Nan Ya Plastics Corporation and Subsidiaries

1 Stock Code:1303

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

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Six Months Ended June 30, 2018 and 2017

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

Contents Page 1. Cover Page 1 2. Table of Contents 2 3. Independent Auditors’ Report 3 4. Consolidated Balance Sheets 4 5. Consolidated Statements of Comprehensive Income 5 6. Consolidated Statements of Changes in Equity 6 7. Consolidated Statements of Cash Flows 7 8. Notes to the Consolidated Financial Statements (1) Company history 8 (2) Approval date and procedures of the consolidated financial 8 statements (3) New standards, amendments and interpretations adopted 8～15 (4) Summary of significant accounting policies 15～23 (5) Significant accounting assumptions and judgments, and 23～24 major sources of estimation uncertainty (6) Explanation of significant accounts 24～52 (7) Related-party transactions 52～59 (8) Pledged assets 59 (9) Commitments and contingencies 59～60 (10) Losses Due to Major Disasters 60 (11) Subsequent Events 60 (12) Other 61 (13) Other disclosures (a) Information on significant transactions 61～62、64～77 (b) Information on investees 62、78～80 (c) Information on investment in mainland China 62、81～82 (14) Segment information 62～63 3

Independent Auditors’ Review Report

To the Board of Directors of NAN YA PLASTICS CORPORATION:

Introduction

We have reviewed the accompanying consolidated balance sheets of the NAN YA PLASTICS CORPORATION (the "Company") and its subsidiaries (together referred to as the "Consolidated Company") as of June 30, 2018 and 2017, and the related consolidated statements of comprehensive income for the three-month and six-month periods ended June 30, 2018 and 2017, changes in equity and cash flows for the six months ended June 30, 2018 and 2017, and notes to the consolidated financial statements, including a summary of significant accounting policies. The management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standards (“IASs”) 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our review.

Scope of Review

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

Basis for Qualified Conclusion

As stated in Note 4 (b), the consolidated financial statements included the financial statements of certain non- significant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect the total assets amounting to $73,660,593 thousand and $64,615,002 thousand, constituting 12.23% and 12.06% of the consolidated total assets; and the total liabilities amounting to $6,101,831 thousand and $6,420,114 thousand, constituting 2.79% and 3.15% of the consolidated total liabilities as of June 30, 2018 and 2017, respectively; well as the total comprehensive income (loss) amounting to $5,332,849 thousand, $1,125,846 thousand, $5,704,710 thousand and $(814,551) thousand, constituting 21.09%, 9.37%, 13.53% and (4.92)% of consolidated total comprehensive income (loss) for the three-month and six-month periods ended June 30, 2018 and 2017, respectively.

Furthermore, as stated in Note 6 (g), the other equity accounted investments of the Consolidated Company in its investee companies of $25,430,131 thousand and $25,230,671 thousand as of June 30, 2018 and 2017, respectively, and its equity in net earnings on these investee companies of $319,026 thousand, $154,400 thousand, $359,433 thousand and $(248,456) thousand for the three-month and six-month periods ended June 30, 2018 and 2017, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors. 3-1

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews and the review report of another auditor (please refer to Other Matter paragraph), nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Consolidated Company as of June 30, 2018 and 2017, and of its consolidated financial performance for the three-month and six-month periods ended June 30, 2018 and 2017, as well as its consolidated cash flows for the six months ended June 30, 2018 and 2017 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IASs 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Other Matter

We did not review the financial statements of certain subsidiaries of the Company. Those financial statements were reviewed by other auditors, whose review report has been furnished to us, and our conclusion, insofar as it relates to the amounts included for those subsidiaries, is based solely on the review report of other auditors. The financial statements of those subsidiaries reflect the total assets amounting to $110,256,710 thousand and $98,102,425 thousand, constituting 18.30% and 18.31% of the consolidated total assets as of June 30, 2018 and 2017, respectively, and the total revenues amounting to $21,588,101 thousand, $16,447,257 thousand, $40,682,308 thousand and $33,184,818 thousand, constituting 24.97%, 22.19%, 24.12% and 22.61% of the consolidated total revenues for the three-month and six-month periods ended June 30, 2018 and 2017, respectively.

We did not review the financial statements of certain investee companies, which represented the investment in other entities accounted for using the equity method of the Consolidated Company. Those financial statements were reviewed by another auditor, whose review report has been furnished to us, and our conclusion, insofar as it relates to the amounts included for those investee companies, is based solely on the review report of another auditor. The aforementioned investments accounted for using the equity method amounted to $90,498,012 thousand and $77,415,715 thousand, constituting 15.02% and 14.45% of the total assets as of June 30, 2018 and 2017, respectively; and the related shares of profit of associates and joint ventures accounted for using the equity method amounted to $5,958,896 thousand, $2,950,443 thousand, $10,190,394 thousand and $8,238,343 thousand, constituting 29.69%, 25.64%, 28.87% and 34.30% of the total profit before tax for the three-month and six-month periods ended June 30, 2018 and 2017, respectively.

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

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

KPMG

Taipei, Taiwan (Republic of China) August 10, 2018

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

The independent auditors’ review report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ review report and consolidated financial statements, the Chinese version shall prevail. 4 (English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Reviewed only, not audited in accordance with the generally accepted auditing standards as of June 30, 2018 and 2017 NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets June 30, 2018, December 31, 2017, and June 30, 2017 (Expressed in Thousands of New Taiwan Dollars)

June 30, 2018 December 31, 2017 June 30, 2017 June 30, 2018 December 31, 2017 June 30, 2017 Assets Amount % Amount % Amount % Liabilities and Equity Amount % Amount % Amount % Current assets: Current liabilities: 1100 Cash and cash equivalents (notes 6(a) and (x)) $ 51,617,946 9 44,304,079 8 52,183,129 10 2100 Short-term borrowings (notes 6(l) and (x)) $ 17,674,381 3 9,295,583 2 11,782,237 2 1110 Current financial assets at fair value through profit or loss 4,842,074 1 - - - - 2110 Short-term notes and bills payable (notes 6(k) and (x)) 4,799,477 1 7,998,778 1 7,999,146 1 (notes 6(b) and (x)) 2170 Notes and accounts payable (note 6(x)) 9,295,453 1 10,252,937 2 9,890,766 2

1120 Current financial assets at fair value through other 50,237,362 8 - - - - 2180 Accounts payable to related parties (notes 6(x) and 7) 9,571,235 2 9,722,905 2 7,458,092 1 comprehensive income (notes 6(c) and (x)) 2200 Other payables 59,663,595 10 20,651,855 4 52,977,803 10 1126 Available-for-sale financial assets-current (notes 6(d) - - 49,047,420 9 46,276,025 9 and (x)) 2321 Current portion of bonds payable (notes 6(n) and (x)) 9,127,204 1 7,887,079 1 9,622,678 2 1150 Notes receivable, net (notes 6(e) and (x)) 13,082,970 2 12,128,351 2 9,025,649 2 2322 Current portion of long-term borrowings (notes 6(m) 15,883,279 3 12,661,784 3 2,977,194 1 and (x)) 1170 Accounts receivable, net(note 6(e) and (x)) 44,443,267 7 41,459,623 8 37,172,430 7 2399 Other current liabilities 1,291,451 - 1,210,273 - 1,282,154 - 1180 Accounts receivable due from related parties (notes 6(e), 2,528,889 1 2,532,401 1 2,658,901 - (x) and 7) Total current liabilities 127,306,075 21 79,681,194 15 103,990,070 19 1200 Other receivables (notes 6(f)) 19,740,591 3 2,168,987 - 16,878,823 3 Non-Current liabilities: 1210 Other receivables due from related parties (notes 6(f) 14,456,442 2 14,347,741 3 15,656,925 3 2530 Bonds payable (notes 6(n) and (x)) 46,843,687 8 48,036,622 9 46,468,672 9 and 7) 2540 Long-term borrowings (notes 6(m) and (x)) 4,831,759 1 10,489,649 2 18,029,479 3 130X Inventories (notes 6(g)) 43,240,255 7 40,731,138 7 37,941,803 7 2570 Deferred tax liabilities 12,036,771 2 10,785,221 2 10,313,559 2 1470 Other current assets 4,174,509 1 5,347,051 1 5,028,217 1 2611 Long-term notes payable (notes 6(m) and (x)) 4,996,164 1 4,998,418 1 - - Total current assets 248,364,305 41 212,066,791 39 222,821,902 42 2640 Net defined benefit liability-non-current 21,677,709 3 21,792,242 4 24,288,733 5 Non-current assets: 2645 Guarantee deposits 663,363 - 704,676 - 706,223 - 1517 Total non-current financial assets at fair value through 34,153,089 6 - - - - 2670 Other non-current liabilities (note 6(h)) 677,660 - 363,608 - 233,857 - other comprehensive income (notes 6(c) and (x)) Total non-current liabilities 91,727,113 15 97,170,436 18 100,040,523 19 1524 Non-current available-for-sale financial assets-non-current - - 1,128,219 - 1,150,445 - (notes 6(d) and (x)) Total liabilities 219,033,188 36 176,851,630 33 204,030,593 38 1543 Non-current financial assets at cost non-current (note 6(d)) - - 18,694,079 3 17,336,100 3 Equity attributable to owners of parent (notes 6(q)): 1550 Investments accounted for using equity method 163,308,785 27 158,648,552 29 139,190,696 26 3110 Common Stock 79,308,216 13 79,308,216 15 79,308,216 15 (note 6(h)) 3200 Capital surplus 26,732,673 5 26,158,472 5 23,361,499 4 1600 Property, plant and equipment (note 6(i)) 133,808,542 22 132,901,898 24 135,041,854 25 3300 Retained earnings 199,563,169 33 208,480,444 38 175,505,789 33 1782 Trademarks(note 6(j)) 2,583,312 1 2,679,885 1 2,776,457 1 3400 Others 66,623,880 11 41,672,728 7 41,800,231 8 1812 Technology development expense 44,304 - 57,905 - 71,507 - 36XX Non-controlling interests 11,184,131 2 11,599,899 2 11,757,006 2 1840 Deferred tax assets 5,172,407 1 5,911,842 1 5,481,333 1 Total equity 383,412,069 64 367,219,759 67 331,732,741 62 1915 Prepayments for purchase of equipment 5,862,340 1 2,329,541 - 2,123,026 - 1937 Overdue receivables (note 6(e)) ------1975 Net defined benefit asset-non-current 6,439 - 6,325 - 1,097 - 1990 Other non-current assets 9,141,734 1 9,646,352 3 9,768,917 2 Total non-current assets 354,080,952 59 332,004,598 61 312,941,432 58 Total assets $ 602,445,257 100 544,071,389 100 535,763,334 100 Total liabilities and equity $ 602,445,257 100 544,071,389 100 535,763,334 100

See accompanying notes to Consolidated financial statements. 5 (English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Consolidated Statements of Comprehensive Income For the three months and six months ended June 30, 2018 and 2017 (Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

For the three months ended June 30 For the six months ended June 30 2018 2017 2018 2017 Amount % Amount % Amount % Amount % 4000 Operating revenue (notes 6(r), (s) and 7) $ 86,454,090 100 74,105,572 100 168,674,081 100 146,781,725 100 5000 Operating costs (notes 6(g), (o), (v), 7 and 12) 72,774,125 84 62,858,697 85 141,237,162 84 122,502,640 83 5910 Less:Unrealized (realized) profit from affiliated companies (note 7) (11,639) - (13,579) - (24,272) - (18,595) - Gross profit, net 13,691,604 16 11,260,454 15 27,461,191 16 24,297,680 17 Operating expenses (notes 6(j), (o), (v), 7 and 12): 6100 Selling expenses 2,646,600 3 2,449,934 3 5,159,493 3 4,779,962 3 6200 Administrative expenses 2,234,519 3 3,111,819 4 4,426,339 2 5,341,439 4 Total operating expenses 4,881,119 6 5,561,753 7 9,585,832 5 10,121,401 7 Operating income 8,810,485 10 5,698,701 8 17,875,359 11 14,176,279 10 Non-operating income and expenses (notes 6(h), (w) and 7): 7010 Other income 785,447 1 604,119 1 1,427,131 1 1,215,231 1 7020 Other gains and losses 1,304,442 2 450,699 - 806,587 - (1,696,313) (1) 7050 Finance costs (459,061) (1) (502,004) (1) (874,098) (1) (923,268) (1) 7060 Share of profit of associates and joint ventures accounted for using equity 9,627,449 11 5,257,521 7 16,067,714 10 11,247,299 7 method Total non-operating income and expenses 11,258,277 13 5,810,335 7 17,427,334 10 9,842,949 6 Profit before income tax 20,068,762 23 11,509,036 15 35,302,693 21 24,019,228 16 7950 Less: Income tax expense (note 6(p)) 3,465,578 4 2,506,580 3 5,432,212 3 4,446,995 3 Profit (loss) 16,603,184 19 9,002,456 12 29,870,481 18 19,572,233 13 8300 Other comprehensive income: (notes 6 (h) and (q)) 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8316 Unrealized gains (losses) from investments in equity instruments measured at 5,166,695 6 - - 7,546,278 5 - - fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures 574,726 1 - - 2,233,789 1 - - accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will - - - - 171,261 - - - not be reclassified to profit or loss 5,741,421 7 - - 9,951,328 6 - - 8360 Other components of other comprehensive income that will not be reclassified to profit or loss 8361 Exchange differences on translation 2,955,448 3 2,069,740 3 2,498,408 1 (6,876,020) (5) 8362 Unrealized gains (losses) on valuation of available-for-sale financial assets - - 833,231 1 - - 705,499 1 8370 Share of other comprehensive income of associates and joint ventures (9,575) - 126,335 - (10,598) - 2,787,900 2 accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax related to components of other comprehensive income that will be - - (21,077) - (135,016) - 365,578 - reclassified to profit or loss 2,945,873 3 3,008,229 4 2,352,794 1 (3,017,043) (2) 8300 Other comprehensive income, net 8,687,294 10 3,008,229 4 12,304,122 7 (3,017,043) (2) 8500 Total comprehensive income for the year $ 25,290,478 29 12,010,685 16 42,174,603 25 16,555,190 11 Profit (loss), attributable to: 8610 Profit (loss), attributable to owners of parent $ 16,669,733 19 9,030,791 12 30,134,392 18 19,898,009 13 8620 Profit (loss), attributable to non-controlling interests (66,549) - (28,335) - (263,911) - (325,776) - $ 16,603,184 19 9,002,456 12 29,870,481 18 19,572,233 13 Comprehensive income attributable to: 8710 Comprehensive income, attributable to owners of parent $ 25,368,367 29 11,965,164 16 42,371,827 25 17,005,452 11 8720 Comprehensive income, attributable to non-controlling interests (77,889) - 45,521 - (197,224) - (450,262) - $ 25,290,478 29 12,010,685 16 42,174,603 25 16,555,190 11

Before After Before After Before After Before After Basic earnings per share (note 6(u)): Tax Tax Tax Tax Tax Tax Tax Tax 9710 Income from continuing operations $ 2.53 2.09 1.45 1.14 4.45 3.77 3.03 2.47 Income from non-controlling equity (0.13) 0.01 (0.13) - (0.24) 0.03 (0.24) 0.04 9750 Income attributable to shareholders of the parent $ 2.40 2.10 1.32 1.14 4.21 3.80 2.79 2.51

See accompanying notes to Consolidated financial statements. 6

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Consolidated Statements of Changes in Equity For the six months ended June 30, 2018 and 2017 (Expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of parent Total other equity interest Share capital Retained earnings Unrealized gains (losses) on Exchange financial assets Unrealized differences on measured at gains (losses) Gains (losses) translation of fair value on available- on effective Total equity Unappropriat foreign through other for-sale portion of Gains (losses) attributable to Non- Ordinary Capital Legal Special ed retained financial comprehensive financial cash flow on hedging owners of controlling shares surplus reserve reserve earnings statements income assets hedges instruments parent interests Total equity Balance at January 1, 2017 $ 79,308,216 23,155,633 52,989,825 80,261,502 58,045,150 584,042 - 44,067,434 41,312 - 338,453,114 12,580,352 351,033,466 Legal reserve appropriated - - 5,884,027 - (5,884,027) ------Special reserve appropriated - - - 6,670,914 (6,670,914) ------Cash dividends of ordinary share - - - - (35,688,697) - - - - - (35,688,697) - (35,688,697) Other changes in capital surplus: Other changes in capital surplus - 205,866 ------205,866 - 205,866 Profit (loss) - - - - 19,898,009 - - - - - 19,898,009 (325,776) 19,572,233 Other comprehensive income - - - - - (6,385,472) - 3,517,373 (24,458) - (2,892,557) (124,486) (3,017,043) Total comprehensive income - - - - 19,898,009 (6,385,472) - 3,517,373 (24,458) - 17,005,452 (450,262) 16,555,190 Changes in non-controlling interests ------(373,084) (373,084) Balance at June 30, 2017 $ 79,308,216 23,361,499 58,873,852 86,932,416 29,699,521 (5,801,430) - 47,584,807 16,854 - 319,975,735 11,757,006 331,732,741 Balance at January 1,2018 $ 79,308,216 26,158,472 57,873,852 86,932,416 63,674,176 (6,026,197) - 47,691,196 7,729 - 355,619,860 11,599,899 367,219,759 Effects of retrospective application - - - - 1,206,363 - 60,594,455 (47,691,196) (7,729) 7,729 14,109,622 (1,172) 14,108,450 Equity at beginning of period after adjustments 79,308,216 26,158,472 57,873,852 86,932,416 64,880,539 (6,026,197) 60,594,455 - - 7,729 369,729,482 11,598,727 381,328,209 Legal reserve appropriated - - 5,452,101 - (5,452,101) ------Special reserve appropriated - - - 6,819,825 (6,819,825) ------Cash dividends of ordinary share - - - - (40,447,190) - - - - - (40,447,190) - (40,447,190) Reversal of special reserve - - - (13,917) 13,917 ------Other changes in capital surplus: Other changes in capital surplus - 574,201 ------574,201 - 574,201 Profit (loss) - - - - 30,134,392 - - - - - 30,134,392 (263,911) 29,870,481 Other comprehensive income - - - - 189,542 2,298,291 9,760,200 - - (10,598) 12,237,435 66,687 12,304,122 Total comprehensive income - - - - 30,323,934 2,298,291 9,760,200 - - (10,598) 42,371,827 (197,224) 42,174,603 Changes in non-controlling interests ------(217,372) (217,372) Disposal of investments in equity instruments designated at fair value through other comprehensive income - - - - (382) - - - - - (382) - (382) Balance at June 30, 2018 $ 79,308,216 26,732,673 63,325,953 93,738,324 42,498,892 (3,727,906) 70,354,655 - - (2,869) 372,227,938 11,184,131 383,412,069

See accompanying notes to Consolidated financial statements. 7

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows For the three months and six months ended June 30, 2018 and 2017 (Expressed in Thousands of New Taiwan Dollars)

For the six months ended June 30 2018 2017 Cash flows from (used in) operating activities: Profit before tax $ 35,302,693 24,019,228 Adjustments: Adjustments to reconcile profit (loss): Depreciation expense 8,152,397 8,011,343 Amortization expense 976,960 1,047,488 Net loss on financial assets or liabilities at fair value through profit or loss (137,165) - Interest expense 874,098 923,268 Interest income (481,115) (568,001) Share of profit of associates and joint ventures accounted for using equity method (16,067,714) (11,247,299) Loss on disposal of property, plant and equipment 28,949 28,847 Property, plant and equipment transferred to expenses 8,759 21,238 Impairment loss on financial assets - 1,023 Realized profit on from sales (24,272) (18,595) Unrealized foreign exchange loss (704,157) (283,229) Other revenue, overdue dividends and compensation of board and directors 1,705 (16,122) Gain on reversal of impairment loss of property, plant and equipment (5,378) (86,879) Total adjustments to reconcile profit (loss) (7,376,933) (2,186,918) Changes in operating assets and liabilities: Increase in notes receivable (954,619) (11,595) Increase in accounts receivable (including related parties) (2,566,060) (989,788) Increase in other receivable (600,959) (684,453) Increase in inventories (3,026,824) (2,305,775) Decrease (increase) in other current assets 1,172,794 (489,154) Total changes in operating assets (5,975,668) (4,480,765) Decrease in notes and accounts payable (1,126,984) (2,705,064) Decrease (increase) in other payable (615,081) 1,151,248 Increase in other current liabilities 79,535 6,946 Decrease in net defined benefit liability (114,647) (1,232,832) Total changes in operating liabilities (1,777,177) (2,779,702) Total adjustments (15,129,778) (9,447,385) Cash inflow generated from operations 20,172,915 14,571,843 Interest received 566,354 547,931 Dividends received 190,318 481,871 Interest paid (758,738) (1,102,099) Income taxes paid (4,333,433) (3,624,349) Net cash flows from operating activities 15,837,416 10,875,197 Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income (1,676,070) - Proceeds from capital reduction of financial assets at fair value through other comprehensive income 1,972 - Proceeds from disposal of financial assets designated at fair value through profit or loss 772,908 - Proceeds from capital reduction of financial assets at cost - 50 Acquisition of investments accounted for using equity method - (1,683,440) Acquisition of property, plant and equipment (6,564,120) (5,142,340) Proceeds from disposal of property, plant and equipment 36,675 209,834 Increase in refundable deposits (37,349) (11,549) (Increase) decrease in other receivables due from related parties (108,701) 9,516,359 Increase in other non-current assets (5,000,036) (2,140,195) Net cash flows (used in) from investing activities (12,574,721) 748,719 Cash flows from (used in) financing activities: Increase (decrease) in short-term loans 8,378,798 (8,099,977) (Decrease) increase in short-term notes and bills payable (3,199,301) 1,655,344 Proceeds from long-term debt 1,200,000 3,000,000 Repayments of long-term debt (3,636,395) (11,132,052) (Decrease) increase in guarantee deposits received (41,313) 46,561 Increase (decrease) in other non-current liabilities 336,579 72,578 Cash dividends paid (4,594) (20,626) Change in non-controlling interests (180,839) (243,070) Net cash flows from (used in) financing activities 2,852,935 (14,721,242) Effect of exchange rate changes on cash and cash equivalents 1,198,237 (2,131,050) Net increase (decrease) in cash and cash equivalents 7,313,867 (5,228,376) Cash and cash equivalents at beginning of period 44,304,079 57,411,505 Cash and cash equivalents at end of period $ 51,617,946 52,183,129

See accompanying notes to Consolidated financial statements. 8

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) Reviewed only, not audited in accordance with generally accepted auditing standards NAN YA PLASTICS CORPORATION AND SUBSIDIARIES Notes to the Consolidated Financial Statements June 30, 2018 and 2017 (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 August 10, 2018.

