Operating expenses	Non-Operating expenses	Total	Operating Costs	Operating expenses	Non-Operating expenses	Total
Employee benefit Salaries Labor and health insurance Pension expenses Remuneration of directors Others personnel expenses Depreciation expenses Amortization expenses	28,590,039 2,034,455 1,342,729 - 1,199,501 14,439,647 1,309,863	5,907,723 354,685 298,915 36,197 222,574 763,667 244,914	- - - - - 19,385 -	34,497,762 2,389,140 1,641,644 36,197 1,422,075 15,222,699 1,554,777	29,371,912 2,103,858 1,638,905 - 1,249,637 14,546,276 1,039,106	5,432,775 363,328 350,848 35,172 211,038 681,407 247,073	- - - - - 30,780 -	34,804,687 2,467,186 1,989,753 35,172 1,460,675 15,258,463 1,286,179

(Continued)

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(13) Other disclosures:

• (a) Information on significant transactions:

• (i) Loan to other parties: Please see attached Table 1.

• (ii) Guarantees and endorsements for other parties: Please see attached Table 2.

• (iii) Information regarding securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures): Please see attached Table 3.

• (iv) Information regarding individual securities acquired or disposed of with accumulated amount exceeding the lower of TWD300 million or 20% of the capital stock: Please see attached Table 4.

• (v) Information regarding acquisition of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: None

• (vi) Information regarding disposal of individual real estate with amount exceeding the lower of TWD300 million or 20% of the capital stock: Please see attached Table 5.

• (vii) Information regarding related-party transactions for purchases and sales with amounts exceeding the lower of TWD100 million or 20% of the capital stock: Please see attached Table 6.

• (viii) Information regarding receivables from related parties with amounts exceeding the lower of TWD100 million or 20% of the capital stock: Please see attached Table 7.

• (ix) Information regarding trading in derivative financial instruments: None.

• (x) Significant transactions and business relationship: Please see attached Table 8.

• (b) Information on investees: Please see attached Table 9.

• (c) Information on investment in mainland China: Please see attached Table 10.

• (d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Chang Gung Medical Foundation	876,733,453	% 11.05
Formosa Plastics Corporation	783,356,866	% 9.87
Formosa Chemicals and Fiber Corporation	413,327,750	% 5.21

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (i) The information on major shareholders, which is provided by the Taiwan Depository & Clearing Corporation, summarized the shareholders who held over 5% of total non-physical common stocks and preferred stocks (including treasury stocks) on the last business date of each quarter. The registered non-physical stocks may be different from the capital stocks disclosed in the financial statement due to different calculation basis.

• (ii) If share are entrusted, the above information regarding such shares will be revealed by each trustors of individual trust account. The shareholders holding more than 10% of the total shares of the company should declare insider’s equity according to Securities and Exchange Act. The numbers of the shares declared by the insider include the shares of the trust assets which the insider has discretion over use. For details of the insider’s equity announcement please refer to the TWSE website.

(14) Segment information:

• (a) General Information

The Consolidated Company’ s four reportable segments are: plastics products, plastic materials, electronic materials and fiber products. Plastic products department mainly engaged in the manufacture and sale of flexible PVC sheets and other plastics processing products; plastic materials department is mainly engaged in the manufacture and sale of ethylene glycol and other plastic petrochemical raw materials; electronic materials department is mainly engaged in the manufacture and sale of copper clad laminate; fiber products department is mainly engaged in the manufacture and sale of polyester products.

The Consolidated Company’s reportable segments are responsible for the Consolidated Company’s strategic business units, including the manufacturing and supplying of different products. As each strategic business unit requires different technology and marketing strategies, each unit is administered individually.

(b) Segment revenue and operating results

The Consolidated Company uses the internal management report that the chief operating decision maker reviews as the basis to determine resource allocation and make a performance evaluation. The internal management report includes profit before taxation, excluding any shares of profit (loss) of associates and joint ventures accounted for using equity method, income tax, extraordinary gains and losses, and foreign exchange gains and losses, because they are managed on a group basis, and hence they are not allocated to each reportable segment. In addition, not all reportable segments include depreciation and amortization of significant non-cash items. The reportable amount is similar to that in the report used by the chief operating decision maker.

There were no material differences between the accounting policies adopted for the Consolidated Company’ s operating segments and those described in Note 4. The terms and conditions for the Consolidated Company’ s intersegment sales and transfers are the same as those of third-party transactions, which are measured at market price.

(Continued)

80

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Operating segments are combined and reconciled as follows:

Revenue： Net revenue from external customers Net revenue from sales among intersegments Interest revenue Total revenue Interest expense Depreciation and amortization Share of profit (loss) of associates and joint ventures accounted for using equity method Reportable segment profit or loss Reportable segment assets Reportable segment liabilities Revenue： Net revenue from external customers Net revenue from sales among intersegments Interest revenue Total revenue Interest expense Depreciation and amortization Share of profit (loss) of associates and joint ventures accounted for using equity method Reportable segment profit or loss Reportable segment assets Reportable segment liabilities				For the ye	ar ended Decemb	er 31, 2020		Total 273,353,806 - 754,444
		Plastics Product $ 40,920,730 1,232,735 182,178 $ 42,335,643 $ 81,079 1,536,439 $ 4,001,820 $ 39,620,770 $ 10,631,665	Plastics Material 64,901,861 7,132,530 10,023 72,044,414 514,137 4,940,255 2,381,453 87,875,539 11,933,877	Electronic Materials 119,777,239 19,699,701 634,626 140,111,566 216,713 7,764,324 13,763,789 157,820,643 34,304,806 For the ye	Polyester Product 43,580,158 574,406 2,006 44,156,570 174,919 1,858,549 1,790,083 32,289,602 10,187,185 ar ended Decemb	Other Department 4,173,818 3,197,663 227,283 7,598,764 631,143 677,909 19,939,020 448,671,743 171,398,847 er 31, 2019	Reconciliations - (31,837,035) (301,672) (32,138,707) (301,672) - (11,438,425) (181,565,950) (10,330,511)
								274,108,250
								1,316,319 16,777,476 6,643,303 30,437,740
								584,712,347
								228,125,869
								Total 286,303,059 - 1,090,433
		Plastics Product $ 42,529,381 1,294,908 217,255 $ 44,041,544 $ 95,805 1,520,694 $ 3,222,819 $ 36,222,891 $ 10,417,840	Plastics Material 72,185,495 8,277,826 148,752 80,612,073 892,028 4,733,890 (2,549,569) 76,553,181 19,255,892	Electronic Materials 112,257,646 19,627,835 565,513 132,450,994 295,524 7,849,577 7,979,595 139,519,674 29,203,048	Polyester Product 55,150,576 991,997 1,385 56,143,958 204,706 1,823,620 2,112,671 34,504,449 10,063,287	Other Department 4,179,961 3,704,696 631,436 8,516,093 606,273 616,861 22,471,164 451,894,399 142,497,488	Reconciliations - (33,897,262) (473,908) (34,371,170) (473,908) - (6,547,650) (184,015,915) (12,329,576)
								287,393,492
								1,620,428 16,544,642 11,838,753 26,689,030
								554,678,679
								199,107,979

Further explanations of the significant reconciling items of reportable segment information exhibited above are described as follows:

The eliminations of the Consolidated Company’s intersegment revenue amounted to $32,138,707 and $34,371,170 in 2020 and 2019, respectively.

(c) Geographic information

The Consolidated Company’ s revenues from continuing operations from external customers by location of operations and information about its non-current assets by location of assets are as follows:

Geographic Net Revenue from External Customers: Taiwan China and HK U.S.A. Others	For the years ended December 31	For the years ended December 31
	2020 $ 83,518,817 117,166,405 31,249,908 41,418,676 $ 273,353,806	2019
		82,326,864 116,321,519 37,218,261 50,436,415
		286,303,059

(Continued)

81

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Geographic Non-current Assets: Taiwan China and HK U.S.A.	December 31, 2020 $ 92,760,173 51,609,299 45,014,165 $ 189,383,637	December 31, 2019
		87,701,251 49,900,319 35,563,525
		173,165,095

Non-current assets include property, plant and equipment, intangible assets, technology development expense, prepayments for purchase of equipment and other assets, but do not include financial instruments, deferred tax assets, post-employment benefit assets, and non-current assets arising from insurance contracts.

