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FORMOSA PLASTICS CORPORATION AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014 AND 2015 (With Independent Accountants’ Review Report Thereon)

See accompanying notes to consolidated financial statements.

Consolidated financial statements as of March 31, 2014 and 2015 are reviewed only, not audited in accordance with generally accepted auditing standards FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

MARCH 31, DECEMBER 31, 2014 AND MARCH 31, 2015

(Expressed in thousands of New Taiwan Dollars)

March 31, 2014

(Adjusted)

December 31, 2014

(Adjusted) March 31,

2015 Assets

Current assets： Cash and cash equivalents (note 6(1)) $ 8,608,789 5,392,825 11,115,984 Available-for-sale financial assets－current(notes 6(2), 7 and 8) 66,048,634 83,956,324 87,283,948 Notes receivable (note 6(3)) 974,458 1,026,818 987,988 Accounts receivable, net (note 6(3)) 7,549,829 7,350,138 7,179,266 Accounts receivable－related parties (notes 6(3) and 7) 4,893,812 4,225,994 4,405,466 Other receivables (note 6(3)) 1,301,605 1,052,161 1,037,557 Other receivables－related parties (notes 6(3) and 7) 20,412,446 29,179,344 28,799,968 Inventories (note 6(4)) 25,004,649 22,872,390 19,033,464 Other current assets 5,339,146 5,082,721 4,933,315

Total current assets 140,133,368 160,138,715 164,776,956

Non-current assets： Available-for-sale financial assets－non-current (note 6(2)) 14,132,857 10,729,587 10,464,659 Financial assets carried at cost－non-current 2,416,168 2,437,768 2,462,768 Investments accounted for using equity method (notes 6(5), 7 and 8) 155,372,474 160,240,810 161,982,691 Property, plant and equipment (notes 6(6), 7 and 8) 82,735,370 83,997,627 82,805,292 Intangible assets 625,134 601,282 579,113 Deferred tax assets 1,712,787 1,677,266 1,647,335 Other assets (notes 6(3), 7 and 8) 13,677,646 10,979,936 10,788,765

Total non-current assets 270,672,436 270,664,276 270,730,623 Total assets $ 410,805,804 430,802,991 435,507,579

March 31,

2014 (Adjusted)

December 31, 2014

(Adjusted) March 31,

2015 Liabilities and Equity

Current liabilities： Short-term borrowings (notes 6(7) and 8) $ 16,427,489 13,767,560 10,923,003 Accounts payable 2,104,441 5,454,975 1,551,414 Accounts payable－related parties (note 7) 11,855,135 7,358,639 9,119,588 Other payables 1,304,709 1,270,407 2,919,944 Other payables－related parties (note 7) 873,549 937,159 1,007,355 Current portion of bonds payable (note 6(9)) 5,997,630 7,993,512 7,994,987 Current portion of long-term debts (notes 6(8) and 8) 4,995,601 1,515,645 2,008,253 Other current liabilities (note 7) 10,720,863 9,625,843 12,649,842

Total current liabilities 54,279,417 47,923,740 48,174,386

Non-current liabilities： Bonds payable (note 6(9)) 53,900,336 51,913,453 51,920,286 Long-term debts (notes 6(8) and 8) 20,945,927 26,944,995 24,814,923 Deferred tax liabilities 7,775,356 9,412,161 9,557,168 Accrued pension liabilities 9,291,040 8,985,137 8,872,539 Other liabilities 472,930 473,295 499,631

Total non-current liabilities 92,385,589 97,729,041 95,664,547

Total liabilities 146,665,006 145,652,781 143,838,933

Equity attributable to owners of the parent (notes 6(12)(13)): Common stock 63,657,408 63,657,408 63,657,408 Capital surplus 11,278,180 11,277,988 11,277,971 Retained earnings Legal reserve 41,267,621 43,339,205 43,339,205 Special reserve 33,508,131 39,078,218 39,078,218 Unappropriated retained earnings 55,162,906 46,066,241 49,709,926 Total retained earnings 129,938,658 128,483,664 132,127,349 Other components of equity 59,266,552 81,731,150 84,605,918

Total equity 264,140,798 285,150,210 291,668,646

Total Liabilities and Equity $ 410,805,804 430,802,991 435,507,579


Reviewed only, not audited in accordance with generally accepted auditing standards FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2014 AND 2015 (Expressed in thousands of New Taiwan Dollars, except for earnings per share)

For the three-month periods ended

March 31, 2014 (Adjusted) 2015

Operating revenues (notes 6(14) and 7) $ 51,989,871 47,697,112

Operating costs (notes 6(4)(10)(12) and 7) 48,208,250 42,125,233

Gross profit 3,781,621 5,571,879

Operating expenses (notes 6(10)(12) and 7)： Selling expenses 1,249,892 1,370,949 Administrative expenses 1,221,631 1,061,923 Research and development expenses 220,729 200,024

Total operating expenses 2,692,252 2,632,896

Operating income 1,089,369 2,938,983

Non-operating income and expenses (notes 6(5)(15) and 7)： Other income 155,642 111,009 Other gains and losses 2,925,497 (139,201) Finance costs (379,665) (361,212) Recognized share of profit of associates and joint ventures accounted for using equity

method, net 4,182,677

1,902,405

Total non-operating income and expenses 6,884,151 1,513,001

Income before income tax 7,973,520 4,451,984

Less: income tax expense (note 6(11)) 790,546 808,299

Net income 7,182,974 3,643,685

Other comprehensive income (loss):

Items that could be reclassified subsequently to profit or loss Exchange differences arising on translation foreign operations 1,356,292 (1,059,813) Unrealized (losses) gains on available-for-sale financial assets (5,359,605) 3,211,590 Share of other comprehensive income of associates and joint ventures accounted for

using equity method (722,480)

601,755

Less: Income tax expense related to components of other comprehensive income (184,284) 121,236

Total items that could be reclassified subsequently to profit or loss (4,910,077) 2,874,768

Total other comprehensive (loss) income, net after tax (4,910,077) 2,874,768

Total comprehensive income $ 2,272,897 6,518,453

Basic earnings per share (note 6(13))

before income tax $ 1.25 0.70

after income tax $ 1.13 0.57



CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2014 AND 2015


Equity Attributable to Owners of the Parent Retained Earnings Others

Common stock

Capital surplus

Legal reserve

Special reserve

Unappropriated retained earnings

Exchange difference on translation of

foreign operations

Unrealized gains on

available-for-sale financial assets

Gains (losses) on effective portion of

cash flow hedges

Total Equity

Balance as of January 1, 2014 $ 63,657,408 11,275,671 41,267,621 33,508,131 48,550,893 558,916 63,615,604 2,109 262,436,353 Effect of retrospective application and adjustment - - - - (570,961) - - - (570,961) Adjusted balance, January 1, 2014 63,657,408 11,275,671 41,267,621 33,508,131 47,979,932 558,916 63,615,604 2,109 261,865,392 Net income for the period - - - - 7,182,974 - - - 7,182,974 Other comprehensive income (loss) for the period, net after tax - - - - - 1,172,008 (6,084,640) 2,555 (4,910,077) Total comprehensive income (loss) for the period - - - - 7,182,974 1,172,008 (6,084,640) 2,555 2,272,897 Changes in capital surplus Changes in equity of associates and joint ventures accounted for using equity

method -

2,546

-

-

-

-

-

-

2,546

Other - (37) - - - - - - (37)

Balance as of March 31, 2014 $ 63,657,408 11,278,180 41,267,621 33,508,131 55,162,906 1,730,924 57,530,964 4,664 264,140,798

Balance as of January 1, 2015 $ 63,657,408 11,277,988 43,339,205 39,078,218 46,807,749 5,416,784 76,317,462 (3,096) 285,891,718 Effect of retrospective application and adjustment - - - - (741,508) - - - (741,508) Adjusted balance, January 1, 2015 63,657,408 11,277,988 43,339,205 39,078,218 46,066,241 5,416,784 76,317,462 (3,096) 285,150,210 Net income for the period - - - - 3,643,685 - - - 3,643,685 Other comprehensive income (loss) for the period, net after tax - - - - - (938,577) 3,772,837 40,508 2,874,768 Total comprehensive income (loss) for the period - - - - 3,643,685 (938,577) 3,772,837 40,508 6,518,453 Changes in capital surplus Other - (17) - - - - - - (17)

Balance as of March 31, 2015 $ 63,657,408 11,277,971 43,339,205 39,078,218 49,709,926 4,478,207 80,090,299 37,412 291,668,646



CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 2014 AND 2015


For the three-month periods ended March 31,

2014 (Adjusted) 2015 Cash flows from operating activities: Income before income tax $ 7,973,520 4,451,984 Adjustments for: Depreciation expense 1,903,069 1,895,668 Amortization expense 152,302 241,165 (Reversal) provision for bad debt expense (1,126) 197 Interest expenses 379,665 361,212 Interest income (128,835) (80,637) Share of profit of associates and joint ventures accounted for using equity method (4,182,677) (1,902,405) Gain on disposal of property, plant and equipment (16,456) (5,705) Property, plant and equipment transferred to expenses 854 - Gain on disposal of investments - (159,813) Gain on disposal of investments accounted for using equity method (2,627,625) - Unrealized foreign exchange gain (137,243) (381,420) Incomes and expenses not affecting cash flows (4,658,072) (31,738) Changes in operating assets and liabilities : Changes in operating assets : Notes receivable 85,096 38,830 Accounts receivable 1,231,295 181,302 Accounts receivable－related parties (261,867) (179,472) Other receivables 431,482 13,185 Other receivables－related parties (153,168) (143,039) Inventories (3,305,058) 3,892,369 Other current assets (412,895) 149,892 Total changes in operating assets (2,385,115) 3,953,067 Changes in operating liabilities : Accounts payable (2,373,657) (3,903,561) Accounts payable－related parties (998,624) 1,760,949 Other payables 106,705 1,149,840 Other payables－related parties (20,731) 76,908 Accrued expense and other current liabilities 1,651,007 2,846,849 Accrued pension liabilities (36,699) (112,597) Total changes in operating liabilities (1,671,999) 1,818,388 Total changes in operating assets and liabilities (4,057,114) 5,771,455 Total adjustments (8,715,186) 5,739,717 Cash generated from operations: (741,666) 10,191,701 Interest received 87,913 82,055 Dividends received - 120,300 Interest paid (164,290) (184,061) Income tax paid (135,120) (8,732) Net cash (used in) provided by operating activities (953,163) 10,201,263 Cash flows from investing activities: Acquisition of available-for-sale financial assets (965) - Proceeds from disposal of available-for-sale financial assets - 308,707 Acquisition of financial assets carried at cost - (25,000) Proceeds from disposal of investments accounted for using equity method 3,776,928 - Acquisition of property, plant and equipment (2,739,134) (865,048) Proceeds from disposal of property, plant and equipment 16,701 7,398 Decrease in due from related parties (listed under other receivables－related parties) 874,309 932,255 Increase in other assets (601,172) (475,463) Net cash provided by (used in) investing activities 1,326,667 (117,151) Cash flows from financing activities: Increase in short-term borrowings 48,951,384 22,562,214 Decrease in short-term borrowings (50,045,732) (25,403,685) Decrease in short-term notes and bills payable (3,099,844) - Proceeds from long-term debts 5,363,750 3,100,000 Repayments of long-term debts (633,514) (4,737,464) Increase (decrease) in due to related parties (listed under other payables－related parties) 11,816 (6,712) Increase in other liabilities 49,460 26,336 Cash dividends paid (2,576) (3,712) Net cash provided by (used in) financing activities 594,744 (4,463,023) Effect of foreign currency exchange translation (32,336) 102,070 Increase in cash and cash equivalents 935,912 5,723,159 Cash and cash equivalents at beginning of period 7,672,877 5,392,825 Cash and cash equivalents at end of period $ 8,608,789 11,115,984

Notes to consolidated financial statements as of March 31, 2014 and 2015 are reviewed only, not audited in accordance with generally accepted auditing standards FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2014 AND 2015

(All amounts are expressed in thousands of New Taiwan Dollars, except for per share information or unless otherwise specified)

1. Organization and principal activities

Formosa Plastics Corporation (the “Company”) was incorporated on November 5, 1954, and established its factories in Kaohsiung City. The Company and its subsidiaries (the “Group”) engages in the manufacture and sale of plastic raw materials, chemical fibers, and petrochemical products. The Company has gone through several capital increases and established many divisions, and become a well-diversified enterprise.