(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 following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2018.

Effective date New, Revised or Amended Standards and Interpretations per IASB Amendment to IFRS 2 “Clarifications of Classification and Measurement of January 1, 2018 Share-based Payment Transactions” Amendments to IFRS 4 “Applying IFRS 9 Financial Instruments with IFRS 4 January 1, 2018 Insurance Contracts” IFRS 9 “Financial Instruments” January 1, 2018 IFRS 15 “Revenue from Contracts with Customers” January 1, 2018 Amendment to IAS 7 “Statement of Cash Flows -Disclosure Initiative” January 1, 2017 Amendment to IAS 12 “Income Taxes- Recognition of Deferred Tax Assets for January 1, 2017 Unrealized Losses” Amendments to IAS 40 “Transfers of Investment Property” January 1, 2018 Annual Improvements to IFRS Standards 2014–2016 Cycle: Amendments to IFRS 12 January 1, 2017 Amendments to IFRS 1 and Amendments to IAS 28 January 1, 2018 IFRIC 22 “Foreign Currency Transactions and Advance Consideration” January 1, 2018

(Continued) 9

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

Except for the following items, the Consolidated Company believes that the adoption of the above IFRSs would not have any material impact on its consolidated financial statements. The extent and impact of signification changes are as follows:

(i) IFRS 9 “Financial Instruments”

IFRS 9 replaces IAS 39 “Financial Instruments: Recognition and Measurement” which contains classification and measurement of financial instruments, impairment and hedge accounting.

As a result of the adoption of IFRS 9, the Consolidated Company adopted the consequential amendments to IAS 1 “Presentation of Financial Statements” which requires impairment of financial assets to be presented in a separate line item in the statement of profit or loss and OCI. Additionally, the Consolidated Company adopted the consequential amendments to IFRS 7 Financial Instruments: Disclosures that are applied to disclosures about 2018 but generally have not been applied to comparative information.

The detail of new significant accounting policies and the nature and effect of the changes to previous accounting policies are set out below:

1) Classification of financial assets and financial liabilities

IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL). The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. The standard eliminates the previous IAS 39 categories of held to maturity, loans and receivables and available for sale. Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never bifurcated. Instead, the hybrid financial instrument as a whole is assessed for classification. For an explanation of how the Consolidated Company classifies and measures financial assets and accounts for related gains and losses under IFRS 9, please see note 4(c).

The adoption of IFRS 9 did not have any a significant impact on its accounting policies on financial liabilities.

2) Impairment of financial assets

IFRS 9 replaces the ‘incurred loss’ model in IAS 39 with the ‘expected credit loss’ (ECL) model. The new impairment model applies to financial assets measured at amortized cost, contract assets and debt investments at FVOCI, but not to investments in equity instruments. Under IFRS 9, credit losses are recognized earlier than they are under IAS 39 – please see note 4(c).

(Continued) 10

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

3) Transition

The adoption of IFRS 9 have been applied retrospectively, except as described below,

‧Comparative periods have been restated only for retrospective application of the cost of hedging approach for forward points. Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of IFRS 9 are recognized in retained earnings and reserves as on January 1, 2018. Accordingly, the information presented for 2017 does not generally reflect the requirements of IFRS 9, and therefore, is not comparable to the information presented for 2018 under IFRS 9.

‧The following assessments have been made on the basis of the facts and circumstances that existed at the date of initial application.

－ The determination of the business model within which a financial asset is held.

－ The designation and revocation of previous designations of certain financial assets and financial liabilities as measured at FVTPL.

－ The designation of certain investments in equity instruments not held for trading as at FVOCI.

‧If an investment in a debt security had low credit risk at the date of initial application of IFRS 9, then the Consolidated Company assumed that the credit risk on its asset will not increase significantly since its initial recognition.

4) Classification of financial assets on the date of initial application of IFRS 9

The following table shows the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for each class of the Consolidated Company’s financial assets as of January 1, 2018.

IAS39 IFRS9 Carrying Carrying Measurement categories Amount Measurement categories Amount Financial Assets

Debt securities Available-for-sale (note 1) 798,901 FVOCI 666,289

Equity instruments Available-for-sale (note 2) 43,898,921 FVOCI 44,010,639

Available-for-sale (note 4) 5,477,817 FVTPL 5,477,817

Carried at cost (note 2) 18,694,079 FVOCI 30,050,756

Net receivables Loans and receivables (note 3) 72,637,103 Amortized cost 72,637,103

Other financial assets Loans and receivables 412,690 Amortized cost 412,690 (Guarantee deposits)

(Continued) 11

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

Note 1:The corporate debt securities categorized as available-for-sale under IAS 39 are held by the Consolidated Company’ s treasury unit in a separate portfolio to provide interest income; however, they may be sold to meet liquidity requirements arising in the normal course of business. The Consolidated Company considers that these securities are held within a business model whose objective is achieved both by collecting contractual cash flows and by selling securities. The corporate debt securities mature in one to two years and the contractual terms of these financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. These assets have therefore been classified as financial assets at FVOCI under IFRS 9.

Note 2:These equity securities (including financial assets measured at cost) represent investments that the Consolidated Company intends to hold for the long term for strategic purposes. As permitted by IFRS 9, the Consolidated Company has designated these investments at the date of initial application as measured at FVOCI, resulting in an increase of $11,335,783 thousand in those assets recognized, as well as the increase of $12,561,654 thousand and $1,547,968 thousand in other equity interests and retained earnings, respectively, which were recognized on January 1, 2018.

Note 3:Trade, lease and other receivables that were classified as loans and receivables under IAS 39 are now classified at amortized cost. The adoption of IFRS 9 did not have any significant impact on its accounting policies on financial assets.

Note 4:These equity securities (fund investments) represent investments that the Consolidated Company intends to hold for available-for-sale strategic purposes. As permitted by IFRS 9, the Consolidated Company has designated these investments at the date of initial application as measured at FVTPL, resulting in an increase of $341,605 in those assets recognized, as well as the increase of $341,605 and the decrease of $1,172 in retained earnings and non-controlling interests, respectively, which were recognized on January 1, 2018.

The following table reconciles the carrying amounts of financial assets under IAS 39 to the carrying amounts under IFRS 9 upon transition to IFRS 9 on 1 January, 2018:

2017.12.31 2018.1.1 2018.1.1 2018.1.1 2018.1.1 IAS 39 IFRS 9 Non- Carrying Carrying Retained Other controlling Amount Reclassifications Remeasurements Amount earnings equity Interests Fair value through profit or loss Additions – equity instruments:

From available for sale $ - 5,477,817 - 5,477,817 (341,605) 341,605 (1,172)

Fair value through other comprehensive income Beginning balance of available for sale (including measured at cost) (IAS 39) $ 68,869,718 - - - - - Available for sale to FVOCI - - 11,335,783 1,206,363 12,903,259 - Subtraction – equity instruments: To FVTPL – required reclassification based on classification criteria - (5,477,817) - 341,605 (341,605) - $ 68,869,718 (5,477,817) 11,335,783 74,727,684 1,547,968 12,561,654 -

(Continued) 12

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

2017.12.31 2018.1.1 2018.1.1 2018.1.1 2018.1.1 IAS 39 IFRS 9 Non- Carrying Carrying Retained Other controlling Amount Reclassifications Remeasurements Amount earnings equity Interests Amortized cost Beginning balance of trade and other $ 73,049,793 - - 73,049,793 - - - receivables, and other financial assets

(b) The impact of IFRS endorsed by FSC but not yet effective

The following new standards, interpretations and amendments have been endorsed by the FSC and are effective for annual periods beginning on or after January 1, 2019 in accordance with Ruling No. 1070324857 issued by the FSC on July 17, 2018:

Effective date New, Revised or Amended Standards and Interpretations per IASB IFRS 16 “Leases” January 1, 2019 IFRIC 23 “Uncertainty over Income Tax Treatments” January 1, 2019 Amendments to IFRS 9 “Prepayment features with negative compensation” January 1, 2019 Amendments to IAS 19 “Plan Amendment, Curtailment or Settlement” January 1, 2019 Amendments to IAS 28 “Long-term interests in associates and joint ventures” January 1, 2019 Annual Improvements to IFRS Standards 2015–2017 Cycle January 1, 2019

(i) IFRS 16“Leases”

IFRS 16 replaces the existing leases guidance, including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.

IFRS 16 introduces a single and an on-balance sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. In addition, the nature of expenses related to those leases will now be changed since IFRS 16 replaces the straight-line operating lease expense with a depreciation charge for right-of-use assets and interest expense on lease liabilities. There are recognition exemptions for short-term leases and leases of low- value items. The lessor accounting remains similar to the current standard – i.e. the lessors will continue to classify leases as finance or operating leases.

(Continued) 13

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

The Consolidated Company has completed an initial assessment of the potential impact on its consolidated financial statements, wherein the detailed assessment has yet to be completed. The actual impact of applying IFRS 16 on its financial statements in the period of initial application will depend on future economic conditions, including the Consolidated Company’s discounting rate, the composition of the Consolidated Company’s lease portfolio at that date, the Consolidated Company’s latest assessment of whether it will exercise any lease renewal options and the extent to which the Consolidated Company chooses to use practical expedients and recognition exemptions.

So far, the most significant impact identified is that the Consolidated Company will have to recognize the new assets and liabilities for its operating leases of offices, warehouse and factory facilities.No significant impact is expected for the Consolidated Company’ s finance leases. Besides, The Consolidated Company does not expect the adoption of IFRS 16 to have any impact on its ability to comply with the revised maximum leverage threshold loan covenant.

1) Determining whether an arrangement contains a lease

On transition to IFRS 16, the Consolidated Company can choose to apply either of the following:

‧ IFRS 16 definition of a lease to all its contracts; or

‧A practical expedient that does not need any reassessment whether a contract is, or contains, a lease.

The Consolidated Company plans to apply the practical expedient to grandfather the definition of a lease upon transition. This means that it will apply IFRS 16 to all contracts entered into before January 1, 2019 and identified as leases in accordance with IAS 17 and IFRIC 4.

2) Transition

As a lessee, the Consolidated Company can apply the standard using either of the following:

‧retrospective approach; or

‧modified retrospective approach with optional practical expedients.

The lessee applies the election consistently to all of its leases.

On January 1, 2019, the Consolidated Company plans to initially apply IFRS 16 using the modified retrospective approach. Therefore, the cumulative effect of adopting IFRS 16 will be recognized as an adjustment to the opening balance of retained earnings at January 1, 2019, with no restatement of comparative information.

(Continued) 14

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

When applying the modified retrospective approach to leases previously classified as operating leases under IAS 17, the lessee can elect, on a lease-by-lease basis, whether to apply a number of practical expedients on transition. The Consolidated Company is assessing the potential impact of using these practical expedients.

The Consolidated Company is not required to make any adjustments for leases in which the Consolidated Company is the lessor except where the Consolidated Company is the intermediate lessor in a sub-lease.

(ii) IFRIC 23 Uncertainty over Income Tax Treatments

In assessing whether and how an uncertain tax treatment affects the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits, as well as tax rates, an entity shall assume that a taxation authority will examine the amounts it has the right to examine and have a full knowledge on all related information when making those examinations.

If an entity concludes that it is probable that the taxation authority will accept an uncertain tax treatment, the entity shall determine the taxable profit (tax loss), tax bases, unused tax losses, unused tax credits, as well as tax rates consistently with the tax treatment used or planned to be used in its income tax filings. Otherwise, an entity shall reflect the effect of uncertainty for each uncertain tax treatment by using either the most likely amount or the expected value, depending on which method the entity expects to better predict the resolution of the uncertainty.

So far, the most significant impact identified is that the Consolidated Company will have to recognize the new income tax liabilities and income tax expense for its uncertainty over income tax treatments.

As of the date the following IFRSs that have been issued by the IASB, but have not yet to be endorsed by the FSC:

Effective date New, Revised or Amended Standards and Interpretations per IASB Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between Effective date to an Investor and Its Associate or Joint Venture” be determined by IASB IFRS 17 “Insurance Contracts” January 1, 2021

(Continued) 15

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

Those which may be relevant to The Consolidated Company are set out below:

Issuance / Release Standards or Dates Interpretations Content of amendment September 11, 2014 Amendments to IFRS 10 and The amendments address an acknowledged IAS 28 “Sale or Contribution inconsistency between the requirements in of Assets Between an Investor IFRS 10 and those in IAS 28 (2011) in and Its Associate or Joint dealing with the sale or contribution of assets Venture” between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.

The Consolidated Company 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 Consolidated Company completes its evaluation.

(4) Summary of significant accounting policies:

(a) Statement of compliance

The consolidated interim 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 consolidated interim financial statements, the Chinese version shall prevail.

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

Except the following accounting policies mentioned below, the significant accounting policies adopted in the consolidated interim financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2017. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2017.

(Continued) 16

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

(b) Basis of consolidation

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

Shareholding The name of June 30, December 31, June 30, Investor subsidiaries Business activity 2018 2017 2017 Note The Company Nan Ya Plastics Corporation production of plastic 100.00 % 100.00 % 100.00 % Note 1 U.S.A. products The Company Nan Ya Plastics Corporation production of plastic, 100.00 % 100.00 % 100.00 % Note 1 America polyester and chemical products The Company Formosa Plastics Group investment 100.00 % 100.00 % 100.00 % Note 1 Investment Corp The Company Nan Ya Plastics (Hong plastics and electronic 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. products trading, investment holding The Company Superior World Wide plastics trading, 100.00 % 100.00 % 100.00 % Note 1 Trading Co., Ltd. investment The Company Nan Ya PCB Corporation production of printed 66.97 % 66.97 % 66.97 % circuit board The Company Wen Fung Industrial Co., production of electronic 100.00 % 100.00 % 100.00 % Note 1 Ltd. components The Company Nan Chung Petrochemical production of chemical 50.00 % 50.00 % 50.00 % Note 1 Corporation products The Company Nan Ya International investment 100.00 % 100.00 % 100.00 % Note 1 (Cayman) Limited The Company PFG Fiber Glass production of glass fiber 100.00 % 100.00 % 100.00 % Note 1 Corporation The Company PFG Fiber Glass (Hong investment 100.00 % 100.00 % 100.00 % Kong) Corporation Limited Nan Ya PCB Nan Ya PCB (U.S.A.) retargeting 100.00 % 100.00 % 100.00 % Corporation Corporation Nan Ya PCB Nan Ya PCB (HK) electronic materials 100.00 % 100.00 % 100.00 % Corporation Corporation trading, investment Nan Ya PCB (HK) Nan Ya PCB (Kunshan) production of printed 100.00 % 100.00 % 100.00 % Corporation Corporation circuit board Nan Ya Plastics (Hong Nan Ya Plastics (Nantong) production of plastic 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. Co., Ltd. products, steam and electricity Nan Ya Plastics (Hong Nan Ya Electric (Nantong) production of switch 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. Co., Ltd. gear and control panel Nan Ya Plastics (Hong Nan Ya Plastics Film production of plastic 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. (Nantong) Co., Ltd. products Nan Ya Plastics (Hong China Nantong Huafeng trading 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. Co., Ltd. Nan Ya Plastics (Hong Nantong Huafu Plastics Co., trading 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. Ltd. Nan Ya Plastics (Hong Nan Ya Electronic Materials production of electronic 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. (Kunshan) Co., Ltd. materials, polyester products, steam and electricity Nan Ya Plastics (Hong Nan Ya Draw Textured production of fiber 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. Yarn (Kunshan) Co., Ltd. Nan Ya Plastics (Hong Nan Ya Plastics production of polyester 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. (Guangzhou) Co., Ltd. products Nan Ya Plastics (Hong Nan Ya Plastics (Huizhou) production of polyester 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. Co., Ltd. products

(Continued) 17

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

Shareholding The name of June 30, December 31, June 30, Investor subsidiaries Business activity 2018 2017 2017 Note Nan Ya Plastics (Hong Nan Ya Plastics Film production of plastic 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. (Huizhou) Co., Ltd. film products Nan Ya Plastics (Hong Nan Ya Electronic Materials production of electronic 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. (Huizhou) Co., Ltd. materials Nan Ya Plastics (Hong Nan Ya Trading (Huizhou) trading 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. Co., Ltd. Nan Ya Plastics (Hong Nan Ya Plastics (Xiamen) production of plastic 85.00 % 85.00 % 85.00 % Kong) Co., Ltd. Co., Ltd. products Nan Ya Plastics (Hong Nan Ya Plastics (Ningbo) production of plastic 100.00 % 100.00 % 100.00 % Kong) Co., Ltd. Co., Ltd. products and plasticizer Wen Fung Industrial Wellink Technology production of electronic 100.00 % 100.00 % 100.00 % Note 1 Co., Ltd. Corporation components Nan Ya Plastics Nan Ya Plastics Corporation production of chemical 100.00 % 100.00 % 100.00 % Note 1 Corporation America Texas products PFG Fiber Glass (Hong PFG Fiber Glass (Kunshan) production of glass fiber 100.00 % 100.00 % 100.00 % Kong) Corporation Co., Ltd. Limited

Note 1: The aforementioned companies are not material subsidiaries.Their financial statements have not been reviewed.

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.

(i) Financial assets

Financial assets are classified into the following categories: measured at amortized cost, fair value through other comprehensive income (FVOCI), and fair value through profit or loss (FVTPL).

The Consolidated Company shall reclassify all affected financial assets only when it changes its business model for managing its financial assets.

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.