• (d) Information about major customers

There is no single customer’s sale which exceeds 10% of the Consolidated Company’s revenues.

��

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES LENDING TO OTHER PARTIES FOR THE YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan Dollars)

TABLE 1

No.	Name of Lenders	Name of Borrowers	Account Name	Related Party	Highest Balance of Financing to Other Parties during the Period	Ending Balance	Actual Usage during the Period	Range of Interest Rates during the Period.	Purposes of Fund Financing for the Borrowers (Note 1)	Transaction Amount for Business Between Two Parties (Note 2)	Reasons for Short-term Financing	Allowance for Bad Debt	Collateral	Collateral	Individual Funding Loan Limits (Note 3.4)	Maximum Limitation on Fund Financing (Note 3.4)
													Item	Value
0 0 0 0 0 0 0 0 0 0 1 1 2 2	The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Nan Ya Plastics Corporation America Nan Ya Plastics Corporation America Nan Ya PCB Corporation Nan Ya PCB Corporation	Formosa Plastics Group Investment Corp. (Note 6) Wellink Technology Corporation (Note 6) PFG Fiber Glass Corporation(Note 6) Nan Ya Plastics (Hong Kong) Co., Ltd. (Note 6) Nan Chung Petrochemical Corporation (Note 6) Formosa Heavy Industries Corporation Formosa Petrochemical Corporation Formosa Plastics Corporation Formosa Chemicals and Fiber Corporation Formosa Plastics Marine Corporation Nan Ya Plastics Corporation Texas (Note 6) Nan Ya Plastics Corporation U.S.A. (Note 6) The Company (Note 6) Nan Ya PCB (HK) Corporation (Note 6)	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	YES YES YES YES YES YES YES YES YES YES YES YES YES YES	100,000 100,000 500,000 500,000 500,000 9,000,000 10,000,000 8,000,000 8,000,000 7,683,706 18,245,120 855,240 7,000,000 100,000	100,000 100,000 500,000 500,000 500,000 5,700,000 4,500,000 4,500,000 4,500,000 6,203,200 10,262,880 855,240 3,000,000 100,000	- - - - - - - - - 4,263,200 10,262,880 214,755 3,000,000 -	- - - - 1.229931%~1.418142% - - - - 1.229561%~1.418142% 1.315%~2.937% 1.315%~2.937% 1.230%~1.418% -	2 2 2 2 2 2 2 2 2 2 2 2 2 2	- - - - - - - - - - - - - -	Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital	- - - - - - - - - - - - - -	� � � � � � � � � � � - - �	- - - - - - - - - - - - - -	86,154,217 86,154,217 86,154,217 86,154,217 86,154,217 86,154,217 86,154,217 86,154,217 86,154,217 86,154,217 20,648,695 20,648,695 8,090,672 8,090,672	172,308,434 172,308,434 172,308,434 172,308,434 172,308,434 172,308,434 172,308,434 172,308,434 172,308,434 172,308,434 41,297,390 41,297,390 16,181,345 16,181,345

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No.	Name of Lenders	Name of Borrowers	Account Name	Related Party	Highest Balance of Financing to Other Parties during the Period	Ending Balance	Actual Usage during the Period	Range of Interest Rates during the Period.	Purposes of Fund Financing for the Borrowers (Note 1)	Transaction Amount for Business Between Two Parties (Note 2)	Reasons for Short-term Financing	Allowance for Bad Debt	Collateral	Collateral	Individual Funding Loan Limits (Note 3.4)	Maximum Limitation on Fund Financing (Note 3.4)
													Item	Value
4 4 4 5 5 5 6 6 8 8 8 8 8 9 9 10 10	Wen Fung Industrial Co., Ltd. Wen Fung Industrial Co., Ltd. Wen Fung Industrial Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Plastics (Huizhou) Co., Ltd. Nan Ya Plastics (Huizhou) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics (Nantong) Co., Ltd. China Nantong Huafeng Co., Ltd. China Nantong Huafeng Co., Ltd.	Wellink Technology Corporation (Note 6) Formosa Fairway Corporation Formosa Environmental Technology Corporation PFG Fiber Glass (Kunshan) Co., Ltd. (Note 6) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 6) Nan Ya Plastics (Ningbo) Co., Ltd. (Note 6) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 6) Nan Ya Plastics (Ningbo) Co., Ltd. (Note 6) Xiamen Haicang Investment Group Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 6) Nan Ya Plastics (Ningbo) Co., Ltd. (Note 6) PFG Fiber Glass (Kunshan) Co., Ltd. (Note 6) Nan Ya Plastics (Zhengzhou) Co., Ltd. PFG Fiber Glass (Kunshan) Co., Ltd. (Note 6) Nan Ya Plastics (Ningbo) Co., Ltd. (Note 6) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 6) Nan Ya Plastics (Ningbo) Co., Ltd. (Note 6)	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES YES	23,000 15,000 60,000 52,429 567,979 729,634 1,048,576 533,026 87,381 139,810 43,691 39,322 139,810 21,845 1,651,507 166,025 157,286	23,000 15,000 60,000 - 567,979 345,156 1,048,576 109,227 87,381 139,810 43,691 - 100,489 - 463,121 166,025 146,364	- 15,000 60,000 - 567,979 345,156 1,048,576 109,227 87,381 139,810 43,691 - 100,489 - 463,121 166,025 146,364	- 1.230% 1.230% 3.08%~3.08% 3.08%~3.32% 3.08%~3.48% 3.08%~3.48% 3.08%~3.48% 3.08%~3.48% 3.08%~3.32% 3.08%~3.08% 3.24%~3.48% 3.08%~3.48% 3.08%~3.08% 3.08%~3.48% 3.08%~3.48% 3.08%~3.32%	2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2	- - - - - - - - - - - - - - - - -	Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital	- - - - - - - - - - - - - - - - -	� � � � - � � � - - - � - � � � �	- - - - - - - - - - - - - - - - -	25,149 100,595 125,744 1,362,738 1,362,738 1,362,738 1,752,748 1,752,748 564,802 564,802 564,802 564,802 564,802 5,201,519 5,201,519 169,192 169,192	251,487 251,487 251,487 2,725,472 2,725,472 2,725,472 3,505,491 3,505,491 706,004 706,004 706,004 706,004 706,004 10,403,038 10,403,038 338,384 338,384

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No.	Name of Lenders	Name of Borrowers	Account Name	Related Party	Highest Balance of Financing to Other Parties during the Period	Ending Balance	Actual Usage during the Period	Range of Interest Rates during the Period.	Purposes of Fund Financing for the Borrowers (Note 1)	Transaction Amount for Business Between Two Parties (Note 2)	Reasons for Short-term Financing	Allowance for Bad Debt	Collateral	Collateral	Individual Funding Loan Limits (Note 3.4)	Maximum Limitation on Fund Financing (Note 3.4)
													Item	Value
11 11 12 12 12 13 13 13 13	Nantong Huafu Plastics Co., Ltd. Nantong Huafu Plastics Co., Ltd. Nan Ya Electric (Nantong) Co., Ltd. Nan Ya Electric (Nantong) Co., Ltd. Nan Ya Electric (Nantong) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd.	PFG Fiber Glass (Kunshan) Co., Ltd. (Note 6) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 6) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 6) PFG Fiber Glass (Kunshan) Co., Ltd. (Note 6) Nan Ya Plastics (Ningbo) Co., Ltd. (Note 6) Nan Ya Plastics (Ningbo) Co., Ltd. (Note 6) PFG Fiber Glass (Kunshan) Co., Ltd. (Note 6) Nan Ya PCB (Kunshan) Corporation (Note 6) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 6)	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	YES YES YES YES YES YES YES YES YES	31,457 43,691 43,691 65,536 314,573 262,144 327,680 1,660,246 4,910,832	- 43,691 43,691 - 52,429 65,536 - 1,511,697 2,970,966	- 43,691 43,691 - 52,429 65,536 - 1,511,697 2,970,966	3.32%~3.32% 3.24%~3.48% 3.24%~3.24% 3.08%~3.24% 3.08%~3.48% 3.08%~3.48% 3.08%~3.48% 3.08%~3.48% 3.08%~3.48%	2 2 2 2 2 2 2 2 2	- - - - - - - - -	Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital Operating capital	- - - - - - - - -	� � - � � � � - �	- - - - - - - - -	47,618 47,618 609,354 609,354 609,354 30,054,767 30,054,767 30,054,767 30,054,767	95,233 95,233 1,218,708 1,218,708 1,218,708 60,109,530 60,109,530 60,109,530 60,109,530

Note 1 � (a) Those with business contact please fill in 1; (b) Those necessary for short-term financing please fill in 2.