2. Approval date and procedures of the consolidated financial statements

The consolidated financial statements were reported and issued by the Board of Directors on May 8, 2015.

3. New and revised standards and interpretations

(1) The impact of adoption of new and amended standards and interpretations endorsed by the Financial Supervisory Commission of the Republic of China (“FSC”).

The Group adopted the 2013 version of IFRSs endorsed by the FSC (excluding IFRS 9 Financial Instruments) as they issue consolidated financial statements commencing from 2015. Related new, revised and amended standards and interpretations are listed below:

New, Revised or Amended Standards and Interpretations

Effective Date Prescribed by

IASB Amendments to IFRS 1 “Limited Exemption from Comparative IFRS 7

Disclosures for First - time Adopters” July 1, 2010

Amendments to IFRS 7 “Disclosures –Transfer of Financial Assets” July 1, 2011 Amendments to IFRS 7 “Disclosures - offsetting Financial Assets and

Financial Liabilities” January 1, 2013

IFRS 10 “Consolidated financial statements” January 1, 2013

(Investment entity took effect on January 1, 2014)

IFRS 11 “Joint arrangements” January 1, 2013 IFRS 12 “Disclosure of interests in other entities” January 1, 2013 IFRS 13 “Fair Value Measurement” January 1, 2013

2

FORMOSA PLASTICS CORPORATION AND SUBSIDIARIES


(Continued)

New, Revised or Amended Standards and Interpretations

Effective Date Prescribed by

IASB

Amendments to IAS 1 “Presentation of Items of Other Comprehensive

Income” July 1, 2012

Amendments to IAS 12 “Deferred Tax: Recovery of Underlying Assets” January 1, 2012 Amendments to IAS 19 “Employee Benefits” January 1, 2013 Amendments to IAS 27 “Separate Financial Statements” January 1, 2013 Amendments to IAS 32 “Offsetting of Financial Assets and Financial

Liabilities” January 1, 2014

Except for the following, the Group believes that the adoption of aforementioned 2013 version of IFRSs endorsed by the FSC did not have any significant effect on the Group’s consolidated financial statements. (a) Amendments to IAS 19, “Employee Benefits”

The amendments to IAS 19 require the Group to calculate a “net interest” amount by applying the discount rate to the net defined benefit liability or asset to replace the interest cost and expected return on planned assets used in current IAS 19. In addition, the amendments eliminate the accounting treatment of either corridor approach or the immediate recognition of actuarial gains and losses to profit or loss when incurred, and instead, require to recognize all actuarial gains and losses immediately through other comprehensive income. The past service cost, on the other hand, is expensed immediately when incurred and is no longer amortized over the average period before vested on a straight-line basis. In addition, instead of recognizing liability and expense only when the demonstrable benefit commitment is made, the amendments require the Group to recognize liability and expense for termination benefit on (1) the date when the Group can no longer withdraw the offer of the benefit; or (2) the date when the Group recognizes related restructuring expense, whichever date is earlier. Moreover, the amendments also require a broader disclosure for defined benefit plans. The Group has changed the accounting policy related to the measure and expression of net defined benefit assets, pension cost and actuarial gains or losses. With the elimination of the corridor approach, the Group has fully recognized the unrecognized prior service cost and actuarial gains or losses, and retrospectively adjusted the accumulated deficit. The influenced items and amounts are as follows:

3



(Continued)

Consolidated statement of financial position:

2010 IFRSs

amounts Impact on transition

2013 IFRSs amounts

March 31, 2014： Investments accounted for using equity

method $ 155,646,296 (273,822) 155,372,474 Deferred tax assets 1,645,780 67,007 1,712,787 Accrued pension liabilities 8,896,881 394,159 9,291,040 Other liabilities 473,308 (378) 472,930 Retained earnings 55,763,502 (600,596) 55,162,906

December 31, 2014： Investments accounted for using equity

method 160,602,440 (361,630) 160,240,810 Deferred tax assets 1,599,335 77,931 1,677,266 Accrued pension liabilities 8,526,717 458,420 8,985,137 Other liabilities 473,906 (611) 473,295 Retained earnings 46,807,749 (741,508) 46,066,241

Consolidated statement of comprehensive income:

2010 IFRSs amounts

Impact on transition

2013 IFRSs amounts

For the three-month periods ended March 31, 2014： Operating expenses $ 2,691,717 535 2,692,252

Share of other comprehensive income of associates and joint ventures accounted for using equity method 4,211,868 (29,191) 4,182,677

Income tax expense 790,637 (91) 790,546

(2) The IFRSs issued by IASB but not yet endorsed by FSC

New, revised and amended standards and interpretations for IFRSs issued by the IASB but not yet endorsed by the FSC are as follows:

New, Revised or Amended Standards and Interpretations Effective Date

Prescribed by IASB

IFRS 9 “Financial Instruments” January 1, 2018 Amendments to IFRS 10 and IAS 28 “Sale or Contribution of

Assets between an Investor and its Associate or Joint Venture” Amendments to IFRS 10, IFRS 12 and IAS 28 “Investment

Entities: Applying the Consolidation Exception”

January 1, 2016 January 1, 2016

Amendments to IFRS 11 “Accounting for Acquisitions of January 1, 2016

4



(Continued)

New, Revised or Amended Standards and Interpretations Effective Date

Prescribed by IASB

Interests in Joint Operations” IFRS 14 “Regulatory Deferral Account” January 1, 2016 IFRS 15 “Revenue from Contracts with Customers” January 1, 2017 Amendment to IAS 1 “Disclosure Initiative” January 1, 2016 Amendments to IAS16 and IAS 38 “Clarification of Acceptable

Methods of Depreciation and Amortization” January 1, 2016

Amendments to IAS16 and IAS 41 “Bearer Plants” January 1, 2016 Amendments to IAS 19 “Defined Benefit Plans: Employee

Contributions” July 1, 2014

Amendment to IAS 27 “Equity Method in Separate Financial Statements” January 1, 2016

Amendments to IAS 36: Recoverable Amount Disclosures for Non-Financial Assets January 1, 2014

Amendments to IAS 39 “Novation of Derivatives and Continuation of Hedge Accounting” January 1, 2014

Annual Improvements Cycle 2010-2012 and 2011-2013 July 1, 2014 Annual Improvements to IFRSs 2012–2014 Cycle January 1, 2016 Amendments to IFRIC Interpretation 21 “Levies” January 1, 2014

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

4. Summary of Significant Accounting Policies

(1) Statement of compliance

The accompanying consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to the Regulations) and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed by the FSC. These consolidated financial statements are not required to include all disclosures required for full annual financial statements under the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations as endorsed by the FSC (hereinafter referred to as IFRS as endorsed by the FSC).

Except as described below, the significant accounting policies adopted in the accompanying consolidated financial statements are the same as the consolidated financial statements as of and for the year ended December 31, 2014. Please refer to Note 4 of the consolidated financial statements as of and for the year ended December 31, 2014 for the detail disclosures of significant accounting policies. Please refer to Note 3(1) for the impact of adoption of the 2013 version of IFRSs endorsed and issued to be effective by the FSC commencing from January 1, 2015.

5



(Continued)

(2) Basis of consolidation

Except for Note 3(1), principle of preparing consolidated financial statements are the same as the consolidated financial statements as of and for the year ended December 31, 2014. Please refer to Note 4(c) of the consolidated financial statements as of and for the year ended December 31, 2014.

1. Subsidiary included in the consolidated financial statements is as follows:

Percentage of Ownership (%)

Investor

Name of subsidiaries

Business activity

March 31,2014

December 31,2014

March 31,2015

The Company Formosa Plastics Corp.

(Cayman Ltd). Investment 100% 100% 100%

Formosa Plastics Corp. (Cayman Ltd.)

Formosa Industries (Hong Kong) Limited

Investment 100% 100% 100%


Formosa Industries (Ningbo) Co., Ltd.

Plastics 100% 100% 100%


Formosa Acrylic Esters (Ningbo) Co., Ltd.

Acrylic Esters 100% 100% 100%


Formosa Polyethylene (Ningbo) Co., Ltd.

Polyethylene 100% 100% 100%


Formosa Polypropylene (Ningbo) Co., Ltd.

Polypropylene 100% 100% 100%


Formosa Super Absorbent Polymer (Ningbo) Co., Ltd.

Absorbent polymer 100% 100% 100%


Formosa electronic (Ningbo) Co., Ltd.

Electronics 100% 100% 100%

2. Subsidiary not included in the consolidated financial statements: None.

(3) Income tax

The Group evaluates and discloses interim period income tax expense in accordance with paragraph B12 of IAS 34 “Interim Financial Reporting”. Income tax expense is the best estimated by multiplying the pretax income for the interim reporting period by the effective annual tax rate as forecasted by the management, and is recognized as current tax expense.

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

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(Continued)

(4) Employee benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.

5. Critical Accounting Judgments and Key Sources of Estimation Uncertainly

The consolidated financial statements are prepared in conformity with IAS 34 “Interim financial reporting” as endorsed by the FSC, under which, management 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. In these consolidated financial statements, judgments and key sources of estimation uncertainty used by management in the application of critical accounting policies are expected to be consistent with those of Note 5 of the consolidated financial statements as of and for the year ended December 31, 2014.

6. Significant Accounts

Except as described below, the description of significant accounts in the accompanying consolidated financial statements is not materially different from the consolidated financial statements as of and for the year ended December 31, 2014. Please refer to Note 6 of the consolidated financial statements as of and for the year ended December 31, 2014 for the detailed disclosures of these significant accounts. (1) Cash and Cash Equivalents

March 31, 2014

December 31, 2014

March 31, 2015

Cash on hand $ 994 322 339 Bank deposit 748,251 865,540 2,667,134 Time deposits 7,859,544 4,526,963 8,448,511 $ 8,608,789 5,392,825 11,115,984

(2) Available-for-sale Financial Assets

March 31, 2014

December 31, 2014

March 31, 2015

Listed securities: Listed stocks $ 80,181,491 94,685,911 97,748,607 Please refer to Note 8 for available-for-sale financial assets pledged as collateral as of March 31, and December 31, 2014, and March 31, 2015, respectively.