(Continued) 18

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

A financial asset measured at amortized cost is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment loss, 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.

A financial asset measured at FVOCI is initially recognized at fair value, plus any directly attributable transaction costs. These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment losses, deriving from debt investments are recognized in profit or loss; whereas dividends deriving from equity investments 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 of financial assets measured at FVOCI are recognized in OCI. On derecognition, gains and losses accumulated in OCI of equity investments are reclassified to profit or loss. However, gains and losses accumulated in OCI of debt investments are reclassified to retain earnings instead of 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.

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 and accounts receivable (except for those presented as accounts receivable but measured at FVTPL). 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.

(Continued) 19

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

Financial assets in this category are measured at fair value at initial recognition. Attributable transaction costs are recognized in profit or loss as incurred. Subsequent changes that are measured at fair value, which take into account any dividend and interest 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.

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.

(Continued) 20

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

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 on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and accounts receivable, leases receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI, accounts receivable and contract assets.

The Consolidated Company measures loss allowances at an amount equal to lifetime expected credit loss (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.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 month 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.

(Continued) 21

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

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.

When there is a breach of contract, the Consolidated Company will assume that the credit risk on a financial asset has increased significantly.

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 and debt securities at FVOCI are 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 90 days 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. For debt securities at FVOCI, the loss allowance is recognized in other comprehensive income instead of reducing the carrying amount of the asset. The Consolidated Company recognizes the amount of expected credit losses (or reversal) in profit or loss, as an impairment gain or loss.

(Continued) 22

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

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Consolidated Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-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

Financial assets are derecognized when the contractual rights to the cash flows from the assets expire, or when the Consolidated Company transfers substantially all the risks and rewards of ownership of the financial assets.

On derecognition of a debt instrument in its entirety, the Consolidated Company recognizes the difference between its carrying amount and the sum of the consideration received or receivable and any cumulative gain or loss that had been recognized in other comprehensive income and presented in “other equity – unrealized gains or losses on fair value through other comprehensive income”, in profit or loss, and in the line item of non- operating income and expenses in the statement of comprehensive income.

On derecognition of a financial asset other than in its entirety, the Group allocates the previous carrying amount of the financial asset between the part it continues to recognize under continuing involvement, and the part it no longer recognizes on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized in profit or loss, and presented in the line item of non-operating income and expenses. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.

(d) Revenue from contracts with customers (applicable from January 1, 2018)

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.

(Continued) 23

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

(i) 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 has objective evidence that all criteria for acceptance have been satisfied.

(ii) 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 group does not adjust any of the transaction prices for the time value of money.

(e) Income taxes

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

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

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

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

(f) Employee benefits

The pension cost in the consolidated interim financial statements was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off event.

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

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

(Continued) 24

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

The preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2017. For the related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2017.

(6) Explanation of significant accounts:

Except for the following disclosures, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2017. Please refer to Note 6 of the 2017 annual consolidated financial statements.

(a) Cash and Cash Equivalents

June 30, December 31, June 30, 2018 2017 2017 Cash on hand $ 1,454 1,421 1,382 Cash in banks 11,327,659 4,958,290 6,153,532 Time deposits 38,428,759 32,674,075 39,125,066 Cash equivalents 1,860,074 6,670,293 6,903,149 Cash and cash equivalents $ 51,617,946 44,304,079 52,183,129

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

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

June 30, December 31, June 30, 2018 2017 2017 Financial assets designated as at fair value through profit or loss： Funds $ 4,842,074 - -

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

Financial assets at fair value through other comprehensive income - current

June 30, 2018 Equity instruments at fair value through other comprehensive income : Stocks $ 50,237,362

(Continued) 25

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

Financial assets at fair value through other comprehensive income- non-current

June 30, 2018 Debt instruments at fair value through other comprehensive income: Bonds $ 680,843 Subtotal 680,843 Equity instruments at fair value through other comprehensive income： Stocks 33,021,575 Others 450,671 Subtotal 33,472,246 Total $ 34,153,089

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

The Consolidated Company has assessed that the bonds shown above are held within a business model whose objective is achieved by both collecting the contractual cash flows and by selling financial assets; therefore, they have been classified as debt investments at fair value through other comprehensive income on January 1, 2018. The investments were classified as available-for-sale financial assets on December 31, 2017 and June 30, 2017.

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

The Consolidated Company designated the investments shown above as equity instruments as 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. These investments were classified as available-for-sale financial assets and financial assets at costs on December 31, 2017 and June 30, 2017.

No strategic investments were disposed as of June 30, 2018, and there were no transfers of any cumulative gain or loss within equity relating to these investments.

On April 16, 2018, the Consolidated Company participated in the proportional capital increase by cash of Formosa Ha Tinh (Cayman) Limited, at 11.43% ownership interest, with the total investment amounting to USD57,160 thousand (equivalent to NTD1,676,070 thousand), recognized under “Financial assets at fair value through other comprehensive income”(Stocks).

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

(iv) As of June 30, 2018, the financial assets at fair value through other comprehensive income of the Consolidated Company had been pledged as collateral; please refer to note 6(x).

(Continued) 26

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

(d) Available-for-sale Financial Assets

(i) Financial assets consisted of the following:

December 31, June 30, 2017 2017 Available-for-sale financial assets－current: Stocks $ 43,569,603 40,746,947 Funds 5,477,817 5,529,078 Total $ 49,047,420 46,276,025 Available-for-sale financial assets－non-current: Bonds and others $ 1,128,219 1,150,445 Financial assets carried at cost－non-current: Stocks $ 18,694,079 17,336,100

The financial assets carried at cost are measured at cost, less, accumulated impairment losses on the reporting date. The fair values of these investments cannot be measured reliably because the range of reasonable fair value estimates is large and the probabilities for each estimate cannot be reasonably determined.

The aforementioned investments were classified as financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income on June 30, 2018; please refer to note 3(a), 6(b) and (c).

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

As of December 31 and June 30, 2017, the available-for-sale financial assets of the Consolidated Company had been pledged as collateral; please refer to note 6(x).

(e) Notes receivable and accounts receivable

June 30, December 31, June 30, 2018 2017 2017 Notes receivable $ 13,141,412 12,186,059 9,096,704 Accounts receivable 47,324,826 44,314,368 40,159,905 Overdue receivables 35,311 38,772 45,687 Allowance for doubtful receivables (446,423) (418,824) (445,316) $ 60,055,126 56,120,375 48,856,980

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 June 30, 2018. To measure the expected credit losses, trade 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 June 30, 2018 amounted to 446,423, expected loss rate less than 1%.

(Continued) 27

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

The Consolidated Company applies the expected credit losses to analysis of notes and trade receivable as of June 30, 2018, as follows:

June 30, 2018 Past due 1 to 90 days $ 276,238 Past due 90 to 180 days 73,472 Past due 180 to 360 days 61,165 Past due over 360 days 135,045 $ 545,920

As of December 31 and June 30, 2017, the Consolidated Company applies the incurred loss model to consider the loss allowance provision of notes and trade receivable, as well as the aging analysis of notes and trade receivable as of December 31 and June 30, 2017, which were past due but not impaired, as follows:

December 31, June 30, 2017 2017 Past due 1 to 90 days 581,530 632,938 Past due 90 to 180 days 132,150 139,693 Past due 180 days to 360 days 136,442 225,849 Past due over 360 days 129,170 59,802 979,292 1,058,282

As of December 31 and June 30, 2017, notes and trade receivable which were overdue or under legal proceedings amounted to, $38,772 and $45,687, respectively. Such receivables were reclassified to overdue receivables under other assets and provided with a full impairment loss provision.

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

2018 2017 Balance on January 1, 2018 and 2017 IAS 39 $ 418,824 461,805 Adjustment on initial application of IFRS 9 - Balance on January 1, 2018 per IFRS 9 418,824 Impairment losses recognized (reversed) 23,501 (3,311) Foreign exchange gains/(losses) 4,098 (13,178) Balance on June 30, 2018 and 2017 $ 446,423 445,316

(Continued) 28

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 June 30, 2018, and December 31, 2017 and June 30, 2017, the outstanding accounts receivable factoring transactions between the Consolidated Company and the financial institutions were as follows:

June 30, 2018 Purchaser Factoring Advanced Factoring Balance Amount Line Gold Circuit Electornics, ltd E. Sun Bank $ 40,902 - 100,000

December 31, 2017 Purchaser Factoring Advanced Factoring Balance Amount Line Gold Circuit Electornics, ltd E. Sun Bank $ 52,231 - 100,000

June 30, 2017 Purchaser Factoring Advanced Factoring Balance Amount Line Gold Circuit Electornics, ltd E. Sun Bank $ 39,072 - 100,000

(f) Other receivables

June 30, December 31, June 30, 2018 2017 2017 Other accounts receivable—other $ 19,740,591 2,168,987 16,878,823 Other accounts receivable—loans to 14,456,442 14,347,741 15,656,925 associates Less: Loss allowance - - - Total $ 34,197,033 16,516,728 32,535,748

(Continued) 29

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

(g) Inventories, net

The components of inventories were as follows:

June 30, December 31, June 30, 2018 2017 2017 Finished goods $ 12,038,582 11,493,525 12,489,745 Work in process 10,757,900 9,597,819 9,275,473 Machinery and accessories in process 4,746,673 4,126,753 3,079,992 Raw materials 12,200,421 12,419,521 11,492,995 Supplies 856,720 747,586 665,837 Consigned-out raw materials 1,262,077 236,578 209,542 Consigned-out finished goods 30,150 11,424 15,931 Goods in transit 1,347,732 2,097,932 712,288 Total $ 43,240,255 40,731,138 37,941,803

For the six-month period ended June 30, 2018 and 2017, cost of sales recognized in consolidated statement of comprehensive income amounted to $141,131,858 and $122,494,111, respectively.

The revaluation inventory to net realizable value as of June 30, 2018 and 2017, resulted in a loss on inventory revaluation of $112,760, $65,291, $105,304 and $8,529 for the three-month and six-month periods ended June 30, 2018 and 2017, which was debited to cost of goods sold.

None of the inventory was pledged as collateral as of June 30, 2018, December 31, 2017 and June 30, 2017.

(h) Investments accounted for using equity method

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

June 30, December 31, June 30, 2018 2017 2017 Associates $ 162,799,057 158,170,613 138,706,125 Jointly ventures 509,728 477,939 484,571 $ 163,308,785 158,648,552 139,190,696

(Continued) 30

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

(i) Associates

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

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 The Consolidated Company’s share of net income of associates $ 9,616,094 5,237,545 16,043,822 11,207,691

1) The unrealized translation gain or loss arising from the investment in foreign entities, which was determined on exchange rates as of June 30, 2018, December 31, 2017 and June 30, 2017 was 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.

3) The Consolidated Company, which invested in “Formosa Automobile Sales Corporation” (originally was Formosa Automobile Corporation), an investee accounted for using the equity method, recognized gains of $9,573, $13,945, $21,990 and $19,198 from this investment for the six-month and three-month periods ended June 30, 2018 and 2017, respectively. As of June 30, 2018, December 31, 2017 and June 30, 2017, the Consolidated Company’s cumulative loss from this investment had already exceeded the book value of the investment by $7,342, $29,473 and $47,452, respectively.

As the Consolidated Company intends to support this investee companies, the investments in this investees were offset against related accounts receivable-related parties. As the balances of accounts receivable-related parties from “Formosa Automobile Corporation” were $0 as of June 30, 2018, December 31, 2017 and June 30, 2017, such offset resulted in credit balances to the investments in this investees of $7,342, $29,473 and $47,452, respectively, which were reclassified to non-current other liabilities.

4) Aggregate information of associates that were not individually material:

June 30, December 31, June 30, 2018 2017 2017 The carrying value of associates that were not individually material $ 162,799,057 158,170,613 138,706,125

(Continued) 31

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

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Attributable to the Consolidated Company: Net Income $ 9,616,094 5,237,545 16,043,822 11,207,691 Other comprehensive income 1,231,472 186,260 2,442,456 1,928,210 Total comprehensive income $ 10,847,566 5,423,805 18,486,278 13,135,901

(ii) Joint ventures

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

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 The Consolidated $ 11,355 19,976 23,892 39,608 Company’s share of net income of joint ventures

Aggregate information of joint ventures that were not individually material:

June 30, December 31, June 30, 2018 2017 2017 The carrying value of joint ventures that were not individually material $ 509,728 477,939 484,571

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Attributable to the Consolidated Company: Net income $ 11,355 19,976 23,892 39,608 Other comprehensive income - - - - Total comprehensive income $ 11,355 19,976 23,892 39,608

(iii) Collateral

Please refer to note 8 for investments accounted for using equity method which were pledged to banks or courts as collateral to secure the Consolidated Company’s bank loans and lawsuits as of June 30, 2018, December 31, 2017 and June 30, 2017.

(Continued) 32

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

(iv) The unreviewed financial statements of investments accounted for using equity method

Except for those of Nan Ya Technology Corporation, Mai-Liao Power Corporation, Formosa Petrochemical Corporation, Nan Ya Kyowa plastics (Nantong) Corporation and Nan Ya Plastics (Zhengzhou) Corporation, the shares of profit or loss and the other comprehensive income of those investments were calculated based on the financial statements that have not been reviewed.

(i) Property, Plant and Equipment

The cost, depreciation, and impairment of property, plant and equipment of the Consolidated Company for the six-month period ended June 30, 2018 and 2017 were as follows:

Machinery Building and and Transportation Other Construction Land construction equipment equipment facilities in progress Total Cost or deemed cost: Balance on January 1, 2018 $ 9,870,462 61,875,380 339,296,466 1,555,915 12,091,506 13,476,233 438,165,962 Additions 8,780 238 682,551 7,758 92,362 5,772,431 6,564,120 Disposals (685) (75,183) (1,616,325) (24,598) (102,978) (8,407) (1,828,176) Reclassification 20 131,011 3,939,516 11,126 255,944 (2,666,269) 1,671,348 Effect of exchange rate changes 1,456 343,271 1,740,325 6,924 41,098 243,822 2,376,896 Balance on June 30, 2018 $ 9,880,033 62,274,717 344,042,533 1,557,125 12,377,932 16,817,810 446,950,150 Balance on January 1, 2017 $ 9,871,616 61,776,017 340,269,689 1,563,481 12,073,648 12,000,648 437,555,099 Additions - 19,940 509,713 15,425 152,288 4,444,974 5,142,340 Disposals - (3,425) (1,764,979) (17,632) (130,255) (17,546) (1,933,837) Reclassification - 164,943 3,214,431 14,469 144,764 (2,520,061) 1,018,546 Effect of exchange rate changes (3,392) (1,124,335) (5,582,906) (21,305) (156,540) (243,895) (7,132,373) Balance on June 30, 2017 $ 9,868,224 60,833,140 336,645,948 1,554,438 12,083,905 13,664,120 434,649,775 Depreciation and impairment loss: Balance on January 1, 2018 $ - 33,094,723 261,429,163 1,372,432 9,367,746 - 305,264,064 Depreciation for the period - 1,043,287 6,805,996 23,201 279,913 - 8,152,397 Reversal of impairment - - (5,378) - - - (5,378) Disposals - (71,401) (1,557,113) (23,327) (101,952) - (1,753,793) Reclassification - - (4,808) - (663) - (5,471) Effect of exchange rate changes - 167,079 1,285,001 5,659 32,050 - 1,489,789 Balance on June 30, 2018 $ - 34,233,688 267,952,861 1,377,965 9,577,094 - 313,141,608 Balance on January 1, 2017 $ - 31,518,303 255,594,785 1,381,323 9,336,230 - 297,830,641 Depreciation for the period - 1,015,001 6,709,915 22,432 263,995 - 8,011,343 Reversal of impairment - - (84,425) (8) (2,446) - (86,879) Disposals - (409) (1,548,210) (17,391) (107,908) - (1,673,918) Reclassification - 2 34,364 614 (35,080) - (100) Effect of exchange rate changes - (511,338) (3,827,521) (17,296) (117,011) - (4,473,166) Balance on June 30, 2017 $ - 32,021,559 256,878,908 1,369,674 9,337,780 - 299,607,921 Carrying amounts: Balance on January 1, 2018 $ 9,870,462 28,780,657 77,867,303 183,483 2,723,760 13,476,233 132,901,898 Balance on June 30, 2018 $ 9,880,033 28,041,029 76,089,672 179,160 2,800,838 16,817,810 133,808,542 Balance on June 30, 2017 $ 9,868,224 28,811,581 79,767,040 184,764 2,746,125 13,664,120 135,041,854

(Continued) 33

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

(i) Please refer to note 8 for the property, plant and equipment pledged to secure bank loans as of June 30, 2018, December 31, 2017 and June 30, 2017.

(ii) For the three-month and six-month periods ended June 30, 2018 and 2017, the capitalized interest on borrowings for the purchase of the property, plant and equipment of the Consolidated Company amounted to $15,338, $22,769, $31,993 and $44,752, respectively. The capitalized interest rate ranged from 1.4980% to 2.2793% and 1.562% to 2.284% for the six- months ended June 30, 2018 and 2017, respectively.

(j) Intangible assets

The cost, amortization and impairment of the intangible assets of the Consolidated Company for the six months ended June 30, 2018 and 2017 were as follows:

Trademark Costs : Balance at June 30, 2018 (as same as balance at January 1, 2018) $ 2,897,172 Balance at June 30, 2017 (as same as balance at January 1, 2017) $ 2,897,172 Accumulated amortization and impairment losses : Balance at January 1, 2018 $ 217,287 Amortization for the year 96,573 Balance at June 30, 2018 $ 313,860 Balance at January 1, 2017 $ 24,143 Amortization for the year 96,572 Balance at June 30, 2017 $ 120,715 Carrying value： Balance at June 30, 2018 $ 2,583,312 Balance at January 1, 2018 $ 2,679,885 Balance at June 30, 2017 $ 2,776,457

The amortization expense relating to the intangible assets of the Consolidated Company for the six- months ended June 30, 2018 and 2017 was recognized in the administrative expenses in the statements of comprehensive income.

(Continued) 34

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

(k) Short-term notes and bills payable

June 30, December 31, June 30, 2018 2017 2017 Short-term notes and bills payable $ 4,800,000 8,000,000 8,000,000 Discount on short-term notes and bills payable (523) (1,222) (854) Total $ 4,799,477 7,998,778 7,999,146 Interest rate 0.36%~0.45% 0.36%~0.45% 0.34%~0.73%

(l) Short-term borrowings

June 30, December 31, June 30, 2018 2017 2017 Unsecured short-term borrowings $ 17,674,381 9,295,583 11,782,237 Interest rate 0.55%~4.35% 0.50%~4.35% 0.65%~4.5%

The Consolidated Company were no material issues, and the amount of $8,099,977 was redeemed on short term borrowings for the six months ended June 30, 2017. The amount of $8,378,798 was issued, and there were no material buyback or redemption during the six month periods ended June 30, 2018. For information concerning interest expense, please refer to note 6(w), for other information please refer to note 6(j) of the consolidated financial reports for the year ended 2017.

(m) Long-term debts

Long-term debts consisted of the following:

June 30, 2018 Currency Interest rate Expiration Amount Secured long-term debts TWD 1.6316% 2018~2021 $ 4,000,000 Unsecured long-term debts TWD 1.00%~1.09% 2019~2020 6,000,000 Unsecured long-term debts USD 1.43%~3.38% 2018 9,749,946 Unsecured long-term debts CNY 4.75% 2020 965,092 Long-term notes payable NTD 0.58%~0.89% 2019~2020 4,996,164 Current portion (15,883,279) Total $ 9,827,923

(Continued) 35

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

December 31, 2017 Currency Interest rate Expiration Amount Secured long-term debts TWD 1.2180%~1.6316% 2020~2021 $ 4,766,666 Unsecured long-term debts TWD 0.95%~1.15% 2018~2019 7,300,000 Unsecured long-term debts USD 1.36%~2.3826% 2018 10,128,451 Unsecured long-term debts CNY 4.75% 2020 956,316 Long-term notes payable NTD 0.58%~0.89% 2019~2020 4,998,418 Current portion (12,661,784) Total $ 15,488,067

June 30, 2017 Currency Interest rate Expiration Amount Secured long-term debts TWD 1.2182%~1.6316% 2017~2021 $ 5,433,333 Unsecured long-term debts TWD 0.95%~1.15% 2017~2019 4,257,143 Unsecured long-term debts USD 1.36%~2.2793% 2017~2020 11,316,197 Current portion NTD (2,977,194) Total $ 18,029,479

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

(i) The Consolidated Company issued the amounts of $1,200,000 and $3,000,000 on long term loans for the six months ended June 30, 2018 and 2017, respectively. The amounts of $3,636,395 and $11,132,052 were redeemed for the six months ended June 30, 2018 and 2017, respectively. For information on interest expense, please refer to note 6(w). For other information, please refer to note 6(k) of the consolidated financial reports for the year ended 2017.