Note 2 � Amount from business contact stands for the sum of purchases and sales.

• Note 3�Capital loaned to other parties should not exceed 50% of the lender’s net worth, of which the sum loaned to non-interested parties for capital requirements should not exceed 40% of the net worth of borrower. The cap amount of loans to associates and interested parties should not exceed 25% of the equity of the lenders. Other parties should not exceed 20% of the lender’s net worth.

• Note 4 � Subsidiaries' capital loaned to associates and interested parties should not exceed 50% of the equity of the lenders. Other parties should not exceed 40% of the lender’s net worth.

• The subsidiaries' cap amount of loans to other parties should not exceed 100% of its equity. Non-interested parties should not exceed 40% of its net worth. However, subsidiaries' capital loaned to the parties located in non-Taiwan and directly or indirectly held by the company 100% of the shares are not be limited.

• Note 5�Reporting currency of Nan Ya Plastics corporation, America and Nan Ya Plastics corporation USA are denominated in USD, and the exchange rate of TWD to USD as of December 31, 2020 (in average) is 28.508(29.567)�1.

• Reporting currency of Nan Ya Plastics (Hong Kong) Co., Ltd and Superior World Wide Trading Co., Ltd. are denominated in HKD, and the exchange rate of TWD to HKD as of December 31, 2020 (in average) is 3.6549(3.7907)�1.

Note 6 � This transaction has already been written off during the consolidation process.

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES GUARANTEES AND ENDORSEMENTS FOR OTHER PARTIES FOR THE YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan Dollars)

TABLE 2

				B=A/2		C			D=C/SE	A=S/E*1.3
No	Endorsement Guarantee Provider	Counterparty of Guarantee and Endorsement		Limitation Amount of Guarantees and Endorsements for a Specific Enterprise	Highest Balance for Guarantee and Endorsements during the Period	Balance of Guarantees and Endorsements as of December 31, 2020	Amount Secured by Guaranteedand Endorsed Property	Amount of Endorsement /Guarantee Collateralized by Properties	Ratio of Accumulated Amounts of Guarantees and Endorsements to Net Worth of the Latest Financial Statements	Maximum Amounts for Guarantees and Endorsements	Parent Company Endorses /Guarantees to Third Parties on Behalf of Subsidiary	Subsidiary Endorses /Guarantees to Third Parties on Behalf of Parent Company	Endorsements /Guarantees to the Third Parties on Behalf of the Companies in Mainland China
		Name	Relationship with The Company (Note)
0 0 0 0 1	The Company The Company The Company The Company Nan Ya Plastics Corporation America	Formosa Industries Corporation Formosa Group (Cayman) Ltd. Formosa Ha Tinh (Cayman) Ltd. Formosa Resources Corporation Nan Ya Plastics Corporation Texas	1 6 6 6 4	9,025,177 224,000,964 224,000,964 224,000,964 26,843,304	427,620 7,127,000 19,651,978 3,064,610 97,482	- 7,127,000 18,967,581 3,064,610 -	- 7,127,000 18,967,581 3,064,610 -	- - - - -	0.00% 2.07% 5.50% 0.89% 0.00%	448,001,927 448,001,927 448,001,927 448,001,927 53,686,607	N N N N Y	N N N N N	N N N N N

Note1: The total amount of guarantees and endorsements by the company shall not exceed 1.3 times of the company's net value, and the amount of guarantees and endorsements for a specific enterprise shall not exceed one half of the foregoing total.

Note2: There are seven conditions in which the Company may have guarantees or endorsements for other parties as follows:

• (1)The Company has business relationship.

• (2)The Company holds directly and indirectly more than 50% of the voting shares of the subsidiaries.

• (3)In aggregate, the Company holds directly or its subsidiaries hold indirectly more than 50% of the investee.

• (4)Subsidiaries in which the Company holds directly or indirectly more than 90% of the voting shares make endorsement and guarantees for each other.

• (5)The Company is required to provide guarantees or endorsements for the construction project based on the construction contract.

• (6)The stockholders of the Company provide guarantees or endorsements for the investee in proportion to their stockholding percentage.

• (7)According to Consumer Protection Act, companies are required to provide guarantees and endorsements for joint and several libilities if take part in business of preconstruction real estate.

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES INFORMATION REGARDING SECURITIES HELD AT THE REPORTING DATE (SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES NOT INCLUDED) DECEMBER 31, 2020 (Expressed in thousands of New Taiwan Dollars)

TABLE 3

Security Holder	Category and Name of Security	Relationship Between Issuer of Security and the Company which Holds Securities	Account Name	December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020	Highest Percentage of Ownership During the Year	Notes
				Number of Shares (in thousands)	Carrying Value	Shareholding Percentage	Market Value or Net Asset Value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Mega Internaitonal Private USD Money Market Formosa Plastics Corporation Formosa Chemicals and Fiber Corporation Formosa Group Ocean Marine Investment Corporation Formosa Plastics Corporation U.S.A. Ostendo Technologies Inc. Formosa Plastics Maritime Corp. Formosa International Development Co., Ltd. Mai Liao Harbor Administration Corp. Formosa Plastics Marine Corporation ASIA Pacific Investment Co. Formosa Technologies Corporation WK Technology Fund Ltd. WK Technology Fund IV Ltd. Central Leasing Corp. Chinese Television System Inc. China Investment & Development Company, Limited	- Other related parties Other related parties Other related parties Other related parties - Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties - - - - -	Financial assets valued at FVTPL �current Financial assets valued at FVTOCI�current Financial assets valued at FVTOCI�current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current	12,479 294,793 140,520 3 2 150 352 18,255 39,562 2,429 63,717 2,925 326 460 1,779 1,769 1,287	3,888,883 28,418,056 11,902,014 5,685,107 286,442 - 215,173 266,735 780,924 313,958 2,439,310 93,747 6,310 4,490 - 37,277 6,926	- 4.63% 2.40% 19.00% 0.51% 0.12% 18.00% 18.00% 17.98% 15.00% 14.99% 12.50% 1.63% 1.08% 1.07% 1.04% 0.80%	3,888,883 28,418,056 11,902,014 5,685,107 286,442 - 215,173 266,735 780,924 313,958 2,439,310 93,747 6,310 4,490 - 37,277 6,926	- 4.63% 2.40% 19.00% 0.51% 0.12% 18.00% 18.00% 17.98% 15.00% 14.99% 12.50% 1.63% 1.08% 1.07% 1.04% 0.80%	Note 1