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(Continued)

(3) Notes Receivable, Accounts Receivable and Other Receivables

March 31, 2014

December 31, 2014

March 31, 2015

Notes receivable $ 974,458 1,026,818 987,988 Accounts receivable (including related parties) 12,448,740 11,581,109 11,589,906 Other receivables－current (including related parties) 21,714,051 30,231,505 29,837,525 Other receivables－non-current (listed under other assets) 4,248,910 1,840,999 1,446,633 Less : allowance for doubtful receivables (5,099) (4,977) (5,174) $ 39,381,060 44,675,454 43,856,878 Aging analysis of notes receivable, accounts receivable and other receivables: Past due but not impaired Neither past due

nor impaired

Within 30 days

31-60 days

Over 61 days Total

March 31, 2014 $ 39,319,135 61,817 - 108 39,381,060 December 31, 2014 44,612,221 63,122 108 3 44,675,454 March 31, 2015 43,844,705 11,943 230 - 43,856,878 Movements of the allowance for doubtful receivables were as follows:


2014 2015

Balance, beginning of period $ 6,225 4,977 Provision of impairment - 197 Reversal of impairment (1,126) - Balance, end of period $ 5,099 5,174 The terms of sales made by the Group were net 30~90 days. Based on historical default rates, the Group recognizes 0.1% allowance for impairment of uncollectible accounts receivable.

(4) Inventories

March 31, 2014

December 31, 2014

March 31, 2015

Finished goods $ 16,213,242 13,390,307 10,886,256 Work in process 2,506,666 2,727,638 2,236,896 Raw materials 4,205,968 4,078,981 3,281,432 Supplies 672,474 745,675 727,876 Machinery and accessories in process 967,238 1,496,028 1,502,049 Others 439,061 433,761 398,955 Total $ 25,004,649 22,872,390 19,033,464

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(Continued)

As the net realizable value of inventories has increased because the circumstance that caused the inventory devaluation in prior period has improved, the Group recognized gain from recovery in the value of inventories of $84,574 and $65,802 for the three-month periods ended March 31, 2014 and 2015, respectively, which were credited to cost of goods sold.

(5) Investments Accounted for Using Equity Method

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

March 31, 2014

December 31, 2014

March 31, 2015

Associates

Formosa Petrochemical Corporation $ 71,148,450 68,855,649 69,399,141 Formosa Plastics Corp., U.S.A. 35,285,243 40,524,762 41,856,606 Formosa Heavy Industries Corp. 7,147,592 7,783,997 7,869,851 Sky Dragon Investment Limited 3,295,606 2,265,937 1,922,384 Mai Liao Power Corp. 11,215,811 11,422,034 11,794,070 Formosa Sumco Technology Corporation 5,505,970 5,706,246 5,820,685 Formosa Transportation Corp. 602,397 652,552 664,493 Formosa Fairway Corp. 87,225 75,408 76,179 Yi-Jih Development Corp. 61,964 62,209 62,281 Ya Tai Development Corp. 92,564 49,055 47,929 Formosa Automobile Corporation - - - Wha Ya Park Management Consulting

Corporation Ltd. 1,824

2,113

2,156

Su-Hua Transportation Corporation 169,594 180,569 192,394 Formosa Environmental Technology

Corporation 271,589 267,354 265,989

Formosa Resources Corporation 3,014,683 4,359,188 4,332,161 Formosa Group (Cayman) Limited 368 21,942 49,190 Formosa Group Investment (Cayman) Limited - 384 382 Formosa Plastics Development Corporation Ltd. - 14,559 13,606 Formosa Ha Tinh Steel Corporation 15,490,584 - - Formosa Ha Tinh (Cayman) Limited - 15,761,499 15,448,295

Jointly controlled entities

Formosa Asahi Spandex Co., Ltd. 1,216,160 1,312,517 1,231,249 Formosa Daikin Advanced Chemical Co., Ltd. 641,946 799,302 812,765 Formosa Mitsui Advanced Chemical Co., Ltd. 122,904 123,534 120,885

$ 155,372,474 160,240,810 161,982,691

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(Continued)

For the three-month periods ended March 31, 2014 and 2015, the Group’s share of net income (loss) of associates and jointly controlled entities were as follows:

For the three-month periods ended March 31, 2014 2015

Associates Formosa Petrochemical Corporation $ 2,522,061 321,892 Formosa Plastics Corp., U.S.A. 1,475,697 1,391,438 Formosa Heavy Industries Corp. 140,863 85,853 Sky Dragon Investment Limited (404,308) (314,182) Mai Liao Power Corp. 338,870 372,035 Formosa Sumco Technology Corporation 49,136 114,439 Formosa Transportation Corp. (1,999) 11,941 Formosa Fairway Corp. 613 770 Yi-Jih Development Corp. 82 72 Ya Tai Development Corp. 18,765 (1,126) Formosa Automobile Corporation 8,971 14,182 Wha Ya Park Management Consulting Corporation Ltd. 52 43 Su-Hua Transportation Corporation 9,935 11,826 Formosa Environmental Technology Corporation (1,675) (1,365) Formosa Resources Corporation (10,679) (27,027) Formosa Group (Cayman) Limited - 27,636 Formosa Group Investment (Cayman) Limited - 2 Formosa Plastics Development Corporation Ltd. - (953) Formosa Ha Tinh Steel Corporation (43,138) - Formosa Ha Tinh (Cayman) Limited - (156,630)

Jointly controlled entities

Formosa Asahi Spandex Co., Ltd. 30,683 39,031 Formosa Daikin Advanced Chemical Co., Ltd. 48,795 13,463 Formosa Mitsui Advanced Chemical Co., Ltd. (47) (935)

$ 4,182,677 1,902,405 (b) Associates

(i) The information of the major associate of the investments accounted for using the equity

method was as follows:

Percentage of ownership

Associates Relationship Registration

Country March 31,

2014 December 31,

2104 March 31,

2015 Formosa

Petrochemical Corporation

Formosa Petrochemical Corporation , the main supplier of raw materials for the Group, has principal activities that consists of petroleum refining and integrated manufacture of hydrocarbon

Taiwan 28.79% 28.79% 28.79%

10



(Continued)

The fair value of investments in publicly traded stocks of the major associate was as follows:

March 31, 2014

December 31, 2104

March 31, 2015

Formosa Petrochemical Corporation $ 212,547,548 188,413,117 187,864,607

The following is the aggregated financial information of the major associate, and necessary changes have already been made to the information therein concerning the associates' consolidated financial statements based on the IFRS as endorsed by FSC to reflect the fair value adjustments made at the time of acquisition and adjustment for accounting policy variations.

The financial information of Formosa Petrochemical Corporation was as follows:

March 31, 2014

December 31, 2104

March 31, 2015

Current assets $ 305,390,348 260,281,831 231,452,469 Non-current assets 225,332,647 212,734,399 210,550,666 Current liabilities (144,842,587) (104,523,565) (75,147,732) Non-current liabilities (138,125,624) (128,851,442) (125,321,535) Net asset $ 247,754,784 239,641,223 241,533,868 Net asset contributed to non-controlling interest

of Formosa Petrochemical Corporation $ 31,240

34,359

35,349

Net asset contributed to Formosa Petrochemical Corporation

$ 247,723,544

239,606,864

241,498,519

For the three-month periods ended March 31, 2014 2015 Revenue $ 263,363,117 155,034,556 Net income $ 8,782,671 1,122,927 Other comprehensive income (1,414,672) 769,718 Total comprehensive income $ 7,367,999 1,892,645 Income allocated to non-controlling interest of Formosa

Petrochemical Corporation $ 562

990

Income allocated to Formosa Petrochemical Corporation $ 7,367,437 1,891,655

11



(Continued)

For the three-month periods ended March 31, 2014 2015 Beginning balance of investment in associate at

January 1 $ 70,386,512 68,855,649

Total comprehensive income allocated to the Group 1,908,695

543,492

Ending balance of investment in associate at March 31 72,295,207 69,399,141 Difference in capital surplus from changes in holding

proportion due to non-acquisition of newly-issued shares

2,546 -

Decrease in carrying amount from disposal of associate’s shares

(1,149,303)

-

Total carrying amount of equity of the major associate

$ 71,148,450

69,399,141

(ii) The financial information of the minor associates of the investments accounted for using

equity method was as follows:

March 31, 2014

December 31, 2104

March 31, 2015

Total carrying amount of equity of the minor

associates $ 82,243,014

89,149,808

90,418,651

For the three-month periods ended March 31 2014 2015 Attributable to the parent Net income $ 1,581,185 1,528,954 Other comprehensive income (3,747) 344,525 Total comprehensive income $ 1,577,438 1,873,479

(c) Jointly controlled entities

The description of joint controlled entities in the accompanying consolidated financial statements is not materially different from the consolidated financial statements as of and for the year ended December 31, 2014. Please refer to Note 6(5) of the consolidated financial statements as of and for the year ended December 31, 2014. The Group’s investments in jointly controlled entities are not significant. The financial information of the minor joint ventures of the investments accounted for using equity method was as follows:

March 31,

2014 December 31,

2104 March 31,

2015 Total carrying amount of equity of the minor joint

ventures $ 1,981,010

2,235,353

2,164,899

12



(Continued)

For the three-month periods ended March 31, 2014 2015 Attributable to the parent Net income $ 79,431 51,559 Other comprehensive income - - Total comprehensive income $ 79,431 51,559

(d) On January 17, 2014, the Group sold 49,348 thousand common shares of Formosa

Petrochemical Corporation for $3,776,928. This resulted in a gain on disposal of this investment of $2,627,625, net of related expenses, which was charged to comprehensive income under other gains and losses.

(e) Collaterals

Please refer to Note 8 for investments accounted for using equity method which were pledged to banks as collateral to secure the Company’s bank loans as of March 31, and December 31, 2014 and March 31, 2015.

(6) Property, Plant and Equipment

The cost and depreciation of the property, plant and equipment of the Consolidated Company as of and for the three-month periods ended March 31, 2014 and 2015：

Land Building Machinery and

equipment

Other facilities Construction in progress

Total

Cost: Balance as of January 1, 2014 $ 6,478,259 25,629,603 153,035,372 5,580,269 15,842,282 206,565,785 Additions - - 36,736 28,424 2,673,974 2,739,134 Disposals (11) - (121,916) (8,498) - (130,425) Reclassification 25,024 674,407 19,133 (600,145) 118,419 Effect of exchange rate change - 45,663 276,575 12,835 111,541 446,614 Balance as of March 31, 2014 $ 6,478,248 25,700,290 153,901,174 5,632,163 18,027,652 209,739,527 Balance as of January 1, 2015 $ 6,679,420 25,987,137 154,812,660 5,986,397 22,272,129 215,737,743 Additions - 1,092 24,801 25,998 813,157 865,048 Disposals (1,507) - (119,031) (17,486) - (138,024) Reclassification - 5,034 1,809,339 57,984 (1,484,203) 388,154 Effect of exchange rate change - (68,103) (413,518) (20,163) (255,945) (757,729) Balance as of March 31, 2015 $ 6,677,913 25,925,160 156,114,251 6,032,730 21,345,138 216,095,192 Accumulated depreciation: Balance as of January 1, 2014 $ - 11,250,245 109,627,468 4,231,674 - 125,109,387 Depreciation for the period - 223,668 1,612,994 66,407 - 1,903,069 Disposals - - (121,825) (8,355) - (130,180) Reclassification - - - 68 - 68 Effect of exchange rate change - 9,618 103,849 8,346 - 121,813 Balance as of March 31, 2014 $ - 11,483,531 111,222,486 4,298,140 - 127,004,157 Balance as of January 1, 2015 $ - 12,178,285 115,117,081 4,444,750 - 131,740,116 Depreciation for the period - 223,876 1,591,670 80,122 - 1,895,668 Disposals - - (119,031) (17,300) - (136,331) Reclassification - - (1,192) 1,678 - 486 Effect of exchange rate change - (17,221) (180,949) (11,869) - (210,039) Balance as of March 31, 2015 $ - 12,384,940 116,407,579 4,497,381 - 133,289,900 Carrying amounts: Balance as of March 31, 2014 $ 6,478,248 14,216,759 42,678,688 1,334,023 18,027,652 82,735,370 Balance as of December 31, 2014 $ 6,679,420 13,808,852 39,695,579 1,541,647 22,272,129 83,997,627 Balance as of March 31, 2015 $ 6,677,913 13,540,220 39,706,672 1,535,349 21,345,138 82,805,292

13



(Continued)

(a) As of March 31, and December 31, 2014 and March 31, 2015, the Group’s parcels of land with title temporarily registered under the names of third parties for trust purpose had carrying value of $35,914, $35,914, and $34,407, respectively, which were recorded under property, plant and equipment. The Group has implemented a deed of trust with the authorities to secure the Group’s rights related to the abovementioned properties.