(ii) Pledged assets for bank loans

Refer to note 8 for information on the Consolidated Company’s assets pledged to secure loans.

(iii) Secured debts

In order to raise funds to repay debts and for reinvestments, new factory construction plans, and foreign and domestic equipment acquisitions, the Consolidated Company signed a syndicated long-term mortgage loan agreement with Bank of Taiwan, the lead bank of the syndicated loan, and other banks on November 14, 2013. The key terms and conditions of the loan agreement are as follows:

1) Credit line: NT$6,000,000

2) Interest rate: as settled with each participating bank.

3) Period: 7 years (including a 3-year grace period)

(Continued) 36

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

4) Collateral: the acquired land financed by the loan.

5) The financial covenants under this loan agreement include the requirement to maintain certain financial ratios based on the audited annual financial reports. Failure to comply with these financial covenants may cause the syndicated banks to terminate the credit line or declare the unpaid principal and interest under the loan agreement to be immediately due and payable. These financial ratios are as follows:

a) Current Ratio (total current assets divided by total current liabilities): not less than 100%

b) Leverage Ratio (total liabilities plus contingent liabilities to tangible net worth): not higher than 150%

As of June 30, 2018, NT$6,000,000 of the credit line had been drawn.

(n) Unsecured bonds payable

June 30, December 31, June 30, 2018 2017 2017 Domestic unsecured nonconvertible corporate $ 54,200,000 54,200,000 52,500,000 bonds Foreign unsecured nonconvertible corporate 1,830,386 1,791,254 3,652,548 bonds Costs of issuing bonds (59,495) (67,553) (61,198) Current portion (9,127,204) (7,887,079) (9,622,678) Total $ 46,843,687 48,036,622 46,468,672

The terms of domestic corporate bonds as of June 30, 2018 were as follows:

The first domestic The second domestic The third domestic The first domestic The second domestic unsecured unsecured unsecured unsecured unsecured nonconvertible nonconvertible nonconvertible nonconvertible nonconvertible corporate bond corporate bond corporate bond corporate bond corporate bond in 2012 in 2012 in 2012 in 2013 in 2013 Issued amount NT$6,800,000 NT$5,200,000 NT$6,000,000 NT$9,600,000 NT$10,400,000 Balance, end of year 1,299,528 2,798,807 5,997,817 4,198,375 10,384,954 Current portion 649,764 1,399,404 1,199,563 2,299,110 - Issuance date July 4, 2012 September 7, 2012 February 25, 2013 August 5, 2013 December 18, 2013 Issuance period 5 years and 7 years 5 years and 7 years 7 years and 10 years 4 years, 5 years and 7 10 years and 12 years years Coupon rate 1.36% and 1.45% 1.25% and 1.37% 1.36% and 1.50% 1.40%, 1.45% and 1.98% and 2.08% 1.55% Interest payment date July 4 September 7 February 25 August 5 December 18 Repayment method Payable in 2 equal Payable in 2 equal Payable in 2 equal Payable in 2 equal Payable in 2 equal installments for each installments for each installments for each installments for each installments for each coupon rate in coupon rate in coupon rate in coupon rate in coupon rate in 2016~2017 and 2016~2017 and 2018~2019 and 2016~2017, 2022~2023 and 2018~2019, 2018~2019, 2021~2022, 2017~2018 and 2024~2025, respectively. respectively. respectively 2019~2020, respectively respectively

(Continued) 37

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

The first domestic The second domestic The first domestic The first domestic unsecured unsecured unsecured unsecured nonconvertible nonconvertible nonconvertible nonconvertible corporate bond corporate bond corporate bond corporate bond in 2014 in 2014 in 2016 in 2017 Issued amount NT$10,000,000 NT$5,000,000 NT$5,000,000 NT$9,500,000 Balance, end of year 9,981,465 4,997,078 4,994,715 9,487,766 Current portion - 1,748,977 - -

Issuance date June 24, 2014 November 11, 2014 August 16, 2016 July 10, 2017 Issuance period 14 years and 15 years 5 years and 10 years 5 years 5 years and 7 years Coupon rate 2.04% 1.45% and 1.93% 0.68% 1.03% and 1.25% Interest payment date June 24 November 11 August 16 July 10 Repayment method Payable in 2 equal Payable in 2 equal Payable in 2 equal Payable in 2 equal installments for each installments for each installments for each installments for each coupon rate in 2028 coupon rate in coupon rate in 2020 coupon rate in and 2029, 2018~2019 and and 2021, respectively 2021~2022 and respectively. 2023~2024, 2023~2024, respectively respectively

The details of Nan Ya Plastics (Hong Kong) Co., Ltd’s overseas corporate bond were as follows:

Issued in 2013

Issued amount USD$ 180,000 thousand Issuance date August 5, 2013 Issuance period 5 years Coupon rate 3 month LIBOR+1.1% Interest payment date February 5, May 5, August 5, and November 5 Bondholders with a put option The bondholders bear no right to request the Consolidated Company to redeem the bond. Issuer with a redemption option The bond issuer bears the right to request the holders to redeem all outstanding bonds if the issuer needs to pay extra tax due to change in laws and regulations.

(o) Employee Benefits

(i) Defined benefit plans

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim consolidated financial statements was measured and disclosed according to the actuarial report as of December 31, 2017 and 2016.

(Continued) 38

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

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Operating costs $ 130,612 138,946 259,976 278,017 Selling expenses 6,049 6,591 12,021 13,152 Administrative 29,012 32,938 58,142 66,013 expenses $ 165,673 178,475 330,139 357,182

(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.

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Operating costs $ 261,308 274,663 560,269 547,111 Selling expenses 12,931 13,996 30,555 27,877 Administrative 34,038 36,508 73,687 72,889 expenses $ 308,277 325,167 664,511 647,877

(Continued) 39

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

(p) Income Tax

(i) Income tax expense

The components of income tax expense were as follows:

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Current income tax expense Current period $ 2,301,629 1,775,684 3,357,542 2,907,952 Adjustment for prior (42,454) 15,200 (42,454) 15,200 periods Deferred tax expense Origination and 1,193,403 715,696 2,676,922 1,523,843 reversal of temporary differences Adjustment for prior 13,000 - 13,000 - periods Effect of tax rate - - (572,798) - changes Total income tax $ 3,465,578 2,506,580 5,432,212 4,446,995 expense (i) Income tax examination and approval

The Company’s tax returns through 2016 have been examined by the ROC tax authorities.

(q) Capital and other equity

Except for the following disclosure, there was no significant change for capital and other equity for the six months ended June 30, 2018 and 2017. For the related information, please refer to note 6(o) of the consolidated financial statements for the year ended December 31, 2017.

(i) Capital surplus

The components of capital surplus were as follows:

June 30, December 31, June 30, 2018 2017 2017 Paid-in capital from conversion of $ 8,997,136 8,997,136 8,997,136 corporate bond to common stock in excess of par value Gains on acquisition of Taiwan Plasticizer 74,474 74,474 74,474 Corporation Other 17,661,063 17,086,862 14,289,889 Total $ 26,732,673 26,158,472 23,361,499 (Continued) 40

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

(ii) Retained earnings

1) 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 first- time 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 $6,131,117, $6,145,034 and $6,145,034 as of June 30, 2018, December 31, 2017 and June 30, 2017.

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

2) 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.

(Continued) 41

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

Based on the resolutions approved by stockholders during meetings held on June 19, 2018 and June 20, 2017, the distribution of the Company's earnings in 2017 and 2016, respectively, were as follows:

2017 2016 Dividends per share: Cash dividends $ 5.10 4.50 Stock dividends - - $ 5.10 4.50

The aforementioned earnings distributions did not differ from those proposed by the board of directors.

(iii) Other equity accounts (net of tax)

Unrealized gains (losses) on Exchange financial differences on assets at translation of fair value Gains foreign through Available- (losses) on financial profit or for-sale Cash flow hedging statements loss investment hedge instruments Total Balance, January 1, 2018 $ (6,026,197) - 47,691,196 7,729 - 41,672,728 Adjustments due to new standard - 60,594,455 (47,691,196) (7,729) 7,729 12,903,259 Adjusted balance, January 1, 2018 (6,026,197) 60,594,455 - - 7,729 54,575,987 Exchange differences arising on translation of 2,079,026 - - - - 2,079,026 foreign operations Share of exchange differences of associates / joint 219,265 - - - - 219,265 ventures under equity method Unrealized gains (losses) on financial assets at fair - 7,546,278 - - - 7,546,278 value through other comprehensive income Share of unrealized gains (losses) on financial - 2,213,922 - - - 2,213,922 assets of associates / joint ventures under equity method through other comprehensive income Share of cash flow hedge of associates / joint ventures - - - - (10,598) (10,598) Balance, June 30, 2018 $ (3,727,906) 70,354,655 - - (2,869) 66,623,880

Unrealized Exchange gains differences on (losses) on translation of available- foreign for-sale financial financial Cash flow statements assets hedge Total Balance, January 1, 2017 584,042 44,067,434 41,312 44,692,788 Exchange differences arising on translation of foreign operations (5,525,782) - - (5,525,782) Share of exchange differences of associates/joint ventures under equity method (859,690) - - (859,690) Unrealized gains (losses) on available-for-sale financial assets - 705,015 - 705,015 Share of unrealized gains (losses) on available-for-sale financial assets of associates/joint venture under equity method - 2,812,358 - 2,812,358 Share of cash flow hedge of associates/ joint ventures - - (24,458) (24,458) Balance, June 30, 2017 $ (5,801,430) 47,584,807 16,854 41,800,231 (Continued) 42

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

(r) Customer contractual revenue

For the three months ended June 30, 2018 Plastics Chemical Electronic Polyester Other industry industry industry industry industries Total Main Products PVC sheet $ 1,902,390 - - - - 1,902,390 Rigid sheet 2,238,919 - - - - 2,238,919 Pipes 1,494,078 - - - - 1,494,078 Phthalate Plasticizers - 3,755,460 - - - 3,755,460 BPA - 5,076,440 - - - 5,076,440 EG - 10,644,376 - - - 10,644,376 CCL - - 7,581,610 - - 7,581,610 Epoxy - - 7,217,793 - - 7,217,793 PCB - - 6,987,907 - - 6,987,907 Polyester Staple Fiber - - - 3,365,387 - 3,365,387 PET Resin - - - 7,633,462 - 7,633,462 DTY - - - 4,936,547 - 4,936,547 Machinery and Switchgear - - - - 1,443,428 1,443,428 Others 6,114,794 5,854,776 8,397,758 1,726,226 82,739 22,176,293 $ 11,750,181 25,331,052 30,185,068 17,661,622 1,526,167 86,454,090

For the six months ended June 30, 2018 Plastics Chemical Electronic Polyester Other industry industry industry industry industries Total Main Products PVC sheet $ 3,795,855 - - - - 3,795,855 Rigid sheet 4,277,613 - - - - 4,277,613 Pipes 2,860,859 - - - - 2,860,859 Phthalate Plasticizers - 6,596,279 - - - 6,596,279 BPA - 10,153,704 - - - 10,153,704 EG - 22,388,258 - - - 22,388,258 CCL - - 15,203,720 - - 15,203,720 Epoxy - - 13,188,441 - - 13,188,441 PCB - - 13,163,512 - - 13,163,512 Polyester Staple Fiber - - - 6,493,752 - 6,493,752 PET Resin - - - 14,837,586 - 14,837,586 DTY - - - 9,626,016 - 9,626,016 Machinery and Switchgear - - - - 2,640,299 2,640,299 Others 11,838,812 11,278,085 16,922,914 3,250,104 158,272 43,448,187 $ 22,773,139 50,416,326 58,478,587 34,207,458 2,798,571 168,674,081

Please refer to note 6 (s) for the total revenue for three-month and six-month periods ended June 30, 2017.

(Continued) 43

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

(s) Revenue

For the three months For the six months ended June 30, 2017 ended June 30, 2017 Sale of goods $ 73,054,840 144,809,995 Rendering of services 11,301 38,818 Other operating income 1,039,431 1,932,912 $ 74,105,572 146,781,725

(t) Share-based payment

The Consolidated Company's subsidiary, Nan Ya PCB Corporation, believes that there were no significant changes on share-based payment for the six months ended June 30, 2018 and 2017. For the related information, please refer to note 6(p) of the consolidated financial statements for the year ended December 31, 2017.

The units of employee stock option issued by Nan Ya PCB Corporation on June 23, 2009 and March 25, 2010 had expired on June 22, 2017 and March 24, 2018, respectively.

(u) Earnings Per Share

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Net income attributable to the Company $ 16,669,733 9,030,791 30,134,392 19,898,009 Number of weighted average outstanding shares 7,930,822 7,930,822 7,930,822 7,930,822 $ 2.10 1.14 3.80 2.51

(v) 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.

For the three-month and six-month periods ended June 30, 2018 and 2017 , the Company estimated its employee remuneration amounted to $19,066, $10,469, $33,420, and $22,157, respectively, which were calculated based on the Company's profit before tax without the employee compensation of each period, multiplied by the percentage of remuneration to employees as specified in the Company's articles. These remunerations were expensed under operating costs or operating expenses during 2018 and 2017. If there would be any changes after the reporting date, the changes shall be accounted for as changes in accounting estimates and recognized as profit or loss in the following year.

(Continued) 44

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

The Company recognized its employee remuneration amounted to $58,908 in 2017 and to $51,567 in 2016. There was no difference from the actual distribution. The information is available on the Market Observation Post System website.

(w) Non-operating income and expenses

(i) Other income

The components of other income were as follows:

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Interest income $ 276,301 330,160 481,115 568,001 Dividend income 35,995 18,065 35,995 18,065 Other income 473,151 255,894 910,021 629,165 $ 785,447 604,119 1,427,131 1,215,231

(ii) Other gains and losses

The components of other gains and losses were as follows:

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Foreign exchange gain (loss) $ 1,165,819 321,091 794,587 (1,807,637) Net loss on financial assets at fair value through profit or loss 225,137 - 137,165 - Impairment loss on financial assets - - - (1,023) Loss on disposal of property, plant and equipment (23,087) (13,393) (28,949) (28,847) Reversal of impairment/ Impairment loss of property, plant and equipment, and non- financial instruments 236 46,286 5,378 86,879 Others (63,663) 96,715 (101,594) 54,315 $ 1,304,442 450,699 806,587 (1,696,313)

(Continued) 45

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

(iii) Finance costs

The components of finance costs were as follows:

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Interest expense $ 474,399 524,773 906,091 968,020 Less: Capitalization of (15,338) (22,769) (31,993) (44,752) interest $ 459,061 502,004 874,098 923,268

(x) Financial Instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Consolidated Company’s financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to note 6(u) of the consolidated financial statements for the year ended December 31, 2017.

(i) Currency risk

1) Exposure to foreign currency risk

The Consolidated Company’ s foreign currency denominated financial assets and liabilities exposed to exchange rate risk were as follows:

June 30, 2018 Foreign Currency Exchange Rate TWD Financial assets Monetary items USD $ 1,305,830 30.5000 39,827,815 JPY 329,375 0.2765 91,072 EUR 3,278 35.3441 115,858 HKD 9,775 3.9103 38,223 CNY 6,050 4.6099 27,890 Non-monetary items USD 670,930 30.5000 20,463,365 CNY 52,341 4.6099 241,287 IDR 120,599,474 0.0022 265,319 VND 6,226,923,371 0.0013 8,095,000

(Continued) 46

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

June 30, 2018 Foreign Currency Exchange Rate TWD Financial liabilities Monetary items USD 423,821 30.5000 12,926,541 JPY 714,528 0.2765 197,567 EUR 2,581 35.3441 91,223 CNY 241 4.6099 1,111

December 31, 2017 Foreign Currency Exchange Rate TWD Financial assets Monetary items USD $ 999,623 29.8480 29,836,747 JPY 118,876 0.2641 31,395 EUR 1,836 35.6081 65,376 HKD 6,989 3.8267 26,745 CNY 1,324 4.5679 6,048 Non-monetary items USD 584,711 29.8480 17,452,454 CNY 50,062 4.5679 228,678 IDR 114,274,967 0.0022 251,405 VND 5,983,703,009 0.0013 7,778,814 Financial liabilities Monetary items USD 442,738 29.8480 13,214,844 JPY 824,118 0.2641 217,650 EUR 2,317 35.6081 82,504 CNY 2 4.5679 9

June 30, 2017 Foreign Currency Exchange Rate TWD Financial assets Monetary items USD $ 1,419,737 30.4360 43,211,115 JPY 431,509 0.2708 116,853 EUR 1,343 34.7536 46,674 HKD 8,104 3.9021 31,623 CNY 1,457 4.4929 6,546 (Continued) 47

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

June 30, 2017 Foreign Currency Exchange Rate TWD Non-monetary items USD $ 647,841 30.4360 19,717,689 CNY 51,639 4.4929 232,009 IDR 105,908,750 0.0023 243,590 VND 6,451,956,339 0.0013 8,387,543 Financial liabilities Monetary items USD $ 581,333 30.4360 17,693,451 JPY 1,247,268 0.2708 337,760 EUR 8,129 34.7536 282,512 CNY 136 4.4929 611

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 which are denominated in different foreign currencies. The overall effects to net income before tax for the six months ended June 30, 2018 and 2017 assuming the TWD depreciated or appreciated by 1% against the USD, JPY, EUR, HKD and CNY as of June 30, 2018 and 2017 were as follows:

For the six months ended June 30 2018 2017 Appreciation in value of 1% $ (268,830) (251,025) Depreciation in value of 1% 268,830 251,025

This analysis is performed on the same basis assuming that all other variables remain constant and ignoring any impact of forecasted sales and purchases.

3) Foreign exchange gain and loss on monetary items

Due to the variety of functional currencies, the Consolidated Company disclosed its aggregated foreign exchange gains (losses); the Consolidated Company’ s foreign exchange gains and losses, including realized and unrealized, for the six months ended June 30, 2018 and 2017 were the net exchange losses of $794,587 and $(1,807,637), respectively.