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Security Holder	Category and Name of Security	Relationship Between Issuer of Security and the Company which Holds Securities	Account Name	December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020	Highest Percentage of Ownership During the Year	Notes
				Number of Shares (in thousands)	Carrying Value	Shareholding Percentage	Market Value or Net Asset Value
The Company The Company The Company The Company Nan Ya Plastics Corporation America Nan Ya Plastics Corporation America Nan Ya Plastics Corporation America Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Hong Kong) Co., Ltd. Formosa Plastics Group Investment Corp. Formosa Plastics Group Investment Corp.	Taiwan Aerospace Corp. Guang Yuan Securities Investment Consulting Corporation Mega Growth Capital Venture Formosa Ha Tinh (Cayman) Ltd. Sutton (Bonds) American Overseas Reinsurance Co., Ltd. (Preferred Stock) MBIA Insurance Corp. (Preferred Stock) Hua Ya (Dong Ying) Plastics Corp. Hua Ya (Wu Hu) Plastics Corp. WK Technology Fund Ltd. WK Technology Fund IV Ltd.	- - - - - - - - - - -	Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTPL �non current Financial assets valued at FVTPL �non current Financial assets valued at FVTPL �non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current Financial assets valued at FVTOCI�non current	1,070 3,750 2,500 621,178 - - - - - 1,935 658	14,372 21,450 20,458 8,145,932 248,972 105,481 203,775 341,170 390,831 9,359 14,968	0.79% 3.91% 1.97% 11.43% - - - 15.00% 15.00% 2.42% 3.60%	14,372 21,450 20,458 8,145,932 248,972 105,481 203,775 341,170 390,831 9,359 14,968	0.79% 3.91% 1.97% 11.43% - - - 15.00% 15.00% 2.42% 3.60%

Note 1 � The Company pledged its shares of Formosa Plastics Corporation of 12,736 thousand common shares amounting to $1,227,750.

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES

RMATION REGARDING INDIVIDUAL SECURITIES ACQUIRED OR DISPOSED OF WITH ACCUMULATED AMOUNT EXCEEDING THE LOWER OF 300 MILLION OR 20% OF THE CAPITAL ST FOR THE YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan Dollars)

TABLE 4

Company Name	Category and Name of Security	Financial Statement Account	Counter-party	Relationship	Beginning Balance	Beginning Balance	Purchases	Purchases	Sales	Sales	Sales	Sales	Ending Balance	Ending Balance
					Shares (in thousands)	Amount	Shares (in thousands)	Amount	Shares (in thousands)	Price	Carrying Value	Gain/Loss on Disposal	Shares (in thousands)	Amount
Nan Ya PCB Corporation Nan Ya PCB (Hong Kong) Corporation Nan Ya Plastics Corporation America The Company Nan Ya Plastics (Hong Kong) Co., Ltd. The Company	Nan Ya PCB (Hong Kong) Corporation Nan Ya PCB (Kunshan) Corporation Nan Ya Plastics Corporation Texas Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. Formosa Plastics Construction Corporation	Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method	Nan Ya PCB (Hong Kong) Corporation Nan Ya PCB (Kunshan) Corporation Nan Ya Plastics Corporation Texas Nan Ya Plastics (Hong Kong) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. Formosa Plastics Construction Corporation	Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method Investments accounted for using equity method	1,223,820 - 3 953,253 - 10,000	9,603,122 9,589,396 8,565,565 85,283,330 1,886,579 75,521	374,400 - - 23,790 - 50,000	1,456,560 1,456,560 4,660,160 892,371 892,371 500,000	- - - - - -	- - - - - -	- - - - - -	- - - - - -	1,598,220 - 3 977,043 - 60,000	11,534,930 (Note1.2) 11,521,860 (Note1.2) 12,306,315 (Note1.2) 94,503,253 (Note1.2) 4,256,031 (Note1.2) 568,402 (Note1.2)

Note 1 � End of period amount includes investment income and transaction adjustment under equity method and the effect of exchange changes.

Note 2 � This transaction has already been written off during the consolidation process.

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES

ORMATION REGARDING DISPOSAL OF INDIVIDUAL REAL ESTATE WUTH AMOUNT EXCEEDING THE LOWER OF 300 MILLION OR 20% OF THE CAPITAL STO FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

TABLE 5

TABLE 5
Company Name	Name of Property	Transaction Date	Acquisition Date	Book Value	Transaction Amount	Status of Payment	Gains (Loss) on Disposal	**Counter-party **	Relationship	Purpose of Disposal	Reference for Determining Price	Others
Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd.	Right-of-use asset (Land)	2020.06	2003.11	42,579	304,789	The full amount has been collected on July 2020.	261,371	Kunshan Guochuang Investment Group Co., Ltd.	Non-related parties	Disposal of Idle Land	Based on the government repurchase land price of state-owned construction land use right of Kunshan Economic and Technological Development Zone Planning and Construction Bureau.	None

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES

INFORMATION REGARDING RELATED-PARTY TRANSACTIONS FOR PURCHASES AND SALES WITH AMOUNTS EXCEEDING THE LOWER OF 100 MILLION OR 20% OF THE CAPITAL STOCK FOR THE YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan Dollars)

TABLE 6

TABLE 6
Company Name	Related Party	Relationship	Transaction Details				Abnormal Transaction		Notes/Accounts (Payable) Receivable		Notes
			Purchases / (Sales)	Amount	% to total purchase/(sales)	Credit Period	**Unit Price **	Payment Term	Ending Balance	% to Total
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Nan Ya PCB Corporation Nan Ya PCB Corporation Nan Ya PCB Corporation Nan Ya PCB (Kunshan) Corporation Nan Ya PCB (Kunshan) Corporation Nan Ya PCB (Kunshan) Corporation Nan Ya PCB (Kunshan) Corporation Nan Chung Petrochemical Corporation Nan Chung Petrochemical Corporation Nan Chung Petrochemical Corporation Nan Chung Petrochemical Corporation Wellink Technology Corporation PFG Fiber Glass Corporation PFG Fiber Glass Corporation PFG Fiber Glass Corporation	Formosa Plastics Corporation Formosa Chemicals and Fiber Corporation Nan Ya PCB Corporation Formosa Petrochemical Corporation Nanya Technology Corporation Formosa Heavy Industries Corporation Formosa Taffeta Co., Ltd. Nan Ya Plastics Corporation U.S.A. Nan Ya Plastics Corporation America Nan Ya Electronic Materials (Huizhou) Co., Ltd. Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Formosa Industries Corporation Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. Nan Chung Petrochemical Corporation Nan Ya Plastics (Guangzhou) Co., Ltd. Formosa Plastics Corporation Formosa Chemicals and Fiber Corporation Formosa Petrochemical Corporation PFG Fiber Glass Corporation Nan Chung Petrochemical Corporation The Company Nan Ya PCB (Kunshan) Corporation Formosa Advanced Technologies Co., LTD. Nan Ya PCB Corporation Nan Ya Electronic Materials (Kunshan) Co., Ltd. Formosa Advanced Technologies Co., LTD. Wellink Technology Corporation The Company China Man-made Fiber Corporation Formosa Petrochemical Corporation The Company Nan Ya PCB (Kunshan) Corporation The Company Formosa Chemicals and Fiber Corporation Formosa Petrochemical Corporation	Other related parties Other related parties Subsidiaries Associates Associates Associates Other related parties Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Associates Subsidiaries Subsidiaries Subsidiaries Subsidiaries Other related parties Other related parties Associates Subsidiaries Subsidiaries Parent Subsidiaries Associates Subsidiaries Same chairman Associates Same chairman Parent Other related parties Associates Parent Subsidiaries Parent Other related parties Other related parties	(Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) (Sales) Purchases Purchases Purchases Purchases Purchases Purchases Purchases (Sales) (Sales) Purchases (Sales) Purchases (Sales) (Sales) Purchases Purchases (Sales) (Sales) Purchases Purchases	(1,213,121) (7,460,636) (1,060,830) (1,152,996) (197,131) (174,988) (596,978) (574,780) (316,391) (3,962,713) (804,741) (6,303,415) (1,227,351) (144,265) (489,568) (166,282) (184,155) 11,141,397 20,526,039 24,963,737 2,599,495 2,073,749 1,060,830 8,605,502 (213,434) (8,605,502) 1,249,818 (201,128) 105,982 (2,073,749) (2,053,199) 2,875,621 166,282 (105,982) (2,599,495) 422,637 128,175	(0.85)% (5.20)% (0.74)% (0.80)% (0.14)% (0.12)% (0.42)% (0.40)% (0.22)% (2.76)% (0.56)% (4.40)% (0.86)% (0.10)% (0.34)% (0.12)% (0.13)% 12.13% 22.34% 27.17% 2.83% 2.26% 5.69% 46.19% (0.64)% (62.43)% 16.00% (1.46)% 1.36% (50.04)% (49.54)% 94.21% 5.45% (50.76)% (75.77)% 24.15% 7.33%	30 days 30 days 30 days 30 days 30 days 30 days 30 days O/A105 days O/A105 days O/A180 days O/A150 days O/A150 days O/A150 days O/A150 days O/A150 days 30 days O/A150 days 30 days 30 days 30 days 30 days 30 days 30 days 30 days 70 days 30 days 60 days 70 days 60 days 30 days 15th day of next month 15th day of next month 30 days O/A150 days 30 days 30 days 30 days	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � �	176,445 1,269,799 82,150 283,494 34,608 96,331 46,114 317,278 57,528 1,165,223 352,445 1,991,134 191,827 57,950 90,968 0 66,075 (1,224,446) (2,134,838) (2,750,104) (235,311) 0 (82,150) (872,319) 0 872,319 (147,626) 46,704 (26,916) 0 0 0 0 26,916 235,311 (33,554) (12,243)	0.89% 6.40% 0.41% 1.43% 0.17% 0.49% 0.23% 1.60% 0.29% 5.88% 1.78% 10.04% 0.97% 0.29% 0.46% 0.00% 0.33% (10.34)% (18.04)% (23.23)% (1.99)% 0.00% (2.74)% (29.13)% 0.00% 45.50% (9.18)% 2.44% (1.67)% 0.00% 0.00% 0.00% 0.00% 60.80% 73.93% (19.61)% (7.15)%	Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note