(b) Please refer to Note 6(15) for further information about the capitalized interest on borrowings

for the purchase of the property, plant and equipment and gain (loss) on disposal of property, plant and equipment.

(c) Collaterals

The property, plant and equipment pledged to secure bank loans as of March 31, and December 31, 2014 and, December 31, 2015, are described in Note 8.

(7) Short-term Borrowings

(a) Short-term borrowings consisted of the following:

March 31, December 31, March 31, 2014 2014 2015 Unsecured short-term borrowings $ 15,839,390 13,460,290 10,610,931 Employees’ savings 588,099 307,270 312,072 Total $ 16,427,489 13,767,560 10,923,003 Interest rate 0.664%~3.435% 0.695%-2.635% 0.696%~2.200%

(b) Issuance and redemption of loans


2014 2015 Balance as of January 1 $ 17,521,603 13,767,560 New issuance during the period 48,951,362 22,562,214 Repayments during the period (50,045,710) (25,403,685) Effect of exchange rate change 234 (3,086) Balance as of March 31 $ 16,427,489 10,923,003 Interest Rate 0.664%~3.435% 0.696%~2.200%

(c) The assets pledged to secure loans are described in Note 8.

14



(Continued)

(8) Long-term Loans

(a) Long-term loans consisted of the following:

Mach 31, 2014

December 31, 2014

March 31, 2015

Unsecured bank loans $ 21,571,525 17,898,069 16,259,464 Secured bank loans 4,370,003 10,562,571 10,563,712 Less: Current portion of long-term loans (4,995,601) (1,515,645) (2,008,253) Total $ 20,945,927 26,944,995 24,814,923 Repayment period 2014~2019 2015~2021 2015~2021 Interest rate 1.135%~2.204% 1.198%~2.280% 1.186%~1.649%

(b) Issuance and redemption of loans

For the three-month periods ended

March 31, 2014 2015 Balance as of January 1 $ 21,211,292 28,460,640 New issuance during the period 5,363,750 3,100,000 Repayments during the period (633,514) (4,737,464) Balance as of March 31 $ 25,941,528 26,823,176 Interest Rate 1.368%~2.204% 1.186%~1.649%

(c) Secured bank loans

(i) In order to raise funds to finance the Sixth Naphtha Cracker project and the construction of related factories, the Group signed a syndicated loan agreement with Mega International Commercial Bank (formerly Chiao Tung Bank), the lead bank of the syndicated loan, and other banks on April 28, 1995. The details of the loan agreement are as follows: I. Credit line: $30,769,000 and US$242,000 thousand. II. Interest rate: as settled with each participating bank. III. Period: 10 to 15 years. IV. Collateral: the acquired land, buildings and machinery financed by the loan. V. The financial covenants under the loan agreement include the requirement to maintain

certain financial ratios based on the audited financial reports. If the Company breaches these financial covenants, the syndicated banks may determine to declare the unpaid principal, interest, fees and other sums payable by the Company under the loan agreement to be immediately due and payable. These financial ratios are as follows:

Current Ratio (total current assets divided by total current liabilities): not lower than

100%, except for the syndicated loan of Sixth Naphtha Cracker project, which is not lower than 120%.

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

15



(Continued)

The Company did not breach the above mentioned financial covenants in respect of its financial statements as of March 31, 2015.

VI. As of March 31, 2015, NT$30,479,000 and US$242,000 thousand of the credit line had

been drawn.

(ii) In order to raise funds to build the plant and accessory equipment, the Group signed a syndicated loan agreement with Bank of Taiwan, the lead bank of the syndicated loan, and 18 other banks on November 14, 2013. As of March 31, 2015, the details of the loan agreement are as follows:

I. Credit line: $10,300,000. II. Interest rate: as settled with each participating bank. III. Period: 7 years (including a 3 years extension). IV. Collateral: the land at Sixth Naphtha Cracker pledged for 120 percent of the credit line

financed by the loan. V. The financial covenants under the loan agreement include the requirement to maintain

certain financial ratios based on the audited consolidated financial reports. If the Company breaches these financial covenants, the syndicated banks may determine to declare the unpaid principal, interest, fees and other sums payable by the Company under the loan agreement to be immediately due and payable. These financial ratios are as follows:

Current Ratio (total current assets divided by total current liabilities): not lower than

100%.

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

The Company did not breach the above mentioned financial covenants in respect of its financial statements as of March 31, 2015.

VI. As of March 31, 2015, NT$10,300,000 of the credit line had been used.

(d) The assets pledged to secure loans are described in Note 8.

16



(Continued)

(9) Bonds Payable

March 31, December 31, March 31, 2014 2014 2015 Domestic unsecured nonconvertible

corporate bonds $ 59,897,966 59,906,965 59,915,273

Less: current portion (5,997,630) (7,993,512) (7,994,987) Total $ 53,900,336 51,913,453 51,920,286 Expiry 2014~2023 2015~2026 2015~2026

The first domestic unsecured

nonconvertible corporate bond

in 2009



in 2010



in 2011

The second domestic unsecured


in 2011



in 2012 Issue amounts $6,000,000 $6,000,000 $6,000,000 $4,000,000 $7,000,000 Ending balance at March 31, 2014 2,999,496 5,996,269 5,991,424 3,994,212 6,988,926 Current portion at March 31, 2014 2,999,496 2,998,134 - - - Ending balance at December 31, 2014 - 2,998,668 5,993,874 3,995,815 6,991,572 Current portion at December 31, 2014 - 2,998,668 2,996,937 1,997,907 - Ending balance at March 31, 2015 - 2,999,467 5,994,691 3,996,349 6,992,454 Current portion at March 31, 2015 - 2,999,467 2,997,346 1,998,174 - Issuance date May 22, 2009 June 21, 2010 November 16, 2011 December 15, 2011 May 22, 2012 Coupon rate 1.85% 1.55% 1.34% 1.35% 1.26%、1.42% Interest payment date May 22 June 21 November 16 December 15 May 22 Repayment method Payable in 2 equal

installments for each different coupon rate in 2013 and 2014, respectively.

Payable in 2 equal installments for each different coupon rate in 2014 and 2015, respectively.



Payable in 2 equal installments for each different coupon rate in 2016~2017 and 2018~2019, respectively.

The second

domestic unsecured


in 2012

The third domestic unsecured


in 2012



in 2013

The second domestic unsecured


in 2013



in 2014 Issue amounts $5,000,000 $9,000,000 $11,500,000 $8,500,000 $6,000,000 Ending balance at March 31, 2014 4,991,222 8,982,413 11,475,387 8,478,617 - Current portion at March 31, 2014 - - - - - Ending balance at December 31, 2014 4,993,118 8,986,080 11,479,788 8,482,080 5,985,970 Current portion at December 31, 2014 - - - - - Ending balance at March 31, 2015 4,993,750 8,987,302 11,481,255 8,483,235 5,986,770 Current portion at March 31, 2015 - - - - - Issuance date September 12, 2012 November 5, 2012 June 10, 2013 November 8, 2013 May 21, 2014 Coupon rate 1.28%、1.40% 1.25%、1.39%、1.53% 1.23%、1.52% 1.42%、1.94% 1.83%、1.92% Interest payment date September 12 November 5 June 10 November 8 May 21 Repayment method Payable in 2 equal

installments for each different coupon rate in 2016~2017 and 2018~2019. , respectively.

Payable in 3 equal installments for each different coupon rate in 2016~2017, 2018~2019 and 2021~2022, respectively.




17



(Continued)

(10) Employee Benefits

(a) Defined benefit plan Subsequent to December 31, 2014, there is apparently no evidence of any material market volatility, material curtailment, reimbursement and settlement or other material one-time events. Therefore, pension cost in the consolidated financial statements is measured and disclosed according to the respective actuarial report for the years ended December 31, 2013 and 2014.

The Group’s pension costs recognized in profit or loss were as follows:


Operating cost $ 43,461 42,861 Selling expenses $ 1,679 1,616 Administrative expenses $ 24,766 25,231

(b) Defined contribution plan

The Group’s pension costs recognized in profit or loss were as follows:


Operating cost $ 37,286 39,139 Selling expenses $ 1,684 1,814 Administrative expenses $ 24,182 22,731

(11) Income Tax

(a) The details of income tax expense for the three-month periods ended March 31, 2014 and 2015 were as follows:


2014 2015

Current income tax expense $ 339,840 512,124 Deferred tax expense 450,706 296,175 Income tax expense $ 790,546 808,299

18



(Continued)

(b) The income tax expense related to components of other comprehensive income for the three-month periods ended March 31, 2014 and 2015 was as follows:

For the three-month periods

ended March 31, 2014 2015 Items that could be reclassified subsequently to profit or

loss:

Exchange differences on translation of foreign financial statements

$ 184,284

(121,236)

(c) Examination and approval

The Company’s income tax returns have been examined by the ROC tax authority through 2013.

(d) Information related to the accumulated deficit and imputation credit account (ICA) and creditable ratio were as follows:

March 31,

2014 December 31, 2014

March 31, 2015

Undistributed earnings in 1997 and prior years $ 432,111 432,111 432,111 Undistributed earnings in 1998 and thereafter 54,730,795 45,634,130 49,277,815 $ 55,162,906 46,066,241 49,709,926 Imputation credit account $ 2,901,834 3,141,029 3,152,638

2013 (actual) 2014 (estimated)

Tax deduction ratio for earnings distribution to ROC residents 9.80% 8.16%

Under the information for integrated income tax, the above imputation credit account and creditable ratio were calculated according to the formal interpretation No.10204562810 issued by Taxation Administration, Ministry of Finance, R.O.C. on October 17, 2013.

(12) Equity

Except as described below, there was no material change in equity for the three-month periods ended March 31, 2014 and 2015. Please refer to Note 6(13) of the consolidated financial statements as of and for the year ended December 31, 2014 for the related detail disclosures on equity.

19



(Continued)

(a) Capital surplus

The components of capital surplus were as follows:

March 31, 2014

December 31, 2014

March 31, 2015

Paid-in capital in excess of par value $ 8,130,081 8,130,081 8,130,081 Overdue unpaid directors’ remuneration and dividends 83,490 83,298 83,281 Paid in capital in excess of the par value derived from

overseas corporate bond conversion 2,997,503

2,997,503

2,997,503

Treasury stock transactions 16,263 16,263 16,263 Equity in capital surplus of investee companies 50,843 50,843 50,843 $ 11,278,180 11,277,988 11,277,971

(b) Retained earnings

In accordance with the Company’s articles of incorporation, the Company’s annual earnings after providing for income tax are appropriated and distributed as follows:

• Cover prior year’s accumulated deficit, if any; • Of the remaining balance, if any, 10% is set aside as legal reserve; • Of the remaining balance, if any, certain amount is set aside as special reserve and as

common stockholders’ dividends;

• The remainder, together with accumulated earnings from prior year, is reported to the board of directors for purposes of making a plan for the distribution of cash dividend and/or stock dividend and bonuses for stockholders, directors, and supervisors.