(Continued) 48

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

(ii) Fair value of financial instruments

1) The categories and fair value of financial instruments

The carrying amount and fair value of the Consolidated Company’s financial assets and liabilities, including the information on fair value hierarchy as stated below. 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 for equity investments that has no quoted prices in the active markets and whose fair value cannot be reliably measured, disclosure of fair value information is not required :

June 30, 2018 Fair Value Carrying amount Level 1 Level 2 Level 3 Total Financial assets at fair value through profit or loss Financial assets designated as at fair value through profit or loss $ 4,842,074 905,447 3,936,627 - 4,842,074 Financial assets at fair value through other comprehensive income Stocks in listed companies $ 50,237,362 50,237,362 - - 50,237,362 Unquoted equity instruments 33,021,575 - - 33,021,575 33,021,575 Bond investments and others 1,131,514 - - 1,131,514 1,131,514 Subtotal $ 84,390,451 50,237,362 - 34,153,089 84,390,451 Financial assets measured at amortized cost Cash and cash equivalent $ 51,617,946 - - - - Notes and accounts receivable (including related parties) 60,055,126 - - - - Subtotal $ 111,673,072 - - - - Financial liabilities at amortized cost Short-term borrowing $ 17,674,381 17,674,381 - - 17,674,381 Short-term notes and bills payable 4,799,477 4,799,477 - - 4,799,477 Notes and accounts payable (including related parties) 18,866,688 - - - - Bonds payable 55,970,891 55,970,891 - - 55,970,891 Long-term borrowing 20,715,038 20,715,038 - - 20,715,038 Long-term notes payable 4,996,164 4,996,164 - - 4,996,164 Subtotal $ 123,022,639 104,155,951 - - 104,155,951

(Continued) 49

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

December 31, 2017 Fair Value Carrying amount Level 1 Level 2 Level 3 Total Available-for-sale financial assets Stocks in listed companies $ 43,569,603 43,569,603 - - 43,569,603 Domestic and foreign funds 5,477,817 903,549 4,574,268 - 5,477,817 Bonds and others 1,128,219 - - 1,128,219 1,128,219 Subtotal $ 50,175,639 44,473,152 4,574,268 1,128,219 50,175,639 Loans and receivables Cash and cash equivalent $ 44,304,079 - - - - Notes and accounts receivable (including related parties) 56,120,375 - - - - Subtotal $ 100,424,454 - - - - Financial liabilities at amortized cost Short-term borrowing $ 9,295,583 9,295,583 - - 9,295,583 Short-term notes and bills payable 7,998,778 7,998,778 - - 7,998,778 Notes and accounts payable (including related parties) 19,975,842 - - - - Bonds payable 55,923,701 55,923,701 - - 55,923,701 Long-term borrowing 23,151,433 23,151,433 - - 23,151,433 Long-term notes payable 4,998,418 4,998,418 - - 4,998,418 Subtotal $ 121,343,755 101,367,913 - - 101,367,913

June 30, 2017 Fair Value Carrying amount Level 1 Level 2 Level 3 Total Available-for-sale financial assets Stocks in listed companies $ 40,746,947 40,746,947 - - 40,746,947 Domestic and foreign funds 5,529,078 901,763 4,627,315 - 5,529,078 Bond investments and others 1,150,445 - - 1,150,445 1,150,445 Subtotal $ 47,426,470 41,648,710 4,627,315 1,150,445 47,426,470 Loans and receivables Cash and cash equivalent $ 52,183,129 - - - - Notes and accounts receivable (including related parties) 48,856,980 - - - - Subtotal $ 101,040,109 - - - -

(Continued) 50

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

June 30, 2017 Fair Value Carrying amount Level 1 Level 2 Level 3 Total Financial liabilities at amortized cost Short-term borrowing $ 11,782,237 11,782,237 - - 11,782,237 Short-term notes and bills payable 7,999,146 7,999,146 - - 7,999,146 Notes and accounts payable (including related parties) 17,348,858 - - - - Bonds payable 56,091,350 56,091,350 - - 56,091,350 Long-term borrowing 21,006,673 21,006,673 - - 21,006,673 Subtotal $ 114,228,264 96,879,406 - - 96,879,406

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 (held-to-maturity financial assets)

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 assets measured at amortized cost (debt investment that has no active markets) and 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.

(Continued) 51

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

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:

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 six-month period ended June 30, 2018 and 2017.

5) Movement of financial instruments grouped into level 3

Fair value through other comprehensive income (available-for- sale financial assets) Unquoted equity Bond investment instruments and others January 1, 2018 $ 30,050,756 1,107,325 Total gains and losses recognized: In other comprehensive income 878,519 - Purchased 1,676,070 - Capital reduction (1,972) - Effect of exchange rate changes 418,202 24,189 June 30, 2018 $ 33,021,575 1,131,514 January 1, 2017 $ - 1,220,108 Total gains and losses recognized: Effect of exchange rate changes - (69,663) June 30, 2017 $ - 1,150,445

(Continued) 52

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

(y) Financial risk management

There were no significant changes in the Consolidated Company's financial risk management and policies as disclosed in Note 6(v) of the consolidated financial statements for the year ended December 31, 2017.

(z) Capital Management

Management believes that the objectives, policies and processes of capital management of the Consolidated Company has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2017. Also, management believes that there were no significant changes in the Consolidated Company's capital management information as disclosed for the year ended December 31, 2017. Please refer to Note 6(w) of the consolidated financial statements for the year ended December 31, 2017 for further details.

(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)

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 Heavy Industries Corp. (GZ) Ltd. 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 Automobile 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

(Continued) 53

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

Relationship with the Name of related party Consolidated Company Formosa Plastics Corporation Other related parties Formosa Chemicals and Fiber Corporation Other related parties Hwa Ya Power Corporation Other related parties Formosa Taffeta Co., Ltd. Other related parties Formosa Advanced Technology Corporation 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 Electronic (Ningbo) Co., Ltd. Other related parties Formosa ABS Plastics (Ningbo) Limited Company Other related parties Formosa Chemicals and Fiber (Ningbo) Corporation Other related parties Formosa Phenol (Ningbo) Limited Company 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

(i) Sales to related parties

Significant sales to related parties were as follows:

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Associates and joint $ 1,947,451 1,688,195 3,698,354 3,077,736 ventures Other related parties 3,837,341 3,550,831 8,274,978 7,065,682 $ 5,784,792 5,239,026 11,973,332 10,143,418

(Continued) 54

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

The receivables from related parties were as follows:

June 30, December 31, June 30, 2018 2017 2017 Associates and joint ventures $ 1,097,240 859,276 1,458,818 Other related parties 1,431,649 1,673,125 1,200,083 $ 2,528,889 2,532,401 2,658,901

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 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

Significant purchases from related parties were as follows:

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Associates and joint ventures Formosa Petrochemical $ 11,741,099 10,540,865 24,083,063 21,682,342 Corporation Other associates and 62,468 7,200 72,275 23,348 joint ventures Other related parties Formosa Chemicals 8,853,094 6,441,799 17,312,235 13,781,733 and Fiber Corporation Other related parties 5,889,234 4,326,881 12,303,706 9,623,843 $ 26,545,895 21,316,745 53,771,279 45,111,266

(Continued) 55

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

The payables to related parties were as follows:

June 30, December 31, June 30, 2018 2017 2017 Associates and joint ventures Formosa Petrochemical Corporation $ 3,624,022 3,884,307 3,328,575 Other associates and joint ventures - - 389 Other related parties Formosa Chemicals and Fiber 3,105,363 3,299,791 2,199,646 Corporation Other related parties 2,429,436 2,538,691 1,923,897 $ 9,158,821 9,722,789 7,452,507

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 for the three-month and six-month periods ended June 30, 2018 and 2017 were as follows:

For the three months ended June 30, 2018 For the six months ended June 30, 2018 Unrealized sales Unrealized sales profit at (Realized) Unrealized sales profit at (Realized) Unrealized beginning of Unrealized sales profit at end of beginning of Unrealized sales sales profit at Investee period profits period period profits end of period Associates and joint ventures $ 89,616 (11,639) 77,977 102,249 (24,272) 77,977

For the three months ended June 30, 2018 For the six months ended June 30, 2017 Unrealized sales Unrealized sales profit at (Realized) Unrealized sales profit at (Realized) Unrealized beginning of Unrealized sales profit at end of beginning of Unrealized sales sales profit at Investee period profits period period profits end of period Associates and joint ventures $ 130,022 (13,579) 116,443 135,038 (18,595) 116,443

(iv) Construction

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

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Associates and joint ventures Formosa Heavy Industries $ 219,441 34,368 655,339 108,825 Corporation

(Continued) 56

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

The payables to related parties were as follows:

June 30, December 31, June 30, 2018 2017 2017 Associates and joint ventures Formosa Heavy Industries $ 412,414 116 5,585 Corporation

(v) Utility expenses

Part of the utilities of the 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:

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Associates and joint ventures Formosa $ 1,829,771 1,898,721 3,746,226 3,487,285 Petrochemical Corporation Other related parties Formosa Plastics 27,347 27,194 51,797 50,500 Corporation $ 1,857,118 1,925,915 3,798,023 3,537,785

(vi) Loans to related parties

The loans to related parties were as follows:

Other Receivables from Related Parties June 30, December 31, June 30, 2018 2017 2017 Associates and joint ventures Nanya Technology Corporation $ - - 9,800,000 Formosa Heavy Industries Corporation 2,500,000 1,000,000 1,000,000 Formosa Group (Cayman) Limited 4,259,500 4,259,500 - Other associates and joint ventures 585,524 779,460 575,434

(Continued) 57

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

Other Receivables from Related Parties June 30, December 31, June 30, 2018 2017 2017 Other related parties Formosa Plastics Marine Corporation $ 3,978,721 4,176,922 3,191,633 Formosa Ha Tinh (Cayman) Ltd. 3,040,500 3,040,500 - Other related parties 92,197 1,091,359 1,089,858 $ 14,456,442 13,347,741 15,656,925

(vii) Property transactions

1) Acquisition of financial assets

Financial Transaction For the three Statement Shares Transaction months ended Account (in thousands) Items June 30, 2018 Other related parties ─ Formosa Non ─ current Shares of stock of Ha Tinh (Cayman) Ltd. financial assets at Formosa Ha Tinh fair value through (Cayman) Ltd. other comprehensive income 56,471 $ 1,676,070

Financial Transaction For the three Statement Shares Transaction months ended Account (in thousands) Items June 30, 2017 Associates ─ Formosa Resources Investments Shares of stock of Corporation accounted for using Formosa Resources equity method 168,344 Corporation $ 1,683,440

Financial Transaction For the six months Statement Shares Transaction ended June 30, Account (in thousands) Items 2018 Other related parties ─ Formosa Non ─ current Shares of stock of Ha Tinh (Cayman) Ltd. financial assets at Formosa Ha Tinh fair value through (Cayman) Ltd. other comprehensive income 56,471 $ 1,676,070

Financial Transaction For the six months Statement Shares Transaction ended June 30, Account (in thousands) Items 2017 Associates ─ Formosa Resources Investments Shares of stock of Corporation accounted for using Formosa Resources equity method 168,344 Corporation $ 1,683,440

(Continued) 58

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:

June 30, December 31, June 30, 2018 2017 2017 Associates and joint ventures Formosa Group (Cayman) Limited $ 19,062,500 21,639,800 29,522,920 Formosa Industries Corporation 5,005,309 4,898,311 4,994,806 Other associates and joint ventures 3,278,750 3,890,900 4,315,390 Other related parties Formosa Ha Tinh (Cayman) Ltd. 15,795,023 15,457,372 11,760,519 $ 43,141,582 45,886,383 50,593,635

(ix) Rental

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

For the three months ended June For the six months ended June 30 30 2018 2017 2018 2017 Associates and joint ventures Nan Ya $ 57,946 51,582 115,793 102,742 Technology Corporation

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 from its related parties, recognized as operating costs and expenses, are as follows:

For the three months ended June 30 For the six months ended June 30 2018 2017 2018 2017 Associates and joint ventures $ 3,183 3,183 6,367 6,367 Other related parties 22,043 18,717 42,495 41,513 $ 25,226 21,900 48,862 47,880

The related parties charged their rentals based on the local market prices, which are paid depending on the contract periods (e.g. monthly, semi-annually or annually)

(Continued) 59

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

(d) Key management personnel compensation

Key management personnel compensation comprised:

For the three months ended For the six months ended June 30 June 30 2018 2017 2018 2017 Short-term employee benefits $ 28,053 26,442 54,204 50,331

(8) Pledged assets:

The carrying values of pledged assets were as follows:

June 30, December 31, June 30, Pledged assets Object Usage 2018 2017 2017 Financial asset at fair value Others The collateral to $ 1,432,800 - - through other provisional comprehensive income－ execution current－stock of in litigation Formosa Plastics Corporation Available-for-sale financial Others The collateral to asset－current－stock of provisional Formosa Plastics execution Corporation in litigation - 1,257,043 1,180,627 Investment accounted for Long-term and short- Long-term and using equity method－ term debt short-term debt stock of Formosa Petrochemical Corporation 9,063,097 9,099,955 7,698,199 Land (include idle land) Long-term and short- Long-term and term debt short-term debt 7,529,494 7,529,494 7,529,494 Machinery and equipment Long-term and short- Long-term and term debt short-term debt 95,184 235,439 382,375 Total $ 18,120,575 18,121,931 16,790,695

(9) Commitments and contingencies:

June 30, December 31, June 30, 2018 2017 2017 (1) Outstanding standby letter of credit $ 2,071,417 1,480,072 1,172,861 (2) Endorsements and guarantees 43,141,582 45,886,383 50,593,635 (3) Bonding guarantees by banks 25,000 25,000 31,500 (4) Letters of credit guarantees by banks 22,275 22,275 22,275

(Continued) 60

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

(5) Nan Ya PCB (Kunshan) Corporation, a subsidiary of Nan Ya PCB Corporation and a sub-subsidiary of the Company, signed a syndicated loan contract with a group of financial institutions, with Chang Hwa Bank as the lead bank, amounting to USD 117,330 thousand, for its construction funds commencing 2012. According to the requirement of the consortium, Nan Ya PCB Corporation has to offer a letter of undertaking and commit to monitor the operations of Nan Ya PCB (Kunshan) to ensure that it completes its construction on schedule.

(6) Formosa Ha Tinh (Cayman) Ltd., a Company’ s investee, signed a syndicated line of credit with a group of financial institutions amounting to USD 1,870,000 thousand for its operational needs. According to the requirement of the consortium, the Company has to offer a letter of undertaking based on its ownership of 11.432% and commit to monitor the operations of Formosa Ha Tinh (Cayman) Ltd. to ensure that it completes its financial obligation.

(7) 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 NTD 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, the Court authorized the Company to hold certain properties of DBTEL as its collateral. However, DBTEL was not satisfied with the decision made by the Court; therefore, it filed an appeal against the Company. On April 18, 2017, the Court decided that the compensation demanded by the Company should not exceed the amounts of USD 1,246,118 and NTD 27,229,161 (both including principal and interest). Plus, the said properties that were held by the Company for collateral amounting to NTD 167,711,921 should also be returned to DBTEL, with additional interest from May 3, 2011 to the return date calculated by 5% annual interest rate. The Company considered the verdict handed down by the Taiwan High Court to be unreasonable and contradictory to its previous decision. Therefore, it filed an appeal to the Supreme Court. Currently, this case is still in progress.

(10) Losses Due to Major Disasters:None

(11) Subsequent Events:None

(Continued) 61

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

(12) Other:

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

For the three months ended June 30, 2018 2017 Operating Operating Non-Operating Operating Operating Non-Operating Costs expenses expenses Total Costs expenses expenses Total Employee benefit

Salaries 5,456,117 1,426,156 - 6,882,273 5,256,102 1,426,023 - 6,682,125

Labor and health insurance 487,987 84,914 - 572,901 470,947 84,337 - 555,284

Pension expenses 391,920 82,030 - 473,950 413,609 90,033 - 503,642

Remuneration of directors - 6,321 - 6,321 - 6,374 - 6,374

Others personnel expenses 295,348 44,666 - 340,014 305,792 50,710 - 356,502

Depreciation expenses 3,908,000 137,320 6,007 4,051,327 3,786,107 198,117 5,248 3,989,472

Amortization expenses 388,307 65,809 - 454,116 520,751 64,710 - 585,461

For the six months ended June 30, 2018 2017 Operating Operating Non-Operating Operating Operating Non-Operating Costs expenses expenses Total Costs expenses expenses Total Employee benefit

Salaries 10,880,373 2,913,681 - 13,794,054 10,363,465 2,929,929 - 13,293,394

Labor and health insurance 1,012,526 174,988 - 1,187,514 954,154 170,941 - 1,125,095

Pension expenses 820,245 174,405 - 994,650 825,128 179,931 - 1,005,059

Remuneration of directors - 12,421 - 12,421 - 11,781 - 11,781

Others personnel expenses 632,062 102,708 - 734,770 611,494 99,761 - 711,255

Depreciation expenses 7,870,781 270,556 11,060 8,152,397 7,603,126 397,722 10,495 8,011,343

Amortization expenses 839,576 137,384 - 976,960 914,484 133,004 - 1,047,488

(13) Other disclosures:

(a) Information on significant transactions:

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

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

(iii) Securities held as of June 30, 2018 (excluding investment in subsidiaries, associates and joint ventures): Please see attached Table 3.

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:Please see attached Table 4.

(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: Please see attached Table 5.

(Continued) 62

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

(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None

(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please see attached Table 6.

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: Please see attached Table 7.

(ix) Trading in derivative instruments: None

(x) Business relationships and significant intercompany transactions: Please see attached Table 8.

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

(14) Segment information:

Operating segments are combined and reconciled as follows:

For the three months ended June 30, 2018 Plastics Plastics Electronic Polyester Other Product Material Materials Product Department Reconciliations Total Revenue： Net revenue from external customers $ 11,750,181 25,331,052 30,185,068 17,661,622 1,526,167 - 86,454,090 Net revenue from sales among intersegments 293,747 2,369,877 5,843,870 339,703 697,626 (9,544,823) - Total revenue $ 12,043,928 27,700,929 36,028,938 18,001,325 2,223,793 (9,544,823) 86,454,090 Reportable segment profit or loss $ 1,008,343 4,320,605 2,932,411 940,600 13,976,016 (3,109,213) 20,068,762

For the three months ended June 30, 2017 Plastics Plastics Electronic Polyester Other Product Material Materials Product Department Reconciliations Total Revenue： Net revenue from external customers $ 11,128,919 21,513,906 26,136,335 13,472,871 1,853,541 - 74,105,572 Net revenue from sales among intersegments 253,214 2,079,620 4,712,582 167,398 789,242 (8,002,056) - Total revenue $ 11,382,133 23,593,526 30,848,917 13,640,269 2,642,783 (8,002,056) 74,105,572 Reportable segment profit or loss $ 1,048,314 1,394,532 3,423,081 353,790 7,643,644 (2,354,325) 11,509,036

For the six months ended June 30, 2018 Plastics Plastics Electronic Polyester Other Product Material Materials Product Department Reconciliations Total Revenue： Net revenue from external customers $ 22,773,139 50,416,326 58,478,587 34,207,458 2,798,571 - 168,674,081 Net revenue from sales among intersegments 523,974 4,799,404 11,637,618 557,908 1,599,527 (19,118,431) - Total revenue $ 23,297,113 55,215,730 70,116,205 34,765,366 4,398,098 (19,118,431) 168,674,081 Reportable segment profit or loss $ 1,968,984 8,802,879 5,846,522 1,545,945 23,180,699 (6,042,336) 35,302,693

(Continued) 63

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

For the six months ended June 30, 2017 Plastics Plastics Electronic Polyester Other Product Material Materials Product Department Reconciliations Total Revenue： Net revenue from external customers $ 22,154,774 42,314,871 51,889,135 27,493,893 2,929,052 - 146,781,725 Net revenue from sales among intersegments 430,779 3,769,778 9,465,130 408,215 1,398,924 (15,472,826) - Total revenue $ 22,585,553 46,084,649 61,354,265 27,902,108 4,327,976 (15,472,826) 146,781,725 Reportable segment profit or loss $ 2,075,013 4,825,059 6,487,885 569,569 15,101,596 (5,039,894) 24,019,228

Plastics Plastics Electronic Polyester Other Product Material Materials Product Department Reconciliations Total Reportable segment assets: June 30, 2018 $ 32,110,810 68,895,923 138,114,594 34,393,122 509,353,788 (180,422,980) 602,445,257 December 31, 2017 $ 32,612,367 63,714,019 139,985,117 35,058,030 442,646,826 (169,944,970) 544,071,389 June 30, 2017 $ 31,669,526 62,100,424 132,203,713 34,104,711 435,327,380 (159,642,420) 535,763,334

Plastics Plastics Electronic Polyester Other Product Material Materials Product Department Reconciliations Total Reportable segment liabilities June 30, 2018 $ 9,997,542 14,384,129 31,125,180 10,712,797 161,668,545 (8,855,005) 219,033,188 December 31, 2017 $ 10,192,314 13,833,368 29,722,991 11,284,939 121,238,465 (9,420,447) 176,851,630 June 30, 2017 $ 9,438,772 17,374,001 28,029,666 10,847,349 145,427,110 (7,086,305) 204,030,593 64