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Company Name	Related Party	Relationship	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts (Payable) Receivable	Notes/Accounts (Payable) Receivable	Notes
			Purchases / (Sales)	Amount	% to total purchase/(sales)	Credit Period	**Unit Price **	Payment Term	Ending Balance	% to Total
Nan Ya Plastics Corporation U.S.A. Nan Ya Plastics Corporation U.S.A. Nan Ya Plastics Corporation U.S.A. Nan Ya Plastics Corporation America Nan Ya Plastics Corporation America Nan Ya Plastics Corporation America Nan Ya Plastics Corporation America Nan Ya Plastics Corporation America Nan Ya Plastics Corporation Texas PFG Fiber Glass (Kunshan) Co., Ltd. PFG Fiber Glass (Kunshan) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Electronic Materials (Huizhou) Co., Ltd. Nan Ya Electronic Materials (Huizhou) Co., Ltd. Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd.	Formosa Plastics Corporation U.S.A. The Company Nan Ya Plastics Corporation America Formosa Plastics Corporation U.S.A. Nan Ya Plastics Corporation U.S.A. Formosa Industries Corporation Formosa Plastics Corporation U.S.A. The Company Formosa Plastics Corporation U.S.A. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Formosa Plastics Corporation Formosa Industries (Ningbo) Co., Ltd. The Company The Company Nan Ya Electronic Materials (Kunshan) Co., Ltd. Formosa Plastics Corporation The Company Formosa Industries (Ningbo) Co., Ltd. The Company Nanya Kyowa Plastics (Nantong) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Formosa Chemicals and Fiber (Ningbo) Corporation The Company Nan Ya Electronic Materials (Huizhou) Co., Ltd. Nan Ya PCB (Kunshan) Corporation PFG Fiber Glass (Kunshan) Co., Ltd. The Company Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. PFG Fiber Glass (Kunshan) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. The Company The Company Nan Ya Electronic Materials (Kunshan) Co., Ltd.	Other related parties Parent Subsidiaries Other related parties Subsidiaries Other related parties Other related parties Parent Other related parties Subsidiaries Subsidiaries Other related parties Other related parties Other related parties Parent Parent Subsidiaries Other related parties Parent Other related parties Parent Joint venture Subsidiaries Other related parties Parent Subsidiaries Same chairman Subsidiaries Parent Subsidiaries Subsidiaries Subsidiaries Parent Parent Subsidiaries	Purchases Purchases Purchases (Sales) (Sales) Purchases Purchases Purchases Purchases (Sales) Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases (Sales) (Sales) (Sales) Purchases Purchases (Sales) (Sales) (Sales) Purchases Purchases Purchases Purchases Purchases (Sales) (Sales)	621,221 574,780 152,987 (517,296) (152,987) 145,510 160,901 316,391 418,656 (2,657,429) 236,570 243,947 555,586 349,674 184,155 3,962,713 3,438,921 348,605 804,741 759,925 (117,924) (343,650) (3,411,215) 5,250,106 489,568 (3,438,921) (1,249,818) (236,570) 6,303,415 261,720 2,657,429 3,411,215 144,265 (109,696) (261,720)	26.50% 24.52% 6.53% (2.02)% (0.60)% 0.63% 0.70% 1.37% 100.00% (79.76)% 18.12% 22.23% 30.12% 18.96% 9.98% 48.01% 41.66% 7.06% 16.30% 15.39% (2.19)% (6.37)% (31.90)% 68.40% 6.38% (7.22)% (2.63)% (0.50)% 17.33% 0.72% 7.30% 9.38% 8.15% (4.14)% (9.89)%	payment within one month O/A 105 days payment within one month payment within one month payment within one month O/A150 days payment within one month O/A 105 days payment within one month 60 days 60 days 60 days O/A 150 days 60 days O/A 150 days O/A180 days 180 days O/A 150 days O/A 150 days 60 days O/A 150 days 60 days 60 days 60 days O/A 150 days 180 days 60 days 60 days O/A 150 days 60 days 60 days 60 days O/A 150 days O/A 150 days 60 days	- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	� � � � � - � � - � � � � � � � � � � � � - � � � � � � � � � � � � �	(70,077) (317,278) 0 0 0 0 (16,955) (57,528) (403,446) 295,724 (24,111) (17,748) (141,287) (54,884) (66,075) (1,165,223) (2,233,163) (40,748) (352,445) (85,392) 28,248 79,496 231,495 (509,100) (90,968) 2,233,163 147,626 24,111 (1,991,134) (31,626) (295,724) (231,495) (57,950) 78,043 31,626	(12.49)% (56.53)% 0.00% 0.00% 0.00% 0.00% (2.64)% (8.96)% (100.00)% 50.84% (10.62)% (18.79)% (43.61)% (16.94)% (20.39)% (33.94)% (65.05)% (5.19)% (44.90)% (10.88)% 1.55% 4.37% 27.41% (71.01)% (12.69)% 11.73% 0.78% 0.13% (49.89)% (0.79)% (7.41)% (5.80)% (31.88)% 23.19% 9.40%	Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note Note

Note � The transaction has been written off during the consolidation process.