(i) 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 IFRS as endorsed by the FSC, unrealized revaluation increments and cumulative translation adjustments (gains) of $2,790,507, which were previously recognized in shareholders’ equity were reclassified to retained earnings. In accordance with Regulatory Permit No. 1010012865 as issued by the FSC on April 6, 2012, a special reserve is appropriated from retained earnings for aforementioned reclassification. In addition, during the use, disposal or reclassifications of relevant assets, this special reserve is reverted to distributable earnings proportionately. The carrying amount of special reserve amounted to $2,790,507 as of March 31, and December 31, 2014 and March 31, 2015.

20



(Continued)

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.

(ii) Earnings distribution

The Company appropriates 0.1% to 1% of the distributable earnings after dividends as employee bonuses, which are recognized as the Company’s expenses in the year earnings. These bonuses are charged to operating costs and expenses in each period when those earnings arise. For the three-month periods ended March 31, 2014 and 2015, the estimated employee bonuses amounted to $9,506 and $8,511, respectively. The employee bonuses amounted to $30,000 and $26,686 in 2013 and 2014, respectively. The amounts as stated in the consolidated financial statements are identical to the actual distributions for 2013. The information about the appropriations of bonuses to employees is available at the Market Observation Post System website. The differences between the amounts approved in the shareholders’ meeting and those recognized in the consolidated financial statements, if any, are accounted for as changes in accounting estimates and recognized as profit or loss in 2015.

The appropriations of earnings in 2014 were approved in the board of directors’ meeting on March 24, 2015, and the appropriations in 2013 earnings were approved in the stockholders’ meeting on June 13, 2014, respectively. The amounts of appropriation of dividends per share were as follows:

2013 2014 Dividends Dividends per share Amount per share Amount Dividends attributable to ordinary

shareholders:

Cash dividends $ 1.90 12,094,907 1.70 10,821,759

21



(Continued)

(c) Other equity

Exchange differences

on translation of foreign operations

Unrealized gains (losses) on


Cash flow hedge Balance at January 1, 2014 $ 558,916 63,615,604 2,109 Exchange differences on translation of

foreign operations, net of tax

-the Group 1,066,641 - - -associates 105,367 - - Unrealized gains (losses) on


-the Group - (5,359,605) - -associates - (725,035) 2,555 Balance at March 31, 2014 $ 1,730,924 57,530,964 4,664 Balance at January 1, 2015 $ 5,416,784 76,317,462 (3,096) Exchange differences on translation of

foreign operations, net of tax

-the Group (902,948) - - -associates (35,629) - - Unrealized gains (losses) on


-the Group - 3,211,590 - -associates - 561,247 40,508

Balance at March 31, 2015 $ 4,478,207 80,090,299 37,412

(13) Earnings Per Share The basic earnings per share were calculated as follows: For the three-month periods

ended March 31, 2014 2015 Net income attributable to the Group $ 7,182,974 3,643,685 Weighted-average number of ordinary shares outstanding (basic) 6,365,741 6,365,741 Basic earnings per share (dollars) $ 1.13 0.57

22



(Continued)

(14) Revenue For the three-month periods ended March 31, 2014 and 2015, the Group’s details of revenue were as follows:


2014 2015 Sale of goods $ 51,360,786 46,975,653 Construction revenue 214,212 251,316 Others 414,873 470,143 Total $ 51,989,871 47,697,112

(15) Non-operating Income and Expenses

(a) Other income For the three-month periods ended March 31, 2014 and 2015, the components of other income were as follows:


Interest income $ 128,835 80,637 Rental income 26,807 30,372 $ 155,642 111,009

(b) Other gains and losses For the three-month periods ended March 31, 2014 and 2015, the components of other gains and losses were as follows:


2014 2015 Gain on disposal of property, plant and equipment $ 16,456 5,705 Gain on disposal of investments 2,627,625 159,813 Foreign exchange gains (loss), net 246,620 (359,944) Other gains 112,824 272,666 Other losses (78,028) (217,441) $ 2,925,497 (139,201)

23



(Continued)

(c) Finance expenses The Group’s details of finance expenses were as follows:


2014 2015 Interest expense $ 454,518 428,141 Less: capitalized interest (74,853) (66,929) $ 379,665 361,212 Capitalized interest rate 1.39%~2.25% 1.36%~1.53%

(16) Financial Instruments

Except as described below, there was no material change with regard to the fair value and exposure risks of credit risk, liquidity risk and market risk on financial instruments. Please refer to Note 6(17) of the consolidated financial statements as of and for the year ended December 31, 2014 for the related detail disclosures on financial instruments. (a) Currency risk

(i) Exposure to currency risk

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

March 31, 2014 December 31, 2014 March 31, 2015 Foreign

currency (in thousands)

Exchange rate

New Taiwan Dollars

Foreign currency

(in thousands) Exchange

rate

New Taiwan Dollars

Foreign currency

(in thousands) Exchange

rate

New Taiwan Dollars

Financial assets: Monetary items USD $ 286,212 30.5100 8,732,328 592,275 31.7180 18,785,778 805,554 31.4010 25,295,201 EUR 2 41.9420 84 101 38.531 3,892 41 33.6720 1,381 JPY 178,426 0.2947 52,582 171,056 0.2650 45,330 137,509 0.2616 35,972 Financial liabilities Monetary items USD 569,561 30.5100 17,377,306 611,073 31.7180 19,382,013 526,153 31.4010 16,521,730 EUR 687 41.9420 28,814 182 38.5310 7,013 45 33.6720 1,515 JPY 240,727 0.2947 70,942 39,047 0.2650 10,347 89,277 0.2616 23,355 SGD 7 24.2260 170 19 23.9910 456 - - - GBP 6 50.7060 304 - - - 7 46.347 324 CHF 33 32.6560 1,078 24 32.0410 769 19 32.3480 615 CAD - - - - - - 8 24.6710 197

24



(Continued)

(ii) Sensitivity analysis The Group’s exposure to foreign currency risk arises from the foreign currency exchange fluctuations on cash and cash equivalents, accounts receivable, other receivables, loans and borrowings, accounts payable and other payables which are denominated in different foreign currencies. A 1% depreciation of the NTD against the USD, EUR, JPY, SGD, GBP, CHF and CAD as of March 31, 2014 and 2015 would have decreased the net income after tax by $86,936 and increased the net income after tax by $87,848 for the three-month periods ended March 31, 2014 and 2015, respectively. This analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The management believes that the analysis is performed on the same basis. Because there are a variety of functional currencies, the Group discloses a summary of its information on exchange gain or loss. The realized and unrealized exchange gain or loss amounted to $246,620 and $(359,944) for the three-month periods ended March 31, 2014 and 2015, respectively.

(b) Fair value

(i) Fair value and carrying amount

The Group considers the carrying amounts of notes receivable, accounts receivable (including related parties), other receivables (including related parties) and short-term/long-term loans and borrowings as a reasonable approximation of fair value because the maturity dates of these short-term financial instruments are within one year from the balance sheet date.

(ii) Valuation techniques and assumptions used in fair value determination

If a quoted price is available on an active market, the market price should be used as the fair value; the market price published by the primary stock exchanges as the basis of fair value evaluation for listed equity instruments. Fair value of the Group’s financial instruments that have an active market is displayed by category and attributed as follows: Listed stocks are financial assets with standard transaction terms and conditions, and are traded on an active market. The fair value of such items is determined in reference to the quoted market price.

25



(Continued)

Carrying Fair value Value Level 1 Level 2 Level 3 Total

March 31, 2014 Available-for-sale financial assets

Listed stocks $ 80,181,491 80,181,491 - - 80,181,491

December 31, 2014 Available-for-sale financial assets

Listed stocks $ 94,685,911 94,685,911 - - 94,685,911

March 31, 2015 Available-for-sale financial assets

Listed stocks $ 97,748,607 97,748,607 - - 97,748,607

There were no transfers among the fair value hierarchy levels for the three-month periods ended March 31, 2014 and 2015.

(17) Financial Risk Management

There were no material changes in financial risk management in comparison to Note 6(18) of the consolidated financial statements as of and for the year ended December 31, 2014.

(18) Capital Management There were no material changes in capital management target adopted for capital management in comparison to Note 6(19) of the consolidated financial statements as of and for the year ended December 31, 2014.

7. Related-party Transactions

(1) Parent company and ultimate controlling party

The Company is the ultimate controlling party of the Group.

(2) Significant related-party transactions

(a) Sales to related parties

The Group’s significant sales to related parties and the balance of accounts receivable were as follows:

26



(Continued)

Sales For the three-month periods

ended March 31,

Accounts receivable－related parties

2014

2015 March 31,

2014 December 31,

2014 March 31,

2015 Associates $ 4,601,288 2,106,759 2,271,960 1,120,649 1,183,741 Jointly controlled entities 131,477 130,966 47,000 57,881 49,723 Other related parties 6,982,177 6,862,378 2,574,852 3,047,464 3,172,002 Total $ 11,714,942 9,100,103 4,893,812 4,225,994 4,405,466

The selling prices and collection terms for the sales to related parties are not significantly different from those third-party customers, and receivables are collected on the 27th of the month following the month of sales. The terms of receivables from other foreign related parties are O/A 60 days or L/C at sight.

(b) Purchase from related parties

The Group’s significant purchases from related parties and the balance of accounts payable were as follows:

Purchases


ended March 31, Accounts payable－related parties

2014 2015 March 31,

2014 December 31,

2014 March 31,

2015 Associates $ 30,439,021 20,359,641 10,882,657 6,939,963 8,628,329 Jointly controlled entities 7,545 7,711 2,280 3,373 2,975 Other related parties 1,525,414 851,279 970,198 415,303 488,284 Total $ 31,971,980 21,218,631 11,855,135 7,358,639 9,119,588 The purchase price and payment terms for the purchase from related parties are not significantly different from those with third-party vendors, and payables are paid on the 27th of the month following the month of purchase.

(c) Property plant and equipment

Purchase property, plant and equipment for the three-month

periods ended March 31,

Other payables–related parties

2014 2015 March 31,

2014 December 31,

2014 March 31,

2015 Other related parties $ 14,098 62,545 - 24,809 46,188

27



(Continued)

(d) Financing transactions

The Group’s significant financing transactions with related parties were as follows: Due from related parties (recognized as other

receivables–related parties) March 31,

2014 December 31,

2014 March 31,

2015 Associates $ 5,408,378 6,927,529 6,131,555 Jointly controlled entities 74,411 46,651 46,002 Other related parties 11,640,000 11,157,926 11,036,476 $ 17,122,789 18,132,106 17,214,033

As of March 31, and December 31, 2014 and December 31, 2015, the interest revenue from the abovementioned transactions amounted to $88,417, $26,977 and $18,459, respectively, which was recognized as other receivables–related parties. Due from related parties (recognized as other

payables–related parties) March 31,

2014 December 31,

2014 March 31,

2015 Other related parties $ 633,878 658,783 652,071

As of March 31, and December 31, 2014 and December 31, 2015, the interest expense from the abovementioned transactions amounted to $1,270, $2,618 and $3,500 respectively, which was recognized as accrued expenses.