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES LOANS TO OTHER PARTIES FOR THE SIX MONTHS ENDED JUNE 30, 2018 (Expressed in thousands of New Taiwan Dollars) TABLE 1

Highest Balance of Actual Usage Purposes of Fund Transaction Amount for Reasons for Individual Maximum Related Ending Range of Interest Rates Allowance Collateral No. Name of Lenders Name of Borrowers Financing to Other during the Financing for the Business Between Two Short-term Funding Loan Limitation on Fund Account Name Party Balance during the Period. for Bad Debt Parties during the Period Period Borrowers (Note 1) Parties (Note 2) Financing Item Value Limits (Note 3) Financing (Note 4) 3 Nan Ya Plastics (Hong Kong) Co., Nan Ya Draw Textured Yarn Other receivables from YES 5,442,778 2,038,175 2,038,175 0.90%~0.92% 2 - Operating - ‑ - 39,830,540 79,661,081 Ltd. (Kunshan) Co., Ltd. (Note 6) related parties capital 4 Wen Fung Industrial Co., Ltd. Wellink Technology Other receivables from YES 23,000 23,000 - - 2 - Operating - ‑ - 48,347 241,735 Corporation (Note 6) related parties capital 4 Wen Fung Industrial Co., Ltd. Formosa Environmental Other receivables from YES 61,000 60,000 60,000 1.408%~1.408% 2 - Operating - ‑ - 120,868 241,735 Technology Corporation related parties capital 5 Wellink Technology Corporation Formosa Automobile Other receivables from YES 20,000 - - 1.408%~1.408% 2 - Operating - ‑ - 67,318 134,636 Corporation related parties capital 6 Nan Ya Plastics (Guangzhou) Co., Nan Ya Plastics (Ningbo) Co., Other receivables from YES 1,110,053 912,751 912,751 3.48%~3.48% 2 - Operating - ‑ - 1,310,028 2,620,056 Ltd. Ltd. (Note 6) related parties capital 7 Nan Ya Plastics (Huizhou) Co., Nan Ya Electronic Materials Other receivables from YES 265,067 - - 3.48%~3.48% 2 - Operating - - - 1,657,274 3,314,549 Ltd. (Huizhou) Co., Ltd. (Note 6) related parties capital 7 Nan Ya Plastics (Huizhou) Co., Nan Ya Draw Textured Yarn Other receivables from YES 451,766 290,421 290,421 3.48%~3.48% 2 - Operating - ‑ - 1,657,274 3,314,549 Ltd. (Kunshan) Co., Ltd. (Note 6) related parties capital 7 Nan Ya Plastics (Huizhou) Co., Nan Ya Plastics (Ningbo) Co., Other receivables from YES 689,634 666,585 666,585 3.48%~3.48% 2 - Operating - ‑ - 1,657,274 3,314,549 Ltd. Ltd. (Note 6) related parties capital 7 Nan Ya Plastics (Huizhou) Co., Nan Ya Plastics Film Other receivables from YES 678,570 667,046 667,046 3.48%~3.48% 2 - Operating - ‑ - 1,657,274 3,314,549 Ltd. (Huizhou) Co., Ltd. (Note 6) related parties capital 8 Nan Ya Trading (Huizhou) Co., Nan Ya Electronic Materials Other receivables from YES 4,610 - - 3.48%~3.48% 2 - Operating - ‑ - 27,537 55,074 Ltd. (Huizhou) Co., Ltd. (Note 6) related parties capital 8 Nan Ya Trading (Huizhou) Co., Nan Ya Plastics Film Other receivables from YES 18,439 - - 3.48%~3.48% 2 - Operating - ‑ - 27,537 55,074 Ltd. (Huizhou) Co., Ltd. (Note 6) related parties capital 8 Nan Ya Trading (Huizhou) Co., PFG Fiber Glass (Kunshan) Other receivables from YES 25,354 25,354 25,354 3.48%~3.48% 2 - Operating - ‑ - 27,537 55,074 Ltd. Co., Ltd. (Note 6) related parties capital 9 Nan Ya Plastics (Xiamen) Co., Nan Ya Plastics Film Other receivables from YES 18,439 - - 3.48%~3.48% 2 - Operating - ‑ - 731,897 731,897 Ltd. (Huizhou) Co., Ltd. (Note 6) related parties capital 9 Nan Ya Plastics (Xiamen) Co., Nan Ya Electronic Materials Other receivables from YES 82,977 - - 3.48%~3.48% 2 - Operating - ‑ - 731,897 731,897 Ltd. (Huizhou) Co., Ltd. (Note 6) related parties capital 9 Nan Ya Plastics (Xiamen) Co., Xiamen Haicang Investment Other receivables from YES 92,197 92,197 92,197 3.48%~3.48% 2 - Operating - - - 731,897 731,897 Ltd. Group Co., Ltd. related parties capital 9 Nan Ya Plastics (Xiamen) Co., Nan Ya Draw Textured Yarn Other receivables from YES 138,296 138,296 138,296 3.48%~3.48% 2 - Operating - - - 731,897 731,897 Ltd. (Kunshan) Co., Ltd. (Note 6) related parties capital 9 Nan Ya Plastics (Xiamen) Co., Nan Ya Plastics (Ningbo) Co., Other receivables from YES 281,201 281,201 281,201 3.48%~3.48% 2 - Operating - - - 731,897 731,897 Ltd. Ltd. (Note 6) related parties capital 10 Nan Ya Plastics (Nantong) Co., Nan Ya Plastics Film Other receivables from YES 3,227 - - 3.48%~3.48% 2 - Operating - - - 3,749,136 7,498,271 Ltd. (Huizhou) Co., Ltd. (Note 6) related parties capital 10 Nan Ya Plastics (Nantong) Co., Nan Ya Draw Textured Yarn Other receivables from YES 622,330 622,330 622,330 3.48%~3.48% 2 - Operating - ‑ - 3,749,136 7,498,271 Ltd. (Kunshan) Co., Ltd. (Note 6) related parties capital 10 Nan Ya Plastics (Nantong) Co., Nan Ya Plastics (Ningbo) Co., Other receivables from YES 3,397,461 2,807,861 2,807,861 3.48%~3.48% 2 - Operating - ‑ - 3,749,136 7,498,271 Ltd. Ltd. (Note 6) related parties capital 11 China Nantong Huafeng Co., Ltd. Nan Ya Plastics Film Other receivables from YES 64,538 - - 3.48%~3.48% 2 - Operating - ‑ - 167,942 335,883 (Huizhou) Co., Ltd. (Note 6) related parties capital 11 China Nantong Huafeng Co., Ltd. Nan Ya Draw Textured Yarn Other receivables from YES 145,210 145,210 145,210 3.48%~3.48% 2 - Operating - ‑ - 167,942 335,883 (Kunshan) Co., Ltd. (Note 6) related parties capital 11 China Nantong Huafeng Co., Ltd. Nan Ya Plastics (Ningbo) Co., Other receivables from YES 165,955 165,955 165,955 3.48%~3.48% 2 - Operating - ‑ - 167,942 335,883 Ltd. (Note 6) related parties capital 12 Nantong Huafu Plastics Co., Ltd. Nan Ya Plastics Film Other receivables from YES 41,489 - - 3.48%~3.48% 2 - Operating - ‑ - 46,850 93,700 (Huizhou) Co., Ltd. (Note 6) related parties capital 12 Nantong Huafu Plastics Co., Ltd. PFG Fiber Glass (Kunshan) Other receivables from YES 23,049 23,049 23,049 3.48%~3.48% 2 - Operating - ‑ - 46,850 93,700 Co., Ltd. (Note 6) related parties capital 13 Nan Ya Electric (Nantong) Co., Nan Ya Plastics Film Other receivables from YES 71,453 - - 3.48%~3.48% 2 - Operating - ‑ - 575,939 1,151,878 Ltd. (Huizhou) Co., Ltd. (Note 6) related parties capital 13 Nan Ya Electric (Nantong) Co., PFG Fiber Glass (Kunshan) Other receivables from YES 46,099 46,099 46,099 3.48%~3.48% 2 - Operating - ‑ - 575,939 1,151,878 Ltd. Co., Ltd. (Note 6) related parties capital 13 Nan Ya Electric (Nantong) Co., Nan Ya Plastics (Ningbo) Co., Other receivables from YES 366,483 366,483 366,483 3.48%~3.48% 2 - Operating - ‑ - 575,939 1,151,878 Ltd. Ltd. (Note 6) related parties capital 66

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：Nan Ya Plastics corporation, America and Nan Ya Plastics corporation USA s’reporting currency are denominated in USD, and the exchange rate of NTD to USD as of June 30, 2018 (in average) is 30.5(29.561)：1. Nan Ya Plastics (Hong Kong) Co., Ltd and Superior World Wide Trading Co., Ltd. s’reporting currency are denominated in HKD, and the exchange rate of NTD to HKD as of June 30, 2018 (in average) is 3.9103(3.7899)：1. Note 6：This transaction has already been written off during the consolidation process. 67 NAN YA PLASTICS CORPORATION AND SUBSIDIARIES GUARANTEES AND ENDORSEMENTS FOR OTHER PARTIES FOR THE SIX MONTHS ENDED JUNE 30, 2018 (Expressed in thousands of New Taiwan Dollars) TABLE 2 B=A/2 C D=C/SE A=S/E*1.3 Counterparty of Guarantee and Limitation Highest Balance Parent Company Subsidiary Amount of Ratio of Accumulated Maximum Endorsements Endorsement Amount of for Guarantee Balance of Amount Secured Endorses Endorses Endorsement Amounts of Guarantees Amounts for /Guarantees to the Third Endorsement Guarantees and and Guarantees and by Guaranteed /Guarantees to /Guarantees to No /Guarantee and Endorsements to Guarantees Parties on Behalf of the Guarantee Provider Relationship with Endorsements for Endorsements Endorsements as and Endorsed Third Parties on Third Parties on Name Collateralized by Net Worth of the Latest and Companies in Mainland The Company (Note) a Specific during the of June 30, 2018 Property Behalf of Behalf of Parent Properties Financial Statements Endorsements China Enterprise Period Subsidiary Company 0 The Company Nan Ya Plastics 2 241,948,160 12,810,183 12,810,183 12,810,183 - 3.44% 483,896,319 Y N N (Hong Kong) Co., 0 The Company Formosa Industries 1 9,655,812 5,005,309 5,005,309 5,005,309 - 1.34% 483,896,319 N N N Corporation 0 The Company Formosa Group 6 241,948,160 22,112,500 19,062,500 19,062,500 - 5.12% 483,896,319 N N N (Cayman) Ltd. 0 The Company Formosa Ha Tinh 6 241,948,160 15,795,023 15,795,023 15,795,023 - 4.24% 483,896,319 N N N (Cayman) Ltd. 0 The Company Formosa Resources 6 241,948,160 3,278,750 3,278,750 3,278,750 - 0.88% 483,896,319 N N N Corporation 1 Nan Ya Plastics Formosa Utility 1 25,223,998 697,143 - - - 0.00% 50,447,995 N N N Corporation America Venture 1 Nan Ya Plastics Nan Ya Plastics 2 25,223,998 1,805,473 1,805,473 1,805,473 - 4.99% 50,447,995 Y N N Corporation America Corporation Texas

Note: The six conditions in which the Company may have guarantees or endorsements for the receiving parties are as follows: (1) The Company has business with the receiving parties. (2) The Company holds directly more than 50% of the common stock of the subsidiaries. (3) In aggregate, the Company and its subsidiaries hold more than 50% of the investee. (4) In aggregate, the Company holds directly or indirectly through its subsidiaries more than 50% of the investee. (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. 68 NAN YA PLASTICS CORPORATION AND SUBSIDIARIES SECURITIES HELD (EXCLUDING INVESTMENT IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES) JUNE 30, 2018 (Expressed in thousands of New Taiwan Dollars) TABLE 3

Relationship Between Issuer of June 30, 2018 Security Holder Category and Name of Security Security and the Account Name Notes Company which Number of Shares Carrying Shareholding Market Value or Net Holds Securities (in thousands) Value Percentage Asset Value The Company Mega Internaitonal Private USD Money - Financial assets valued at FVTPL 12,479 3,936,627 - 3,936,627 Market －current Nan Ya PCB Corporation Capital Money Market - Financial assets valued at FVTPL 56,331 905,447 - 905,447 －current The Company Formosa Plastics Corporation Other related parties Financial assets valued at FVTOCI 294,793 33,164,225 4.63% 33,164,225 Note 1 －current The Company Formosa Chemicals and Fiber Corporation Other related parties Financial assets valued at FVTOCI 140,520 17,073,137 2.40% 17,073,137 －current The Company Formosa Group Ocean Marine Investment Other related parties Financial assets valued at FVTOCI 3 5,361,896 19.00% 5,361,896 Corporation －non current The Company Formosa Plastics Corporation U.S.A. Other related parties Financial assets valued at FVTOCI 2 2,012,865 0.51% 2,012,865 －non current The Company Ostendo Technologies Inc. - Financial assets valued at FVTOCI 150 - 0.12% - －non current The Company Formosa Plastics Maritime Co. Other related parties Financial assets valued at FVTOCI 352 282,707 18.00% 282,707 －non current The Company Formosa International Development Co., Other related parties Financial assets valued at FVTOCI 15,246 286,703 18.00% 286,703 Ltd. －non current The Company Mai Liao Harbor Administration Corp. Other related parties Financial assets valued at FVTOCI 39,562 721,095 17.98% 721,095 －non current The Company Formosa Plastics Marine Corporation Other related parties Financial assets valued at FVTOCI 2,429 404,676 15.00% 404,676 －non current The Company ASIA Pacific Investment Co. Other related parties Financial assets valued at FVTOCI 63,717 3,718,073 14.99% 3,718,073 －non current The Company Formosa Technologies Corporation Other related parties Financial assets valued at FVTOCI 2,925 80,965 12.50% 80,965 －non current The Company WK Technology Fund Ltd. - Financial assets valued at FVTOCI 326 4,064 1.63% 4,064 －non current The Company WK Technology Fund IV Ltd. - Financial assets valued at FVTOCI 460 2,994 1.08% 2,994 －non current 69 Relationship Between Issuer of June 30, 2018 Security Holder Category and Name of Security Security and the Account Name Notes Company which Number of Shares Carrying Shareholding Market Value or Net Holds Securities (in thousands) Value Percentage Asset Value The Company Central Leasing Corp. - Financial assets valued at FVTOCI 1,779 - 1.07% - －non current The Company Chinese Television System Inc. - Financial assets valued at FVTOCI 1,769 30,678 1.04% 30,678 －non current The Company China Investment & Development - Financial assets valued at FVTOCI 1,287 6,811 0.80% 6,811 Company, Limited －non current The Company Taiwan Aerospace Corp. - Financial assets valued at FVTOCI 1,070 25,213 0.79% 25,213 －non current The Company Guang Yuan Securities Investment - Financial assets valued at FVTOCI 5,000 36,292 3.91% 36,292 Consulting Corporation －non current The Company Nan Ya Photonics Inc Other related parties Financial assets valued at FVTOCI 6,446 101,072 14.42% 101,072 －non current The Company Mega Growth Capital Venture - Financial assets valued at FVTOCI 2,500 19,441 1.97% 19,441 －non current Nan Ya Plastics Corporation Double Oak (Bonds) - Financial assets valued at FVTOCI - 219,932 - 219,932 America －non current Nan Ya Plastics Corporation Ballantyne Re plc (Bonds) - Financial assets valued at FVTOCI - 165,336 - 165,336 America －non current Nan Ya Plastics Corporation Sutton (Bonds) - Financial assets valued at FVTOCI - 295,575 - 295,575 America －non current Nan Ya Plastics Corporation American Overseas Reinsurance Co., Ltd. - Financial assets valued at FVTOCI - 228,284 - 228,284 America (Preferred Stock) －non current Nan Ya Plastics Corporation MBIA Insurance Corp. (Preferred Stock) - Financial assets valued at FVTOCI - 222,387 - 222,387 America －non current Nan Ya Plastics (Hong Kong) Hua Ya (Dong Ying) Plastics Corp. - Financial assets valued at FVTOCI - 353,526 15.00% 353,526 Co., Ltd. －non current Nan Ya Plastics (Hong Kong) Hua Ya (Wu Hu) Plastics Corp. - Financial assets valued at FVTOCI - 379,035 15.00% 379,035 Co., Ltd. －non current Formosa Plastics Group WK Technology Fund Ltd. - Financial assets valued at FVTOCI 484 6,028 2.42% 6,028 Investment Corp. －non current Formosa Plastics Group WK Technology Fund IV Ltd. - Financial assets valued at FVTOCI 1,534 9,981 3.60% 9,981 Investment Corp. －non current Nan Ya International (Cayman) Formosa Ha Tinh (Cayman) Ltd. Other related parties Financial assets valued at FVTOCI 621,178 19,177,460 11.43% 19,177,460 Limited －non current

Note 1：The Company pledged its shares of Formosa Plastics Corporation of 12,736 thousand common shares amounting to NTD 1,432,800. 70 NAN YA PLASTICS CORPORATION AND SUBSIDIARIES INDIVIDUAL SECURITIES ACQUIRED OR DISPOSED OF WITH ACCUMULATED AMOUNT EXCEEDING THE LOWER OF NT$300 MILLION OR 20% OF THE CAPITAL STOCK FOR THE SIX MONTHS ENDED JUNE 30, 2018 (Expressed in thousands of New Taiwan Dollars) TABLE 4

Beginning Balance Purchases Sales Ending Balance Category and Company Financial Statement Name of Counter-party Relationship Shares Shares Shares Carrying Gain/Loss on Shares Name Account Amount Amount Price Amount Security (in thousands) (in thousands) (in thousands) Value Disposal (in thousands)

The Company Mega Financial assets valued - - 14,979 4,574,268 - - 2,500 772,908 820,847 - (Note 3) 12,479 3,936,627 Internaitonal at FVTPL－current (Note) Private USD Money Market

The Company Nan Ya Investments accounted Nan Ya Investments 51 15,675,756 1 1,676,070 52 19,177,710 International for using equity International accounted for (Note 1) (Note 2) (Cayman) Limited method (Cayman) using equity Limited method

Nan Ya Formosa Ha Tinh Financial assets valued Formosa Ha - 564,707 15,675,511 56,471 1,676,070 621,178 19,177,460 International (Cayman) Ltd. at FVTOCI－non Tinh (Cayman) (Note 1) (Cayman) current Ltd. Limited

Note：End of period amount includes effects measured by fair value. 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. Note 3：The carrying value has been measured at the fair value before the disposition, with the loss on valuation amounting to NTD 47,939, which was recognized under "Other gains and losses" in the consolidated statements of comprehensive income. 71 NAN YA PLASTICS CORPORATION AND SUBSIDIARIES ACQUISITION OF INDIVIDUAL REAL ESTATE WITH AMOUNTS EXCEEDING THE LOWER OF NT$300 MILLION OR 20% OF THE CAPITAL STOCK FOR THE SIX MONTHS ENDED JUNE 30, 2018 (Expressed in thousands of New Taiwan Dollars) TABLE 5

Disclosure of Information on Previous Transfer of Equipment is Required for Related Parties Purpose of Relationship Transaction Transaction Status of who are also the Counter Parties References for Acquisition Company Name Name of Property Counter-party with the Others Date Amount Payment Relationship Determining Price and Current Company Date of Owner with the Amount Condition Transfer Company The Company "Taipei．CBD" Building 2018.05 3,476,500 The first and TransGlobe Life None - - - - Market price and Building None second Insurance Inc. Valuation report installments had (Note) been paid

The Company "Taipei．CBD" Building 2018.05 1,000,500 The first and Meifu None - - - - Market price and Building None second Development Co., Valuation report installments had Ltd. (Note) been paid

Nan Ya Plastics Construction in progress 2018.01 393,525 Unpaid Formosa Heavy Associates - - - - Negotiation Plant expansion None Corporation Texas Industries Corporation Nan Ya Plastics Construction in progress 2018.06 116,603 Paid Formosa Heavy Associates - - - - Negotiation Plant expansion None Corporation Texas Industries Corporation