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES

INFORMATION REGARDING RECEIVABLES FROM RELATED-PARTIES WITH AMOUNTS EXCEEDING THE LOWER OF 100 MILLION OR 20% OF THE CAPITAL STOCK DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

TABLE 7

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Periods	Allowance for Bad Debts
					Amount	Action Taken
The Company The Company The Company The Company The Company The Company The Company The Company Nan Ya PCB (Kunshan) Corporation PFG Fiber Glass Corporation PFG Fiber Glass (Kunshan) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. The Company Nan Ya Plastics Corporation America Nan Ya Plastics Corporation America Nan Ya PCB Corporation Nan Ya Plastics (Nantong) Co., Ltd.	Formosa Plastics Corporation Formosa Chemicals and Fiber Corporation Formosa Petrochemical Corporation Nan Ya Plastics Corporation U.S.A.(Note 1) Nan Ya Electronic Materials (Huizhou) Co., Ltd.(Note 1) Nan Ya Plastics (Nantong) Co., Ltd. (Note 1) Nan Ya Electronic Materials (Kunshan) Co., Ltd.(Note 1) Formosa Industries Corporation Nan Ya PCB Corporation(Note 1) The Company(Note 1) Nan Ya Electronic Materials (Kunshan) Co., Ltd.(Note 1) Nan Ya Electronic Materials (Kunshan) Co., Ltd.(Note 1) Nan Ya Electronic Materials (Huizhou) Co., Ltd.(Note 1) Nan Ya PCB (Kunshan) Corporation(Note1) Formosa Plastics Marine Corporation Nan Ya Plastics Corporation Texas(Note 1) Nan Ya Plastics Corporation U.S.A.(Note 1) The Company(Note 1) Nan Ya Plastics (Ningbo) Co., Ltd.(Note 1)	Other related parties Other related parties Assosiates Subsidiaries Subsidiaries Subsidiaries Subsidiaries Assosiates Subsidiaries Parent Subsidiaries Subsidiaries Subsidiaries Same chairman Other related parties Subsidiaries Subsidiaries Parent Subsidiaries	Receivables from related parties� 176,445 Receivables from related parties� 1,269,799 Receivables from related parties� 283,494 Receivables from related parties� 317,278 Receivables from related parties� 1,165,223 Receivables from related parties� 352,445 Receivables from related parties� 1,991,134 Receivables from related parties� 191,827 Receivables from related parties� 872,319 Receivables from related parties� 235,311 Receivables from related parties� 295,724 Receivables from related parties� 231,495 Receivables from related parties� 2,233,163 Receivables from related parties� 147,626 Other receivables from related parties� 4,263,200 Other receivables from related parties� 10,262,880 Other receivables from related parties� 214,755 Other receivables from related parties� 3,000,000 Other receivables from related parties� 463,121	10.36 7.85 6.21 1.92 2.32 2.50 4.03 5.45 9.30 10.90 9.41 12.03 1.48 8.99 note note note note note	� � � � � � � � � � � - � � � � � � �	� � � � � � � � � � � - � � � � � � �	122,580 832,238 31,443 77,494 461,503 79,204 643,064 50,084 873,319 235,311 295,724 231,495 500,469 147,626 � � � � �	� � � � � � � � � � � - � � � � � � �

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Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Periods	Allowance for Bad Debts
					Amount	Action Taken
Nan Ya Plastics (Huizhou) Co., Ltd. Nan Ya Plastics (Huizhou) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. China Nantong Huafeng Co., Ltd. China Nantong Huafeng Co., Ltd.	Nan Ya Plastics (Ningbo) Co., Ltd.(Note 1) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd.(Note 1) Nan Ya Plastics (Zhengzhou) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd.(Note 1) Nan Ya Plastics (Ningbo) Co., Ltd.(Note 1) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd.(Note 1) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd.(Note 1) Nan Ya PCB (Kunshan) Corporation(Note 1) Nan Ya Plastics (Ningbo) Co., Ltd.(Note 1) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd.(Note 1)	Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries	Other receivables from related parties� 109,227 Other receivables from related parties� 1,048,576 Other receivables from related parties� 100,489 Other receivables from related parties� 139,810 Other receivables from related parties� 345,156 Other receivables from related parties� 567,979 Other receivables from related parties� 2,970,966 Other receivables from related parties� 1,511,697 Other receivables from related parties� 146,364 Other receivables from related parties� 166,025	note note note note note note note note note note	� � � � � � � � � �	� � � � � � � � � �	� � � � � � � � � �	� � � � � � � � � �

Note� The turnover rate of other receivables from related parties cannot be calculated.

Note 1 � The transaction has been written off during the consolidation process.

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES SIGNIFICANT TRANSACTIONS AND BUSINESS RELATIONSHIP FOR THE YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan Dollars)

TABLE 8

No. (Note 1)	Company Name	Counter-party	Relationship (Note 2)	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions
				Financial Statement Item	Amount	Terms	Percentage of Consolidated Total Gross Sales or Total Assets
0 0 0 0 0 0 0 0 1 2 3 4 5 5 6 6 6 7 7 0 0 0 0	The Company The Company The Company The Company The Company The Company The Company The Company Nan Chung Petrochemical Corporation Wen Fung Industrials Co., Ltd. and its subsidiaries PFG Fiber Glass Corporation Nan Ya Plastics Corporation U.S.A. Nan Ya Plastics Corporation America Nan Ya Plastics Corporation America Nan Ya Plastics (Hong Kong) Co., Ltd. and its subsidiaries Nan Ya Plastics (Hong Kong) Co., Ltd. and its subsidiaries Nan Ya Plastics (Hong Kong) Co., Ltd. and its subsidiaries PFG Fiber Glass (Hong Kong) Corporation Limited and its subsidiaries PFG Fiber Glass (Hong Kong) Corporation Limited and its subsidiaries The Company The Company The Company The Company	Nan Ya PCB Corporation and its subsidiaries Nan Chung Petrochemical Corporation PFG Fiber Glass Corporation Nan Ya Plastics Corporation U.S.A Nan Ya Plastics Corporation America Nan Ya Plastics (Hong Kong) Co., Ltd. and its subsidiaries Superior World Wide Trading Co., Ltd. PFG Fiber Glass (Hong Kong) Corporation Limited and its subsidiaries The Company Nan Ya PCB Corporation and its subsidiaries The Company The Company Nan Ya Plastics Corporation U.S.A The Company The Company Nan Ya PCB Corporation and its subsidiaries PFG Fiber Glass (Hong Kong) Corporation Limited and its subsidiaries The Company Nan Ya Plastics (Hong Kong) Co., Ltd. and its subsidiaries Nan Ya PCB Corporation and its subsidiaries Nan Ya Plastics Corporation U.S.A Nan Ya Plastics Corporation America Nan Ya Plastics (Hong Kong) Co., Ltd. and its subsidiaries	1 1 1 1 1 1 1 1 2 3 2 2 3 2 2 3 3 2 3 1 1 1 1	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Accounts receivable Accounts receivable Accounts receivable Accounts receivable	1,088,583 166,282 53,598 574,780 316,391 12,706,462 6,556 20,286 2,073,749 166,162 2,599,495 48,807 152,987 58,922 246,026 1,721,159 256,082 1,304 2,660,364 86,328 317,278 57,528 3,759,606	30-150 days 30 days 30 days O/A 105 days O/A 105 days O/A 150-180 days O/A 150 days O/A 150 days 30 days 30 days 30 days O/A 105 days payment within one month O/A 105 days 60 days 60 days 60 days O/A 150 days 60 days 30-150 days O/A 105 days O/A 105 days O/A 150-180 days	0.40% 0.06% 0.02% 0.21% 0.12% 4.65% 0.00% 0.01% 0.76% 0.06% 0.95% 0.02% 0.06% 0.02% 0.09% 0.63% 0.09% 0.00% 0.97% 0.01% 0.05% 0.01% 0.64%

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No. (Note 1)	Company Name	Counter-party	Relationship (Note 2)	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions	Intercompany Transactions
				Financial Statement Item	Amount	Terms	Percentage of Consolidated Total Gross Sales or Total Assets
3 6 6 6 7 0	PFG Fiber Glass Corporation Nan Ya Plastics (Hong Kong) Co., Ltd. and its subsidiaries Nan Ya Plastics (Hong Kong) Co., Ltd. and its subsidiaries Nan Ya Plastics (Hong Kong) Co., Ltd. and its subsidiaries PFG Fiber Glass (Hong Kong) Corporation Limited and its subsidiaries The Company	The Company The Company Nan Ya PCB Corporation and its subsidiaries PFG Fiber Glass (Hong Kong) Corporation Limited and its subsidiaries Nan Ya Plastics (Hong Kong) Co., Ltd. and its subsidiaries Nan Ya PCB Corporation and its subsidiaries	2 3 3 3 3 1	Accounts receivable Accounts receivable Accounts receivable Accounts receivable Accounts receivable Rent revenue	235,311 107,169 201,888 28,879 296,299 207,514	30 days O/A 150-180 days 60 days 60 days 60 days 30-150 days	0.04% 0.02% 0.03% 0.00% 0.05% 0.08%

Note 1: The appointed numbers represent:

1. 0 refers to the Parent Company.