(e) Endorsements and guarantees

(i) The Group’s endorsements guarantees to secure related parties’ loans were as follows:

March 31, 2014

December 31, 2014

March 31, 2015

Associates $ 371,696 13,409,116 17,280,792

28



(Continued)

(ii) The amounts of commitment letters for related parties that the Group had issued to financial institutions were as follows (expressed in thousands):

March 31, 2014 December 31, 2014 March 31, 2015

USD CNY USD CNY USD CNY Associates $ 328,000 1,360,000 1,086,000 1,834,000 1,086,000 1,658,000

(f) Other significant transactions

(i) The Group’s income received from related parties, such as sewage treatment income,

wharf usage income and utility and steam income were as follows:

Other receivables–related parties March 31,

2014 December 31,

2014 March 31,

2015 Other related parties $ 184 130 -

(ii) The Group’s expenses paid to related parties, such as sewage treatment expense, wharf usage expense, utility and steam expenses, transportation expense and restoration expense were as follows:

Other payables–related parties March 31,

2014 December 31,

2014 March 31,

2015 Other related parties $ 239,671 253,567 309,096

(g) Receivables from payment on behalf of related parties

(i) The Group paid for construction design service fees on behalf of related parties as

follows:

Other receivables–related parties March 31,

2014 December 31,

2014 March 31,

2015 Other related parties $ 3,201,056 11,020,131 11,567,476

(ii) As of March 31, and December 31, 2014 and December 31, 2015, the Group paid the

down payments on behalf of associated investee for the purchase of equipment of $4,248,910, $1,840,999 and $1,446,633, respectively, which were accounted for as prepayments (classified under other assets).

29



(Continued)

(h) Rental (recognized as other income) The Group leased its office and building to related parties, and derived rental income thereon as follows: For the three-month periods

ended March 31, 2014 2015 Associates $ 10,286 10,022 Jointly controlled entities 1,792 1,792 Other related parties 9,174 10,127 $ 21,252 21,941

(3) Compensation of key management

The compensation to key management was as follows:


ended March 31, 2014 2015 Short-term employee benefits $ 10,573 14,373

8. Pledged Properties

The Group’s assets pledged to secure loans are as follows:

Classification of assets Nature of Pledged Assets March 31,

2014 December 31,

2014 March 31,

2015

Fixed assets Property plant and equipment $ 3,464,213 3,112,822 3,002,788 Refundable deposits Certificate of deposit 33,709 34,625 34,625 Available-for-sale financial assets Stocks of Nan Ya Plastics Corp. 690,150 - - Investments accounted for using

equity method Stocks of Formosa Petrochemical

Corp. 7,781,926

7,529,265

7,591,384

$ 11,969,998 10,676,712 10,628,797 9. Commitments and Contingencies

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

March 31,

2014 December 31,

2014 March 31,

2015 Endorsements and guarantees $ 371,696 13,409,116 17,280,792

30



(Continued)

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

March 31, 2014

December 31, 2014

March 31, 2015

Unused outstanding letters $ 1,761,865 1,850,806 452,743

(c) The amounts of commitment letters for related parties were as follows:

March 31,

2014 December 31,

2014 March 31,

2015 USD $ 328,000 1,086,000 1,086,000 CNY $ 1,360,000 1,834,000 1,658,000

10. Significant Disaster Loss: None.

11. Subsequent Event: None.

12. Others

(1) The nature of operating costs and expenses of the Group were as follows:


2014 2015 Operating

costs Operating expenses

Non- operating expenses

Total

Operating costs

Operating expenses

Non- operating expenses

Total

Employee benefits Salaries 1,179,314 862,084 - 2,041,398 1,190,852 821,240 - 2,012,092 Labor and health insurance 84,035 58,936 - 142,971 85,042 55,719 - 140,761 Pension 80,747 52,311 - 133,058 82,000 51,392 - 133,392 Employees’ bonuses 5,597 3,909 - 9,506 5,113 3,398 - 8,511 Others 26,337 15,116 - 41,453 24,355 13,717 - 38,072

Depreciation expenses 1,823,440 79,629 - 1,903,069 1,803,950 91,718 - 1,895,668 Amortization expenses 141,133 2,058 9,111 152,302 229,541 2,617 9,007 241,165

(2) Seasonality of operation

The operation of the Group is not influenced by seasonality and periodicity.

31



(Continued)

13. Other Disclosure Items

(a) Related information on material transaction items

The significant transactions required by the “Guidelines” for the Group were as follows: (i) Fund financing to other parties (the amounts expressed in RMB are in thousands):

No. Name of Lenders Name of Borrowers

Account name

Related party

Highest balance of

financing to other parties during the

period

Ending Balance

Actual usage

during the period

Range of interest

rates during the

period

Purposes of fund financing

for the borrowers

(Note 1)

Transaction amount for

business between two

parties

Reasons for short-term financing

Allowance for bad

debt

Collateral Individual funding

loan limits (Note 2)

Maximum limitation on fund

financing (Note 2)

Note Name Value

0 The Company Formosa Petrochemical Corp.

Due from related parties

Yes $ 6,000,000 $ 6,000,000 $ - 1.627% ~1.628%

2 - Short-term financing

- - - $ 58,333,729 $ 116,667,458

0 The Company Formosa Chemicals & Fibre Corp.


Yes 6,000,000 6,000,000 - 1.628% 2 - Short-term financing

- - - 58,333,729 116,667,458

0 The Company Nan Ya plastic Corp. Due from related parties

Yes 6,000,000 6,000,000 - 1.628% 2 - Short-term financing

- - - 58,333,729 116,667,458

0 The Company Formosa Heavy Industries Corp.


Yes 11,000,000 11,000,000

2,500,000 1.627% ~1.628%


- - - 58,333,729 116,667,458

0 The Company Formosa Plastic Transportation Corp.


Yes 150,000 150,000 150,000 1.627% ~1.628%


- - - 58,333,729 116,667,458

0 The Company Mai Liao Power Corp.


Yes 750,000 750,000 - 1.628% 2 Short-term financing

- - - 58,333,729 116,667,458

0 The Company Nan Ya Technology Corp.


Yes 8,700,000 8,000,000 8,000,000 1.627% ~1.628%


- - - 58,333,729 116,667,458

0 The Company Asian Pacific Investment Corp.


Yes 650,000 650,000 650,000 1.627% ~1.628%


- - - 58,333,729 116,667,458

0 The Company Formosa Ha Tinh (Cayman) Limited


Yes 6,457,955 6,457,955 3,304,955 1.627% ~1.628%

2 Short-term financing

- - - 58,333,729 116,667,458

0 The Company Formosa Ha Tinh (Cayman) Limited Taiwan Branch


Yes 357,600 357,600 176,600 1.627% ~1.628%


- - - 58,333,729 116,667,458

0 The Company Formosa Group Ocean Marine Corp.


Yes 4,015,476 4,015,476 2,386,476 0.754% ~0.768%


- - - 58,333,729 116,667,458

32



(Continued)

No. Name of Lenders Name of Borrowers

Account name

Related party

Highest balance of

financing to other parties during the

period

Ending Balance

Actual usage

during the period

Range of interest

rates during the

period

Purposes of fund financing

for the borrowers

(Note 1)

Transaction amount for

business between two

parties

Reasons for short-term financing

Allowance for bad

debt

Collateral Individual funding

loan limits (Note 2)

Maximum limitation on fund

financing (Note 2)

Note Name Value

1 Formosa Industries (Ningbo) Co., Ltd.



Yes $ 127,800 (RMB25,000)

$ 127,800 (RMB 25,000)

$ 127,783 (RMB 25,000)

3.745% ~3.920%


- - - $ 2,815,944 $ 2,815,944 Note 4, 5

2 Formosa Acrylic Esters (Ningbo) Co., Ltd.



Yes 1,957,896 (RMB 383,000)

1,957,896 (RMB 383,000)

1,957,643 (RMB 383,000)

3.745% ~3.920%


- - - 5,514,761 5,514,761 Note 4, 5

2 Formosa Acrylic Esters (Ningbo) Co., Ltd.



Yes 802,584 (RMB 157,000)

802,584 (RMB 157,000)

802,480 (RMB 157,000)

3.745% ~3.920%


- - - 5,514,761 5,514,761 Note 4, 5

3 Formosa Polypropylene (Ningbo) Co., Ltd.



Yes 411,360 (RMB 80,000)

102,240 (RMB 20,000)

102,227 (RMB 20,000)

3.745% ~3.920%


- - - 2,646,753 2,646,753 Note 4, 5

Note 1: (1) Those with business contact please fill in 1

(2) Those necessary for short-term financing please fill in 2.

Note 2: (1) The maximum financing allowed should not exceed 50% of the Company’s net equity, and the maximum short-term financing to companies with no transaction with the Company could not exceed 40% of the Company’s net equity as of March 31, 2015.

(2) The Company grants financing to a related party even if the Company has no normal business transactions with the entity. However, such financing is limited to 25% of the related party’s equity based on the current independent auditor’s report.

(3) The Company grants financing to an entity even if the Company has no normal business transactions with the entity. However, such financing is limited to 20% of the Company’s equity based on the current independent auditor’s report.

Note 3: The ending balance was approved by the Board of Directors.

Note 4: The transaction has already been written off in the consolidated financial statements.

Note 5: The exchange rate of New Taiwan dollars to RMB dollars was 5.112 to 1 for the highest balance of financing to other parties during the period and for the ending balance; and the exchange rate of New Taiwan dollars

to RMB dollars was 5.111339 to 1 for the actual usage during the period.

33



(Continued)

(ii) Guarantees and endorsements for other parties:

No.

Endorsement guarantee provider

Counter-party

Limitation amount of

guarantees and endorsements for

a specific enterprise

Highest balance for

guarantee and endorsements

during the period

Balance of guarantees and

endorsements as of March 31,

2015

Amount Actually Drawn

Amount of Endorsement/

Guarantee Collateralized by

Properties

Ratio of accumulated amounts of

guarantees and endorsements to net worth of

the latest financial

statements

Maximum amounts for

guarantees and endorsements

Parent Company endorses/

guarantees to third

parties on behalf of

subsidiary

Subsidiary endorses/

guarantees to third parties

on behalf of Parent Company

Endorsements/ guarantees to the third

parties on behalf of the Companies

in Mainland China

Name

Relationship with The Company (Note 2)

0 The Company

Formosa Sumco Technology Corp.

6 $ 189,584,620 $ 206,498 $ 206,498 $ 206,498 - 0.07% $ 379,169,240 N N N

0 The Company

Formosa Group (Cayman) Limited

6 189,584,620 48,082,781 48,082,781 17,074,294 - 16.49% 379,169,240 N N N

Note 1: The guarantees and endorsements of the Company and its subsidiaries were listed in the form of numbers with the rules below:

(1) The Company is represented by 0. (2) The subsidiaries are represented numerically starting from 1.

Note 2: There are six conditions in which the Company may have guarantees or endorsements for other parties as follows:

(1) The Company has business relationship. (2) The Company holds directly more than 50% of the common shares of 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 its subsidiaries hold indirectly 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.