Note：The assets are jointly paid by the Company, as well as Formosa Plastics Corporation, Formosa Chemicals and Fiber Corporation, and Formosa Petrochemical Corporation. The overall value amounting to NTD18,044,586 and NTD180,010,228 of the assets are assessed by the Euro-Asia Real Estate Appraisers Firm and Taiwan Dawa Real Estate Appraiser & Associates, respectively. 72

NAN YA PLASTICS CORPORATION AND SUBSIDIARIES RELATED-PARTY TRANSACTIONS FOR PURCHASES AND SALES WITH AMOUNTS EXCEEDING THE LOWER OF NT$100 MILLION OR 20% OF THE CAPITAL STOCK FOR THE SIX MONTHS ENDED JUNE 30, 2018 (Expressed in thousands of New Taiwan Dollars) TABLE 6

Abnormal Notes/Accounts (Payable) Transaction Details Transaction Receivable Company Name Related Party Relationship Notes Purchases % to total Unit Payment Ending Amount Credit Period % to Total / (Sales) purchase/(sales) Price Term Balance The Company Formosa Plastics Corporation Other related parties (Sales) (733,693) (0.75)% 30 days - ‑ 151,523 0.66% The Company Formosa Chemicals and Fiber Corporation Other related parties (Sales) (4,514,776) (4.63)% 30 days - ‑ 602,936 2.62% The Company Nan Ya PCB Corporation Subsidiaries (Sales) (433,523) (0.44)% 30 days - ‑ 89,797 0.39% Note The Company Formosa Petrochemical Corporation Associates (Sales) (557,794) (0.57)% 30 days - ‑ 152,917 0.67% The Company Nanya Technology Corporation Associates (Sales) (142,665) (0.15)% 30 days - ‑ 19,535 0.08% The Company Formosa Heavy Industries Corporation Associates (Sales) (123,052) (0.13)% 30 days - ‑ 94,335 0.41% The Company Formosa Taffeta Co., Ltd. Other related parties (Sales) (423,961) (0.43)% 30 days - ‑ 81,970 0.36% The Company Formosa Ha Tinh Steel Corporation Other related parties (Sales) (210,691) (0.22)% O/A 150 - ‑ 226,978 0.99% The Company Formosa Industries (Ningbo) Co., Ltd. Other related parties (Sales) (112,267) (0.12)% O/A 150 - ‑ 757 0.00% The Company Nan Ya Plastics Corporation U.S.A. Subsidiaries (Sales) (175,295) (0.18)% O/A 105 - ‑ 122,138 0.53% Note The Company Nan Ya Plastics Corporation America Subsidiaries (Sales) (219,166) (0.22)% O/A 105 - ‑ 124,698 0.54% Note The Company Nan Ya Electronic Materials (Huizhou) Co., Ltd. Subsidiaries (Sales) (2,429,182) (2.49)% O/A 180 - ‑ 2,715,005 11.81% Note The Company Nan Ya Plastics (Nantong) Co., Ltd. Subsidiaries (Sales) (372,826) (0.38)% O/A 150 - ‑ 160,339 0.70% Note The Company Nan Ya Electronic Materials (Kunshan) Co., Ltd. Subsidiaries (Sales) (2,054,133) (2.10)% O/A 150 - ‑ 1,059,151 4.61% Note The Company Formosa Industries Corporation Associates (Sales) (2,661,337) (2.73)% O/A 150 - ‑ 721,202 3.14% The Company Nan Ya Draw Textured Yarn (Kunshan) Co., Subsidiaries (Sales) (273,865) (0.28)% O/A 150 - ‑ 207,651 0.90% Note The Company Nan Ya Plastics (Ningbo) Co., Ltd. Subsidiaries (Sales) (205,913) (0.21)% O/A 150 - ‑ 106,739 0.46% Note The Company Formosa Plastics Corporation Other related parties Purchases 6,962,938 10.48% 30 days - ‑ (1,214,166) (9.30)% The Company Formosa Chemicals and Fiber Corporation Other related parties Purchases 16,930,092 25.49% 30 days - ‑ (3,019,354) (23.13)% The Company Formosa Petrochemical Corporation Associates Purchases 20,960,299 31.56% 30 days - ‑ (3,144,389) (24.09)% The Company PFG Fiber Glass Corporation Subsidiaries Purchases 1,629,069 2.45% 30 days - ‑ (287,880) (2.21)% Note The Company PFG Fiber Glass (Kunshan) Co., Ltd. Subsidiaries Purchases 274,500 0.41% O/A 150 - ‑ (91,572) (0.70)% Note The Company Nan Chung Petrochemical Corporation Subsidiaries Purchases 1,873,257 2.82% 30 days - ‑ (320,677) (2.46)% Note Nan Ya PCB Corporation The Company Parent Purchases 433,523 5.60% 30 days - ‑ (89,797) (5.40)% Note Nan Ya PCB Corporation Nan Ya PCB (Kunshan) Corporation Subsidiaries Purchases 4,284,363 55.30% 30 days - ‑ (926,399) (55.71)% Note Nan Ya PCB (Kunshan) Corporation Nan Ya PCB Corporation Parent (Sales) (4,284,363) (65.22)% 30 days - ‑ 926,399 49.54% Note Nan Ya PCB (Kunshan) Corporation Nan Ya Electronic Materials (Kunshan) Co., Ltd. Same chairman Purchases 1,264,031 30.25% 60 days - ‑ (253,565) (20.31)% Note Nan Chung Petrochemical Corporation The Company Parent (Sales) (1,873,257) (49.95)% 30 days - ‑ 320,677 51.21% Note Nan Chung Petrochemical Corporation China Man-made Fiber Corporation Other related parties (Sales) (1,873,257) (49.95)% 15th day of next month - ‑ 302,253 48.26% Nan Chung Petrochemical Corporation Formosa Petrochemical Corporation Associates Purchases 3,009,895 97.10% 15th day of next month - ‑ (461,096) (98.24)% PFG Fiber Glass Corporation The Company Parent (Sales) (1,629,069) (68.46)% 30 days - ‑ 287,880 60.40% Note PFG Fiber Glass Corporation Formosa Chemicals and Fiber Corporation Other related parties Purchases 215,767 30.98% 30 days - ‑ (47,119) (44.47)% PFG Fiber Glass Corporation Formosa Petrochemical Corporation Other related parties Purchases 112,869 16.21% 30 days - ‑ - 18,536 (17.49)% 73

Abnormal Notes/Accounts (Payable) Transaction Details Transaction Receivable Company Name Related Party Relationship Notes Purchases % to total Unit Payment Ending Amount Credit Period % to Total / (Sales) purchase/(sales) Price Term Balance Nan Ya Plastics Corporation U.S.A. Formosa Plastics Corporation U.S.A. Other related parties Purchases 421,866 28.89% payment within one - ‑ (83,492) (31.90)% Nan Ya Plastics Corporation U.S.A. The Company Parent Purchases 175,295 12.01% O/A 105 - ‑ (122,138) (46.66)% Note Nan Ya Plastics Corporation America Formosa Plastics Corporation U.S.A. Other related parties (Sales) (207,635) (1.06)% payment within one - ‑ - 0.00% Nan Ya Plastics Corporation America Formosa Plastics Corporation U.S.A. Other related parties Purchases 103,374 0.59% payment within one - ‑ (19,028) (7.63)% Nan Ya Plastics Corporation America The Company Parent Purchases 219,166 1.26% O/A 105 - ‑ (124,698) (50.03)% Note PFG Fiber Glass (Kunshan) Co., Ltd. The Company Parent (Sales) (274,500) (8.01)% O/A 150 - ‑ 91,572 6.66% Note PFG Fiber Glass (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Subsidiaries (Sales) (2,118,115) (61.81)% 60 days - ‑ 410,049 29.82% Note PFG Fiber Glass (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Subsidiaries Purchases 184,966 19.98% 60 days - ‑ (69,650) (27.44)% Note Nan Ya Plastics (Xiamen) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Other related parties Purchases 123,714 26.52% 60 days - ‑ (19,059) (20.03)% Nan Ya Plastics (Guangzhou) Co., Ltd. Formosa Plastics Corporation Other related parties Purchases 266,823 24.62% O/A 150 - ‑ (119,078) (41.36)% Nan Ya Plastics (Guangzhou) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Other related parties Purchases 236,808 21.85% 60 days - ‑ (66,639) (23.15)% Nan Ya Electronic Materials (Huizhou) Co., The Company Parent Purchases 2,429,182 49.07% O/A 180 - ‑ (2,715,005) (50.80)% Note Nan Ya Electronic Materials (Huizhou) Co., Nan Ya Electronic Materials (Kunshan) Co., Ltd. Subsidiaries Purchases 1,918,407 38.75% 180 days - ‑ (2,537,507) (47.47)% Note Nan Ya Plastics (Nantong) Co., Ltd. The Company Parent Purchases 372,826 16.50% O/A 150 - ‑ (160,339) (32.41)% Note Nan Ya Plastics (Nantong) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Other related parties Purchases 260,511 11.53% 60 days - ‑ (48,200) (9.74)% Nan Ya Plastics Film (Nantong) Co., Ltd. Formosa Industries (Ningbo) Co., Ltd. Other related parties Purchases 238,691 36.12% 60 days - ‑ (75,846) (57.12)% Nan Ya Plastics (Ningbo) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. Subsidiaries (Sales) (2,183,725) (34.04)% 60 days - ‑ 562,631 38.12% Note Nan Ya Plastics (Ningbo) Co., Ltd. Formosa Chemicals and Fiber Corporation Other related parties Purchases 161,961 3.15% O/A 150 - ‑ (38,889) (3.77)% Nan Ya Plastics (Ningbo) Co., Ltd. Formosa Chemicals and Fiber (Ningbo) Other related parties Purchases 3,380,013 65.82% 60 days - ‑ (698,064) (67.64)% Nan Ya Plastics (Ningbo) Co., Ltd. The Company Parent Purchases 205,913 4.01% O/A 150 - ‑ (106,739) (10.34)% Note Nan Ya Electronic Materials (Kunshan) Co., Nan Ya Electronic Materials (Huizhou) Co., Ltd. Subsidiaries (Sales) (1,918,407) (7.52)% 180 days - ‑ 2,537,507 11.98% Note Nan Ya Electronic Materials (Kunshan) Co., Nan Ya PCB (Kunshan) Corporation Same chairman (Sales) (1,264,031) (4.95)% 60 days - ‑ 253,565 1.20% Note Nan Ya Electronic Materials (Kunshan) Co., PFG Fiber Glass (Kunshan) Co., Ltd. Subsidiaries (Sales) (184,966) (3.36)% 60 days - ‑ 69,650 0.33% Note Nan Ya Electronic Materials (Kunshan) Co., The Company Parent Purchases 2,054,133 10.19% O/A 150 - ‑ (1,059,151) (30.80)% Note Nan Ya Electronic Materials (Kunshan) Co., Nan Ya Draw Textured Yarn (Kunshan) Co., Subsidiaries Purchases 141,667 0.70% 60 days - ‑ (19,389) (0.56)% Note Nan Ya Electronic Materials (Kunshan) Co., PFG Fiber Glass (Kunshan) Co., Ltd. Subsidiaries Purchases 2,118,115 10.51% 60 days - ‑ (410,049) (11.92)% Note Nan Ya Electronic Materials (Kunshan) Co., Nan Ya Plastics (Ningbo) Co., Ltd. Subsidiaries Purchases 2,183,725 10.83% 60 days - ‑ (562,631) (16.36)% Note Nan Ya Draw Textured Yarn (Kunshan) Co., The Company Parent Purchases 273,865 26.04% O/A 150 - ‑ (207,651) (49.45)% Note Nan Ya Draw Textured Yarn (Kunshan) Co., Nan Ya Electronic Materials (Kunshan) Co., Ltd. Subsidiaries (Sales) (141,667) (10.86)% 60 days - ‑ 19,389 7.01% Note

Note：The transaction has been written off during the consoliation process. 74 NAN YA PLASTICS CORPORATION AND SUBSIDIARIES RECEIVABLES FROM RELATED PARTIES WITH AMOUNTS EXCEEDING THE LOWER OF NT$100 MILLION OR 20% OF THE CAPITAL STOCK FOR THE SIX MONTHS ENDED JUNE 30, 2018 (Expressed in thousands of New Taiwan Dollars) TABLE 7

Amounts Allowance Turnover Overdue Received in Company Name Related Party Relationship Ending Balance for Bad Rate Subsequent Debts Amount Action Taken Periods The Company Formosa Plastics Corporation Other related Receivables from related parties： 151,523 13.84 ‑ ‑ 149,241 ‑ The Company Formosa Chemicals and Fiber Corporation Other related Receivables from related parties： 602,936 13.08 ‑ ‑ 597,442 ‑ i The Company Formosa Petrochemical Corporation Associates Receivables from related parties： 152,917 8.69 ‑ ‑ 144,286 ‑ The Company Formosa Ha Tinh Steel Corporation Other related Receivables from related parties： 226,978 1.84 ‑ ‑ 9,957 ‑ i The Company Nan Ya Plastics Corporation U.S.A. (Note 1) Subsidiaries Receivables from related parties： 122,138 2.90 ‑ ‑ 1,535 ‑ The Company Nan Ya Plastics Corporation America (Note 1) Subsidiaries Receivables from related parties： 124,698 3.55 ‑ ‑ 47,001 ‑ The Company Nan Ya Electronic Materials (Huizhou) Co., Ltd. (Note 1) Subsidiaries Receivables from related parties： 2,715,005 2.01 ‑ ‑ 631,490 ‑ The Company Nan Ya Plastics (Nantong) Co., Ltd. (Note 1) Subsidiaries Receivables from related parties： 160,339 4.29 ‑ ‑ 78,642 ‑ The Company Nan Ya Electronic Materials (Kunshan) Co., Ltd. (Note 1) Subsidiaries Receivables from related parties： 1,059,151 3.11 ‑ ‑ 362,080 ‑ The Company Formosa Industries Corporation Associates Receivables from related parties： 721,202 7.53 ‑ ‑ 383,949 ‑ The Company Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 1) Subsidiaries Receivables from related parties： 207,651 3.72 ‑ ‑ - ‑ The Company Nan Ya Plastics (Ningbo) Co., Ltd. (Note 1) Subsidiaries Receivables from related parties： 106,739 7.64 ‑ ‑ 18 ‑ Nan Ya PCB (Kunshan) Corporation Nan Ya PCB Corporation (Note 1) Parent Receivables from related parties： 926,399 8.95 ‑ ‑ 706,236 ‑ Nan Chung Petrochemical Corporation The Company (Note 1) Parent Receivables from related parties： 320,677 9.43 ‑ ‑ 320,677 ‑ Nan Chung Petrochemical Corporation China Man-made Fiber Corporation Other related Receivables from related parties： 302,253 9.76 ‑ ‑ 302,253 ‑ i PFG Fiber Glass Corporation The Company (Note 1) Parent Receivables from related parties： 287,880 13.74 ‑ ‑ 287,880 ‑ PFG Fiber Glass (Kunshan) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. (Note 1) Subsidiaries Receivables from related parties： 410,049 10.28 ‑ ‑ 410,049 ‑ Nan Ya Plastics (Ningbo) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. (Note 1) Subsidiaries Receivables from related parties： 562,631 9.08 ‑ ‑ 562,631 ‑ Nan Ya Electronic Materials (Kunshan) Co., Nan Ya Electronic Materials (Huizhou) Co., Ltd. (Note 1) Subsidiaries Receivables from related parties： 2,537,507 1.49 ‑ ‑ 390,120 ‑ Ld Nan Ya Electronic Materials (Kunshan) Co., Nan Ya PCB (Kunshan) Corporation (Note 1) Same chairman Receivables from related parties： 253,565 7.23 ‑ ‑ 253,565 ‑ Ld The Company Formosa Heavy Industries Corporation Associates Other receivables from related 2,500,000 Note ‑ ‑ ‑ ‑ i The Company Formosa Group (Cayman) Limited Associates Other receivables from related 4,259,500 Note ‑ ‑ ‑ ‑ i The Company Formosa Ha Tinh (Cayman) Ltd. Other related Other receivables from related 3,040,500 Note ‑ ‑ ‑ ‑ i i The Company Formosa Plastics Marine Corporation Other related Other receivables from related 3,978,721 Note ‑ ‑ ‑ ‑ Nan Ya Plastics Corporation America Nan Ya Plastics Corporation Texas (Note 1) Subsidiariesi Otheri receivables from related 7,339,388 Note ‑ ‑ ‑ ‑ Nan Ya Plastics Corporation America Nan Ya Plastics Corporation U.S.A. (Note 1) Subsidiaries Otheri receivables from related 471,213 Note ‑ ‑ ‑ ‑ Nan Ya PCB Corporation Nan Ya PCB (Kunshan) Corporation (Note 1) Subsidiaries Otheri receivables from related 915,000 Note ‑ ‑ ‑ ‑ Nan Ya Plastics (HongKong) Co., Ltd. Nan Ya Electronic Materials (Kunshan) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 1,831,545 Note ‑ ‑ ‑ ‑ Nan Ya Plastics (HongKong) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 2,038,175 Note ‑ ‑ ‑ ‑ i 75 Amounts Allowance Turnover Overdue Received in Company Name Related Party Relationship Ending Balance for Bad Rate Subsequent Debts Amount Action Taken Periods Nan Ya Plastics (Guangzhou) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. (Note 1) Subsidiaries Other receivables from related 912,751 Note ‑ ‑ ‑ ‑ Nan Ya Plastics (Huizhou) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 290,421 Note ‑ ‑ ‑ ‑ Nan Ya Plastics (Huizhou) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 666,585 Note ‑ ‑ ‑ ‑ Nan Ya Plastics (Huizhou) Co., Ltd. Nan Ya Plastics Film (Huizhou) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 667,046 Note ‑ ‑ ‑ ‑ Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 138,296 Note ‑ ‑ ‑ ‑ Nan Ya Plastics (Xiamen) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 281,201 Note ‑ ‑ ‑ ‑ Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 622,330 Note ‑ ‑ ‑ ‑ Nan Ya Plastics (Nantong) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 2,807,861 Note ‑ ‑ ‑ ‑ China Nantong Huafeng Co., Ltd. Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 145,210 Note ‑ ‑ ‑ ‑ China Nantong Huafeng Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 165,955 Note ‑ ‑ ‑ ‑ Nan Ya Electric (Nantong) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 366,483 Note ‑ ‑ ‑ ‑ Nan Ya Electronic Materials (Kunshan) Co., Nan Ya Plastics (Zhengzhou) Co., Ltd. Joint ventures Otheri receivables from related 165,955 Note ‑ ‑ ‑ ‑ NanLtd Ya Electronic Materials (Kunshan) Co., Formosa Synthetic Rubber (Ningbo) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 359,569 Note ‑ ‑ ‑ ‑ NanLd Ya Electronic Materials (Kunshan) Co., Nan Ya Electronic Materials (Huizhou) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 917,361 Note ‑ ‑ ‑ ‑ NanLtd Ya Electronic Materials (Kunshan) Co., Nan Ya Plastics (Ningbo) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 1,000,338 Note ‑ ‑ ‑ ‑ NanLtd Ya Electronic Materials (Kunshan) Co., PFG Fiber Glass (Kunshan) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 1,908,479 Note ‑ ‑ ‑ ‑ NanLtd Ya Electronic Materials (Kunshan) Co., Nan Ya Draw Textured Yarn (Kunshan) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 3,452,780 Note ‑ ‑ ‑ ‑ NanLtd Ya Plastics Film (Nantong) Co., Ltd. Nan Ya Plastics (Ningbo) Co., Ltd. (Note 1) Subsidiaries Otheri receivables from related 470,205 Note ‑ ‑ ‑ ‑ i Note： The turnover rate of other receivables from related parties can not be calculated. Note 1：The transaction has been written off during the consoliation process. 76 NAN YA PLASTICS CORPORATION AND SUBSIDIARIES BUSINESS RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE SIX MONTHS ENDED JUNE 30, 2018 (Expressed in thousands of New Taiwan Dollars) TABLE 8