2. Subsidiaries are numbered and organized in a ascending chronological order.

Note 2: Transactions are categorized as follows:

1. Parent company to subsidiary.

2. Subsidiary to parent company.

3. Subsidiary to subsidiary.

Note 3: Disclosure of information on significant transactions and business relationship between the parent company and its subsidiaries regarding sales and accounts receivable, excluding their related purchases and accounts payable.

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES INFORMATION ON INVESTEES (EXCLUDING THOSE IN MAINLAND CHINA) FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan Dollars)

TABLE 9

TABLE 9
Investor Company	Investee Company	Location	Major Operations	Original Investment Amount		Balance as of December 31, 2020			Highest Percentage of Ownership During the Year	Net Income of Investee	Investment Income (Loss) Recognized by the Investor Company	Notes
				December 31, 2020	December 31, 2019	Shares (in thousands)	%	Carrying Value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Nan Ya Plastics Corporation U.S.A. (Note) Nan Ya Plastics Corporation America (Note) Nan Ya Plastics (Hong Kong) Co., Ltd. (Note 1) Superior World Wide Trading Co., Ltd. (Note 1) Formosa Synthetic Rubber (Hong Kong) Corporation Limited (Note) PFG Fiber Glass (Hong Kong) Corporation Limited (Note 1) Formosa Industries Corporation (Note 2) Nan Ya PCB Corporation Formosa Plastics Group Investment Corp. Nanya Technology Corporation Formosa Environmental Technology Corporation Formosa Petrochemical Corporation PFG Fiber Glass Corporation Nan Chung Petrochemical Corporation Wen Fung Industrial Co., Ltd.	U.S.A. U.S.A. Hong Kong Hong Kong Hong Kong Hong Kong Vietnam Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	production of plastic products production of plastic, polyester and chemical plastics, electronic products trading, and plastics trading and investment production of synthetic rubber products investment chemical fiber, dyeing and finishing and electric production of printed circuit board investment semiconductor production and marketing environmental protection production of chemical products production of glass fiber production of chemical products production of electronic components	313,920 7,853,605 40,059,044 33,677 4,213,858 4,495,987 8,435,875 4,480,417 76,859 52,438,472 672,370 24,647,480 2,648,131 1,000,002 214,236	313,920 7,853,605 39,166,673 33,677 4,162,010 4,495,987 8,435,875 4,480,417 76,859 52,438,472 672,370 24,647,480 2,648,131 1,000,002 214,236	2 60 977,043 14 138,333 76 - 432,745 5,000 907,304 46,257 2,201,306 100,000 100,000 18,738	100.00% 100.00% 100.00% 100.00% 33.33% 100.00% 42.50% 66.97% 100.00% 29.51% 26.99% 23.11% 100.00% 50.00% 100.00%	1,806,611 41,297,390 94,503,253 757,984 2,163,217 7,740,314 8,015,342 21,635,835 79,430 45,385,484 252,079 71,161,386 4,098,568 1,103,433 258,824	100.00% 100.00% 100.00% 100.00% 33.33% 100.00% 42.50% 66.97% 100.00% 29.70% 26.99% 23.11% 100.00% 50.00% 100.00%	48,611 1,992,139 6,872,106 34,477 (500,699) (66,309) 630,599 3,665,917 124 7,686,041 5,812 7,429,610 143,185 (98,496) 8,444	48,611 1,992,139 6,872,106 34,477 (164,284) (86,308) 268,005 2,456,661 124 2,274,089 1,568 1,717,157 (29,796) (49,034) 8,487	Note 3.4 Note 3.4 Note 3.4 Note 3.4 Note 3 Note 3.4 Note 3 Note 3.4 Note 3.4 Note 3 Note 3 Note 3 Note 3.4 Note 3.4 Note 3.4

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Investor Company	Investee Company	Location	Major Operations	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2020	Balance as of December 31, 2020	Balance as of December 31, 2020	Highest Percentage of Ownership During the Year	Net Income of Investee	Investment Income (Loss) Recognized by the Investor Company	Notes
				December 31, 2020	December 31, 2019	Shares (in thousands)	%	Carrying Value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company Nan Ya Plastics Corporation America (Note) Nan Ya Plastics Corporation America (Note) Nan Ya Plastics Corporation Texas (Note)	Formosa Automobile Sales Corporation Ya Tai Development Corporation Formosa Heavy Industries Corporation Formosa Fairway Corporation Formosa Plastics Transport Corporation Hwa Ya Science Park Management Consulting Co., Ltd. Yi Jih Development Corporation Mai Liao Power Corporation Nan YA Photonics Inc. Formosa Synthetic Rubber Corporation Formosa Resources Corporation Formosa Group (Cayman) Limited (Note) Formosa Plastics Construction Corporation Nan Ya International (Cayman) Limited (Note) FG Inc. (Note) Formosa Utility Venture, Ltd.(Note) Nan Ya Plastics Corporation Texas (Note) Formosa Olefins, L.L.C. (Note)	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Cayman Islands Taiwan Cayman Islands U.S.A. U.S.A. U.S.A. U.S.A.	production of automobile development industry machinery industry transportation business transportation business service business construction business electricity generation business LED equipment manufacturer production of synthetic rubber products mining industry investment construction business investment investment electricity generation and trading production of chemical products chemical business	945,028 53,941 2,497,721 33,340 67,254 359 13,335 5,985,465 761,820 - 7,415,940 377 600,000 - 1,137,655 228,064 13,968,920 1,960,638	945,028 53,941 2,497,721 33,340 67,254 359 58,000 5,985,465 - 446,000 7,415,940 377 100,000 18,784,619 891,746 228,064 9,407,640 1,960,638	27,046 1,304 651,706 4,699 6,566 34 1,221 601,727 10,609 - 741,594 13 60,000 - 2 - 3 -	45.00% 44.96% 32.91% 33.34% 33.33% 34.00% 29.22% 24.94% 23.02% - 25.00% 25.00% 33.33% - 10.00% 12.10% 100.00% 21.00%	259,350 18,067 7,179,892 68,267 1,177,690 3,121 20,512 12,415,371 297,265 - 6,169,287 649,229 568,402 - 1,042,417 2,289,468 12,306,315 1,844,017	45.00% 44.96% 32.91% 33.34% 33.33% 34.00% 29.22% 24.94% 23.02% 33.33% 25.00% 25.00% 33.33% 100.00% 10.00% 12.10% 100.00% 21.00%	173,301 104 566,338 (38,443) 308,015 1,176 1,730 6,702,012 90,298 (686,050) 74,886 125,884 (21,358) - (149,350) (21,404) (379,469) 2,678,094	77,988 47 186,386 (12,817) 102,673 400 505 1,671,606 12,065 (228,683) 18,721 31,471 (7,119) - (14,935) (1,739) (379,469) 562,400	Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3.4 Note 3 Note 3 Note 3.4 Note 3

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Investor Company	Investee Company	Location	Major Operations	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2020	Balance as of December 31, 2020	Balance as of December 31, 2020	Highest Percentage of Ownership During the Year	Net Income of Investee	Investment Income (Loss) Recognized by the Investor Company	Notes
				December 31, 2020	December 31, 2019	Shares (in thousands)	%	Carrying Value
Nan Ya PCB Corporation Nan Ya PCB Corporation Nan Ya PCB Corporation Nan Ya PCB (Hong Kong) Corporation Wen Fung Industrial Co., Ltd. Superior World Wide Trading Co., Ltd. (Note 1)	Nan Ya PCB (Hong Kong) Corporation Nan Ya PCB (U.S.A.) Corporation Formosa Advanced Technologies Co.,LTD. Nan Ya PCB (Kunshan) Corporation Wellink Technology Corporation P.T.Indonesia Nanya Indah Plastics Co.	Hong Kong U.S.A. Taiwan China Taiwan Indonesia	production of electronic products and investment retargeting IC packaging, testing and modules production of printed circuit board production of electronic components production of plastic products	6,477,460 3,479 472,968 6,474,281 212,017 115,371	5,020,900 3,479 472,968 5,017,721 212,017 115,371	1,598,220 1,000 13,267 - 12,739 5	100.00% 100.00% 3.00% 100.00% 100.00% 50.00%	11,534,930 14,580 487,152 11,521,860 143,447 236,557	100.00% 100.00% 3.00% 100.00% 100.00% 50.00%	325,627 1,629 1,402,677 325,553 7,644 56,659	325,627 1,629 41,970 325,553 7,644 29,633	Note 3.4 Note 3.4 Note 3 Note 3.4 Note 3.4 Note 3

Note � The reporting currency of Nan Ya Plastics Corporation U.S.A, Nan Ya Plastics Corporation America, Formosa Synthetic Rubber (Hong Kong) Corporation Limited, Formosa Group (Cayman)

Limited, Nan Ya International (Cayman) Limited, FG Inc., Formosa Utility Venture, Ltd., Nan Ya Plastics Corporation Texas, and Formosa Olefins, L.L.C is denominated in USD,

and the exchange rate of TWD to USD as of December 31, 2020 (in average) is 28.508(29.567)�1.