34



(Continued)

(iii) The securities held at balance sheet date (excluding subsidiaries, associates and joint ventures):

Security holder Category and name of security

Relationship between issuer of security and the company which

holds securities

Account name

2015.03.31

Note Shares / Units (in

thousands)

Carrying value

Percentage of

ownership

Market value or

net asset value The Company Asian Pacific Investment Corp. Other related parties Financial assets carried at cost 68,743 $ 777,804 16.17% $ 2,505,629 Note 2 The Company Mai-Liao Harbor Administration Corp. Other related parties Financial assets carried at cost 39,574 539,486 17.99% 907,559 Note 1 The Company Taiwan Aerospace Corp. - Financial assets carried at cost 1,103 11,026 0.81% 12,223 Note 1 The Company Chinese Television System Inc. - Financial assets carried at cost 1,769 28,609 1.05% 59,390 Note 2 The Company China Investment & Development Co., Ltd. - Financial assets carried at cost 1,287 8,250 0.80% 13,609 Note 1 The Company Formosa Plastics Development Corp. Other related parties Financial assets carried at cost 13,639 90,010 18.00% 223,489 Note 1 The Company Xiangho Aircraft Leasing Corp. - Financial assets carried at cost 2,071 - 9.55% - The Company Formosa Petrochemical Transportation

Corporation, Ltd. Other related parties Financial assets carried at cost 2,642 24,013 12.00% 37,188 Note 1

The Company Formosa Network Technology Corp. Other related parties Financial assets carried at cost 1,800 13,331 12.50% 33,686 Note 2 The Company Formosa Plastics Marine Corp. Other related parties Financial assets carried at cost 2,429 15,000 15.00% 107,017 Note 1 The Company Formosa Group Ocean Investment Corp. Other related parties Financial assets carried at cost 3 856,948 19.00% 8,009,577 Note 2 The Company Formosa Plastics Maritime Corp. Other related parties Financial assets carried at cost 354 1,691 18.11% 53,339 Note 1 The Company Am Trust Capital I Corp. - Financial assets carried at cost 5,000 50,000 3.91% 50,740 Note 1 The Company Central Leasing International Corp. - Financial assets carried at cost 2,373 - 1.43% - The Company Inteplast Taiwan Corporation Other related parties Financial assets carried at cost 2,160 21,600 18.00% 21,930 Note 1 The Company Mega Growth Venture Capital Co., Ltd. - Financial assets carried at cost 2,500 25,000 2.50% 25,000 The Company Nan Ya Plastics Corporation Other related parties Available-for-sale financial asset－current 783,357 54,443,302 9.88% 54,443,302 The Company Formosa Chemicals & Fibre Corporation Other related parties Available-for-sale financial asset－current 198,744 14,269,815 3.39% 14,269,815 The Company Nan Ya Technology Corp. Other related parties Available-for-sale financial asset－current 235,074 18,570,831 9.80% 18,570,831 The Company Nan Ya Technology Corp. Other related parties Available-for-sale financial asset－non-current 132,464 10,464,659 5.52% 10,464,659

Note 1: The net asset value of equity was calculated based on audited financial statements.

Note 2: The net asset value of equity was calculated based on unaudited financial statements.

35



(Continued)

(iv) The accumulated purchase or sale of securities for the period exceeding $300 million or 20% of the paid-in capital:

Company Name

Type and Issuer of Marketable Securities

Account Name Counterparty Nature of the Relationship

Beginning Balance Acquisition Disposal Ending Balance

Number of Shares

(in thousands) Amount

Number of Shares

(in thousands) Amount

Number of Shares

(in thousands) Amount Carrying

Value Gain (Loss) on

Disposal

Number of Shares

(in thousands)

Amount

The Company

Stock- Nan Ya Technology Corp.

Available-for-sale financial asset－current

Nan Ya Technology Corp.

Other related parties

238,895 $ 19,350,480 - - (3,821) $ 308,707 (Note 1)

$(148,894) $ 159,813 235,074 $ 18,570,831 (Note 2)

Note 1: The Group sold 309,768 thousand common shares of Nan Ya Technology Corp. for $308,707 after deducting related expenses of $1,061. Note 2: The ending balance includes unrealized loss on financial instruments of $630,755.

(v) Information on the acquisition of real estate which exceeds $300 million or 20% of the paid-in capital for the year ended March 31, 2015: None.

(vi) Information on the disposal of real estate which exceeds $300 million or 20% of the paid-in capital for the year ended March 31, 2015: None.

(vii) Information regarding related-party purchase and sale transactions which exceed $100 million or 20% of the paid-in capital:

Company name Related party Relationship

Transaction details Abnormal transaction

Note/Account (payable) receivable

Purchase (Sale) Amount

% to total purchase

/sale Payment terms Unit price Payment

terms Ending balance

% to total Note

The Company Nan Ya Plastics Corporation Other related parties (Sales) $ (3,378,357) (8.27) % Before the 27th of the following month

- $ 1,269,598 10.88%

The Company Formosa Chemicals & Fibre Corporation 〃〃 (1,575,113) (3.86) % Before the 27th of the following month

- 494,848 4.24%

The Company Formosa Petrochemical Corporation Associates 〃 (1,638,200) (4.01) % Before the 27th of the following month

- 704,598 6.04%

The Company Formosa Daikin Advanced Chemical Co., Ltd. Jointly controlled entities 〃 (122,647) (0.30) % Before the 27th of the following month

- 48,547 0.42%

36



(Continued)

Company name Related party Relationship

Transaction details Abnormal transaction

Note/Account (payable) receivable

Purchase (Sale) Amount

% to total purchase

/sale Payment terms Unit price Payment

terms Ending balance

% to total Note

The Company Formosa Industries (Ningbo) Co., Ltd. Parent-subsidiary (Sales) (1,012,405) (2.48) % O/A 90 days - 908,117 7.78% Note The Company Formosa Acrylic Esters (Ningbo) Co., Ltd. Parent-subsidiary 〃 (434,474) (1.06) % O/A 90 days - 432,981 3.71% Note The Company Formosa ABS Plastic (Ningbo) Co., Ltd. Other related parties 〃 (1,123,412) (2.75) % O/A 60 days - 897,988 7.70% The Company Formosa Plastics Corp., U.S.A. Associates 〃 (345,364) (0.85) % O/A 90 days - 470,576 4.03% The Company Nan Ya Rigid Film (Guangzhou) Co., Ltd. Other related parties 〃 (128,366) (0.31) % O/A 60 days - 110,550 0.95% Formosa Acrylic Esters (Ningbo) Co., Ltd.


Subsidiaries 〃 (154,008) (8.90) % Before the 90th of the following month

- 71,600 4.94% Note


Nan Ya Plastics Film (Nantong) Co., Ltd. Other related parties 〃 (101,835) (4.77) % Before the 30th of the following month

- 70,388 11.18%

The Company Nan Ya Plastics Corporation 〃 Purchase 208,763 0.76% Before the 27th of the following month

- (74,450) (0.76)%

The Company Formosa Chemicals & Fibre Corporation 〃〃 450,932 1.65% Before the 27th of the following month

- (228,938) (2.35)%

The Company Formosa Petrochemical Corporation Associates 〃 20,265,903 74.21% Before the 27th of the following month

- (8,624,566) (88.34)%


The Company Parent-subsidiary 〃 1,092,657 68.91% O/A 90 days - (1,045,755) (80.18)% Note、 Note 1


Nan Ya Plastics Corporation Other related parties 〃 185,410 11.69% O/A 90 days - (184,122) (14.12)%


The Company Parent-subsidiary 〃 2,609,252 89.36% O/A 90 days - (2,435,149) (99.09)% Note、 Note 1

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

Note 1：Including the purchases of raw materials on behalf of related parties.

37



(Continued)

(viii) Information regarding receivables from related parties which exceed $100 million or 20% of the paid-in capital:

Company name Related party Relationship Ending balance

Turnover day

Overdue Amounts received in subsequent

periods

Allowance for bad debts Note

Amount Action taken

The Company Nan Ya Plastics Corporation Other related parties $ 1,269,598 11,61% - - $ 1,193,090 - The Company Formosa Chemicals & Fibre Corporation 〃 494,848 11.82% - - 494,848 - The Company Formosa Petrochemical Corporation Associates 704,598 11.44% - - 624,912 - The Company Formosa Industries (Ningbo) Co., Ltd. Parent-subsidiary 908,117 3.85% - - 91,934 - Note The Company Formosa Acrylic Esters (Ningbo) Co., Ltd. 〃 432,981 4.74% - - 75,603 - Note The Company Formosa ABS Plastics (Ningbo) Co., Ltd. Other related parties 897,988 4.89% - - 294,875 - The Company Formosa Plastics Corp., U.S.A. Associates 470,576 2.54% - - 292,598 - The Company Nan Ya Rigid Film (Guangzhou) Other related parties 110,550 3.73% - - 23,740 - The Company Formosa Heavy Industries Corp. Associates 2,500,000 -% - - - - The Company Nan Ya Technology Corp. Other related parties 8,000,000 -% - - - - The Company Asian Pacific Investment Corp. 〃 650,000 -% - - - - The Company Formosa Group Ocean Marine Corp. 〃 2,386,476 -% - - - - The Company Formosa Plastic Transportation Corp. Associates 150,000 -% - - - - The Company Formosa Ha Tinh (Cayman) Limited 〃 3,304,955 -% - - 3,276,748 - The Company Formosa Ha Tinh (Cayman) Limited Taiwan Branch 〃 176,600 -% - - - - The Company Formosa Acrylic Esters (Ningbo) Co., Ltd. Parent-subsidiary 612,774 -% - - - - Note The Company Formosa Polypropylene (Ningbo) Co., Ltd. 〃 2,433,586 -% - - - - Note The Company Fujian Fuxin Special Steel Co., Ltd Associates 181,255 -% - - - - The Company Formosa Ha Tinh Steel Corporation 〃 12,832,854 -% - - - - Formosa Industries (Ningbo) Co., Ltd. Formosa Polyethylene (Ningbo) Co., Ltd. Subsidiaries 127,783 -% - - - - Note Formosa Acrylic Esters (Ningbo) Co., Ltd. Formosa Super Absorbent Polymer (Ningbo) Co., Ltd. 〃 1,957,643 -% - - - - Note Formosa Acrylic Esters (Ningbo) Co., Ltd. Formosa Polyethylene (Ningbo) Co., Ltd. 〃 802,840 -% - - - - Note Formosa Polypropylene (Ningbo) Co., Ltd. Formosa Super Absorbent Polymer (Ningbo) Co., Ltd. 〃 102,227 -% - - - - Note

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

38



(Continued)

(ix) For information regarding trading in derivative financial instruments: None.

(x) Intercompany relationships and significant intercompany transactions:

No. Company name Counter party Relationship

Intercompany transactions

Financial Statement Item Amount Terms

Percentage of consolidated total gross

sales or total assets 0 The Company Formosa Industries (Ningbo) Co., Ltd. 1 Sales $ 1,012,405 O/A 90 days 2.12% 0 The Company Formosa Industries (Ningbo) Co., Ltd. 1 Accounts receivable 908,117 〃 0.21% 0 The Company Formosa Acrylic Esters (Ningbo) Co., Ltd. 1 Sales 434,474 〃 0.91% 0 The Company Formosa Acrylic Esters (Ningbo) Co., Ltd. 1 Accounts receivable 432,981 〃 0.10% 0 The Company Formosa Acrylic Esters (Ningbo) Co., Ltd. 1 Other receivables－related parties 612,774 〃 0.14% 0 The Company Formosa Polypropylene (Ningbo) Co., Ltd. 1 Other receivables－related parties 2,433,586 〃 0.56% 1 Formosa Industries (Ningbo) Co., Ltd. Formosa Polyethylene (Ningbo) Co., Ltd. 3 Due from related parties 127,783 - 0.03% 2 Formosa Acrylic Esters (Ningbo) Co., Ltd. Formosa Super Absorbent Polymer (Ningbo) Co., Ltd. 3 Sales 154,008 Before the 90th of the following

month 0.32%

2 Formosa Acrylic Esters (Ningbo) Co., Ltd. Formosa Super Absorbent Polymer (Ningbo) Co., Ltd. 3 Accounts receivable 71,600 〃 0.02% 2 Formosa Acrylic Esters (Ningbo) Co., Ltd. Formosa Polyethylene (Ningbo) Co., Ltd. 3 Due from related parties 802,480 - 0.18% 2 Formosa Acrylic Esters (Ningbo) Co., Ltd. Formosa Super Absorbent Polymer (Ningbo) Co., Ltd. 3 Due from related parties 1,957,643 - 0.45% 3 Formosa Polypropylene (Ningbo) Co., Ltd. Formosa Super Absorbent Polymer (Ningbo) Co., Ltd. 3 Due from related parties 102,227 - 0.02%

Note 1: Assigned numbers represent the following: 1. 0 represents the parent company. 2. The subsidiaries are represented numerically starting from 1.