Intercompany Transactions No. Relationship Percentage of Company Name Counter-party Financial Statement Consolidated (Note 1) (Note 2) Amount Terms Item Total Gross Sales or Total Assets 0 The Company Nan Ya PCB Corporation and its subsidiaries 1 Sales 472,936 30-150 days 0.28% 0 The Company Nan Chung Petrochemical Corporation 1 Sales 88,774 30 days 0.05% 0 The Company PFG Fiber Glass Corporation 1 Sales 26,220 30 days 0.02% 0 The Company Nan Ya Plastics Corporation U.S.A 1 Sales 175,295 O/A 105 0.10% 0 The Company Nan Ya Plastics Corporation America 1 Sales 219,166 O/A 105 0.13% 0 The Company Nan Ya Plastics (HongKong) Co., Ltd. and its subsidiaries 1 Sales 5,554,760 O/A 150-180 3.29% 0 The Company Superior World Wide Trading Co., Ltd. 1 Sales 8,622 O/A 150 0.01% 0 The Company PFG Fiber Glass (HongKong) Corporation Limited and its subsidiaries 1 Sales 19,415 O/A 150 0.01% 1 Nan Chung Petrochemical Corporation The Company 2 Sales 1,873,257 30 days 1.11% 2 Wen Fung Industrials Co., Ltd. and its subsidiaries Nan Ya PCB Corporation and its subsidiaries 3 Sales 54,684 30 days 0.03% 3 PFG Fiber Glass Corporation The Company 2 Sales 1,629,069 30 days 0.97% 4 Nan Ya Plastics Corporation America Nan Ya Plastics Corporation U.S.A 3 Sales 89,922 payment within one month 0.05% 5 Nan Ya Plastics (HongKong) Co., Ltd. and its subsidiaries The Company 2 Sales 78,264 60 days 0.05% 5 Nan Ya Plastics (HongKong) Co., Ltd. and its subsidiaries Nan Ya PCB Corporation and its subsidiaries 3 Sales 1,554,951 60 days 0.92% 5 Nan Ya Plastics (HongKong) Co., Ltd. and its subsidiaries PFG Fiber Glass (HongKong) Corporation Limited and its subsidiaries 3 Sales 195,569 60 days 0.12% 6 PFG Fiber Glass (HongKong) Corporation Limited and its subsidiaries The Company 2 Sales 274,500 O/A 150 0.16% 6 PFG Fiber Glass (HongKong) Corporation Limited and its subsidiaries Nan Ya Plastics (HongKong) Co., Ltd. and its subsidiaries 3 Sales 2,123,080 60 days 1.26% 0 The Company Nan Ya PCB Corporation and its subsidiaries 1 Accounts receivable 103,576 30-150 days 0.02% 0 The Company Nan Ya Plastics Corporation U.S.A 1 Accounts receivable 122,138 O/A 105 0.02% 0 The Company Nan Ya Plastics Corporation America 1 Accounts receivable 124,698 O/A 105 0.02% 0 The Company Nan Ya Plastics (HongKong) Co., Ltd. and its subsidiaries 1 Accounts receivable 4,351,184 O/A 150-180 0.72% 1 Nan Chung Petrochemical Corporation The Company 2 Accounts receivable 320,677 30 days 0.05% 3 PFG Fiber Glass Corporation The Company 2 Accounts receivable 287,880 30 days 0.05% 5 Nan Ya Plastics (HongKong) Co., Ltd. and its subsidiaries Nan Ya PCB Corporation and its subsidiaries 3 Accounts receivable 360,443 60 days 0.06% 77 Intercompany Transactions No. Relationship Percentage of Company Name Counter-party Financial Statement Consolidated (Note 1) (Note 2) Amount Terms Item Total Gross Sales or Total Assets 5 Nan Ya Plastics (HongKong) Co., Ltd. and its subsidiaries PFG Fiber Glass (HongKong) Corporation Limited and its subsidiaries 3 Accounts receivable 71,917 60 days 0.01% 6 PFG Fiber Glass (HongKong) Corporation Limited and its subsidiaries The Company 2 Accounts receivable 91,572 O/A 150 0.02% 6 PFG Fiber Glass (HongKong) Corporation Limited and its subsidiaries Nan Ya Plastics (HongKong) Co., Ltd. and its subsidiaries 3 Accounts receivable 410,049 60 days 0.07% 0 The Company Nan Ya PCB Corporation and its subsidiaries 1 Rent revenue 96,424 30-150 days 0.06%

Note 1: The appointed numbers represent: 1. 0 refers to the Parent Company. 2. Subsidiaries are numbered and organized in a ascending chronological order in an 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. 78 NAN YA PLASTICS CORPORATION AND SUBSIDIARIES INFORMATION ON INVESTEES (EXCLUDING THOSE IN MAINLAND CHINA) FOR THE SIX MONTHS ENDED JUNE 30, 2018 (Expressed in thousands of New Taiwan Dollars) TABLE 9

Original Investment Amount Balance as of June 30, 2018 Investment Income Net Income of (Loss) Recognized Investor Company Investee Company Location Major Operations June 30, December 31, Shares Carrying Notes % Investee by the Investor 2018 2017 (in thousands) Value Company The Company Nan Ya Plastics Corporation U.S.A. U.S.A. production of plastic products 313,920 313,920 2 100.00% 1,891,790 28,288 28,288 Note 5.6 (Note) The Company Nan Ya Plastics Corporation America U.S.A. production of plastic, polyester and 7,853,605 7,853,605 60 100.00% 38,806,150 2,589,986 2,589,986 Note 5.6 (Note) chemical products The Company Nan Ya Plastics (HongKong) Co., Hong Kong plastics and electronic products 34,858,082 34,858,082 844,053 100.00% 79,636,635 2,903,950 2,903,950 Note 5.6 Ltd. (Note 1) trading, investment holding The Company Superior World Wide Trading Co., Hong Kong plastics trading and investment 33,677 33,677 14 100.00% 715,424 17,411 17,411 Note 5.6 Ltd. (Note 1) The Company Formosa Synthetic Rubber Hong Kong production of synthetic rubber 2,151,560 2,151,560 70,000 31.82% 617,870 (467,658) (148,801) Note 5 (HongKong) Corporation Limited products The Company PFG Fiber Glass (HongKong) Hong Kong investment 4,495,987 4,495,987 76 100.00% 7,806,452 604,602 594,590 Note 5.6 Corporation Limited (Note 1) The Company Formosa Industries Corporation (Note Vietnam chemical fiber, dying and finishing 8,435,875 8,435,875 - 42.50% 8,260,518 742,995 315,773 Note 5 2) and electric power The Company Nan Ya PCB Corporation Taiwan production of printed circuit board 4,480,417 4,480,417 432,745 66.97% 19,896,567 (892,909) (597,992) Note 5.6

The Company Formosa Plastics Group Investment Taiwan investment 76,859 76,859 5,000 100.00% 84,751 12,873 12,873 Note 5.6 Corp. The Company Nanya Technology Corporation Taiwan semiconductor production and 52,438,472 52,438,472 907,304 29.26% 42,974,599 18,536,761 5,491,975 Note 5 marketing The Company Formosa Environmental Technology Taiwan environmental protection 672,370 672,370 46,257 26.99% 251,960 3,316 895 Note 5 Corporation The Company Formosa Petrochemical Corporation Taiwan production of chemical products 24,647,480 24,647,480 2,201,306 23.11% 78,514,648 43,527,264 10,059,571 Note 5

The Company PFG Fiber Glass Corporation Taiwan production of glass fiber 2,648,131 2,648,131 100,000 100.00% 4,681,963 458,756 372,195 Note 5.6

The Company Nan Chung Petrochemical Taiwan production of chemical products 1,000,002 1,000,002 100,000 50.00% 1,162,713 43,949 22,315 Note 5.6 Corporation The Company Wen Fung Industrial Co., Ltd. Taiwan production of electronic components 214,236 214,236 18,738 100.00% 244,486 2,828 2,828 Note 5.6 79 Original Investment Amount Balance as of June 30, 2018 Investment Income Net Income of (Loss) Recognized Investor Company Investee Company Location Major Operations June 30, December 31, Shares Carrying Notes % Investee by the Investor 2018 2017 (in thousands) Value Company The Company Formosa Automobile Sales Taiwan production of automobile 945,028 945,028 27,046 45.00% - 48,866 21,990 Note 5 Corporation (Note 3.4) The Company Ya Tai Development Corporation Taiwan development industry 53,941 53,941 1,304 44.96% 22,029 (3,055) (1,374) Note 5

The Company Formosa Heavy Industries Taiwan machinery industry 2,497,721 2,497,721 651,706 32.91% 8,290,904 300,278 98,824 Note 5 Corporation The Company Formosa Fairway Corporation Taiwan transportation business 33,340 33,340 4,699 33.34% 109,014 (17,762) (5,922) Note 5

The Company Formosa Plastics Transport Taiwan transportation business 17,254 17,254 4,771 33.33% 751,217 (20,941) (6,980) Note 5 Corporation The Company Hwa Ya Science Park Management Taiwan service business 359 359 34 34.00% 1,473 143 49 Note 5 Consulting Co., Ltd. The Company Yi Jih Development Corporation Taiwan construction business 58,000 58,000 5,800 29.22% 64,295 585 171 Note 5

The Company Mai Liao Power Corporation Taiwan electricity generation business 5,985,465 5,985,465 547,025 24.94% 11,983,364 524,513 130,823 Note 5

The Company Su Hua Transport Corporation Taiwan transportation business 50,000 50,000 10,495 25.00% 280,780 19,523 4,881 Note 5

The Company Formosa Synthetic Rubber Taiwan production of synthetic rubber 400,000 400,000 40,000 33.33% 216,760 (1,044) (348) Note 5 Corporation products The Company Formosa Resources Corporation Taiwan mining industry 5,845,940 5,845,940 584,594 25.00% 5,207,661 (616,440) (154,110) Note 5

The Company Formosa Group (Cayman) Limited Cayman investment 377 377 13 25.00% 602,393 956,241 239,060 Note 5 (Note) Islands The Company Formosa Plastics Construction Taiwan construction business 100,000 100,000 10,000 33.33% 85,485 (6,866) (2,289) Note 5 Corporation The Company Nan Ya International (Cayman) Cayman investment 18,784,619 17,108,550 52 100.00% 19,177,710 - - Note 5.6 Limited (Note) Islands The Company FG Inc. (Note) U.S.A. investment 660,176 660,176 2 10.00% 667,772 (23,864) (2,386) Note 5

Nan Ya Plastics Corporation Formosa Utility Venture, Ltd. (Note) U.S.A. electricity generation and trading 244,000 244,000 - 12.10% 2,252,056 443,084 54,026 Note 5 America (Note) Nan Ya Plastics Corporation Nan Ya Plastics Corporation Texas U.S.A. sale of chemical materials 10,065,000 10,065,000 3 100.00% 9,642,978 (142,405) (142,405) Note 5.6 America (Note) (Note) Nan Ya Plastics Corporation Texas Formosa Olefins, L.L.C. (Note) U.S.A. production of chemical products 1,857,450 1,857,450 - 21.00% 1,644,259 (247,649) (52,006) Note 5 (Note) 80 Original Investment Amount Balance as of June 30, 2018 Investment Income Net Income of (Loss) Recognized Investor Company Investee Company Location Major Operations June 30, December 31, Shares Carrying Notes % Investee by the Investor 2018 2017 (in thousands) Value Company Nan Ya PCB Corporation Nan Ya PCB (HK) Corporation Hong Kong production of electronic products 5,020,900 5,020,900 1,223,820 100.00% 10,129,656 (453,761) (453,761) Note 5.6 and investment Nan Ya PCB Corporation Nan Ya PCB (U.S.A.) Corporation U.S.A. retargeting 3,479 3,479 1,000 100.00% 11,904 (642) (642) Note 5.6

Nan Ya PCB (HK) Corporation Nan Ya PCB (Kunshan) Corporation China production of printed circuit board 5,017,721 5,017,721 - 100.00% 10,116,194 (453,905) (453,905) Note 5.6

Wen Fung Industrial Co., Ltd. Wellink Technology Corporation Taiwan production of electronic components 212,017 212,017 12,739 100.00% 133,782 2,497 2,497 Note 5.6

Superior World Wide Trading Co., P.T.Indonesia Nanya Indah Plastics Indonesia production of plastic products 123,433 123,433 5 50.00% 268,442 26,631 13,315 Note 5 Ltd. (Note 1) Co.

Note：The reporting currency of Nan Ya Plastics Corporation America, Nan Ya Plastics Corporation USA, FG Inc., Formosa Utility Venture, Ltd, Nan Ya Plastics Corporation Texas, Formosa Olefins, L.L.C, Formosa Synthetic Rubber (Hong Kong) Corporation Limited, Formosa Group (Cayman) Limited and Nan Ya Internaitonal (Cayman) Limited is denominated in USD, and the exchange rate of TWD to USD as of June 30, 2018 (in average) is 30.5(29.561)：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 NTD to HKD as of June 30, 2018 (in average) is 3.9103(3.7899)：1. Note 2：The reporting currency of Formosa Industries Corporation is denominated in VND, and the exchange rate of NTD to VND as of June 30, 2018 (in average) is 1：0.001329(0.001298). Note 3：Due to the fact that cumulative losses from investments under equity method have already exceeded the long term investment book value of NTD 7,342, and the excess is reclassified to other non current liabilities. Note 4：Formosa Automobile Corporation merged with Formosa Automobile Sales Corporation on May 8, 2017, and Formosa Automobile Sales Corporation is the surviving company. Note 5：Investment income of the current period does not include cumulative translation adjustment and capital surplus adjustment.

Note 6：The transaction has been written off during the consoliation process. 81 NAN YA PLASTICS CORPORATION AND SUBSIDIARIES INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE SIX MONTHS ENDED JUNE 30, 2018 (Expressed in thousands of New Taiwan Dollars) TABLE 10

(a) Information regarding investments in Mainland China : Direct and Accumulated Investment Investment Indirect Carrying Value of Inward Name of the PRC Investee Primary Business Amount of Paid- Method of Transferred from For The Year Ended June 30, 2018 Transferred from Current Income Investment Gain Shareholding Investment as of Remittance of Company Scope in Capital Investment Taiwan as of Taiwan as of June of Investees (Loss) Percentage by the June 30, 2018 Earnings as of January 1, 2018 30, 2018 Outflow Inflow Company June 30, 2018 Nan Ya Plastics production of polyester 1,998,681 Indirect investment 1,998,681 - - 1,998,681 50,619 100.00% 50,619 2,473,424 611,825 (Guangzhou) Co., Ltd. (Note products 1) Nan Ya Plastics (Xiamen) production of plastic 775,457 Indirect investment 738,752 - - 738,752 57,939 85.00% 49,248 1,134,535 72,820 Co., Ltd. (Note 1) products

Nan Ya Plastics (Huizhou) production of polyester 1,679,527 Indirect investment 1,679,527 - - 1,679,527 26,410 100.00% 26,410 3,325,643 - Co., Ltd. (Note 1) products

Nan Ya Plastics Film production of polyester 847,935 Indirect investment 738,870 - - 738,870 (31,843) 100.00% (31,843) (26,516) - (Huizhou) Co., Ltd. (Note 1) products

Nan Ya Electronic Materials production of electronic 1,180,918 Indirect investment 1,180,918 - - 1,180,918 95,608 100.00% 95,608 2,056,382 - (Huizhou) Co., Ltd. (Note 1) materials

Nan Ya Trading (Huizhou) trading 32,267 Indirect investment 32,267 - - 32,267 1,907 100.00% 1,907 60,586 - Co., Ltd. (Note 1)

Nan Ya Plastics (Nantong) production of plastic 3,219,604 Indirect investment 1,973,292 - - 1,973,292 235,979 100.00% 235,979 7,730,762 103,612 Co., Ltd. (Note 1) products, production of steam and electricity China Nantong Huafeng Co., trading 93,004 Indirect investment 99,636 - - 99,636 3,285 100.00% 3,285 342,882 - Ltd. (Note 1)

Nantong Huafu Plastics Co., trading 79,111 Indirect investment 71,503 - - 71,503 792 100.00% 792 95,615 - Ltd. (Note 1)

Nan Ya Electric (Nantong) production of switch 339,275 Indirect investment 339,275 - - 339,275 16,146 100.00% 16,146 1,108,870 - Co., (Note 1) gear and control panel

Nan Ya Plastics Film production of plastic 1,321,132 Indirect investment 1,035,626 - - 1,035,626 61,119 100.00% 61,119 2,099,189 - (Nantong) Co., Ltd. (Note 1) products

Nanya Kyowa Plastics interior decorating 200,988 Indirect investment 100,494 - - 100,494 24,298 50.00% 12,149 177,333 - (Nantong) Co., Ltd. business

Nan Ya Electronic Materials production of electronic 15,159,216 Indirect investment 15,159,216 - - 15,159,216 2,263,074 100.00% 2,263,074 54,972,917 - (Kunshan) Co., Ltd. (Note 1) materials, production of steam and electricity Nan Ya Draw Textured Yarn production of polyester 7,035,085 Indirect investment 7,035,085 - - 7,035,085 (555,328) 100.00% (555,328) 798,314 - (Kunshan) Co., Ltd. (Note 1) products

Nan Ya Plastics (Zhengzhou) production of plastic 261,737 Indirect investment 130,869 - - 130,869 (3,145) 50.00% (1,572) 63,953 - Co., Ltd. products 82 Direct and Accumulated Investment Investment Indirect Carrying Value of Inward Name of the PRC Investee Primary Business Amount of Paid- Method of Transferred from For The Year Ended June 30, 2018 Transferred from Current Income Investment Gain Shareholding Investment as of Remittance of Company Scope in Capital Investment Taiwan as of Taiwan as of June of Investees (Loss) Percentage by the June 30, 2018 Earnings as of January 1, 2018 30, 2018 Outflow Inflow Company June 30, 2018 Nan Ya Plastics (Ningbo) production of plastic 2,188,834 Indirect investment 1,989,308 - - 1,989,308 475,290 100.00% 475,290 848,913 - Co., Ltd. (Note 1) products and plasticizer

PFG Fiber Glass (Kunshan) glass fiber trading 4,668,263 Indirect investment 4,487,409 - - 4,487,409 664,302 100.00% 664,302 7,723,616 149,416 Co., Ltd. (Note 1)

Hua Ya (Dong Ying) Plastics production of plastic 254,190 Indirect investment 34,591 - - 34,591 - 15.00% - 353,526 23,020 Corp. products

Hua Ya (Wu Hu) Plastics production of plastic 624,948 Indirect investment 34,591 - - 34,591 - 15.00% - 379,035 12,687 Corp. products

Formosa Synthetic Rubber synthetic rubber 6,746,240 Indirect investment 2,151,560 - - 2,151,560 (467,658) 31.82% (148,800) 617,870 - (Ningbo) Limited Corporation

Note: All equity in the earnings (losses) are recognized according to the reviewed financial statements except for Hua Ya (DongYing) Plastics Corp., Hua Ya (Wu Hu) Plastics Corp. and Formosa Syntheic Rubber (Ninbo) Co., Ltd., Whose earnings (losses) for the period were based on the unreriewed interim financial statement. Note 1: The transaction has been written-off during the consolidation process.

(b) Quota for investments in Mainland China :

Amount of Investment Accumulative Remittance Approved by from Taiwan to Mainland Investment Limit on the Amount of Investment China as of June 30, 2018 Commission, Ministry in Mainland China (Note 3) (Note 1) of Economic Affairs (Note 2) 41,271,928 48,854,606 -

Note 1：Reporting currency of Chinese subsidiaries is RMB, and the monetary amount is first translated to HKD using the exchange rate as of June 30, 2018 (in average) of 1：1.1789(1.2244), and translated to NTD using the exchange rate as of June 30, 2018 (in average) of 1：3.9103(3.7899). Note 2：It includes the amount of NTD 3,010,315 from approved capital increase, 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.

For more information concerning the direct or indirect significant transactions, which has already been written off during the consolidation process, between the Company and its Chinese investees for the year ended June 30, 2018, please refer to the explanation of "Information on material transaction items".