Note 1 � The reporting currency of Nan Ya Plastics (Hong Kong) Co., Ltd., Superior World Wide Trading Co., Ltd. and PFG Fiber Glass (Hong Kong) Corporation Limited is denominated in HKD,

and the exchange rate of TWD to HKD as of December 31, 2020 (in average) is 3.6549(3.7907)�1.

Note 2 � The reporting currency of Formosa Industries Corporation, Vietnam is denominated in VND, and the exchange rate of TWD to VND as of December 31, 2020 (in average) is 0.001234113(0.001272465)�1.

Note 3 � Investment income of the current period does not include cumulative translation adjustment and capital surplus adjustment.

Note 4 � The transaction has been written off during the consolidation process.

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NAN YA PLASTICS CORPORATION AND SUBSIDIARIES INFORMATON ON INVESTMENT IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (Expressed in thousands of New Taiwan Dollars)

TABLE 10

(a) Information regarding investments in Mainland China :

Name of the PRC Investee Company	Primary Business Scope	Amount of Paid-in Capital	Method of Investment	Investment Transferred from Taiwan as of January 1, 2020	For The Year Ended December 31, 2020	For The Year Ended December 31, 2020	Investment Transferred from Taiwan as of December 31, 2020	Current Income of Investees	Direct and Indirect Shareholding Percentage by the Company	Highest Percentage of Ownership During the Year	Investment Gain (Loss)	Carrying Value of Investment as of December 31, 2020	Accumulated Inward Remittance of Earnings as of December 31, 2020
					Outflow	Inflow
Nan Ya Plastics (Guangzhou) Co., Ltd.(Note1) Nan Ya Plastics (Xiamen) Co., Ltd.(Note1) Nan Ya Plastics (Huizhou) Co., Ltd.(Note1) Nan Ya Electronic Materials (Huizhou) Co., Ltd.(Note1) Nan Ya Trading (Huizhou) Co., Ltd.(Note1) Nan Ya Plastics (Nantong) Co., Ltd.(Note1) China Nantong Huafeng Co., Ltd.(Note1) Nantong Huafu Plastics Co., Ltd.(Note1) Nan Ya Electric (Nantong) Co.,(Note1) Nanya Kyowa Plastics (Nantong) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd.(Note1) Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd.(Note1) Nan Ya Plastics (Zhengzhou) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd.(Note1) PFG Fiber Glass (Kunshan) Co., Ltd.(Note1)	production of polyester products production of plastic products production of polyester products production of copper clad laminate trading sale of plastic products, steam and electricity trading trading production of switch gear and control panel interior decorating business production of copper clad laminate, polyester products, steam and electricity, copper clad, epoxy production of polyester products production of plastic products production of BPA and plasticizer production of glass fiber	1,998,681 775,457 2,527,462 5,489,509 32,267 4,540,736 93,004 79,111 339,275 200,988 15,159,216 7,035,085 261,737 3,081,205 4,668,263	Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment Indirect investment	1,998,681 738,752 2,418,397 5,489,509 32,267 3,008,918 99,636 71,503 339,275 100,494 15,159,216 7,035,085 130,869 1,989,308 4,487,409	- - - - - - - - - - - - - 892,371 -	- - - - - - - - - - - - - - -	1,998,681 738,752 2,418,397 5,489,509 32,267 3,008,918 99,636 71,503 339,275 100,494 15,159,216 7,035,085 130,869 2,881,679 4,487,409	87,203 115,125 127,363 486,266 447 377,606 5,657 2,224 57,904 108,888 4,533,043 (429,694) 43,503 1,409,295 (73,420)	100.00% 85.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 50.00% 100.00% 100.00% 50.00% 100.00% 100.00%	100.00% 85.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 50.00% 100.00% 100.00% 50.00% 100.00% 100.00%	87,203 97,856 127,363 486,266 447 377,606 5,657 2,224 57,904 54,444 4,533,043 (429,694) 21,752 1,409,295 (73,420)	2,437,985 1,015,972 3,396,832 6,925,380 58,928 10,297,597 340,625 96,409 1,177,143 222,630 61,722,460 (232,087) 81,482 4,256,031 7,729,271	611,825 72,820 - - - 103,612 - - - - - - - - 149,416

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Name of the PRC Investee Company	Primary Business Scope	Amount of Paid-in Capital	Method of Investment	Investment Transferred from Taiwan as of January 1, 2020	For The Year Ended December 31, 2020	For The Year Ended December 31, 2020	Investment Transferred from Taiwan as of December 31, 2020	Current Income of Investees	Direct and Indirect Shareholding Percentage by the Company	Highest Percentage of Ownership During the Year	Investment Gain (Loss)	Carrying Value of Investment as of December 31, 2020	Accumulated Inward Remittance of Earnings as of December 31, 2020
					Outflow	Inflow
Hua Ya (Dong Ying) Plastics Corp. Hua Ya (Wu Hu) Plastics Corp. Formosa Synthetic Rubber (Ningbo) Limited Corporation	production of plastic products production of plastic products synthetic rubber	254,190 624,948 12,777,590	Indirect investment Indirect investment Indirect investment	34,591 34,591 4,162,010	- - -	- - -	34,591 34,591 4,162,010	- - (500,699)	15.00% 15.00% 33.33%	15.00% 15.00% 33.33%	- - (164,284)	341,170 390,831 2,163,217	23,020 12,687 -

Note: All companies disclosed within the investment income of the current year column are recognized according to the audited financial statements of the Company, except for Formosa Synthetic Rubber (Ningbo) Co., Ltd.,

which are recognized according to the financial statements audited by an international accounting firm.

Note 1: The transaction has been written-off during the consolidation process.

(b) Quota for investments in Mainland China :

Accumulative Remittance from Taiwan to Mainland China as of December 31, 2020 (Note 1)	Amount of Investment Approved by Investment Commission, Ministry of Economic Affairs (Note 2)	Limit on the Amount of Investment in Mainland China (Note 3)
48,483,340	53,671,092	-

Note 1 � Reporting currency of Chinese subsidiaries is CNY, and the monetary amount is first translated to HKD using the exchange rate as of December 31, 2020 (in average) is 1�1.1954(1.1317), and translated to TWD using the exchange rate as of December 31, 2020 (in average) is 1�3.6549(3.7907). Note 2 � It includes the amount of $3,010,315 from capital increase out of earnings and capital increase out of capital surplus.

Note 3 � The Industrial Development Bureau of the MOEA issued a letter to the Company stating that it qualifies under Section 12 of the Statute for Upgrading Industries.

Note 4 : The accumulative remittance from Taiwan to Mainland China, end of the period includes the amount of Nan Ya Plastics (Anshan) Co., Ltd.

(c) Information on significant transactions �

For more information concerning the direct or indirect significant transactions between the Company and its Chinese investees for the year ended December 31, 2020, please refer to the attachment of note 13 for "Information on material transaction items".