Note 2: The terms of transactions are defined as follows: 1. Represents the parent company having transaction with a subsidiary. 2. Represents a subsidiary having transaction with the parent company. 3. Represents a subsidiary having transaction with a subsidiary.

39



(Continued)

(b) Information on investment (excluding those in Mainland China, the amounts expressed USD are in thousands):

Investor company Investee company Location Major operations

Original investment Amount Balance as of March 31, 2015 Net income of

investee

Investment income (loss) recognized by

the investor company

Notes March 31, 2015

December 31, 2014 Shares % Carrying

value

The Company Formosa Petrochemical Corporation Taiwan Petrochemicals $ 30,388,721 $ 30,388,721 2,742,549 28.79% $ 69,399,141 $ 1,121,947 $ 321,892 Note, Note 2 The Company Formosa Plastics Corp., U.S.A. U.S.A Chemicals 5,614,024 5,614,024 70 22.59% 41,856,606 6,052,232 1,391,438 Note, Note 2 The Company Formosa Heavy Industries Corp. Taiwan Mechanical equipment 2,498,463 2,498,463 589,356 32.92% 7,869,851 245,130 85,853 Note, Note 2 The Company Sky Dragon Investment Limited Samoa Investment 3,851,882 3,851,882 125,000 50.00% 1,922,384 (628,364) (314,182) Note, Note 2 The Company Formosa Plastics Corp. (Cayman Ltd.) Cayman Investment 19,004,308 19,004,308 75 100.00% 30,525,463 (325,829) (325,829) Note, Note 1 The Company Mai Liao Power Corp. Taiwan Electricity 5,985,531 5,985,531 498,842 24.94% 11,794,070 1,491,721 372,035 Note, Note 2 The Company Formosa Sumco Technology Corp. Taiwan Electronics manufacture 2,837,042 2,837,042 225,415 29.06% 5,820,685 393,808 114,439 Note 2 The Company Formosa Transportation Corp. Taiwan Transportation 60,664 60,664 3,993 33.33% 664,493 35,828 11,941 Note, Note 2 The Company Formosa Fairway Corp. Taiwan Transportation 33,330 33,330 4,252 33.33% 76,179 2,310 770 Note 2 The Company Yi-Jih Development Corp. Taiwan Construction 57,000 57,000 5,700 28.72% 62,281 252 72 Note 2 The Company Ya Tai Development Corp. Taiwan Development of land 54,034 54,034 1,306 45.04% 47,929 (2,501) (1,126) Note 2 The Company Formosa Asahi Spandex Co., Ltd. Taiwan Artificial fiber 501,752 501,752 50 50.00% 1,231,249 78,063 39,031 Note 2 The Company Formosa Automobile Corporation Taiwan Automobile 944,972 944,972 27,044 45.00% - 31,514 14,182 Note 2 The Company

Wha Ya Park Management Consulting Corporation Ltd.

Taiwan Consulting service 341 341 33 33.00% 2,156 130 43 Note 2

The Company Formosa Daikin Advanced Chemical Co., Ltd. Taiwan Chemical industry 100,000 100,000 24 50.00% 812,756 26,925 13,463 Note 2 The Company Su-Hua Transportation Corporation Taiwan Transportation 50,000 50,000 7,659 25.00% 192,394 47,302 11,826 Note 2 The Company Formosa Resources Corporation Taiwan Mining industry 4,162,500 4,162,500 416,250 25.00% 4,332,161 (108,109) (27,027) Note, Note 2 The Company Formosa Environmental Technology Corporation Taiwan Environmental industry 417,145 417,145 41,714 24.34% 265,989 (5,608) (1,365) Note, Note 2 The Company Formosa Ha Tinh (Cayman) Limited Cayman Investment $ 15,369,735 15,369,735 508,237 14.75% $ 15,448,295 $ (1,061,897) $ (156,630) Note, Note 2 The Company Formosa Group (Cayman) Limited Cayman Investment 377 377 13 25.00% 49,190 110,543 27,636 Note, Note 2 The Company Formosa Group Investment (Cayman) Limited Cayman Investment 377 377 13 25.00% 382 8 2 Note, Note 2 The Company Formosa Plastics Development Corporation Ltd. Taiwan Construction 15,000 15,000 1,500 33.33% 13,606 (2,858) (953) Note 2 Formosa Plastics Corp. (Cayman Ltd.)

Formosa Industries (Hong Kong) Limited Hong Kong

Reinvestment 7,376,158 (USD234,902)

7,450,622 (USD234,902)

- 100.00% 30,400,992 (USD968,153)

(324,896) (USD-10,285)

(324,896) (USD-10,285)

Note 2, Note 3

Note ： Including cumulative translation adjustments.

Note 1：The transaction has already been written off in the consolidated financial statements.

Note 2：Long-term equity investments under equity method.

Note 3：The exchange rate of New Taiwan dollars to US dollars on March 31, 2015, was 31.401 to 1. The average exchange rate of New Taiwan dollars to US dollars for the three-month periods ended March 31, 2015, was 31.5929 to 1.

40



(Continued)

(c) Information regarding investments in Mainland China:

(i) Information on indirect investment in companies in Mainland China (amounts expressed in USD are in thousands):

Name of the PRC investee company

Primary business

scope

Amount of paid-in

capital

Method of investment

Investment transferred

from Taiwan, beginning of

period

Three-month periods ended March 31, 2015 Investment

transferred from Taiwan, end of period

Equity in the

earnings (losses)

Direct and indirect

shareholding percentage by the company

The maximum holding

percentage for the period

Recognized gain or loss

from investment for

the current period

Carrying value of investment,

end of period

Remitted gain on investment, end of period Remittance Remittance


Plastics $ 5,740,234 (USD177,350)

Indirect investment

$ 4,206,583 (USD126,000)

- - $ 4,206,583 (USD126,000)

$ (164,027) (USD-5,192)

100.00% 100.00% $ (164,027) (USD-5,192)

$ 7,032,288 (USD223,951)

-


Acrylic esters 7,849,446 (USD248,973)

Indirect investment

5,332,705 (USD163,570)

- - 5,332,705 (USD163,570)

(377,810) (USD-11,959)

100.00% 100.00% (377,810) (USD-11,959)

13,789,593 (USD439,145)

-


Polypropylene 6,980,064 (USD211,900)

Indirect investment

6,980,064 (USD211,900)

- - 6,980,064 (USD211,900)

235,029 (USD7,439)

100.00% 100.00% 235,029 (USD7,439)

6,616,882 (USD210,722)

-


Absorbent polymer

834,293 (USD26,300)

Indirect investment

624,930 (USD19,300)

- - 624,930 (USD19,300)

14,001 (USD443)

100.00% 100.00% 14,001 (USD443)

1,079,658 (USD34,383)

-

Formosa electronic (Ningbo) Co., Ltd.

Electronics 74,648 (USD2,260)

Indirect investment

66,137 (USD2,000)

- - 66,137 (USD2,000)

6,543 (USD207)

100.00% 100.00% 6,543 (USD207)

248,355 (USD7,909)

-


Polyethylene 1,670,088 (USD57,500)

Indirect investment

1,670,088 (USD57,500)

- - 1,670,088 (USD57,500)

(38,632) (USD-1,223)

100.00% 100.00% (38,632) (USD-1,223)

1,634,216 (USD52,043)

-

Formosa Mitsui Advanced Chemical Co., Ltd.

Electrolyte 244,196 (USD8,200)

Indirect investment

122,098 (USD4,100)

-

- 122,098 (USD4,100)

(1,871) (USD-59)

50.00% 50.00% (935) (USD-30)

120,885 (USD3,850)

-

Fujian Fuxin Special Steel Co., Ltd.

Steel 15,371,400 (USD500,000)

Indirect investment

3,842,850 (USD125,000)

-

- 3,842,850 (USD125,000)

(1,256,727) (USD-39,779)

33.00% 33.00% (314,182) (USD-9,945)

1,921,799 (USD61,202)

-

Note : Except for Formosa Mitsui Advanced Chemical Co., Ltd. and Fujian Fuxin Special Steel Co., Ltd., the others were already written off in the consolidated financial statements.

41



(Continued)

(ii) Quota for investment in Mainland China:

Accumulative remittance from Taiwan to Mainland China,

end of the period

Amount of investment approved by Investment Commission,

Ministry of Economic Affairs (Note 1)

Limit on the amount of investment in Mainland China (Note 2)

22,845,455 (USD709,370)

26,797,080 (USD853,383)

-

Note: The exchange rate of New Taiwan dollars to US dollars on March 31, 2015, was 31.401 to 1. Note 1: Including USD$144,013 thousand approved capital increase out of retained earnings. Note 2: The Industrial Development Bureau of the MOEA issued a letter to the Company stating that it qualifies under Section 12 of the Statute for Upgrading Industries.

(iii) Significant transactions：None.

42



14. Segment information Operating segments are combined and reconciled as follows:

For the three-month periods ended March 31, 2014 Plastic

division Polyolefin division

Polypropylene division

Tairylan division

Chemistry division

Others divisions

Adjustments and eliminated

Total

Revenue: From external customers $ 17,749,689 8,691,908 8,870,903 8,111,805 7,599,156 966,410 - 51,989,871 From sales among intersegments 460,214 487,204 34,929 18,176 744,984 1,284,656 (3,030,163) - Total revenue $ 18,209,903 9,179,112 8,905,832 8,129,981 8,344,140 2,251,066 (3,030,163) 51,989,871 Reportable segment profit or loss $ 713,793 442,532 (89,193) (37,920) 250,224 99,732 6,594,352 7,973,520

For the three-month periods ended March 31, 2015 Plastic



Tairylan division

Chemistry division

Others divisions


Total

Revenue: From external customers $ 16,186,280 9,000,451 8,949,513 6,150,078 6,481,106 929,684 - 47,697,112 From sales among intersegments 326,287 424,108 24,749 13,619 665,637 1,230,738 (2,685,138) - Total revenue $ 16,512,567 9,424,559 8,974,262 6,163,697 7,146,743 2,160,422 (2,685,138) 47,697,112 Reportable segment profit or loss $ 1,044,169 835,988 920,740 (790,605) 1,019,026 225,122 1,197,544 4,451,984

Plastic



Tairylan division

Chemistry division

Others divisions


Total

Reportable segment assets March 31, 2014 $ 39,161,696 12,995,314 25,258,931 48,194,334 7,734,026 317,197,978 (39,736,475) 410,805,804 December 31, 2014 $ 36,331,322 14,901,334 20,581,766 44,748,084 8,867,489 359,879,813 (54,506,817) 430,802,991 March 31, 2015 $ 34,771,623 13,819,581 18,750,178 43,275,117 6,742,059 370,749,871 (52,600,850) 435,507,579

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